TIDMOEX
RNS Number : 6591M
Oilex Ltd
22 September 2021
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Contents
Chairman's Review
Business Review
Permit Schedule
Directors' Report
Remuneration Report - Audited
Lead Auditor's Independence Declaration
Annual Financial Report
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors' Declaration
Independent Auditor's Report
Additional Shareholder Information
Definitions
Corporate Information
Dear Shareholder,
The recovery of the oil price from a low of around $20 in April
2020 to a current price of over $70 and a bullish demand outlook
reflects the ongoing recovery of a global economy dramatically
affected by both the COVID-19 pandemic and the changing energy
environment driven by the need to attain net-zero carbon emissions.
Your company has adopted a strategy focused on gas, the cleanest
hydrocarbon, rather than oil and aimed particularly at gas
production, gas storage and sequestration of carbon dioxide. All
three have commonalities in that they involve sub-surface
reservoirs and engineering processes well understood and developed
within the hydrocarbon industry and well within the capabilities of
the Oilex team, which has been further strengthened by senior
management appointments this year.
Our revised strategy, announced in June this year, will focus on
making long-awaited progress in our existing Cambay asset in India
and further developing an asset base in the UK. Both project areas
will focus on gas production.
The joint venture impasse in the Cambay project is finally being
resolved through the Company's purchase of GSPC's 55% equity in the
project. The transfer of the equity to Oilex only requires the
final approval of the Government of India, which is expected within
the coming months. This resolution has occurred because of the
dedication of the Oilex staff through challenging times.
Following an unsuccessful request to the UK Oil and Gas
Authority to extend the initial term of the P2446 exploration
licence, the Company has decided to relinquish the licence. The
extension was requested due to COVID-19 related delays in
completing the initial phase work programme. The remaining
technical uncertainties and the Company's new strategy to focus on
mature gas field acquisitions and carbon capture and storage (CCS)
opportunities were the main drivers behind the Company's
decision.
Oilex is now poised to enter a new phase of growth involving the
search for and addition of attractive new projects. To that end,
the Oilex Board has made significant changes to the management team
through the addition of Roland Wessel and Colin Judd who have
worked together over many years and overseen the growth and success
of a number of projects and companies. This is a very positive
event for the Company and the new team is now leading the revised
strategy. The initial elements of the execution of the strategy
include a restart of field activities in the Cambay PSC, and a
focus on mature gas field acquisitions and CCS opportunities in the
UK. The Company is committed to achieving carbon-neutral gas
production in the UK via the implementation of CCS projects, which
will be leveraged by the management team's experience and expertise
with respect to gas storage in depleted reservoirs.
At the same time, the historic projects inside of the Company
have been largely rationalised with the Indian Bhandut project and
the Australian asset base sold, the JPDA dispute resolved, and
Indonesian efforts making progress.
Throughout this process, we have enjoyed continued support from
our major shareholders who have provided the funding for the GSPC
acquisition and maintain a strong interest in the Company's
activities.
We seek your continued support in our efforts given the
resolution of the major historic challenges and the appointment of
a new team to lead the Company through its next development phase.
On behalf of the Board, I wish to thank you, our staff,
contractors, local communities, shareholders, and stakeholders for
your ongoing support.
Mr J Salomon
Executive Chairman
22 September 2021
External Impact on the Petroleum Industry
A number of factors have challenged our industry over the last
year as the world deals with the continued effects of the COVID--19
crisis which has produced a marked shift in working styles and
technology used for communications, the move towards net zero
carbon and increased activism related to global climate change.
These factors, along with low commodity prices for oil and gas in
the first half of the financial year, have produced investment
caution in our industry while the need for gas as a transition fuel
into the future remains very robust. India has been particularly
impacted by sequential waves of the COVID-19 pandemic, affecting
progress on the Cambay project.
While the cost base of both our Australian and Indian operations
continued to see reductions through the reporting period, the
Company remained committed to resolving the long-standing impasse
of the Cambay PSC and has continued with work on its other
projects.
Oilex Strategy
During 2020-2021, Oilex's focus shifted further towards gas,
considered by many to be the transition fuel for decades to come.
In particular, we have focussed on our core gas project in India
and on gas in the UK. Our exposure to oil has been reduced through
the sale of our Cooper-Eromanga projects in Australia. Our prime
interest continues to lie within proven super-basins which contain
world-class source rocks, well-defined fairways, undeveloped
discoveries, progressive regulators, open access to data, existing
infrastructure, and demonstrable upside potential for junior
companies. In addition, the Company is focussing on areas where we
believe gas has an important role to play in the energy mix of the
surrounding region, and also where carbon sequestration can be
added to our project base given the commonalities of gas
production, gas storage and carbon storage.
To address this strategy, the Company has recently seen major
additions to the executive team which strengthen the Company's
operational capabilities in drilling and production projects, along
with providing the credentials to access new opportunities,
particularly in the UK. The immediate new opportunity focus will be
on projects which provide near-term cash flow to the Company.
This revised strategy will see an increased focus on UK
activities with an emphasis on carbon-neutral gas production in
conjunction with CCS. The Company believes that natural gas will
continue to provide an important part of the UK's energy mix for
the foreseeable future and will seek to invest in UKCS gas
production. Oilex believes it can make a positive contribution to
the UK's energy supply and CO2 reduction goals.
Cambay Field, Onshore Gujarat, India
Oilex - 100% (subject to final Government of India approval)
Oilex is the Operator of the Cambay Field and as a result of the
recent acquisition of GSPC's 55% participating interest, the
Company will hold 100% equity in the project once the Government of
India approves the transfer of interest. The buy-out of GSPC has
been a focus for some time, facilitated by agreements reached with
GSPC in early April 2021 and a capital raising exercise later in
the same month, which resulted in an injection of A$4.3 million
from sophisticated shareholders into Oilex. The purchase price of
GSPC's share of equity was US$2.2 million.
The Cambay PSC has been explored since the late 1950s and saw
one of the first exploration successes in India's history.
Hydrocarbon production was established from several conventional
vertically stacked reservoir sections over the succeeding decades.
Oilex entered the project in 2006 and drilled a number of
successful early wells establishing production, however, the focus
then turned to a potentially large gas resource in the Eocene-aged
tight siltstone, which was known to contain and flow gas on test,
starting with some of the earliest exploration wells in the region.
The potential exists for a TCF-scale gas resource within the
licence area and the purchase of GSPC's share of equity now
provides the pathway for a pilot project to be undertaken to
confirm both flow rate potential and resource size.
The PSC area is located onshore in the state of Gujarat in the
heart of one of India's most prolific hydrocarbon provinces. It is
ideally located within a major industrial corridor and
approximately 20 km from the existing national gas trunk pipeline
grid. India's large energy market is currently dependent on gas
imports. The Cambay PSC is well-positioned to displace imported gas
with indigenous gas supplies.
Oilex's plan centres around recommencement of production from 2
wells (C-73 and C-77H) and the further evaluation of the Cambay
EP-IV tight gas accumulation . In this respect, both
workovers/recompletion of existing wells and the drilling of new
wells are being considered. A significant body of work has been
completed to understand the reasons for under-delivery in past
drilling programs and to provide a reliable approach to achieve
commercial gas flow rates. Field execution is expected to be in the
first half of 2022. This ties in with a government approved Field
Development Plan (FDP) which provides a staged approach, initially
focussing on the drilling of a small number of new wells to gather
key information on reservoir performance. The plan is based on the
results from a series of technical studies with the application of
the most appropriate drilling, stimulation and completion
technologies available.
Upon success, the upcoming programme will provide the basis for
a larger drilling programme to follow, aimed at aggregating
sufficient production volumes to connect to the trunk pipelines.
Such a success will link Oilex's gas production to the
high-pressure gas network with higher (LNG replacement) gas prices
and greater offtake stability.
Oilex also remains in discussion with a number of companies who
have expressed interest in the Cambay PSC and its potential, with
the possibility of a farmout exercise to reduce the Company's
exposure to financing and project risk.
Oilex expects to obtain a new environmental clearance from the
Ministry of Environment and Forest and Cabinet Committee to
supersede the clearances already obtained under the previous
regulatory requirements, which will allow the small scale gas
production to re-commence from the existing C-73 and C-77H wells.
While production rates are small, the proceeds pay for field
costs.
Resource volumes for the Eocene are unchanged since June 2016
and are summarised in the following table which shows 100% working
interest. The development plan submitted as part of the application
for extension of the PSC term addresses a sub-set of these
resources in a staged approach.
Unrisked Cambay Field Contingent Resource Estimates (100%)
Gas Volume Condensate Volume
Bcf million bbl
------------------------- ----------------------
1C 2C 3C 1C 2C 3C
--------------------- ------- ------- ------- ------
X & Y Zones 478 926 1616 26.6 60.8 121.3
----------------------- ------- ------- ------- ------- ----- ------
Source: RISC Resource Report April 2015 and
Letter 23 June 2016
During the financial year, the Joint Venture received US$0.364
million gross from GSPC against outstanding cash calls for Cambay.
An additional payment of US$0.543 million has been paid by GSPC to
Oilex on 4 September 2021 as settlement for all remaining unpaid
cash calls.
Bhandut Field, Onshore Gujarat, India
During the year, Oilex N.L. Holdings (India) Limited divested
its 40% holding in the Bhandut Field Production Sharing Contract
(PSC) in the Cambay Basin onshore Gujarat, to Kiri and Company
Logistics (Kiri) for US$0.29 million in cash.
During the financial year, the Joint Venture received US$0.052
million gross from GSPC against outstanding cash calls for Bhandut
. In addition, US$0.028 million was paid by Kiri to Oilex for
GSPC's share of outstanding cash calls.
JPDA 06-103, Timor Sea
(Oilex - 10%, Operator)
In August 2020, on behalf of its Joint Venture Participants,
Oilex announced a Deed of Settlement and Release (Deed) with the
Autoridade Nacional Do Petroleo E Minerais (ANPM). Under the terms
of the Deed, Oilex has committed to a settlement of US$800,000
payable up to the financial year 2024. A total of US$211,843 has
been paid to date. Under an unsecured loan facility agreement that
the Company has entered into with two of its joint venture
partners, the balance of US$588,157 is due for settlement prior to
17 August 2023.
West Kampar PSC, Central Sumatra, Indonesia
The Company continued to work on its 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.
The West Kampar Block is located in central Sumatra adjacent to
the most prolific oil producing basin in Indonesia and covers some
900 square kilometres. It contains the Pendalian Oilfield which has
remaining production potential.
Following various meetings and correspondence with the
Government of Indonesia and with the support of our local
Indonesian partner, the government has advised that our Proposed
Direct Bid, through the Joint Study of the West Kampar Region, is
declared administratively complete and has recorded it as a
proposal for a Direct Offer through a Joint Study as stipulated in
ESDM Regulation No. 35 of 2008. The Company continues to engage
with the regulator with a view to restoring its interest in West
Kampar. Oilex will share in any award of the PSC on a 50-50 joint
basis with its local Indonesian partner, PT Ephindo. Upon success,
the longer-term position of the asset will be determined in line
with the Company's broader strategic objectives.
Cooper Eromanga Basins
In September 2020, Oilex completed the sale of its Cooper
Eromanga Basin asset package to Armour Energy. Under the agreement,
Armour acquired 100% of the issued capital of CoEra Limited, a
wholly-owned subsidiary of Oilex holding the Cooper-Eromanga
assets, in exchange for Armour issuing 22,050,000 fully paid
ordinary shares to Oilex as the purchase price. Subsequently, in
January 2021, 5,000,000 Armour shares were sold to raise
maintenance capital for the Company. A further 19,153 Armour shares
were sold in February 2021. The remaining 17,030,847 shares are
being held by the Company.
East Irish Sea (P2446 Licence)
Following an unsuccessful request to the UK Oil and Gas
Authority to extend the initial term of the P2446 exploration
licence, the Company plans to relinquish the licence. The extension
was requested due to COVID-19 related delays in completing the
initial phase work programme. The remaining technical uncertainties
and the Company's new strategy to focus on mature gas field
acquisitions and CCS opportunities were the main drivers behind the
Company's decision.
Financial
Treasury policy
The funding requirements of the Group are reviewed on a regular
basis by the Group's Chief Financial Officer and reported to the
Board to ensure the Group can meet its financial obligations as and
when they fall due. Internal cash flow models are used to review
and test investment decisions. Until sufficient operating cash
flows are generated from its operations, the Group remains reliant
on equity or debt funding, as well as assets divestiture or
farmouts to fund its expenditure commitments.
Formal control over the Group's activities is maintained through
a budget and cash flow monitoring process with annual budgets
considered in detail and monitored monthly by the Board and forming
the basis of the Company's financial management strategy.
Cash flows are tested under various scenarios to ensure that
expenditure commitments can be met under all reasonably likely
scenarios. Expenditures are also carefully monitored against the
budget. The Company continues to actively develop funding options
in order to meet its expenditure commitments and its planned future
discretionary expenditure. During the year several capital raisings
were completed to provide for working capital for the Company.
A number of debt and equity capital raisings were undertaken
during the year to provide working capital for the Company's
activities:
September 2020 quarter
-- Placement of 312,500,000 ordinary shares at an issue price of
GBP0.0008 per share (A$0.00144 per share) for gross proceeds of
GBP0.25 million (A$0.5 million).
-- Repayment in full of the Series B loan funding facility.
December 2020 quarter
-- Amendment of Series C loan funding facility repayment date
extended initially from 31 October 2020 to 31 December 2020 and
then to 31 March 2021.
March 2021 quarter
-- Amendment of Series D loan funding facility to 30 June 2021.
-- Repayment in full of the Series C loan funding facility.
-- Placement of 250,000,000 ordinary shares at an issue price of
GBP0.0014 per share (A$0.00252 per share) for gross proceeds of
GBP0.35 million (A$0.63 million).
June 2021 quarter
-- Repayment in full of the Series D (19/04/2021) loan funding facility.
-- Placement of 1,008,403,361 ordinary shares at an issue price
of GBP0.00238 per share (A$0.00425 per share) for gross proceeds of
GBP2.4 million (A$4.3 million) in two tranches. The funds raised
are to be applied to the acquisition cost of GSPC's PI, and the
development of the Company's plans to undertake a drilling and
testing appraisal program and the Company's working capital
base.
Corporate
The Company has dual listing on the ASX and the Alternative
Investment Market (AIM) of the London Stock Exchange with
approximately 81.20% of the Company's shares held on the Company's
UK register.
During the year 204,545,455 loan options were exercised at an
exercise price of GBP0.11 pence per option, and 29,802,631 broker
options were exercised at a weighted-average exercise price of
GBP0.00135 per option.
As at 30 June 2021 the Company had:
-- Available cash resources of $4,310,767,
-- Nil borrowings
-- Issued capital of 5,685,971,571 fully paid ordinary shares
and unlisted options of 603,403,361.
Executive and Board Changes
During the financial year, t he following board changes were
made:
-- The appointment of Mr Roland Wessel as Chief Executive
Officer and Director, effective 16 June 2021. Roland's appointment
was a significant addition to the Oilex senior management team.
Roland continues to play an instrumental role in leading the
Company through a new and ambitious growth phase.
-- Concurrent to Roland Wessel's appointment, Joe Salomon, who
was the Company's Managing Director and Interim Chairman, assumed
the position of Executive Chairman.
Risk Management
The full Board undertakes the function of the Audit and Risk
Committee and is responsible for the Group's internal financial
control system and the Company's risk management framework.
Management of business risk, particularly exploration, development
and operational risk is essential for success in the oil and gas
business. The Group manages risk through a formal risk
identification and risk management system.
Health, Safety, Security and Environment
Oilex is committed to protecting the health and safety of
everybody who plays a part in our operations or lives in the
communities where we operate. Wherever we operate, we will conduct
our business with respect and care for both the local and global,
natural and social environment and systematically manage risks to
drive sustainable business growth. We will strive to eliminate all
injuries, occupational illness, unsafe practices and incidents of
environmental harm from our activities. The safety and health of
our workforce and our environmental stewardship are just as
important to our success as operational and financial performance
and the reputation of the Company.
Oilex respects the diversity of cultures and customs that it
encounters and endeavours to incorporate business practices that
accommodate such diversity and that have a beneficial impact
through our working involvement with local communities. We strive
to make our facilities safer and better places in which to work and
our attention to detail and focus on safety, environmental, health
and security issues will help to ensure high standards of
performance. We are committed to a process of continuous
improvement in all we do and to the adoption of international
industry standards and codes wherever practicable. Through
implementation of these principles, Oilex seeks to earn the
public's trust and to be recognised as a responsible corporate
citizen.
Qualified Petroleum Reserves and Resources Evaluator
Statement
Pursuant to the requirements of Chapter 5 of the ASX Listing
Rules, the information in this report relating to petroleum
reserves and resources is based on and fairly represents
information and supporting documentation prepared by or under the
supervision of Mr Jonathan Salomon, Executive Chairman employed by
Oilex Ltd. Mr Salomon has over 35 years' experience in petroleum
geology and is a member of the American Association of Petroleum
Geologists, and the Society of Petroleum Engineers. Mr Salomon
meets the requirements of a qualified petroleum reserve and
resource evaluator under Chapter 5 of the ASX Listing Rules and
consents to the inclusion of this information in this report in the
form and context in which it appears. Mr Salomon also meets the
requirements of a qualified person under the AIM Note for Mining,
Oil and Gas Companies and consents to the inclusion of this
information in this report in the form and context in which it
appears.
PETROLEUM PERMIT SCHEDULE - 30 JUNE 2021
ASSET LOCATION ENTITY EQUITY OPERATOR
%
------------------ -------------------- -------- --------------
Cambay Field Gujarat, India Oilex Ltd 30.0 Oilex Ltd
PSC (1)
------------------ --------------
Oilex N.L.
Holdings (India)
Limited 15.0
-------------------------------------------------------- -------- --------------
Oilex N.L.
Bhandut Field Holdings (India)
PSC (2) Gujarat, India Limited 0.0
------------------ -------------------- -------- --------------
JPDA 06-103 Joint Petroleum Oilex (JPDA 10.0 Oilex (JPDA
PSC (3) Development 06-103) Ltd 06-103) Ltd
Area
Timor Leste
and Australia
------------------ -------------------- -------- --------------
P2446 (4) United Kingdom Oilex EIS Limited 100% Oilex EIS
(East Irish Limited
Sea)
------------------ -------------------- -------- --------------
(1) Oilex has signed a binding agreement to acquire GSPC's 55%
share of equity and the purchase price has been paid under a bank
guarantee. Following GoI approval Oilex will hold 100% equity.
(2) Bhandut PSC has been sold to Kiri and Company Logistics
Private Limited.
(3) PSC terminated 15 July 2015.
(4) The P2446 licence was relinquished in September 2021.
For the year ended 30 June 2021
The directors of Oilex Ltd present their report (including the
Remuneration Report) together with the consolidated financial
statements of the Group comprising of Oilex Ltd (the Company) and
its subsidiaries for the financial year ended 30 June 2021 and the
auditors' report thereon.
DIRECTORS
The directors of Oilex Ltd in office at any time during or since
the end of the financial year are:
Mr Roland Wessel
(Chief Executive Officer and Director, appointed 16 June
2021)
Mr Wessel is a geologist with 45 years' experience in all of the
world's major oil and gas regions. Further details of Mr Wessel's
qualifications and experience can be found in the Executive
Management section of the Directors' Report.
