TIDMGBP
RNS Number : 0942O
Global Petroleum Ltd
30 September 2019
30 September 2019
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ('MAR). Upon the
publication of this announcement via a Regulatory Information
Service ('RIS'), this inside information is now considered to be in
the public domain.
Global Petroleum Limited
("Global" or "the Company")
Final Results for the Year Ended 30 June 2019, Annual Report,
Appendix 4G
The Directors of Global Petroleum Limited present their report
together with the consolidated financial statements of the Group
comprising of Global Petroleum Limited ("the Company" or "Global"
or "Parent") and the entities it controlled at the end of, or
during, the year ended 30 June 2019 ("Consolidated Entity" or
"Group").
The Company confirms that a full copy of its latest Annual
Report and Accounts, as well as the relevant Appendix 4G will be
available shortly on the Company's website:
www.globalpetroleum.com.au
Full copies of the Directors' Report and 2018-2019 Financial
Statements are available at:
https://www.asx.com.au/asxpdf/20190930/pdf/4490zxwc7g090g.pdf
For further information please visit www.globalpetroleum.com.au
or contact:
Global Petroleum Limited
Peter Hill, Managing Director & CEO +44 (0) 20 7495 6802
Andrew Draffin, Company Secretary +61 (0)3 8611 5333
Cantor Fitzgerald Europe (Nominated Adviser
& Joint Broker)
David Porter/Rick Thompson +44 (0) 20 7894 7000
GMP FirstEnergy Capital LLP (Joint Broker)
Hugh Sanderson +44 (0) 20 7448 0200
Tavistock (Financial PR & IR)
Simon Hudson / Nick Elwes/ Barney Hayward +44 (0) 20 7920 3150
Chairman and CEO's Review
The last financial year saw Global increase its acreage offshore
Namibia by the acquisition of Block 2011A via the Company's wholly
owned subsidiary, Global Petroleum Namibia Limited. In Italy,
during the same period all of the appeals made against the
Environmental Decrees relating to Global's four Adriatic Sea
licence applications were heard, and ultimately all were
rejected.
In September 2018, the Company was pleased to announce that it
had signed a Petroleum Agreement to acquire Block 2011A (designated
PEL 0094), offshore Namibia. PEL 0094 is located in the northern
Walvis Basin, immediately to the east of the Company's other
licence PEL 0029. The combination of the two licences increases the
Company's presence in the Namibian offshore to 11,607 square
kilometres, making Global one of the largest net acreage holders
within the region.
Under the PEL 0094 work programme, within the first two years of
the Initial Exploration Period, Global is to carry out various
studies, plus acquire and reprocess all existing seismic data in
the licence area. The studies and reprocessing will both enable the
reservoirs in the Welwitschia structure and elsewhere in the
acreage to be mapped with more confidence, and also facilitate the
identification of future leads. In particular, the Company has been
liaising with the state Oil Company, NAMCOR, with a view to
agreeing terms for the acquisition of the existing 3D seismic data
on the block.
At the end of two years, Global has the option either to shoot a
new 2,000 square kilometre 3D seismic data survey in the eastern
part of Block 2011A, or alternatively to relinquish the
licence.
In its older licence, PEL 0029, Global agreed a work commitment
for the Second Renewal Period (Phase 3) with the Namibian Ministry
of Mines and Energy.
Phase 3 commenced on 3 December 2018 and the firm additional
work programme for PEL 0029 consists of various studies, including
mapping, with a financial commitment of US$350,000. In addition,
and carried over from the First Renewal Period (Phase 2) extension,
is the acquisition of 600 sq km of 3D seismic data - contingent
upon Global concluding a farmout - plus the drilling of one
exploration well.
The Ministry of Mines and Energy has also waived the requirement
to surrender a further 25 per cent of the original PEL 0029 Licence
Area, which is normally required at the end of the First Renewal
Period. 50 per cent had already been surrendered in accordance with
the Petroleum Agreement at the end of the Initial Exploration
Period (Phase 1).
In Italy, as previously reported, a total of twelve parties had
appealed against some or all of the four Environmental Decrees
granted in relation to the Company's applications in the Adriatic
Sea. All appeals were heard by the Administrative Tribunal in Rome
("Tribunal") in the course of the reporting period and all were
adjudicated in Global's favour (the last of the judgements was
published post the reporting period). In all cases costs were
awarded to Global, and the Company is advised that that this is
indicative of the attitude of the Tribunal regarding the merits of
the appeals.
The largest of the original appellants, the Italian Region of
Puglia, has appealed against the relevant judgements of the
Tribunal with regard to all four Environmental Decrees (two of the
four further appeals were made post the reporting period). These
further appeals were made to the Council of State, the highest
level of appeal in Italy.
Whilst the results of the various appeals are highly
encouraging, as previously reported the Italian Parliament passed a
Bill in February 2019 suspending all hydrocarbon exploration
activities, including permit applications, for a period of 18
months.
Following the 18 month evaluation period, the intention is that
a hydrocarbon plan will be activated, setting out a strategy for
exploration and production, notably those areas to be excluded from
future hydrocarbon exploitation.
The Company regards its Adriatic application areas as
potentially valuable assets, prospective for both oil and gas and
continues to monitor political developments in Italy in the period
since the commencement of the exploration moratorium.
Financial
During the year ended 30 June 2019, the Group recorded a loss
after tax of US$1,734,589 (2018: US$1,965,570). The cash balance at
30 June 2018 amounted to US$2,786,791 (2018: US$4,928,998). The
Group has no debt outside of suppliers who are settled on normal
commercial terms.
Strategy and Outlook
The Company remains very positive with regard to the
prospectively of its Namibian assets, noting that oil & gas
majors continue to make significant acreage acquisitions offshore
Namibia. Global continues to monitor opportunities which might
complement its existing portfolio of exploration assets, and
remains open to strategic growth of a more structural nature.
John van der Welle Peter G. Hill
Non-Executive Chairman Chief Executive Officer
OPERATING AND FINANCIAL REVIEW
Namibian Project
The Namibian Project consists of an 85% participating interest
in Petroleum Exploration Licence ("PEL") Number 0029 covering
Blocks 1910B and 2010A and PEL 0094 (acquired in 2018) which covers
Block 2011A.
PEL 0029, issued on 3 December 2010, originally covered 11,730
square kilometres and is located offshore Namibia in water depths
ranging from 1,300 metres to 3,000 metres.
The Company's wholly owned subsidiary, Global Petroleum Namibia
Limited, formerly Jupiter Petroleum (Namibia) Limited, is operator
of the Licence, with an 85% interest in the two blocks. Partners
NAMCOR and Bronze Investments Pty Ltd (Bronze) hold 10% and 5%
respectively, both as carried interests.
In December 2015, the Company entered into the First Renewal
Exploration Period (Phase 2) of the Licence with a reduced Minimum
Work Programme, making a mandatory relinquishment of 50% of the
Licence Area. Phase 2 originally had a duration of 24 months.
Following reprocessing and evaluation of historic 2D data, as
previously reported, the Company entered into a contract with
Seabird Exploration of Norway in order to acquire 834 km of full
fold 2D seismic data over its Blocks, which was shot in June/July
2017. Processing and interpretation of the new 2D seismic data was
completed early in Q4 2017.
The new information significantly improved the prospectively
across PEL 0029 in general and the Gemsbok prospect in particular.
Better imaging from the new 2D data revealed that the known source
rock intervals are likely to be within the oil generative window
and this, combined with data showing repeating oil seeps along the
faulted flanks of Gemsbok, greatly improves the chance of a major
oil discovery.
Consequently, the Company commissioned a Competent Person's
Report ("CPR") in respect of its acreage from consultants AGR
TRACS. Prospective resources have been calculated on three
prospects: the Company's primary structure, Gemsbok, as well as Dik
Dik and Lion. The results of the CPR are set out in more detail in
the Company's announcement on 15 January 2018.
In late 2017, the Company also negotiated and agreed with the
Namibian Ministry of Mines and Energy ("MME") an extension of the
First Renewal Exploration Period (Phase 2) of the Company's Licence
of 12 months to December 2018. At the same time, the MME had
previously agreed entry into the Second Renewal Period (Phase 3)
effective from 3 December 2018 for a period of two years.
Subsequently, a firm work programme for Phase 3 was agreed with the
MME whereby the Company will undertake various studies, including
mapping of source rock, mapping of contourites deposits, fault
studies and amplitude versus offset analyses and extended elastic
impedance studies on seismic data.
The financial commitment to undertake the work programme is
estimated at US$350,000. In addition, and carried over from the
First Renewal Period (Phase 2), is the acquisition of 600 sq km of
3D seismic data, contingent upon the Company concluding a farmout
and the drilling of one exploration well.
PEL 0094 is located in the northern Walvis basin, immediately to
the east of PEL 0029. Global holds an 85% interest in the PEL 0094
as operator whilst State oil company, NAMCOR, and a local private
company, Aloe Investments, hold interests of 10% and 5%
respectively, both as carried interests.
