AnnuAl
RepoRt
2020
uncovering
hidden value
Maximising shareholder
value by recognising
high-impact strategic
opportunities before
our competitors
2
3D Oil has strengthened its portfolio of high
potential, frontier offshore exploration permits
in Australia, while ensuring the progression
of high-impact gas projects through arguably
one of the best farmout deals in the last 15 years
in Australia.
A farm down in equity of T/49-P permit (20%-owned),
offshore Otway Basin, to ConocoPhillips provides the
opportunity to realise a total prospective gas resource
of 10TCF (Best Estimate).
The 100%-owned WA- 527-P permit covers a
large underexplored area with similar plays to the
significant Dorado-1 hydrocarbon discovery in the
Bedout Sub-basin.
The 50%-owned VIC-P74 permit, offshore Gippsland
Basin, is proximal to the largest oil discovery in
Australia and under evaluation through the recent
purchase of state-of-the-art reprocessing.
Executive Chairman’s Letter to shareholders
Review of operations
Directors' report
Auditor's independence declaration
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors' declaration
Independent auditor's report to the members of 3D Oil Limited
Shareholder information
Corporate directory
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3
executive
chAiRmAn’s
letteR to
shAReholdeRs
4
If just for a moment we put the effects of
Covid-19 on the global economy aside I can
categorically state that 3D Oil has had its
most positive year since the inception of
the company.
Of course, virtually all facets of business
have been affected by the tsunami which
is Covid-19 and the oil and gas industry is
no exception. In fact, prior to the outbreak a
glut of oil globally had already significantly
softened the oil price. Covid-19 drove global
oil price below US$ 30 per bbl and resulted
in some cases an inability to dispose of oil as
global demand dropped by approximately
10%. Subsequently gas prices have fallen as
a function of the linkage between oil price
and long-term gas contracts - though we
may have already passed the bottom for
LNG prices as demand in SE Asia has recently
risen driven by switching from coal to gas
power generation.
The uncertainty created by Covid-19 shows
little sign of abating. Second waves continue
to strike countries globally. While major oil
and gas companies slash budgets and staff
levels. In the US we have witnessed the shale
oil industry be decimated due to high costs of
production, representing about 10% of global
production, the withdrawal of capital from the
industry and a number of high-profile shale
company insolvencies. Global investment in
exploration and development has dried up.
Many projects in pre execution phase are now
on ice with a 32% reduction in capex so far
this year compared to last year.
In spite of this dramatic backdrop 3D Oil
has managed to secure arguably the best
farmout deal in Australia for over 15 years.
But more on this in moment.
Is there a silver lining to this crisis? Considering
historical oil prices most oil price collapses
are followed by a significant rebound within a
relatively short time – but of course every oil
crisis is different and no one has a crystal ball.
I am extremely confident that 3D Oil will not
only survive this crisis but will shine on the
other side of the pandemic.
Our farmout of T/49P has stunned many in the
industry for a number of reasons. The deal itself
is exceptional by any standard; it was executed
in the middle of the Covid-19 crisis when most
majors were slashing budgets; ConocoPhillips
(‘COP’) had recently sold major assets in
Western Australia and appeared to be retreating.
The deal also confirmed that 3D Oil’s optimism
in relation to the gas potential of this permit
is also shared with one of the largest oil and
gas companies in the world. Most importantly
it underlines that 3D Oil’s strategy is valid. It is
also arguably unique in Australia with virtually
no other junior explorers attempting to disrupt
where the majors explore.
Let me remind you of the major terms of the
deal. 3D Oil received $5 million cash payment,
COP to acquire a minimum of 1600 sq km of
3D seismic at no expense to 3D Oil. Further,
if COP decide to drill they will carry the first
US$30 million of the well. At the time of
writing this letter COP are in full swing to
undertake acquisition of the 3D seismic in
2021 while undertaking some preparation
for drilling in 2022. The cash payment is
particularly relevant as it enables TDO to fund
its activities while it develops further value
creation opportunities and positions itself for
further farmouts
The timing could not be better with the
Federal Government’s push for a gas led
recovery at a time when gas production in
this region is in serious decline. Production
from the Gippsland Basin is currently in rapid
decline while in the Otway Basin operators
have deferred exploration drilling.
I have said this previously it is 3D Oil’s belief
that the T/49P permit is the last place on
the east coast where large gas reserves can
potentially be uncovered. There is nowhere else.
I am proud our team has put us in the box
seat. 3D Oil is now being carried towards
the drilling of an exploration well that could
realise reserves of potentially more than 1 TCF
gas and provide an answer to the southeast
gas supply deficit. 3D Oil is unique being
one of the few remaining junior oil and gas
companies active offshore in Australia and
providing the opportunity to be involved in
large scale hydrocarbon discoveries.
The acquisition of the Gippsland Basin permit
VIC/P74 was no accident. It fit perfectly into
our strategy of getting in early where the
majors play. Of course, however, we had to
have an idea. The permit has been poorly
explored in the past and forgotten for almost
two decades despite being adjacent the
largest oilfield in Australia – Kingfish, which
has produced over a billion barrels of oil.
The permit was picked up with a minimal
bid – purchase of reprocessed 3D seismic –
and it contains the Omeo gas discovery!
3D Oil recently acquired the 3D reprocessed
seismic data which we are now singularly
focused on interpreting. It may be an early
call but VIC/P74 is shaping up as significantly
more prospective than we could have foreseen.
We are very excited about what we are
uncovering and intend to release Prospective
Resources to the market as soon as possible.
It must be remembered the commercial
threshold within this area is relatively low due
to its proximity to existing infrastructure.
It is significant that we have had a number of
unsolicited approaches on VIC/P74 already.
The acquisition of WA-527P permit prior to
the discovery of Dorado was a master stroke
by our team - it wasn’t an accident or luck.
We reviewed the previous drilling results of
the region and the Dorado prospect and again
picked up the permit for a relatively low work
program bid. The rest is history of course, with
the Dorado-1 well uncovering the largest oil
discovery in Australia in decades, in a newly
discovered petroleum province.
It is now pleasing to see that the Dorado
joint venture is proceeding with FEED for
the development of the field despite the
low oil prices. This gives an indication of the
robustness of the project.
The experience of farming out T/49P has
taught us that patience is paramount when
dealing with the majors. The process can
be extremely long. Just getting a major
through the door of a junior explorer is a
significant achievement in itself. Once on
board all opportunities have to be ranked
against all global opportunities and then
pass internal gateways. This process rarely
takes less than 12 months! But as seen from
the deal on T/49P the wait can be worth it,
even transformational. WA-527P is now the
only entry point for new players to access
the Dorado style play and this exciting new
petroleum system.
We have an exciting year ahead at 3D Oil
with the acquisition of 3D seismic surveys
in the Otway Basin and Bedout Sub-basin
respectively. The focus in both areas will be
to locate highly prospective drilling targets.
I am extremely proud of my team at 3D Oil
which has executed a brilliant farmout by any
measure but in the middle of a global pandemic!
3D Oil has survived through tough times,
which means that we can keep participating in
these high risk, but high value projects for the
long haul, therefore maximizing the potential
return to shareholders.
On behalf of the Company, I thank the Board
and the 3D Oil team for their endeavors and
commitment over the last year. They are an
integral part of realizing our ambition to
become a significant Australian oil and gas
producer. I would also like to acknowledge the
important contribution and thank our recently
retired board advisor Peter Willcox.
Noel Newell
Managing Director
5
Review of
opeRAtions
6
wA/527-p, Bedout suB-BA sin,
offshoRe noRthwest shelf
In July of 2018, the Santos (ASX: STO) led
Joint Venture drilled Dorado-1 discovering
162 MMbbls of liquids and 748 Bcf of gas
within multiple reservoir zones of the
Lower Triassic. The high quality of these
sands has been confirmed by the Dorado
appraisal program. Flow testing at Dorado-3
drilled in September of 2019, recorded a
maximum 48 mscf/day of gas and 4,500
bbl/day oil from the Baxter reservoir while
testing from the Caley achieved up to
11,100 bbl/day oil and 21mcf/day associated
gas (STO release, 8 October 2019). Flow
rates from both intervals were constrained
by surface equipment and are some of
the best ever recorded on the Northwest
Shelf of Australia. These are excellent
results for reservoirs buried greater than
4000m. Importantly, Triassic targets within
WA/527-P are likely to have up to 1000m
less overburden than at Dorado and are
therefore interpreted to host similar if not
better reservoir potential.
Exploration permit WA/527-P is a large
permit covering approximately 6,500km2
in the Bedout Sub-basin of the Northwest
Shelf, approximately 80km north-east of
the recent Dorado oil and gas condensate
discovery (Carnarvon Petroleum 20%,
Santos 80%).
The Bedout Sub-basin is an element of the
Roebuck Basin located along the productive
Northwest Shelf of Australia. Recent
exploration results in adjacent acreages have
proven 3D Oil’s long held technical view that
the region hosts a prolific petroleum system
that until recently has been overlooked
by industry. The acquisition of WA/527-P
demonstrates the ability for 3D Oil to
recognize opportunity early and act ahead
of our larger competitors.
Exploration in the basin began during the
1980s with the drilling of the Phoenix wells
by BP Australia. Disappointing results
caused a lack of subsequent exploration
activity in the basin, until the Phoenix
South and Roc wells were drilled between
2014 and 2019. Phoenix South 1 discovered
a series of light oil zones, while Roc 1 & 2
and other Phoenix South wells all discovered
gas-condensate within sands of the lower
Triassic, Caley reservoir.
“The acquisition of
WA/527-P demonstrates
the ability for 3D Oil to
recognize opportunity
early and act ahead of our
larger competitors.”
Figure 1 – WA/527-P Location and
Sea Floor Bathymetry
The Santos led Joint Venture is currently
in the stakeholder consultation phase of a
development plan at Dorado. The proposed
development will comprise a Well Head
Platform (WHP) with a Floating Production,
Storage and Offloading Facility (FPSO).
Once completed, the development will
establish the Bedout Sub-basin as one of
Australia’s newest producing petroleum
provinces. 3D Oil is proud to have secured
a 6,500km2 piece of what will be Australia’s
newest petroleum producing region.
7
Figure 2 –
Interpretation of
reprocessed seismic
line JN87-20, including
a series of erosional
channels within
WA/527-P
Sauropod has been designed to provide
modern, high resolution imaging allowing,
technical staff to determine whether
identified traps represent viable closures,
and detect any additional targets hidden
between available 2D data.
Even with social distancing restrictions
imposed throughout 2020, 3D Oil has
continued to host presentations for multiple
interested Exploration & Production
companies. 3D Oil has also begun a
procurement process for a seismic vessel
operator that is capable of acquiring the
Sauropod 3D MSS within the constraints of
the approved Environment Plan.
Activities
Throughout 2019, 3D Oil conducted
reprocessing of a series of legacy
2D seismic lines. Results support the
interpretation of a series of erosional
channel systems (Figure 2) that may
represent trapping mechanisms for targets
within the lower Triassic. These erosional
systems are considered important to the
play concept as a similar feature, filled with
impermeable claystone is proven to provide
the trap for the nearby Dorado discovery.
The balance of available 2D seismic in
WA/527-P is sparse with mostly poor
quality and it is difficult to fully map these
channels or any associated targets. As
such, the next stage in 3D Oil’s exploration
campaign includes acquisition and
processing of modern 3D seismic data.
During the year 3D Oil received approval
to acquire the Sauropod 3D Marine Seismic
Survey (MSS). The Sauropod 3D program
is planned for January – April inclusive of
2021 and will allow for acquisition of up to
3,447 km2 of 3D seismic data. This survey
is an integral next step in the exploration
strategy for the permit and will have
multiple objectives, including;
— Delineation of any targets that are
analogous to the Dorado discovery by
virtue of trapping against the interpreted
Triassic erosional channel systems in the
southwest of the acreage,
— Maturation of Leads identified by 2D
seismic including Salamander, Jaubert
and Whaleback,
— Investigation of the potential Palaeozoic
play interpreted to be operating in the
eastern side of the acreage and,
— Identification of any prospects that are not
imaged by the current 2D seismic data.
8
Figure 3 – WA/527-P Location, recent oil & gas
discoveries and Triassic erosional channel systems
pRospectivity
mesozoic leads
3D Oil has identified a series of structures
along the western side of the acreage
which may host Triassic sands, similar to
those encountered at Dorado and Roc.
Trap types in the Triassic play include
a combination of conventional faulted
anticlines and possible stratigraphic traps
sealed by the mentioned erosional channel
systems. Additional inversion and fault-
bound targets within the Jurassic sections
are also identified.
The largest of the Mesozoic leads include
Whaleback and Salamader, with a Best
Estimate Prospective Resource of 86
MMbbls and 190 MMbbls respectively.
The Sauropod 3D MSS will allow 3D Oil to
delineate the structural closure of these
features more accurately, and thus update
the prospective resource estimates.
Figure 4 – Proposed Location of Sauropod
3D MSS Full-Fold Acquisition Area
palaeozoic leads
3D Oil has identified the presence of at
least six reef-like features that could form
viable oil targets. These features range
in size from 3-30km2. These are mostly
identifiable within the eastern side of the
acreage, within what is interpreted to
be a section of an extensive Palaeozoic
Barrier Reef System. This system is proven
as an effective petroleum system by the
Blina and Ungani oil fields in the onshore
Canning Basin. The Sauropod 3D MSS will
provide imaging for the largest of these
features located in the north of the permit.
table 1: wA/527-p prospective Resource estimate (mmbbls)
Recoverable oil (Asx ann. 26/2/18)
Prospect
Salamander
Jaubert
Whaleback
WA/527-P Arithmetic Total
Status
Low
Lead
Lead
Lead
57
17
16
90
Best
191
72
87
High
713
205
219
350
1,137
9
10
Figure 5 – Otway Basin, Fields and
Infrastructure Location
“This transaction
signifies an important
step forward in 3D Oil’s
strategy to discover gas
in South East Australia
and provide resources to
the local market”
Figure 6 – Modelled gas expulsion and migration
accordance with the Farm out Agreement
(‘FOA’), COP has transferred A$5m cash
payment to 3D OIL in recognition of
previous permit expenditure. According to
the agreement, COP will now undertake the
acquisition of a 3D seismic survey of not less
than 1580 sq km within the Permit to which
3D OIL will make no financial contribution.
The survey is of paramount importance
to the Joint Venture’s overall exploration
strategy as it will cover remaining leads
in lightly explored central and southern
sections of the T/49P acreage and will
allow for the generation of a permit-wide
prospect seriatim that will inform the best
possible drilling location.
Upon completion of the 3D seismic
program, COP may elect to drill an
exploration well which will full-fill the
current Year 6 work commitment. In the
event COP elects to drill such exploration
well, the Company will be carried for up to
US$30 million in drilling costs after which it
will contribute 20% of drilling costs in line
with its interest in the Permit.
pRospectivity
3D Oil selected T49/P based on its unique
position within the regional structural
configuration of the Southern Otway
Basin. The permit is located along the
edge of a paleo-shelf break, which was
the depositional focus of a series of thick
progradational clino-forms throughout
the last 35 Million Years. These clino-forms
have resulted in rapid loading of the proven
sources rocks in this section of the Otway
Basin. 3D Oil believes that this mechanism
for hydrocarbon generation is responsible for
charging the largest offshore Otway Basin
gas fields, Thylacine and Geographe and
is likely to contribute hydrocarbons to the
Leads and Prospects of T49/P (Figure 5).
11
t49/p, otwAy BAsin, offshoRe victoRiA
3D Oil holds 20% interest in the T/49P
exploration permit, which covers
4,960km2 of the strategic offshore Otway
Basin. The permit is located adjacent to
the producing Thylacine and Geographe
gas fields (100% owned by Beach Energy
Limited (ASX: BPT)).
The Otway Basin covers an area of
~150,000km2 along the southern margin of
Australia. The basin has been an important
supplier of gas to the east coast since the
1980s, and the T49/P permit is optimally
placed to contribute much needed
additional resources to this market.
3D Oil management firmly believes that
the south-east Australian gas market will
be strong in coming years as existing gas
production in both the Gippsland and
Otway Basin decline. The National COVID-19
response Co-ordination Commission
has flagged the importance of securing
additional natural gas supply to fuel industry
recovery from the COVID-19 Pandemic.
