ANNUAL REPORT 2018 Front Cover Images:
Ensign 950 drilling Jarrar 5 oil appraisal well
Naccowlah Block SW Queensland.
October 2018
K E Y O U T C O M E S & O U T L O O K
O IL PRODUCTI ON AND DEVELOPMENT
• Bounty group achieving strengthening oil revenue in Queensland expected to reach
$2.6 million in 2019 with:-
• Three successful Birkhead zone oil appraisal wells at Watkins and Jarrar Fields; Naccowlah
Block, South-west Queensland
• Further 6 - 8 appraisal wells programmed
• Planning for 2019 commencement of Surat Basin oil production
• Improving oil output and strong A$ oil prices at around A$100
• Naccowlah drilling expected to increase oil reserves
O IL EXPLORATION
• Bounty oil and gas exploration acreage in Surat Basin will underwrite future resource
and revenue growth
• Bounty achieves full control of Rough Range oil project, Western Australia
• Bounty pursuing AC/P 32 Timor Sea farm-out as oil prices strengthen
FU L L YEAR 20 18 - RESULTS
• Group petroleum revenue for the year down 41% to $1.57 million (2017: $2.7 million)
primarily due to reduced Tanzania gas sales
• Operating loss of $0.27 million (2017: Profit $0.9 million) before non-cash expenses
• Cash and current assets at 30 June 2018 were $2.48 million with nil debt
ANNUA L GENERAL MEETING
The 2018 Annual General Meeting will be held at
Amora Hotel Jamison Sydney, 11 Jamison Street, Sydney NSW 2000
on 27 November 2018 commencing at 11.00 a.m.
The Notice of Meeting and Proxy Form have been mailed separately
from this Annual Report.
Bounty Oil & Gas NL Annual Report - 2018
TABLE OF CONTENTS
Key Outcomes
Chairman’s Review
CEO’s Review
Project and Operations Review
Corporate Governance Statement
Page
Inside
Cover
2
3 – 5
6 – 13
14
Directors Report including Remuneration Report
14 – 25
Auditor's Independence Declaration
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Contents of the Notes to and Forming Part of the
Financial Statements
Directors Declaration
Independent Auditors Report to Members
26
27
28
29
30
31 – 54
55
56 – 59
Website
Bounty maintains a website at:
www.bountyoil.com
On our website you will find full
information about the Company.
Every announcement made to
the Australian Securities
Exchange (ASX) is published on
the website. You will also find
detailed information about the
Company's Exploration and
Production Permits.
Stock Exchange Listing
Bounty Oil & Gas N.L. securities
are listed on the Australian
Securities Exchange.
Additional Information Required by ASX Listing Rules
60 – 61
ASX Code: BUY
Schedule of Petroleum Tenements
Abbreviations
Corporate Directory
62 – 63
64 – 65
66
Bounty Oil & Gas NL
ACN: 090 625 353
ABN: 82 090 625 353
Annual General Meeting:
The 2018 Annual General Meeting will be held at Amora Hotel Jamison Sydney, 11 Jamison Street, Sydney NSW 2000,
on 27 November 2018, commencing at 11.00 a.m.
The Notice of Meeting and Proxy Form have been mailed separately from this Annual Report.
Bounty Oil & Gas NL Annual Report - 2018
CHAIRMAN’S REVIEW
Dear Shareholder
Bounty has always pursued conventional oil and gas production and the very recent strengthening of the oil price to
around A$107 (USD76) plus recent drilling success; sees your company likely to significantly increase petroleum
revenue in 2019. This follows a challenging and difficult year for your company. The price of crude oil languished in
2014 to 2017 with a decrease in drilling activity and the operator of our Kiliwani North gas project in Tanzania has so
far failed to collect overdue payments for gas sold by Bounty to the Tanzania power authority under contract. Gas
production from the Kiliwani North gas well declined sharply in late 2017 and the reservoir was compartmentalised,
meaning the initial gas reserves likely cannot be recovered without additional drilling. Bounty doubts that further
investment in the Field is justified. The well was shut-in to allow pressure build up for most of the last half-year.
These factors resulted in a reduction in income from petroleum production to AU$1.57 million for the year and a
non-cash impairment of Bounty’s interest in the Tanzania joint venture of $1.27 million.