During the last three financial years and up to the date of this
report, Mr Wessel has not been a director of any other ASX listed
companies.
Mr Jonathan Salomon ( B App Sc (Geology), GAICD)
(Executive Chairman, appointed 16 June 2021)
(Interim Chairman and Managing Director until 15 June 2021)
Mr Salomon was appointed as a Non-Executive Director in November
2015, Managing Director on 18 March 2016, and Interim Chairman on 5
May 2020 following the resignation of Mr Lingo. Mr Salomon
continued as Managing Director and Interim Chairman until he was
appointed as Executive Chairman on 16 June 2021. Mr Salomon has
over 35 years of experience working for upstream energy companies.
Further details of Mr Salomon's qualifications and experience can
be found in the Executive Management section of the Directors'
Report.
During the last three financial years, Mr Salomon has not been a
director of any other ASX listed companies.
Mr Mark Bolton (B Business)
(Non-Executive Director, appointed 1 July 2021)
(Executive Director and Chief Financial Officer until 1 July
2021, Company Secretary until 25 August 2021)
Mr Bolton was appointed Chief Financial Officer and Company
Secretary on 3 June 2016, and as Executive Director on 26 March
2020. Mr Bolton continued as Executive Director and Chief Financial
Officer until 1 July 2021, when he was appointed as Non-Executive
Director. Mr Bolton resigned as Company Secretary on 25 August
2021. Mr Bolton has significant experience in the development and
financing of new resources projects, particularly in emerging
economies. Further details of Mr Bolton's qualifications and
experience can be found in the Executive Management section of the
Directors' Report.
During the last three financial years and up to the date of this
report , Mr Bolton has not been a director of any other ASX listed
company.
Mr Paul Haywood
(Non-Executive Director)
Mr Haywood was appointed as a Non-Executive Director in May
2017. Mr Haywood has over 17 years of international experience in
delivering value for his investment network through a blended skill
set of corporate and operational experience, including more than
six years in the Middle East, building early stage and growth
projects. More recently, Mr Haywood has held senior management
positions with UK and Australian public companies in the natural
resource and energy sectors including oil and gas exploration and
development in UK, EU and Central Asia. Mr Haywood's expertise
stretches across UK and Australian public markets, with a
cross-functional skill set encompassing research, strategy,
implementation, capital and transactional management. Mr Haywood is
currently Chief Executive Officer of Block Energy Plc.
During the last three financial years and up to the date of this
report, Mr Haywood has not been a director of any other ASX listed
companies.
Mr Peter Schwarz ( B Sc (Geology), M Sc (Petroleum Geology))
(Non-Executive Director)
Mr Schwarz was appointed as a Non-Executive Director in
September 2019. A former director of BG Exploration and Production
Limited and CEO of independent exploration company Virgo Energy
Ltd, Mr Schwarz is an AAPG Certified Petroleum Geologist and
business development professional with over 40 years' experience in
the oil and gas industry. Mr Schwarz has previously held various
senior management roles with Amerada Hess, BG, and Marubeni and is
currently a director of Finite Energy Limited, an oil and gas
consultancy business he founded over 15 years ago, specialising in
strategy and business development advice in the UK and Europe.
During the last three financial years and up to the date of this
report, Mr Schwarz has not been a director of any other ASX listed
companies.
COMPANY SECRETARY
The Executive Director, Mr Mark Bolton (B Business) was
appointed Company Secretary on 3 June 2016. He resigned as Company
Secretary on 25 August 2021. Mrs Suzie Foreman (FGIA, CA, BComm)
was appointed as Company Secretary in Mr Bolton's place on 25
August 2021.
Mrs Foreman is a Chartered Accountant and Governance Institute
Fellow member, specialising in the provision of corporate
governance, financial reporting and company secretarial advice to
entities for over 20 years. Mrs Foreman has held senior management
roles and has demonstrated experience across a range of businesses
from start-up enterprises to large corporates, Mrs Foreman has
acted in the capacity of Non-Executive Director, Chief Financial
Officer and Company Secretary and is currently the Company
Secretary of ASX-listed entity Spectur Limited.
CORPORATE GOVERNANCE STATEMENT
The Corporate Governance Statement, which reports on Oilex's key
governance principles and practices is available on the Oilex
website.
In establishing its corporate governance framework, the Company
has referred to the recommendations set out in the ASX Corporate
Governance Council's Corporate Governance Principles and
Recommendations 4(th) edition.
The Company has followed each recommendation where the Board has
considered the recommendation to be an appropriate benchmark for
its corporate governance practices. Where the Company's corporate
governance practices follow a recommendation, the Board has made
appropriate statements reporting on the adoption of the
recommendation. In compliance with the "if not, why not" reporting
regime, where, after due consideration, the Company's corporate
governance practices do not follow a recommendation, the Board has
explained its reasons for not following the recommendation and
disclosed what, if any, alternative practices the Company has
adopted instead of those in the recommendation.
The Corporate Governance Statement provides detailed information
on the Board and committee structure, diversity and risk
management.
DIRECTORS' MEETINGS
Directors in office and directors' attendance at meetings during
the 2020/21 financial year are as follows:
Board Meetings (1)
Held (2) Attended
------------------------- ---------- ---------
Non-Executive Directors
P Haywood 12 12
P Schwarz 12 12
Executive Directors
R Wessel (3) 1 1
J Salomon (4) 12 12
M Bolton (5) 12 12
------------------------- ---------- ---------
(1) Following the changes to the Board at the Annual General
Meeting on 25 November 2015, the Board resolved that the full Board
would perform the role of the Audit and Risk Committee and the
Remuneration and Nomination Committee.
(2) Held indicates the number of meetings available for
attendance by the director during the tenure of each director.
(3) Appointed Chief Executive Officer and Director on 16 June
2021.
(4) Managing Director and Interim Chairman until 15 June 2021,
appointed Executive Chairman 16 June 2021
(5) Executive Director until 30 June 2021, appointed
Non-Executive Director 1 July 2021.
EXECUTIVE MANAGEMENT
Mr Roland Wessel
(Chief Executive Officer and Director, appointed 16 June
2021)
Mr Wessel is a geologist with 45 years' experience in all of the
world's major oil and gas regions. Mr Wessel founded and built Star
Energy, the UK onshore operator of 25 oil and gas fields, through
to its listing on AIM in 2004 and its sale to Petronas in 2008.
During its evolution, Star Energy grew rapidly through acquisitions
and diversification, culminating in it becoming a major gas storage
developer and operator. During his career, Mr Wessel has founded
and managed a drilling services company and has developed and
patented several key oilfield technologies. He has extensive
experience in both project and corporate management.
Mr Jonathan Salomon ( B App Sc (Geology), GAICD)
(Executive Chairman, appointed 16 June 2021)
(Interim Chairman and Managing Director until 15 June 2021)
Mr Salomon was appointed as a Non-Executive Director in November
2015, Managing Director on 18 March 2016, and Interim Chairman on 5
May 2020 following the resignation of Mr Lingo. Mr Salomon
continued as Managing Director and Interim Chairman until he was
appointed as Executive Chairman on 16 June 2021. Mr Salomon has a
Bachelor Degree in Applied Science and is a member of the American
Association of Petroleum Geologists and the Society of Petroleum
Engineers, and has over 35 years of experience working for upstream
energy companies. Mr Salomon has worked for a number of oil and gas
companies in various senior positions including General Manager
Exploration and New Ventures at Murphy Oil Corporation and Global
Head of Geoscience at RISC PL, in addition to a number of Executive
Director roles including Strategic Energy Resources, Norwest Energy
and Nido Petroleum. At several times in his career, Mr Salomon has
acted as an independent consultant for various oil and gas
companies, including New Standard Energy and Pacrim Energy. Mr
Salomon first worked on Indian projects in 1994 while at Ampolex
and since that time has maintained a connection with the Indian
industry, at various times bidding in India's exploration and field
development rounds and working with Indian companies as joint
venture partners, both in India and internationally.
Mr Colin Judd
(Chief Financial Officer, appointed 1 July 2021)
Mr Judd qualified as a chartered accountant with Price
Waterhouse in 1979, where he fulfilled various professional
accounting positions in the UK, Europe and the Far East. Mr Judd
joined Christian Salvesen plc in 1987, undertaking senior financial
management roles culminating in the position of European Financial
Controller. In 1994, Mr Judd moved to Aberdeen where he undertook
Chief Financial Officer roles for two private-equity-backed oil
service businesses. In 1999, Mr Judd joined Star Energy Limited as
a founder member and Chief Financial Officer and was instrumental
in the company's successful listing on AIM in 2004, various
subsequent share placings and the company's ultimate sale to
Petronas. Mr Judd cofounded Trans European Oil & Gas Limited, a
company backed by KKR, with the strategy to develop a pan-European
oil and gas business.
Mr Mark Bolton (B Business)
(Non-Executive Director, appointed 1 July 2021)
(Executive Director and Chief Financial Officer until 1 July
2021, Company Secretary until 25 August 2021)
Mr Bolton was appointed Chief Financial Officer and Company
Secretary on 3 June 2016, and as Executive Director on 26 March
2020. Mr Bolton continued as Executive Director and Chief Financial
Officer until 1 July 2021, when he was appointed as Non-Executive
Director. Mr Bolton resigned as Company Secretary on 25 August
2021. He has significant experience in the resource sector in
Australia, having worked as Chief Financial Officer and Company
Secretary for a number of resource companies since 2003. Prior to
this, Mr Bolton worked with Ernst & Young as an Executive
Director in Corporate Finance. Mr Bolton has experience in the
areas of commercial management and the financing of resource
projects internationally. He also has extensive experience in
capital and equity markets in a number of jurisdictions including
ASX, AIM and the TSX.
Mr Ashish Khare (Bachelor of Engineering (BE in Chemical
Engineering, including petroleum management))
(Head of India Assets)
Mr Khare was appointed Head of India Assets on 8 November 2016
and is based in Gandhinagar India. Mr Khare has over 20 years of
experience in the petroleum industry. Mr Khare's area of expertise
include upstream oil and gas, as well as midstream and downstream
project implementation and operations management. Mr Khare
originally worked for Oilex as GM Operations & Business
Development, and has experience working for various Indian
companies including Cairn India Ltd and Reliance Petroleum.
PRINCIPAL ACTIVITIES
The principal activities of the consolidated entity during the
financial year included:
-- exploration for oil and gas;
-- appraisal and development of oil and gas prospects; and
-- production and sale of oil and gas.
There were no significant changes in the nature of the
activities during the year.
OPERATING RESULTS
The loss after income tax of the consolidated entity for the
year ended 30 June 2021, from continuing operations, amounted to
$1,710,917 (2020: $5,652,540). This loss was reduced to $614,345
after taking into account the profit after income tax from
discontinued operations of $1,096,572 (2020: loss was increased to
$5,841,096 after taking into account the loss after income tax from
discontinued operations of $188,556).
The results from discontinued operations related to the Group's
operating results from its interests in the Bhandut PSC joint
venture and the CoEra Limited group for the prior and current
financial periods up to the date of sale of those assets. The
profit after income tax from discontinued operations includes a
gain on sale of the Bhandut Joint Venture interest after tax of
$788,236 (2020: $nil) and a gain on sale of CoEra Limited group of
subsidiaries after tax of $344,167 (2020: $nil).
Following the voluntary shut-in of the Cambay Field in Q1 2019
resulting in the cessation of production, no revenue was recognised
during the current and previous financial years. Other income
during the year included COVID-19 related government assistance
arrangements of $130,400 (2020: $98,000) and a gain on sale of
equity securities (related to Armour shares which were sold during
the year) of $100,402 (2020: $nil).
In the absence of a repayment schedule for outstanding cash
calls from Gujarat State Petroleum Corporation (GSPC), the Company
has continued to provide in full the amounts owing from its Joint
Venture partner as well as amounts owing from the Cambay and
Bhandut Joint Ventures, with the exception of a US$543,114
(A$722,267) Cambay cash call payment which was received on 4
September 2021, subsequent to the reporting date.
In addition to the above cash call payment received, the
reduction in joint venture cash call and recharges since 30 June
2021 has resulted in a reversal in the provision for doubtful debts
related to Cambay cash calls and recharges of $622,216 and a
reversal in the provision for doubtful debts related to other
receivables of $25,719. These reversals have been partially offset
by a provision for doubtful debts expense of $121,551 required for
the Group's share of JPDA JV cash call receivables. As a result,
results from continuing operations include a credit to the
provision for doubtful debts expense of $526,385 (2020:
$23,336).
Exploration costs related to continuing operations have
decreased to $513,122 (2020: $994,779) reflecting the Group's
efforts to contain costs and due to the general impact of the
ongoing COVID-19 pandemic, especially in India . In addition to
these exploration costs, the Group has also written off $309,703
(2020: $nil), due to the Company's plans to relinquish its P2446
exploration licence, as announced on 17 September 2021 following an
unsuccessful request to the UK Oil and Gas Authority (OGA) to
extend the initial term of the licence. The $309,703 which was
written off consists of $260,331 which was spent on the acquisition
of the licence and $49,372 capitalised expenditure which was
incurred post the acquisition of the licence.
Care and maintenance costs related to continuing operations
decreased to $140,259 (2020: $1,061,121) also reflecting the
Group's efforts to contain costs. The care and maintenance costs
from continuing operations included a write-down of inventory of
$29,922 (2020: $859,440).
No further impairment charge has been applied to the Cambay
Field development assets during the current financial year (2020:
$1,348,458)
The prior year results from continuing operations included a
reduction in variable operating expenses as part of Group's effort
to reduce costs. In the current year, efforts to contain costs have
continued with further reductions in administration employee
expenses $503,643 (2020: $718,210). Total administration expenses
from continuing operations of $1,075,711 (2020: $1,967,442) include
the above-mentioned reduction in employee expenses and other
administration expenses.
Other expenses have decreased to $24,888 (2020: $335,393), as
other expenses during the prior financial year included an increase
of the termination penalty provision related to the JPDA 06-103
Production Sharing Contract by $297,885.
The impact of the ongoing COVID-19 pandemic up to 30 June 2021
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 completion of the sale of GSPC's 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.
Cash and cash equivalents held by the Group as at 30 June 2021
has increased to $4,310,767 (2020: $173,816).
FINANCIAL POSITION
The net assets of the consolidated entity totalled $8,982,903 as
at 30 June 2021 (2020: $3,719,824).
DIVIDS
No dividend was paid or declared during the year and the
directors do not recommend the payment of a dividend.
REVIEW OF OPERATIONS
A review of the operations of the Group during the financial
year and the results of those operations are set out in the Review
of Operations on pages 3 to 7 of this report.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
The Review of Operations details those changes that have had a
significant effect on the Group.
Other than those matters, t here have been no other significant
changes in the state of affairs of the Group that occurred during
the financial year.
LIKELY DEVELOPMENTS
Additional comments on expected results on operations of the
Group are included in the Review of Operations on pages 3 to 7
.
Further disclosure as to likely developments in the operations
of the Group and expected results of those operations have not been
included in this report as, in the opinion of the Board, these
would be speculative and as such, disclosure would not be in the
best interests of the Group.
ENVIRONMENTAL ISSUES
The Group's oil and gas exploration and production activities
are subject to environmental regulation under the legislation of
the respective states and countries in which they operate. The
majority of the Group's activities involve low level disturbance
associated with its drilling programmes and production from
existing wells. The Board actively monitors compliance with these
regulations and as at the date of this report is not aware of any
material breaches in respect of these regulations.
SIGNIFICANT EVENTS AFTER BALANCE DATE
The impact of the COVID-19 pandemic is ongoing and while it has
been financially negative for the consolidated entity up to 30 June
2021, 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.
Following the Company's announcement on 11 June 2021 on the
execution of the SPA and the Acquisition of Cambay, the Company
secured a bank guarantee on 31 July 2021 for the US$2.2 million
consideration payable for the Acquisition. The ratification of the
SPA and Acquisition by the Government of India is expected to occur
in the coming months and is the last outstanding condition to
completing the Acquisition. Refer to Note 12 for further details of
the Acquisition.
On 12 August 2021, the Company also announced the issue of
2,458,785 shares in lieu of non-executive director remuneration for
the period from 1 May 2021 through to 31 July 2021 at an issue
price of $0.004 per ordinary share.
On 4 September 2021, the Company received cash proceeds of
US$543,114 with regards to outstanding GSPC cash calls for the
Cambay PSC.
On 17 September 2021, the Company announced its plans to
relinquish the P2446 licence, following an unsuccessful request to
the UK Oil and Gas Authority (OGA) to extend the initial term of
the licence. This has been recognised in the 30 June 2021 results
with a write-off of $309,703 in respect of licence acquisition
costs ($260,331) and post-acquisition capitalised expenditure
($49,372).
There were no other significant subsequent events occurring
after the year-end.
FINANCIAL POSITION
Capital Structure and Treasury Policy
As at 30 June 2021 the Group had unsecured loans at face value
$nil (2020: $804,959). Refer note 17 of the Consolidated Financial
Statements for details of the carrying amount, terms and
conditions, repayment schedule, and options attached to the
loans.
Details of transactions involving ordinary shares during the
financial year are as follows:
Number of Value of Gross Amount
Shares Issued Shares $ Raised $
----------------------------------------------------------- --------------- ---------- -------------
July 2020
* Share Placements (in lieu of consulting fees) 71,922,222 128,885 -
August 2020
* Share Placements 312,500,000 - 455,346
August 2020
* Share Placements (in lieu of consulting fees) 31,111,111 45,360 -
December 2020
* Acquisition of Petroleum Exploration Licences 42,500,000 151,704 -
February 2021
* Non-executive Director Remuneration 4,646,025 9,292 -
March 2021
* Share Placements 250,000,000 - 628,479
March 2021
* Share Placements (in lieu of consulting fees) 4,642,858 11,607 -
April 2021
* Share Placements (exercise of options) 234,348,086 - 475,867
April 2021
* Share Placements 84,375,000 - 359,944
May 2021
* Share Placements 320,625,000 - 1,370,056
May 2021
* Non-executive Director Remuneration 1,882,398 9,412 -
June 2021
* Non-executive Director Remuneration 19,918,844 49,415 -
June 2021
* Share Placements 603,403,361 - 2,637,217
----------------------------------------------------------- --------------- ---------- -------------
Total 1,981,874,905 405,675 5,926,909
----------------------------------------------------------- --------------- ---------- -------------
In accordance with the ASX Waiver granted 2 November 2020 the
Company advises that the number of remuneration shares that were
issued to non-executive directors totalled 26,447,267. This
represents 0.47% of the Company's issued capital as at 30 June
2021.
As at the date of this report the Company had a total issued
capital of 5,688,430,356 ordinary shares and 603,403,361 unlisted
options exercisable at weighted average price of GBP 0.00476
(A$0.009) per share.
DIRECTORS' INTERESTS
The relevant interest of each director in shares and unlisted
options issued by the Company, as notified by the directors to the
ASX in accordance with Section 205G (1) of the Corporations Act
2001, at the date of this report is as follows:
Number of Ordinary Shares
Direct Indirect
----------- -------------- -------------
R Wessel - -
J Salomon - 14,987,013
M Bolton - -
P Haywood 12,381,837 -
P Schwarz 19,843,316 -
----------- -------------- -------------
SHARE OPTIONS
Unissued shares under option
All options were granted in the current and previous financial
years.