In addition, the federal government
Technology Roadmap discussion paper
released on 21 May 2020 comments that
gas will play an important role as the nation
switches from coal fired power, and will also
support the uptake of renewable energy
by filling gaps in the grid where renewable
energy generation is intermittent.
3D Oil recognized the potential for the
shortfall in gas supply to south-east
Australia as early as 2012, and as a result
acquired the T49/P exploration permit in
the Otway Basin. The wider industry now
shares the view that the region contains
significant yet-to-find gas. In August of 2019
Cooper Energy (ASX:COE) drilled Annie-1
resulting in the first offshore gas discovery
in the Otway Basin in 11 years. In December
of 2019, Cooper Energy and Mitsui Group
took possession of the Minerva Gas Plant
and announced a $37 Million investment
with the intention of processing gas from
the Casino, Henry and Netherby fields (COE
Release, 20 July 2020). Beach Energy plans
to drill up to nine wells between December
2020 and March 2021. The first of these will
be the Aritsan-1 exploration well, followed
by a series of near-field and appraisal wells
at Thylacine and Geographe. Yet another
compelling indication of the importance
of the Otway Basin is the entrance of
ConocoPhillips Australia, by way of farm-in
to 3D Oil’s T49/P exploration permit.
The T49/P permit contains a number of
structures prospective for gas within an
area of 4,960 km2 and in water depths
generally no greater than 100m. The
north of the permit is covered by 974 km2
of modern 3D seismic, while the area to
the south remains lightly explored and
covered by a broad grid of 2D seismic data
of varying vintage and quality. Only two
early exploration wells have been drilled in
the permit (in 1967 and 1970) on historic,
widely spaced 2D seismic. In subsequent
years the region was largely overlooked by
the industry despite the proximity of the
Thylacine and Geographe gas fields.
Activities
This year 3D Oil completed the farm-out
of 80% interest in the T49/P exploration
permit to ConocoPhillips Australia SH1
Pty Ltd (‘COP’). The National Offshore
Petroleum Titles Administrator (NOPTA),
granted approval for the farmout on
9 June 2020. This transaction signifies an
important step forward in 3D Oil’s strategy
to discover gas in South East Australia and
provide resources to the local market.
3D Oil believes that COP are the ideal
partner, with the resources and technical
expertise required to competently progress
the exploration campaign in T49/P.
Under the terms of the Joint Operating
Agreement (‘JOA’), COP now holds 80%
interest in the permit and is operating. In
Figure 7 – Seismic
Interpretation at the
Seal rocks Lead
seal Rocks lead
One of the key objectives of the upcoming
3D seismic program is the Seal Rocks
Lead, located in the South of the permit.
In 2019 3D Oil completed reprocessing
and interpretation of legacy 2D seismic.
This data defined the presence of high
amplitude zones, likely to represent good
quality reservoir sands appearing to fit
a series of tilted fault-blocks. While the
reprocessed 2D seismic has provided
a more accurate understanding of the
structure at Seal Rocks, 3D seismic data
is required to determine the true resource
potential of the feature.
table 2: t/49p prospective Resource estimate (tcf)
Recoverable Gas (Asx ann. 27-Jul-17)
Location
Flanagan
Munro (T/49P Part)
Whistler Point
British Admiral
Seal Rocks
Harbinger
Status
Prospect
Lead
Lead
Lead
Lead
Lead
Low
0.53
0.04
0.82
0.37
0.95
0.33
Best
1.34
0.19
2.04
1.03
4.64
0.79
High
2.74
0.57
8.95
4.45
10.64
1.43
T/49P Arithmetic Total
3.04
10.03
28.78
The estimated quantities of petroleum that may potentially be recovered by the application of a future
development project(s) relate to undiscovered accumulations. These estimates have both an associated
risk of discovery and a risk of development. Further exploration appraisal and evaluation is required to
determine the existence of a significant quantity of potentially moveable hydrocarbons
flanagan prospect
Flanagan is the permit’s ‘drill ready’
prospect. The structure has a maximum
aerial closure of approximately 80 sq km
and is positioned adjacent to multiple
source kitchens. It is defined by the
Flanagan 3D survey acquired in 2014 and
has a best estimate prospective resource
1.34 TCF (announced 27 July 2017). The
Prospect is located in shallow water and
is the permit’s closest feature to existing
infrastructure at Thylacine and Geographe.
The potential for gas in the Flanagan
Prospect is supported by quantitative
geophysical modelling, which indicates the
presence of a Class III amplitude versus
offset (AVO) anomaly. In the Otway Basin,
this type of response is known to be
indicative of gas bearing sands.
12
vic/p57, G ippslAnd BA sin offshoRe victoRiA
Figure 8 – VIC/P57 Location (blue polygon)
with Gippsland ReGeneration Reprocessing
data (red polygon)
Exploration Permit VIC/P57 is located in
the northwest of the offshore Gippsland
Basin. The permit is approximately 246km2
in size and located in shallow waters
close to shore and proximal to existing
infrastructure. The permit was renewed by
3D Oil and operating partner Carnarvon
Hibiscus Pty Ltd (CHPL) in 2018 for further
five-year tenure. As part of this process the
Joint Venture relinquished non prospective
graticular blocks and has retained the most
valuable acreage.
3D Oil holds a 24.9% interest in the VIC/
P57. By arrangement with permit operator
Carnarvon Hibiscus Pty Ltd (CHPL), 3D Oil
Limited continues to carry out subsurface
technical work for the permit on behalf of
the Joint Venture.
The Gippsland Basin, with initial reserves
estimated at 4 billion barrels of oil and
11.5 trillion cubic feet of gas, is Australia’s
most prolific oil and gas producing basin.
Twenty-one oil and gas fields are on
production with most of the hydrocarbons
hosted by the world-class sandstones of
the Latrobe Group.
The Gippsland Basin is considered
extremely important for gas supply to
south east Australia, however, production
from the basin is in decline. This year
ExxonMobil continued with their plan to
bring the West Barracouta development
online, while Cooper Energy has
commenced commissioning of the Orbost
Gas Plant with the intention of processing
gas from the Sole Gas field. The Australian
Energy Market Operator (AEMO) Gas
Statement of Opportunities released
in March of 2020 suggests that current
and contingent resources (such as West
Barracouta and Sole) will be insufficient
to offset existing decline. Between 2019
and 2020 ExxonMobil embarked on a new
drilling campaign in an attempt to bolster
supply. The campaign included the drilling
of exploration wells Hairtail-1, Baldfish-1
and Sculpin-1, however, all failed to discover
additional resources.
In September of 2019, ExxonMobil
announced their intention to sell their stake
in the Gippsland Basin assets, including
their interest in the Longford Gas plant.
In August of 2020, Joint Venture partner
BHP announced that they too intended to
sell their non-operator assets. If successful,
this sale will end a 50-year history of
ExxonMobil and BHP exploring and
producing in the Gippsland Basin.
3D Oil believes that there are significant
resources remaining in the Gippsland
Basin, with many plays including some
within the lower Latrobe Group remaining
underexplored. If there is to be secure
supply of gas to the south-east Australia,
innovative exploration that takes advantage
of modern data to investigate previously
overlooked opportunities is required.
This requires investment in new technology
such as modern seismic acquisition and/
or reprocessing of existing data with a
focus on enhancing imaging of the less
understood, deeper levels of the Gippsland
Basin. The 3D Oil/Hibiscus Joint Venture is
leveraging new reprocessed seismic data
to search for new prospects. The Joint
Venture now has two exploration permits
in the western Gippsland Basin that share a
common exploration rationale.
“The Australian Energy
Market Operator (AEMO)
Gas Statement of
Opportunities released in
March of 2020 suggests
that current and contingent
resources (such as West
Barracouta and Sole) will
be insufficient to offset
existing decline”
13
Figure 9 – Arbitrary seismic line through
Wirrah Discovery, Felix Prospect and Moonfish
Field (Image courtesy of CGG Multiclient &
New Ventures)
Activities
The Joint Venture has completed its
technical evaluation in VIC/P57. The
primary term of the current renewal period
was designed to de-risk and high grade the
prospect inventory and ultimately progress
prospects to ‘drill-ready’ status.
Two drilling candidates have been
identified in the permit including; Felix and
Pointer. The Pointer Prospect is an AVO
supported gas target, located close to
shore and nearby infrastructure. It is well
placed to supply gas to the east Australian
market. The Felix Prospect is a low risk
Oil & Gas prospect located between the
Wirrah discovery and Moonfish field. Dexter
has been confirmed as a strong Lead and
represents valuable additional potential for
the permit.
Since completion of the technical
program, a farm-out campaign was
initiated, and 3D Oil has hosted data
rooms for numerous interested parties
throughout the year. The low risk profile
of Felix and the potential for Pointer to
provide low-cost gas to the domestic
market is recognized by industry.
pRospectivity
felix prospect
Felix Prospect is an inversion anticline
(Figure 8) favourably situated between
the Moonfish and Wirrah discoveries along
the Seahorse Fault. The structure is highly
likely to have access to charge from the
same kitchen as the existing discoveries.
The reservoir-seal configuration is well
constrained by nearby wells and excellent
reservoir seal pairs are anticipated across
the L.balmei zone at Felix.
Since finalizing interpretation of the latest
reprocessed seismic data, 3D Oil believes
that it is now possible to understand the
trapping mechanism at Felix with far
greater accuracy. This provides a higher
degree of certainty with respect to the
prospective resource estimations for the
prospect. The improved velocity model
from the reprocessed data has helped to
de-risk the presence of closure in the depth
domain across the L.balmei zone and has
assisted with determining the best drilling
location at the Prospect.
14
Figure 10 – Pointer Prospect Amplitude
Anomaly (image courtesy of CGG Multiclient &
New Ventures)
pointer prospect
The Pointer Prospect is a combination
structural-stratigraphic gas prospect within
the Upper L.balmei reservoir of the upper
Latrobe Group. The prospect shows a clear
rising amplitude with offset response,
a Class III AVO (Figure 9) which is likely
to represent dry gas. Improved imaging
has permitted high-resolution mapping
of the fault architecture and has reduced
uncertainty on the trapping mechanism,
highlighting a conformance of amplitude
with structure. Located proximal to existing
infrastructure, within water depths of less
than 40m, and a drilling depth of ~1600m,
Pointer represents low-cost development
for the domestic gas market.
table 3: total vic/p57 prospective Resources estimate (mmbbls)
Recoverable oil (Asx ann. 27/7/17)
Location
Felix
Salsa
VIC/P57 Total
Status
Prospect
Lead
Low
6.8
10.7
17.5
Best
15.9
15.1
High
26.9
20.6
31.0
47.5
table 4: total vic/p57 prospective Resource estimate (Bcf)
Recoverable Gas (Asx ann. 27/7/17)
Location
Pointer
Dexter
Status
Prospect
Lead
Low
140.1
37.0
Best
235.3
132.0
High
364.9
259.1
VIC/P57 Total
177.1
367.3
624.0
15
LEGEND
VIC/P74 Permit Outline
CGG 3D Reprocessing
Pipelines
Gas
Fields
Gas
Petroleum Titles
Oil
Oil
Figure 11 – VIC/P74 Location
vic/p74, G ippslAnd BA sin offshoRe victoRiA
Located in shallow waters of the offshore
Gippsland Basin, VIC/P74 was awarded to
3D Oil on 26 July 2019 by the NOPTA. The
permit covers 1,006 km2 and is situated on
the southern flank of the Gippsland Basin,
where it straddles the boundary of the
Southern Terrace and the Central Deep.
The permit includes the Omeo Gas-
condensate discovery and is located
adjacent to the giant, world class
Kingfish Oil Field, the largest oil field ever
discovered in Australia. To date, Kingfish
Field has produced over one billion barrels
of oil from the classic Top of Latrobe play.
Bream Field is also located adjacent to
VIC/P74, a large oil and gas discovery also
producing from the Top of Latrobe play,
with additional columns throughout the
deeper Latrobe Group.
As with VIC/P57, exploration of this region
has been hampered by velocity anomalies
in shallow overburden causing limitations
to seismic imagery. Exploration drilling
post-mortems suggests that several of
the wells in permit have failed as a result
of this issue.
As evidenced in VIC/P57, recent advances
in reprocessing techniques have made
significant improvements in relation to
this technical limitation. The rationale for
the acquisition of VIC/P74 was based
on anticipated uplift in 3D imaging and
velocity data given the availability of CGG
3D ReGeneration Reprocessing over the
area, as well as the potential for significant
un-drilled traps and the local prolific
petroleum system.
fARmout to hiB iscus
In October 2019, 3D Oil announced that
Carnarvon Hibiscus Pty Ltd (‘CHPL’),
an indirect wholly owned subsidiary of
Hibiscus Petroleum Berhad, elected to
enter into a joint venture agreement by
acquiring a 50% interest in the permit.
During July of 2020, NOPTA approved the
Assignment Agreement between 3D OIL and
CHPL which created the right for the two
companies to enter into a Joint Operating
Agreement (JOA). 3D OIL has since executed
a Joint JOA with CHPL and is currently
awaiting approval of this document from
NOPTA. Under the terms of the agreement,
3D Oil will remain as Operator and retain
50% equity in the permit.
3D OIL is pleased to further strengthen
its partnership with Hibiscus. The Joint
Venture now has significant acreage
holding in the Western Gippsland Basin.
16
“hydrocarbons have migrated
into the permit from a
thermally mature source
rock that is likely to
contribute hydrocarbon to
other targets in the permit”
Activities
The primary work programme (Years 1-3) is
fully funded and requires the development
of an exploration database, purchase
of 905km2 of the CGG Gippsland 3D
ReGeneration Reprocessing, and a range
of geology and geophysics (G&G) studies
aimed at adding to the Gippsland Joint
Venture’s portfolio of leads and prospects.
3D Oil’s well database has been extended
to include the local VIC/P74 area,
allowing the construction of a seamless
stratigraphic framework between
VIC/P57 and VIC/P74, as well as an
improved understanding of the local
distribution of hydrocarbon shows and
discoveries. This has included an in-house
petrophysical assessment of the Omeo
wells to aid in the development of a
geostatistical model for the Omeo
gas-condensate discovery, and subsequent
volumetric assessment.
Geochemistry data has been consolidated
and interrogated to determine local source
rock candidates. Whole oil and cuttings
geochemistry datasets from the Omeo
wells indicate that hydrocarbons have
migrated into the permit from a thermally
mature source rock that is likely to
contribute hydrocarbon to other targets in
the permit.
Omeo hydrocarbon reservoirs are
located within the Golden Beach
Sub-Group, however, most Golden Beach
well penetrations are located on the flank
of the Northern Terrace. Hence, a regional
assessment of formation tops and reservoir
properties has better informed the
likely depositional settings and reservoir
properties to be expected at any Golden
Beach leads identified from future mapping
of the CGG 3D reprocessing.
In August of 2020, the Joint Venture
licensed 1,004 km2 of the CGG 3D
ReGeneration Reprocessing, fulfilling a
major work commitment of the primary
term. Data includes full and offsets stacks,
gathers and velocity cube. The next major
phase of the VIC/P74 work programme will
comprise the detailed interpretation of the
seismic, including AVO screening and the
identification of leads and prospects.
As anticipated, the state-of-the-art CGG
reprocessing has yielded a significant
uplift in data quality, especially across the
deeper Latrobe Group stratigraphy. Most
important to the strategy of the permit,
the Joint Venture now has excellent
constraint on velocity inversions across
the shallow overburden, permitting
increasingly accurate depth conversions.
A range of depth conversion techniques
and comprehensive sensitivity analysis will
be conducted after the completion of the
seismic interpretation.
17
diRectoRs’
RepoRt
18
The Directors present their report, together
with the financial statements, on the
consolidated entity (referred to hereafter
as the 'Consolidated Entity') consisting
of 3D Oil Limited (referred to hereafter
as the 'Company' or 'parent entity') and
the entities it controlled at the end of, or
during, the year ended 30 June 2020.
diRectoRs
The following persons were Directors of
3D Oil Limited during the whole of the
financial year and up to the date of this
report, unless otherwise stated:
Mr Noel Newell
Mr Ian Tchacos
Mr Leo De Maria
pRincipAl Activities
During the financial year the principal
continuing activities of the Company
consisted of exploration and development
of upstream oil and gas assets.
dividends
There were no dividends paid or declared
during the current or previous financial year.
