ANNUAL REPORT
FOR THE FINANCIAL YEAR ENDED
30 JUNE 2017
CORPORATE DIRECTORY
ABN 13 008 694 817
Directors
Peter F Mullins, Chairman
Giustino Guglielmo
Hector M Gordon
Mark L Lindh
Managing Director
Giustino Guglielmo
Company Secretary
Robyn M Hamilton
Registered Office and
Principal Administration Office
Level 2, 15 Queen Street
Melbourne, Victoria 3000 Australia
Telephone +61 (3) 9927 3000
Facsimile +61 (3) 9614 6533
Email
admin@bassoil.com.au
Auditors
Deloitte Touche Tohmatsu
11 Waymouth Street
Adelaide SA 5000 Australia
Share Registry
Link Market Services Limited
Tower 4, 727 Collins Street
Melbourne, Victoria 3008 Australia
Telephone +61 (3) 9615 9800
Facsimile +61 (3) 9615 9900
Stock Exchange Listing
Australian Stock Exchange Ltd
525 Collins Street
Melbourne, Victoria 3000 Australia
ASX Codes: BAS – Ordinary Shares
Web Site: www.bassoil.com.au
CONTENTS
Chairman’s Letter ............................................... 1
Managing Director’s Report ................................. 2
Directors’ Report ................................................. 8
Remuneration Report ........................................ 11
Auditor’s Independence Declaration .................. 17
Directors’ Declaration ....................................... .18
Consolidated Statement of Profit or Loss and
Other Comprehensive Income ........................... 19
Consolidated Statement of Financial Position .... 20
Consolidated Statement of Changes in Equity .. .21
Consolidated Statement of Cash Flows ............. 22
Notes to the Financial Statements ..................... 23
Independent Auditor’s Report ........................... 48
Shareholder & Other Information....................... 51
FORWARD LOOKING STATEMENTS
about
This Annual Report includes certain forward-looking
that have been based on current
statements
and
future
expectations
circumstances. These forward-looking statements are,
however,
risks, uncertainties and
assumptions that could cause those acts, events and
circumstances
the
from
forward-looking
expectations described
statements.
differ materially
in such
subject
events
acts,
to
to
factors
include, among other
These
things,
commercial and other risks associated with
the
investment
meeting of objectives and other
considerations, as well as other matters not yet known
to the Group or not currently considered material by
the Group.
CHAIRMAN’S MESSAGE
On behalf of the Board, I present to you the Annual Report of your company, Bass Oil Limited (“Bass”) for the year
ended 30 June 2017.
Amidst the ongoing subdued state of the oil and gas market, Bass has taken the opportunity to refocus the
Company’s corporate strategy and as a result, established an emerging South-east Asia focused oil production
business.
In October 2016, Bass announced the acquisition of Cooper Energy Limited’s 55% interest in the Tangai-Sukananti
KSO which lies in the South Sumatra Basin, Indonesia. The acquisition was a culmination of significant efforts in
securing a strategic project and project team which has transformed the Company from an Australian explorer to
an Indonesian oil producer.
Bass has successfully established a solid platform for near-term expansion of its oil business across South-east
Asia. Following transaction completion in February 2017, the Company began searching for and has since
undertaken due diligence on additional growth opportunities in close proximity to the existing KSO, within the
prolific hydrocarbon province.
Location of Bass’ Indonesian operations in relation to neighbouring oil and gas fields
The Company is also focusing its efforts on production optimisation and resource development at the existing
operations in an effort to increase total production of the field over the coming period and maximise field
recoveries.
Bass is grateful for the support of existing shareholders, particularly during the non-renounceable rights issue
undertaken in November 2016. The Company raised approximately $772,000 to fund the up-front costs associated
with the recent Tangai-Sukananti KSO acquisition. This support demonstrates the confidence in the future potential
of Bass’ team, its assets and our ability to create shareholder value.
Finally, I wish to thank the executive team based in Melbourne, the Indonesian-based operations team and my
fellow directors for their diligent attention to the affairs of your Company, as we continue to work on strategically
positioning ourselves for future growth.
Peter Mullins
Chairman
27 September 2017
1
Bass Oil Limited Annual Report 2017
MANAGING DIRECTORS’ REPORT
Over the past year, Bass revised its corporate strategy in transforming from an Australian-based explorer to a
South-east Asian oil producer. The new strategy places the Company in a position to grow shareholder value
allowing it to significantly benefit from a sector recovery, whilst growing the value of its production assets and
pursuing acquisitions.
On 19 October 2016, Bass entered into a Share Sale Agreement to acquire Cooper Energy Limited’s 55% interest
in the Tangai-Sukananti Indonesia KSO – an Indonesian producing asset comprising 11 exploration and
development wells drilled from 1992 to 2015. The transaction was completed 28 February 2017, with an effective
date of 1 October 2016.
The transaction consideration is outlined below:
Upfront cash consideration of $500,000
Upfront Scrip consideration of 180 million shares at 0.2 cent per share (being the share price on date of
issue), equivalent to $360,000
Deferred cash consideration of $2.27million, payable in four instalments between 31 December 2017 and
31 December 2018
Bass to take on all the existing Indonesian-based office and field staff
The recent acquisition of the Tangai-Sukananti production asset provides an ability to pursue regional growth
opportunities through acquisitions within the world-class Indonesian hydrocarbon province. In the June quarter, the
Company commenced production optimisation activities at the KSO, and subsequently expects total production
uplift at the field in due course.
With the overwhelming support of its shareholders, Bass has been able to seamlessly implement its revised
corporate strategy in securing a value accretive investment, and will now focus on growth, building a sustainable
and profitable South-east Asian based oil business.
Bass will continue to take advantage of the subdued market and build a portfolio of assets which share synergies
with existing operations. Bass will target potential acquisitions of certain assets no longer core to the portfolios of
other companies, and prospective late development stage or non-core producing assets that have become un-
economic to run for larger operators and which lie in close proximity to Bass’ existing operations.
The highlights of a busy year in review include:
The successful acquisition of Tangai-Sukananti KSO, South Sumatra Basin
The evaluation and implementation of production optimisation opportunities at Tangai-Sukananti
Ongoing due diligence and screening of regional growth opportunities in Indonesia
Completion of a successful Rights Issue in December 2016, raising approximately $772,000 to fund the
upfront transaction costs to purchase the Tangai-Sukanati KSO
Relinquishing Bass’ interests in offshore Gippsland Basin permit Vic/P41 during the March Quarter
Reviewing options for the Company’s Vic/P68 Gippsland Basin permit, including a farm-out or potential
sale or surrendered
Minimising activity and expenditure in the Otway Basin on permit PEP 150 due to the Victorian
Government moratorium on onshore exploration activities
2
Bass Oil Limited Annual Report 2017
MANAGING DIRECTORS’ REPORT (continued)
Figure 1: Tangai-Sukananti KSO
REVIEW OF OPERATIONS
Tangai-Sukananti KSO
Bass holds a 55% interest in the Tangai-Sukananti production assets, located within the South Sumatra basin, a
prolific Indonesian oil and gas region. Following the acquisition from Cooper Energy Limited on 28 February 2017,
Bass assumed the operator role and retained the experienced Indonesian on-site personnel and the Jakarta based
management teams, who have proven experience in efficiently managing the operation. The KSO contains four
producing wells in two fields, Bunian and Tangai. The Bunian field is the main producer and contains the greatest
potential for expansion.
The KSO is considered long-life with production expected beyond current licence expiry in mid-2025. Historically it
has been possible to negotiate extensions to licence terms within 3 years of expiry. Bass will likely apply for an
extension of this licence in 2022. The assets provide a future platform for growth through low-cost field
development opportunities and execution of value-accretive acquisitions whereby minimal additional corporate
overheads are required given Bass’ established Jakarta-based personnel.
Since acquiring the Tangai-Sukananti KSO, Bass has sustained strong, consistent levels of production, as seen in
figure 2. The asset has performed at expectations, producing approximately 116,000 barrels (55% basis) for year
ending 30 June 2017. Bass has now commenced a field optimisation program which aims to further increase
output at the operation.
The optimisation program thus far has led to the removal of scale restriction in the Tangai-1 flowline, subsequently
increasing production from 50 to 150BOPD from the Tangai-1 well. Bass continues to expand its development and
optimisation program, aiming to further increase the field’s total production and efficiency, which the Company
expects to be reflected in the upcoming financial year.
3
Bass Oil Limited Annual Report 2017
MANAGING DIRECTORS’ REPORT (continued)
Figure 2: Strong sustained production at the Indonesian
KSO since Bass assumed operatorship in March
As at 30 June 2017, the Tangai-Sukananti KSO was producing over 600 barrels of oil per day (BOPD) from 4 wells
(100% JV Share) and contained 2P oil reserves of 1.35 million barrels (55% JV share) with net attributable 2P
reserves to Bass of 0.7 million barrels (refer to 2017 reported Resource & Reserves). Sixty five percent of 2P
reserves currently remain undeveloped, representing substantial low-risk upside potential.
DEVELOPMENT and APPRAISAL
Since assuming the operator role at the Tangai-Sukananti KSO, Bass has highlighted a number of prospective
targets and leads that warrant further testing and development.
The Company believes there is a substantial quantity of oil reserves that remain undeveloped, within the Bunian
and Tangai Fields. Significant expansion opportunities have also been identified at Bunian-West, and will likely be
tested with a planned future appraisal well in 2018. Additionally, Bunian-5 and 6 represent low-risk development
opportunities with high flow-rate potential.
The Tangai Field also shows potential for further development, with Tangai-5 highlighted as a low risk development
well targeting the up-dip potential from strongly performing Tangai-1.
A further three un-drilled structures have been identified for future evaluation. Those are, Updip Sukananti, Updip
TMB-6 and Updip Kupang and an untested shallow gas zone, Bunian ABF, which extends beyond the existing
active well zones.
Bass is currently undertaking an integrated reservoir study, in order to evaluate this potential and determine the
best way of addressing these opportunities. This study is due for completion by year end 2017.
Figure 3: Tangai-Sukananti Prospects Leads
4
Bass Oil Limited Annual Report 2017
MANAGING DIRECTORS’ REPORT (continued)
PERMIT MANAGEMENT
Vic/P68 (Bass 100%)
PEP 150 (Bass 15%)
Vic/P41 (relinquished)
In December 2016, the National Offshore Petroleum Administrator (NOPTA) advised Bass that its application for a
suspension and extension of the permit duration for Vic/P68 in the Gippsland Basin was successful. Year three now
expires on 3 November 2017, with year five of the primary term now ending 3 November 2019. Year three requires
the acquisition of 225sq km of 3D seismic. In the absence of a farmout or sale of the tenement, Vic/P68 is likely to
be surrendered in November 2017.
In relation to PEP 150 in the Otway Basin, minimal activity and expenditure was undertaken over the past year,
given the Victorian Government moratorium on onshore exploration activities. The Government has legislated for a
permanent ban on the use of fracture simulation. Subsequent to the year end, Bass has withdrawn from this Joint
Venture as the interest is immaterial and no longer a part of its core strategy.
During the March quarter, Bass advised the market of its decision to relinquish its interests in the Vic/P41,
Gippsland Basin permit, in line with its revised corporate strategy. The permit was relinquished on the 13th
January, 2017.
RESERVES and RESOURCES
Reserves:
Bass Oil’s Gross (55% share) 2P Reserves at 30 June 2017 are assessed to be 1.35 million barrels of oil.
In accordance with ASX reporting requirements for fiscal environments that use production sharing contracts or
similar, Bass reports Net 2P Oil Reserves of 0.70 million barrels. Net Reserves are the reserves to which Bass has
a net economic entitlement, consisting of a share of cost oil and profit oil that Bass is entitled to receive under the
terms of the KSO signed with the Indonesian government body, PT Pertamina.
(1) Aggregated 1P, estimates may be conservative and aggregated 3P estimates may be optimistic due to the effects of
arithmetic summation.
(2) Totals may not exactly reflect arithmetic addition due to rounding
(3) Deterministic methods have been used
5
Bass Oil Limited Annual Report 2017
MANAGING DIRECTORS’ REPORT (continued)
Notes on Calculation of Reserves:
The approach for all reserves and resources estimates is consistent with the definitions and guidelines in the
Society of Petroleum Engineers (SPE) 2007 Petroleum Resources Management System (PRMS). Reserves are
estimated by deterministic estimation methodologies consistent with the PRMS definitions and guidelines.