The combination of the two licences gives Global an interest in
an aggregate area of 11,608 square kilometres offshore northern
Namibia, and makes it one of the largest net acreage holders in the
region. Global believes that PEL 0094 contains the same plays as
those detailed in the CPR for PEL 0029.
Under the PEL 0094 work programme, in the first two years of the
Initial Exploration Period, Global will carry out various studies
and will reprocess all existing seismic in the licence area, which
includes a 3D seismic data survey shot in the western part. The
studies and reprocessing will enable the reservoirs in the
Welwitschia structure and elsewhere in the acreage to be mapped
with more confidence, and the leads to be identified more
accurately.
At the end of two years, Global has the option either to shoot a
new 2,000 square kilometre 3D seismic data survey in the eastern
part of Block 2011A, or alternatively, to relinquish the
licence.
Permit Applications in the Southern Adriatic, Offshore Italy
In August 2013, the Company submitted an application, proposed
work programme and budget to the Italian Ministry of Economic
Development for four exploration areas offshore Italy (the "Permit
Applications").
As previously reported, various local authorities and interest
groups appealed against the Environmental Decrees in relation to
applications d 82 F.R-GP and d 83 F.R-GP, which were published in
October 2016. Publication of Environmental Decrees is the final
administrative stage before grant of the Permits.
The Company announced in October 2017 that the remaining two
Environmental Decrees in relation to the Permit Applications,
designated d 80 F.R-GP and d 81 F.R-GP, had been published by the
Italian authorities. As with the previous two Environmental
Decrees, a number of appeals by various interested parties were
made.
A total of seven parties filed appeals with the Rome Tribunal
against the 2016 Decrees, and nine parties filed appeals with the
Rome Tribunal against the 2017 Decrees.
Finally, three appellants filed appeals with the President of
the Republic (one appellant against the 2016 Decrees, two against
the 2017 Decrees) - it should be noted that in all cases the
appellants were out of time for appeal to the Rome Tribunal.
In February 2019, the Italian Parliament passed a Bill
suspending all hydrocarbon exploration activities, including permit
applications, for a period of 18 months. Under the proposed
legislation, the Ministries of Economic Development and Environment
will review all onshore and offshore areas for the stated purpose
of evaluating their suitability for hydrocarbon exploration and
development in the future. In doing so, the suitability of such
activities in the context of social, industrial, urban, water
source and environmental factors will be evaluated. In offshore
areas, suitability will additionally be assessed having regard to
the impact of such activity on the littoral environment, marine
ecosystems and shipping routes. Following the 18-month evaluation
period, the intention is that a hydrocarbon plan will be activated,
setting out a strategy for future exploration and development.
The Southern Adriatic and adjacent areas continue to be the
focus of industry activity. Most notably, in Montenegro, offshore
concessions were awarded in 2016/2017 to Energean and Eni/Novatek
(the latter just 35 km from the nearest of the Applications).
Eni/Novatek plan to spend nearly $100 million on exploration on
these permits where, reportedly, 3D seismic acquisition has
recently been completed. Energean plans to spend nearly $20 million
on its permits, with 3D seismic acquisition reportedly imminent. In
Albania, Shell continues to evaluate its Shpiragu discovery.
The four Application blocks are contiguous with the Italian
median lines abutting Croatia, Montenegro and Albania
respectively.
Results of operations
2019 2018
US$ US$
Loss from continuing operations before
tax (1,734,589) (1,965,570)
Income tax benefit / (expense) - -
------------- -------------
Net loss (1,734,589 (1,965,570)
============= =============
The results of the Group include revenue from interest income of
US$51,497 (2018: US$79,813).
Review of financial condition
As at 30 June 2019, the Group had cash of US$2,786,791 (2018:
US$4,928,998) and had no debt outside of suppliers who are settled
on normal commercial terms.
GLOBAL PETROLEUM LIMITED AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE YEARED 30 JUNE 2019
2019 2018
Note US$ US$
Continuing operations
Employee benefits expense (375,890) (416,647)
Administrative expense (1,065,831) (1,084,743)
Exploration and business development
expenses (135,758) (208,622)
Depreciation and amortisation (548) (1,189)
Other expenses (172,402) (192,646)
Foreign exchange gain (loss) (35,657) (13,369)
Equity based remuneration - (128,167)
--------------- -------------
Results from operating activities
before income tax (1,786,086) (2,045,383)
--------------- -------------
Finance income 51,497 79,813
--------------- -------------
Net finance income 51,497 79,813
--------------- -------------
(Loss) from continuing operations
before tax (1,734,589) (1,965,570)
--------------- -------------
Tax expense 3 - -
--------------- -------------
(Loss) from continuing operations
after tax (1,734,589) (1,965,570)
--------------- -------------
(Loss) for the year (1,734,589) (1,965,570)
=============== =============
Earnings per share
From continuing and discontinued
operations:
Basic earnings per share (cents) 6 (0.86) (0.97)
Diluted earnings per share (cents) 6 (0.86) (0.97)
The accompanying notes form part of these financial
statements.
GLOBAL PETROLEUM LIMITED AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
2019 2018
Note US$ US$
Assets
Current assets
Cash and cash equivalents 7 2,786,791 4,928,998
Trade and other receivables 8 73,667 97,416
Other assets 12 66,098 68,502
--------------- --------------
Total current assets 2,926,556 5,094,916
--------------- --------------
Non-current assets
Property, plant and equipment 10 4,933 4,755
Exploration and evaluation assets 11 2,339,095 1,988,145
--------------- --------------
Total non-current assets 2,344,028 1,992,900
--------------- --------------
Total assets 5,270,584 7,087,816
=============== ==============
Liabilities
Current liabilities
Trade and other payables 13 183,331 267,511
Provisions 14 142,632 141,095
--------------- --------------
Total current liabilities 325,963 408,606
Total liabilities 325,963 408,606
=============== ==============
Net assets 4,944,621 6,679,210
=============== ==============
Equity
Issued share capital 15 39,221,112 39,221,112
Reserves 1,535,305 1,535,305
Accumulated losses (35,811,796) (34,077,207)
--------------- --------------
Total equity 4,944,621 6,679,210
=============== ==============
The accompanying notes form part of these financial
statements.
GLOBAL PETROLEUM LIMITED AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2019
Foreign
currency
Option translation Accumulated
Share capital reserve reserve losses Total equity
Consolidated Group US$ US$ US$ US$ US$
--------------- ----------- -------------- ---------------- --------------
Balance at 1 July 2017 39,221,112 836,728 570,410 (32,111,637) 8,516,613
Comprehensive income/(loss)
Loss for the year - - - (1,965,570) (1,965,570)
--------------- ----------- -------------- ---------------- --------------
Total comprehensive
income/(loss)
for the year - - - (1,965,570) (1,965,570)
--------------- ----------- -------------- ---------------- --------------
Transactions with owners,
in their capacity as
owners,
and other transfers
Issue of options - 128,167 - - 128,167
--------------- ----------- -------------- ---------------- --------------
Total transactions with
owners and other transfers - 128,167 - - 128,167
--------------- ----------- -------------- ---------------- --------------
Balance at 30 June 2018 39,221,112 964,895 570,410 (34,077,207) 6,679,210
=============== =========== ============== ================ ==============
Balance at 1 July 2018 39,221,112 964,895 570,410 (34,077,207) 6,679,210
Comprehensive income/(loss)
Loss for the year - - - (1,734,589) (1,734,589)
--------------- ----------- -------------- ---------------- --------------
Total comprehensive
income/(loss)
for the year - - - (1,734,589) (1,734,589)
--------------- ----------- -------------- ---------------- --------------
Transactions with owners,
in their capacity as
owners,
and other transfers
Issue of shares - - - - -
--------------- ----------- -------------- ---------------- --------------
Total transactions with
owners and other transfers - - - - -
--------------- ----------- -------------- ---------------- --------------
Balance at 30 June 2019 39,221,112 964,895 570,410 (35,811,796) 4,944,621
=============== =========== ============== ================ ==============
The accompanying notes form part of these financial
statements.
GLOBAL PETROLEUM LIMITED AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE YEARED 30 JUNE 2019
2019 2018
Note US$ US$
Cash flows from operating activities
Interest received 51,497 79,813
Payments to suppliers and employees (1,860,851) (2,062,758)
GST/VAT refunds received 17,069 215,212
------------- -------------
Net cash (used in) by operating activities (1,792,285) 1,767,733)
------------- -------------
Cash flows from investing activities
Payments for exploration and business
development expenditure (350,950) (1,087,652)
Payments for property, plant and equipment (727) -
------------- -------------
Net cash (used in) by investing activities (351,677) (1,087,652)
------------- -------------
Net (decrease) in cash held (2,143,962) (2,855,385)
Cash and cash equivalents at beginning
of financial year 4,928,998 7,807,605
Effect of exchange rates on cash holdings
in foreign currencies 1,755 (23,222)
------------- -------------
Cash and cash equivalents at end of
financial year 7 2,786,791 4,928,998
============= =============
The accompanying notes form part of these financial
statements.