The Consolidated Entity does not have
franking credits available for subsequent
financial years.
Review of opeRAtions
The loss for the Consolidated Entity after
providing for income tax amounted to
$3,006,065 (30 June 2019: $1,089,254).
Refer to the detailed Review of Operations
preceding this Directors' Report.
finAnciAl position
The net assets decreased by $3,000,200
to $8,742,543 at 30 June 2020 (30 June
2019: $11,742,743). During the period the
Consolidated Entity spent a net amount
after reimbursements of $726,453 (2019:
$880,967) on exploration, mainly in relation
to WA/527P and VIC/P74 during the year.
Exploration assets at 30 June 2020 were net
of $5,000,000, received in relation to T/49P
for the completion of Farm-out Agreement
with Conoco Phillips. Following a review by
the Directors and management, the book
value of VIC/P57 was written down to Nil as
at 30 June 2020, reflecting the estimated
future economic benefits expected to be
derived from this area of interest.
The working capital position as at 30 June
2020 of the Consolidated Entity results in
an excess of current assets over current
liabilities of $4,033,946 (30 June 2019:
$903,047). The Consolidated Entity made
a loss after tax of $3,006,065 during
the financial year (2019 loss: $1,089,254)
and had net operating cash outflows of
$980,209 (2019: $958,034). The cash
balances, including term deposits, as
at 30 June 2020 was $5,170,768
(2019: $1,934,458).
Based on the above the Directors believe
the Company is in a stable position to
continue to pursue its current operations.
siGnificAnt chAnGes in
the stAte of AffAiRs
On 26 July 2019, the Company announced
that it was awarded the VIC/P74 permit in
the offshore Gippsland Basin. The permit
covers approximately 1,006km2 and the
primary work programme is modest and
largely consists of purchase of reprocessed
3D seismic data.
On 4 October 2019, the Company and
Hibiscus Petroleum Berhad entered into
a farm-out arrangement in relation to
VIC/P74. The Company will remain as
operator with 50% equity when a Joint
Operating Agreement (JOA) is signed
by both parties and required
government approvals.
On 18 December 2019, the Company
announced that its wholly owned subsidiary,
3D Oil T49P Pty Ltd had executed a
Farm-out Agreement (‘FOA’) with
ConocoPhillips Australia SH1 Pty Ltd
(‘ConocoPhillips Australia’) in relation
to the offshore Tasmanian Permit T/49P.
ConocoPhillips Australia have taken
operatorship of T/49P and were transferred
an 80% interest in the permit at completion
of the Farm-out. In exchange for the transfer:
— 3D Oil received a A$5m cash payment
in recognition of previous permit
expenditure;
— ConocoPhillips Australia will acquire at
least 1,580km2 of 3D seismic survey in
T/49P at no cost to 3D Oil; and
— ConocoPhillips Australia may elect to
drill an exploration well in which it will
carry up to the first US$30 million of
costs, after which 3D Oil will contribute
20% of costs in line with its interest in
the permit.
On 1 April 2020, the Company announced
that it had been granted a 21-month
Suspension and Extension by the National
Offshore Petroleum Titles Administrator
(‘NOPTA’) for the offshore Bedout Sub-basin
permit WA-527-P. This now provides 3D Oil
until the 28 December 2021 to acquire and
process a minimum of 510 km2 of 3D
seismic data.
There were no other significant changes
in the state of affairs of the Consolidated
Entity during the financial year.
mAtteRs suBsequent
to the end of the
finAnciAl yeAR
On 14 July 2020, the Company announced
that it has been awarded the necessary
environmental approvals from the
Commonwealth Statuary National Agency,
NOPSEMA, to acquire the Sauropod
3D Marine Seismic Survey (MSS) within
100% owned WA-527-P of the Offshore
Roebuck Basin.
No other matter or circumstance has arisen
since 30 June 2020 that has significantly
affected, or may significantly affect
the Consolidated Entity's operations,
the results of those operations, or the
Consolidated Entity's state of affairs in
future financial years.
likely developments
And expected Results
of opeRAtions
The Consolidated Entity will continue to
pursue its exploration interest in
— VIC/P57 and VIC/P74 in partnership with
Carnarvon Hibiscus Pty Ltd;
— T/49P in partnership with Conoco Phillips
Australia;
— WA-527-P in the Roebuck Basin of
Western Australia.
enviRonmentAl
ReGulA tion
The Consolidated Entity holds participating
interests in a number of oil and gas areas.
The various authorities granting such
tenements require the licence holder to
comply with the terms of the grant of the
licence and all directions given to it under
those terms of the licence. There have
been no known breaches of the tenement
conditions, and no such breaches have
been notified by any government agencies
during the year ended 30 June 2020.
19
infoRmA tion on diRectoRs
compAny secRetARies
mr noel newell
executive chairman
mr leo de maria
non-executive director
qualifications
B App Sc (App Geol)
experience and expertise
Noel Newell holds a Bachelor of Applied
Science and has over 25 years' experience
in the oil and gas industry, with 20 years of
this time with BHP Billiton and Petrofina.
With these companies Mr Newell has been
technically involved in exploration of areas
around the globe, particularly South East
Asia and all major Australian offshore
basins. Prior to leaving BHP Billiton in 2002,
Mr Newell was Principal Geologist working
within the Southern Margin Company
and primarily responsible for exploration
within the Gippsland Basin. Mr Newell has
a number of technical publications and
has co-authored Best Paper and runner
up Best Paper at the Australian Petroleum
Production & Exploration Association
conference and Best Paper at the Western
Australian Basins Symposium. Mr Newell is
the founder of 3D Oil. Immediately prior to
starting 3D Oil, Mr Newell was a technical
advisor to Nexus Energy Limited and was
directly involved in their move to explore in
the offshore of the Gippsland Basin.
other current directorships
None
former directorships
(last 3 years)
None
special responsibilities
None
interests in shares
44,192,229 ordinary fully paid shares.
interests in options
None
20
experience and expertise
Leo De Maria is a Chartered Accountant
with extensive experience in company
management, financial management,
mergers and acquisitions and risk
management.
other current directorships
None
former directorships
(last 3 years)
None
special responsibilities
Chairman of Audit Committee and
Remuneration and Nomination Committee
interests in shares
650,070 ordinary fully paid shares.
interests in options
None
mr ian tchacos
non-executive director
experience and expertise
Ian Tchacos is an oil and gas professional
with over 30 years international
experience in corporate development
and strategy, mergers and acquisitions,
petroleum exploration, development and
production operations, decision analysis,
commercial negotiation, oil and gas
marketing and energy finance. He has
a proven management track record in a
range of international energy company
environments.
other current directorships
ADX Energy Ltd
former directorships
(last 3 years)
Xstate Resources Limited (resigned on
26 November 2019)
special responsibilities
Member of Audit Committee and Member
of Remuneration and Nomination
Committee
interests in shares
428,500 ordinary fully paid shares
interests in options
None
melanie leydin
BBus (Acc. corp law) cA fGiA
Joint company secretary
Melanie Leydin holds a Bachelor of
Business majoring in Accounting and
Corporate Law. She is a member of the
Institute of Chartered Accountants, Fellow
of the Governance Institute of Australia
and is a Registered Company Auditor. She
graduated from Swinburne University in
1997, became a Chartered Accountant
in 1999 and since February 2000 has
been the principal of Leydin Freyer. The
practice provides outsourced company
secretarial and accounting services to
public and private companies across a
host of industries including but not limited
to the Resources, technology, bioscience,
biotechnology and health sectors.
Melanie has over 25 years’ experience in the
accounting profession and over 15 years as
a Company Secretary. She has extensive
experience in relation to public company
responsibilities, including ASX and ASIC
compliance, control and implementation of
corporate governance, statutory financial
reporting, reorganisation of Companies and
shareholder relations.
mr stefan Ross
Joint company secretary
Mr Ross has over 10 years of experience in
accounting and secretarial services for ASX
Listed companies. His extensive experience
includes ASX compliance, corporate
governance control and implementation,
statutory financial reporting and Board and
secretarial support.
'Other current directorships' quoted above
are current directorships for listed entities
only and excludes directorships in all other
types of entities, unless otherwise stated.
'Former directorships (in the last 3 years)'
quoted above are directorships held in
the last 3 years for listed entities only and
excludes directorships in all other types of
entities, unless otherwise stated.
meetinGs of d iRectoRs
The number of meetings of the Company's
Board of Directors ('the Board') held during
the year ended 30 June 2020, and the
number of meetings attended by each
Director were:
Mr N Newell
Mr L De Maria
Mr I Tchacos
Meetings Held
Meetings Attended
3
3
3
3
3
3
Held: represents the number of meetings held during the time the Director held office.
RemuneRAtion RepoRt
(Audited)
The remuneration report, which has
been audited, outlines the director and
executive remuneration arrangements
for the Company, in accordance with the
requirements of the Corporations Act 2001
and its Regulations.
Key management personnel are those
persons having authority and responsibility
for planning, directing and controlling the
activities of the entity, directly or indirectly,
including all directors.
The remuneration report is set out under
the following main headings:
— Principles used to determine the nature
and amount of remuneration
— Details of remuneration
— Service agreements
— Share-based compensation
— Additional information
— Additional disclosures relating to key
management personnel
The reward framework is designed to align
executive reward to shareholders' interests.
The Board have considered that it should
seek to enhance shareholders' interests by:
— focusing on sustained growth in
shareholder wealth, consisting of
dividends and growth in share price,
and delivering constant or increasing
return on assets as well as focusing the
executive on key non-financial drivers
of value
— attracting and retaining high
calibre executives
Additionally, the reward framework should
seek to enhance executives' interests by:
— rewarding capability and experience
— reflecting competitive reward
for contribution to growth in
shareholder wealth
— providing a clear structure for
earning rewards
In accordance with best practice
corporate governance, the structure of
non-executive director and executive
director remuneration is separate.
principles used to determine
the nature and amount of
remuneration
The objective of the Consolidated Entity's
executive reward framework is to ensure
reward for performance is competitive and
appropriate for the results delivered. The
framework aligns executive reward with the
achievement of strategic objectives and
the creation of value for shareholders, and
conforms with the market best practice for
delivery of reward. The Board of Directors
('the Board') ensures that executive reward
satisfies the following key criteria for good
reward governance practices:
— competitiveness and reasonableness
— acceptability to shareholders
— alignment of executive compensation
— transparency
The Board is responsible for determining
and reviewing remuneration arrangements
for its directors and executives. The
performance of the Consolidated Entity
and the Company depends on the quality
of its directors and executives. The
remuneration philosophy is to attract,
motivate and retain high performance and
high quality personnel.
The Board has structured an executive
remuneration framework that is market
competitive and complementary to the
reward strategy of the Consolidated Entity.
21
detAils of RemuneRA tion
Amounts of remuneration
Details of the remuneration of key
management personnel of the
Consolidated Entity are set out in the
following tables.
Details of the remuneration of the directors
and other key management personnel
(defined as those who have the authority
and responsibility for planning, directing
and controlling the major activities of the
company) of the company are set out in
the following tables.
The performance of Executives is measured
against criteria agreed annually with each
executive and is based predominantly on
the overall success of the Consolidated
Entity in achieving its broader corporate
goals. Bonuses and incentives are linked to
predetermined performance criteria. The
Board may, however, exercise its discretion
in relation to approving incentives, bonuses,
and options, and can require changes
to the Executive's remuneration. This
policy is designed to attract the highest
calibre of Executives and reward them
for performance that results in long-term
growth in shareholder wealth.
All remuneration paid to Directors and
Executives is valued at the cost to the
Consolidated Entity and expensed. Options
are valued using the Black-Scholes or
Binomial methodology.
The long-term incentives ('LTI') includes long
service leave and share-based payments.
Shares and or options are awarded to
executives on the discretion of the Board
based on long-term incentive measures.
consolidated entity
performance and link to
remuneration
Remuneration packages do not include
performance-based components. An
individual member of staff's performance is
assessed by reference to their contribution
to the Company's overall achievements.
The intention of this program is to facilitate
goal congruence between Executives with
that of the business and shareholders.
Generally, the executive's remuneration is
tied to the Consolidated Entity's successful
achievement of certain key milestones as
they relate to its operating activities.
voting and comments made at
the company's 11 november
2019 Annual General meeting
('AGm')
The Company received 91.78% of 'for' votes
in relation to its remuneration report for the
year ended 30 June 2019. The Company
did not receive any specific feedback at the
AGM regarding its remuneration practices.
non-executive directors
remuneration
Fees and payments to non-executive
directors reflect the demands which are
made on, and the responsibilities of, the
directors. Non-executive directors fees
and payments are reviewed annually
by the Board. The chairman's fees are
determined independently to the fees
of other non-executive directors based
on comparative roles in the external
market. The chairman is not present at any
discussions relating to determination of
his/her own remuneration. Non-executive
directors do not receive share options or
other incentives.
ASX listing rules requires that the aggregate
non-executive directors remuneration shall
be determined periodically by a general
meeting. The most recent determination
was at the Annual General Meeting held
on 21 November 2012, where the
shareholders approved an aggregate
remuneration of $400,000.
executive remuneration
The Consolidated Entity aims to reward
executives with a level and mix of
remuneration based on their position and
responsibility, which are both fixed.
The executive remuneration and reward
framework have three components:
— base pay and non-monetary benefits
— share-based payments
— other remuneration such as
superannuation and long service leave
The combination of these comprises the
executive's total remuneration.
Fixed remuneration, consisting of base salary,
superannuation and non-monetary benefits,
are reviewed annually by the Board, based
on individual and business unit performance,
the overall performance of the Company and
comparable market remunerations.
Executives can receive their fixed
remuneration in the form of cash or other
fringe benefits (for example motor vehicle
benefits) where it does not create any
additional costs to the Company and adds
additional value to the executive.
All Executives are eligible to receive a
base salary (which is based on factors
such as experience and comparable
industry information) or consulting fee.
The Board reviews the Executive
Chairman's remuneration package, and
the Executive Chairman reviews the
senior Executives' remuneration packages
annually by reference to the Consolidated
Entity's performance, executive
performance and comparable information
within the industry.
22
2020
Non-Executive Directors:
Mr I Tchacos
Mr L De Maria
Executive Directors:
Mr N Newell
2019
Non-Executive Directors:
Mr I Tchacos
Mr L De Maria
Executive Directors:
Mr N Newell
Short-term
benefits
Post-
employment
benefits
Long-term
benefits
Salaries
and fees
Super-
annuation
Long
service leave
$
$
43,151
41,096
4,099
3,904
$
-
-
353,180
437,427
23,275
31,278
14,414
14,414
$
$
43,151
41,096
4,099
3,904
337,488
421,735
19,308
27,311
$
-
-
-
-
Total
$
47,250
45,000
390,869
483,119
$
47,250
45,000
356,796
449,046
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
Mr I Tchacos
Mr L De Maria
Executive Directors:
Mr N Newell
Fixed remuneration
2020
2019
100%
100%
100%
100%
100%
100%
23
seRvice AGReements
Remuneration and other terms of
employment for key management
personnel are formalised in service
agreements. Details of these agreements
are as follows:
mr n newell
executive chairman
mr ian tchacos
non-executive director
mr leo de maria
non-executive director
Agreement commenced
1 November 2006
Agreement commenced
14 October 2016
Agreement commenced
30 September 2014
details
(i) Mr Newell may resign from his position
and thus terminate this contract by
giving 6 months written notice.
(ii) The Company may terminate this
employment agreement by providing
6 months written notice.
(iii) The Company may terminate the
contract at any time without notice
if serious misconduct has occurred.
Where termination with cause occurs,
Mr Newell is only entitled to that
portion of remuneration which is fixed,
and only up to the date of termination.
(iv) On termination of the agreement,
Mr Newell will be entitled to be paid
those outstanding amount owing to
him up until the Termination date.
details
(i) Mr Tchacos may resign from his
position and thus terminate this
contract by giving 3 months written
notice.
details
(i) Mr De Maria may resign from his
position and thus terminate this
contract by giving 3 months written
notice.
(ii) The Company may terminate this
(ii) The Company may terminate this
employment agreement by providing
3 months written notice.
employment agreement by providing
3 months written notice.