The Bunian Field has three producing reservoirs (TRM3, GRM and K1 sandstones) and the Tangai Field has one
producing reservoir (the M sandstone).
Qualified Petroleum Reserves and Resources Evaluator Statement:
The information contained in this report regarding the Bass Oil Limited reserves is based on and fairly represents
the data and supporting documentation reviewed by Mr Giustino Guglielmo who is an employee of Bass Oil Limited
and holds a Bachelor of Engineering (Mech). He is a member of the Society of Petroleum Engineers (SPE) and as
such is qualified in accordance with ASX listing rule 5.4.1 and has consented to the inclusion of this information in
the form and context in which it appears.
RISC consents that the Developed Producing Reserves forecasts used in this report relating to the Bunian and
Tangai fields are based on an independent review conducted by RISC Operations Pty Ltd (RISC) and fairly
represent the information and supporting documentation reviewed.
The review was carried out under the supervision of Mr Antony Corrie-Keilig, a Principal Petroleum Engineer at
RISC, a leading independent petroleum advisory firm. Mr Corrie-Keilig is a Chartered Professional Engineer
(CPEng) and is registered on the National Engineering Register (NER) in Petroleum Engineering. He is a Fellow of
the Institution of Engineers Australia (FIE Aust) and is a member of both the Society of Petroleum Engineers (SPE)
and Society of Petroleum Evaluation Engineers (SPEE). His qualifications include a Bachelor of Engineering
(Mechanical) from Monash University and a Graduate Diploma (Petroleum Engineering) from University of New
South Wales. Mr Corrie-Keilig consents to the inclusion of this information in this report.
HEALTH and SAFETY PERFORMANCE
Upon assuming control of the Tangai-Sukananti Production assets in March 2017, Bass integrated the Indonesian
health, safety and environmental management system with its own corporate management system and
implemented a focus on quality and quality outcomes. The initiatives maintain a robust and inclusive safety
culture, reporting continued positive safety statistics.
The Company is highly focussed on the well-being of the Indonesian crew, reliability of operations, preservation of
the environment and respect for the local communities within the area which we work. We make certain this is our
absolute priority and thus ensure this focus is maintained.
Since March, Bass has steadily increased the number of Safe Man Hours at the operation (see figure 4), despite
increases in work activity and production rates due to optimisation initiatives in the recent quarter. Furthermore,
Bass reduced the occurrence of reportable incidents, which led to a significant decline in the TRIR of ~47% (see
figure 5). Bass is pleased to confirm there were no lost-time injuries or work-related recordable injuries that
required medical treatment in this recent period.
The Company is committed to delivering exceptional standards of health and safety year-on-year, and will focus on
developing its current health, safety environment, quality and community (HSEQC) management processes, to
further improve and monitor our ability to identify, manage and subsequently minimise potential hazards and risks
associated with the operations moving forward.
Figure 4: Tangai-Sukananti Safe Man Hours
6
Bass Oil Limited Annual Report 2017
MANAGING DIRECTORS’ REPORT (continued)
Figure 5: Tangai-Sukananti Total Recordable Incident Rate
7
Bass Oil Limited Annual Report 2017
DIRECTORS’ REPORT
The Directors present their report on the results of Bass Oil Limited consolidated entity (“BAS” or “Bass” or “the
Company” or “the Group”) for the year ended 30 June 2017.
DIRECTORS
The names and details of the Company’s directors in office during the financial year and until the date of this report
follow. Directors were in office for the entire period unless otherwise stated.
Peter F Mullins FFin – Chairman and non-executive independent director (Appointed 16 December 2014)
Mr Mullins has over 40 years banking experience in Australia and New York, USA, specialising in Institutional and
Corporate Finance across the Agriculture, Defence, Energy, Infrastructure, Mining, Oil & Gas, Property and Wine
industries. He is experienced in Mergers and Acquisitions, Privatisations, Structured Finance, IPO’s and Capital
Raisings.
Mr Mullins retired as Head of Institutional Banking SA&NT with the Commonwealth Bank of Australia in 2009 to
take up a part time role as Senior Advisor, Institutional, Corporate and Business Banking for Commonwealth Bank
in SA&NT. He retired from this role in 2013.
Mr Mullins was a Director of Somerton Energy Limited, a listed oil and gas exploration company, from April 2010
until it merged with Cooper Energy Limited in July 2012.
He is a Fellow of the Financial Services Institute of Australasia and graduated from the Advanced Management
Program at the University of Melbourne – Mt Eliza, in 1987.
Mr Mullins served on the audit committee during the period.
Giustino (Tino) Guglielmo BEng (Mech) – Managing director from 1 February 2017, previously was
Executive Director (Appointed 16 December 2014)
Mr Guglielmo is a Petroleum Engineer with over 36 years of technical, managerial and senior executive experience
in Australia and internationally.
Mr Guglielmo was the CEO and Managing Director of two ASX listed companies; Stuart Petroleum Limited for
seven years and Ambassador Oil & Gas Limited for three years. Both companies merged with larger ASX listed
companies generating significant value for shareholders following the identification of compelling resource potential
in their respective petroleum resource portfolios.
Mr Guglielmo also worked at Santos Limited, Delhi Petroleum Limited, and internationally with NYSE listed
Schlumberger Corp. His experience spans the Cooper basin, Timor Sea, Gippsland basin, and exposure to US
land and other international basins.
Mr Guglielmo is currently a director of Octanex NL and a member of the Resources and Infrastructure Task Force
and the Minerals and Energy Advisory Council, both South Australian Government advisory bodies. He is a Fellow
of the Institution of Engineers, Australia, a member of the Society of Petroleum Engineers and Australian Institute
of Company Directors.
Mr Guglielmo served on the audit committee during the period.
Hector M Gordon BSc (Hons) – Non-executive independent director (Appointed 23 October 2014)
Mr Gordon currently serves on the Board of Cooper Energy Limited as a Non-Executive Director.
Mr Gordon is a geologist with over 40 years of experience in the upstream petroleum industry, primarily in Australia
and southeast Asia. Until June 2017 Mr Gordon was employed by Cooper Energy Limited as Executive Director -
Exploration & Production.
Mr Gordon's previous employers also include Beach Energy, Santos Limited, AGL Petroleum, TMOC Resources,
Esso Australia and Delhi Petroleum Pty Ltd. He is currently a Non-Executive Director of Cooper Energy Limited,
which is a substantial shareholder of Bass Oil Limited.
Mr Gordon is a member of the American Association of Petroleum Geologists and a member of the Society of
Petroleum Engineers.
Mr Gordon served as Chair on the audit committee during the period.
8
Bass Oil Limited Annual Report 2017
DIRECTORS’ REPORT (CONTINUED)
Mark L Lindh - Non-executive non-independent director (Appointed 16 December 2014)
Mr Mark Lindh is a corporate advisor with in excess of 15 years experience in advising mining and resources
companies with a particular focus on the energy sector.
He is a founding director of Adelaide Equity Partners Limited, an investment and advisory company.
Mr Lindh served on the audit committee during the period.
INTERESTS IN THE SHARES & OPTIONS OF THE COMPANY
As at the date of this report, the interests of the Directors in the shares and options of Bass Oil Limited were:
P F Mullins
G Guglielmo
H M Gordon
M L Lindh (a)
Number of Ordinary Shares Number of Options over Ordinary Shares
38,400,000
223,688,815
17,066,668
215,829,397
7,200,000
41,941,650
3,200,000
40,295,515
(a) Mr Lindh’s interest includes 18,112,000 shares held directly and 197,717,397 shares held indirectly by a
related party, South Australian Resource Investments Pty Ltd, a subsidiary of Adelaide Equity Partners Ltd.
COMPANY SECRETARY
Mrs R Hamilton was appointed Company Secretary on the 31st March 2011. She has been a Chartered Accountant
for over 20 years.
DIVIDENDS
During the year and to the date of this report, no dividends were recommended, provided for or paid.
PRINCIPAL ACTIVITY
The principal activities of the Group during the year were oil and gas exploration and oil production after the
completion of the acquisition of low cost oil production assets in Indonesia. The Company has realigned its
corporate strategy following the landmark acquisition of a 55% interest in Tangai-Sukananti KSO which contains
producing assets located in the prolific oil and gas region of South Sumatra, Indonesia.
OPERATING AND FINANCIAL REVIEW
Operating results for year
During the financial year, the Group acquired a subsidiary which has a 55% interest in Tangai-Sukananti KSO, an
oil producing asset in South Sumatra. This is a significant transaction for the Group and enables the Group to have
a future income stream and other opportunities in this prolific oil producing basin.
These financial statements are the twelve months ended 30 June 2017 and reflect the change in the Groups
strategic direction for a period of four months, after the acquisition of the oil producing assets was completed on
the 28 February 2017.
The Company’s operating loss for the year ended 30 June 2017 after income tax was $1,795,591 (2016:
$4,030,740) and includes impairment of the Gippsland exploration assets of $1,062,325.
Review of Financial Condition
Liquidity
The Group’s consolidated statement of cash flows for the year recorded an increase of $916,822 (2016: decrease
of $294,571) in cash and cash equivalents. The cash flows were derived from operating receipts of $963,991
(2016: $38,933), other receipts of $3,178 (2016: $6,162), proceeds from sale of assets $nil (2016: $56,148),
capital raising net of transaction costs of $712,429 (2016: $434,397) and the net cash acquired on the acquisition
of a subsidiary of $587,066 (2016:$nil)
9
Bass Oil Limited Annual Report 2017
Cash outflows relating to operations of $1,255,563 (2016: $607,821). There were also cash outflows in investing
activities of $94,279 (2016: net cash outflows $166,242) mainly relating to petroleum exploration expenditure
activities and oil properties.
DIRECTORS’ REPORT (CONTINUED)
Cash assets at 30 June 2017 were $1,346,338 (2016: $457,054).
CHANGES IN THE STATE OF AFFAIRS
On 27 February 2017 the Group with shareholder approval, changed its name from Bass Strait Oil Company Ltd to
Bass Oil Limited.
On 28 February 2017 the Group acquired a subsidiary, Cooper Energy Sukananti Ltd, which has a 55% interest in
Tangai-Sukananti KSO, an oil producing asset in South Sumatra, Indonesia and has moved its focus from
exploration in Australia to oil production and exploration in South East Asia.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Since assuming the operator role at the Tangai-Sukananti KSO, Bass has highlighted a number of prospective
targets and leads that warrant further testing and development.
The Company believes there is a substantial quantity of oil reserves that remain undeveloped, within the Bunian
and Tangai Fields.
Bass is currently undertaking an integrated reservoir study, in order to evaluate this potential and determine the
best way of addressing these opportunities. This study is due for completion by year end 2017.
SHARE OPTIONS
Unissued shares
As at the date of this report there were 386,103,297 unissued ordinary shares under options (nil at 30 June 2016).
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
BAS maintains a directors and officers insurance policy and has paid an insurance premium for the policy. The
contract of insurance prohibits disclosure of the amount of the premium and the nature of the liabilities insured.
Pursuant to the constitution the Company has entered into Deeds of Indemnity with the Directors and Chief
Financial Officer.
INDEMNIFICATION OF AUDITORS
To the extent permitted by law, the Company has agreed to indemnify its auditors, Deloitte Touche Tohmatsu, as
part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an
unspecified amount). No payment has been made to indemnify Deloitte Touche Tohmatsu during or since the
financial year.
DIRECTORS’ MEETINGS
The number of meetings of directors (including meetings of committees of directors) held during the year and the
number of meetings attended by each director was as follows:
P F Mullins
G Guglielmo
H M Gordon
M L Lindh
Board Meetings
Audit Committee
Held
9
9
9
9
Attended
9
9
9
9
Held
2
2
2
2
Attended
2
2
2
2
10
Bass Oil Limited Annual Report 2017
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED) (30 June 2017)
This Remuneration Report outlines the director and executive remuneration arrangements of the Group in
accordance with the Corporations Act 2001 and its Regulations. For the purposes of this report, key management
personnel (KMP) of the Group are defined as those persons having authority and responsibility for planning,
directing and controlling the major activities of the Group, directly or indirectly, including any director (whether
executive or otherwise) of the parent company, and includes the Company Secretary.
Details of Key Management Personnel (including executives of the Group)
(i) Directors
P F Mullins
G Guglielmo
H M Gordon
M L Lindh
Chairman
Managing Director (was an Executive Director until 1 February 2017)
Director (Non-executive)
Director (Non-executive)
(ii) Executives
R M Hamilton Company Secretary
There have been no changes to key management personnel after 30 June 2017 and before the date the financial
report was authorised for issue.