At the date of this report, unissued ordinary shares of the
Company under option (with an exercise price) are:
Expiry Date Number of Shares Exercise Price
------------------------------ ----------------- ---------------------
Unlisted Options
Issued in 2021:
30 June 2022 603,403,361 GBP0.00476 (A$0.009)
Issued in previous financial
years:
Nil - -
------------------------------ ----------------- ---------------------
Total 603,403,361
------------------------------ ----------------- ---------------------
These options do not entitle the holder to participate in any
share issue of the Company or any other body corporate.
Unissued shares under option that expired during the year
During the financial year, the following unlisted options
expired or were cancelled upon cessation of employment:
Date Lapsed Number Exercise Price
------------------ ------------ --------------------
31 July 2020 115,727,273 GBP0.0011 (A$0.002)
1 August 2020 166,666,667 GBP0.0021 (A$0.004)
24 December 2020 6,666,667 GBP0.0036 (A$0.006)
29 January 2021 113,636,364 GBP0.0011 (A$0.002)
------------------ ------------
Total 402,696,971
------------------ ------------
Shares issued on exercise of unlisted options
During or since the end of the financial year, the Company
issued ordinary shares as a result of the exercise of unlisted
options as follows (there were no amounts unpaid on the shares
issued):
Number of Shares Amount Paid on Each
Share
-------------------------------- ----------------- --------------------
During the financial year 204,545,455 GBP0.0011 (A$0.002)
14,802,631 GBP0.0019 (A$0.003)
15,000,000 GBP0.0008 (A$0.001)
-------------------------------- ----------------- --------------------
Total 234,348 , 086
Since the end of the financial
year -
-------------------------------- ----------------- --------------------
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Group paid a premium in respect of insurance cover for the
directors and officers of the Group. The Group has not included
details of the nature of the liabilities covered or the amount of
the premium paid in respect of the directors' liability and legal
expense insurance contracts, as such disclosure is prohibited under
the terms of the insurance contract.
PROCEEDINGS ON BEHALF OF THE COMPANY
No proceedings have been brought on behalf of the Company, nor
has any application been made in respect of the Company under
Section 237 of the Corporations Act 2001.
NON-AUDIT SERVICES
The Company may decide to employ the Auditor on assignments
additional to their statutory audit duties where the Auditor's
expertise and experience with the Group is important.
The Board has considered the non-audit services provided during
the year and is satisfied that the provision of the non-audit
services is compatible with, and did not compromise, the general
standard of independence for auditors imposed by the Corporations
Act 2001. The directors are satisfied that the provision of
non-audit services by the auditor, as set out below, did not
compromise the auditor independence requirements of the
Corporations Act 2001 for the following reasons:
-- all non-audit services were subject to the corporate
governance procedures adopted by the Group and these have been
reviewed by the Board to ensure they do not impact the impartiality
and objectivity of the auditor; and
-- the non-audit services provided do not undermine the general
principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants, as they did not
involve reviewing or auditing the auditor's own work, acting in a
management or decision-making capacity for the Group, acting as an
advocate for the Group or jointly sharing risks and rewards.
Refer note 28 of the Consolidated Financial Statements for
details of the amounts paid to the auditors of the Group, PKF Perth
and their network firms for audit and non-audit services provided
during the year.
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.
LEAD AUDITOR'S INDEPENCE DECLARATION
The Lead Auditor's Independence Declaration for the year ended
30 June 2021 has been received and can be found on page 25 .
REMUNERATION REPORT - AUDITED
The Board has performed the function of the Nomination and
Remuneration Committee since June 2016 when the Board considered
that, given the size and composition of the existing Board, that
there are no efficiencies to be gained by having a separate
committee. The Board has adopted a Nomination and Remuneration
Committee Charter, which describes the role, composition, functions
and responsibilities of the committee. The Nomination and
Remuneration Committee is responsible for the review and
recommendation to the Board, of the Company's Remuneration Policy,
senior executives' remuneration and incentives, the remuneration
framework for directors, superannuation arrangements, incentive
plans and remuneration reporting.
1. PRINCIPLES OF COMPENSATION
Remuneration is referred to as compensation throughout this
report. The Remuneration Report explains the remuneration
arrangements for directors and senior executives of Oilex Ltd who
have authority and responsibility for planning, directing and
controlling the activities of the Group (key management
personnel).
The compensation structures explained below are designed to
attract, retain and motivate suitably qualified candidates, reward
the achievement of strategic objectives and achieve the broader
outcome of the creation of value for shareholders. The compensation
structures take into account:
-- the capability and experience of the key management personnel;
-- the ability of key management personnel to control the performance of the relevant segments;
-- the current downturn and uncertainty within the resources industry;
-- the Company's performance including:
o the Group's earnings; and
o the growth in share price and delivering constant returns on
shareholder wealth;
-- exploration success; and
-- development of projects.
Compensation packages include a mix of fixed compensation and
long-term performance-based incentives. In specific circumstances,
the Group may also provide short-term cash incentives based upon
the achievement of Company performance hurdles or in recognition of
specific achievements.
1.1 Fixed Compensation
Fixed compensation consists of base compensation and employer
contributions to superannuation funds. Compensation levels are
reviewed annually through a process that considers individual,
sector and overall performance of the Group. In addition, reviews
of available data on oil and gas industry companies provide
comparison figures to ensure the directors' and senior executives'
compensation is competitive in the market.
Reductions in remunerations were introduced in 2016 and 2017 for
the Executive and Non-Executive Directors in office at the time,
and all staff have remained in place, with further reductions for
some staff which commenced in April/May 2020.
Compensation for senior executives is separately reviewed at the
time of promotion or initial appointment.
1.2 Performance Linked Compensation
Performance linked compensation includes both short-term and
long-term incentives designed to reward key management personnel
for growth in shareholder wealth. The short-term incentive (STI) is
an "at risk" bonus provided in the form of cash or shares, while
the long-term incentive plan (LTI) is used to reward performance by
granting options over ordinary shares of the Company.
Short-term incentive bonus
The Group does not utilise short-term incentives on an annual or
regular basis, as these are not considered part of the standard
compensation package for key management personnel.
In certain circumstances, the Board may, for reasons of
retention, motivation or recognition, consider the use of
short-term incentives.
Short-term incentives, if granted, are at the discretion of the
Board having regard to the business plans set before the
commencement of the financial year as well as the achievement of
performance targets as determined by the Board. These targets
include a combination of key strategic, financial and personal
performance measures which may have a major influence over company
performance in the short term.
There were no short-term incentives, performance bonuses or
shares granted to senior executives or staff during the year ended
30 June 2021.
REMUNERATION REPORT - AUDITED (CONTINUEd)
1 . PRINCIPLES OF COMPENSATION (Continued)
1.2 Performance Linked Compensation (Continued)
Long-term incentive bonus
Shareholders approved the 2017 Employee Incentive Plan (the
Plan) at the AGM held 29 November 2017, which has yet to be
implemented.
The Plan is a long-term incentive plan designed to allow the
Group to attract and retain talented employees. The Plan aims to
closely align the interests of directors, senior executives,
employees and eligible contractors with those of shareholders and
create a link between increasing shareholder value and employee
reward.
The Plan permits the Board to grant shares and rights to acquire
shares in the Company. Rights granted under the Plan may be in the
form of options with a market-based exercise price, or performance
rights, or a combination of these depending upon the Company's
objectives in making the grant.
Vesting conditions may include one or more objectives and/or
time-based milestones set at the discretion of the Board.
Whilst the Company moved certain assets to development in
previous financial years, these were impaired during the previous
financial year, and the Company does not generate profits or net
operating cash inflows and as such does not pay any dividends, and
consequently remuneration packages are not linked to profit
performance. It is the performance of the overall exploration and
appraisal programme and ultimately the share price that largely
determines Oilex's performance. The Board therefore considered that
fixed compensation combined with short-term and long-term incentive
components is the best remuneration structure for achieving the
Company's objectives to the benefit of shareholders. The table
below sets out the closing share price at the end of the current
and four previous financial years.
2021 2020 2019 2018 2017
------------- ----- ----- ----- ----- -----
Share Price
(cents) 0.4 0.2 0.2 0.3 0.3
------------- ----- ----- ----- ----- -----
The remuneration of directors may consist of a cash component as
well as an equity component; and is designed to retain directors of
a high calibre, whilst rewarding them for their ongoing commitment
and contribution to the Company on a cost-effective basis. The
issue of shares, rights or options to directors, subject to
shareholder approval, is judged by the Company, to further align
the directors' interests with that of shareholders, whilst
maintaining the cash position of the Company. The Board does not
consider that there are any significant opportunity costs to the
Company or benefits foregone by the Company in issuing shares,
rights or options to directors.
The Company did not issue any long-term incentives to directors,
senior executives or staff during the year ended 30 June 2021.
1.3 Non-Executive Directors
Total compensation for all Non-Executive Directors is based on a
comparison with external data with reference to fees paid to
Non-Executive Directors of comparable companies. Directors' fees
cover all main Board activities and membership of committees, if
applicable.
The Board resolved to further reduce the remuneration of
Non-Executive Directors by 10% effective from 1 October 2016 and
these reductions remained in place during the year ended 30 June
2021.
The annual fee for Mr Bolton was set at $55,381 plus statutory
superannuation per annum effective from 1 July 2021 when he
resigned as Executive Director and was appointed as Non-Executive
Director.
The annual fee for Mr Haywood, the Company's UK based
Non-Executive Director was set at GBP30,000 per annum on
commencement in May 2017 and remains unchanged.
The annual fee for Mr Schwarz, the Company's UK based
Non-Executive Director was set at GBP30,000 per annum on
commencement in September 2019 and remains unchanged.
At the Annual General Meeting held 27 November 2019 shareholders
approved the issue of remuneration shares, whereby two
Non--Executive Directors agreed to receive part of their Directors
fees paid through the issue of shares in lieu of cash payments, for
the period of 1 November 2019 through to 31 October 2020, in order
to conserve the cash reserves of the Company. Similar shareholder
approval was also received at the Annual General Meeting held on 16
December 2020 for the period 1 November 2020 through to 31 October
2021. Shareholder approval was separately obtained at the General
Meeting held on 8 June 2021 for the remuneration shares issued for
the period from 1 May 2019 through to 31 October 2020.
REMUNERATION REPORT - AUDITED (CONTINUEd)
1 . PRINCIPLES OF COMPENSATION (Continued)
1.3 Non-Executive Directors (Continued)
The aggregate maximum fixed annual amount of remuneration
available for Non-Executive Directors of $500,000 per annum was
approved by Shareholders on 9 November 2011.
In addition to the fixed component, the Company can remunerate
any director called upon to perform extra services or undertake any
work for the Company beyond their general duties. This remuneration
may either be in addition to, or in substitution for, the
director's share of remuneration approved by Shareholders.
1.4 Clawback Policy
The Board has adopted the following Clawback Policy applicable
from August 2015.
In relation to circumstances where an employee acts fraudulently
or dishonestly, or wilfully breaches his or her duties to the
Company or any of its subsidiaries, the Board has adopted a
clawback policy in relation to any cash performance bonuses
(including deferred share awards) or LTIs. The Board reserves the
right to take action to reduce, recoup or otherwise adjust an
employee's performance based remuneration in circumstances where in
the opinion of the Board, an employee has acted fraudulently or
dishonestly or wilfully breached his or her duties to the Company
or any of its subsidiaries. The Board may:
-- deem any bonus payable, but not yet paid, to be forfeited;
-- require the repayment by the employee of all or part of any cash bonus received;
-- determine that any unvested and/or unexercised LTIs will lapse;
-- require the repayment of all or part of the cash amount
received by the employee following vesting and subsequent sale of a
LTI;
-- reduce future discretionary remuneration to the extent
considered necessary or appropriate to take account of the event
that has triggered the clawback;
-- initiate legal action against the employee; and/or
-- take any other action the Board considers appropriate.
1.5 Remuneration Consultants
There were no remuneration recommendations made in relation to
key management personnel by remuneration consultants in the
financial year ended 30 June 2021.
1.6 Adoption of year ended 30 June 2020 Remuneration Report
At the Annual General Meeting held 16 December 2020 shareholders
adopted the 30 June 2020 Remuneration Report with a clear majority
of 486,660,940 votes in favour, being 99.70% of the votes cast.
REMUNERATION REPORT - AUDITED (CONTINUEd)
2. EMPLOYMENT CONTRACTS
The following table summarises the terms and conditions of
contracts between key executives and the Company:
Termination
Notice
Contract Contract Resignation Unvested Required
Start Termination Notice Options on from the Termination
Executive Position Date Date Required Resignation Company (1) Payment
---------- ---------------------- ---------- ------------ ------------ ------------ ------------ --------------
R Wessel Chief Executive 15 June n/a 3 months Forfeited 3 months For
(2) Officer and Director 2021 termination
by the
Company, 1
month's
salary plus
any accrued
leave
entitlement.
J Salomon Executive Chairman 18 March n/a (3) 3 months Forfeited 3 months For
(3) 2016 termination
by the
Company,
three months'
salary plus
any accrued
leave
entitlement.
If
a Material
Change Event
occurs,
employee may
give notice
to the
Company
within one
month of
the Material
Change Event,
terminating
the Contract
of Employment
and following
that
effective
date, the
Company will
pay a
Termination
Payment equal
to six
months' fixed
annual
remuneration.
Subject to
the
Corporations
Act 2001 and
any necessary
approvals
required
thereunder.
C Judd Chief Financial 1 July n/a 3 months Forfeited 3 months For
(4) Officer 2021 termination
by the
Company, 1
month's
salary plus
any accrued
leave
entitlement.
M Bolton Non-Executive 3 June n/a (5) Applicable Forfeited Applicable Applicable
(5) Director (Previously 2016 until 30 until 30 until 30 June
Executive Director, June 2021: June 2021: 2021:
Chief Financial 3 months 3 months For
Officer and Company Applicable Applicable termination
Secretary) from 1 July from 1 July by the
2021: 2021: Company,
n/a n/a three months'
salary plus
any accrued
leave
entitlement.
Applicable
from 1 July
2021:
n/a
A Khare Head of India Assets 1 May n/a 30 days Forfeited 30 days For
2015 termination
by the
Company, one
months'
salary plus
any accrued
leave
entitlement.
---------- ---------------------- ---------- ------------ ------------ ------------ ------------ --------------
(1) The Company may terminate the contract immediately if
serious misconduct has occurred. In this case the termination
payment is only the fixed remuneration earned until the date of
termination and any unvested options will immediately be
forfeited.
(2) Appointed Chief Executive Officer and Director on 16 June
2021.
(3) Managing Director and Interim Chairman until 15 June 2021,
appointed as Executive Chairman on 16 June 2021. Mr Salomon's
contract has been extended past 30 June 2021 by mutual agreement
between the Company and Mr Salomon on an ongoing basis as at the
date of this report.
(4) Appointed Chief Financial Officer on 1 July 2021.
(5) Executive Director and Chief Financial Officer until 1 July
2021, Company Secretary until 25 August 2021, appointed as
Non-Executive Director on 1 July 2021. Mr Bolton's contract has
been extended by mutual agreement between the Company and Mr Bolton
on an ongoing basis as at the date of this report.
3. DIRECTORS' AND EXECUTIVE OFFICERS' REMUNERATION
Details of the nature and amount of each major element of
remuneration of each director of the Company and other key
management personnel of the consolidated entity are:
Share-based
Short-Term Payments
--------------- ------
Proportion
of
Benefits Other Shares, Remuneration
STI (including Post-Employment Long-Term Options Performance
Salary Cash Non-Monetary) Super-annuation Benefits Termination and Rights Related
& Fees Bonus (1) Total Benefits (2) Benefits (3) Total (4)
Year $ $ $ $ $ $ $ $ $ %
--------------- ------ -------- ------ -------------- -------- ---------------- ---------- ------------ ------------ -------- -------------
(6)
Non-Executive
Directors (4)
M Bolton (5) 2021 47,501 - 1, 286 48,787 4,513 4,000 - - 57,300 -
Non-Executive
Director 2020 154,375 - 1,687 156,062 14,666 11,849 - - 182,577 -
P Haywood (6) 2021 43, 332 - - 43,332 - - - 11,327 54,659 -
Non-Executive
Director 2020 44,348 - - 44,348 - - - 10,725 55,073 -
P Schwarz (7) 2021 27,083 - - 27,083 - - - 28,247 55,330 -
Non-Executive
Director 2020 23,354 - - 23,354 - - - 22,378 45,732 -
B Lingo (8) 2021 - - - - - - - - - -
Chairman
(resigned
5 May 2020) 2020 188,772 - - 188,772 17,613 - - - 206,385 -
(7) Executive
Directors
R Wessel (9) 2021 12,955 - - 12,955 - - - - 12,955 -
Chief 2020 - - - - - - - - - -
Executive
Officer
and Director
J Salomon (10) 2021 124,178 - 3,216 127,394 11,797 13,897 - - 153,088 -
Executive
Chairman 2020 199,637 - 3,765 203,402 18,966 18,792 - - 241,160 -
(8) Executives
C Judd (11) 2021 - - - - - - - - - -
Chief 2020 - - - - - - - - - -
Financial
Officer
A Khare (12) 2021 67, 171 - 287 67,458 - - - - 67,458 -
Head of India
Assets 2020 147,362 - 325 147,687 16,127 3,905 - - 167,719 -
Total 2021 322,220 - 4, 789 327,009 16,310 17,897 - 39,574 400,790 -
Total 2020 757,848 - 5,777 763,625 67,732 34,546 - 33,103 898,646 -
--------------- ------ -------- ------ -------------- -------- ---------------- ---------- ------------ ------------ -------- -------------
The Directors and Executives of the Company may be Directors or
Executives of the Company's subsidiaries. No remuneration is
received for directorships of subsidiaries. All key management
personnel other than Mr Judd and Mr Khare are employed by the
parent entity.
Refer to the following explanatory notes for additional
information.
3 . DIRECTORS' AND EXECUTIVE OFFICERS' REMUNERATION (Continued)
Notes in Relation to Directors' and Executive Officers'
Remuneration
(1) Benefits, including non-monetary include relocation costs
and related expenses, as well as minor benefits, such as payments
on behalf of employees considered personal, insurance premiums, car
parking and any associated fringe benefits tax.
(2) Includes, where applicable, accrued employee leave entitlement movements.
(3) The 2021 share-based payment disclosures relate to the issue
of remuneration shares (refer point 4 below). No unlisted options
were issued to key management personnel or executives as
remuneration during the year ended 30 June 2020 or 30 June 2021. In
accordance with the ASX waiver granted 2 November 2020, the Company
advises that the number of remuneration shares that were issued to
directors in the year ended 30 June 2021 totalled 26,447,267 and
the percentage of the Company's issued capital represented by these
remuneration shares was 0.47%.
(4) Fees for Non-Executive Directors are not linked to the
performance of the Group. At the Annual General Meeting (AGM) held
on 27 November 2019 shareholders approved the issue of remuneration
shares, whereby two Non-Executive Directors agreed to receive part
of their directors' fees paid through the issue of shares in lieu
of cash payments, for the period of 1 November 2019 through to 31
October 2020, in order to conserve the cash reserves of the
Company. Similar shareholder approval was also received at the AGM
held on 16 December 2020 for the period from 1 November 2020
through to 31 October 2021 . Shareholder approval was separately
obtained at the General Meeting held on 8 June 2021 for the
remuneration shares issued for the period from 1 May 2019 through
to 31 October 2020.