(iii) The Company may terminate the
(iii) The Company may terminate the
contract at any time without notice
if serious misconduct has occurred.
Where termination with cause occurs,
Mr Tchacos is only entitled to that
portion of remuneration which is fixed,
and only up the date of termination.
contract at any time without notice
if serious misconduct has occurred.
Where termination with cause occurs,
Mr De Maria is only entitled to that
portion of remuneration, which is fixed,
and only up the date of termination.
(iv) On termination of the agreement,
(iv) On termination of the agreement,
Mr Tchacos will be entitled to be paid
those outstanding amounts owing to
him up until the Termination date.
Mr De Maria will be entitled to be paid
those outstanding amounts owing to
his up until the Termination date.
Key management personnel have no
entitlement to termination payments in the
event of removal for misconduct.
24
shARe-BA sed compensAtion
issue of shares
The Company issued nil (2019: 1,552,072)
shares to directors and key management
personnel as part of compensation during
the year ended 30 June 2020.
options
There were no options over ordinary shares
granted to or vested by Directors and other
key management personnel as part of
compensation during the year ended 30
June 2020 (2019: Nil).
performance rights
There were no performance rights over
ordinary shares issued to Directors and
other key management personnel as part
of compensation that were outstanding as
at 30 June 2020 (2019: Nil).
Additional information
The earnings of the Consolidated Entity
for the five years to 30 June 2020 are
summarised below:
Interest income / sundry income
85,279
43,629
27,696
14,677
73,967
Net loss before tax
Net loss after tax
(3,006,065)
(1,089,254)
(1,154,810)
(1,839,978)
(10,332,422)
(3,006,065)
(1,089,254)
(1,154,810)
(1,839,978)
(10,291,156)
2020
$
2019
$
2018
$
2017
$
2016
$
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
2020
0.11
0.07
(1.13)
2019
0.05
0.11
(0.42)
2018
0.04
0.05
(0.49)
2017
0.02
0.04
(0.77)
2016
0.06
0.02
(4.33)
Share price at financial year start ($)
Share price at financial year end ($)
Basic earnings per share (cents per share)
Additional disclosures relating
to key management personnel
shareholding
The number of shares in the Company held
during the financial year by each Director
and other members of key management
personnel of the Consolidated Entity,
including their related parties, is set out below:
Ordinary shares
Mr N Newell
Mr L De Maria
Mr I Tchacos
This concludes the remuneration report, which has been audited.
Balance
at the start
of the year
Received
as part of
remuneration
Additions
Disposals/
other
Balance
at the end
of the year
44,082,229
650,070
428,500
45,160,799
-
-
-
-
110,000
-
-
110,000
-
-
-
-
44,192,229
650,070
428,500
45,270,799
25
non-audit services
There were no non-audit services provided
during the financial year by the auditor.
Officers of the Company who are former
partners of Grant Thornton Audit Pty Ltd
There are no officers of the Company who
are former partners of Grant Thornton
Audit Pty Ltd.
Auditor's independence
declaration
A copy of the auditor's independence
declaration as required under section 307C
of the Corporations Act 2001 is set out
immediately after this Directors' report.
Auditor
Grant Thornton Audit Pty Ltd continues in
office in accordance with section 327 of the
Corporations Act 2001.
Rounding of amounts
3D Oil Limited is a type of Company
that is 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.
This report is made in accordance with a
resolution of Directors, pursuant to section
298(2)(a) of the Corporations Act 2001.
On behalf of the Directors
Noel Newell
Executive Chairman
24 September 2020
Melbourne
shares under option
There were no unissued ordinary shares of
3D Oil Limited under option outstanding at
the date of this report.
shares under
performance rights
There were no unissued ordinary shares of
3D Oil Limited under performance rights
outstanding at the date of this report.
shares issued on the exercise
of options
There were no ordinary shares of 3D Oil
Limited issued on the exercise of options
during the year ended 30 June 2020 and
up to the date of this report.
shares issued on the exercise
of performance rights
There were no ordinary shares of
3D Oil Limited issued on the exercise of
performance rights during the year ended
30 June 2020.
indemnity and insurance of
officers
The Consolidated Entity has indemnified
the directors of the Company for costs
incurred, in their capacity as a director, for
which they may be held personally liable,
except where there is a lack of good faith.
During the financial year, the Company
paid a premium in respect of a contract
to insure the directors of the Company
against a liability to the extent permitted by
the Corporations Act 2001. The contract of
insurance prohibits disclosure of the nature
of liability and the amount of the premium.
indemnity and insurance of
auditor
The Company has not otherwise, during
or since the financial year, indemnified or
agreed to indemnify the auditor of the
Company or any related entity against a
liability incurred by the auditor.
During the financial year, the Company has
not paid a premium in respect of a contract
to insure the auditor of the Company or
any related entity.
proceedings on behalf of the
company
No person has applied to the Court under
section 237 of the Corporations Act 2001
for leave to bring proceedings on behalf
of the Company, or to intervene in any
proceedings to which the Company
is a party for the purpose of taking
responsibility on behalf of the Company for
all or part of those proceedings.
26
27
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation. www.grantthornton.com.au Collins Square, Tower 5 727 Collins Street Melbourne Victoria 3008 Correspondence to: GPO Box 4736 Melbourne VIC 3001 T +61 3 8320 2222 F +61 3 8320 2200 E info.vic@au.gt.com W www.grantthornton.com.au Auditor’s Independence Declaration To the Directors of 3D Oil Limited In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of 3D Oil Limited for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been: a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b no contraventions of any applicable code of professional conduct in relation to the audit. Grant Thornton Audit Pty Ltd Chartered Accountants B L Taylor Partner – Audit & Assurance Melbourne, 24 September 2020 finAnciAl
RepoRts
28
stAtement of pRofit oR loss
And otheR compRehensive income
For the year ended 30 June 2020
Other income
Interest income
Expenses
Corporate expenses
Employment expenses
Occupancy expenses
Depreciation and amortisation expense
Impairment of exploration assets
Finance costs
Loss before income tax expense
Income tax expense
Consolidated
2019
$
-
43,629
2020
$
75,873
9,406
(572,794)
(568,673)
(471,800)
(418,442)
(34,427)
(110,207)
(1,886,343)
(15,773)
(91,619)
(32,762)
(19,740)
(1,647)
(3,006,065)
(1,089,254)
-
-
Note
5
6
14
6
7
Loss after income tax expense for the year attributable to the owners of 3D Oil Limited
(3,006,065)
(1,089,254)
Other comprehensive income for the year, net of tax
-
-
Total comprehensive income for the year attributable to the owners of 3D Oil Limited
(3,006,065)
(1,089,254)
Basic earnings per share
Diluted earnings per share
32
32
Cents
(1.13)
(1.13)
Cents
(0.42)
(0.42)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
29
stAtement of finAnciAl position
As at 30 June 2020
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Short term investments
Prepayments
Total current assets
Non-current assets
Furniture and computer equipment
Right-of-use assets
Intangibles
Exploration and evaluation
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payable
Lease liabilities
Employee benefits
Total current liabilities
Non-current liabilities
Lease liabilities
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Accumulated losses
Total equity
The above statement of financial position should be read in conjunction with the accompanying notes
30
Note
Consolidated
2020
$
2019
$
8
9
10
11
12
13
14
15
16
17
18
19
5,077,191
934,458
8,216
58,288
93,577
1,000,000
39,447
38,401
5,218,431
2,031,147
14,031
165,496
74,068
17,800
-
94,160
4,546,537
10,735,892
4,800,132
10,847,852
10,018,563
12,878,999
934,177
1,000,333
102,039
148,269
-
127,767
1,184,485
1,128,100
85,705
5,830
91,535
-
8,156
8,156
1,276,020
1,136,256
8,742,543
11,742,743
20
55,483,678
55,483,678
(46,741,135)
(43,740,935)
8,742,543
11,742,743
stAtement of chAnGes in equity
For the year ended 30 June 2020
Consolidated
Balance at 1 July 2018
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Contributed
equity
Accumulated
losses
Reserves
Total equity
$
$
$
$
52,657,366
(42,665,694)
53,221
10,044,893
-
-
-
(1,089,254)
-
(1,089,254)
-
-
-
-
(1,089,254)
-
(1,089,254)
2,787,104
-
-
Contributions of equity, net of transaction costs (note 20)
2,787,104
-
Expiry of performance rights
Conversion of vested performance rights
-
14,013
39,208
-
(14,013)
(39,208)
Balance at 30 June 2019
55,483,678
(43,740,935)
-
11,742,743
Consolidated
Balance at 1 July 2019
Contributed
equity
Accumulated
losses
$
$
55,483,678
(43,740,935)
Adjustment from adoption of AASB 16
-
5,865
Balance at 1 July 2019 – restated
55,483,678
(43,735,070)
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
-
-
-
(3,006,065)
-
(3,006,065)
Balance at 30 June 2020
55,483,678
(46,741,135)
The above statement of changes in equity should be read in conjunction with the accompanying notes
Reserves
Total equity
$
-
-
-
-
-
-
-
$
11,742,743
5,865
11,748,608
(3,006,065)
-
(3,006,065)
8,742,543
31
stAtement of cAsh flows
For the year ended 30 June 2020
Cash flows from operating activities
Payments to suppliers and employees (inclusive of GST)
Interest received
Interest paid
COVID-19 incentives
Net cash used in operating activities
Cash flows from investing activities
Payments for computer equipment
Payments for intangibles
Payments for exploration and evaluation
Proceeds from/(used) short term investments
Proceeds from farm-out arrangement
Note
Consolidated
2019
$
2018
$
(1,058,349)
(984,616)
25,245
(12,353)
28,230
(1,648)
(1,045,457)
(958,034)
65,248
-
31
(980,209)
(958,034)
11
13
-
-
(18,845)
(2,665)
(726,453)
(880,967)
906,423
(1,000,000)
14
5,000,000
-
Net cash from/(used in) investing activities
5,179,970
(1,902,477)
Cash flows from financing activities
Proceeds from issue of shares
Share issue transaction costs
Payment of principal element of lease liabilities
Net cash from/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
20
-
-
3,003,035
(215,931)
(57,028)
-
(57,028)
2,787,104
4,142,733
(73,407)
934,458
1,007,865
Cash and cash equivalents at the end of the financial year
8
5,077,191
934,458
The above statement of cash flows should be read in conjunction with the accompanying notes
32
notes to the finAnciAl st Atements
30 June 2020
note 1. GeneRAl
infoRmAtion
The financial statements cover 3D Oil
Limited as a consolidated entity consisting
of 3D Oil Limited and the entities it
controlled at the end of, or during, the year.
The financial statements are presented in
Australian dollars, which is 3D Oil Limited's
functional and presentation currency.
3D Oil Limited is a listed public company
limited by shares, incorporated and
domiciled in Australia. Its registered office
and principal place of business is:
Level 18
41 Exhibition Street
Melbourne VIC 3000
A description of the nature of the
Consolidated Entity's operations and its
principal activities are included in the
Directors' report, which is not part of the
financial statements.
The financial statements were authorised
for issue, in accordance with a resolution
of Directors, on 24 September 2020. The
Directors have the power to amend and
reissue the financial statements.
note 2.
siGnificAnt
AccountinG
policies
The principal accounting policies adopted
in the preparation of the financial
statements are set out either in the
respective notes or below. These policies
have been consistently applied to all the
years presented, unless otherwise stated.
new oR Amended
AccountinG st AndARds
And inteRpRet Ations
Adopted
The Consolidated Entity 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 Consolidated
Entity. The following Accounting Standards
and Interpretations are most relevant to the
Consolidated Entity:
interpretation 23 uncertainty
over income tax treatments
Interpretation 23 requires the assessment
of whether the effect of uncertainty over
income tax treatments should be included
in the determination of taxable profit (tax
loss), tax bases, unused tax losses, unused
tax credits and tax rates. The Interpretation
outlines the requirements to determine
whether an entity considers uncertain tax
treatments separately, the assumptions
an entity makes about the examination
of tax treatments by taxation authorities,
how an entity determines taxable profit
(tax loss), tax bases, unused tax losses,
unused tax credits and tax rates and how
an entity considers changes in facts and
circumstances.
The Company has adopted Interpretation
23 from 1 July 2019, based on an
assessment of whether it is ‘probable’ that
a taxation authority will accept an uncertain
tax treatment. This assessment takes
into account that for certain jurisdictions
in which the Company operates, a
local tax authority may seek to open a
company’s books as far back as inception
of the Company. Where it is probable, the
Company has determined tax balances
consistently with the tax treatment used or
planned to be used in its income tax filings.
Where the Company has determined that it
is not probable that the taxation authority
will accept an uncertain tax treatment, the
most likely amount or the expected value
has been used in determining taxable
balances (depending on which method is
expected to better predict the resolution of
the uncertainty). There has been no impact
from the adoption of Interpretation 23 in
this reporting period.
AAsB 16 leases
The Consolidated Entity has adopted AASB
16 from 1 July 2019. The standard replaces
AASB 117 'Leases' and for lessees eliminates
the classifications of operating leases and
finance leases. Except for short-term leases
and leases of low-value assets, right-of-use
assets and corresponding lease liabilities
are recognised in the statement of financial
position. Straight-line operating lease
expense recognition is replaced with a
depreciation charge for the right-of-use
assets (included in operating costs) and an
interest expense on the recognised lease
liabilities (included in finance costs). In the
earlier periods of the lease, the expenses
associated with the lease under AASB 16
will be higher when compared to lease
expenses under AASB 117. However, EBITDA
(Earnings Before Interest, Tax, Depreciation
and Amortisation) results improve as
the operating expense is now replaced
by interest expense and depreciation in
profit or loss. For classification within
the statement of cash flows, the interest
portion is disclosed in operating activities
and the principal portion of the lease
payments are separately disclosed in
financing activities. For lessor accounting,
the standard does not substantially change
how a lessor accounts for leases.
Other accounting pronouncements which
have become effective from 1 July 2019 and
have therefore been adopted have not had
a significant impact on the Group’s financial
results or position.
GoinG conceRn
The financial report has been prepared on
the going concern basis, which assumes
continuity of normal business activities
and the realisation of assets and the
settlement of liabilities in the ordinary
course of business.
The working capital position as at
30 June 2020 of the Consolidated Entity
results in an excess of current assets over
current liabilities of $4,023,321 (30 June
2019: $903,047). The Consolidated Entity
made a loss after tax of $3,006,065 during
the financial year (2019 loss: $1,089,254)
and had net operating cash outflows of
$980,209 (2019: $958,034). The cash
balances, including term deposits, as
at 30 June 2020 was $5,170,768 (2019:
$1,934,458). The continuing viability of
the Consolidated Entity and its ability
to continue as a going concern is
dependent upon the Consolidated Entity
being successful in its continuing efforts
in exploration projects and accessing
additional sources of capital to meet the
commitments as and when required. To
meet the Company's funding requirements
as and when they fall due the Group will
need to take appropriate steps, including a
combination of:
— Raising capital by one of or a
combination of the following: placement
of shares, rights issue, share purchase
plan, etc;
— Meeting its obligations by either
farm-out or partial sale of the Group’s
exploration interests;
33
— Subject to negotiation and approval,
minimum work requirements may be
varied or suspended, and/or permits
may be surrendered or cancelled; or
— Other avenues that may be available to
the Group.
In March 2020, the World Health Organization
declared the outbreak of a novel coronavirus
(COVID-19) as a pandemic, which continues
to spread globally as well as in Australia. The
spread of COVID-19 has caused significant
volatility in Australian and international
markets. There is a significant uncertainty
around the breadth and duration of business
disruptions related to COVID-19 and therefore
the Company has taken precautionary
measures by temporarily closing the
Company’s office and having arranged for
its employees to work remotely, as well
as minimising non-critical activities and
curtailing travel. At the date of this report, the
impact of these measures is not expected to
significantly impact the completion of the
current work being undertaken. However,
as the circumstances continue to evolve,
there may be disruptions to the future work
timelines if employees, consultants or their
respective families are personally impacted
by COVID-19 or if travel and other operational
restrictions are not lifted.
Having assessed the potential uncertainties
relating to the Consolidated Entity’s ability
to effectively fund exploration activities
and operating expenditures, the Directors
believe that the Consolidated Entity will
continue to operate as a going concern
for the foreseeable future. Therefore, the
Directors consider it is appropriate to
prepare the financial statements on a going
concern basis.