GLOBAL PETROLEUM LIMITED AND CONTROLLED ENTITIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2019
Note 1 Summary of Significant Accounting Policies
Basis of Preparation
These general purpose consolidated financial statements have
been prepared in accordance with the Corporations Act 2001,
Australian Accounting Standards (AASBs) and Interpretations of the
Australian Accounting Standards Board and in compliance with
International Financial Reporting Standards as issued by the
International Accounting Standards Board. The Group is a for-profit
entity for financial reporting purposes under Australian Accounting
Standards. Material accounting policies adopted in the preparation
of these financial statements are presented below and have been
consistently applied unless stated otherwise.
Except for cash flow information, the financial statements have
been prepared on an accrual basis and are based on historical
costs, modified, where applicable, by the measurement at fair value
of selected non-current assets, financial assets and financial
liabilities.
(a) Going Concern
The financial statements have been prepared on the going concern
basis of accounting, which contemplates the continuity of normal
business activity and the realisation of assets and the settlement
of liabilities in the ordinary course of business.
The Group has no source of operating revenue and settles its
expenditure obligations from existing cash resources. It generated
a loss of US$1,734,589 (2018: loss of US$1,965,570) and had net
cash outflows from the operating activities of US$1,792,285 (2018:
net cash outflows of US$1,767,733) for the year ended 30 June 2019.
As of that date, the Group had net assets of US$4,944,621 (2018:
US$6,679,210) and cash assets of US$2,786,791 (2018: US$4,928,998).
The Group has no debt.
The Directors have prepared a cash flow forecast for the next 12
months based on best estimates of future inflows and outflows of
cash, to support the Group's ability to continue as a going
concern. The ability of the Company to continue as a going concern
is principally dependent upon a combination of one or more of the
following factors - management of existing funds; securing further
funds via raising capital from equity markets (See note 15 - Issued
Share Capital); concluding a farm-out arrangement whereby a farm-in
party would assume the costs of meeting certain future exploration
and other commitments on the Company's Namibian licences; and the
deferral of licence commitments. (See note 11 - Exploration Assets
and note 16 - Future Commitments).
The raising of additional equity capital is subject to market
conditions and investor demand; securing a farm-out requires
agreement with a suitable third party which the Group has not
achieved to date; and any deferral of licence commitments would
require the consent of the Namibian Ministry of Mines and Energy.
As each of these are not within the Company's control, these
conditions constitute a material uncertainty that may cast
significant doubt on the use of the going concern basis of
accounting. However the Directors have a reasonable expectation
that one or more of these actions will be achieved. On this basis
the Group's projections indicate that it will have sufficient
liquidity to meet its expenditure related liabilities as they fall
due in the next twelve months from the date of finalising these
financial statements.
Accordingly the Directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence
for the foreseeable future, and therefore the Directors continue to
adopt the going concern basis of accounting in preparing the
financial statements. The financial statements do not include any
adjustments relating to the classification of assets including
Exploration and Evaluation assets, or the recoverability of asset
carrying values, or to the amount and classification of
liabilities, that might result should the Group be unable to
continue as a going concern.
(b) Principles of Consolidation
The consolidated financial statements incorporate all of the
assets, liabilities and results of Global Petroleum Limited and all
of its subsidiaries being entities that the Parent controls. The
Parent controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
A list of the subsidiaries is provided in Note 9.
The assets, liabilities and results of all subsidiaries are
fully consolidated into the financial statements of the Group from
the date on which control is obtained by the Group. The
consolidation of a subsidiary is discontinued from the date that
control ceases. Inter- company transactions, balances and
unrealised gains or losses on transactions between Group entities
are fully eliminated on consolidation. Accounting policies of
subsidiaries may be changed and adjustments made where necessary to
ensure uniformity of the accounting policies adopted by the
Group.
Equity interests in a subsidiary not attributable, directly or
indirectly, to the Group are presented as "non-controlling
Interests". The Group initially recognises non-controlling
interests that are present ownership interests in subsidiaries and
are entitled to a proportionate share of the subsidiary's net
assets on liquidation at either fair value or the non-controlling
interests' proportionate share of the subsidiary's net assets.
Subsequent to initial recognition, non-controlling interests are
attributed their share of profit or loss and each component of
other comprehensive income. Non-controlling interests are shown
separately within the equity section of the statement of financial
position and statement of comprehensive income. No non-controlling
interests were recognise for the reporting period.
Business Combinations
Business combinations occur where an acquirer obtains control
over one or more businesses.
A business combination is accounted for by applying the
acquisition method, unless it is a combination involving entities
or businesses under common control. The business combination will
be accounted for from the date that control is obtained, whereby
the fair value of the identifiable assets acquired and liabilities
(including contingent liabilities) assumed is recognised (subject
to certain limited exemptions).
When measuring the consideration transferred in the business
combination, any asset or liability resulting from a contingent
consideration arrangement is also included. Subsequent to initial
recognition, contingent consideration classified as equity is not
remeasured and its subsequent settlement is accounted for within
equity. Contingent consideration classified as an asset or
liability is remeasured each reporting period to fair value,
recognising any change to fair value in profit or loss, unless the
change in value can be identified as existing at the acquisition
date.
All transaction costs incurred in relation to business
combinations, other than those associated with the issue of a
financial instrument, are recognised as expenses in profit or loss
when incurred.
The acquisition of a business may result in the recognition of
goodwill or a gain from a bargain purchase.
Goodwill
Goodwill is carried at cost less any accumulated impairment
losses. Goodwill is calculated as the excess of the sum of:
i. the consideration transferred at fair value;
ii. any non-controlling interest (determined under either fair
value or proportionate interest method); and
iii. the acquisition date fair value of any previously held equity interest;
over the acquisition date fair value of any identifiable assets
acquired and liabilities assumed.
The acquisition date fair value of the consideration transferred
for a business combination plus the acquisition date fair value of
any previously held equity interest shall form the cost of the
investment in the separate financial statements.
Changes in the Group's ownership interests in subsidiaries that
do not result in the Group losing control over the subsidiaries are
accounted for as equity transactions. The carrying amounts of the
Group's interests and the non-controlling interests are adjusted to
reflect the changes in their relative interests in the
subsidiaries. Any difference between the amount by which the
non-controlling interests are adjusted and the fair value of the
consideration paid or received is recognised directly in equity and
attributed to owners of the Group.
When the Group loses control of a subsidiary, a gain or loss is
recognised in profit or loss and is calculated as the difference
between (i) the aggregate of the fair value of the consideration
received and the fair value of any retained interest and (ii) the
previous carrying amount of the assets (including goodwill), and
liabilities of the subsidiary and any non-controlling interests.
All amounts previously recognised in other comprehensive income in
relation to that subsidiary are accounted for as if the Group had
directly disposed of the related assets or liabilities of the
subsidiary (i.e. reclassified to profit or loss or transferred to
another category of equity as specified/permitted by applicable
AASB Accounting Standards). The fair value of any investment
retained in the former subsidiary at the date when control is lost
is regarded as the fair value on initial recognition for subsequent
accounting under AASB 139: Financial Instruments: Recognition and
Measurement, when applicable, the cost on initial recognition of an
investment in an associate or a joint venture.
The amount of goodwill recognised on acquisition of each
subsidiary in which the Group holds less than 100% interest will
depend on the method adopted in measuring the non-controlling
interest. The Group can elect in most circumstances to measure the
non- controlling interest in the acquiree either at fair value
(full goodwill method) or at the non-controlling interest's
proportionate share of the subsidiary's identifiable net assets
(proportionate interest method). In such circumstances, the Group
determines which method to adopt for each acquisition and this is
stated in the respective note to the financial statements
disclosing the business combination.
Under the full goodwill method, the fair value of the
non-controlling interest is determined using valuation techniques
which make the maximum use of market information where
available.
Goodwill on acquisitions of subsidiaries is included in
intangible assets. Goodwill on acquisition of associates is
included in investments in associates.
Goodwill is tested for impairment annually and is allocated to
the Group's cash-generating units or groups of cash-generating
units, representing the lowest level at which goodwill is monitored
and not larger than an operating segment. Gains and losses on the
disposal of an entity include the carrying amount of goodwill
related to the entity disposed of.
(c) Income Tax
The income tax expense (income) for the year comprises current
income tax expense (income) and deferred tax expense (income).
Current income tax expense charged to profit or loss is the tax
payable on taxable income for the current period. Current tax
liabilities (assets) are measured at the amounts expected to be
paid to (recovered from) the relevant taxation authority using tax
rates (and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.
Deferred tax expense reflects movements in deferred tax asset
and deferred tax liability balances during the year as well as
unused tax losses.
Current and deferred income tax expense (income) is charged or
credited outside profit or loss when the tax relates to items that
are recognised outside profit or loss or arising from a business
combination.
A deferred tax liability shall be recognised for all taxable
temporary differences, except to the extent that the deferred tax
liability arises from: (a) the initial recognition of goodwill; or
(b) the initial recognition of an asset or liability in a
transaction which: (i) is not a business combination; and (ii) at
the time of the transaction, affects neither accounting profit nor
taxable profit (tax loss).