(5) Mr Bolton was appointed Chief Financial Officer and Company
Secretary on 3 June 2016 and Executive Director on 26 March 2020,
with an initial fixed annual remuneration of $273,750 inclusive of
statutory superannuation, which was reduced to $260,063 effective 1
October 2016. The amounts paid during the years ended 30 June 2020
and 30 June 2021 reflects the reduced working hours implemented 1
October 2017 to facilitate a 20% reduction in salaries together
with a further reduction in Mr Bolton's working hours to reduce
costs which were implemented on 1 April 2020. Subsequent to year
end, Mr Bolton resigned as Executive Director and Chief Financial
Officer and was appointed as Non-Executive Director on 1 July 2021,
with his annual remuneration negotiated to $55,381 plus statutory
superannuation per annum effective from this date. Mr Bolton
resigned as Company Secretary on 25 August 2021.
(6) Mr Haywood was appointed a Non-Executive Director on 29 May
2017. Mr Haywood is based in the United Kingdom and is paid
GBP30,000 per annum. The amount disclosed is converted into
Australian dollars at the applicable exchange rate at the date of
payment. During the 2021 financial year Mr Haywood received
8,360,226 remuneration shares (refer point 3 above) at a value of
$22,040 (which included remuneration shares at a value of $12,531
which was previously accrued at 30 June 2020). As at 30 June 2021
remuneration shares not yet issued to Mr Haywood had a value of
$1,818. These shares shall be issued in the next financial
year.
(7) Mr Schwarz was appointed a Non-Executive Director on 4
September 2019. Mr Schwarz is based in the United Kingdom and is
paid GBP30,000 per annum. The amount disclosed is converted into
Australian dollars at the applicable exchange rate at the date of
payment. During the 2021 financial year Mr Schwarz received
18,087,041 remuneration shares (refer point 3 above) at a value of
$46,079 (which included remuneration shares at a value of $22,377
which was previously accrued at 30 June 2020). As at 30 June 2021
remuneration shares not yet issued to Mr Schwarz had a value of
$4,545. These remuneration shares will be issued in the next
financial year.
(8) Mr Lingo was appointed a Non-Executive Director on 11
February 2016 and interim Chairman on 23 February 2017 at an annual
salary of $70,956 inclusive of statutory superannuation. On 6
September 2019, the Company announced an expanded operational role
for Mr Lingo to drive the Cooper Basin Strategy. A new agreement
for Mr Lingo, effective from 1 August 2019, had an initial term of
6 months and provided for a monthly consultancy fee of $20,000 per
month, plus superannuation; and is also inclusive of the Chairman's
fees. The agreement was subsequently extended until 30 March 2020
with a further one-month extension to 30 April 2020. Mr Lingo
resigned on 5 May 2020.
During 2020 Mr Lingo elected to receive no remuneration
shares.
(9) Mr Wessel was appointed as Chief Executive Officer and
Director on 16 June 2021 at a fixed annual remuneration of
GBP150,000 per annum, plus 14% UK National Insurance.
(10) Mr Salomon was appointed Managing Director in March 2016
with an initial fixed annual remuneration of $350,000 per annum,
inclusive of statutory superannuation, which was reduced to
$271,950 inclusive of statutory superannuation effective from 1
October 2016, following the implementation of cost reductions by
the Company. A reduction in Mr Solomon's working hours to further
reduce costs was implemented on 1 April 2020. Mr Salomon was
appointed as Interim Chairman on 5 May 2020 and continued as
Managing Director and Interim Chairman until he was appointed as
Executive Chairman on 16 June 2021. His annual remuneration was
renegotiated to $170,100 effective from 1 September 2021.
3 . DIRECTORS' AND EXECUTIVE OFFICERS' REMUNERATION (Continued)
Notes in Relation to Directors' and Executive Officers'
Remuneration (Continued)
(11) Mr Judd was appointed as Chief Financial Officer on 1 July
2021 at fixed annual remuneration of GBP110,000 per annum, plus 14%
UK National Insurance.
(12) Mr Khare became key management personnel on 8 November 2016
and is based in India. The amount paid during the years ended 30
June 2020 and 30 June 2021 reflects the reduced working hours
implemented 1 October 2017 to facilitate a 20% reduction in
salaries together with a further reduction in working hours which
was implemented on 1 May 2020. Mr Khare's remuneration has been
converted from Indian Rupees at the average exchange rate for the
year.
Analysis of Bonuses included in Remuneration
There were no short-term incentive cash bonuses awarded as
remuneration to key management personnel during the financial
year.
4. Equity Instruments
All rights and options refer to rights and unlisted options over
ordinary shares of the Company, which are exercisable on a
one-for-one basis.
4.1 Rights and Options Over Equity Instruments Granted as Compensation
There were no rights or options over ordinary shares granted as
compensation to key management personnel during the financial year
(2020: nil).
4.2 Rights and Options Over Equity Instruments Granted as Compensation Granted Since Year End
No rights and options over ordinary shares in the Company were
granted as compensation to key management personnel and executives
since the end of the financial year.
4.3 Modification of Terms of Equity-Settled Share-based Payment Transactions
No terms of equity-settled share-based payment transactions
(including options granted as compensation to key management
personnel) have been altered or modified by the issuing entity
during the financial year.
4.4 Exercise of Options Granted as Compensation
During the financial year no shares were issued on the exercise
of options previously granted as compensation.
4.5 Details of Equity Incentives Affecting Current and Future Remuneration
There are no rights or options currently held by key management
personnel, (2020: nil).
4.6 Analysis of Movements in Equity Instruments
There were no shares, rights or options over ordinary shares in
the Company granted to or exercised by key management personnel in
the current year.
4.7 Options or Rights over Equity Instruments Granted as Compensation
There are no rights or options held by key management personnel,
or their related parties as at 1 July 2020 through to 30 June
2021.
5. KEY MANANGEMENT PERSONNEL TRANSACTIONS
5.1 Other Transactions with Key Management Personnel
There were no other transactions with entities associated with
key management personnel in the year ended 30 June 2021 (2020:
nil).
5.2 Movements in Shares
The movement during the financial year in the number of ordinary
shares in the Company held, directly, indirectly or beneficially,
by each key management person, including their related parties, is
as follows:
Held at Received on Exercise Remuneration Shares Held at
(9) 1 July 2020 of Options Issued (1) Other Changes (2) 30 June 2021
------------------- ------------- ---------------------- ---------------------- ------------------ --------------
(10) R Wessel (3) - - - - -
(11) J Salomon 14,987,013 - - - 14,987,013
(12) M Bolton - - - - -
(13) P Haywood 3,319,101 - 8,360,226 - 11,679,327
(14) P Schwarz - - 18,087,041 - 18,087,041
(15) C Judd (4) - - - - -
(16) A Khare - - - - -
------------------- ------------- ---------------------- ---------------------- ------------------ --------------
(1) At the AGM held 27 November 2019 shareholders approved the issue of remuneration shares,
whereby two Non-Executive Directors agreed to receive part of their directors' fees paid through
the issue of shares in lieu of cash payments, for the period of 1 November 2019 through to
31 October 2020, in order to conserve the cash reserves of the Company. Similar shareholder
approval was also received at the AGM held on 16 December 2020 for the period 1 November 2020
to 31 October 2021. Shareholder approval was separately obtained at the General Meeting held
on 8 June 2021 for the remuneration shares issued for the period from 1 May 2019 through to
31 October 2020.
(2) Other changes represent shares that were granted, purchased or sold during the year.
(3) Appointed Chief Executive Officer and Director on 16 June 2021.
(4) Appointed Chief Financial Officer on 1 July 2021.
----------------------------------------------------------------------------------------------------------------------
OF REMUNERATION REPORT - AUDITED
Mr Roland Wessel Mr Joe Salomon
Chief Executive Officer Executive Chairman
Signed in accordance with a resolution of the Directors.
West Perth
Western Australia
22 September 2021
AUDITOR'S INDEPENCE DECLARATION
TO THE DIRECTORS OF OILEX LTD
In relation to our audit of the financial report of Oilex Ltd
for the year ended 30 June 2021, to the best of my knowledge and
belief, there have been no contraventions of the auditor
independence requirements of the Corporations Act 2001 or any
applicable code of professional conduct.
PKF Perth
Simon Fermanis
Partner
22 September 2021
West Perth,
Western Australia
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.
2021 FINANCIAL REPORT
CONTENTS
Consolidated Statement of Profit or Loss and Other Comprehensive
Income..........................................................
27
Consolidated Statement of Financial
Position...........................................................................................................
28
Consolidated Statement of Changes in
Equity..........................................................................................................
29
Consolidated Statement of Cash
Flows....................................................................................................................
30
Notes to the Consolidated Financial
Statements.............................................................................................
31
Directors'
Declaration................................................................................................................................................
72
Independent Auditor's
Report...................................................................................................................................
73
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE YEARED 30 JUNE 2021
Note 2021 2020
$ $
------------ ------------
Revenue - -
Cost of sales - -
------------ ------------
Gross loss - -
Other income 4(a) 230,802 98,000
Exploration expenditure and write-off 4(b) (822,825) (994,779)
Care and maintenance expenditure 4(c) (140,259) (1,061,121)
Administration expense 4(d) (1,075,711) (1,967,442)
Reversal of expected credit losses 9 526,385 23,336
Share-based payments expense 22 (253,971) -
Impairment of development assets 13 - (1,348,458)
Other expenses 4(e) (24,888) (335,393)
------------ ------------
Results from operating activities (1,560,467) (5,585,857)
------------ ------------
Finance income 4(f) 310 1,659
Finance costs 4(g) (139,488) (70,977)
Foreign exchange (loss)/gain 4(h) (11,272) 2,635
------------ ------------
Net finance costs (150,450) (66,683)
------------ ------------
Loss before tax from continuing operations (1,710,917) (5,652,540)
Tax expense 5 - -
Loss after tax from continuing operations (1,710,917) (5,652,540)
Profit/(Loss) after tax from discontinued
operations 6(a) 1,096,572 (188,556)
Loss after tax for the year (614,345) (5,841,096)
------------ ------------
Other comprehensive income/(loss)
Items that may be reclassified to
profit or loss
Foreign operations - foreign currency
translation differences (244,462) (34,949)
------------ ------------
Other comprehensive income, net of
tax (244,462) (34,949)
------------ ------------
Total comprehensive loss (858,807) (5,876,045)
------------ ------------
Loss per share from continuing operations
Basic loss per share (cents per share) 7 (0.04) (0.18)
Diluted loss per share (cents per
share) 7 (0.04) (0.18)
Loss per share from continuing and
discontinued operations
Basic loss per share (cents per share) 7 (0.01) (0.18)
Diluted loss per share (cents per
share) 7 (0.01) (0.18)
The above Consolidated Statement of Profit or Loss and Other
Comprehensive Income is to be read in conjunction with the
accompanying notes.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021
2021 2020
Note $ $
-------------- --------------
Assets
Cash and cash equivalents 8 4,310,767 173,816
Trade and other receivables 9 931,721 645,344
Prepayments 16,386 24,212
Inventories 10 102,917 146,084
Investments, including derivatives 11 442,802 -
5,804,593 989,456
Assets held for sale 6 - 327,791
-------------- --------------
Total current assets 5,804,593 1,317,247
Exploration and evaluation 12 549,778 581,322
Development assets 13 8,710,490 9,823,965
Property, plant and equipment 14 78,905 104,040
Total non-current assets 9,339,173 10,509,327
Total assets 15,143,766 11,826,574
Liabilities
Trade and other payables 15 2,095,992 1,071,344
Employee benefits 16 209,388 143,110
Provisions 16 - 1,165,671
Borrowings 17 - 769,555
2,305,380 3,149,680
Liabilities directly associated with
the assets held for sale 6 - 451,469
-------------- --------------
Total current liabilities 2,305,380 3,601,149
Provisions 16 3,855,483 4,505,601
Total non-current liabilities 3,855,483 4,505,601
Total liabilities 6,160,863 8,106,750
Net assets 8,982,903 3,719,824
-------------- --------------
Equity
Issued capital 21(a) 185,355,925 179,254,814
Reserves 21(b) 7,096,752 7,445,820
Accumulated losses (183,469,774) (182,980,810)
-------------- --------------
Total equity 8,982,903 3,719,824
-------------- --------------
The above Consolidated Statement of Financial Position is to be
read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2021
----------------------------------------------------------------------------------------------------------------------
Attributable to Owners of the Company
Foreign
Currency
Issued Options Loan Options Translation Accumulated Total
Capital Reserve Reserve Reserve Losses Equity
$ $ $ $ $ $
Note 18(a) 18(b) 18(b) 18(b)
-------------- ------------
Balance at 30 June
2019 176,502,200 36,485 88,740 7,376,163 (177,264,547) 6,739,041
Total comprehensive
loss
Loss after tax for
the year - - - - (5,841,096) (5,841,096)
------------ ---------- --------------- ------------- -------------- ------------
Other comprehensive
loss
Foreign currency
translation
differences - - - (34,949) - (34,949)
------------ ---------- --------------- ------------- -------------- ------------
Total other
comprehensive
loss - - - (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 21(a) 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 17 - - 62,798 - - 62,798
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
Total comprehensive
(loss)/income
Loss after tax for
the year - - - - (614,345) (614,345)
------------ ---------- --------------- ------------- -------------- ------------
Other comprehensive
income
Foreign currency
translation
differences - - - (244,462) - (244,462)
Total comprehensive
(loss)/income - - - (244,462) - (244,462)
------------ ---------- --------------- ------------- -------------- ------------
Total comprehensive
loss - - - (244,462) (614,345) (858,807)
------------ ---------- --------------- ------------- -------------- ------------
Transactions with
owners of the Company
Contributions and
distributions
Shares issued 21(a) 5,602,746 - - - - 5,602,746
Capital raising costs
(1) (231,473) - - - - (231,473)
Shares issued on
exercise
of options 475,867 - - - - 475,867
Transfer on exercise
of options - (52,903) (30,890) - 83,793 -
Transfers on
forfeited
options - (27,790) (13,798) - 41,588 -
Recognition of equity
component of loans 17 - - 9,284 - - 9,284
Share-based payment
transactions 253,971 11,491 - - - 265,462
Total transactions
with owners of the
Company 6,101,111 (69,202) (35,404) - 125,381 6,121,886
------------ ---------- --------------- ------------- -------------- ------------
Balance at 30 June
2021 185,355,925 - - 7,096,752 (183,469,774) 8,982,903
------------ ---------- --------------- ------------- -------------- ------------
(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.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 30 JUNE 2021
----------------------------------------------------------------------------------------------------------------------
2021 2020
Note $ $
------------ ------------
Cash flows from operating activities
Cash receipts from customers - -
Recovery of prior period operating cost 816,435 -
Payments to suppliers and employees (1,548,027) (2,018,352)
Partial repayment of JPDA 06-103 PSC termination penalty 15 (283,668) -
------------ ------------
Cash outflow from operations (1,015,260) (2,018,352)
Payments for exploration and evaluation expenses (466,175) (897,455)
Proceeds from government assistance arrangements 147,096 98,000
Interest received 310 1,659
Interest paid (60,011) (21,513)
Net cash used in operating activities 8 (1,394,040) (2,837,661)
------------ ------------
Cash flows from investing activities
Payments for capitalised exploration and evaluation (49,372) -
Acquisition of exploration assets 23 - (72,750)
Acquisition of exploration licence interests 12 (80,997) (49,583)
Acquisition of property, plant and equipment 14 (7,345) (1,453)
Proceeds from sale of Bhandut Joint Venture 6 387,937 -
Proceeds from sale of other investments 11 250,977 -
Net cash from/(used in) investing activities 501,200 (123,786)
------------ ------------
Cash flows from financing activities
Proceeds from issue of share capital 21(a) 5,451,042 2,365,288
Proceeds from 55,555,556 shares to be issued at 30 June 2020 (issued during July
2021) 90,449 -
Proceeds from exercise of share options 475,867 330,000
Payment for share issue costs (219,981) (186,708)
Proceeds from borrowings - 597,781
Repayment of borrowings (806,958) (330,000)
Net cash from financing activities 4,990,419 2,776,361
------------ ------------
Net increase/(decrease) in cash and cash equivalents 4,097,579 (185,086)
Cash and cash equivalents at 1 July 173,816 357,970
Effect of exchange rate fluctuations on cash held 39,372 932
Cash and cash equivalents at 30 June 8 4,310,767 173,816
------------ ------------
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 24.
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 22 September 2021.
(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 $614,345 (2020: $5,841,096),
had cash outflows from operating activities of $1,394,040 (2020:
$2,837,661), concluded the year with cash and cash equivalents of
$4,310,767 (2020: $173,816) and had no loans outstanding at
year-end (2020: loans outstanding of $769,555).
The Group will require further funding within the next twelve
months in order to progress the Cambay development and drilling
programme, to meet its ongoing administrative expenses, 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.
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.
NOTE 2 - BASIS OF PREPARATION (CONTINUED)
(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
dollars, Australian dollars or Pounds Sterling.
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 23. 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 25.
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.
(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 5
-- Trade and other receivables - refer note 9
-- Exploration and evaluation assets - refer note 12
-- Development assets - refer note 13
-- Property, plant and equipment - refer note 14
-- Provisions - refer note 16
-- Share-based payments - refer note 22
NOTE 2 - BASIS OF PREPARATION (CONTINUED)
(f) Key Estimates, Judgements and Assumptions (Continued)
COVID-19 pandemic
Judgement has been exercised in considering the impacts that the
ongoing 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 COVID-19 pandemic up to 30 June 2021 has been
financially negative for the consolidated entity. This is largely
due to its general impact in India where significant delays were
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 matter 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 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
any changes in accounting policies.
Changes in significant accounting policies
The Group has adopted all of the new or amended Accounting
Standards and Interpretations issued by the Australian Accounting
Standards Board ('AASB') that are mandatory for the current
reporting period. Any new or amended Accounting Standards or
Interpretations that are not yet mandatory have not been early
adopted.
The adoption of these Accounting Standards and Interpretations
did not have any significant impact on the financial performance or
position of the Group.
Accounting Standards and Interpretations issued but not yet
effective
A number of new or amended Accounting Standards and
Interpretations are effective for annual periods beginning after 1
January 2021 and earlier application is permitted; however, the
Group has not early adopted the new or amended Accounting Standards
and Interpretations in preparing these consolidated financial
statements. The Group has not yet assessed the impact of these new
or amended Accounting Standards and Interpretations, however, none
of these new or amended Accounting Standards and Interpretations
are expected to have a significant impact on the Group's
consolidated financial statements.
This section focuses on the results and performance of the
Group.
NOTE 3 - 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 Chief Executive Officer (CEO) (the Group's chief
operating decision maker). The operating results of a ll operating
segments are regularly reviewed by the Group's CEO 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 CEO 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 CEO 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
No revenues were recognised during the current and prior
financial periods 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.