RoundinG of Amounts
3D Oil Limited is a type of Company
that is 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.
BAsis of pRepARAtion
These general purpose financial statements
have been prepared in accordance with
Australian Accounting Standards and
Interpretations issued by the Australian
Accounting Standards Board ('AASB') and
the Corporations Act 2001, as appropriate
for for-profit oriented entities. These
financial statements also comply with
International Financial Reporting Standards
as issued by the International Accounting
Standards Board ('IASB').
histoRic Al cost
convention
The financial statements have been
prepared under the historical cost
34
convention, except for, where applicable,
the revaluation of financial assets and
liabilities at fair value through profit or
loss, financial assets at fair value through
other comprehensive income, investment
properties, certain classes of property,
plant and equipment and derivative
financial instruments.
cRiticAl AccountinG
estimAtes
The preparation of the financial statements
requires the use of certain critical
accounting estimates. It also requires
management to exercise its judgement in
the process of applying the Consolidated
Entity's accounting policies. The areas
involving a higher degree of judgement or
complexity, or areas where assumptions
and estimates are significant to the financial
statements, are disclosed in note 3.
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 27.
pRinciples of
consolidAtion
The consolidated financial statements
incorporate the assets and liabilities of all
subsidiaries of 3D Oil Limited ('Company' or
'parent entity') as at 30 June 2020 and the
results of all subsidiaries for the year then
ended. 3D Oil Limited and its subsidiaries
together are referred to in these financial
statements as the 'Consolidated Entity'.
Subsidiaries are all those entities over
which the Consolidated Entity has control.
The Consolidated Entity controls an entity
when the Consolidated Entity 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 to direct the activities of the
entity. Subsidiaries are fully consolidated
from the date on which control is
transferred to the Consolidated Entity.
They are de-consolidated from the date
that control ceases.
Intercompany transactions, balances
and unrealised gains on transactions
between entities in the Consolidated
Entity are eliminated. Unrealised losses
are also eliminated unless the transaction
provides evidence of the impairment of
the asset transferred. Accounting policies
of subsidiaries have been changed where
necessary to ensure consistency with the
policies adopted by the Consolidated Entity.
The acquisition of subsidiaries is accounted
for using the acquisition method of
accounting. A change in ownership interest,
without the loss of control, is accounted
for as an equity transaction, where the
difference between the consideration
transferred and the book value of the share
of the non-controlling interest acquired is
recognised directly in equity attributable to
the parent.
Where the Consolidated Entity loses
control over a subsidiary, it derecognises
the assets including goodwill, liabilities and
non-controlling interest in the subsidiary
together with any cumulative translation
differences recognised in equity. The
Consolidated Entity recognises the fair value
of the consideration received and the fair
value of any investment retained together
with any gain or loss in profit or loss.
inteRest income
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.
otheR Revenue
Other revenue is recognised when it is
received or when the right to receive
payment is established.
income tAx
The income tax expense or benefit for the
period is the tax payable on that period's
taxable income based on the applicable
income tax rate for each jurisdiction,
adjusted by the changes in deferred
tax assets and liabilities attributable to
temporary differences, unused tax losses
and the adjustment recognised for prior
periods, where applicable.
Deferred tax assets and liabilities are
recognised for temporary differences at the
tax rates expected to be applied when the
assets are recovered or liabilities are settled,
based on those tax rates that are enacted or
substantively enacted, except for:
— When the deferred income tax asset or
liability arises from the initial recognition
of goodwill or an asset or liability in
a transaction that is not a business
combination and that, at the time of
the transaction, affects neither the
accounting nor taxable profits; or
— When the taxable temporary difference
is associated with interests in
subsidiaries, associates or joint ventures,
and the timing of the reversal can be
controlled and it is probable that the
temporary difference will not reverse in
the foreseeable future.
Deferred tax assets are recognised for
deductible temporary differences and
unused tax losses only if it is probable
that future taxable amounts will be
available to utilise those temporary
differences and losses.
The carrying amount of recognised and
unrecognised deferred tax assets are
reviewed at each reporting date. Deferred
tax assets recognised are reduced to the
extent that it is no longer probable that
future taxable profits will be available
for the carrying amount to be recovered.
Previously unrecognised deferred tax
assets are recognised to the extent that it
is probable that there are future taxable
profits available to recover the asset.
Deferred tax assets and liabilities are offset
only where there is a legally enforceable
right to offset current tax assets against
current tax liabilities and deferred tax
assets against deferred tax liabilities; and
they relate to the same taxable authority
on either the same taxable entity or
different taxable entities which intend to
settle simultaneously.
3D Oil Limited (the 'head entity') and its
wholly-owned Australian subsidiaries
have formed an income tax consolidated
group under the tax consolidation regime.
The head entity and each subsidiary in
the tax consolidated group continue to
account for their own current and deferred
tax amounts. The tax consolidated group
has applied the 'separate taxpayer within
group' approach in determining the
appropriate amount of taxes to allocate to
members of the tax consolidated group.
cuRRent And non-
cuRRent clA ssificAtion
Assets and liabilities are presented in the
statement of financial position based on
current and non-current classification.
An asset is classified as current when: it is
either expected to be realised or intended
to be sold or consumed in the Consolidated
Entity's normal operating cycle; it is held
primarily for the purpose of trading; it is
expected to be realised within 12 months
after the reporting period; or the asset is
cash or cash equivalent unless restricted
from being exchanged or used to settle
a liability for at least 12 months after the
reporting period. All other assets are
classified as non-current.
A liability is classified as current when:
it is either expected to be settled in the
Consolidated Entity's normal operating
cycle; it is held primarily for the purpose
of trading; it is due to be settled within
12 months after the reporting period; or
there is no unconditional right to defer the
settlement of the liability for at least
12 months after the reporting period. All
other liabilities are classified as non-current.
Deferred tax assets and liabilities are
always classified as non-current.
Joint opeRAtions
A joint operation is a joint arrangement
whereby the parties that have joint
control of the arrangement have rights
to the assets, and obligations for the
liabilities, relating to the arrangement.
The Consolidated Entity has recognised
its share of jointly held assets, liabilities,
revenues and expenses of joint
operations. These have been incorporated
in the financial statements under the
appropriate classifications.
exploRAtion
expendituRe
Exploration expenditure incurred is
accumulated in respect of each identifiable
area of interest. These costs are only
carried forward in relation to each area
of interest to the extent the following
conditions are satisfied:
(a) the rights to tenure of the area of
interest are current; and
(b) at least one of the following conditions
is also met:
(i) the exploration and evaluation
expenditures are expected to
be recouped through successful
development and exploitation of
the area of interest, or alternatively,
by its sale; and
(ii) exploration and evaluation
activities in the area of interest
have not at the reporting date
reached a stage which permits
a reasonable assessment of
the existence or otherwise
of economically recoverable
reserves, and active and significant
operations in, or in relation to, the
area of interest are continuing.
Accumulated costs in relation to an
abandoned area are written off in full
against profit in the year in which the
decision to abandon the area is made.
When production commences, the
accumulated costs for the relevant area
of interest are amortised over the life of
the area according to the rate
of depletion of the economically
recoverable reserves.
A regular review is undertaken of each area
of interest to determine the appropriateness
of continuing to carry forward cost in
relation to that area of interest.
Costs of site restoration are provided over
the life of the facility from when exploration
commences and are included in the cost of
that stage. Site restoration costs include
the dismantling and removal of mining
plant, equipment and building structures,
waste removal, and rehabilitation of the site
in accordance with clauses of the mining
permits. Such costs have been determined
using estimates of future costs, current
legal requirements and technology on an
undiscounted basis.
Any changes in the estimates for the
costs are accounted on a prospective
basis. In determining the costs of site
restoration, there is uncertainty regarding
the nature and extent of the restoration
due to community expectations and future
legislation. Accordingly the costs have
been determined on the basis that the
restoration will be completed within one
year of abandoning the site.
impAiRment of
non-finAnciAl A ssets
Non-financial assets are reviewed for
impairment whenever events or changes
in circumstances indicate that the carrying
amount may not be recoverable. An
impairment loss is recognised for the
amount by which the asset's carrying
amount exceeds its recoverable amount.
Recoverable amount is the higher of an
asset's fair value less costs of disposal
and value-in-use. The value-in-use is the
present value of the estimated future cash
flows relating to the asset using a pre-tax
discount rate specific to the asset or
cash-generating unit to which the
asset belongs. Assets that do not have
independent cash flows are grouped
together to form a cash-generating unit.
leAses
At inception of a contract, the Consolidated
Entity assesses whether a contract is, or
contains, a lease. A contract is, or contains,
a lease if the contract conveys the right to
control the use of an identified asset for a
period of time in exchange for consideration.
To assess whether a contract conveys the
right to control the use of an identified asset,
the Consolidated Entity assesses whether:
— The contract involves the use of an
identified asset – this may be specified
explicitly or implicitly and should
be physically distinct or represent
substantially all of the capacity of a
physically distinct asset. If the supplier
has a substantive substitution right, then
the asset is not identified;
— The Consolidated Entity has the
right to obtain substantially all of the
economic benefits from use of the asset
throughout the period of use; and
35
Lease payments included in the
measurement of the lease liability comprise
the following:
— Fixed payments, including in-substance
fixed payments;
— Variable lease payments that depend
on an index or a rate, initially measured
using the index or rate as at the
commencement date;
— Amounts expected to be payable under
a residual value guarantee; and
— The exercise price under a purchase
option that the Consolidated Entity is
reasonably certain to exercise, lease
payments in an optional renewal period
if the Consolidated Entity is reasonably
certain to exercise an extension option,
and penalties for early termination of a
lease unless the Consolidated Entity is
reasonably certain not to terminate early.
The lease liability is measured at amortised
cost using the effective interest method,
It is remeasured when there is a change
in future lease payments arising from
a change in an index or rate, if there is
a change in the Consolidated Entity’s
estimate of the amount expected to be
payable under a residual value guarantee,
or if the Consolidated Entity changes its
assessment of whether it will exercise a
purchase, extension or termination option.
When the lease liability is remeasured in
this way, a corresponding adjustment is
made to the carrying amount of the right-
of-use assets, or is recorded in profit or loss
if the carrying amount of the right-of-use
asset has been reduced to zero.
shoRt-teRm leA ses And
leAses of low-vAlue
Assets
The Consolidated Entity has elected not
to recognise right-of-use assets and lease
liabilities for short-term leases that have a
lease term of 12 months or less and leases
of low-value assets, including IT equipment.
The Consolidated Entity recognises the
lease payments associated with these
leases as an expense on a straight-line
basis over the lease term.
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.
fAiR v Alue meAsuRement
When an asset or liability, financial or
non-financial, is measured at fair value for
recognition or disclosure purposes, the fair
value is based on the price that would be
received to sell an asset or paid to transfer
a liability in an orderly transaction between
market participants at the measurement
date; and assumes that the transaction will
take place either: in the principal market; or
in the absence of a principal market, in the
most advantageous market.
Fair value is measured using the
assumptions that market participants
would use when pricing the asset or
liability, assuming they act in their
economic best interests. For non-financial
assets, the fair value measurement is based
on its highest and best use. Valuation
techniques that are appropriate in the
circumstances and for which sufficient
data are available to measure fair value,
are used, maximising the use of relevant
observable inputs and minimising the use
of unobservable inputs.
new AccountinG
stAndARds And
inteRpRet Ations
not yet mAndAtoRy
oR eARly Adopted
Australian Accounting Standards and
Interpretations that have recently been
issued or amended but are not yet
mandatory, have not been early adopted
by the Consolidated Entity for the annual
reporting period ended 30 June 2020. The
Consolidated Entity has not yet assessed
the impact of these new or amended
Accounting Standards and Interpretations.
— The Consolidated Entity has the right
to direct the use of the asset. The
Consolidated Entity has this right when
it has the decision-making rights that
are most relevant to changing how and
for what purpose the asset is used. In
rare cases where the decision about how
and for what purpose the asset is used is
predetermined, the Consolidated Entity
has the right to direct the use of the
asset if either:
— The Consolidated Entity has the right
to operate the asset; or
— The Consolidated Entity designed the
asset in a way that predetermine how
and for what purpose it will be used.
This policy is applied to contracts entered
into, or changed, on or after 1 July 2019.
At inception or on reassessment of a
contract that contains a lease component,
the Consolidated Entity allocates the
consideration in the contract to each lease
component on the basis of their relative
stand-alone prices. However, for the
leases of land and buildings in which it is a
lessee, the Consolidated Entity has elected
not to separate non-lease components
and account for the lease and non-lease
components as a single lease component.
As A lessee
The Consolidated Entity 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, which
comprises the initial amount of the lease
liability adjusted for any lease payments
made at or before the commencement
date, plus any initial direct costs incurred
and an estimate of costs to dismantle and
remove the underlying asset or to restore
the underlying asset or the site on which it
is located, less any lease incentives received.
The right-of-use asset is subsequently
depreciated using the straight-line method
from the commencement date to the
earlier of the end of the useful life of
the right-of-use asset or the end of the
lease term. The estimated useful lives of
right-of-use assets are determined on
the same basis as those of property and
equipment. In addition, the right-of-use
asset is periodically reduced by impairment
losses, if any, and adjusted for certain
remeasurements of the lease liability.
The lease liability is initially measured at the
present value of the 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 Consolidated Entity’s
incremental borrowing rate. Generally, the
Consolidated Entity uses its incremental
borrowing rate as the discount rate.
36
note 3. cRitic Al
AccountinG
JudGements,
estimAtes And
Assumptions
The preparation of the financial statements
requires management to make judgements,
estimates and assumptions that affect the
reported amounts in the financial statements.
Management continually evaluates its
judgements and estimates in relation to
assets, liabilities, contingent liabilities,
revenue and expenses. Management bases
its judgements, estimates and assumptions
on historical experience and on other
various factors, including expectations of
future events, management believes to
be reasonable under the circumstances.
The resulting accounting judgements and
estimates will seldom equal the related
actual results. The judgements, estimates
and assumptions that have a significant
risk of causing a material adjustment to the
carrying amounts of assets and liabilities
(refer to the respective notes) within the next
financial year are discussed below.
coronavirus (covid-19)
pandemic
Judgement has been exercised in
considering the impacts that the
Coronavirus (COVID-19) pandemic has
had, or may have, on the Consolidated
Entity based on known information. This
consideration extends to the nature of the
products and services offered, customers,
supply chain, staffing and geographic
regions in which the Consolidated Entity
operates. Other than as addressed in
specific notes, there does not currently
appear to be either any significant impact
upon the financial statements or any
significant uncertainties with respect to
events or conditions which may impact the
Consolidated Entity unfavourably as at the
reporting date or subsequently as a result
of the Coronavirus (COVID-19) pandemic.
estimation of useful lives
of assets
The Consolidated Entity determines
the estimated useful lives and related
depreciation and amortisation charges for
its property, plant and equipment and finite
life intangible assets. 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.
income tax
The Consolidated Entity is subject to
income taxes in the jurisdictions in which it
operates. Significant judgement is required
in determining the provision for income
tax. There are many transactions and
calculations undertaken during the ordinary
course of business for which the ultimate tax
determination is uncertain. The Consolidated
Entity recognises liabilities for anticipated
tax audit issues based on the Consolidated
Entity's current understanding of the tax
law. Where the final tax outcome of these
matters is different from the carrying
amounts, such differences will impact the
current and deferred tax provisions in the
period in which such determination is made.
Recovery of deferred
tax assets
Deferred tax assets are recognised for
deductible temporary differences only
if the Consolidated Entity considers it is
probable that future taxable amounts will
be available to utilise those temporary
differences and losses.
lease term
The lease term is a significant component
in the measurement of both the right-of-
use asset and lease liability. Judgement
is exercised in determining whether
there is reasonable certainty that an
option to extend the lease or purchase
the underlying asset will be exercised,
or an option to terminate the lease will
not be exercised, when ascertaining the
periods to be included in the lease term.