The Board of Directors (“the Board”) is responsible for determining and reviewing remuneration arrangements for
the directors and executives. No remuneration consultant was engaged nor was any remuneration advice sought
during the period.
The Board assesses the appropriateness of the nature and amount of remuneration of executives on a periodic
basis by reference to relevant employment market conditions with the overall objective of ensuring maximum
stakeholder benefit from retention of a high quality, high performing executive team.
Remuneration Philosophy
The performance of the Company largely depends upon the quality of its directors and executives. To this end, the
Company embodies the following principles in its remuneration framework:
Provide competitive rewards to attract high calibre executives.
Remuneration Structure
In accordance with best practice corporate governance, the structure of non-executive director and executive
remuneration is separate and distinct.
Non-Executive Director Remuneration
Remuneration policy
The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and
retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders. The amount of
aggregate remuneration sought to be approved by shareholders and the fee structure is reviewed annually. The
Board considers advice from external consultants if required, as well as the fees paid to non-executive directors of
comparable companies when undertaking the annual review process.
The Company’s constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive
directors shall be determined from time to time by a general meeting. The latest determination was at the Annual
General Meeting held on 3 October 2001, when shareholders approved an aggregate remuneration of $250,000 per
year.
Structure
The remuneration of non-executive directors consists of director’s fees and committee fees for the non-executive
director who chairs the Audit committee. The payment of additional fees for chair of the Audit committee
recognises the additional time commitment required by a non-executive director who chairs a sub-committee. The
non-executive directors also receive retirement benefits in the form of superannuation. There are no other
retirement benefits, other than superannuation.
11
Bass Oil Limited Annual Report 2017
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED) (30 June 2017) (continued)
The table below summaries the non-executive director remuneration (excluding superannuation):
Board fees
Chairman
Directors
Incremental Audit Committee fees
Chairman
$75,000
$50,000
$5,000
No other fees are paid for serving on Board committees or on boards of wholly owned subsidiaries.
Non-executive directors have been encouraged by the Board to hold shares in the Company.
The remuneration of non-executive directors for the period ending 30 June 2017 and 30 June 2016 is detailed in
Table 1 and 2 respectively of this Remuneration Report.
The Directors agreed to a reduction of 50% of the above amounts to 31 January 2017 when they reverted to the
above agreed levels based on the strengthening of the Company’s cash position. As at the date of this report no
further reassessment has occurred.
Executive Remuneration
Objective
The Company aims to reward executives with a level and mix of remuneration commensurate with their position
and responsibilities within the Company so as to:
Reward executives for individual performance;
Align the interests of executives with those of shareholders; and
Ensure that total remuneration is competitive by market standards.
Structure
In determining the level and make-up of executive remuneration, the Board engages external consultants as
needed to provide independent advice. No consultant was engaged in the current year.
Remuneration consists of fixed remuneration being base salary and superannuation and/or consultancy fees.
The proportion of base salary and superannuation and/or consultancy fees for each executive is set out in Table 1.
Fixed remuneration
Objective
Fixed remuneration is reviewed regularly by the Board, with access to external advice if required.
Structure
Executives are given the opportunity to receive their fixed (primary) remuneration in a variety of forms including
cash and superannuation. It is intended that the manner of payment chosen will be optimal for the recipient without
creating undue costs for the Company. The fixed remuneration component of executives is detailed in Table 1.
Employment contracts
Managing Director and Chief Executive Officer
Mr G Guglielmo was appointed Managing Director and Chief Executive Officer (“CEO”) on 1 February 2017.
Prior to this date, Mr Guglielmo was an executive director engaged on a Consultancy Services Agreement that
required a minimum of 2 days per week at $150,000 per annum, from 2 February 2015.
The Managing Director and CEO is employed under a rolling contract and under the terms of the contract, Mr
Guglielmo receives fixed remuneration of $300,000 per annum. If there is cause for termination, the Company can
terminate the contract immediately without compensation, other than any employee entitlements up to the date of
termination. Otherwise, the contract may be terminated at any time by either side giving six months notice in
writing or by the Company paying six months salary in lieu of notice, unless mutually agreed.
12
Bass Oil Limited Annual Report 2017
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED) (30 June 2017) (continued)
Consultancy Services Agreements
The Group has entered into consultancy agreements with Robyn Hamilton.
Details of the agreements entered into by the Group and outstanding as at 30 June 2017 are set out below:
Type
Details
Term
Robyn
Hamilton
Consultancy
Minimum of 1 day per week at an
agreed hourly rate, from 6 October
2014.
The agreement is on a going forward
basis with the Company being able to
terminate the agreement, at no less than
one months notice.
Company performance
The remuneration of Bass executives and contractors is not formally linked to financial performance measures of
the Company. In accordance the Section 300A of the Corporations Act 2001 the following table summarises
Bass’s performance over a five year period:
Measure
2017
2016
2015
2014
2013
Net (loss)/profit - $
(1,795,591)
(4,030,740)
(836,252)
(3,091,993
)
(3,641,170
)
Basic (loss) per share – cents per share
(0.001)
(0.001)
(0.001)
(0.006)
(0.007)
Share price at the beginning of year* -
$
0.001
0.002
0.003
0.004
0.010
Share price at end of year* - $
0.001
0.001
0.002
0.003
0.004
Dividends per share – cents
Nil
Nil
Nil
Nil
Nil
* Prices have been rounded to two decimal points
Remuneration of key management personnel
No key management personnel appointed during the period received a payment as part of his or her consideration
for agreeing to hold the position.
13
Bass Oil Limited Annual Report 2017
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED) (30 June 2017) (continued)
Table 1: Remuneration for the year ended 30 June 2017
Short-term
benefits
Post
employmen
t
Share-
based
payments
Long-term
benefits
Super-
annuation
$
Options
$
Long
service
leave
$
Non-executive
Directors
P F Mullins
H M Gordon
M L Lindh
Sub-total non-
executive directors
Managing Director
G Guglielmo
Other key
management
personnel
R M Hamilton
Totals
Non-executive
Directors
P F Mullins
H M Gordon
M L Lindh
Sub-total non-
executive directors
Executive Director
G Guglielmo
Other key
management
personnel
R M Hamilton
Totals
Salary & fees
$
53,125
38,958
35,416
5,047
3,701
3,364
127,499
12,112
189,375
35,000
54,680
-
371,554
47,112
Salary & fees
$
37,500
27,500
25,000
90,000
150,000
41,080
3,563
2,612
2,375
8,550
-
-
281,080
8,550
Table 2: Remuneration for the year ended 30 June 2016
Short-term
benefits
Post
employmen
t
Share-
based
payments
Long-term
benefits
Super-
annuation
$
Options
$
Long service
leave
$
Total
$
58,172
42,659
38,780
139,611
224,375
54,680
418,666
Total
$
41,063
30,112
27,375
98,550
150,000
41,080
289,630
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14
Bass Oil Limited Annual Report 2017
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED) (30 June 2017) (continued)
Table 3: Shareholdings of key management personnel
Shares held in Bass Oil Limited (number)
2017
Directors
P F Mullins
G Guglielmo
H M Gordon
M L Lindh (a)
Other key management personnel
R M Hamilton
1 July 2016
Balance at
beginning of
period
24,000,000
139,805,515
10,666,668
135,118,377
309,590,560
Participation in
Rights Issue
Net change
other
30 June 2017
Balance at
end of
period
14,400,000
83,883,300
6,400,000
80,591,030
185,274,330
-
-
-
119,990
119,990
38,400,000
223,688,815
17,066,668
215,829,397
494,984,880
-
-
5,000,000
5,000,000
-
-
5,000,000
5,000,000
(a) Mr M Lindh’s interest includes 18,112,000 (2016: 11,320,000) shares held directly and 197,717,397 (2016:
121,385,043) shares held indirectly by related parties, South Australian Resource Investments Pty Ltd and
Chesser Nominees Pty Ltd, both subsidiaries of Adelaide Equity Partners Ltd, a director related entity of Mr
M Lindh.
Options held in Bass Oil Limited (number)
2017
Directors
P F Mullins
G Guglielmo
H M Gordon
M L Lindh (b)
Other key management personnel
R M Hamilton
1 July 2016
Balance at
beginning of
period
Participation in
Rights Issue
Net change
other
30 June 2017
Balance at
end of
period
-
-
-
-
-
-
-
7,200,000
41,941,650
3,200,000
40,295,515
92,637,165
2,500,000
2,500,000
-
-
-
-
-
-
-
7,200,000
41,941,650
3,200,000
40,295,515
92,637,165
2,500,000
2,500,000
(b) Mr M Lindh’s interest includes 3,396,000 (2016: nil) options held directly and 36,899,515 (2016: nil) options
held indirectly by related parties, South Australian Resource Investments Pty Ltd and Chesser Nominees Pty
Ltd, both subsidiaries of Adelaide Equity Partners Ltd, a director related entity of Mr M Lindh.
Rights Issue
On 14 December 2016 the Company issued 772,206,594 ordinary shares completing a non-renounceable rights
issue of three new shares for every five shares held at an issue price of $0.001 cents per share. The company also
issued one free attaching option to every two new shares purchased with an exercise price of $0.003 cents and an
expiry date of 15 December 2017. Each new option upon exercise will receive one new piggy back option having an
exercise price of $0.006 cents and an expiry date of 15 December 2018. The Company issued 386,103,275
options.
Other transactions and balances with key management personnel and their related parties
In accordance with AASB 124: “Related Party Disclosures”, key management personnel (KMP) have authority and
responsibility for planning, directing and controlling the activities of the Bass Oil Limited. Hence, KMP are deemed
to include the following:
the non-executive Directors of Bass Oil Limited; and
certain executives in the Managing Director’s senior leadership team.
15
Bass Oil Limited Annual Report 2017
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED) (30 June 2017) (continued)
During the year the Group paid corporate advisory and investor relations fees to Adelaide Equity Partners Limited
(a director related entity of Mr M Lindh) of $97,500 (2016:$60,000) (under a corporate advisory and investor
relations mandate). The fees were provided under normal commercial terms and conditions. Amounts outstanding
at balance date were $8,250 (2016: $5,500). The corporate advisory and investor relations mandate has a monthly
retainer of $7,500 per month and can be terminated at anytime by written notice to the other party.
HEALTH, SAFETY AND ENVIRONMENT
The Company has adopted an Environment Policy and a Safety Policy and conducts its operations in accordance
with the APPEA Code of Environmental Practice 2008.
The Company’s petroleum exploration and development activities are subject to environmental conditions specified
in the Offshore Petroleum and Greenhouse Gas Storage Act 2006, associated Regulations and Directions, as well
as the Environment Protection and Biodiversity Conservation Act 1999. During the period there were no known
contraventions by the Company of any relevant environmental regulations.
The Company considers all injuries are avoidable and has policies and procedures to ensure employees and
contractors manage safety accordingly. There is a continuous process of monitoring and evaluating our
procedures. During the year there were no recorded health and safety incidents.
CORPORATE GOVERNANCE
The Company’s Corporate Governance Statement for the year ended 30 June 2017 may be accessed from the
Company’s website at www.bassoil.com.au.
AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 in
relation to the audit for the year ended 30 June 2017 is included on page 17.
Non-audit services
The Directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by another
person or firm on the auditor’s behalf) is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001. The Audit Committee, in conjunction with the Chief Financial Officer,
assesses the provision of non-audit services by the auditors to ensure that the auditor independence requirements
of the Corporation Act 2001 in relation to the audit are met.
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are
outlined in note 8 to the financial statements.
The directors are of the opinion that the services as disclosed in note 8 to the financial statements do not
compromise the external auditor’s independence, based on advice received from the Audit Committee, for the
following reasons:
All non-audit services have been reviewed and approved to ensure that they do not impact the integrity
and objectivity of the auditor, and
none of the services undermine the general principles relating to auditor independence as set out in Code
of Conduct APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional
& Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a
management or decision-making capacity for the company, acting as advocate for the company or jointly
sharing economic risks and rewards.
Signed in accordance with a resolution of the Directors
Chairman
Melbourne, 27 September 2017
16
Bass Oil Limited Annual Report 2017
Deloitte Touche Tohmatsu
ABN 74 490 121 060
11 Waymouth Street
Adelaide, SA, 5000
Australia
Phone: +61 8 8407 7000
www.deloitte.com.au
27 September 2017
The Board of Directors
Bass Oil Limited
Level 2
15 Queen Street
MELBOURNE VIC 3000
Dear Board Members
Bass Oil Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of Bass Oil Limited.