Except for business combinations, no deferred income tax is
recognised from the initial recognition of an asset or liability,
where there is no effect on accounting or taxable profit or
loss.
Deferred tax assets and liabilities are calculated at the tax
rates that are expected to apply to the period when the asset is
realised or the liability is settled and their measurement also
reflects the manner in which management expects to recover or
settle the carrying amount of the related asset or liability. With
respect to non-depreciable items of property, plant and equipment
measured at fair value and items of investment property measured at
fair value, the related deferred tax liability or deferred tax
asset is measured on the basis that the carrying amount of the
asset will be recovered entirely through sale. When an investment
property that is depreciable is held by the entity in a business
model whose objective is to consume substantially all of the
economic benefits embodied in the property through use over time
(rather than through sale), the related deferred tax liability or
deferred tax asset is measured on the basis that the carrying
amount of such property will be recovered entirely through use.
Deferred tax assets relating to temporary differences and unused
tax losses are recognised only to the extent that it is probable
that future taxable profit will be available against which the
benefits of the deferred tax asset can be utilised, unless the
deferred tax asset relating to temporary differences arises from
the initial recognition of an asset or liability in a transaction
that:
- is not a business combination; and
- at the time of the transaction, affects neither accounting
profit nor taxable profit (tax loss).
Where temporary differences exist in relation to investments in
subsidiaries, branches, associates, and joint ventures, deferred
tax assets and liabilities are not recognised where the timing of
the reversal of the temporary difference can be controlled and it
is not probable that the reversal will occur in the foreseeable
future.
Current tax assets and liabilities are offset where a legally
enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the
respective asset and liability will occur. Deferred tax assets and
liabilities are offset where: (i) a legally enforceable right of
set-off exists; and (ii) the deferred tax assets and liabilities
relate to income taxes levied by the same taxation authority on
either the same taxable entity or different taxable entities where
it is intended that net settlement or simultaneous realisation and
settlement of the respective asset and liability will occur in
future periods in which significant amounts of deferred tax assets
or liabilities are expected to be recovered or settled.
(d) Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair
value on either a recurring or non-recurring basis, depending on
the requirements of the applicable accounting standard.
Fair value is the price the Group would receive to sell an asset
or would have to pay to transfer a liability in an orderly (i.e.
unforced) transaction between independent, knowledgeable and
willing market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent
observable market pricing information is used to determine fair
value. Adjustments to market values may be made having regard to
the characteristics of the specific asset or liability. The fair
values of assets and liabilities that are not traded in an active
market are determined using one or more valuation techniques. These
valuation techniques maximise, to the extent possible, the use of
observable market data.
To the extent possible, market information is extracted from
either the principal market for the asset or liability (i.e. the
market with the greatest volume and level of activity for the asset
or liability) or, in the absence of such a market, the most
advantageous market available to the entity at the end of the
reporting period (i.e. the market that maximises the receipts from
the sale of the asset or minimises the payments made to transfer
the liability, after taking into account transaction costs and
transport costs).
For non-financial assets, the fair value measurement also takes
into account a market participant's ability to use the asset in its
highest and best use or to sell it to another market participant
that would use the asset in its highest and best use.
The fair value of liabilities and the entity's own equity
instruments (excluding those related to share-based payment
arrangements) may be valued, where there is no observable market
price in relation to the transfer of such financial instruments, by
reference to observable market information where such instruments
are held as assets. Where this information is not available, other
valuation techniques are adopted and, where significant, are
detailed in the respective note to the financial statements.
(e) Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost
or fair value as indicated less, where applicable, any accumulated
depreciation and impairment losses.
Property, Plant and Equipment
Property, plant and equipment are measured on the cost basis and
therefore carried at cost less accumulated depreciation and any
accumulated impairment. In the event the carrying amount of
property, plant and equipment is greater than the estimated
recoverable amount, the carrying amount is written down immediately
to the estimated recoverable amount and impairment losses are
recognised either in profit or loss. A formal assessment of
recoverable amount is made when impairment indicators are present
(refer to Note 1(h) for details of impairment).
The carrying amount of property, plant and equipment is reviewed
annually by Directors to ensure it is not in excess of the
recoverable amount from these assets. The recoverable amount is
assessed on the basis of the expected net cash flows that will be
received from the asset's employment and subsequent disposal. The
expected net cash flows have been discounted to their present
values in determining recoverable amounts.
The cost of fixed assets constructed within the consolidated
Group includes the cost of materials, direct labour, borrowing
costs and an appropriate proportion of fixed and variable
overheads.
Subsequent costs are included in the asset's carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured
reliably. All other repairs and maintenance are recognised as
expenses in profit or loss during the financial period in which
they are incurred.
Depreciation
The depreciable amount of all fixed assets including buildings
and capitalised leased assets, but excluding freehold land, is
depreciated on a straight-line basis over the asset's useful life
to the Group commencing from the time the asset is held ready for
use. Leasehold improvements are depreciated over the shorter of
either the unexpired period of the lease or the estimated useful
lives of the improvements.
The depreciation rates used for each class of depreciable assets
are:
Class of fixed asset Depreciation rate
Property, plant and equipment 20%
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its
recoverable amount if the asset's carrying amount is greater than
its estimated recoverable amount.
Gains and losses on disposals are determined by comparing
proceeds with the carrying amount. These gains and losses are
recognised in profit or loss in the period in which they arise.
Gains shall not be classified as revenue. When revalued assets are
sold, amounts included in the revaluation surplus relating to that
asset are transferred to retained earnings.
(f) Exploration and Evaluation Expenditure
Expenditure on exploration and evaluation is accounted for in
accordance with the 'area of interest' method and with AASB 6
Exploration for and Evaluation of Mineral Resources, which is the
Australian equivalent of IFRS 6 - Exploration for and Evaluation of
Mineral Resources.
Exploration and evaluation costs are capitalised as intangible
assets and assessed for impairment where facts and circumstances
suggest that the carrying amount of an exploration and evaluation
asset may exceed the recoverable amount. Exploration and evaluation
costs are capitalised if the rights to tenure of the area of
interest are current and either:
(i) the expenditure relates to an exploration discovery where,
at balance sheet date, activities have not yet reached a stage
which permits an assessment of the existence or otherwise of
economically recoverable reserves and active and significant
operations in, or in relation to, the area of interest are
continuing; or
(ii) it is expected that the expenditure will be recouped
through successful exploitation of the area of interest, or
alternatively, by its sale.
Costs incurred before the Group has obtained the legal rights to
explore an area are expensed.
Each potential or recognised area of interest is reviewed every
six months to determine whether economic quantities of reserves
have been found or whether further exploration and evaluation work
is underway or planned to support the continued carry forward of
capitalised costs.
Where a determination is made that there is no further value to
be extracted from the data licenses then any unamortised balance is
written off.
Once management has determined the existence of economically
recoverable reserves for an area of interest, deferred costs are
tested for impairment and then classified from exploration and
evaluation assets to oil and gas assets on the Consolidated
Statement of Financial Position.
The recoverability of the carrying amount of the exploration and
evaluation assets is dependent on successful development and
commercial exploitation, or alternatively, sale of the respective
areas of interest.
(g) Financial Instruments
Recognition and Initial Measurement
Financial assets and financial liabilities are recognised when
the Group becomes a party to the contractual provisions to the
instrument. For financial assets, this is the date that the Group
commits itself to either the purchase or sale of the asset (i.e.
trade date accounting is adopted).
Financial instruments (except for trade receivables) are
initially measured at fair value plus transactions costs except
where the instrument is classified 'at fair value through profit or
loss' in which case transaction costs are expensed to profit or
loss immediately. Where available, quoted prices in an active
market are used to determine fair value. In other circumstances,
valuation techniques are adopted.
Trade receivables are initially measured at the transaction
price if the trade receivables do not contain a significant
financing component or if the practical expedient was applied as
specified in AASB 15.63.
Classification and Subsequent Measurement
Financial liabilities
Financial instruments are subsequently measured at:
- amortised cost; or
- fair value through profit or loss.
A financial liability is measured at fair value through profit
and loss if the financial liability is:
- held for trading; or
- initially designated as at fair value through profit or
loss.
All other financial liabilities are subsequently measured at
amortised cost using the effective interest method.
The effective interest method is a method of calculating the
amortised cost of a debt instrument and of allocating interest
expense in profit or loss over the relevant period. The effective
interest rate is the internal rate of return of the financial asset
or liability. That is, it is the rate that exactly discounts the
estimated future cash flows through the expected life of the
instrument to the net carrying amount at initial recognition.
A financial liability is held for trading if:
- it is incurred for the purpose of repurchasing or repaying in
the near term; or
- part of a portfolio where there is an actual pattern of
short-term profit taking.
Any gains or losses arising on changes in fair value are
recognised in profit or loss to the extent that they are not part
of a designated hedging relationship are recognised in profit or
loss.
A financial liability cannot be reclassified.