In determining the lease term, all facts and
circumstances that create an economical
incentive to exercise an extension
option, or not to exercise a termination
option, are considered at the lease
commencement date. Factors considered
may include the importance of the asset
to the Consolidated Entity's operations;
comparison of terms and conditions to
prevailing market rates; incurrence of
significant penalties; existence of significant
leasehold improvements; and the costs
and disruption to replace the asset. The
Consolidated Entity reassesses whether it is
reasonably certain to exercise an extension
option, or not exercise a termination option,
if there is a significant event or significant
change in circumstances.
incremental borrowing rate
Where the interest rate implicit in a
lease cannot be readily determined, an
incremental borrowing rate is estimated to
discount future lease payments to measure
the present value of the lease liability at
the lease commencement date. Such a
rate is based on what the Consolidated
Entity estimates it would have to pay a
third party to borrow the funds necessary
to obtain an asset of a similar value to
the right-of-use asset, with similar terms,
security and economic environment.
employee benefits provision
As discussed in note 2, the liability for
employee benefits expected to be settled
more than 12 months from the reporting
date are recognised and measured
at the present value of the estimated
future cash flows to be made in respect
of all employees at the reporting date.
In determining the present value of the
liability, estimates of attrition rates and pay
increases through promotion and inflation
have been taken into account.
exploration and
evaluation costs
Exploration and evaluation costs have
been capitalised on the basis that the
Consolidated Entity will commence
commercial production in the future, from
which time the costs will be amortised in
proportion to the depletion of the mineral
resources. Key judgements are applied in
considering costs to be capitalised which
includes determining expenditures directly
related to these activities and allocating
overheads between those that are expensed
and capitalised. In addition, costs are only
capitalised that are expected to be recovered
either through successful development
or sale of the relevant mining interest.
The expectation of recovery of the costs
capitalised is based on the assumption that
the Group will be able to obtain adequate
financing to allow the continued exploration
and subsequent development of areas of
interest by either successfully farming out
a proportion of existing permits or raising
adequate capital in its own right. To the
extent that capitalised costs are determined
not to be recoverable in the future, they will
be written off in the period in which this
determination is made.
note 4. opeRA tinG
seGments
AASB 8 requires operating segments to be
identified on the basis of internal reports
about the components of the Consolidated
Entity that are regularly reviewed by the
chief decision maker in order to allocate
resources to the segment and to assess
its performance. 3D Oil Limited operates
in the development of oil and gas within
Australia. The Consolidated Entity's
activities are therefore classified as one
operating segment.
The chief decision makers, being the Board
of Directors, assess the performance of the
Consolidated Entity as a whole and as such
through one segment.
37
Accounting policy for
operating segments
Operating segments are presented using
the 'management approach', where the
information presented in this financial
statements is on the same basis as the
internal reports provided to the Chief
Operating Decision Makers ('CODM'). The
CODM is responsible for the allocation
of resources to operating segments and
assessing their performance.
note 5. otheR income
COVID-19 incentives
COVID-19 incentives represent the job
keeper and cash flow boost payments
received from Federal Government in
response to ongoing novel coronavirus
(COVID-19) pandemic. Government grants
are recognised in the financial statements
at expected values or actual cash received
when there is a reasonable assurance that
the Consolidated Entity will comply with
the requirements and that the grant will
be received. The Consolidated Entity has
recognised its share of revenues, expenses
and expenses reimbursements of joint
operations, which give rise to job keeper
payments, within exploration assets in the
financial statements.
note 6. expenses
Loss before income tax includes the following specific expenses:
Depreciation
Plant and equipment
Right-of-use assets
Total depreciation
Amortisation
Software
Total depreciation and amortisation
Post-employment benefit plans – Superannuation contributions
Employment entitlements
Operating lease payments
Office lease
Finance costs
Interest and finance charges paid/payable
Interest and finance charges paid/payable on lease liabilities
Finance costs expensed
38
Consolidated
2020
$
75,873
2019
$
-
Consolidated
2020
$
2019
$
(3,769)
(15,334)
(86,346)
-
(90,115)
(15,334)
(20,092)
(17,428)
(110,207)
(29,106)
(32,762)
(23,065)
(442,694)
(395,377)
(471,800)
(418,442)
-
(84,364)
-
(1,647)
(15,773)
-
(15,773)
(1,647)
note 7. income tAx expense
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 27.5%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Entertainment expenses
Impairment of exploration assets
Amounts not brought to account as deferred tax assets
Non-assessable non-exempt income – cashflow boost
Proceeds from farm-out arrangement tax at statutory tax rates
Previously unrecognised DTA now brought to account
Income tax expense
Consolidated
2020
$
2019
$
(3,006,065)
(1,089,254)
(826,668)
(299,545)
1,037
518,744
293,137
13,750
1,375,000
(1,375,000)
-
1,997
-
297,548
-
-
-
-
petroleum Resource Rent tax
Petroleum Resource Rent Tax (PRRT)
applies to petroleum projects in Australian
onshore and offshore areas under the
Petroleum Resource Rent Tax Assessment
Act 1987. PRRT is assessed on a project
basis or production licence area and
is levied on the taxable profits of a
petroleum project at a rate of 40%. Eligible
expenditure incurred in relation to permits
VIC/P57, VIC/P74, T/49P and WA-527-P,
attach to the permit and can be carried
forward. Certain specified undeducted
expenditure is eligible for annual
compounding at set rates. The compound
amount can be deducted against
assessable receipts in future years.
The Company has not recognised a
deferred tax asset with respect to the
carried forward undeducted expenditure.
Deferred tax assets not recognised
Deferred tax assets not recognised comprises temporary differences attributable to:
Tax losses
Total deferred tax assets not recognised
The above potential tax benefit, which
excludes tax losses, for deductible
temporary differences has not been
recognised in the statement of financial
position as the recovery of this benefit is
uncertain.
The taxation benefits of tax losses and
temporary difference not brought to
account will only be obtained if:
(i) the Consolidated Entity derives future
assessable income of a nature and of
an amount sufficient to enable the
benefit from the deductions for the
losses to be realised;
(ii) the Consolidated Entity continues
to comply with the conditions for
deductibility imposed by law; and
(iii) no change in tax legislation adversely
affects the Company in realising the
benefits from deducting the losses.
Consolidated
2020
$
2019
$
15,887,558
16,685,138
15,887,558
16,685,138
39
note 8. cuRRent A ssets – cAsh And cAsh equivAlents
Cash at bank
Cash on deposit
Consolidated
2020
$
2019
$
5,077,191
720,969
-
213,489
5,077,191
934,458
Accounting policy for cash
and cash equivalents
Cash and cash equivalents includes cash
on hand, deposits held at call with financial
institutions, other short-term, highly
liquid investments with original maturities
of three months or less that are readily
convertible to known amounts of cash and
which are subject to an insignificant risk of
changes in value.
note 9. cuRRent A ssets – tRAde And otheR Receiv ABles
Trade receivables
Interest receivable
GST receivable
Consolidated
2019
$
27,954
16,704
13,630
2020
$
6,000
865
1,351
8,216
58,288
Trade receivables represent reimbursement
of labour costs and third party invoices by
JV partners.
The average credit period on trade and
other receivables is 30 days. No interest
is charged on the receivables. The
Consolidated Entity has financial risk
management policies in place to ensure
that all receivables are received within the
credit timeframe. Due to the short-term
nature of these receivables, their carrying
value is assumed to be approximate to their
fair value.
Accounting policy for trade
and other receivables
Trade receivables are initially recognised
at fair value and subsequently measured
at amortised cost using the effective
interest method, less any allowance for
expected credit losses. Trade receivables
are generally due for settlement within
30 days.
Other receivables are recognised at
amortised cost, less any allowance for
expected credit losses.
note 10. cuRRent A ssets – shoRt teRm investments
Cash on deposit
This amount relates to cash on deposit held with a term to maturity greater than 3 months.
40
Consolidated
2020
$
2019
$
93,577
1,000,000
note 11. non-cuRRent A ssets –
fuRnituRe And computeR equipment
Furniture and equipment – at cost
Less: Accumulated depreciation
Computer equipment – at cost
Less: Accumulated depreciation
Reconciliations
Reconciliations of the written down values
at the beginning and end of the current and
previous financial year are set out below:
Consolidated
Balance at 1 July 2018
Additions
Depreciation expense
Balance at 30 June 2019
Depreciation expense
Balance at 30 June 2020
Consolidated
2020
$
2019
$
184,083
184,083
(184,083)
(184,083)
-
-
18,845
(4,814)
14,031
18,845
(1,045)
17,800
14,031
17,800
Computer
equipment
$
14,289
18,845
Total
$
14,289
18,845
(15,334)
(15,334)
17,800
(3,769)
17,800
(3,769)
14,031
14,031
Accounting policy for
furniture and computer
equipment
Furniture and computer equipment are
stated at historical cost less accumulated
depreciation and impairment. Historical
cost includes expenditure that is directly
attributable to the acquisition of the items.
Depreciation is calculated on a straight-
line basis to write off the net cost of each
item of property, plant and equipment
(excluding land) over their expected useful
lives as follows:
Computer equipment
3-7 years
The residual values, useful lives and
depreciation methods are reviewed,
and adjusted if appropriate, at each
reporting date.
note 12. non-
cuRRent A ssets
– RiGht-of-use
Assets
The Consolidated Entity has lease
arrangements for office space. Rental
contracts are typically made for fixed
periods of 12 to 36 months but may
have an extension option. This note
provides information for leases where the
Consolidated Entity is a lessee.
Lease terms are negotiated on an individual
basis and may contain a wide range of
different terms and conditions. The lease
agreements do not impose any covenants
other than th e security interests in the
leased assets that are held by the lessor.
Leased assets may not be used as security
for borrowing purposes.
RiGht-of-use Assets And
leAse liABilities
The Consolidated Entity has adopted
AASB 16 Leases (AASB 16) on 1 July 2019
but has not restated comparatives for
the 2019 reporting period, as permitted
under the specific transition provisions in
the standard. The reclassifications and the
adjustments arising from the new leasing
rules are therefore recognised in the
opening balance sheet on 1 July 2019.
On adoption of AASB 16, the Consolidated
Entity recognised lease assets (known as
‘right-of-use’) and liabilities in relation to
leases which had previously been classified
as ‘operating leases’ under the principles of
AASB 117 Leases. These assets and liabilities
were measured at the present value of
the remaining lease payments, discounted
using the lessee’s incremental borrowing
rate as of 1 July 2019. In applying AASB 16
41
for the first time, the Consolidated Entity
has used the following practical expedients
permitted by the standard:
— applying a single discount rate to a
portfolio of leases with reasonably
similar characteristics
— relying on previous assessments on
whether leases are onerous as an
alternative to performing an impairment
review – there were no onerous contracts
as at 1 July 2019
— accounting for operating leases with
a remaining lease term of less than
12 months as at 1 July 2019 as
short-term leases
— excluding initial direct costs for the
measurement of the right-of-use asset
at the date of initial application, and
— using hindsight in determining the
lease term where the contract contains
options to extend or terminate the lease.
The Consolidated Entity has also elected
not to reassess whether a contract is,
or contains a lease at the date of initial
application. Instead, for contracts entered
into before the transition date the group
relied on its assessment made applying
AASB 117 and Interpretation 4 Determining
whether an Arrangement contains a Lease.
The statement of financial position shows
the following amounts relating to right of
use assets:
Office space- right-of-use
Less: Accumulated depreciation
Refer note 16 and 18 to these financial
statements for the current and non-current
lease liabilities. Depreciation expenses of
right of use assets and finance charges on
lease liabilities are presented in note 6 to
the financial statements.
The Consolidated Entity had no short-term
lease arrangements during the year ended
30 June 2020.
On adoption of AASB 16, the Consolidated
Entity recognised lease liabilities in
relation to leases which had previously
been classified as ‘operating leases’ under
the principles of AASB 117 Leases. These
liabilities were measured at the present
value of the remaining lease payments,
discounted using the lessee’s incremental
borrowing rate as of 1 July 2019.
The weighted average lessee’s incremental
borrowing rate applied to the lease
liabilities on 1 July 2019 was 7.5%.
Operating lease commitments disclosed as at 30 June 2019
Impact of discount (using the incremental borrowing rate)
Gross value of right of use assets recognised at 1 July 2019
Gross value of right of use assets recognised at 1 July 2019
Transitional adjustments on right of use assets at 1 July 2019
Lease liability recognised at 1 July 2019
Consolidated
2019
$
-
-
-
2020
$
251,842
(86,346)
165,496
Consolidated
2019
$
281,040
(29,198)
251,842
251,842
(5,865)
245,977
Accounting policy for
right-of-use assets
A right-of-use asset is recognised at the
commencement date of a lease. The
right-of-use asset is measured at cost,
which comprises the initial amount of the
lease liability, adjusted for, as applicable,
any lease payments made at or before
the commencement date net of any lease
incentives received, any initial direct costs
incurred, and, except where included in the
cost of inventories, an estimate of costs
expected to be incurred for dismantling
and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a
straight-line basis over the unexpired period
of the lease or the estimated useful life of
the asset, whichever is the shorter. Where
the Consolidated Entity expects to obtain
ownership of the leased asset at the end of
the lease term, the depreciation is over its
estimated useful life. Right-of use assets are
subject to impairment or adjusted for any
remeasurement of lease liabilities.
The Consolidated Entity has elected not
to recognise a right-of-use asset and
corresponding lease liability for short-term
leases with terms of 12 months or less and
leases of low-value assets. Lease payments
on these assets are expensed to profit or
loss as incurred.
42
note 13. non-cuRRent A ssets – intAnG iBles
Software – at cost
Less: Accumulated amortisation
Reconciliations
Reconciliations of the written down values
at the beginning and end of the current and
previous financial year are set out below:
Consolidated
Balance at 1 July 2018
Additions
Amortisation expense
Balance at 30 June 2019
Amortisation expense
Balance at 30 June 2020
Consolidated
2020
$
2019
$
334,790
334,790
(260,722)
(240,630)
74,068
94,160
Software
$
Total
$
108,922
108,922
2,665
2,665
(17,427)
(17,427)
94,160
94,160
(20,092)
(20,092)
74,068
74,068
Accounting policy for
intangible assets
Intangible assets acquired as part of
a business combination, other than
goodwill, are initially measured at their
fair value at the date of the acquisition.
Intangible assets acquired separately
are initially recognised at cost. Indefinite
life intangible assets are not amortised
and are subsequently measured at cost
less any impairment. Finite life intangible
assets are subsequently measured at cost
less amortisation and any impairment.
The gains or losses recognised in profit
or loss arising from the derecognition of
intangible assets are measured as the
difference between net disposal proceeds
and the carrying amount of the intangible
asset. The method and useful lives of
finite life intangible assets are reviewed
annually. Changes in the expected pattern
of consumption or useful life are accounted
for prospectively by changing the
amortisation method or period.
software
Significant costs associated with software
are deferred and amortised on a straight-
line basis over the period of their expected
benefit, being their finite life of 5 years.
note 14. non-cuRRent A ssets – exploRA tion And evAluAtion
Exploration and evaluation expenditure
Less: Impairment
Consolidated
2020
$
2019
$
6,432,880
10,735,892
(1,886,343)
-
4,546,537
10,735,892
43
Exploration
& evaluation
expenditure
$
Total
$
9,821,789
9,821,789
933,843
(19,740)
933,843
(19,740)
10,735,892
10,735,892
696,988
696,988
(1,886,343)
(1,886,343)
(5,000,000)
(5,000,000)
4,546,537
4,546,537
Reconciliations
Reconciliations of the written down values
at the beginning and end of the current and
previous financial year are set out below:
Consolidated
Balance at 1 July 2018
Expenditure during the year
Impairment of exploration assets
Balance at 30 June 2019
Expenditure during the year
Impairment of exploration assets
Proceeds from farm-out arrangement
Balance at 30 June 2020
The exploration and evaluation assets
relate to VIC/P57 and VIC/P74 offshore
Gippsland Basin in Victoria, T/49P offshore
Otway Basin in Tasmania and WA-527-P in
Western Australia. The recoverability of the
carrying amounts of the exploration and
evaluation expenditure is dependent on the
successful development and commercial
exploitation, or alternatively the sale, of the
respective areas of interest.
The Company carried out an impairment
review of the carrying amount of its
exploration expenditure in VIC/P57,
VIC/P74, T/49P and WA-527-P as at
30 June 2020. Following a review by the
Directors and management, the book
value of VIC/P57 was written down to
Nil as at 30 June 2020, reflecting the
estimated future economic benefits
expected to be derived from this area
of interest.