As lead audit partner for the audit of the financial statements of Bass Oil Limited for the financial year ended
30 June 2017, I declare that to the best of my knowledge and belief, there have been no contraventions of:
The auditor independence requirements of the Corporations Act 2001 in relation to the audit
Any applicable code of professional conduct in relation to the audit.
(i)
(ii)
Yours faithfully
DELOITTE TOUCHE TOHMATSU
Darren Hall
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
17
Bass Oil Limited Annual Report 2017
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Bass Oil Limited, I state that:
In the opinion of the directors:
(a)
the financial statements and notes of the consolidated entity, are in accordance with the Corporations Act
2001, including:
(i)
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2017 and
it’s performance for the year ended on that date; and
(ii)
complying with Accounting Standards and Corporations Regulations 2001; 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; and
the financial statements and notes comply with International Financial Reporting Standards as stated in
Note 2(a).
(b)
(c)
This declaration has been made after receiving the declarations required to be made to the directors in accordance
with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2017.
On behalf of the Board
Chairman
Melbourne, 27 September 2017
18
Bass Oil Limited Annual Report 2017
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2017
Note
Consolidated
2017
$
Revenue
Oil revenue
Cost of oil sold
Gross profit
Other income
Interest received
Operator fees
Rent received
Total revenue and other income
Administrative expenses
Depreciation
Employee benefits expense
Finance costs
Exploration costs impaired and written off
Change in fair value of the equity options
Acquisition expenses
Loss before income tax
Income tax expense
Loss for the year
Other comprehensive income, net of income tax
Items that may be reclassified to profit or loss
Exchange difference on translation of foreign operations
Other comprehensive income, net of income tax
4
6
7
16
23
18
9
2016
$
-
-
-
6,065
18,072
16,900
41,037
(609,163)
(3,104)
(698)
-
(3,421,325)
-
-
1,911,320
(901,843)
1,009,477
3,178
25,590
-
1,038,245
(909,556)
(1,578)
(323,341)
(16,516)
(1,062,325)
(262,727)
(189,774)
(1,727,572)
(3,993,253)
(68,019)
(37,487)
(1,795,591)
(4,030,740)
(16,740)
(16,740)
-
-
Total comprehensive income/(loss) for the year
(1,812,331)
(4,030,740)
Basic and diluted (loss)/earnings per share
27
($0.001)
($0.005)
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
19
Bass Oil Limited Annual Report 2017
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Inventories
Other financial assets
Total current assets
Non-current assets
Trade and other receivables
Other financial assets
Plant and equipment
Exploration and evaluation expenditure
Oil properties
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Provisions
Provision for tax
Other financial liabilities
Borrowings
Total current liabilities
Non-current liabilities
Trade and other payables
Provisions
Borrowings
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
Note
10
11
12
13
14
11
14
15
16
17
21
22
9(e)
23
24
21
22
24
Consolidated
2017
$
1,346,338
1,180,622
98,864
66,376
16,133
2,708,333
275,770
35,507
1,257
-
2,072,227
2,384,761
2016
$
457,054
10,511
7,860
-
-
475,425
-
16,133
2,674
1,034,689
-
1,053,496
5,093,094
1,528,921
585,936
177,883
654,468
364,261
963,993
2,746,541
118,994
387,403
1,260,769
1,767,166
131,145
-
-
-
-
131,145
-
-
-
-
4,513,707
131,145
579,387
1,397,776
25
26
33,798,034
(16,740)
(33,201,907)
32,804,092
-
(31,406,316)
579,387
1,397,776
The above statement of financial position should be read in conjunction with the accompanying notes.
20
Bass Oil Limited Annual Report 2017
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2017
Consolidated
Note
Contributed
equity
$
32,804,092
Accumulated
losses
$
(31,406,316)
Currency
translation
reserve
$
-
Total
$
1,397,776
-
-
-
(1,795,591)
-
(1,795,591)
-
(16,740)
(16,740)
(1,795,591)
(16,740)
(1,812,331)
At 1 July 2016
Net loss for the year
Foreign currency
translation differences
Total comprehensive
income for the period
Shares issued
Transaction costs on share
issues
Tax consequences of share
issue costs
25
1,030,672
25
25 &
9
(59,777)
23,047
-
-
-
-
-
-
1,030,672
(59,777)
23,047
At 30 June 2017
33,798,034
(33,201,907)
(16,740)
579,387
At 1 July 2015
32,332,208
(27,375,576)
Net loss for the year
Total comprehensive
income for the period
-
-
(4,030,740)
(4,030,740)
Shares issued
Transaction costs on share
issues
Tax consequences of share
issue costs
25
482,629
25
25 &
9
(48,232)
37,487
-
-
-
At 30 June 2016
32,804,092
(31,406,316)
-
-
-
-
-
-
-
4,956,632
(4,030,740)
(4,030,740)
482,629
(48,232)
37,487
1,397,776
The above statement of changes in equity should be read in conjunction with the accompanying notes.
21
Bass Oil Limited Annual Report 2017
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2017
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Net cash used in operating activities
Cash flows from investing activities
Proceeds from the disposal of plant & equipment
Proceeds from other financial asset
Oil properties expenditure
Net cash inflow on acquisition of subsidiary
Petroleum exploration expenditure
Net cash provided by/(used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares and equity options
Transaction costs on issue of shares
Net cash provided by financing activities
Net (decrease)/increase in cash and cash equivalents
Net foreign exchange differences
Cash and cash equivalents at the beginning of the year
Note
34
17
18
16
Consolidated
2017
$
963,991
(1,255,563)
3,178
(288,394)
-
-
(66,643)
587,066
(27,636)
492,787
772,206
(59,777)
712,429
916,822
(27,538)
457,054
2016
$
38,933
(607,821)
6,162
(562,726)
228
55,920
(16,133)
-
(206,257)
(166,242)
482,629
(48,232)
434,397
(294,571)
-
751,625
Cash and cash equivalents at the end of the year
10
1,346,338
457,054
The above statement of cash flows should be read in conjunction with the accompanying notes.
22
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 1. Corporate Information
The consolidated financial statements of Bass Oil Limited (“Parent Entity” or “Company”) and its controlled entities
(collectively as “Consolidated Entity” or “the Group”) for the year ended 30 June 2017 was authorised for issue in
accordance with a resolution of the directors on 27 September 2017.
Bass Oil Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the
Australian Stock Exchange.
The nature of the operations and principal activities of the Group are oil production and exploration.
Note 2. Summary of Significant Accounting Policies
Basis of Preparation
The financial report has been prepared on the basis of historical cost, except for the revaluation of certain non-
current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for
assets. All amounts are presented in Australian dollars, unless otherwise noted.
In the application of the Group’s accounting policies, which are described below, management is required to make
judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent
from other sources. The estimates and associated assumptions are based on historical experience and various
other factors that are believed to be reasonable under the circumstances, the results of which form the basis of
making the judgements. Actual results may differ from these estimates.
(a) Statement of Compliance
These financial statements are general purpose financial statements which have been prepared in accordance with
the Corporations Act 2001, Accounting Standards and Interpretations, and comply with other requirements of the
law. The financial statements comprise the consolidated statements of the Group. For the purpose of preparing the
consolidated financial statements, the Company is a for-profit entity.
Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards
ensures that the financial statements and notes of the Company and the Group comply with International Financial
Reporting Standards.
(b) New Accounting Standards and Interpretations
In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the
Australian Accounting Standards Board that are relevant to its operations and effective for the current annual
reporting period, resulting in no accounting policy changes and no changes to recognition and measurement
At the date of authorisation of the financial statements, the Group has not applied the following new and revised
Australian Accounting Standards, Interpretations and amendments that have been issued but are not yet effective.
Standard/Interpretation
AASB 9 ‘Financial Instruments’, and the relevant amending standards
AASB 15 ‘Revenue from Contracts with Customers’ and AASB 2014-5
‘Amendments to Australian Accounting Standards arising from AASB
15’, AASB 2015-8 ‘Amendments to Australian Accounting Standards –
Effective date of AASB 15’
Effective for annual
reporting periods
beginning on or
after
1 January 2018
Expected to be
initially applied
in the financial
year ending
30 June 2019
1 January 2018
30 June 2019
AASB 16 ‘Leases’
1 January 2019
30 June 2020
Impact of New and Revised Requirements
AASB 9 ‘Financial Instruments’ (December 2009), and the relevant amending standards
AASB 9 applies to annual periods beginning on or after 1 January 2018. The directors of the Company anticipate
that the application of AASB 9 in the future is not anticipated to have a material impact on amounts reported, based
on current transactions, in respect of the Group’s financial assets and financial liabilities, but will affect disclosures
made in the Group’s consolidated financial statements.
23
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 2. Summary of Significant Accounting Policies (continued)
(b) New Accounting Standards and Interpretations (continued)
AASB 15 Revenue from Contracts with Customers, AASB 2014-5 Amendments to Australian Accounting
Standards arising from AASB 15, AASB 2015-8 Amendments to Australian Accounting Standards –
Effective Date of AASB 15, and AASB 2016-3 Amendments to Australian Accounting Standards –
Clarifications to AASB 15
AASB 15 applies to annual periods beginning on or after 1 January 2018. The directors of the Company anticipate
that the application of AASB 15 in the future will not have a material impact on the amounts reported, based on
current transactions, but will affect disclosures made in the Group's consolidated financial statements.
AASB 16 ‘Leases’
AASB 16 provides a comprehensive model for the identification of lease arrangements and their treatment in the
financial statements of both lessees and lessors.
The accounting model for lessees will require lessees to recognise all leases on balance sheet, except for short-
term leases and leases of low value assets.
AASB 16 applies to annual periods beginning on or after 1 January 2019. The directors of the Company anticipate
that the application of AASB 16 in the future may have a material impact on the amounts reported and disclosures
made in the Group's consolidated financial statements. However, it is not practicable to provide a reasonable
estimate of the effect of AASB 16 until the Group performs a detailed review.
(c) Basis of consolidation
The consolidated financial statements comprise the financial statements of Bass Oil Limited and its subsidiaries as
at 30 June each year (the Group).
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over the investee. Specifically, the Group
cotrols an investee if and only if the Group has:
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of
the investee);
Exposure, or rights, to variable returns from its involvement with the investee, and
The ability to use its power over the investee to affect its returns.
The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using
consistent accounting policies. In preparing the consolidated financial statements, all intercompany balances and
transactions, income and expenses and profit and losses resulting from intra-group transactions have been
eliminated in full.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be
consolidated from the date on which control is transferred out of the Group.
(d) Foreign currency translation
(i) Functional and presentation currency
Both the functional and presentation currency of Bass Oil Limited and its subsidiaries is Australian dollars ($).
(ii) Transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange
rates applicable at the date of transaction. Monetary assets and liabilities denominated in foreign currencies
are retranslated at the rate of exchange ruling at the balance date. Non-monetary items that are measured in
terms of historical cost in a foreign currency are translated at the date of the initial transaction. Non-monetary
items measured at fair value in a foreign currency are translated using the exchange rates at the date when the
fair value was determined.
(e) Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank and short term deposits
with an original maturity of three months or less that are readily convertible to known cash amounts of cash which
are subject to an insignificant risk of changes in value.
24
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 2. Summary of Significant Accounting Policies (continued)
(e) Cash and cash equivalents (continued)
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents
as defined above.
(f) Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost less
an allowance for impairment.
An impairment provision is recognised when there is objective evidence that the Group will not be able to collect the
receivable. The amount of the impairment loss is the receivable carrying amount compared to the present value of
estimated future cash flows, discounted at the original effective interest rate.
(g) Inventories
Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a first-in-
first-out basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of
completion and costs necessary to make the sale.
(h) Investments and other financial assets
Investments and financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement
are categorised as either financial assets at fair value through profit or loss, loans and receivables, held to maturity
financial assets or available for sale financial assets. The classification depends on the purpose for which the
assets were acquired or originated. Designation is re-evaluated at each reporting date, but there are restrictions on
reclassifying to other categories. When financial assets are recognised initially, they are measured at fair value,
plus, in the case of assets not at fair value through profit or loss, directly attributable transactions costs.