Financial assets
Financial assets are subsequently measured at:
- amortised cost;
- fair value through other comprehensive income; or
- fair value through profit or loss.
Measurement is on the basis of two primary criteria:
- the contractual cash flow characteristics of the financial
asset; and
- the business model for managing the financial assets.
A financial asset that meets the following conditions is
subsequently measured at amortised cost:
- the financial asset is managed solely to collect contractual
cash flows; and
- the contractual terms within the financial asset give rise to
cash flows that are solely payments of principal and interest on
the principal amount outstanding on specified dates.
A financial asset that meets the following conditions is
subsequently measured at fair value through other comprehensive
income:
- the contractual terms within the financial asset give rise to
cash flows that are solely payments of principal and interest on
the principal amount outstanding on specified dates;
- the business model for managing the financial assets comprises
both contractual cash flows collection and the selling of the
financial asset.
By default, all other financial assets that do not meet the
measurement conditions of amortised cost and fair value through
other comprehensive income are subsequently measured at fair value
through profit or loss.
The Company initially designates a financial instrument as
measured at fair value through profit or loss if:
- it eliminates or significantly reduces a measurement or
recognition inconsistency (often referred to as "accounting
mismatch") that would otherwise arise from measuring assets or
liabilities or recognising the gains and losses on them on
different bases;
- it is in accordance with the documented risk management or
investment strategy, and information about the groupings was
documented appropriately, so that the performance of the financial
liability that was part of a group of financial liabilities or
financial assets can be managed and evaluated consistently on a
fair value basis.
The initial designation of the financial instruments to measure
at fair value through profit or loss is a one-time option on
initial classification and is irrevocable until the financial asset
is derecognised.
Derecognition
Derecognition refers to the removal of a previously recognised
financial asset or financial liability from the statement of
financial position.
Derecognition of financial liabilities
A financial liability is derecognised when it is extinguished
(i.e. when the obligation in the contract is discharged, cancelled
or expires). An exchange of an existing financial liability for a
new one with substantially modified terms, or a substantial
modification to the terms of a financial liability is treated as an
extinguishment of the existing liability and recognition of a new
financial liability.
The difference between the carrying amount of the financial
liability derecognised and the consideration paid and payable,
including any non-cash assets transferred or liabilities assumed,
is recognised in profit or loss.
Derecognition of financial assets
A financial asset is derecognised when the holder's contractual
rights to its cash flows expires, or the asset is transferred in
such a way that all the risks and rewards of ownership are
substantially transferred.
All of the following criteria need to be satisfied for
derecognition of financial asset:
- the right to receive cash flows from the asset has expired or
been transferred;
- all risk and rewards of ownership of the asset have been
substantially transferred; and
- the Company no longer controls the asset (i.e. the Company has
no practical ability to make a unilateral decision to sell the
asset to a third party).
On derecognition of a financial asset measured at amortised
cost, the difference between the asset's carrying amount and the
sum of the consideration received and receivable is recognised in
profit or loss.
On derecognition of a debt instrument classified as at fair
value through other comprehensive income, the cumulative gain or
loss previously accumulated in the investment revaluation reserve
is reclassified to profit or loss.
On derecognition of an investment in equity which was elected to
be classified under fair value through other comprehensive income,
the cumulative gain or loss previously accumulated in the
investment revaluation reserve is not reclassified to profit or
loss, but is transferred to retained earnings.
Impairment
The Group recognises a loss allowance for expected credit losses
on:
- financial assets that are measured at amortised cost or fair
value through other comprehensive income;
Loss allowance is not recognised for:
- financial assets measured at fair value through profit or
loss.
Expected credit losses are the probability-weighted estimate of
credit losses over the expected life of a financial instrument. A
credit loss is the difference between all contractual cash flows
that are due and all cash flows expected to be received, all
discounted at the original effective interest rate of the financial
instrument.
The Group uses the general approach to impairment, as applicable
under AASB 9: Financial Instruments:
General approach
Under the general approach, at each reporting period, the Group
assesses whether the financial instruments are credit-impaired, and
if:
- the credit risk of the financial instrument has increased
significantly since initial recognition, the Group measures the
loss allowance of the financial instruments at an amount equal to
the lifetime expected credit losses; or
- there is no significant increase in credit risk since initial
recognition, the Group measures the loss allowance for that
financial instrument at an amount equal to 12-month expected credit
losses.
(h) Impairment of Non-Financial Assets
At the end of each reporting period, the Company assesses
whether there is any indication that an asset may be impaired. The
assessment will include the consideration of external and internal
sources of information, including dividends received from
subsidiaries, associates or joint ventures deemed to be out of
pre-acquisition profits. If such an indication exists, an
impairment test is carried out on the asset by comparing the
recoverable amount of the asset, being the higher of the asset's
fair value less costs of disposal and value in use, to the asset's
carrying amount. Any excess of the asset's carrying amount over its
recoverable amount is recognised immediately in profit or loss,
unless the asset is carried at a revalued amount in accordance with
another Standard (e.g. in accordance with the revaluation model in
AASB 116: Property, Plant and Equipment). Any impairment loss of a
revalued asset is treated as a revaluation decrease in accordance
with that other Standard.
Where it is not possible to estimate the recoverable amount of
an individual asset, the entity estimates the recoverable amount of
the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill,
intangible assets with indefinite lives and intangible assets not
yet available for use.
When an impairment loss subsequently reverses, the carrying
amount of the asset (or cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised
for the asset (or cash-generating unit) in prior years. A reversal
of an impairment loss is recognised immediately in profit or loss,
unless the relevant asset is carried at a revalued amount, in which
case the reversal of the impairment loss is treated as a
revaluation increase.
(i) Interests in Joint Arrangements
Joint arrangements represent the contractual sharing of control
between parties in a business venture where unanimous decisions
about relevant activities are required.
Separate joint venture entities providing joint venturers with
an interest to net assets are classified as a joint venture and
accounted for using the equity method.
Joint operations represent arrangements whereby joint operators
maintain direct interests in each asset and exposure to each
liability of the arrangement. The Company's interests in the
assets, liabilities, revenue and expenses of joint operations are
included in the respective line items of the financial
statements.
Gains and losses resulting from sales to a joint operation are
recognised to the extent of the other parties' interests. When the
Company makes purchases from a joint operation, it does not
recognise its share of the gains and losses from the joint
arrangement until it resells those goods/assets to a third
party.
(j) Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of the Company is the currency of the
primary economic environment in which that entity operates. The
financial statements are presented in United States dollars, which
is the Company's functional currency.
Transaction and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the date of the
transaction. Foreign currency monetary items are translated at the
year-end exchange rate. Non-monetary items measured at historical
cost continue to be carried at the exchange rate at the date of the
transaction. Non-monetary items measured at fair value are reported
at the exchange rate at the date when fair values were
determined.
Exchange differences arising on the translation of monetary
items are recognised in profit or loss, except exchange differences
that arise from net investment hedges.
Exchange differences arising on the translation of non-monetary
items are recognised directly in other comprehensive income to the
extent that the underlying gain or loss is recognised in other
comprehensive income, otherwise the exchange difference is
recognised in the profit or loss.
The Company
The financial results and position of foreign operations whose
functional currency is different from the entity's presentation
currency are translated as follows:
- assets and liabilities are translated at exchange rates
prevailing at the end of the reporting period;
- income and expenses are translated at exchange rates on the
date of transaction; and
- all resulting exchange differences are recognised in other
comprehensive income.
Exchange differences arising on translation of foreign
operations with functional currencies other than Australian dollars
are recognised in other comprehensive income and included in the
foreign currency translation reserve in the statement of financial
position and allocated to non-controlling interest where relevant.
The cumulative amount of these differences is reclassified into
profit or loss in the period in which the operation is disposed
of.
(k) Employee Benefits
Short-term employee benefits
Provision is made for the Company's obligation for short-term
employee benefits. Short-term employee benefits are benefits (other
than termination benefits) that are expected to be settled wholly
before twelve months after the end of the annual reporting period
in which the employees render the related service, including wages,
salaries and sick leave. Short-term employee benefits are measured
at the (undiscounted) amounts expected to be paid when the
obligation is settled.
The Company's obligations for short-term employee benefits such
as wages, salaries and sick leave are recognised as part of current
trade and other payables in the statement of financial position.
The company's obligations for employees' annual leave and long
service leave entitlements are recognised as provisions in the
statement of financial position.
Other long-term employee benefits
Provision is made for employees' long service leave and annual
leave entitlements not expected to be settled wholly within 12
months after the end of the annual reporting period in which the
employees render the related service. Other long-term employee
benefits are measured at the present value of the expected future
payments to be made to employees.
Expected future payments incorporate anticipated future wage and
salary levels, durations of service and employee departures and are
discounted at rates determined by reference to market yields at the
end of the reporting period on government bonds that have maturity
dates that approximate the terms of the obligations. Any
re-measurements for changes in assumptions of obligations for other
long- term employee benefits are recognised in profit or loss in
the periods in which the changes occur.