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 12 and 13
Doubtful debts - refer note 9
Depreciation - refer note 14
Amortisation - refer note 13
Employee benefits - refer note 16
Leases - refer note 18
NOTE 3 - OPERATING SEGMENTS (CONTINUED)
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 3 - OPERATING SEGMENTS (Continued)
India (Discontinued) Australia United Kingdom Corporate
India (Discontinued) JPDA (1) Indonesia (2) Consolidated
--------------- ------------------------- ---------------------- ------------------- -------------------- --------------------- ---------------------- -------------------------- ----------------------------
2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
--------------- ----------- ------------ --------- ----------- -------- --------- -------- ---------- ---------- --------- ---------- ---------- ------------ ------------ ------------ ------------
Revenue
External - -
revenue - - - - - - - - - - - - - -
--------------- ----------- ------------ --------- ----------- -------- --------- -------- ---------- ---------- --------- ---------- ---------- ------------ ------------ ------------ ------------
Gross profit - - - - - - - - - - - - - - - -
--------------- ----------- ------------ --------- ----------- -------- --------- -------- ---------- ---------- --------- ---------- ---------- ------------ ------------ ------------ ------------
Care and
maintenance
expenditure
Care and
maintenance
costs (129,515) (192,274) (31,735) (38,410) - - - - - - - - - - (161,250) (230,684)
Amortisation
of
development
assets - (18) - - - - - - - - - - - - - (18)
Movement in
oil
stocks
inventory 19,178 (9,389) (1,845) - - - - - - - - - - - 17,333 (9,389)
Write-down of
inventories
to
net
realisable
values (29,922) (859,440) - (170,620) - - - - - - - - - - (29,922) (1,030,060)
--------------- ----------- ------------ --------- ----------- -------- --------- -------- ---------- ---------- --------- ---------- ---------- ------------ ------------ ------------ ------------
Total care and
maintenance
expenditure (140,259) (1,061,121) (33,580) (209,030) - - - - - - - - - - (173,839) (1,270,151)
Exploration
expenditure (519,700) (573,607) (9,209) (13,939) - - - - - - - (128,846) 6,578 (292,326) (522,331) (1,008,718)
Write-off of
exploration
and
evaluation
asset - - - - - - - - - - (309,703) - - - (309,703) -
Impairment of
development
assets - (1,348,458) - - - - - - - - - - - - - (1,348,458)
Depreciation (15,907) (17,702) (1,371) (1,529) - - - - - - - - (8,981) (7,635) (26,259) (26,866)
Share-based
payments - - - - - - - - - - - - (253,971) - (253,971) -
Gain on sale
of
Bhandut joint
venture
interest
after tax - - 788,236 - - - - - - - - - - - 788,236 -
Gain on sale
of
the CoEra
Limited
group after
tax - - - - 344,167 - - - - - - - - - 344,167 -
Other income - - - - - - - - - - - - 230,803 98,000 230,803 98,000
Reversal of
expected
credit losses - - 8,329 83,977 - - - - - - - - 526,385 23,336 534,714 107,313
Other expenses (122,030) (7,663) - - - (48,035) 152,395 (476,017) (102,085) (49,028) - - (1,003,992) (1,744,789) (1,075,712) (2,325,532)
--------------- ----------- ------------ --------- ----------- -------- --------- -------- ---------- ---------- --------- ---------- ---------- ------------ ------------ ------------ ------------
Reportable
segment
profit/(loss)
before income
tax (797,896) (3,008,551) 752,405 (140,521) 344,167 (48,035) 152,395 (476,017) (102,085) (49,028) (309,703) (128,846) (503,178) (1,923,414) (463,895) (5,774,412)
--------------- ----------- ------------ --------- ----------- -------- --------- -------- ---------- ---------- --------- ---------- ---------- ------------ ------------ ------------ ------------
Net finance
income (139,178) (69,317)
Foreign
exchange
(loss)/gain (11,272) 2,633
Income tax
expense - -
------------ ------------
Net loss for
the
year (614,345) (5,841,096)
------------ ------------
Segment assets 10,669,093 11,014,876 - 10,458 - 317,333 18,901 17,340 - - - - 4,455,772 466,567 15,143,766 11,826,574
--------------- ----------- ------------ --------- ----------- -------- --------- -------- ---------- ---------- --------- ---------- ---------- ------------ ------------ ------------ ------------
Segment
liabilities 4,649,701 4,998,350 - 451,470 - - 785,979 1,227,090 90,524 84,950 27,629 121,673 607,030 1,223,217 6,160,863 8,106,750
--------------- ----------- ------------ --------- ----------- -------- --------- -------- ---------- ---------- --------- ---------- ---------- ------------ ------------ ------------ ------------
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 4 - revenue and expenses
Loss from ordinary activities before tax has been determined
after the following revenues and expenses:
Note 2021 2020
$ $
------------ ------------
(a) Other income
Government assistance arrangements
(1) 130,400 98,000
Gain on sale of equity securities designated
as fair value through profit and loss
(FVTPL) 100,402 -
------------ ------------
230,802 98,000
------------ ------------
(b) Exploration expenditure and write-off
Exploration expenditure (513,122) ( 994 ,779)
Write-off of exploration and evaluation
asset 12 (309,703) -
(822,825) ( 994 ,779)
------------ ------------
(c) Care and maintenance expenditure
Care and maintenance expenditure (129,515) (192,274)
Amortisation of development assets - (18)
Movement in oil stocks inventory 19,178 (9,389)
Write-down of inventory to net realisable
values 10 (29,922) (859,440)
------------ ------------
(140,259) (1,061,121)
------------ ------------
(d) Administration expenses
Employee benefits expense (503,643) (718,210)
Administration expense (572,068) (1,249,232)
(1,075,711) (1,967,442)
------------ ------------
(e) Other expenses
Depreciation expense 14 (24,888) (25,339)
Termination penalty provision (JPDA
06-103 PSC) 16 - (297,885)
Loss on disposal of plant and equipment - (12,169)
(24,888) (335,393)
------------ ------------
(f) Finance income
Interest income 310 1,659
------------ ------------
(g) Finance costs
Interest expense - borrowings (71,365) (70,977)
Equity securities designated at FVTPL
- net change in fair value (68,123) -
------------ ------------
(139,488) (70,977)
------------ ------------
(h) Foreign exchange (loss)/gain -
net
Foreign exchange (loss)/gain - realised (22,873) 10,912
Foreign exchange (loss)/gain - unrealised 11,601 (8,277)
------------ ------------
(11,272) 2,635
------------ ------------
(1) Assistance packages provided by the Federal and State
government to businesses and employers in response to the impact of
the COVID-19 pandemic upon the Australian and West Australian
economies.
Accounting Policy - Revenue
The Group's Revenue policy is outlined in note 3.
NOTE 5 - INCOME TAX EXPENSE
Numerical reconciliation between tax expense and pre-tax
accounting loss:
2021 2020
$ $
------------ ------------
Loss from continuing operations before
tax (1,710,917) (5,652,540)
Profit/(Loss) from discontinued operations
before tax 1,096,572 (188,556)
------------ ------------
Total loss before tax (614,345) (5,841,096)
------------ ------------
Tax using the domestic corporation tax
rate of 26.0% (2020: 27.5%) (159,730) (1,606,301)
Effect of tax rate in foreign jurisdictions (367,625) (265,604)
Non-deductible expenses
Share-based payments 66,032 -
Foreign expenditure non-deductible 1,839,559 1,939,864
Other non-deductible expenses 71,770 149,560
Non assessable income
Government assistance arrangements (16,900) (13,750)
1,433,106 203,769
------------ ------------
Unrecognised deferred tax assets (DTA)
generated during the year and not
brought to account at reporting date as
realisation is not regarded as probable - -
------------ ------------
Tax expense 1,433,106 203,769
Tax losses utilised not previously brought
to account (1,433,106) (203,769)
------------ ------------
Impact of reduction in future tax rates 47,017 448,166
Unrecognised DTA not brought to account (47,017) (448,166)
------------ ------------
Tax expense for the year - -
------------ ------------
Tax Assets and Liabilities
During the year ended 30 June 2021, $1,433,106 of previously
unrecognised DTA on tax losses (2020: $203,769) were recognised and
offset against the current tax liability resulting in nil income
tax expense.
2021 2020
$ $
----------- -----------
Unrecognised deferred tax assets not brought
to account at reporting date as realisation
is not regarded as probable - temporary
differences
Other 23,144,686 28,520,335
Losses available for offset against future
taxable income 18,437,920 16,819,556
----------- -----------
Deferred tax asset not brought to account 41,582,606 45,339,891
----------- -----------
The deductible temporary differences and tax losses do not
expire under current tax legislation.
The deferred tax asset not brought to account for the 2021
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 2021 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 5 - 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
$3,677,761 (2020: $4,701,661).
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.
Uncertainty over income tax treatments
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.
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 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 6 - DISCONTINUED OPERATIONS AND DISPOSAL GROUPS HELD FOR
SALE
On 15 October 2020, the Group announced the completion of the
sale of its interests in the Cooper-Eromanga Basins to Armour
Energy Limited (Armour). Pursuant to a Share Purchase Agreement,
Armour acquired 100% of the issued capital of CoEra Limited
(including its interest in its two subsidiaries Holloman Petroleum
Pty Ltd and Cordillo Energy Pty Ltd) which held all the Group's
interests in the Cooper-Eromanga Basins.
As consideration for the acquisition of the Group's interests in
Cooper-Eromanga Basins, Armour issued 22,050,000 Armour shares to
Oilex Ltd.
In addition, on 28 May 2021, the Group announced the completion
of the sale of its 40% participating interest (PI) in the Bhandut
Production Sharing Contract (Bhandut PSC) following the receipt of
US$290,000 from the buyer, Kiri and Company Logistics Private
Limited (Kiri).
The Group's interest in the Cooper-Eromanga Basins up to 15
October 2020, and the Group's 40% participating interest in the
Bhandut PSC joint venture up to 22 March 2021 has been reported in
the current period as discontinued operations. Financial
information relating to the discontinued operations for the period
to their dates of disposal are set out below:
(a) Financial Performance
Information Bhandut Joint Venture CoEra Limited Group Total Discontinued Operations
------------------------ ---------------------- --------------------------------
2021 2020 2021 2020 2021 2020
$ $ $ $ $ $
----------- ----------- ---------- ---------- --------------- ---------------
Care and maintenance
expenditure
Care and maintenance costs (31,735) (38,409) - - (31,735) (38,409)
Movement in oil stocks inventory (1,845) - - - (1,845) -
Write-down of inventories to net
realisable values - (170,620) - - - (170,620)
----------- ----------- ---------- ---------- --------------- ---------------
Total care and maintenance
expenditure (33,580) (209,029) - - (33,580) (209,029)
Exploration expenditure (9,209) (13,940) - - (9,209) (13,940)
Reversal of expected credit
losses 8,329 83,977 - - 8,329 83,977
Depreciation expense (1,371) (1,529) - - (1,371) (1,529)
Administration expense - - - (48,035) - (48,035)
----------- ----------- ---------- ---------- --------------- ---------------
Loss before sale of discontinued
operations (35,831) (140,521) - (48,035) (35,831) (188,556)
Gain on sale of Bhandut Joint
Venture interest after tax 788,236 - - - 788,236 -
Gain on sale of the CoEra Limited
group after tax - - 344,167 - 344,167 -
----------- ----------- ---------- ---------- --------------- ---------------
Profit/(Loss) after tax from
discontinued operations 752,405 (140,521) 344,167 (48,035) 1,096,572 (188,556)
----------- ----------- ---------- ---------- --------------- ---------------
(b) Financial Position
Information Bhandut Joint Venture CoEra Limited Group Total Discontinued Operations
------------------------- ---------------------- --------------------------------
2021 2020 2021 2020 2021 2020
$ $ $ $ $ $
--------- -------------- -------- ------------ ---------- --------------------
Assets held for sale
Trade and other receivables - - - 79,333 - 79,333
Inventories - 3,290 - - - 3,290
Exploration and evaluation - - - 238,000 - 238,000
Property, plant and equipment - 7,168 - - - 7,168
-------- -------------- -------- ------------ ---------- --------------------
Total assets held for sale - 10,458 - 317,333 - 327,791
Liabilities directly
associated with the assets
held for sale
Trade and other payables - 10,205 - - - 10,205
Provisions - 441,264 - - - 441,264
-------- -------------- -------- ------------ ---------- --------------------
Total liabilities directly
associated with the assets held
for sale - 451,469 - - - 451,469
Net assets held for sale / (Net
liabilities directly associated
with the assets held for sale) - (441,011) - 317,333 - (123,678)
-------- -------------- -------- ------------ ---------- --------------------
(c) Cash Flow Information Bhandut Joint Venture CoEra Limited Group Total Discontinued Operations
------------------------ ---------------------- --------------------------------
2021 2020 2021 2020 2021 2020
$ $ $ $ $ $
----------- ----------- -------- ------------ --------------- ---------------
Cash flows from operating
activities
Cash receipts from
customers
Payments to suppliers and
employees (31,735) (38,409) - (48,035) (31,735) (86,444)
----------- ----------- -------- ------------ --------------- ---------------
Cash outflow from operations (31,735) (38,409) - (48,035) (31,735) (86,444)
Payments for exploration and
evaluation expenses (9,209) (13,940) - - (9,209) (13,940)
----------- ----------- -------- ------------ --------------- ---------------
Net cash used in operating
activities (40,944) (52,349) - (48,035) (40,944) (100,384)
Cash flows from investing
activities
Proceeds from sale of Bhandut
Joint Venture 387,937 - - - 387,937 -
----------- ----------- -------- ------------ --------------- ---------------
Net cash from investing
activities 387,937 - - - 387,937 -
Net increase/(decrease) in cash
and cash equivalents from
discontinued operations 346,993 (52,349) - (48,035) 346,993 (100,384)
----------- ----------- -------- ------------ --------------- ---------------
NOTE 6 - DISCONTINUED OPERATIONS AND DISPOSAL GROUPS HELD FOR
SALE (CONTINUED)
(c) Cash Flow Information (Continued)
Reconciliation of Profit/(Loss) After Tax from Discontinued
Operations to Net Cash Used in Operating Activities of Discontinued
Operations
Bhandut Joint Venture CoEra Limited Group Total Discontinued Operations
------------------------ ---------------------- --------------------------------
2021 2020 2021 2020 2021 2020
$ $ $ $ $ $
----------- ----------- ----------- --------- --------------- ---------------
Profit/(Loss) after tax from
discontinued operations 752,405 (140,521) 344,167 (48,035) 1,096,572 (188,556)
Adjusted for:
Non-cash movement in oil stocks
inventory 1,845 - - - 1,845 -
Non-cash write-down of
inventories to net realisable
values - 170,620 - - - 170,620
Reversal of expected credit
losses (8,329) (83,977) - - (8,329) (83,977)
Depreciation expense 1,371 1,529 - - 1,371 1,529
Gain on sale of Bhandut Joint
Venture interest after tax (788,236) - - - (788,236) -
Gain on sale of the CoEra Limited
group after tax - - (344,167) - (344,167) -
----------- ----------- ----------- --------- --------------- ---------------
(40,944) (52,349) - (48,035) (40,944) (100,384)
----------- ----------- ----------- --------- --------------- ---------------
(d) Carrying Amounts of Assets and Liabilities Disposed
Bhandut Joint Venture CoEra Limited Group Total Discontinued Operations
------------------------ ---------------------- --------------------------------
2021 2020 2021 2020 2021 2020
$ $ $ $ $ $
--------------- ------- ------------- ------- -------------------- ----------
Assets disposed
Trade and other receivables - - 79,333 - 79,333 -
Inventories - - - - - -
Exploration and evaluation - - 238,000 - 238,000 -
Property, plant and equipment 5,182 - - - 5,182 -
--------------- ------- ------------- ------- -------------------- ----------
Total assets disposed 5,182 - 317,333 - 322,515 -
Liabilities disposed
Trade and other payables - - - - - -
Provisions 402,820 - - - 402,820 -
--------------- ------- ------------- ------- -------------------- ----------
Total liabilities disposed 402,820 - - - 402,820 -
Carrying amount of investments
and net assets/(liabilities)
disposed (397,638) - 317,333 - (80,305) -
--------------- ------- ------------- ------- -------------------- ----------
(e) Details of the Disposal of Discontinued Operations
Bhandut Joint Venture CoEra Limited Group Total Discontinued Operations
------------------------ ---------------------- --------------------------------
2021 2020 2021 2020 2021 2020
$ $ $ $ $ $
-------------- -------- -------------- ------ -------------------- ----------
Total cash consideration received 387,937 - - - 387,937 -
Fair value of consideration
received
(22,050,000 Armour shares) - - 661,500 - 661,500 -
Add/(Less): Carrying amount of
net liabilities/(assets)
disposed 397,638 - (317,333) - 80,305 -
Derecognition of foreign currency
reserve 2,661 - - 2,661 -
Disposal costs - - - - - -
-------------- -------- -------------- ------ -------------------- ----------
Gain on sale of discontinued
operations before income tax 788,236 - 344,167 - 1,132,403 -
Less: Income tax expense on
gain on sale - - - - - -
-------------- -------- -------------- ------ -------------------- ----------
Gain on sale of discontinued
operations after income tax 788,236 - 344,167 - 1,132,403 -
-------------- -------- -------------- ------ -------------------- ----------
Accounting Policy
Discontinued Operations
A discontinued operation is a component of the consolidated
entity that has been disposed of or is classified as held for sale
and that represents a separate major line of business or
geographical area of operations, is part of a single co-ordinated
plan to dispose of such a line of business or area of operations,
or is a subsidiary acquired exclusively with a view to resale. The
results of discontinued operations are presented separately on the
face of the statement of profit or loss and other comprehensive
income.
NOTE 6 - DISCONTINUED OPERATIONS AND DISPOSAL GROUPS HELD FOR
SALE (CONTINUED)
Accounting Policy (Continued)
Non-Current or Disposal Groups Classified as Held for Sale
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 7 - LOSS PER SHARE
(a) Basic Loss Per Share
2021 2020
cents cents
-------------- --------------
Basic and diluted loss per share
From continuing operations (0.04) (0.18)
From discontinued operations 0.03 -
-------------- --------------
Total basic and diluted loss per share (0.01) (0.18)
-------------- --------------
2021 2020
$ $
-------------- --------------
Profit/(Loss) used in calculating loss per share
P rofit/( Loss) for the period attributable to ordinary shareholders:
From continuing operations (1,710,917) (5,652,540)
From discontinued operations 1,096,572 (188,556)
-------------- --------------
Total loss for the period attributable to ordinary shareholders (614,345) (5,841,096)
-------------- --------------
2021 2020
Note Number Number
-------------- --------------
Weighted average number of ordinary shares
Issued ordinary shares at 1 July 18 3,704,096,666 2,587,318,001
Effect of shares issued 529,240,402 575,564,712
Effect of share options exercised 49,671,610 57,280,753
-------------- --------------
Weighted average number of ordinary shares at 30 June 4,283,008,678 3,220,163,466
-------------- --------------
(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 - CASH AND CASH EQUIVALENTS
2021 2020
$ $
---------- --------
Cash at bank and on hand 4,310,767 173,816
---------- --------
The Group's exposure to interest rate risk and a sensitivity
analysis for financial assets and liabilities are disclosed in note
27(d)(ii).