Recognition and Derecognition
All regular purchases and sales of financial assets are recognised on the trade date. Regular way purchases or
sales are purchases or sales of financial assets under contracts that require delivery of the assets within the period
established generally by regulation or convention in the market place. Financial assets are derecognised when the
right to receive cash flows from the financial assets has expired or when the entity transfers substantially all of the
risks and rewards of the financial assets. If the entity neither retains nor transfers substantially all of the risks and
rewards, it derecognises the asset if it has transferred control of the asset.
(i) Joint arrangements
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.
(j) Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:
Office furniture and equipment – over 3 to 10 years
The assets' residual values, useful lives and amortisation methods are reviewed and adjusted, if appropriate, at
each financial year end. Gains or losses on disposals are determined by comparing proceeds with the carrying
amount and are included in profit or loss.
(k) Leases
The determination of whether an arrangement is or contains a lease is based on substance of the arrangement and
requires assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or
assets and the arrangement conveys a right to use the asset.
Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease
term. Operating lease incentives are recognised as a liability when received and subsequently reduced by
allocating lease payments between rental expense and reduction of the liability.
25
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 2. Summary of Significant Accounting Policies (continued)
(l) Impairment of non-financial assets other than indefinite life intangibles
Non-financial assets other than indefinite life intangibles are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.
The Group conducts an annual internal review of asset values, which is used as a source of information to assess
any indicators for impairment. If any impairment exists, an estimate of the asset’s recoverable amount is
calculated.
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 assets fair value less costs of disposal and value in use. Non-
financial assets that suffered an impairment are tested for possible reversal of the impairment whenever events or
changes in circumstances indicate that the impairment may have reversed.
(m) Exploration and evaluation expenditure
Exploration and evaluation expenditure is carried forward separately for each area of interest provided that the
rights to tenure of the area of interest is current and either:
the exploration and evaluation activities are expected to be recouped through successful development and
exploitation of the area of interest or, alternatively, by its sale; or
exploration and evaluation activities in the area of interest have not at the reporting date reached a stage
that permits a reasonable assessment of the existence or otherwise of economically recoverable reserves,
and active and significant operations in or relating to, the area of interest are continuing.
The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment at the area of
interest level whenever facts and circumstances suggest that the carrying value may exceed its recoverable
amount.
An impairment exists when the carrying amount of capitalised exploration and evaluation expenditure relating to an
area of interest exceeds its recoverable amount. The asset is then written down to its recoverable amount and any
impairment losses are recognised in profit or loss.
(n) Oil properties
Oil properties are carried at cost including construction, installation of infrastructure such as roads and the cost of
development of wells.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it’s probable that future economic benefits associated with the item will flow to the Group and the cost of
the item can be measured reliably. All other repairs and maintenance are charged to the profit or loss during the
financial period in which they are incurred.
Oil properties are amortised on the Units of Production basis using the latest approved estimate of Proven (1P)
Reserves. Amortisation is charged only once production has commences. No amortisation is charged on areas
under development where production has not yet commenced.
(o) Provision for restoration
The Group records the present value of its share of the estimated cost to restore operating locations. The provision
is based on the net present value of the current agreed monthly payment to Pertamina to cover the anticipated
obligations relating to the reclamation, waste site closure, plant closure, production facility removal and other costs
associated with the restoration of the site. Pertamina is responsible for all restoration.
When the liability is recorded the carrying amount of the production asset is increased by the restoration costs
which are depreciated over the producing life of the asset. Over time, the liability is increased for the change in the
present value based on a risk free discount rate and monthly payment to Pertamina. The unwinding of the discount
is recorded as an accretion charge within finance costs.
Any changes in the estimate of the provision for restoration arising from changes in the amount required to be paid
to pertamina or changes in the discount rate of the restoration provision are recorded by adjusting the provision
and the carrying amount of the production or exploration asset and then depreciated over the producing life of the
asset. Any change in the discount rate is applied prospectively.
26
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 2. Summary of Significant Accounting Policies (continued)
(q) Trade and other payables
Trade payables and other payables are carried at amortised cost due to their short term nature they are not
discounted. They represent liabilities for goods and services provided to the Group prior to the end of the financial
year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the
purchase of these goods and services.
(r) Contributed equity
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.
(s) Revenue recognition
Revenue is recognised in profit or loss when the significant risks and rewards of ownership have been transferred
to the buyer. Revenue is recognised and measured at the fair value of the consideration or contributions received,
net of goods and service tax (“GST”), to the extent it is probable that the economic benefits will flow to the Group
and the revenue can be reliably measured.
Sales revenue
Sales revenue is recognised on the basis of the Group’s interest in a producing field (“entitlements” method), when
the physical product and associated risks and rewards of ownership pass to the purchaser, which is at the time the
oil is received at the Pertamina terminal. Revenue earned under a production sharing contract (“KSO”) is
recognised on a net entitlements basis according to the terms of the KSO.
Other income
Other income is recognised in profit or loss at the fair value of the consideration received or receivable, net of GST,
when the significant risks and rewards of ownership have been transferred to the buyer or when the service has
been performed.
Interest income
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the
Group and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by
reference to the principle outstanding and at the effective interest rate applicable, which is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying
amount on initial recognition.
(t) Employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick
leave in the period the related service is rendered.
Liabilities recognised in respect of short term employee benefits, are measured at their nominal values using the
remuneration rate expected at the time of settlement.
(u) Income tax and other taxes
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted by the reporting date.
Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are
recognised for all taxable temporary differences except:
when the deferred income tax liability arises from the initial recognition of goodwill or of 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 profit nor taxable profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and
it is probable that the temporary difference will not reverse in the foreseeable future.
27
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 2. Summary of Significant Accounting Policies (continued)
(u) Income tax and other taxes (continued)
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised,
except:
when the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; or
when the deductible temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable
that the temporary difference will reverse in the foreseeable future and taxable profit will be available against
which the temporary difference can be utilised. The carrying amount of deferred income tax assets is
reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable
profit will be available to allow all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent
that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity
and the same taxation authority.
Indonesian First Tranche Petroleum
A provision for deferred income tax payable related to tax potentially payable by the Group on its share of First
Tranche Petroleum which has already been recovered from Tangai-Sukananti KSO production. This tax will only be
payable in the event the contractors exhaust the pool of cost recovery prior to expiry of the KSO.
Based on the amount of the cost recovery pool, the Group believes that the cost recovery pool could be exhausted
in 2018 and that the tax will become payable in the 2019.
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST or VAT except:
when the GST or VAT incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST or VAT is recognised as part of the cost of acquisition of the asset or as
part of the expense item as applicable; and
receivables and payables, which are stated with the amount of GST or VAT included.
The net amount of GST or VAT recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the statement of financial position.
Commitments and contingencies are disclosed net of the amount of GST or VAT recoverable from, or payable to,
the taxation authority.
(v) Earnings per share
Basic earnings per share is calculated as net profit/(loss) attributable to members of the parent, adjusted to exclude
any costs of servicing equity (other than dividends), divided by the weighted average number of ordinary shares,
adjusted for any bonus element.
(w) Critical accounting estimates and judgements
The preparation of a financial report in conformity with Australian Accounting Standards requires management to
make judgements, estimates and assumptions that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under the circumstances, the results of
which form the basis of making the judgements about carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates.
28
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 2. Summary of Significant Accounting Policies (continued)
(w) Critical accounting estimates and judgements (continued)
These accounting policies have been consistently applied by each entity in the consolidated entity, and the
estimates and underlying assumptions are reviewed on an ongoing basis. The judgements, estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying values of assets and
liabilities within the next financial year are discussed below.
(i)
Impairment of Oil Property Assets
Oil properties impairment testing requires an estimation of the fair value less cost to sell of the cash
generating unit to which deferred costs have been allocated. The fair value less cost to sell calculation
requires the entity to estimate the future cash flows expected to arise from the cash generating unit and a
suitable discount rate in order to calculate present value. Other assumptions used in the calculations
which could have an impact on future years includes USD rates, available reserves and oil prices.
(ii) Useful Life of Oil Property Assets
As detailed at Note 2 (n) oil properties are amortised on a unit-of-production basis, with separate
calculations being made for each resource. Estimates of reserve quantities are a critical estimate
impacting amortisation of oil property assets.
(iii) Estimates of Reserve Quantities
The estimated quantities of Proven and Probable hydrocarbon reserves reported by the Company are
integral to the calculation of the amortisation expense relating to oil properties, and to the assessment of
possible impairment of these assets. Estimated reserve quantities are based upon interpretations of
geological and geophysical models and assessments of the technical feasibility and commercial viability of
producing
the reserves. These assessments require assumptions to be made regarding future
development and production costs, commodity prices, exchange rates and fiscal regimes. The estimates
of reserves may change from period to period as the economic assumptions used to estimate the reserves
can change from period to period, and as additional geological data is generated during the course of
operations. Reserves estimates are prepared in accordance with the Company’s policies and procedures
for reserves estimation which conform to guidelines prepared by the Society of Petroleum Engineers.
Note 3. Financial Risk Management Objectives and Policies
The Group’s principal financial instruments comprise receivables, payables, cash, deposits and borrowings.
The Group manages its exposure to key financial risks, including oil price, interest rate and currency risk in
accordance with the Group’s financial risk management policy. The objective of the policy is to support the delivery
of the Group’s financial targets whilst protecting future financial security.
The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk,
commodity price risk, credit risk and liquidity risk. The Group uses different methods to measure and manage
different types of risk to which it is exposed. These include monitoring levels of exposure to interest rate and foreign
exchange risk and assessments of market forecasts for interest rates, foreign exchange and commodity prices. The
risks are summarised below.
Primarily responsibility for identification and control of financial risks rests with the Managing Director under the
authority of the Board. The Board reviews and agrees management’s assessment for managing each of the risks
identified below.
The carrying amounts and net fair values of the Group’s financial assets and liabilities at 30 June 2017 are cash
and cash equivalents $1,346,338, trade and other receivables $1,456,392, other financial assets $51,640, trade
and other payables $704,930 and borrowings $2,224,762.
29
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 3. Financial Risk Management Objectives and Policies (continued)
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market risk comprises three types of risk: foreign currency risk, commodity price risk and
interest rate risk. Financial instruments affected by market risk include deposits, trade and other receivables, trade
and other payables, and borrowings.
The sensitivity analyses in the following sections relate to the position as at 30 June 2017.
The sensitivity analyses have been prepared on the basis that the amount of the financial instruments in foreign
currencies is all constant. The sensitivity analyses are intended to illustrate the sensitivity changes in market
variables on the Group’s financial instruments and show the impact on profit and loss and shareholders’ equity,
where applicable.
Foreign currency risk
The Group has transactional currency exposure arising from oil sales which are denominated in United States
dollars (USD), whilst costs are denominated in Indonesian Rupiah (IDR), USD and Australian dollars. The Group
does not undertake any hedging activities.
During the year the Group acquired oil production assets in Indonesia and is now exposed to foreign currency risk
arising from various currency exposures, to the United States dollar.
The Board approved the policy of holding certain funds in United States dollars to manage foreign exchange risk.
The Group’s exposure to foreign exchange risk at the reporting date was as follows (holdings are shown in AUD
equivalent):
Financial assets:
Cash and cash equivalents
Trade and other receivables
Financial liabilities:
Trade and other payables
30 JUNE 2017
USD
$
1,038,530
1,224,590
28,429
IDR
$
136,950
218,584
591,253
At the reporting date, if the currencies set out in the table above, strengthened or weakened against the Australian
dollar by the percentage shown, with all other variables held constant, net profit for the year would
increase/(decrease) and net assets would increase/(decrease) by:
Impact on post tax profit
Exchange rate +10%
Exchange rate -10%
Impact on equity
Exchange rate +10%
Exchange rate -10%
30 JUNE 2017
USD
$
223,469
(223,469)
223,469
(223,469)
IDR
$
(23,571)
23,571
(23,571)
23,571
Management believes the risk exposures as at the reporting date are representative of the risk exposure inherent in
the financial instruments. A movement of +/– 10% is selected because a review of recent exchange rate
movements and economic data suggests this range is reasonable.
30
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 3. Financial Risk Management Objectives and Policies (continued)
Commodity Price Risk
The Group is exposed to commodity price fluctuations through the sale of petroleum products denominated in US
dollars. The Group may enter into commodity crude oil price swap and option contracts to manage its commodity
price risk.