The Company's obligations for long-term employee benefits are
presented as non-current provisions in its statement of financial
position, except where the company does not have an unconditional
right to defer settlement for at least 12 months after the end of
the reporting period, in which case the obligations are presented
as current provisions.
(l) Provisions
Provisions are recognised when the Group has a legal or
constructive obligation, as a result of past events, for which it
is probable that an outflow of economic benefits will result and
that outflow can be reliably measured.
Provisions are measured using the best estimate of the amounts
required to settle the obligation at the end of the reporting
period.
(m) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and deposits
available on demand with banks, other short-term highly liquid
investments with original maturities of 3 months or less.
(n) Revenue and Other Income
Revenue recognition
Interest income is recognised using the effective interest
method.
(o) Trade and Other Payables
Trade and other payables represent the liabilities for goods and
services received by the Group that remain unpaid at the end of the
reporting period. The balance is recognised as a current liability
with the amounts normally paid within 30 days of recognition of the
liability. Trade and other payables are initially measured at fair
value and subsequently measured at amortised cost using the
effective interest method.
(p) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount
of GST/VAT, except where the amount of GST/VAT incurred is not
recoverable from the relevant taxation authority.
Receivables and payables are stated inclusive of the amount of
GST/VAT receivable or payable. The net amount of GST/VAT
recoverable from, or payable to, the relevant taxation authority is
included with other receivables or payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST/VAT
components of cash flows arising from investing or financing
activities which are recoverable from, or payable to, the relevant
taxation authority are presented as operating cash flows included
in receipts from customers or payments to suppliers.
(q) Comparative Figures
When required by Accounting Standards, comparative figures have
been adjusted to conform to changes in presentation for the current
financial year.
Where the Company retrospectively applies an accounting policy,
makes a retrospective restatement or reclassifies items in its
financial statements, an additional (third) statement of financial
position as at the beginning of the preceding period in addition to
the minimum comparative financial statements is presented.
(r) Critical Accounting Estimates and Judgements
The preparation of the consolidated financial statements in
conformity with IFRS requires management to make judgements,
estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income
and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods
affected.
Information about critical judgements in applying accounting
policies that have the most significant effect on the amounts
recognised in the financial statements is included in the following
Notes:
Note 11 - Exploration and evaluation assets
Note 3 - Taxes
(s) New Accounting Standards for Application in Future Periods
The AASB has issued a number of new and amended Accounting
Standards that have mandatory application dates for future
reporting periods, some of which are relevant to the Group. The
directors have decided not to early adopt any of the new and
amended pronouncements. Their assessment of the pronouncements that
are relevant to the entity but applicable in future reporting
periods is set out below:
- AASB 16: Leases (applicable to annual reporting periods
beginning on or after 1 January 2019).
The Group has chosen not to early-adopt AASB 16. However, the
Group has conducted a preliminary assessment of the impact of this
new Standard, as follows.
A core change resulting from applying AASB 16 is that most
leases will be recognised on the balance sheet by lessees, as the
new Standard does not differentiate between operating and finance
leases.
An asset and a financial liability are recognised in accordance
with this new Standard. There are, however, two exceptions allowed.
These are short-term and low-value leases.
At the date of this report, the Group has no leases other than
for the short-term rental of office accommodation.
Note 2 Parent Information
The following information has been extracted from the books and
records of the financial information of the parent entity set out
below and has been prepared in accordance with Australian
Accounting Standards.
2019 2018
US$ US$
Statement of financial position
Current assets 2,905,961 5,087,738
Non-current assets 3,244,451 2,559,643
-------------- --------------
Total assets 6,150,412 7,638,381
Liabilities
Current liabilities 318,757 321,323
Non-current liabilities - -
-------------- --------------
Total liabilities 318,757 321,323
-------------- --------------
Net assets 5,831,655 7,317,058
============== ==============
Equity
Issued capital 39,221,112 39,221,112
Accumulated losses (34,354,352) (32,868,949)
Option reserve 964,895 964,895
-------------- --------------
Total equity 5,831,655 7,317,058
============== ==============
Statement of profit or loss and other
comprehensive income
Loss for the year (1,485,403) (1,568,951)
-------------- --------------
Total comprehensive income/(loss) (1,485,403) (1,568,951)
============== ==============
As at 30 June 2019, the parent entity has no capital commitments
(2018: nil).
Note 3 Tax Expense
(a) The prima facie tax on profit from ordinary activities
before income tax is reconciled to income tax as follows:
2019 2018
US$ US$
Prima facie tax payable/(benefit) on
profit from ordinary activities before
income tax at 19% (2018: 19%)
Consolidated Group (329,572) (373,458)
Increase/(decrease) in income tax expense
due to:
Expenditure not allowable for income
tax purposes 4,852 6,550
Adjustment for different tax rates and
consequences of changing tax domicile 34,684 38,622
Deferred tax assets not recognised 290,036 328,286
----------- -----------
Income tax attributable to entity - -
----------- -----------
(b) Current tax payable
The Group has no current tax payable (2018: Nil).
On 1 April 2014, Global Petroleum Limited changed its tax
domicile from Australia to the United Kingdom. However, it must be
noted that under Australian tax law, Global Petroleum Limited
remains an Australian tax resident. As a result, Global Petroleum
Limited is a tax resident of both Australia and the United Kingdom.
Under the terms of the Australia-United Kingdom Double Tax Treaty,
Global Petroleum Limited will be a dual resident company deemed to
be a resident in the UK for the purposes of allocating taxing
rights.
Multilateral Instruments (MLI) came into force in January 2019
which impact the tie breaker rule previously used for dual resident
entities. The MLI changes currently cover six of Australia's double
tax treaties which includes the UK. The dual residents entitlement
to any treaty benefits will be denied where the two competent
authorities, the Australia Taxation Office and HM Revenue and
Customs do not reach an agreement on a single jurisdiction of tax
residency. The Company is in the process of seeking such agreement
from the relevant authorities and does not believe that the tax
treatment of the Group will be impacted.
(c) Deferred income tax
2019 2018
US$ US$
Deferred tax assets
Tax losses available to offset future
taxable income 2,201,926 1,911,890
Tax benefit not brought to account (2,201,926) (1,911,890)
------------- -------------
- -
============= =============
Deferred tax assets have not been recognised in respect of tax
losses because there is no convincing evidence that future taxable
profit will be available against which the Group can utilise the
benefits which amount to US$2,205,847 (2018: US$1,911,890).
The amount of UK tax losses carried forward is US$10.91m as at
30 June 2019. (2018: US$9.43m). A corresponding deferred tax asset,
calculated using the tax rate of 17%, of US$1.86m (2018: US$1.6m)
has not been recognised due to insufficient certainty regarding the
availability of future profits against which the losses can be
utilised. The reduction in the main rate of corporation tax to 17%
from 2020 was enacted in September 2016. It is not expected that
the tax losses will be utilised before 2020. Therefore, a potential
deferred tax asset has been calculated using this rate.
In addition, the Group has a pool of pre-trading expenditure of
US$1.02m (2018: US$0.77m) arising in the overseas subsidiaries for
which no deferred tax asset has been recognised due to insufficient
certainty regarding the availability of future profits against
which the costs can be utilised.
Note 4 Key Management Personnel (KMP) Compensation
The total of remuneration paid to KMP of the Company and the
Group during the year are as follows:
2019 2018
US$ US$
Short-term employee benefits 565,967 530,314
Post-employment benefits 16,237 19,176
Share-based payments - 128,167
--------- ---------
Total KMP compensation 582,204 677,657
========= =========
Short-term employee benefits
- these amounts include fees and benefits paid to the
Non-Executive Chairman and Non-Executive Directors as well as all
salary, paid leave benefits, fringe benefits and cash bonuses
awarded to executive directors and other KMP.
Post-employment benefits
- these amounts are the current year's estimated costs of
providing for the Group's defined benefits scheme post-retirement,
superannuation contributions made during the year and
post-employment life insurance benefits.
Share-based payments
- these amounts represent the expense related to the
participation of KMP in equity-settled benefit schemes as measured
by the fair value of the options, rights and shares granted on
grant date.
Other key management personnel transactions
A number of Directors, or their related parties, hold positions
in other entities that result in them having control or significant
influence over the financial or operating policies of those
entities. A number of these entities transacted with the Company or
its controlled entities in the reporting period.
During the year, the Company paid DW Accounting and Advisory Pty
Ltd, a company controlled by Mr A Draffin US$26,748 (2018:
US$13,746) for company secretarial services and Northlands Advisory
Services Limited, a company controlled by Mr J van der Welle,
US$44,382 (2018: US$44,066) for consulting services. During the
financial year ending 30 June 2018, the Company paid Damien Cronin
Pty Ltd trading as Law Projects, a company controlled by Mr D
Cronin, US$18,536 for company secretarial services.
Included in the above are the following amounts payable to
related parties at 30 June 2019. All payable in full within 30 days
of invoice, have standard industry terms and conditions and non of
the amounts are secured on any assets. Amount owed to DW Accounting
and Advisory Pty Ltd US$13,140 (2018: US$15,290) and Northlands
Advisory Services Limited US$10,311 (2018: US$10,732).