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
2021 2020
$ $
------------ ------------
Loss after tax for the year (614,345) (5,841,096)
Amortisation of development assets - 18
Depreciation 26,259 26,867
Interest expense 41,342 43,439
Reversal of expected credit losses (534,714) (107,313)
Write-off of exploration and evaluation
asset 309,703 -
Gain on sale of Bhandut Joint Venture interest
after tax (788,236) -
Gain on sale of the CoEra Limited group
after tax (344,167) -
Gain on sale of equity securities designated
as FVTPL (100,402) -
Equity securities designated at FVTPL -
net change in fair value 68,123 -
Impairment of development assets - 1,348,458
Loss on disposal of assets - 12,169
Equity settled share-based payments 253,971 -
Unrealised foreign exchange (gain)/loss - (6,083)
Operating Loss Before Changes in Working
Capital and Provisions (1,682,466) (4,523,541)
Movement in trade and other payables 986,820 384,355
Movement in prepayments 7,826 132,253
Movement in trade and other receivables 260,288 (114,927)
Movement in provisions (1,065,999) 277,744
Movement in inventories 33,213 991,935
Movement in employee benefits 66,278 14,520
Net Cash Used in Operating Activities (1,394,040) (2,837,661)
------------ ------------
NOTE 9 - TRADE AND OTHER RECEIVABLES
2021 2020
$ $
------------ ------------
Current
Allocation of receivables
Joint venture receivables 845,187 458,829
Other receivables 86,534 96,066
Shares to be issued - 90,449
------------ ------------
931,721 645,344
------------ ------------
Joint venture receivables
Joint venture receivables 5,763,268 6,394,990
Provision for doubtful debts (4,918,081) (5,936,161)
845,187 458,829
------------ ------------
Other receivables
Corporate receivables 109,464 240,793
Provision for doubtful debts (22,930) (144,727)
86,534 96,066
------------ ------------
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 2021. 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
27(b).
2021 2020
$ $
------------ ------------
Movement in provision for doubtful debts
Balance at 1 July (6,080,888) (6,062,874)
Expected credit losses reversed during
the year 534,714 107,313
Bad debt written off against expected credit -
losses 117,887
Effect of movements in exchange rates 487,276 (125,327)
------------ ------------
Balance at 30 June (4,941,011) (6,080,888)
------------ ------------
Allocation of impairment loss
Joint venture receivables (4,918,081) (5,936,161)
Other receivables (22,930) (144,727)
------------ ------------
(4,941,011) (6,080,888)
------------ ------------
Subsequent Event
On 4 September 2021, the Company received cash proceeds of
US$543,114 (A$722,267) with regards to outstanding GSPC cash calls
for the Cambay PSC.
NOTE 9 - TRADE AND OTHER RECEIVABLES (CONTINUED)
Accounting Policy
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
losses' (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.
ECL assessment
The Group uses its allowance schedule to measure the ECL's of
trade and other receivables. The allowance schedule is based on
actual credit loss experience over the past years. The ECL's
computed are purely derived from historical data; management is of
the view that 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 10 - INVENTORIES
2021 2020
$ $
-------- --------
Oil on hand - net realisable value 38,340 21,857
Drilling inventory - net realisable value 64,577 124,227
-------- --------
102,917 146,084
-------- --------
Inventories have been reduced by $29,922 (2020: $859,440) as a
result of write-down to net realisable value. This does not include
a $nil (2020: $170,620) write-down to Bhandut JV inventories which
were reclassified as assets held for sale during the prior
financial year and disclosed as part of discontinued operations
(refer note 6).
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 - INVESTMENTS, INCLUDING DERIVATIVES
2021 2020
$ $
-------- -----
Current Investments
Equity securities - designated as at FVTPL 442,802 -
442,802 -
-------- -----
On 15 October 2020, the Group announced the completion of the
sale of its interests in the Cooper-Eromanga Basins to Armour
Energy Limited (Armour). Pursuant to a Share Purchase Agreement,
Armour acquired 100% of the issued capital of CoEra Limited,
including its interest in its two subsidiaries Holloman Petroleum
Pty Ltd and Cordillo Energy Pty Ltd, (the CoEra Group) which held
all the Group's interests in the Cooper-Eromanga Basins.
As consideration for the acquisition of the Group's interests in
Cooper-Eromanga Basins, Armour issued 22,050,000 Armour shares to
Oilex Ltd.
The shares issued as consideration by Armour are subject to
12-month voluntary escrow from 15 October 2020. On 15 January 2021,
the Company, with the approval of Armour, sold 5 million shares
held in Armour for net proceeds of $250,000. A further 19,153
shares held in Armour was sold on 3 February 2021 for net proceeds
of $977.
Reference is made to Note 6 for further financial information
regarding the CoEra Group.
Fair Value Measurement
The fair value measurement of the equity securities has been
determined using a three-level hierarchy, based on the lowest level
of input that is significant to the entire fair value measurement,
being:
Level 1: Quoted prices (unadjusted) in active markets for
identical assets that the Group can access at the measurement
date
Level 2: Inputs other than quoted prices included within Level 1
that are observable for the asset, either directly or
indirectly
Level 3: Unobservable inputs for the asset
Equity securities - designated as at FVTPL have been valued
using quoted market rates (Level 1). This valuation technique
maximises the use of observable market data where it is available
and relies as little as possible on entity specific estimates.
Dividends
Dividends received are recognised as other income by the Company
when the right to receive payment is established.
NOTE 11 - OTHER INVESTMENTS, INCLUDING DERIVATIVES
(CONTINUED)
Accounting Policy
Investments and other financial assets are initially measured at
fair value. Transaction costs are included as part of the initial
measurement, except for financial assets at fair value through
profit or loss. Such assets are subsequently measured at either
amortised cost or fair value depending on their classification.
Classification is determined based on both the business model
within which such assets are held and the contractual cash flow
characteristics of the financial asset unless an accounting
mismatch is being avoided.
Financial assets are derecognised when the rights to receive
cash flows have expired or have been transferred and the
consolidated entity has transferred substantially all the risks and
rewards of ownership. When there is no reasonable expectation of
recovering part or all of a financial asset, its carrying value is
written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value
through other comprehensive income are classified as financial
assets at fair value through profit or loss. Typically, such
financial assets will be either: (i) held for trading, where they
are acquired for the purpose of selling in the short-term with an
intention of making a profit, or a derivative; or (ii) designated
as such upon initial recognition where permitted. Fair value
movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive
income
Financial assets at fair value through other comprehensive
income include equity investments which the consolidated entity
intends to hold for the foreseeable future and has irrevocably
elected to classify them as such upon initial recognition.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected
credit losses on financial assets which are either measured at
amortised cost or fair value through other comprehensive income.
The measurement of the loss allowance depends upon the consolidated
entity's assessment at the end of each reporting period as to
whether the financial instrument's credit risk has increased
significantly since initial recognition, based on reasonable and
supportable information that is available, without undue cost or
effort to obtain.
Where there has not been a significant increase in exposure to
credit risk since initial recognition, a 12-month expected credit
loss allowance is estimated. This represents a portion of the
asset's lifetime expected credit losses that is attributable to a
default event that is possible within the next 12 months. Where a
financial asset has become credit impaired or where it is
determined that credit risk has increased significantly, the loss
allowance is based on the asset's lifetime expected credit losses.
The amount of expected credit loss recognised is measured on the
basis of the probability weighted present value of anticipated cash
shortfalls over the life of the instrument discounted at the
original effective interest rate.
For financial assets mandatorily measured at fair value through
other comprehensive income, the loss allowance is recognised in
other comprehensive income with a corresponding expense through
profit or loss. In all other cases, the loss allowance reduces the
asset's carrying value with a corresponding expense through profit
or loss.
NOTE 12 - EXPLORATION AND EVALUATION
2021 2020
$ $
---------- ----------
Balance at 1 July 581,322 568,888
Acquisition of exploration licence interests 260,331 238,000
Reclassification to assets held for sale
(Note 6) - (238,000)
Capitalised exploration and evaluation 68,264 -
expenditure, net of recovery
Write-off of exploration and evaluation (309,703) -
asset
Effect of movements in foreign exchange
rates (50,436) 12,434
---------- ----------
Balance at 30 June 549,778 581,322
---------- ----------
Doyle-Peel Licence (P2446) in the East Irish Sea (EIS)
As at 30 June 2021, $309,703 (after capitalisation of
exploration and evaluation expenditure) of the balance of
exploration and evaluation assets relates to the 100% participating
interest in the Doyle-Peel licence (P2446) in the East Irish Sea
(EIS), offshore the United Kingdom. The licence was acquired on 14
December 2020 with the consideration for acquisition of $260,331 to
be settled via a cash payment of GBP60,000 (in four equal
instalments) and the issue of 42,500,000 ordinary shares at
GBP0.002 each (amounting to a total share consideration of
GBP85,000). The share issue was approved by shareholders at the
Company's Annual General Meeting on 16 December 2020.
During the year, GBP45,000 of the GBP60,000 cash consideration
was paid, with the remaining GBP15,000 accrued and to be settled by
30 September 2021.
P2446 Licence Expenditure Commitments
At the date of acquisition of the P2446 licence, the Group had a
remaining committed work programme, which included the reprocessing
of 50 sq kms 3D seismic data, and obtaining 2,500 kms Aeromagnetic
data. This committed work programme was estimated to cost GBP25,000
(A$44,154). The work programme was completed in April and May 2021
at a lower than estimated total cost of A$31,787. As such, t here
are no minimum exploration work commitments for the P2446 licence
at 30 June 2021 .
P2446 Licence Subsequent Event and Write-Off
On 17 September 2021, the Company announced its plans to
relinquish the P2446 licence, following an unsuccessful request to
the UK Oil and Gas Authority (OGA) to extend the initial term of
the licence. The total amount invested in the licence (being
$309,703, consisting of $260,331 for the acquisition of the licence
and $49,372 for post-acquisition capitalised expenditure) has been
written off at 30 June 2021.
Cambay Field
The balance of the exploration and evaluation assets, being
$549,778 (2020: $581,322), relates to the Cambay Field, which is
currently at evaluation stage, and there was no impairment of this
asset during the year (2020: $nil).
The Cambay Field has minimal production that is sold to a third
party.
Further development of the Cambay field was on previously 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
was subject to significant delays due to the impact of the COVID-19
pandemic in India. On 16 February 2021, the Company announced its
advanced discussions with GSPC where it was proposed for Oilex to
acquire GSPC's 55% PI in Cambay. On 11 June 2021, the Company
announced the execution of the conditional binding sale and
purchase agreement (SPA) to acquire GSPC's 55% PI in the Cambay PSC
(Acquisition).
Following completion of the Company's equity raising in June
2021, and shareholder approval provided on 8 June 2021, the Company
subsequently secured a bank guarantee on 31 July 2021 for the
US$2.2 million consideration payable for the Acquisition. The
ratification of the SPA and Acquisition by the Government of India
is expected to occur in the coming months, and is the last
outstanding condition to completing the Acquisition.
There are no minimum exploration work commitments in the Cambay
PSC.
Cambay Field Subsequent Event
As noted above, the Company secured a bank guarantee on 31 July
2021 for the US$2.2 million consideration payable for the
Acquisition.
NOTE 12 - EXPLORATION AND EVALUATION (CONTINUED)
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 that 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 the 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 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 13 - DEVELOPMENT ASSETS
2021 2020
$ $
------------ -----------
Non-Current
Allocation of development assets
Cambay development asset 4,855,007 5,318,364
Cambay restoration asset 3,855,483 4,505,601
8,710,490 9,823,965
------------ -----------
Cost - Cambay development asset
Balance at 1 July 17,421,776 17,066,528
Effect of movements in foreign exchange
rates (1,447,049) 355,248
------------ -----------
Balance at 30 June 15,974,727 17,421,776
------------ -----------
Amortisation and impairment losses - Cambay
development asset
Balance at 1 July 12,103,412 10,570,938
Impairment of development assets - 1,348,458
Amortisation charge for the year - 17
Effect of movements in foreign exchange
rates (983,692) 183,999
----------- -----------
Balance at 30 June 11,119,720 12,103,412
----------- -----------
Carrying amount - Cambay development assets 4,855,007 5,318,364
----------- -----------
Cost - Cambay restoration asset
Balance at 1 July 4,505,601 3,374,181
Additions during the period - 1,131,420
Reduction due to reassessment of restoration
asset and provision (259,296)
Effect of movements in foreign exchange -
rates (390,822)
---------- ----------
Balance at 30 June 3,855,483 4,505,601
---------- ----------
Amortisation and impairment losses - Cambay
restoration asset
Balance at 30 June - -
---------- ----------
Carrying amount - Cambay restoration asset 3,855,483 4,505,601
---------- ----------
Carrying Amounts - Total
At 1 July 9,823,965 9,869,770
---------- ----------
At 30 June 8,710,490 9,823,965
---------- ----------
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, an
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 the ongoing COVID-19
pandemic, which has seen reduced global demand for energy products
and caused delays to the implementation of the dispute resolution
with GSPC. An impairment charge of $1,348,458 was applied to the
Cambay Field development assets for the financial year ended 30
June 2020.
Other than the ongoing COVID-19 pandemic, no other impairment
indicators were identified during 2021 and no further impairment
charges were applied to the Cambay Field development assets for the
financial year ended 30 June 2021.
During the year, a reassessment was made of the restoration
asset and provision, resulting in the reduction of the restoration
asset and provision by $259,296 (2020: $nil).
NOTE 13 - DEVELOPMENT ASSETS (CONTINUED)
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.
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 principles 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 the 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 14 - PROPERTY, PLANT AND EQUIPMENT
Motor Plant and Office
Vehicles Equipment Furniture Total
$ $ $ $
---------- ----------- ----------- ----------
Cost
Balance at 1 July 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 6) - (36,354) - (36,354)
Balance at 30 June
2020 10,533 867,000 94,929 972,462
Additions - 7,345 - 7,345
Disposals - - - -
Currency translation
differences (2,176) (29,144) (17,164) (48,484)
Balance at 30 June
2021 8,357 845,201 77,765 931,323
---------- ----------- ----------- ----------
Depreciation and Impairment
Losses
Balance at 1 July 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 1,552 9,869
Reclassification to
assets held for sale
(Note 6) - (29,186) - (29,186)
---------- ----------- ----------- ----------
Balance at 30 June
2020 10,324 775,362 82,736 868,422
Depreciation charge
for the year 68 22,714 2,106 24,888
Disposals - - - -
Currency translation
differences (2,127) (22,965) (15,800) (40,892)
Balance at 30 June
2021 8,265 775,111 69,042 852,418
---------- ----------- ----------- ----------
Carrying amounts
At 1 July 2020 209 91,638 12,193 104,040
---------- ----------- ----------- ----------
At 30 June 2021 92 70,090 8,723 78,905
---------- ----------- ----------- ----------
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.
Key Estimates and Assumptions - Estimation of Useful Lives of
Assets
The Group determines the estimated useful lives and related
depreciation and amortisation charges for its property, plant and
equipment. The useful lives could change significantly as a result
of technical innovations or some other event. The depreciation and
amortisation charge will increase where the useful lives are less
than previously estimated lives, or technically obsolete or
non-strategic assets that have been abandoned or sold will be
written off or written down.
NOTE 15 - TRADE AND OTHER PAYABLES
2021 2020
$ $
---------- ----------
Trade creditors 629,369 507,204
Accruals 684,292 564,140
Termination penalty payable (JPDA 06-103
PSC) 782,331 -
---------- ----------
2,095,992 1,071,344
---------- ----------
Trade and Other Payables
Due to the Company's assessment of the recoverability of
outstanding cash call amounts owing from its joint venture partner
(GSPC) in note 9, the Company is of the opinion that the Cambay
Joint Venture (2020: Cambay and Bhandut Joint Ventures) 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 $241,433 at 30 June 2021 to
cover the Cambay PSC (2020: $156,946 for the Cambay and Bhandut
PSC) third party liabilities.
The carrying value of trade and other payables is considered to
approximate its fair value due to the short-term nature of these
financial liabilities.
Termination Penalty Payable (JPDA 06-103 PSC)
2021 2020
$ $
---------- -----
Movement in termination penalty balance
Balance at 1 July - -
Realisation of termination penalty (US$800,000) 1,165,671 -
Partial repayment of termination penalty
(US$211,843) (283,668) -
Effect of movements in exchange rates (99,672) -
---------- -----
Balance at 30 June 782,331 -
---------- -----
The termination penalty payable relates to a settlement of
US$800,000, which was previously included as a provision of the
Company (refer Note 16). This provision was realised during the
year when Oilex committed to the termination penalty under the
terms of a Deed of Settlement and Release (Deed), which was
executed on 7 August 2020 to terminate the ongoing arbitration
proceedings arising from the termination of the JPDA Production
Sharing Contract (PSC) by the Autoridade Nacional Do Petroleo E
Minerais (ANPM) in 2015, and settle all claims and counterclaims
between the parties which occurred from October 2018 to August
2020. Further details of the history surrounding the arbitration
proceedings, claims and counterclaims are detailed in note 28 of
the Notes to the Consolidated Financial Statements for the year
ended 30 June 2020 (refer to the Annual Report for the year ended
30 June 2020).
During the year, the Group settled US$211,843 (A$283,668) of the
US$800,000 termination penalty, resulting in the remaining balance
payable being US$588,157 (A$782,331) at 30 June 2021. The remaining
balance is payable by 30 June 2022. The Deed further provided the
Company with the option, at its sole discretion, to extend the
settlement payments into the 2023-24 financial year.
In addition, during the year, the Company entered into an
unsecured loan facility agreement for US$800,000 with two of its
joint venture partners to fund the settlement. The facility was
unused at year-end. Refer to Note 17 for further details on the
US$800,000 loan facility, including its nominal interest rate and
year of maturity.
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 is 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 16 - PROVISIONS
2021 2020
$ $
-------- --------
Current - Employee Benefits 209,388 143,110
-------- --------
Site Restoration, Well Abandonment and
Other Provisions
Balance at 1 July 5,671,272 4,589,391
Provision adjustments during the year -
JPDA 06-103 PSC termination penalty (2020:
US$200,000) - 297,885
Realisation of JPDA 06-103 PSC termination
penalty (US$800,000) (1,165,671) -
Provision adjustments during the year -
Restoration (refer note 13) - 1,131,420
Reduction of provision due to reassessment
of restoration asset and provision (refer
note 13) (259,296) -
Reclassification to liabilities directly
associated with the assets held for sale
(refer note 6) - (441,264)
Effect of movements in exchange rates (390,822) 93,840
------------ ----------
Balance at 30 June 3,855,483 5,671,272
------------ ----------
Current - JPDA 06-103 PSC provision for
termination penalty - 1,165,671
Non-current - Restoration 3,855,483 4,505,601
------------ ----------
3,855,483 5,671,272
------------ ----------
Provision for JPDA 06-103 PSC Termination Penalty
The provision for the JPDA 06-103 PSC termination penalty
relates to a settlement of US$800,000, which was realised during
the year when Oilex committed to the termination penalty under the
terms of a Deed of Settlement and Release (Deed), which was
executed on 7 August 2020 (refer Note 15).
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 pipelines at the time of installation of the
assets. In most instances, the 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 the cost, future removal technologies in determining the
removal cost, and discount rates to determine the present value of
these cash flows.