On 18 December 2019, 3D Oil T49P Pty Ltd,
a wholly owned subsidiary of the Company,
entered a Farmout Agreement (‘FOA’) in
relation to the offshore Tasmanian Permit
T/49P with ConocoPhillips Australia SH1
Pty Ltd. During the year, the Company
announced that it had received required
regulatory approvals and executed a
Joint Operating Agreement (‘JOA’). Under
the JOA, the Company transferred 80%
interest in the permit to ConocoPhillips
Australia SH1 Pty Ltd. In accordance with
the FOA and JOA, ConocoPhillips Australia
SH1 Pty Ltd has paid $5,000,000 to the
Company in recognition of previous permit
expenditure. Cash consideration received
directly from the farminee is credited
against costs previously capitalised in
relation to the whole interest.
44
farm-out in the exploration
and evaluation phase
The Consolidated Entity does not record
any expenditure made by the farminee
on its account. It also does not recognise
any gain or loss on its exploration and
evaluation farm-out arrangements
but redesignates any costs previously
capitalised in relation to the whole interest
as relating to the partial interest retained.
Any cash consideration received directly
from the farminee is credited against costs
previously capitalised in relation to the
whole interest with any excess accounted
for by the farmor as a gain on disposal.
Accounting policy
for exploration and
evaluation assets
Exploration and evaluation expenditure in
relation to separate areas of interest for
which rights of tenure are current is carried
forward as an asset in the statement of
financial position where it is expected
that the expenditure will be recovered
through the successful development and
exploitation of an area of interest, or by its
sale; or exploration activities are continuing
in an area and activities have not reached
a stage which permits a reasonable
estimate of the existence or otherwise of
economically recoverable reserves. Where
a project or an area of interest has been
abandoned, the expenditure incurred
thereon is written off in the year in which
the decision is made.
note 15. cuRRent liAB ilities – tRAde And otheR p AyABles
Trade payables
Sundry payables and accrued expenses
Refer to note 22 for further information on
financial instruments.
Accounting policy for trade
and other payables
These amounts represent liabilities for
goods and services provided to the
Consolidated Entity prior to the end of the
financial year and which are unpaid. Due to
their short-term nature they are measured
at amortised cost and are not discounted.
The amounts are unsecured and are usually
paid within 30 days of recognition.
note 16. cuRRent liAB ilities – leA se liABilities
Lease liability
Refer to note 22 for further information on
financial instruments.
The changes in the Consolidated Entity’s
total lease liabilities (current and non-
current) arising from financing activities
can be classified as follows:
Adoption of AASB 16
Finance charges
Repayments during the period
Forgiveness of lease payments
Balance at 30 June
Current portion of lease liability
Non-current portion of lease liability
Consolidated
2019
$
91,510
908,823
2020
$
150,649
783,528
934,177
1,000,333
Consolidated
2019
$
-
2020
$
102,039
Consolidated
2020
$
245,977
15,773
(69,381)
(4,625)
187,744
102,039
85,705
187,744
The Consolidated Entity received a 30%
reduction in rent payments for two months
from the landlord, in response to ongoing
COVID-19 pandemic. There are no other
changes to the lease. The forgiveness of
rent is unconditional and qualifies to be
accounted using the practical expedient
of AASB 16 Leases. Applying the practical
expedient, the Consolidated Entity
recognised this forgiveness of rent as a
negative variable lease payment in the
profit or loss.
45
note 17. cuRRent liAB ilities – employee Benefits
Consolidated
2020
$
2019
$
22,145
15,538
126,124
112,229
148,269
127,767
Annual leave
Long service leave
Accounting policy for
employee benefits
short-term employee benefits
Liabilities for wages and salaries, including
non-monetary benefits, annual leave and
long service leave expected to be settled
wholly within 12 months of the reporting
date are measured at the amounts expected
to be paid when the liabilities are settled.
note 18. non-cuRRent liAB ilities – leA se liABilities
Lease liability
Consolidated
2019
$
-
2020
$
85,705
Refer to note 22 for further information on
financial instruments.
Accounting policy for lease
liabilities
A lease liability is recognised at the
commencement date of a lease. The lease
liability is initially recognised at the present
value of the lease payments to be made
over the term of the lease, discounted using
the interest rate implicit in the lease or, if
that rate cannot be readily determined,
the Consolidated Entity's incremental
borrowing rate. Lease payments comprise
of fixed payments less any lease incentives
receivable, variable lease payments that
depend on an index or a rate, amounts
expected to be paid under residual value
guarantees, exercise price of a purchase
option when the exercise of the option
is reasonably certain to occur, and any
anticipated termination penalties. The
variable lease payments that do not
depend on an index or a rate are expensed
in the period in which they are incurred.
Lease liabilities are measured at amortised
cost using the effective interest method.
The carrying amounts are remeasured if
there is a change in the following: future
lease payments arising from a change in
an index or a rate used; residual guarantee;
lease term; certainty of a purchase option
and termination penalties. When a lease
liability is remeasured, an adjustment is
made to the corresponding right-of use
asset, or to profit or loss if the carrying
amount of the right-of-use asset is fully
written down.
note 19. non-cuRRent liAB ilities – employee Benefits
Long service leave
46
Consolidated
2020
$
2019
$
5,830
8,156
Accounting policy for long-
term employee benefits
The liability for long service leave not
expected to be settled within 12 months
of the reporting date are measured as the
present value of expected future payments
to be made in respect of services provided
by employees up to the reporting date
using the projected unit credit method.
Consideration is given to expected future
wage and salary levels, experience of
employee departures and periods of
service. Expected future payments are
discounted using market yields at the
reporting date on high quality corporate
bond rates with terms to maturity and
currency that match, as closely as possible,
the estimated future cash outflows.
note 20. equity – i ssued cApitAl
Ordinary shares – fully paid
265,188,372
265,188,372
55,483,678
55,483,678
2020
Shares
2019
Shares
Consolidated
2020
$
2019
$
Movements in ordinary share capital
Details
Balance
Conversion of vested performance rights
Share placement
Share placement
Share placement
Capital raising costs
Balance
Balance
ordinary shares
Ordinary shares entitle the holder to
participate in dividends and the proceeds
on the winding up of the Company in
proportion to the number of and amounts
paid on the shares held. The fully paid
ordinary shares have no par value and the
Company does not have a limited amount
of authorised capital.
On a show of hands every member present
at a meeting in person or by proxy shall
have one vote and upon a poll each share
shall have one vote.
capital risk management
The company's objectives when managing
capital are to safeguard its ability to
continue as a going concern, so that it
can provide returns for shareholders and
benefits for other stakeholders and to
maintain an optimum capital structure to
reduce the cost of capital.
Capital is regarded as total equity, as
recognised in the statement of financial
position, plus net debt. Net debt is
calculated as total borrowings less cash
and cash equivalents.
Date
1 July 2018
30 July 2018
Shares
Issue price
$
237,523,000
52,657,366
1,552,072
$0.000
39,208
11 September 2018
21,304,348
$0.110
2,450,000
3 October 2018
21 November 2018
4,374,170
434,782
$0.110
$0.110
503,035
50,000
-
-
(215,931)
30 June 2019
265,188,372
30 June 2020
265,188,372
55,483,678
55,483,678
note 21. equity –
dividends
There were no dividends paid or declared
during the current or previous financial year.
The Consolidated Entity does not have
franking credits available for subsequent
financial years.
Accounting policy for
dividends
Dividends are recognised when declared
during the financial year and no longer at
the discretion of the Company.
In order to maintain or adjust the capital
structure, the Company may adjust the
amount of dividends paid to shareholders,
return capital to shareholders, issue new
shares or sell assets to reduce debt.
The Consolidated Entity would look to
raise capital when an opportunity to invest
in a business or Company was seen as
value adding relative to the current parent
entity's share price at the time of the
investment. The Company is not actively
pursuing additional investments in the
short term as it continues to integrate and
grow its existing businesses in order to
maximise synergies.
The capital risk management policy
remains unchanged from the 30 June 2019
Annual Report.
Accounting policy for
issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable
to the issue of new shares or options are
shown in equity as a deduction, net of tax,
from the proceeds.
47
note 22. finAnciAl instRuments
Risk management is carried out by senior
finance executives ('Finance') under policies
approved by the Board of Directors ('the
Board'). These policies include identification
and analysis of the risk exposure of the
Consolidated Entity and appropriate
procedures, controls and risk limits. Finance
identifies, evaluates and hedges financial
risks within the Consolidated Entity's
operating units. Finance reports to the
Board on a monthly basis.
mARket Risk
foreign currency risk
The Consolidated Entity undertakes
certain transactions denominated in
foreign currency and is exposed to foreign
currency risk through foreign exchange
rate fluctuations. The Consolidated Entity
operates a US dollar bank account for the
purpose of transacting in US dollars.
Foreign exchange risk arises from future
commercial transactions and recognised
financial assets and financial liabilities
denominated in a currency that is not the
entity's functional currency. The risk is
measured using sensitivity analysis and
cash flow forecasting.
The carrying amount of the Consolidated
Entity's foreign currency denominated
financial assets and financial liabilities at
the reporting date were as follows:
2020
$
34
Assets
2019
$
33
Liabilities
2020
2019
$
-
$
-
price risk
The Consolidated Entity is not exposed to
any significant price risk.
interest rate risk
The Consolidated Entity's only exposure to
interest rate risk is in relation to deposits
held. Deposits are held with reputable
banking financial institutions.
The tables below illustrate the impact on
profit before tax based upon expected
volatility of interest rates using market data
and analysis forecasts.
Basis points increase
Basis points decrease
Basis
points
change
Effect
on profit
before tax $
Effect
on
equity $
Basis
points
change
Effect
on profit
before tax $
Effect
on
equity $
50
468
468
50
(468)
(468)
Basis points increase
Basis points decrease
Basis
points
change
Effect
on profit
before tax $
Effect
on
equity $
Basis
points
change
Effect
on profit
before tax $
Effect
on
equity $
50
306
306
50
(306)
(306)
finAnciAl Risk
mAnAGement oBJectives
The Consolidated Entity's activities expose
it to a variety of financial risks: market
risk (including foreign currency risk, price
risk and interest rate risk), credit risk and
liquidity risk. The Consolidated Entity's
overall risk management program focuses
on the unpredictability of financial markets
and seeks to minimise potential adverse
effects on the financial performance of
the Consolidated Entity. The Consolidated
Entity uses different methods to measure
different types of risk to which it is
exposed. These methods include sensitivity
analysis in the case of interest rate, foreign
exchange and other price risks, ageing
analysis for credit risk and beta analysis
in respect of investment portfolios to
determine market risk.
Consolidated
US dollars
The Consolidated Entity operated a
US dollar bank account. There were no
other assets or liabilities denominated in
foreign currencies at the year end. The US
balance on the account was US$23 and the
exchange rate used to translate the balance
at 30 June 2020 was $0.6878 (30 June
2019: $0.69768).
Consolidated – 2020
Cash at bank
Consolidated – 2019
Cash at bank
48
cRedit Risk
Credit risk refers to the risk that a
counterparty will default on its contractual
obligations resulting in financial
loss to the Consolidated Entity. The
Consolidated Entity has a strict code of
credit, including obtaining agency credit
information, confirming references and
setting appropriate credit limits. The
Consolidated Entity obtains guarantees
where appropriate to mitigate credit risk.
The maximum exposure to credit risk at
the reporting date to recognised financial
assets is the carrying amount, net of
any provisions for impairment of those
assets, as disclosed in the statement of
financial position and notes to the financial
statements. The Consolidated Entity does
not hold any collateral.
The Consolidated Entity has adopted
a lifetime expected loss allowance in
estimating expected credit losses to trade
receivables through the use of a
provisions matrix using fixed rates of
credit loss provisioning. These provisions
are considered representative across all
customers of the Consolidated Entity
based on recent sales experience, historical
collection rates and forward-looking
information that is available.
Generally, trade receivables are written off
when there is no reasonable expectation
of recovery. Indicators of this include
the failure of a debtor to engage in a
repayment plan, no active enforcement
activity and a failure to make contractual
payments for a period greater than 1 year.
liquidity Risk
Vigilant liquidity risk management requires
the Consolidated Entity to maintain
sufficient liquid assets (mainly cash and
cash equivalents) and available borrowing
facilities to be able to pay debts as and
when they become due and payable.
The Consolidated Entity manages liquidity
risk by maintaining adequate cash reserves
and available borrowing facilities by
continuously monitoring actual and forecast
cash flows and matching the maturity
profiles of financial assets and liabilities.
Remaining contractual
maturities
The following tables detail the Consolidated
Entity's remaining contractual maturity
for its financial instrument liabilities. The
tables have been drawn up based on
the undiscounted cash flows of financial
liabilities based on the earliest date on
which the financial liabilities are required
to be paid. The tables include both interest
and principal cash flows disclosed as
remaining contractual maturities and
therefore these totals may differ from
their carrying amount in the statement of
financial position.
Consolidated – 2020
Non-derivatives
Non-interest bearing
Trade and other payables
Interest-bearing – variable
Lease liability
Between
1 and 2 years
Between
2 and 5 years
Over 5 years
Weighted
average
interest rate
%
-
1 year or less
$
934,177
$
-
7.50%
112,246
91,711
$
-
-
-
$
-
-
-
Total non-derivatives
1,046,423
91,711
Weighted
average
interest rate
1 year or less
Between
1 and 2 years
Between
2 and 5 years
Over 5 years
Consolidated – 2019
%
$
Non-derivatives
Non-interest bearing
Trade and other payables
-
1,000,333
Total non-derivatives
1,000,333
$
-
-
$
-
-
$
-
-
The cash flows in the maturity analysis
above are not expected to occur
significantly earlier than contractually
disclosed above.
fAiR v Alue of finAnciAl
instRuments
Unless otherwise stated, the carrying
amounts of financial instruments reflect
their fair value. The carrying amounts of
trade receivables and trade payables are
assumed to approximate their fair values
due to their short-term nature. Where
appropriate, the fair value of financial
liabilities is estimated by discounting the
remaining contractual maturities at the
current market interest rate that is available
for similar financial instruments.
Remaining
contractual
maturities
$
934,177
203,957
1,138,134
Remaining
contractual
maturities
$
1,000,333
1,000,333
49
note 23. key mAnAGement peRsonnel disclosuRes
directors
The following persons were Directors of 3D
Oil Limited during the financial year:
Mr Noel Newell
Mr Leo De Maria
Mr Ian Tchacos
Executive Chairman
Non-Executive Director
Non-Executive Director
compensation
The aggregate compensation made
to Directors and other members of
key management personnel of the
Consolidated Entity is set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
note 24. RemuneRAtion of AuditoRs
During the financial year the following fees
were paid or payable for services provided
by Grant Thornton Audit Pty Ltd, the
auditor of the Company:
Consolidated
2020
$
2019
$
437,427
421,735
31,278
14,414
27,311
-
483,119
449,046
Consolidated
2020
$
2019
$
Audit services – Grant Thornton Audit Pty Ltd
Audit or review of the financial statements
53,500
52,580
50
note 25. commitments
Operating Lease Commitments
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to four years
Exploration Licenses – Commitments for Expenditure
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
More than five years
In relation to WA-527-P, the Company has
included its commitments for indicative
expenditure in the above note relating
to WA-527-P up to the end of Year 3.
Commitments from Year 4 onwards
are confirmed on a year-by-year basis
dependent on the Company agreeing to
proceed. If the Company was to proceed
beyond Year 3 in relation to WA-527-P, the
current indicative expenditure commitment
for Years 4-6 is currently gross $30.8
million and this would be occurring in
2021-2025 years.
The commitments above does not include
commitments for indicative expenditure
relating to Exploration Permit T/49P, as
they are expected to be covered by the
farm-in partner, ConocoPhillips Australia
Pty Ltd, as per JOA. Under the terms of
JOA TDO will contribute 10% of the joint
operation expenses until ConocoPhillips
Australia has completed an exploration
well or spent at least US$30 million toward
drilling of an exploration well.
In order to maintain current rights of
tenure to exploration tenements, the
Consolidated Entity is required to outlay
rentals and to meet the minimum work
requirements and associated indicative
expenditure of the National Offshore
Petroleum Titles Administrator ('NOPTA').