Note 5 Auditor's Remuneration
Remuneration of the Group auditor KPMG Australia 2019 2018
for: US$ US$
- auditing or reviewing the Group's financial
statements 47,505 38,878
- assurance, taxation and due diligence
services 3,714 4,157
-------- ---------
51,219 43,035
-------- ---------
Note 6 Earnings per Share
(a) Reconciliation of earnings to profit 2019 2018
or loss US$ US$
Loss used in calculating basic and diluted
earnings per share (1,734,589) (1,965,570)
Weighted average number of ordinary shares
used in calculating basic earnings per share 202,652,927 202,652,927
Effect of dilutive securities - -
------------- -------------
Adjusted weighted average number of ordinary
shares and potential ordinary shares used
in calculating basic and diluted earnings
per share 202,652,927 202,652,927
------------- -------------
Basic and diluted (loss) per share (0.86) (0.97)
The above data reflects the income and share data used in the
calculations of basic and diluted earnings per share.
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Company, excluding any costs
of servicing equity other than ordinary shares, by the weighted
average number of ordinary shares outstanding during the year,
adjusted for bonus elements in ordinary shares issued during the
year.
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account the
after tax effect of interest and other financing costs associated
with dilutive potential ordinary shares and the weighted average
number of shares assumed to have been issued for no consideration
in relation to dilutive potential ordinary shares.
Note 7 Cash and Cash Equivalents
2019 2018
US$ US$
Cash at bank and on hand 2,786,791 4,928,998
Short-term bank deposits - -
----------- -----------
2,786,791 4,928,998
----------- -----------
Reconciliation of cash
Cash and cash equivalents at the end of the financial year as
shown in the statement of cash flows is reconciled to items in the
statement of financial position as follows:
2019 2018
US$ US$
Cash and cash equivalents 2,786,791 4,928,998
2,786,791 4,928,998
----------- -----------
Note 8 Trade and Other Receivables
Current 2019 2018
Other receivables US$ US$
- deposits 22,320 8,842
- GST & VAT receivable 51,347 88,574
-------- ---------
Total current trade and other receivables 73,667 97,416
-------- ---------
Credit risk
The Group has no significant concentration of credit risk with
respect to any single counter party or group of counter parties
other than those receivables specifically provided for and
mentioned within Note 8. The class of assets described as Trade and
Other Receivables is considered to be the main source of credit
risk related to the Group.
On a geographic basis, the Group has credit risk exposures in
Australia and the United Kingdom given the substantial operations
in those regions. The Group's exposure to credit risk for
receivables at the end of the reporting period in those regions is
as follows:
2019 2018
US$ US$
Australia 12,013 8,003
United Kingdom 61,654 89,413
-------- ---------
73,667 97,416
-------- ---------
The Group always measures the loss allowance for trade
receivables at an amount equal to lifetime expected credit loss.
The expected credit losses on trade receivables are estimated using
a provision matrix by reference to past default experience of the
debtor and an analysis of the debtor's current financial position,
adjusted for factors that are specific to the debtors, general
economic conditions of the industry in which the debtors operate
and an assessment of both the current as well as the forecast
direction of conditions at the reporting date.
There has been no change in the estimation techniques or
significant assumptions made during the current reporting
period.
The Group writes off a trade receivable when there is
information indicating that the debtor is in severe financial
difficulty and there is no realistic prospect of recovery, e.g.
when the debtor has been placed under liquidation or has entered
into bankruptcy proceedings, or when the trade receivables are over
two years past due, whichever occurs earlier. None of the trade
receivables that have been written off is subject to enforcement
activities.
(a) Financial Assets Measured at Amortised
Cost 2019 2018
Trade and other receivables US$ US$
- total current 12,013 8,003
- total non-current 61,654 89,413
-------- ---------
Total financial assets measured at amortised
cost 73,667 97,416
-------- ---------
Note 9 Interests in Subsidiaries
(a) Information about Principal Subsidiaries
The subsidiaries listed below have share capital consisting
solely of ordinary shares or ordinary units which are held directly
by the Group. The proportion of ownership interests held equals the
voting rights held by Group. Each subsidiary's principal place of
business is also its country of incorporation.
Ownership interest held
by the Group
Name of subsidiary Country of Incorporation 2019 2018
Global Petroleum UK Limited United Kingdom 100% 100%
Global Petroleum Exploration
Limited United Kingdom 100% 100%
Global Petroleum Namibia British Virgin
Limited Islands 100% 100%
Subsidiary financial statements used in the preparation of these
consolidated financial statements have also been prepared as at the
same reporting date as the Group's financial statements.
(b) Significant Restrictions
There are no significant restrictions over the Group's ability
to access or use assets, and settle liabilities, of the Group.
Note 10 Property, Plant and Equipment
2019 2018
US$ US$
Property, plant and equipment
Furniture and fittings
At cost 16,337 15,611
Accumulated depreciation (11,404) (10,856)
---------- ----------
4,933 4,933
---------- ----------
Total property, plant and equipment 4,933 4,933
========== ==========
(a) Movements in Carrying Amounts
Movements in carrying amounts for each class of property, plant
and equipment between the beginning and the end of the current
financial year.
2019 2018
Consolidated Group: US$ US$
Balance at 1 July 2017 5,944 5,944
Additions - -
Depreciation expense (1,189) (1,189)
--------- ---------
Balance at 30 June 2018 4,755 4,755
--------- ---------
Additions 726 726
Depreciation expense (548) (548)
--------- ---------
Balance at 30 June 2019 4,933 4,933
========= =========
Note 11 Exploration and Evaluation Assets
2019 2018
US$ US$
Balance at beginning of year 1,988,145 1,109,115
Expenditure capitalised during the period 350,950 879,030
----------- -----------
Balance at end of year 2,339,095 1,988,145
----------- -----------
At 30 June 2019, the balance of the Group's exploration and
evaluation assets relates solely to its interests in Namibia.
During the year, the Group also incurred exploration and
evaluation expenditure of US$62,462 (2018: US$107,379) which has
been expensed as business development as it did not meet the
criteria for recognition as exploration assets under the Group's
accounting policy.
In addition, an amount of US$73,296 (2018: US$101,243) was spent
on business development, which relates to the Group's activities in
assessing opportunities in the oil and gas sector.
Namibia
In November 2017, Global Petroleum Namibia Limited ("GBPN")
agreed with The Ministry of Mines and Energy ("MME") an extension
to the First Renewal Exploration Period of 12 months to 3 December
2018. In addition, the MME has agreed entry into the Second Renewal
Period which became effective from 3 December 2018.
In September 2018, GBPN was awarded Licence PEL 0094 and the
Petroleum Agreement was signed on 11 September 2018. The Initial
Exploration Period runs for four years, and is divided into two sub
periods of two years each; IEP1 and IEP2. IEP 1 runs from September
2018 to September 2020. During IEP1, Global has undertaken to
purchase and reprocess the existing available 3D Seismic data and
other 2D data, as well as some additional G & G studies.
Exploration commitments on the Company's exploration tenements
are detailed in Note 16.
Note 12 Other Assets
2019 2018
US$ US$
Current
Prepayments 66,098 68,502
Non-current
Prepayments - -
-------- ---------
66,098 68,502
-------- ---------
Note 13 Trade and Other Payables
2019 2018
US$ US$
Current
Trade payables 33,819 169,827
Sundry payables and accrued expenses 149,512 97,684
--------- ---------
183,331 267,511
--------- ---------
(a) Financial liabilities at amortised cost 2019 2018
classified as trade and other payables US$ US$
Trade and other payables
Current 183,331 267,511
Non-current - -
--------- ---------
183,331 267,511
--------- ---------
Note 14 Provisions
Current 2019 2018
Employee benefits US$ US$
Opening balance at 1 July 141,095 117,055
Additional provisions 1,537 24,040
Balance at 30 June 142,632 141,095
--------- ---------
Provision for Employee Benefits
Provision for employee benefits represents amounts accrued for
annual leave and long service leave.
Liabilities for wages, salaries and remuneration, including
non-monetary benefits, annual leave and accumulating sick leave
expected to be settled within 12 months of the reporting date are
recognised in provisions in respect of employees' services up to
the reporting date and are measured at the amounts expected to be
paid when the liabilities are settled. Liabilities for
non-accumulating sick leave are recognised when the leave is taken
and measured at the rates paid or payable. Employee benefits
payable later than one year are measured at the present value of
the estimated future cash flows to be made for those benefits.
Note 15 Issued Share Capital
2019 2018
US$ US$
202,652,927 (2018: 202,652,927) fully paid
ordinary shares 39,221,112 39,221,112
39,221,112 39,221,112
------------ ------------
The Group has authorised share capital amounting to 202,652,927
fully paid ordinary shares. The shares have no par value.
(a) Ordinary shares
2019 2018
No. No.
At the beginning of the reporting period 202,652,927 202,652,927
Shares issued during the year - -
At the end of the reporting period 202,652,927 202,652,927
------------- -------------
No shares were issued during the 2019 financial year.