NOTE 17 - BORROWINGS
2021 2020
$ $
------ --------
Unsecured loans - 769,555
- 769,555
------------------------ --------
Terms and repayment schedule of Series B, C and D Loans
At 30 June 2021, the terms and conditions of outstanding loans
are as follows:
2021 2020
$ $
------------------ -------------------
Nominal
interest Year Face Carrying Face Carrying
Currency rate of maturity value amount value amount
---------- ---------- ------------- ------- --------- -------- ---------
Unsecured loans - from
shareholders and financiers
Series B loan - A$250,000
(repaid 24 August 2020) AUD 5.0% - - - 250,000 247,357
Series C loan - GBP125,000
(repaid 31 March 2021) GBP 5.0% - - - 223,774 221,409
Series D loan - GBP225,000
(repaid 19 April 2021) GBP 5.0% - - - 331,185 300,789
------- --------- -------- ---------
- - 804,959 769,555
------- --------- -------- ---------
At balance date, there were no options issued to the lenders
that were outstanding; 204,545,455 Series D share options were
exercised on 7 April 2021 at GBP0.0011 (A$0.002) each and the
remaining options previously issued to lenders lapsed during the
year as follows:
-- 115,723,273 Series B share options, which lapsed on 31 July 2020;
-- 59,523,810 Series C share options, which lapsed on 1 August 2020;
-- 107,142,857 Series D share options, which lapsed on 1 August 2020; and
-- 113,636,364 Series C share options, which lapsed on 29 January 2021.
In determining the fair value of the liability component of
these borrowing arrangements, it was 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 were recognised in the
Loans Options Reserve as the loans were treated as a convertible
note. That is, the borrowing arrangement fell within the definition
of a compound financial instrument and as such was classified as
both a financial liability and equity.
The Loan Options Reserve amounts related to the expired share
options were applied to retained earnings upon their expiry.
The Series B, Series C and Series D loans were fully repaid
during the year, together with interest payable:
-- The A$250,000 Series B loan was fully repaid on 24 August
2020, together with interest payable ;
-- The GBP125,000 Series C loan was fully repaid on 31 March
2021, together with interest payable ;
-- The GBP225,000 Series D loan (of which only GBP185,000 was
drawn at 30 June 2020) was fully repaid on 19 April 2021, together
with interest payable.
The loans were subject to the following key undertakings without
prior approval by the lenders:
-- Not to dispose of assets having an aggregate value of more than A$1 million;
-- Not to incur any financial indebtedness more than A$50,000; and
-- Not to incur any aggregate payment or outgoing exceeding A$1
million (except for employee benefit expenses).
Terms and repayment schedule of US$800,000 Loan Facility
At 30 June 2021, the terms and conditions of the US$800,000 loan
facility is as follows:
2021 2020
$ $
------------------ ------------------
Nominal
interest Year Face Carrying Face Carrying
Currency rate of maturity value amount value amount
--------- ---------- ------------- ------- --------- ------- ---------
Unsecured loans - from
two of JPDA joint venture
partners
US$800,000 loan facility
(refer note 16) USD 11.0% 2023 - - - -
- - - -
------- --------- ------- ---------
No amounts were drawn from the US$800,000 loan facility during
the year.
NOTE 17 - 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 18 - LEASES
Short-term leases and leases of low value assets
Lease rentals are payable as follows:
2021 2020
$ $
------ ------
Within one year 3,887 5,126
One year or later and no later than five - -
years
------ ------
3,887 5,126
------ ------
During the 2021 financial year, the Group leased its head office
premises at 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.
The Group leases office premises in Gandhinagar (India). The
current lease had a three-year term, which commenced on 16 October
2016 and continued on a monthly rolling basis until it was
renegotiated on 1 July 2020 to be extended until 30 June 2021. The
lease has since been renegotiated to be extended until 31 December
2021.
2021 2020
$ $
------- -------
Expenses related to short-term leases
Operating lease rentals expensed during the financial year 23,759 76,104
------- -------
Accounting Policy
Definition of a lease
The Group 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 the 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
As a lessee, 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.
NOTE 18 - LEASES (CONTINUED)
Accounting Policy (Continued)
As a lessee (continued)
For leases of medium to large-value assets and long-term leases,
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 includes 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.
Leases of low-value assets and short-term leases
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 19 - 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 an 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 (2020: $nil).
There are no minimum exploration work commitments in the Cambay
Production Sharing Contract (refer to note 12).
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 the expiry of the
existing exploration leases.
Capital Expenditure Commitments
The Group had no capital commitments as at 30 June 2021 (2020:
$nil).
NOTE 20 - CONTINGENT ASSETS, CONTINGENT LIABILITIES AND
GUARANTEES
Contingent Assets and Contingent Liabilities at Reporting
Date
The Directors are of the opinion that, except as noted in note
16, there were no contingent assets or contingent liabilities as at
30 June 2021 and as at 30 June 2020.
Guarantees
Oilex Ltd has issued guarantees in relation to corporate credit
cards. The bank guarantees amount to $50,000 (2020: $50,000).
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 21 - 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
2021 2020
Issued Capital Issued Capital
Ordinary Shares Number of Ordinary Shares $ Number of Ordinary Shares $
-------------------------- --------------- -------------------------- ---------------
On issue at 1 July - fully
paid 3,704,096,666 179,254,814 2,587,318,001 176,502,200
Issue of share capital
Shares issued for cash
( (2) ( (5) ( (7) 1,570,903,361 5,451,042 874,289,063 2,365,288
Shares issued for
non-cash ( (1) ( (3) (
(4) ( (5) ( (8) ( (9) 176,623,458 405,675 62,873,896 194,999
Shares to be issued (
(1) - - 55,555,556 90,449
Exercise of unlisted
options ( (6) 234,348,086 475,867 124,060,150 330,000
Capital raising costs - (231,473) - (228,122)
Balance at 30 June - fully
paid 5,685,971,571 185,355,925 3,704,096,666 179,254,814
-------------------------- --------------- -------------------------- ---------------
Refer to the following notes for additional information and Note
22 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 27 November 2019 for the period from 1 November 2019 to 31
October 2020, and at the AGM held on 16 December 2020 for the
period from 1 November 2020 to 31 October 2021. Shareholder
approval was separately obtained at the General Meeting held on 8
June 2021 for the remuneration shares issued for the period from 1
May 2019 through to 31 October 2020. The shares were issued at a
price based upon the 10-Day Volume Weighted Average Price up to the
applicable quarter end of each period.
In accordance with the ASX waiver granted on 6 November 2020,
the Company advises that the number of remuneration shares that
were issued to directors totalled 26,447,267 for the year ended 30
June 2021, which was equivalent to 0.47% of the Company's issued
capital as at 30 June 2021.
Additional information of the issue of ordinary shares and
unlisted options:
(1) On 17 July 2020, the Company announced the issue 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,
which was included as other receivables at 30 June 2020;
- 71,922,222 shares to advisors and consultants in lieu of cash
fees payable at an issue price of GBP0.0009 (A$0.001792) per
ordinary share; and
- 31,111,111 shares to advisors and consultants in lieu of cash
fees payable at an issue price of GBP0.0009 (A$0.001458) per
ordinary share.
(2) On 31 July 2020, the Company announced that it had arranged
an equity capital raising, through Novum Securities Limited and
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 GBP0.0008 (A$0.00144) per share. On 10
August 2020, the Company announced the issue of the shares.
(3) On 17 December 2020, the Company announced that it had
issued 42,500,000 ordinary shares at GBP0.002 (A$0.00357), as part
consideration, to Burgate Exploration and Production Ltd following
completion of the East Irish Sea Transaction P2446 as announced by
the Company on 14 December 2020.
(4) On 12 February 2021, the Company announced the issue of
4,646,025 shares in lieu of non-executive director remuneration for
the period from 1 November 2020 through to 31 January 2021 at an
issue price of $0.002 per ordinary share.
NOTE 21 - ISSUED CAPITAL AND RESERVES (CONTINUED)
(5) On 15 March 2021, the Company announced:
- that it had arranged an equity capital raising, with existing
sophisticated shareholders, to secure further funding of GBP0.35
million (A$0.63 million) through the subscription of 250,000,000
new shares at GBP0.0014 (A$0.00252) per ordinary share; and
- the issue of 4,642,858 new ordinary shares as consideration in
lieu of fees payable to consultants at an issue price of GBP0.0014
(A$0.00252) per ordinary share.
On 17 March 2021, the Company announced the issue of the
shares.
(6) On 7 April 2021, the Company announced the issue of
234,348,086 shares upon the exercise of the following unlisted
options:
- 204,545,455 options convertible at GBP0.0011 (A$0.002) each pursuant to the Series D loan;
- 14,802,631 options convertible at GBP0.0019 (A$0.003) each; and
- 15,000,000 options convertible at GBP0.0008 (A$0.001) each.
(7) On 21 April 2021, the Company announced that it had arranged
an equity capital raising, with existing sophisticated shareholders
and clients of Novum Securities Limited, of GBP2.4 million (A$4.3
million) through the subscription of 1,008,403,361 new ordinary
shares at GBP0.00238 pence (A$0.00425) per share. The subscription
was completed in two tranches:
Tranche 1:
- 84,375,000 shares were issued on 23 April 2021; and
- 320,625,000 shares were issued on 29 April 2021.
Tranche 2:
- 251,418,066 shares were issued on 10 June 2021;
- 125,709,034 shares were issued on 21 June 2021; and
- 226,276,261 shares were issued on 24 June 2021.
(8) On 14 May 2021, the Company announced the issue of 1,882,398
shares in lieu of non-executive director remuneration for the
period from 1 February 2021 through to 30 April 2021 at an issue
price of $0.005 per ordinary share.
(9) On 22 June 2021, the Company announced the issue of
19,918,844 shares in lieu of non-executive director remuneration
for the period from 1 May 2019 through to 31 October 2020 at an
issue price of $0.0025 per ordinary share.
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.
Subsequent Event
On 12 August 2021, the Company announced the issue of 2,458,785
shares in lieu of non-executive director remuneration for the
period from 1 May 2021 through to 31 July 2021 at an issue price of
A$0.004 per ordinary share .
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.
(b) Reserves
2021 2020
$ $
---------- ----------
Foreign currency translation reserve 7,096,752 7,341,214
Options reserve - 69,202
Loan options reserve - 35,404
---------- ----------
7,096,752 7,445,820
---------- ----------
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.
NOTE 21 - ISSUED CAPITAL AND RESERVES (CONTINUED)
(b ) Reserves (Continued)
Foreign Currency Translation Reserve (FCTR) (Continued)
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 22 - 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:
2021 2020
$ $
-------- -----
Shares and rights - equity settled
Non-Executive Directors - remuneration shares (1) 68,119 -
Technical and administrative contractors 185,852 -
Total share-based payments expense 253,971 -
-------- -----
(1) At the Annual General Meeting (AGM) 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 two of the
Non-Executive Directors (Mr Haywood and Mr Schwarz) for the period
from 1 November 2018 to 31 October 2019. Mr Haywood and Mr Schwarz
also agreed to receive part of their directors' fees in the form of
the Company's shares in lieu of cash payments, in order to conserve
the cash reserves of the Company. Similar shareholder approval was
also received at the AGM held on 27 November 2019 for the period
from 1 November 2019 to 31 October 2020; and at the AGM held on 16
December 2020 for the period from 1 November 2020 to 31 October
2021. Shareholder approval was separately obtained at the General
Meeting held on 8 June 2021 for the remuneration shares issued for
the period from 1 May 2019 through to 31 October 2020.
In accordance with the ASX waiver granted 6 November 2020 , the
Company advised that the number of remuneration shares that were
issued to directors for the year ended 30 June 2021 totalled
26,447,267 (2020: nil) and the percentage of the Company's issued
capital represented by these remuneration shares was 0.47% (2020:
nil%).
As at 30 June 2021, the accrued non-executive director fees,
being remuneration shares not yet issued totalled $6,447 (2020:
$34,908).
Accounting Policy
Options allow directors, employees, financiers 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.
Options may also be provided as part of the 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.
NOTE 22 - SHARE-BASED PAYMENTS (CONTINUED)
Accounting Policy (Continued)
The number and weighted average exercise prices (WAEP) of
unlisted share options are as follows:
WAEP Number WAEP Number
2021 2021 2020 2020
------- --------------
Outstanding at 1 July $0.003 508,408,693 $0.004 161,220,442
Lapsed during the year $0.003 (402,696,971) $0.004 (215,218,662)
Exercised during the year (1) (4) $0.002 (234,348,086) $0.003 (124,060,150)
Granted during the year
* Granted to Brokers and Financiers (1) $0.009 618,403,361 $0.004 14,802,631
* Series A Loan Options - - $0.003 124,060,150
* Series B Loan Options (2) - - $0.003 176,392,160
* Series C Loan Options (3) $0.002 113,636,364 $0.004 59,523,810
* Series D Loan Options (4) - - $0.003 311,688,312
Outstanding at 30 June $0.009 603,403,361 $0.003 508,408,693
------- -------------- ------- --------------
Exercisable at 30 June $0.009 603,403,361 $0.003 508,408,693
------- -------------- ------- --------------
The unlisted options outstanding at 30 June 2021 have an
exercise price of GBP0.00476 (A$0.009) (2020: in the range of
$0.002 to $0.006) and a weighted average remaining contractual life
of 1.06 years (2020: 0.5 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 the 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 618,403,361 options issued to brokers and
financiers during the year (15,000,000 issued on 7 August 2020; and
603,403,361 of which 125,709,034 was issued on 21 June 2021 and
477,694,327 was issued on 24 June 2021):
Risk
Price of Free
2021 Fair Value Exercise Shares on Expected Interest Dividend
Grant Date Vesting Date Expiry Date Per Option Price Grant Date Volatility Rate Yield
------------- ------------- ------------- ------------- ------------- ------------ ---------- -------- --------
7 Aug 2020 7 Aug 2020 12 Aug 2022 GBP0.00042 GBP0.0008 GBP0.00085 90.45% 0.25% -
(A$0.0008) (A$0.0014) (A$0.002)
23 June 2021 23 June 2021 30 June 2022 GBP0.00077 GBP0.00476 GBP0.0019 122.26% 0.10% -
(A$0.0014) (A$0.009) (A$0.003)
------------- ------------- ------------------------------------------------------ ---------- -------- --------
The 15,000,000 options issued on 7 August 2020 were exercised
during the year on 7 April 2021.
14,802,631 which were issued to brokers and financiers in the
prior year were also exercised on 7 April 2021.
(2) All remaining Series B loan options lapsed during the period
on 31 July 2020.
(3) The fair value equity component of the 113,636,364 Series C
loan options which were issued on 18 December 2020 was 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 was recognised in the Loan Option
Reserve as the loans have been recognised as convertible notes.
These options lapsed during the period on 29 January 2021. Other
remaining Series C loan options which were granted in prior periods
also lapsed during the period on 1 August 2020.
For further information refer to Note 17: Borrowings.
(4) 204,545,455 Series D loan options were exercised during the
period on 7 April 2021. All other remaining Series D loan options
lapsed during the period on 1 August 2020.
Key Estimates and Assumptions - Share-Based Payment
Transactions
The Group measures the cost of equity-settled transactions with
directors, employees, financiers and advisors by reference to the
fair value of the equity instruments at the date at which they are
granted. The fair value is determined by using either the Binomial
or Black-Scholes model taking into account the terms and conditions
upon which the instruments were granted. The accounting estimates
and assumptions relating to equity-settled share-based payments
would have no impact on the carrying amounts of assets and
liabilities within the next annual reporting period but may impact
profit or loss and equity.
NOTE 23 - CONSOLIDATED ENTITIES
Ownership Interest %
----------------
Country of 2021 2020
Incorporation
--------------------------------------------------------------------------- ---------------- ----------- ----------
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, disposed 15 October 2020) Australia - 100
Holloman Petroleum Pty Ltd (acquired 16 October 2019, disposed 15 October
2020) Australia - 100
Cordillo Energy Pty Ltd (incorporated 18 October 2019, disposed 15 October
2020) Australia - 100
Oilex EIS Limited (incorporated 12 December 2019) United Kingdom 100 100
--------------------------------------------------------------------------- ---------------- ----------- ----------
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 were 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.
Disposal of Operations
On 15 October 2020, the Group announced the completion of the
sale of its interests in the Cooper-Eromanga Basins to Armour
Energy Limited (Armour). Pursuant to a Share Purchase Agreement,
Armour acquired 100% of the issued capital of CoEra Limited
(including its interest in its two subsidiaries Holloman Petroleum
Pty Ltd and Cordillo Energy Pty Ltd) which held all the Group's
interests in the Cooper-Eromanga Basins.
Refer to Note 6 for further details of the sale of CoEra Limited
and its two subsidiaries.
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 24 - PARENT ENTITY DISCLOSURE
As at, and throughout, the financial year ended 30 June 2021 the
parent entity of the Group was Oilex Ltd.
2021 2020
$ $
Result of the parent entity
Loss for the year (1,467,667) (3,812,707)
(275, 240
Other comprehensive income/(loss) (241,941) )
-------------- --------------
Total comprehensive loss for the year (1,709,608) (4,087,947)
-------------- --------------
Financial position of the parent entity
at year end
Current assets 4,402,427 224,271
Total assets 11,095,506 5,325,470
Current liabilities 1,050,148 1,613,752
Total liabilities 3,620,469 3,863,201
Net assets 7,475,037 1,462,269
-------------- --------------
Total equity of the parent entity comprising
of:
Issued capital 185,355,925 179,254,814
Option reserve - 35,404
Loans Options Reserve - 69,202
Foreign currency translation reserve 4,552,133 4,776,928
Accumulated losses (182,433,021) (182,674,079)
-------------- --------------
Total equity 7,475,037 1,462,269
-------------- --------------
Parent entity contingent assets, contingent liabilities and
guarantees
The Directors are of the opinion that Oilex Ltd has no
contingent assets or contingent liabilities as at 30 June 2021 and
as at 30 June 2020.
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. (2020:
$50,000).
Parent entity capital commitments for acquisition of property
plant and equipment
Oilex Ltd had no capital commitments as at 30 June 2021 (2020:
$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 JPDA 06-103 Production
Sharing Contract (PSC) entered into with the Timor Sea Designated
Authority dated 15 November 2006. The PSC was terminated on 15 July
2015, however, the Joint Operating Agreement between the Joint
Venture participants is still in effect, and as such the Deed of
Parent Company Performance Guarantee is also still in effect.
Oilex Ltd has issued no other guarantees in respect of the debts
of its subsidiaries.
NOTE 25 - JOINT ARRANGEMENTS
The Group's interests in joint arrangements as at 30 June 2021
are detailed below. Principal activities are oil and gas
exploration, evaluation, development and production.
(a) Joint Operations Interest
2021 2020
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 (2) India (Cambay Basin) - 40.0
West Kampar Block (3) Indonesia (Central Sumatra) - -
(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) On 28 May 2021, the Group announced the completion of the
sale of its 40% participating interest (PI) in the Bhandut
Production Sharing Contract (Bhandut PSC) following the receipt of
US$290,000 from the buyer, Kiri and Company Logistics Private
Limited (Kiri).
Refer to Note 6 for further details of the sale of the Bhandut
Joint Venture.
(3) Oilex (West Kampar) Limited held 45% participating interest
in the West Kampar Contract Area Production Sharing Contract before
it was terminated on 15 August 2018.
On 27 July 2020, the Company announced that substantial progress
was made towards the Company's objective to regain a participating
interest in the West Kampar PSC in Indonesia.
Following various meetings and correspondence with the
Government of Indonesia and with the support of the Company's local
Indonesian partner, the Government of Indonesia 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.