Minimum commitments may be subject
to renegotiation and with approval may
otherwise be avoided by sale, farm out
or relinquishment. These obligations are
therefore not provided for in the financial
statements as payable.
In relation to VIC/P57, the joint venture
applied to NOPTA in September 2017
for a further 5 year tenure. The program
includes minor but, high impact and
carefully designed work commitments
including state-of-the-art reprocessing of
the 3D seismic data covering the permit.
The Company announced on 7 March 2018
the renewal of the permit by NOPTA for a
further five years.
In relation to VIC/P74, the Company has
included its commitments for indicative
expenditure in the above note relating
to VIC/P74 up to the end of Year 3.
Commitments from Year 4 onwards
are confirmed on a year-by-year basis
dependent on the Company agreeing
to proceed. If the Company was to
proceed beyond Year 3 in relation to
VIC/P74, the current indicative expenditure
commitment for Years 4-7 is currently
gross $42.1 million and this would be
occurring in 2022-2025 years.
Consolidated
2020
$
2019
$
-
-
-
84,792
196,248
281,040
544,133
1,840,000
1,066,667
2,177,778
-
600,000
1,610,800
4,617,778
note 26.
RelAted pARty
tRAnsActions
parent entity
3D Oil Limited is the parent entity.
subsidiaries
Interests in subsidiaries are set out in
note 28.
Joint operations
Interests in joint operations are set out in
note 29.
key management personnel
Disclosures relating to key management
personnel are set out in note 23 and
the remuneration report included in the
Directors' report.
transactions with
related parties
There were no transactions with related
parties during the current and previous
financial year.
Receivable from and payable
to related parties
There were no trade receivables from or
trade payables to related parties at the
current and previous reporting date.
loans to/from related parties
There were no loans to or from related
parties at the current and previous
reporting date.
51
2020
$
Parent
2019
$
(3,003,234)
(1,089,683)
(3,003,234)
(1,089,683)
Parent
2020
$
2019
$
5,125,658
1,965,976
7,267,372
10,124,978
1,184,485
1,128,100
1,276,020
1,136,256
55,483,678
55,483,678
(49,492,326)
(46,494,956)
5,991,352
8,988,722
note 27. pARent entity infoRmA tion
Set out below is the supplementary
information about the parent entity.
statement of profit or loss and
other comprehensive income
Loss after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Accumulated losses
Total equity
Guarantees entered into by
the parent entity in relation to
the debts of its subsidiaries
The parent entity had no guarantees in
relation to the debts of its subsidiaries as at
30 June 2020 and 30 June 2019.
significant accounting
policies
The accounting policies of the parent
entity are consistent with those of the
Consolidated Entity, as disclosed in note 2,
except for the following:
contingent liabilities
The parent entity had no contingent
liabilities as at 30 June 2020 and
30 June 2019.
capital commitments –
property, plant and equipment
The parent entity had no capital
commitments for property, plant and
equipment as at 30 June 2020 and
30 June 2019.
— Investments in subsidiaries are
accounted for at cost, less any
impairment, in the parent entity.
— Investments in associates are accounted
for at cost, less any impairment, in the
parent entity.
— Dividends received from subsidiaries
are recognised as other income by the
parent entity and its receipt may be
an indicator of an impairment of the
investment.
— Significant estimates and judgement –
recoverability of loan to subsidiary. No
objective indicators of impairment as
the current best estimates of potential
resources indicate a quantity of oil/gas
that would allow recovery of the amount
due in full.
52
note 28. inteRests in suBsidiARies
The consolidated financial statements
incorporate the assets, liabilities and results of
the following subsidiary in accordance with
the accounting policy described in note 2:
Name
Principal place of business / Country of incorporation
3D Oil T49P Pty Ltd
Australia
Ownership interest
2020
%
2019
%
100.00%
100.00%
note 29. inteRests in f ARm-out ARRAnGements
The Consolidated Entity has recognised
its share of jointly held assets, liabilities,
revenues and expenses of joint operations.
These have been incorporated in the
financial statements under the appropriate
classifications. Information relating to
joint operations that are material to the
Consolidated Entity are set out below:
Principal place of business / Country of incorporation
Name
T/49P, Otway Basin, offshore Tasmania
Australia
VIC/P74, Gippsland Basin, offshore Victoria*
Australia
VIC/P57, Gippsland Basin, offshore Victoria
Australia
Ownership interest
2020
%
2019
%
20.00%
100.00%
100.00%
24.90%
-
24.90%
* On 4 October 2019, the Consolidated Entity and Hibiscus Petroleum Berhad enter into a
farm-out arrangement in relation to VIC/P74. The Consolidated Entity will remain as operator
with 50% equity when a JOA is signed by both parties and required government approvals.
note 30. events AfteR the RepoRtinG peRiod
On 14 July 2020, the Company announced
that it has been awarded the necessary
environmental approvals from the
Commonwealth Statuary National Agency,
NOPSEMA, to acquire the Sauropod
3D Marine Seismic Survey (MSS) within
100% owned WA-527-P of the Offshore
Roebuck Basin.
No other matter or circumstance has arisen
since 30 June 2020 that has significantly
affected, or may significantly affect
the Consolidated Entity's operations,
the results of those operations, or the
Consolidated Entity's state of affairs in
future financial years.
53
note 31. ReconciliAtion of loss AfteR income t Ax to net
cAsh used in opeRAtinG A ctivities
Loss after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Impairment of exploration and evaluation
Forgiveness of lease payments
Accrued interest
Change in operating assets and liabilities:
Decrease in trade and other receivables
Increase in prepayments
Increase/(decrease) in trade and other payables
Increase in employee benefits
Net cash used in operating activities
note 32. eARninGs peR shARe
Consolidated
2020
$
2019
$
(3,006,065)
(1,089,254)
110,207
1,886,343
(4,625)
32,762
19,740
-
3,420
(15,400)
22,118
(1,046)
(8,737)
18,176
394
(13,912)
87,336
20,300
(980,209)
(958,034)
Consolidated
2020
$
2019
$
Loss after income tax attributable to the owners of 3D Oil Limited
(3,006,065)
(1,089,254)
Weighted average number of ordinary shares used in calculating basic earnings per share
265,188,372
259,489,921
Weighted average number of ordinary shares used in calculating diluted earnings per share
265,188,372
259,489,921
Number
Number
Cents
(1.13)
(1.13)
Cents
(0.42)
(0.42)
Basic earnings per share
Diluted earnings per share
AccountinG policy foR
eARninGs peR shARe
Basic earnings per share
Basic earnings per share is calculated by
dividing the loss attributable to the owners
of 3D Oil Limited, excluding any costs
of servicing equity other than ordinary
shares, by the weighted average number
of ordinary shares outstanding during the
financial year, adjusted for bonus elements
in ordinary shares issued during the
financial year.
54
diluted earnings per share
Diluted earnings per share adjusts the
figures used in the determination of basic
earnings per share to take into account the
after income tax effect of interest and other
financing costs associated with dilutive
potential ordinary shares and the weighted
average number of shares assumed to have
been issued for no consideration in relation
to dilutive potential ordinary shares.
diRectoRs'
declARAtion
In the Directors' opinion:
— the attached financial statements and
notes comply with the Corporations
Act 2001, the Accounting Standards,
the Corporations Regulations 2001 and
other mandatory professional reporting
requirements;
— the attached financial statements and
notes comply with International Financial
Reporting Standards as issued by the
International Accounting Standards
Board as described in note 2 to the
financial statements;
— the attached financial statements
and notes give a true and fair view
of the Consolidated Entity's financial
position as at 30 June 2020 and of its
performance for the financial year ended
on that date; and
— there are reasonable grounds to believe
that the Company will be able to pay its
debts as and when they become due
and payable.
The Directors have been given the
declarations required by section 295A of
the Corporations Act 2001.
Signed in accordance with a resolution of
Directors made pursuant to section 295(5)
(a) of the Corporations Act 2001.
On behalf of the Directors
Noel Newell
Executive Chairman
24 September 2020
Melbourne
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Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation. www.grantthornton.com.au Collins Square, Tower 5 727 Collins Street Melbourne Victoria 3008 Correspondence to: GPO Box 4736 Melbourne Victoria 3001 T 61 3 8320 2222 F 61 3 8320 2200 E info.vic@au.gt.com W www.grantthornton.com.au Independent Auditor’s Report To the Members of 3D Oil Limited Report on the audit of the financial report Opinion We have audited the financial report of 3D Oil Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the Directors’ declaration. In our opinion, the accompanying financial report of 3D Oil Ltd and controlled entities is in accordance with the Corporations Act 2001, including: a giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for the year ended on that date; and b 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 are independent of the Group 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 (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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. 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. [This page has intentionally been left
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Key audit matter How our audit addressed the key audit matter Exploration and Evaluation Assets – valuation (Note 14) As all of the tenements held by 3D Oil Limited are in the exploration stage, qualifying exploration expenditure is capitalised in accordance with Australian Accounting Standard AASB 6 Exploration for and Evaluation of Mineral Resources. The company is required to assess at each reporting date if there are any triggers for impairment which may suggest the carrying value is in excess of the recoverable value. Any impairment losses are then measured in accordance with AASB 136 Impairment of Assets. This area is a key audit matter as significant judgement is required in determining whether the facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount, and then consequently in measuring any impairment loss. Our procedures included, amongst others: Obtaining management’s reconciliation of capitalised exploration and evaluation expenditure and agreeing to the general ledger; Selecting a sample of capitalised exploration and evaluation expenditure and obtaining documentation to support the amount capitalised in line with AASB 6; Reviewing management's treatment of the Joint Operating Agreement entered into during the period; Critically reviewing management's assessment of impairment indicators for the Group's capitalised exploration assets under AASB 6 by: o assessing whether the period for the right to explore the areas of interest has not expired or will not expire in the near future without an expectation of renewal; o making enquires of management regarding their intentions to carry out exploration and evaluation activity in the relevant exploration area, including review of managements’ budgeted expenditure; o Obtaining an understanding as to whether any data exists that indicates the carrying value of these exploration and evaluation assets are unlikely to be recovered from successful development or by sale; o Considering any other available evidence of impairment; and Assessing management’s consequent determination of impairment loss and Reviewing related financial statement disclosures. Going concern (Note 2) 3D Oil is in the exploration and evaluation phase and therefore does not generate revenue from its operations and relies on funding from its shareholders or other sources to continue as a going concern. These funds are used to meet expenditure requirements to maintain the good standing of the Group’s tenements, progress project feasibility studies, and to cover corporate overheads. Under AASB 101: Presentation of Financial Statements the directors of 3D Oil are required to assess the appropriateness of the preparation of the financial report on a going concern basis. Our procedures included, amongst others: Assessing the going concern assumptions for reasonableness by discussing with management and reviewing board minutes; Obtaining and reviewing a copy of management’s cash-flow forecast for mathematical accuracy and assessed whether it appears the current cash levels can sustain the operations of the Group for the 12 month period from date of signing of the financial statements; Reviewing the inputs and assumptions used by management in the cash flow forecasts for reasonableness and consistency and minimum exploration expenditure required under existing permits; Considering the impact of any subsequent events on the going concern assessment and [This page has intentionally been left
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Going concern (Note 2) continued The Group has prepared cash flow projections which include a number of assumptions and judgements, including estimates of project and administrative expenditure. These projections are used to support the sufficiency of working capital. This area is a key audit matter due to its importance to the financial report and the level of judgement involved. Reviewing related financial statement disclosures. Information other than the financial report and auditor’s report thereon The Directors are responsible for the other information. The other information comprises the information included in the Company’s annual report for the year ended 30 June 2020, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. 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 the 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 Company’s/Group’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 Company 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 the 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 the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website. http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf. This description forms part of our auditor’s report. Report on the remuneration report Opinion on the remuneration report We have audited the Remuneration Report included in pages 19 to 23 of the Directors’ report for the year ended 30 June 2020. In our opinion, the Remuneration Report of 3D Oil Limited, for the year ended 30 June 2020 complies with section 300A of the Corporations Act 2001. [This page has intentionally been left
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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. Grant Thornton Audit Pty Ltd Chartered Accountants B L Taylor Partner – Audit & Assurance Melbourne, 24 September 2020 shAReholdeR infoRmA tion
The shareholder information set out below
was applicable as at 9 September 2020.
distribution of equitable
securities
Analysis of number of equitable security
holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Number of
holders of
ordinary shares
47
123
137
447
272
Total units
16,431
412,000
1,177,167
18,794,635
%
0.01
0.16
0.44
7.09
244,788,139
92.31
1,026
265,188,372
100.00
Holding less than a marketable parcel
232
864,002
0.33
equity security holders
twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Mr Noel Newell (Newell Family A/C)
Oceania Hibiscus SDN BHD
H Louey Pang & Co Pty Ltd (Demaria Family A/C)
Fugro Exploration Pty Ltd
Bill Hopper
Sanlirra Pty Ltd (Sanlirra Super Fund A/C)
Citicorp Nominees Pty Limited
Pand Jr Pty Ltd (John Demaria Family A/C)
J K Demaria Pty Ltd
Northern Business Planning Centre Pty Ltd (Newell Super A/C)
HSBC Custody Nominees (Australia) Limited – A/C 2
Pengold Pty Ltd (Pengold Super Fund A/C)
Andrew Paterson
Vin Naidu + Wendy Naidu
Mr Giovanni Monteleone + Mrs Frances Monteleone
Mr Russell Barwick
Eilie Sunshine Pty Ltd (Eilie Sunshine Superfund A/C)
Blamnco Trading Pty Ltd
Sanlirra Pty Ltd (The Leo Demaria Family A/C)
Miclon Pty Ltd (Talty Super Fund A/C)
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Ordinary shares
% of total
shares issued
14.56
11.68
3.22
2.83
2.44
2.11
2.10
1.84
1.83
1.69
1.63
1.40
1.22
1.07
0.96
0.94
0.94
0.88
0.87
0.81
Number held
38,604,620
30,963,000
8,550,000
7,511,000
6,475,000
5,600,000
5,575,949
4,886,510
4,857,055
4,485,616
4,321,740
3,714,000
3,237,500
2,837,500
2,550,000
2,500,000
2,500,000
2,325,000
2,300,000
2,146,348
145,940,838
55.03
unquoted equity securities
There are no unquoted equity securities.
substantial holders
Substantial holders in the Company
are set out below:
Noel Newell (Newell Family A/C)
Oceania Hibiscus SDN BHD
voting rights
The voting rights attached to ordinary
shares are set out below:
ordinary shares
On a show of hands every member present
at a meeting in person or by proxy shall
have one vote and upon a poll each share
shall have one vote.
There are no other classes of
equity securities.
corporate Governance
statement
Refer to the Company's Corporate
Governance statement at:
https://www.3doil.com.au/about/
corporate-governance
coRpoRA te diRectoRy
directors
Noel Newell (Executive Chairman)
Ian Tchacos (Non-Executive Director)
Leo De Maria (Non-Executive Director)
company secretaries
Melanie Leydin
Stefan Ross
Registered office
Level 18, 41 Exhibition Street
Melbourne, VIC 3000
Telephone: (03) 9650 9866
principal place of business
Level 18, 41 Exhibition Street
Melbourne, VIC 3000
Telephone: (03) 9650 9866
share register
Computershare Investor Services
Pty Limited
452 Johnston Street
Abbotsford, Victoria 3067
Telephone: (03) 9415 5000
Auditor
Grant Thornton Audit Pty Ltd
Collins Square Tower 5
727 Collins Street
Melbourne, Victoria 3008
solicitors
Baker McKenzie
Level 19, 181 William Street
Melbourne, Victoria 3000
Ordinary shares
Number held
44,192,229
30,963,000
% of total
shares issued
16.66
11.68
Annual General meeting
3D Oil Limited advises that its Annual
General Meeting will be held on Tuesday,
17 November 2020. The time and other
details relating to the meeting will be
advised in the Notice of Meeting to be
sent to all shareholders and released to
ASX in due course. In accordance with
the ASX Listing Rules and the Company’s
Constitution, the closing date for receipt
of nominations for the position of Director
are required to be lodged at the registered
office of the Company by 5.00pm (AEST)
on 6 October 2020.
stock exchange listing
3D Oil Limited securities are listed on the
Australian Securities Exchange.
(ASX Code: TDO)
website
3doil.com.au
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