If the US dollar oil price changed by +/-10% from the average oil price during the period since acquisition (4
months), with all other variables held constant, the estimated impact on post-tax profit and equity would have been:
Impact on post tax profit
USD dollar oil price +10%
USD dollar oil price -10%
Impact on equity
USD dollar oil price +10%
USD dollar oil price -10%
Interest rate risk
30 JUNE 2017
USD
$
191,132
(191,132)
191,132
(191,132)
The Group’s exposure to market interest rates is related primarily to the Group’s cash and cash equivalents.
The Group constantly analyses its interest rate opportunity and exposure. Within analysis consideration is given to
existing positions and alternative arrangement on fixed or variable deposits.
The following sensitivity analysis is based on the interest rate opportunity/risk in existence at reporting date.
At reporting date, if interest rates changed by +/- 1%, with all other variables held constant, the estimated impact
on post-tax profit and equity would have been:
Impact on post tax profit
Interest rates +1%
Interest rates -1%
Impact on equity
Interest rates +1%
Interest rates -1%
30 JUNE 2017
$
13,463
(13,463)
13,463
(13,463)
A movement of + and-1% is selected because this is historically within the range of rate movements and available
economic data suggests this range is reasonable.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Group’s reputation.
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an
appropriate liquidity risk framework for the management of the Group’s short, medium and longer term funding and
liquidity management requirements. The Group manages liquidity risk by maintaining adequate banking facilities
through monitoring of future rolling cash flow forecasts of its operations, which reflect management’s expectations
of the settlement of financial assets and liabilities.
The financial liabilities are trade and other payables, and borrowings. At 30 June 2017, the Group had $704,930
(2016: $131,145) in trade and other payables. Trade payables are non-interest bearing and have a contractual
maturity of less than 30 days. At 30 June the Group had borrowings of $2,224,762 and are interest free.
31
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 3. Financial Risk Management Objectives and Policies (continued)
The only financial assets are cash and cash equivalents, trade and other receivables, and other financial assets. At
30 June 2017, the Group had $1,346,338 (2016: $457,054) in cash and cash equivalents, $1,456,392 (2016:
$10,511) in trade and other receivables, and $51,640 (2016: $16,133) in other financial assets.
The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities. The
table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on
which the Group can be required to pay. The table includes both interest and principal cash flows.
Weighted
average
effective
interest rate
%
-
1.81%
-
Less than
one year
One to two
years
Greater than
two years
$
$
$
Total
$
585,936
1,000,000
-
1,270,000
118,994
-
704,930
2,270,000
131,145
-
-
131,145
2017
Trade and other payables
Borrowings
2016
Trade and other payables
Credit risk
Credit risk arises from financial assets of the Group, which comprise cash and cash equivalents, trade and other
receivables, and other financial assets.
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to
the Group. The Group have adopted a policy of only dealing with creditworthy counterparties and obtaining
sufficient collateral or other security, where appropriate, as a means of mitigating the risk of financial loss from
defaults.
The carrying amount of financial assets recorded in the financial statements, net of any provisions for losses,
represents the Group’s maximum exposure to credit risk without taking account of any collateral or other security
obtained.
In addition, receivable balances are monitored on an ongoing basis with the result being that the Group’s exposure
to bad debts is not significant. Currently there are no receivables that are impaired or past due but not impaired.
Apart from Pertamina, the Indonesian State owned oil Company, the largest customer of the Group, the Group
does not have significant credit risk exposure to any other counterparty.
The credit risk on liquid funds is banks with high ratings assigned by international credit rating agencies.
Fair value of financial instruments
The Directors consider that the carrying amount of the financial assets and liabilities recorded in the financial
statements approximate their fair values unless otherwise stated.
Capital management
Capital is defined as equity. When managing capital, management’s objective is to ensure the entity continues as a
going concern as well as to maintain optimal returns to shareholders.
The Group will seek to raise further capital, if required, to fund its future strategy for the development of the Tangai-
Sukananti field.
The Group is not subject to any externally imposed capital requirements.
32
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 4. Administrative expenses
Note
Audit and tax fees
Consultants fees other
Corporate related costs
Directors’ remuneration (i)
Foreign exchange losses
Insurance
Legal expenses
Loss on disposal of assets
Operating lease costs
Travel
Other administrative expenses
Consolidated
2017
$
78,443
250,440
32,992
227,111
3,807
12,542
3,375
123
82,758
103,022
114,943
909,556
2016
$
35,000
143,061
38,091
248,550
-
11,926
34,523
2,031
49,886
5,102
40,993
609,163
(i) Mr Guglielmo’s remuneration is included in directors’ remuneration when he was an Executive Director until he
was appointed Managing Director on 1 February 2017. From that date, his remuneration is included in Employee
benefits expense.
Note 5. Depreciation and amortisation
Depreciation and amortisation included in the profit and loss is as follows:
Depreciation of plant and equipment
Amortisation of oil properties
14
Note 6. Employee benefits expense
Wages and salaries
Superannuation
Provision for annual leave
Medical expenses
Termination benefits
Workers compensation
Note 7. Finance costs
Accretion interest
Consolidated
2017
$
1,578
184,824
186,402
Consolidated
2017
$
240,151
35,000
10,525
3,097
34,532
36
323,341
Consolidated
2017
$
16,516
16,516
2016
$
3,104
-
3,104
2016
$
-
-
-
-
-
698
698
2016
$
-
-
33
Bass Oil Limited Annual Report 2017
Note
Consolidated
2017
$
2016
$
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 8. Auditor’s Remuneration
.
Amounts received or due and receivable by Deloitte for:
An audit or review of the financial report of the entity paid
to: Deloitte Touche Tomatsu Australia
Deloitte Touche Tomatsu Indonesia
Total
The auditor of Bass Oil Limited is Deloitte Touche Tohmatsu.
Audit costs included in acquisition costs amounted to $12,499, refer to Note 18.
Note 9. Income Tax
(a) Income tax recognised in profit or loss
Current tax
In respect of the current year
Deferred tax
In respect of the current year
61,000
29,942
90,942
35,000
-
35,000
Consolidated
2017
$
44,972
23,047
2016
$
-
37,487
Total income tax expenses recognised in profit or loss
68,019
37,487
The income tax expense for the year can be reconciled to
the accounting profit or loss as follows:
Loss before tax
(1,727,572)
(3,993,253)
Income tax calculated at 30% (2016: 30%)
(518,272)
(1,197,976)
Difference in tax rates
Cost recovery profit that is not liable to income tax in
Indonesia
Change in fair value of options recorded in other liabilities
Expenses associated with the acquisition
Other
Tax losses previously recognised now not recognised
Current year revenue tax losses not recognised
Income tax expense recognised in the profit or loss
(b) Recognised deferred tax assets and (liabilities)
Deferred tax assets and (liabilities) are attributable to the
following:
Other assets
Exploration and evaluation expenditure
Plant and equipment
Trade and other payables
Provisions
Share issue costs
Net deferred tax assets not recognised
Tax value of revenue losses carried forward
11,243
(167,629)
78,818
56,932
37
48,710
558,180
68,019
(7,829)
-
-
27,383
3,158
32,142
54,854
(54,854)
-
-
-
-
-
-
944,228
291,235
37,487
(2,358)
(310,406)
159
15,191
-
37,255
(260,159)
-
260,159
Net deferred tax assets and (liabilities)
-
-
34
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 9. Income Tax (continued)
(c) Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect
of the following items:
Temporary differences
Revenue tax losses
Capital tax losses
Deferred tax assets have not been recognised in respect to
these items as it is not probable at this time that future
taxable profits will be available against which the group can
utilise the benefit.
(d) Movement in recognised net deferred tax asset
Opening balance
Recognised in equity
Recognised in income
Closing balance
(e) Movement in provision for tax
Opening balance
Provision acquired on acquisition
Income tax expense
Foreign exchange movement
Closing balance
Consolidated
2017
$
2016
$
54,854
6,017,585
232,200
-
5,403,696
232,200
6,304,639
5,635,896
-
(23,047)
23,047
-
-
610,911
44,972
(1,415)
654,468
-
(37,487)
37,487
-
-
-
-
-
-
The provision for tax relates to income tax payable in Indonesia. The tax only becomes payable when there are no
cost recoveries available to be carried forward at the end of the tax year in Indonesia (31 December).
Based on the current life of field model, there will be no cost recoveries carried forward at 31 December 2019,
meaning that the tax will become payable on 30 April 2020.
The provision for tax covers the tax years from 2010 to 2016 and the six months to 30 June 2017.
Note 10. Cash and Cash Equivalents
Cash at bank and in hand
Consolidated
2017
$
1,346,338
1,346,338
2016
$
457,054
457,054
35
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 11. Trade and Other Receivables
Current:
Trade debtors (i)
Other receivables
Goods and services tax
Value-added tax
Non-current:
Other receivables
Consolidated
2017
$
948,865
7,896
5,276
218,585
2016
$
-
3,543
6.968
-
1,180,622
10,511
275,770
275,770
-
-
(i)
At balance date, there are no trade receivables that are past due but not impaired. Due to the short-term
nature of these receivables, their carrying value approximates fair value. Trade receivables are non-interest
bearing and are generally on 60 day terms. Details regarding the credit risk of receivables are disclosed in
Note 3. All sales from the Tangai-Sukananti KSO are to Pertamina, the Indonesia State owned oil Company.
Note 12. Other Current Assets
Prepayments
Accrued revenue
Note 13. Inventories
Oil inventories in tank (at cost)
Maintenance spares (at cost)
Note 14. Other Financial Assets
Current
Security Deposit
Non-current:
Security Deposits
Consolidated
2017
$
83,515
15,349
98,864
Consolidated
2017
$
33,022
33,354
66,376
Consolidated
2017
$
16,133
16,133
35,507
35,507
2016
$
6,974
886
7,860
2016
$
-
-
-
2016
$
-
-
16,133
16,133
36
Bass Oil Limited Annual Report 2017
Note
18
5
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 15. Plant and Equipment
Office equipment, furniture and fittings
Opening balance, net of accumulated depreciation
Assets acquired on acquisition
Disposals
Depreciation charge for the year
Closing balance, net of accumulated depreciation
Cost
Accumulated depreciation
Net carrying amount
Note 16. Exploration and Evaluation Costs
Exploration and evaluation costs
Movement in the carrying value of exploration and evaluation costs
Petroleum tenements in the exploration phase
Balance at the beginning of year
Cost capitalised for the year
Exploration costs impaired and written off
Balance at the end of year
Consolidated
2017
$
2,674
284
(123)
(1,578)
1,257
81,382
(80,125)
2016
$
8,037
-
(2,259)
(3,104)
2,674
66,367
(63,693)
1,257
2,674
Consolidated
2017
$
-
2016
$
1,034,689
-
1,034,689
Consolidated
2017
$
2016
$
1,034,689
27,636
(1,062,325)
4,249,757
206,257
(3,421,325)
-
1,034,689
The net carrying amount of exploration and evaluation costs is represented by Vic/P41 $nil (2016: $577,983),
Vic/P68 $nil (2016: $401,091) and PEP 150 $nil (2016: $55,615).
An impairment exists when the carrying amount of capitalised exploration and evaluation expenditure relating to an
area of interest exceeds its recoverable amount. The asset is then written down to its recoverable amount. Any
impairment losses are recognised in the profit or loss.
In the current year, Vic/P41 was surrendered prior to the commencement of Year 5 work program and the
capitalised expenditure was written off.
As a result of the change in the strategic direction of the Group, no further work is planned to be performed in
relation Vic/P68 and the amounts capitalised have been fully impaired. The Group had been seeking to farm out or
sell this permit but has been unable to gain sufficient interest. It is likely the permit will be surrendered at the end
of the permit year.
Costs associated with PEP 150 have been written off after the Victorian Government extended the moratorium on
onshore exploration activity till 30 June 2020.
Commitments and tenure of each permit are included in Note 30.
37
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 17. Oil Properties
Tangai-Sukananti KSO
Movement in the carrying value of oil properties
Balance at the beginning of year
Oil properties acquired on acquisition (Note 18)
Expenditure during the period
Foreign exchange movement
Depreciation, depletion and amortisation
Balance at the end of year
Note 18. Business Combinations
(a) Subsidiaries acquired
Consolidated
2017
$
2,072,227
2,072,227
Consolidated
2017
$
-
2,187,609
66,643
2,799
(184,824)
2,072,227
2016
$
-
-
2016
$
-
-
-
-
-
-
Principal activity
Date of
Acquisition
Proportion
of shares
acquired
Consideration
transferred
$
Cooper Energy Sukananti Ltd
Oil Producer
28/02/2017
100%
860,000
Cooper Energy Sukananti Ltd holds a 55% interest in the Tangai-Sukananti KSO, an oil producing field, located in
South Sumatra, Indonesia.