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.
NOTE 25 - JOINT ARRANGEMENTS (CONTINUED)
(b) Joint Operations
The aggregate of the Group's interests in all joint operations
is as follows:
2021 2020
$ $
Current assets
Cash and cash equivalents 20,381 33,360
Trade and other receivables (1) 1,967,776 2,109,359
Inventories 94,301 1,133,931
Prepayments 4,643 5,399
---------- -----------
Total current assets 2,087,101 3,282,049
---------- -----------
Non-current assets
Exploration and evaluation 549,777 581,321
Development assets 4,855,008 9,823,965
Property, plant and equipment 64,842 95,509
---------- -----------
Total non-current assets 5,469,627 10,500,797
---------- -----------
Total assets 7,556,728 13,782,846
---------- -----------
Current liabilities
Trade and other payables (445,021) (283,038)
---------- -----------
Total liabilities (445,021) (283,038)
---------- -----------
Net assets 7,111,707 13,499,808
---------- -----------
(1) The balance of trade and other receivables of the joint
operations is before any impairment and provisions.
(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 an application for an exploration permit is made
and at other times. These obligations are not provided for in the
financial report.
The Group has no exploration expenditure commitments
attributable to joint operations during the year (2020: $nil).
There are no minimum exploration work commitments in the Cambay
Production Sharing Contract.
Accounting Policy
Joint arrangements are arrangements in 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 provide the Group a right to the net assets of
the venture and are accounted for using the equity method.
NOTE 26 - RELATED PARTIES
Identity of Related Parties
The Group has a related party relationship with its subsidiaries
(refer note 23), joint operations (refer note 25) and with its key
management personnel.
Key Management Personnel
The following were key management personnel of the Group at any
time during the current and previous financial years and unless
otherwise indicated were key management personnel for the entire
period:
Non-Executive Directors Position
------------------------------------------- -------------------------------------
Mark Bolton (1) Non-Executive Director
Paul Haywood Non-Executive Director
Peter Schwarz (appointed 4 September 2019) Non-Executive Director
Brad Lingo (resigned 5 May 2020) Non-Executive Chairman
Executive Directors Position
------------------------------------------- -------------------------------------
Roland Wessel (appointed 16 June 2021) Chief Executive Officer and Director
Joe Salomon (2) Executive Chairman
Executives Position
------------------------------------------- -------------------------------------
Colin Judd (appointed 1 July 2021) Chief Financial Officer
Ashish Khare Head of India Assets
(1) Executive Director and Chief Financial Officer during the
current period until 1 July 2021, Company Secretary during the
current period until 25 August 2021, and appointed as Non-Executive
Director on 1 July 2021.
(2) Mr Salomon was Managing Director and Interim Chairman during
the current period until 16 June 2021 when he was appointed
Executive Chairman. Mr Salomon was appointed as Interim Chairman
during the previous period on 5 May 2020 following Mr Lingo's
resignation.
Key Management Personnel Compensation
Key management personnel compensation comprised the
following:
2021 2020
$ $
-------- --------
Short-term employee benefits 322,220 757,848
Other long-term benefits 17,897 34,546
Non-monetary benefits 4,789 5,777
Post-employment benefits 16,310 67,372
Equity compensation benefits - shares issued
in lieu of salary 39,574 33,103
-------- --------
400,790 898,646
-------- --------
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 27 - 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:
2021 2020
$ $
---------- --------
Cash and cash equivalents 4,310,767 173,816
Trade and other receivables - current 931,721 645,344
5,242,488 819,160
---------- --------
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 are
$5,694,109 (2020: $6,294,032).
Impairment Losses
The aging of the trade and other receivables at the reporting
date was:
2021 2020
$ $
------------ ------------
Consolidated Gross
Not past due 120,946 226,557
Past due 0-30 days 25,409 177,421
Past due 31-120 days (31,083) 141,146
Past due 121 days to one year 418,111 738,319
More than one year 5,339,349 5,442,789
------------ ------------
5,872,732 6,726,232
Provision for doubtful debts (4,941,011) (6,080,888)
------------ ------------
Trade and other receivables net of provision 931,721 645,344
------------ ------------
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 receivable amounts, is uncertain of the timing or of
full recovery.
NOTE 27 - FINANCIAL INSTRUMENTS (CONTINUED)
(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
$ $ $ $
$ $
---------------- ----------- ---------- ----------------- -------------- -------------
2021
Trade and other payables 2,095,992 2,095,992 2,095,992 2,095,992 - -
Borrowings - - - - - -
Total financial
liabilities 2,095,992 2,095,992 2,095,992 2,095,992 - -
---------------- ----------- ---------- ----------------- -------------- -------------
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 -
---------------- ----------- ---------- ----------------- -------------- -------------
(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 the British
pound (GBP).
The amounts in the table below represent the Australian dollar
equivalent of balances in the entities within the Oilex Group that
are held in a currency other than the functional currency in which
they are measured in those entities. The exposure to currency risk
at balance date was as follows:
2021 2020
---------------------------
USD INR GBP USD INR GBP
In Australian dollar $ $
equivalents $ $ $ $
--------------------------- ---------- ---------- --------- --------- ---------- ----------
Cash and cash equivalents 3,007,650 249,093 730,290 1,591 67,746 20,346
Trade and other
receivables (1) 91,652 2,914,518 - 267,162 3,136,248 -
Trade and other
payables (816,211) (893,070) (65,918) (29,971) (403,585) (128,669)
Loans - - - - - (522,198)
---------- ---------- --------- --------- ---------- ----------
Net balance sheet
exposure 2,283,091 2,270,541 664,372 238,782 2,800,409 (630,521)
---------- ---------- --------- --------- ---------- ----------
(1) Trade and other receivables of joint operations are before
any impairment and provisions.
The following significant exchange rates applied during the
year:
Average Rate Reporting Date Spot Rate
AUD 2021 2020 2021 2020
----- -------- --------- ------------- ------------
USD 0.7468 0.6714 0.7518 0.6863
INR 55.0235 48.5957 55.9200 51.8000
GBP 0.5546 0.5329 0.5429 0.5586
----- -------- --------- ------------- ------------
NOTE 27 - FINANCIAL INSTRUMENTS (CONTINUED)
(d ) Market Risk (Continued)
i) Currency risk (continued)
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
2021.
2021 2020
$ $
---------- ----------
10% Strengthening
United States dollars (USD) 201,817 23,274
Indian rupees (INR) 265,221 290,819
British pounds (GBP) (66,437) 63,052
10% Weakening
United States dollars (USD) (201,817) (23,274)
Indian rupees (INR) (265,221) (290,819)
British pounds (GBP) 66,437 (63,052)
ii) Interest rate risk
At the reporting date the interest rate profile of the Group's
interest-bearing financial instruments were:
Carrying Amount
2021 2020
$ $
---------- ----------
Fixed Rate Instruments
Financial assets (short-term deposits included
in trade receivables) 50,000 50,000
Financial liabilities (borrowings) - (769,555)
Variable Rate Instruments
Financial assets (cash and cash equivalents) 4,310,767 173,816
---------- ----------
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
was performed on the same basis for 2020.
2021 2020
$ $
------- ------
Impact on profit or loss 43,108 1,738
------- ------
iii) Equity price risk
Exposure
The Group's exposure to equity securities price risk arises from
the Group's equity securities designated as at FVTPL (refer note
11). The Group's equity securities are publicly traded on the
Australian Stock Exchange.
Equity price risk sensitivity analysis
The Group's equity securities designated as at FVTPL are listed
on the Australian Stock Exchange. For such investments classified
as at FVTPL, the impact of a 5% increase in the price of the listed
investment would have increased profit or loss by $22,140 after
tax. An equal change in the opposite direction would have decreased
profit or loss by $22,140 after tax.
Amounts recognised in profit or loss and other comprehensive
income
The amounts recognised in profit or loss and other comprehensive
income in relation to the Group's equity securities designated as
at FVTPL are disclosed in notes 4(a) and 4(g).
NOTE 27 - FINANCIAL INSTRUMENTS (CONTINUED)
(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 (not already disclosed) on
items that are required to be disclosed to comply with Australian
Accounting Standards, other regulatory pronouncements and the
Corporations Act 2001.
NOTE 28 - AUDITORS' REMUNERATION
2021 2020
$ $
Audit and review services
Auditors of the Company - PKF Perth
Audit and review of financial reports 47,500 50,000
Audit of Joint Operations operated by Oilex Ltd
Operator proportion only 500 -
48,000 50,000
Other Auditors
Audit and review of financial reports (India Statutory) 5,320 5,821
Audit and review of financial reports (Cyprus Statutory) 20,396 22,687
Audit of Joint Operations operated by Oilex Ltd
Operator proportion only 180 414
73,896 78,922
Other services
Auditors of the Company - PKF Perth
Taxation compliance services 8,758 8,389
8,758 8,389
Other Auditors
Taxation compliance services (India Statutory) 6,810 7,451
------- -------
15,567 15,840
------- -------
NOTE 29 - SUBSEQUENT EVENTS
The impact of the COVID-19 pandemic is ongoing and while it has
been financially negative for the consolidated entity up to 30 June
2021, 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.
Following the Company's announcement on 11 June 2021 on the
execution of the SPA and the Acquisition of Cambay, the Company
secured a bank guarantee on 31 July 2021 for the US$2.2 million
consideration payable for the Acquisition. The ratification of the
SPA and Acquisition by the Government of India is expected to occur
in the coming months and is the last outstanding condition to
completing the Acquisition. Refer to Note 12 for further details of
the Acquisition.
On 12 August 2021, the Company also announced the issue of
2,458,785 shares in lieu of non-executive director remuneration for
the period from 1 May 2021 through to 31 July 2021 at an issue
price of $0.004 per ordinary share.
On 4 September 2021, the Company received cash proceeds of
US$543,114 with regards to outstanding GSPC cash calls for the
Cambay PSC.
On 17 September 2021, the Company announced its plans to
relinquish the P2446 licence, following an unsuccessful request to
the UK Oil and Gas Authority (OGA) to extend the initial term of
the licence. This has been recognised in the 30 June 2021 results
with a write-off of $309,703 in respect of licence acquisition
costs ($260,331) and post-acquisition capitalised expenditure
($49,372) (refer note 12).
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, as
set out on pages 27 to 71 , and the Remuneration Report in the
Directors' Report, as set out on pages 17 to 24 , 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 2021 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
(b) 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 2021
(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 Mr Roland Wessel
Executive Chairman Chief Executive Officer
West Perth
Western Australia
22 September 2021
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 2021, 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 2021 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.
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 matters. For each matter below, our description of
how our audit addressed these matters is provided in that
context
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.
1 - Carrying value of mine development assets
At 30 June 2021 the carrying Our work included, but was not
value of mine development assets limited to, the following procedures:
was $8,710,490 (2020: $9,823,965), * Reviewing management's impairment model, including
as disclosed in Note 13. consideration of inputs used in net present value
This amount is comprised by Cambay calculations ;
Development Assets of $4,855,008
(2020: $9,823,965) and Restoration
Asset of $3,855,482 (2020: $4,505,601). * Reviewing management's assessment of impairment of
Each year management is required the cash generating units;
to assess whether there are any
indicators that the total project
may be impaired in accordance * Reviewing competent persons report on the mineable
with AASB 136 Impairment of Assets. reserves and valuation, it's congruence with
Management's impairment assessment management's assessment and the competence/
indicated that no impairment independence of the author;
was required.
There is a level of judgement
applied in determining the treatment * Ensuring valid mining licenses held and consider
of the mine asset in accordance impairment of assets for which no license is now
with AASB 116 Property, Plant held;
and Equipment and whether the
asset is impaired in accordance
with AASB 136 Impairment of Assets * Ensure that disclosures within the financial
. statements are accurate and that all estimates and
The evaluation of the recoverable judgements made by management are included therein,
amount of the mine asset requires and
significant judgement in determining
the key assumptions supporting
the expected future cash flows * Assessing the appropriateness of the related
of the Cambay Project. disclosures in Note 13.
2 - Carrying value of capitalised exploration expenditure
As at 30 June 2021 the carrying Our work included, but was not
value of exploration and evaluation limited to, the following procedures:
assets was $549,778 (2020: $581,322), * Conducting a detailed review of management's
as disclosed in Note 12. assessment of impairment trigger events prepared in
The consolidated entity's accounting accordance with AASB 6 including:
policy in respect of exploration
and evaluation expenditure is
outlined in Note 12. Estimates o assessing whether the rights
and judgments in relation to to tenure of the areas of interest
capitalised exploration and evaluation remained current at reporting
expenditure is detailed at Note date as well as confirming that
12. rights to tenure are expected
Significant judgement is required: to be renewed for tenements
* in determining whether facts and circumstances that will expire in the near
indicate that the exploration and evaluation assets future;
should be tested for impairment in accordance with o holding discussions with the
Australian Accounting Standard AASB 6 Exploration for Directors and management as
and Evaluation of Mineral Resources ("AASB 6"); and to the status of ongoing exploration
programmes for the areas of
interest, as well as assessing
* in determining the treatment of exploration and if there was evidence that a
evaluation expenditure in accordance with AASB 6, and decision had been made to discontinue
the consolidated entity's accounting policy. In activities in any specific areas
particular: of interest; and
o obtaining evidence of the
consolidated entity's future
o whether the particular areas intention, reviewing planned
of interest meet the recognition expenditure and related work
conditions for an asset; and programmes;
o which elements of exploration * considering whether exploration activities for the
and evaluation expenditures qualify areas of interest had reached a stage where a
for capitalisation for each area reasonable assessment of economically recoverable
of interest. reserves existed;
* 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 12.
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 2021, 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 2021.
In our opinion, the Remuneration Report of Oilex Ltd for the
year ended 30 June 2021, 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
22 September 2021
West Perth,
Western Australia
Shareholder information as at 1 September 2021
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 Mrs Suzie Foreman.
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 shareholdings:
Number of Number of % of issued
Size of holding holders shares capital
----------------- ---------- -------------- ------------
1 - 1,000 290 117,905 0.00
1,001 - 5,000 447 1,321,883 0.02
5,001 - 10,000 291 2,348147 0.04
10,001 - 100,000 763 32,185,578 0.57
100,001 and
over 815 5,652,456,843 99.37
---------- -------------- ------------
Total 2,606 5,688,430,356 100.00
---------- -------------- ------------
(b) Of the above total 1,857 ordinary shareholders hold less than a marketable parcel.
(c) Distribution of option holdings:
Number of Number of
Size of holding holders options % of options
------------------ ---------- ------------ -------------
1 - 1,000 - - -
1,001 - 5,000 - - -
5,001 - 10,000 - - -
10,001 - 100,000 - - -
100,001 and
over 3 603,403,361 100.00
---------- ------------ -------------
Total 3 603,403,361 100.00
---------- ------------ -------------
(d) 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 603,403,361.
Class Number of
Number of holders holding
unquoted Number 20% or more
equity securities of holders in the class
------------------------------ ------------------- ------------ -----------------
Unlisted options exercisable
at GBP 0.00476 expiring
30 June 2022 603,403,361 3 3
Total 603,403,361 3 3
------------------- ------------ -----------------
Unquoted Equity Security Holdings Greater Than or Equal to
20%
Unlisted options exercisable Number of
at GBP 0.00476 expiring unlisted
30 June 2022 options Percentage
-------------------------------- ------------ -----------
Lombard Bank Malta p.l.c 125,709,034 20.83
Republic Investment Management
Ple Ltd 226,276,261 37.50
Novum Securities Limited 251,418,066 41.67
Total 603,403,361 100.00
------------ -----------
Twenty Largest Shareholders
% of issued
Shareholders Shares Held capital
---------------------------------------- ----------------------- ------------
Vidacos Nominees Limited <151004> 698,972,628 # 12.29
Hargreaves Lansdown (Nominees) Limited
<15942> 449,872,439 # 7.91
Interactive Investor Services Nominees
Limited <SMKTISAS> 306,499,174 # 5.39
Interactive Investor Services Nominees
Limited <SMKTNOMS> 305,340,289 # 5.37
Hargreaves Lansdown (Nominees) Limited
<HLNOM> 275,917,644 # 4.85
Hargreaves Lansdown (Nominees) Limited
<VRA> 265,016,855 # 4.66
HSDL Nominees Limited 242,396,375 # 4.26
Barclays Direct Investing Nominees
Limited <CLIENT1> 236,552,471 # 4.16
Lynchwood Nominees Limited <2006420> 235,272,776 # 4.14
Vidacos Nominees Limited <LGUKCIT> 183,770,506 # 3.23
HSDL Nominees Limited <MAXI> 150,334,462 # 2.64
Vidacos Nominees Limited <FGN> 147,646,149 # 2.60
HSBC Client Holdings Nominee (UK)
Limited <731504> 125,419,396 # 2.20
Jim Nominees Limited <JARVIS> 117,506,025 # 2.07
TH Investments Pte Ltd 111,111,111 1.95
HSDL Nominees Limited <LWMAXI> 77,494,453 # 1.36
Zeta Resources Limited 71,323,567 1.25
Rock (Nominees) Limited <CSHNET> 61,987,331 # 1.09
Lawshare Nominees Limited <SIPP> 58,965,804 # 1.04
Lawshare Nominees Limited <ISA> 55,386,357 # 0.97
Total 4,176,785,812 73.43
Total issued shares as at 1 September
2021 5,688,430,276 100.00
---------------------------------------- ----------------------- ------------
(#) Included within the total issued capital are 4,618,806,439
shares held on the AIM register. Included within the top 20
shareholders are certain AIM registered holders as marked.
Substantial shareholders as disclosed in the most recent
substantial shareholder notices given to the company are as
follows:
Shares % of issued Unlisted
Substantial Shareholders Held capital Options Held
-------------------------------- ------------ ------------ --------------
Republic Investment Management 226,276,261
Ple Ltd 698,972,628 12.29 (1)
(1) Republic Investment Management Pte Ltd holds 226,276,261
unlisted options exercisable at GBP 0.00476 expiring on 30
June 2022.
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
Roland Wessel Oilex Ltd's shares are listed
Chief Executive Officer under the code OEX on the
and Director Australian Securities Exchange
and on the Alternative Investment
Joe Salomon (B APP SC (Geology), Market of the London Stock
GAICD) Exchange (AIM)
Executive Chairman
AIM Nominated Adviser
Mark Bolton (B Business) Strand Hanson Limited
Non-Executive Director 26 Mount Row
London W1K 3SQ
Paul Haywood United Kingdom
Non-Executive Director
AIM Broker
Peter Schwarz Novum Securities Limited
(B Sc (Geology), M Sc (Petroleum 2nd Floor
Geology)) Lansdowne House
Non-Executive Director 57 Berkeley Square
London W1J 6ER
United Kingdom
Company Secretary
Suzie Foreman (FGIA, CA,
BComm)
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 255 The Pavilions
West Perth Western Australia Bridgwater Road
6872 Bristol BS13 8AE
Australia United Kingdom
India Operations - Gandhinagar
Project Office Auditors
3rd Floor Radhe Arcade 'Block PKF Perth
C' Level 5, 35 Havelock Street
Nr. Swagat Rainforest 1, West Perth Western Australia
Kudasan 6005
Gandhinagar Koba Road Australia
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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END
FR DZGZLDZRGMZM
(END) Dow Jones Newswires
September 22, 2021 10:59 ET (14:59 GMT)
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