(b) Options
2019 2018
Weighted Weighted
average exercise average exercise
Number of prices Number of prices
options AU$ options. AU$
At the beginning of the reporting
period 15,600,000 0.048 15,600,000 0.048
Options issued during the year - - -
------------
At the end of the reporting
period 15,600,000 0.048 15,600,000 0.048
------------ ------------------- -------------- ----------------------
(c) Capital management
The Board's policy is to maintain a strong capital base so as to
maintain investor, creditor and market confidence and to sustain
future development of the business. Given the stage of development
of the Group, the Board's objective is to minimise debt and to
raise funds as required through the issue of new shares. (See Note
1(a) - Going Concern)
There were no changes in the Group's approach to capital
management during the year. The Group is not subject to any
externally imposed capital requirements.
(d) Dividends
No dividends have been paid or declared during the year (2018:
Nil).
Note 16 Capital and Future Commitments
(a) Exploration and expenditure commitments
In order to maintain current rights of tenure to exploration
tenements, the Group is required to perform minimum exploration
work to meet the minimum expenditure requirements specified by
various foreign governments where exploration tenements are held.
These obligations are subject to renegotiation when application for
a tenement is made and at other times. These obligations are not
provided for in the financial statements. Financial commitments for
subsequent periods can only be determined at future dates, as the
success or otherwise of exploration programmes determines courses
of action allowed under options available in tenements. The Group's
only exploration expenditure commitments relate to its interest in
joint ventures. Refer to Note 16(b) for further information.
(b) Joint venture commitments
Global Petroleum Namibia Limited, a 100% subsidiary of the
Group, holds prospective oil and gas exploration interests offshore
Namibia. In order to maintain current rights to tenure to the
exploration licences, Global is required to perform minimum
exploration work to meet the minimum expenditure requirements
specified in each Namibian Petroleum Exploration Licence (PEL).
Namibia Licence PEL 0029
The obligations include:
(i) First Renewal Exploration Period (Two years from 3 December
2015 to 3 December 2017 - with subsequent extension to 3 December
2018):
- Following the completion of the minimum required exploration
expenditure for the 2 year period, in November 2017, Global agreed
with the MME an extension to the First Renewal Exploration period
of 12 months to 3 December 2018, which has become effective.
- The minimum work programme for the one year extension is the
acquisition of 600 square kilometres of 3D seismic data, contingent
upon Global concluding a farm-out agreement with a third party to
fund the acquisition of the 3D data. The 3D acquisition was not
completed during the 12 month extension period and has been carried
over into the Second Renewal Period.
(ii) Second Renewal Period (Two years from 3 December 2018):
- During the Second Renewal Period, effective from 3 December
2018 for a period of two years, the firm commitment is a work
programme that consists of various studies, including mapping of
source rock, mapping of contourites deposits, fault studies and
amplitude versus offset (AVO) analyses and extended elastic
impedance (EEI) studies on seismic data. The financial commitment
to undertake the firm work programme is US$350,000. In addition,
and carried over from the First Renewal Period (Phase 2) extension,
is the acquisition of 600 sq km of 3D Seismic data - contingent
upon the Company concluding a farmout and drilling one exploration
well, depth and location yet to be agreed.
Global Petroleum Namibia Limited has an 85% interest in the
Petroleum Exploration Licence, however, it is responsible for 100%
of the expenditure requirements with its joint venture partners
holding a total of 15% free carried interest.
Namibia Licence PEL 0094
Global was awarded this licence in Namibia in September 2018,
and a Petroleum Agreement was signed on 11 September 2018. The
Initial Exploration Period ("IEP") runs for four years, and is
divided into two sub periods of two years each; IEP1, and IEP2. IEP
1 runs from September 2018 to September 2020. During IEP1, Global
has undertaken to purchase and reprocess the existing available 3D
seismic data and other 2D data, as well as some additional G&G
studies. The Company is currently negotiating the acquisition of
the 3D data.
The estimated cost of acquisition for 2D data and reprocessing
of both 2D and 3D is estimated at US $1.3 million.
During IEP2, Global has the option to either shoot a new 2,000
square kilometre 3D seismic data survey within the eastern part of
PEL 0094, or alternatively relinquish the licence.
Global Petroleum Namibia Limited has an 85% interest in the
Petroleum Exploration Licence, however, it is responsible for 100%
of the expenditure requirements with its joint venture partners
holding a total of 15% free carried interest.
The Group issued a bank guarantee for US$130,050 to secure
licence PEL 0094 during the reporting period.
Note 17 Operating Segments
General Information
Identification of reportable segments
The Group operates in the oil and gas exploration, development
and production segments as described below. The Group currently
holds prospective oil and gas exploration interests offshore
Namibia.
Basis of accounting for purposes of reporting by operating
segments
(a) Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of
Directors, being the chief operating decision makers with respect
to operating segments, are determined in accordance with accounting
policies that are consistent with those adopted in the annual
financial statements of the Group.
(b) Intersegment transactions
An internally determined transfer price is set for all
intersegment sales. This price is reset quarterly and is based on
what would be realised in the event the sale was made to an
external party at arm's length. All such transactions are
eliminated on consolidation of the Group's financial
statements.
Corporate charges are allocated to reporting segments based on
the segment's overall proportion of revenue generation within the
Group. The Board of Directors believes this is representative of
likely consumption of head office expenditure that should be used
in assessing segment performance and cost recoveries.
Intersegment loans payable and receivable are initially
recognised at the consideration received/to be received net of
transaction costs. If intersegment loans receivable and payable are
not on commercial terms, these are not adjusted to fair value based
on market interest rates. This policy represents a departure from
that applied to the statutory financial statements.
(c) Segment assets
Where an asset is used across multiple segments, the asset is
allocated to the segment that receives the majority of the economic
value from the asset. In most instances, segment assets are clearly
identifiable on the basis of their nature and physical
location.
(d) Segment liabilities
Liabilities are allocated to segments where there is direct
nexus between the incurrence of the liability and the operations of
the segment. Borrowings and tax liabilities are generally
considered to relate to the Group as a whole and are not allocated.
Segment liabilities include trade and other payables and certain
direct borrowings.
(e) Unallocated items
The following items of revenue, expense, assets and liabilities
are not allocated to operating segments as they are not considered
part of the core operations of any segment:
-- Derivatives
-- Net gains on disposal of available-for-sale investments
-- Impairment of assets and other non-recurring items of revenue or expense
-- Income tax expense
-- Deferred tax assets and liabilities
-- Current tax liabilities
-- Other financial liabilities
-- Intangible assets
-- Discontinued operations
-- Retirement benefit obligations
(f) Segment information
(i) Segment performance
Africa Consolidated
2019 2018 2019 2018
US$ US$ US$ US$
Interest income - - 51,497 79,813
Net foreign exchange gain/(loss) - - (35,657) (13,369)
Corporate and administration
costs - - (1,750,429) (1,903,847)
Equity based remuneration - - - (128,167)
--------- -------- ------------- -------------
Loss before income tax - - (1,734,589) (1,965,570)
Income tax (expense)/benefit
for continuing operations - - - -
--------- -------- ------------- -------------
Loss for the year - - (1,734,589) (1,965,570)
========= ======== ============= =============
(ii) Segment assets and liabilities
Africa Consolidated
2019 2018 2019 2018
30 June 2019 US$ US$ US$ US$
Segment assets
Assets 2,339,095 2,004,324 2,339,095 2,004,324
----------- ----------- ----------- -----------
Total segment assets 2,339,095 2,004,324 2,339,095 2,004,324
Unallocated assets 2,931,489 5,083,492
----------- ----------- ----------- -----------
Consolidated assets 5,270,584 7,087,816
=========== =========== =========== ===========
Segment liabilities
Liabilities 7,211 87,282 7,211 87,282
----------- ----------- ----------- -----------
Total segment liabilities 7,211 87,282 7,211 87,282
Unallocated liabilities 318,752 321,324
----------- ----------- ----------- -----------
Consolidated liabilities 325,963 408,606
=========== =========== =========== ===========
Acquisition of non-current
assets, including capitalised
exploration assets 350,950 879,030 350,950 879,030
=========== =========== =========== ===========
Note 18 Cash Flow Information
(a) Reconciliation of cash flows from operating 2019 2018
activities with profit after income tax US$ US$
Loss after income tax (1,734,589) (1,965,570)
Adjustments for items classified as investing/financing
activities: - 208,622
Adjustments for non-cash items:
Depreciation 548 1,188
Unrealised net foreign exchange (gain)/loss (1,755) 23,222
Equity based remuneration - 128,167
Changes in assets and liabilities, net
of the effects of purchase and disposal
of subsidiaries:
Decrease/ (increase) in receivables and
prepayments 26,154 16,406
(Decrease)/ increase in payables (84,180) (177,044)
Increase/ (decrease) in provisions 1,537 (2,724)
------------- -------------
Net cash (used in) operating activities (1,792,285) (1,767,733)
------------- -------------
-ends-
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR SDASISFUSELU
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