(b) Consideration for the acquisition
Cash
Issue of 180,000,000 fully paid ordinary shares
Deferred consideration agreement
Consolidated
2017
$
500,000
360,000
860,000
2,211,444
3,071,444
2016
$
-
-
-
-
-
The Deferred consideration of $2,270,000 is payable over four instalments between 31 December 2017 and 31
December 2018 and has been recorded at the net present value amount.
Acquisition related costs amounting to $189,774 have been excluded from the consideration transferred and have
been recognised as an expense in the profit or loss in the current year, within the ‘acquisition expenses’ line item.
38
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 18. Business Combinations (continued)
(c) Assets acquired and liabilities assumed at the date of acquisition
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Inventories
Non-current assets
Trade and other receivables
Other financial assets
Plant and equipment
Oil properties
Current liabilities
Trade and other payables
Provisions
Provision for tax
Non-current liabilities
Trade and other payables
Provisions
Fair value of asset and liabilities acquired
Less consideration for the acquisition
Cooper Energy
Sukananti Ltd
$
1,087,066
1,507,296
47,268
55,279
178,028
35,606
284
2,187,609
(633,097)
(269,852)
(610,910)
(111,075)
(402,058)
3,071,444
(3,071,444)
-
Some of the above fair values have been accounted for on a provisional basis, as the transaction only recently
occurred.
(d) Net cash inflow on acquisition of subsidiaries
Consideration paid in cash
Cash and cash equivalent balances acquired
Net cash inflow on acquisition of subsidiaries
(e) Impact of acquisition on the results of the Group
Consolidated
2017
$
(500,000)
1,087,066
587,066
2016
$
-
-
-
Included in the loss for the year is $626,223 profit attributable to the additional business generated by Cooper
Energy Sukananti Ltd. Revenue for the year includes $1,911,320 in respect of Cooper Energy Sukananti Ltd.
Had these business combinations been effected at 1 July 2016, the revenue of the Group from continuing
businesses would have been $5,733,963, and the loss for the year from continuing operations would have been
$543,146. The directors of the Group consider these ‘pro-forma’ numbers to present an approximate measure of
the performance of the combined Group on an annualised basis and to provide a reference point for future
comparisons.
39
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 19. Subsidiaries
Details of the Group’s subsidiaries at the end of the reporting period are as follows:
Name of Subsidiary
Principal
activity
Place of
Incorporation
and operation
Proportion of ownership interest
and voting power held by the
Group
BSOC Business Services Pty Ltd
Non-operating
Australia
Cooper Energy Sukananti Ltd
Oil Producer
British Virgin
Islands
30/06/17
30/06/16
100%
100%
100%
-
Note 20. Joint Arrangements
The Group has interests in a number of joint arrangements which are classified as joint operations. Details of the
Group’s joint arrangements at the end of the reporting period are as follows:
Name of Joint Venture
Principal activity
Place of
Incorporation and
operation
Proportion of ownership
interest and voting power
held by the Group
30/06/17
30/06/16
(i) Joint arrangements in which Bass Oil Limited is the operator
Vic/P41
Oil & Gas
exploration
Australia
-
64.6%
Tangai-Sukananti KSO
Oil Producer
Indonesia
55%
-
(ii) Joint arrangements in which Bass Oil Limited is not the operator
PEP 150
Oil & Gas
exploration
Australia
15%
15%
Note 21. Trade and Other Payables
Current:
Trade payables (i)
Other payables
Non-current:
Other payables
Consolidated
2017
$
164,294
421,642
585,936
118,994
118,994
2016
$
52,176
78,969
131,145
-
-
(i) The Groups settles creditors on average within 30 days and no interest is charged.
40
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 22. Provisions
Current
Employee benefits
Non-current:
Restoration
Movement in the carrying value of restoration provision
Balance at the beginning of year
Restoration provision acquired on acquisition (Note 18)
Expenditure during the period
Accretion interest
Foreign exchange movement
Balance at the end of year
Consolidated
2017
$
2016
$
177,883
177,883
387,403
387,403
-
-
-
-
Consolidated
2017
$
2016
$
-
402,058
(11,611)
(3,196)
152
387,403
-
-
-
-
-
-
The restoration provision was agreed with Pertamina for when the licenses expire in July 2025.
Note 23. Other financial liabilities
Movement in equity options
Balance at the beginning of year
Value on issue
Change in fair value
Closing value
Consolidated
2017
$
2016
$
-
101,534
262,727
364,261
-
-
-
-
The equity option relates to the piggy back option as disclosed in Note 25 and Note 29.
This liability will not result in a payment by the Group, as when the equity options are exercised the amount
associated with the exercised option will be transferred to equity and if the options are not exercised by the expiry
date, 15 December 2017, the equity option will be transferred to the profit or loss.
41
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 24. Borrowings
Current
Non-current
Consolidated
2017
$
963,993
1,260,769
2,224,762
2016
$
-
-
-
The acquisition of Cooper Energy Sukananti Ltd (see Note 18) from Cooper Energy Limited was agreed and
approved by shareholders at a Special General Meeting on 13 February 2017. The transaction was settled on the
28 February 2017 with the payment of $500,000 cash and the issue of 180,000,000 ordinary shares, valued at
$360,000. Additionally a deferred settlement of $2,270,000 was agreed to be repaid by 31 December 2018. The
deferred settlement is interest free. The borrowings are secured by a registered charge over the shares the
Company holds in Cooper Energy Sukananti Ltd. The amount due has been recorded at its net present value.
Note 25. Contributed Equity
Issued and paid up capital
Ordinary shares fully paid
Movements in ordinary shares on
issue
Ordinary shares on issue at
beginning of period
Entitlements Issue
Consideration for acquisition
Transaction costs
Tax consequences of share issue
costs
2017
Shares
2016
Shares
Consolidated
2017
$
2016
$
2,239,217,584
1,287,010,990
33,798,034
32,804,092
1,287,010,990
772,206,594
180,000,000
-
804,381,671
482,629,319
-
-
32,804,092
670,672
360,000
(59,777)
32,332,208
482,629
-
(48,232)
-
-
23,047
37,487
2,239,217,584
1,287,010,990
33,798,034
32,804,092
On 14 December 2016 the Company issued 772,206,594 ordinary shares after undertaking a non-renounceable
rights issue of three new shares for every five shares held at an issue price of $0.001 cents per share. The
company also issued one free attaching option to every two new shares purchased with an exercise price of $0.003
cents and expiry date of 15 December 2017. Each new option upon exercise will receive one new piggy back option
having an exercise price of $0.006 cents and an expiry date of 15 December 2018. The Company issued
386,103,297 options. The rights issue raised $772,206 before costs and expenses.
As the new option will result in a piggy back option being granted on exercise, AASB 132 “Financial Instruments:
Presentation” requires the option to be treated as a financial liability instead of equity. Therefore, the Company
recognised the option as a financial liability at fair value through profit and loss. See Note 23.
On 28 February 2017 the Company issued 180,000,000 ordinary shares to Cooper Energy Limited in part
consideration for the acquisition of Cooper Energy Sukananti Ltd. The issue price was $0.002 cents per share. The
shares are being held in subject to a voluntarily agreed escrow agreement for a period of twelve months.
Terms and Conditions of Contributed Equity
Ordinary shares entitle the holder to receive dividends as declared and, in the event of winding up the Company, to
participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up
on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the
Company.
Share Options on Issue
As at 30 June 2017, the Company has 386,103,275 (2016: nil) share options on issue, exercisable on a 1:1 basis
for 386,103,275 (2016: nil) ordinary shares of the Company at an exercise price of $0.003 and an expiry date of
15 December 2017.
42
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 26. Accumulated Losses
Balance at beginning of year
Net loss
Balance at end of year
Note 27. Earnings per Share
Consolidated
2017
$
(31,406,316)
(1,795,591)
2016
$
(27,375,576)
(4,030,740)
(33,201,907)
(31,406,316)
The following reflects the income used in the basic earnings per share computations.
Basic earnings/(loss) per share
Consolidated
2017
$
(0.001)
2016
$
(0.005)
Net loss attributable to ordinary equity shareholders of the
parent
(1,795,591)
(4,030,740)
Weighted average number of ordinary shares:
Issued ordinary shares at 1 July
Effect of shares issued June 2016
Effect of shares issued December 2016
Effect of shares issued February 2017
2017
Number
1,287,010,990
-
418,895,632
60,164,384
2016
Number
804,381,671
25,668,107
-
-
Weighted average number of ordinary shares at 30 June
1,766,071,006
830,049,778
Note 28. Key Management Personnel Disclosures
The aggregate compensation made to directors and other members of key management personnel of the Group is
set out below:
Short-term employee benefits
Post-employment benefits
Consolidated
2017
$
371,554
47,112
418,666
2016
$
281,080
8,550
289,630
43
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 29. Financial instruments
This note provides information about how the Group determines fair values of various financial assets and financial
liabilities.
Fair value of the Group's financial assets and financial liabilities that are measured at fair value on a recurring
basis
Some of the Group's financial assets and financial liabilities are measured at fair value at the end of each reporting
period. The following table gives information about how the fair values of these financial assets and financial
liabilities are determined (in particular, the valuation technique(s) and inputs used).
Financial assets/
Financial
liabilities
Fair value
as at
30/06/17
$
Fair value
as at
30/6/16
$
Fair value
hierarchy
Other financial
liability – equity
option
$364,261
$-
Level 3
Significant
unobservable
input(s)
Relationship
of
unobservable
inputs
to fair value
The share
price volatility
used in the
valuation was
estimated
based on the
average
volatility of a
peer group of
companies.
A higher stock
price volatility
would result in
a higher fair
value, and
vice versa.
Valuation
technique(s)
and
key input(s)
Black Scholes
option pricing
model. The
option call
price was
estimated
based on the
market
observable
share price,
historical
share price
volatility and
prevailing
interest rates.
Fair value of financial assets and financial liabilities that are not measured at fair value on a recurring basis (but
fair value disclosures are required)
The directors consider that the carrying amounts of financial assets and financial liabilities recognised in the
consolidated financial statements approximate their fair values.
Reconciliation of Level 3 fair value measurements:
Opening balance
Issued during the year
Change in fair value taken to profit or loss
Closing balance
Held to Maturity
– Options for
Company
Equities
$
-
101,534
262,727
364,261
44
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 30. Commitments and contingencies
(a) Permit work commitments
Set out below are the minimum work obligations with associated indicative costings under the current significant
exploration permits the group has as at 30 June 2017.
Vic/P68 (Group’s interest is 100%)
The Group is currently in year three of a six year work programme which expires on 3 May 2019. The table below
shows details of the commitments:
Year of
permit
3
4
5
6
Permit year end
Minimum work commitments
3 November 2017
3 May 2018
3 May 2019
3 May 2020
225sq km 3D seismic survey
Geotechnical studies
One exploration well
Geotechnical studies
Estimated
expenditure
3,000,000
250,000
20,000,000
250,000
The commitment for year 3 has not been met as at 30 June 2017. The Group has been seeking to farm out or sell
this permit but has been unable to gain sufficient interest. It is likely the permit will be surrendered at the end of the
permit year.
(b) Non-cancellable operating lease commitments
Future operating lease rentals relating to the rent of the Group’s office in Melbourne that is not provided for in the
financial statements and payable:
Within one year
After one year but not more than five years
Consolidated
2017
$
11,000
-
11,000
2016
$
44,000
11,000
55,000
Set out below are the Group’s share of operating lease commitments that are in Tangai –Sukananti KSO.
Future operating lease rentals relating to the rental of the Jakarta office and equipment in the Jakarta office that are
not provided for in the financial statements and payable:
Within one year
After one year but not more than five years
Consolidated
2017
$
143,159
114,873
258,032
2016
$
-
-
-
Future operating lease rentals relating to the field equipment & vehicles in Indonesia that are not provided for in the
financial statements and payable:
Within one year
After one year but not more than five years
(c) Employment Agreements
Consolidated
2017
$
157,012
14,147
171,159
2016
$
-
-
-
The Group may terminate Mr Guglielmo’s employment agreement by giving six months’ notice. The Group has a
contingent liability of $150,000 in relation to this agreement, if Mr Guglielmo is not required to work out the notice
period.
45
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 31. Parent Entity Disclosures
Information relating to Bass Oil Limited
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Contributed equity
Accumulated losses
Total shareholders’ equity
Loss of the parent entity
Total comprehensive income/(loss) of the parent entity
Parent
2017
$
1,321,608
4,143,431
1,123,424
4,073,528
2016
$
475,053
1,528,921
131,145
131,145
69,903
1,397,776
33,798,034
(33,728,131)
32,804,092
(31,406,316)
69,903
1,397,776
(2,321,815)
(2,321,815)
(4,030,740)
(4,030,740)
The commitments and contingencies of the parent entity are the same as disclosures in Note 30 excluding the
commitments relating to Tangai-Sukananti KSO.
Note 32. Related Party Disclosures
Terms and conditions of transactions with related parties other than KMP
During the year the Group paid corporate advisory and investor relations fees of $97,500 (2016:$60,000) (under a
corporate advisory & investor relations mandate) and a capital raising fee of $nil (2016: $22,105) to Adelaide
Equity Partners Ltd (a director related entity of Mr M Lindh). The fees were provided under normal commercial
terms and conditions. Amounts outstanding at balance date were $8,250 (2016: $5,500). The Group has a
corporate advisory & investor relations mandate with Adelaide Equity Partners. The mandate has a monthly
retainer of $7,500 per month.
The acquisition of Cooper Energy Sukananti Ltd from Cooper Energy Limited (a shareholder and director related
entity) was agreed and approved by shareholders at a Special General Meeting on 13 February 2017. The
transaction was settled on the 28 February 2017 with the payment of $500,000 cash and the issue of 180,000,000
ordinary shares, valued at $360,000. Additionally a deferred settlement of $2,300,000 was agreed to be paid by 31
December 2018. The deferred settlement is interest free and secured by a registered charge over the shares the
Company holds in Cooper Energy Sukananti Ltd.
Note 33. Segment Information
For management purposes there is only one operating segment, which was exploration until 28 February 2017 and
oil production from 1 March 2017
The chief operating decision maker only reviews consolidated financial information. The chief operating decision
maker, who is responsible for allocating resources and assessing performance of the operating segment, has been
identified as the Board.
The Board does not currently receive segment Statement of Financial Position and Statement of Comprehensive
Income information. For exploration activities the Board managed each exploration activity of each permit through
review and approval of joint venture cash calls, Authority for Expenditure (AFE’s) and other operational information.
For oil production (from the Tangai–Sukananti KSO located in South Sumatra Basin in Indonesia) the Board
manages the activity through review of production details, review and approval of the joint venture cash calls and
other operational information.
The result for the year from exploration activities was a loss of $1,169,368 and from oil production was a profit of
$626,223. For the prior year the result related to exploration activities only.
The consolidated entity operated in the petroleum exploration industry within Australia until 28 February 2017 and
in the oil and gas industry in Indonesia from 1 March 2017.
46
Bass Oil Limited Annual Report 2017
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Note 33. Segment Information (continued)
The consolidated assets and liabilities as at 30 June 2017 relate to oil production and the consolidated assets and
liabilities as at 30 June 2016 related to exploration activities.
For the current year the Group’s revenue of $1,911,320 was received from the sale of oil in Indonesia to Pertamina
(the Indonesian State owned oil Company).
Note 34. Reconciliation of Cash flows from Operating Activities
For the purposes of the Statement of Cash Flows, cash includes cash on hand and at bank, and short term
deposits at call.
Reconciliation of profit after income tax to net cash provided/used in operating activities
Net loss after tax
Adjustments for:
Depreciation
Loss on disposal of fixed assets
Amortisation
Write-down in exploration
Change in fair value of options
Accretion interest
Changes in assets and liabilities
Decrease/(increase) in trade and other receivables
(Increase)/decrease in other assets
(Increase) in inventories
(Decrease) In provisions
(Decrease)/increase in trade and other payables
Increase In provision for tax
Increase/(decrease) in deferred tax
Consolidated
2017
$
(1,795,591)
2016
$
(4,030,740)
1,578
123
184,824
1,062,325
262,727
16,516
(267,496)
241,110
(43,074)
(10,790)
(103,068)
(167,291)
39,169
23,047
3,104
2,031
-
3,421,325
-
-
(604,280)
18,789
16,599
-
-
(31,321)
-
37,487
Net cash flows used in operating activities
(288,394)
(562,726)
Non-cash transactions
During the current year the Group entered into the following non-cash investing and financing activities which are
not reflected in the statement of cash flows:
As part of the consideration paid for Cooper Energy Sukananti Ltd, on the 28th February 2017 the Group
issued 180,000,000 shares valued at $360,000 to Cooper Energy Limited.
Deferred consideration of the $2,211,444 relating to the balance of the consideration due for the acquisition
of Cooper Energy Sukananti Ltd.
The issue of shares ($670,672) and equity options ($101,534) as a result of the rights issue that occurred
during December 2016.
Note 35. General Information
Bass Oil Limited (the Company) is a listed public company incorporated in Australia. The address of its registered
office and principle place of business is as follows:
Level 2, 15 Queen Street
Melbourne, VIC 3000
Australia
47
Bass Oil Limited Annual Report 2017
Deloitte Touche Tohmatsu
ABN 74 490 121 060
11 Waymouth Street
Adelaide, SA, 5000
Australia
Phone: +61 8 8407 7000
www.deloitte.com.au
Independent Auditor’s Report
to the members of Bass Oil Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Bass Oil Limited (the “Company”) and its subsidiaries (the “Group”),
which comprises the consolidated statement of financial position as at 30 June 2017, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity
and the consolidated statement of cash flows for the year then ended, 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 the Group 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 2017 and of its financial
performance for the year then ended; 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 confirm that the independence declaration required by the Corporations Act 2001, which has been given
to the directors of the Company, would be in the same terms if given to directors as at the time of this
auditor’s report.
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 for 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.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
Key Audit Matter
How the scope of our audit
responded to the Key Audit Matter
Accounting for acquisitions
Our procedures included, but were not limited to:
On 28 February 2017 the Group
acquired Cooper Energy Sukananti
Limited (“CESL”) for gross
consideration of $3,071,444. This is a
significant acquisition for the Group
and details are disclosed in Note 18.
Accounting for this acquisition requires
significant judgement by management
to determine the fair value of the
acquired assets and liabilities.
obtaining an understanding of the terms and conditions of the
share sale agreement to enable us to assess management’s
accounting treatment including the determination of the deferred
consideration;
evaluating the process that management and the directors were
following to account for the acquisition;
assessing the fair values of the assets and liabilities acquired; and
assessing the fair values of the consideration payable.
We also assessed the appropriateness of the Groups’ disclosures in
note 18 to the financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group’s annual report for the year ended 30 June 2017, 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 ability of the Group 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 Group or to cease operations, or has 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.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
49
Bass Oil Limited Annual Report 2017
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible for
the direction, supervision and performance of the Group’s audit. We remain solely responsible for our
audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance in
the audit of the financial report of the current period and are therefore the key audit matters. We describe these
matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 11 to 16 of the Director’s Report for the year
ended 30 June 2017.
In our opinion, the Remuneration Report of Bass Oil Limited, for the year ended 30 June 2017, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
DELOITTE TOUCHE TOHMATSU
Darren Hall
Partner
Chartered Accountants
Adelaide, 27 September 2017
50
Bass Oil Limited Annual Report 2017
SHAREHOLDER AND OTHER INFORMATION
Compiled as at 22 September 2017
DISTRIBUTION OF ORDINARY SHARES
Numbers of members by size of holding and the total number of shares on issue:
Ordinary Shares
No. of Holders
No. of Shares
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
192
313
203
663
696
59,073
872,051
1,711,595
27,722,823
2,208,852,042
TOTAL ON ISSUE
2,067
2,239,217,584
1,480 holders held less than a marketable parcel of ordinary shares. There is no current on-market buy-back.
DISTRIBUTION OF OPTIONS EXP 15 DECEMBER 2017 @$0.003
Numbers of members by size of holding and the total number of shares on issue:
Ordinary Shares
No. of Holders
No. of Shares
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
TOTAL ON ISSUE
11
28
26
126
165
356
6,212
91,881
197,937
5,221,350
380,585,895
386,103,275
260 holders held less than a marketable parcel of ordinary shares.
SUBSTANTIAL SHAREHOLDERS
As disclosed in notices given to the Company.
Name of Substantial Shareholders
Interest in Number of Shares
Beneficial and non-beneficial
% of Shares
Cooper Energy Ltd
Miller Anderson Pty Ltd
South Australian Resource Investments Pty Ltd
Tattersfield Group
353,361,294
223,688,815
215,829,397
197,978,993
15.78
9.99
9.64
8.84
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Bass Oil Limited Annual Report 2017
SHAREHOLDER AND OTHER INFORMATION (Continued)
Compiled as at 22 September 2017
VOTING RIGHTS
At meetings of members or classes of members:
(a)
each member entitled to vote may vote in person or by proxy, attorney or representative;
(b)
on a show of hands, every person present who is a member or a proxy, attorney or representative of a
member has one vote; and
(c)
on a poll, every person present who is a member or a proxy, attorney or representative of a member has:
(i)
(ii)
for each fully paid share held by him, or in respect of which he is appointed a proxy, attorney or
representative, one vote for the share;
for each partly paid share, only the fraction of one vote which the amount paid (not credited) on the
share bears to the total amounts paid and payable on the share (excluding amounts credited),
subject to any rights or restrictions attached to any shares or class or classes of shares.
THE 20 LARGEST HOLDERS OF ORDINARY SHARES
Holder
Ordinary Shares
% of Total Issued
Somerton Energy Ltd
Miller Anderson Pty Ltd
Tattersfield Securities Ltd
South Australian Resource Investments Pty Ltd
Icon Holdings Pty Ltd
Chesser Nominees Pty Ltd
Crescent Nominees Pty Ltd
Wingmont Pty Ltd
Small Business Finance Pty Ltd
Mr P Sciancalepore & Mrs P Sciancalepore
Starbush Pty Ltd
Mr T Burrows
BNP Paribas Nominees Pty Ltd
Mr P H Chua
Mr D Vigolo
Mr M A Tkocz & Ms S E Evans
Mr S H Bell & Mrs J K Berveling
Yavern Creek Holdings Pty Ltd
Mr N Guglielmo & Mr G Guglielmo
Mr M Lindh & Mrs B Lindh
353,361,294
204,800,000
104,108,778
100,867,999
96,151,310
92,068,120
88,174,215
38,400,000
37,401,351
26,886,372
24,337,000
23,371,076
21,781,006
20,230,000
20,000,000
20,000,000
19,704,765
19,704,765
18,888,815
18,112,000
15.78
9.15
4.65
4.50
4.29
4.11
3.94
1.71
1.67
1.20
1.09
1.04
0.97
0.90
0.89
0.89
0.88
0.88
0.84
0.81
The 20 largest shareholders hold 1,348,348,866 shares representing 60.22% of the issued share capital.
52
Bass Oil Limited Annual Report 2017
SHAREHOLDER AND OTHER INFORMATION (Continued)
Compiled as at 22 September 2017
THE 20 LARGEST HOLDERS OF OPTIONS EXP 15 DECEMBER 2017 @$0.003
Holder
Ordinary Shares
% of Total Issued
Miller Anderson Pty Ltd
South Australian Resource Investments Pty Ltd
Icon Holdings Pty Ltd
Chesser Nominees Pty Ltd
Crescent Nominees Pty Ltd
Tattersfield Securities Ltd
Small Business Finance Pty Ltd
Mr S H Bell & Mrs J K Berveling
Yavern Creek Holdings Pty Ltd
Mr M A Tkocz & Ms S E Evans
Mr C L Bollam
Allowside Pty Ltd
Margadh Stoc Pty Ltd
Mr M Burford
Wingmont Pty Ltd
Mr O J Foster
Mr A D Beijl
Campbell Trading Co. Ltd
Mr P Sciancalepore & Mrs P Sciancalepore
Mr D G Knight
38,400,000
18,912,745
18,028,370
17,262,770
16,532,660
13,895,395
11,700,675
9,602,382
9,602,382
8,456,381
8,219,563
7,776,929
7,671,348
7,653,751
7,200,000
6,000,000
5,724,138
5,402,051
5,041,195
5,000,003
9.95
4.90
4.67
4.47
4.28
3.60
3.03
2.49
2.49
2.19
2.13
2.01
1.99
1.98
1.86
1.55
1.48
1.40
1.31
1.29
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Bass Oil Limited Annual Report 2017