However, on a much brighter note, the Naccowlah Block in SW Queensland, has had four successful oil wells, Irtalie
6, Watkins 2, Watkins 3 and Jarrar 4 cased and suspended during and since year end. The Watkins wells intersected
an extensive oil pool in the Birkhead/Hutton zones and are excellent producers of light sweet crude. The Tapis
crude oil price has risen sharply in the last few months to peak at AU$126 per barrel. The production from these
wells exceeded delivery capacity, and additional pipeline capacity has been installed which will lift production in
coming periods. Jarrar 4 has recently been cased and suspended pending production.
This will have a very significant positive effect on your company's income for the current year.
Progress with preparation of the Alton Oilfield and Downland Gas Field in the southern Surat Basin of Eastern
Queensland to recommence production has been slow due to operational and environmental permitting. However,
the permitting process is nearing completion, and Alton and Downlands are expected to come back on line in 2019,
adding significantly to the company's petroleum income.
There has been some interest in a farm-in to the AC/P 32 permit on the NW Shelf of Western Australia, with two
companies reviewing the data, while the operators of PEP 11 have completed a 2D seismic survey on the Baleen
play, and we await further activity.
With increased crude oil prices, excellent production from Naccowlah Block, and additional production from Surat
Basin, the company is looking forward to a much improved result for 2019.
I wish to thank shareholders for their patience during this hard year. I would also like to thank my fellow Board
members for their support, and Bounty’s employees for their continued good work and dedication during this year.
Graham Reveleigh
Chairman
29 October 2018
2
Bounty Oil & Gas NL Annual Report - 2018
CEO’S REVIEW
Introduction
Subsequent to year end in July 2018 Bounty participated in two exceptional oil appraisal wells at the Watkins Field
in the Naccowlah Block and it has participated in a further success with Jarrar 4.
With significant sales increases since the end of the period and dramatically improved oil prices peaking at A$126
per barrel Bounty will participate in 6 - 8 additional appraisal and NFE oil wells in Naccowlah Block.
Bounty is actively working to recommence oil production at PL 2 Alton and gas production at PL 441 Downlands
after finally obtaining Native Title clearance by dismissal of the long-standing Mandandanji claim at Surat,
Queensland. Bounty has other Surat Basin gas exploration opportunities to contribute to future revenue growth in
the reconstituted ATP 2028P (formerly ATP 754P). Bounty also holds 15% of PEP 11 Offshore Sydney Basin in what
will have the potential to lead up to a new exploration drill of a major gas exploration project near Newcastle, NSW.
Offshore operations are not affected by the various onshore gas exploration road blocks.
At Rough Range, Western Australia Bounty now has 100% ownership of the Rough Range Oilfield and tangibles.
Bounty has faced frustrating technical and commercial dealings with the Tanzania gas project due to shut-in of the
Kiliwani North well; TPDC defaulting on gas payments and sovereign risk.
Bounty anticipates revenue growth to $2.6 million in 2019 and beyond.
More details on current projects are set out in the Project and Operations Review below.
Highlights for the Year:
•
•
•
•
•
Cash and current assets at 30 June 2018 were $2.48 million (2017: $2.39 million) with nil debt.
As oil prices strengthen Bounty is planning to increase oil production and revenue in 2019 to $2.6 million
from its Cooper Basin and Surat Basin, Queensland assets.
Bounty achieved lower petroleum revenue down 41% to $1.57 million (2017:$2.68 million) with significantly
less contribution from Tanzanian gas sales.
Operating loss of $0.27 million (2017: operating profit $0.89 million) before non-cash expenses including
impairment and amortisation of oil & gas assets of $1.8 million.
Net loss of $2.08 million (2017: $0.38 million loss).
Summary
See the Directors Report for further 2018 production and revenue details.
Bounty’s petroleum revenue is expected to increase to around $2.6 million in 2019 by material contributions from
the recent Birkhead zone discoveries at Watkins Field, Naccowlah Block. The joint venture is planning 6 – 8
appraisal wells in Naccowlah Block and a project to increase pipeline capacity at Watkins Field has been completed.
In addition Bounty will move to produce its 100% Surat Basin oil and gas development properties.
Oil has entered a recovery phase and the energy sector remains the world’s most important business exposed to
global growth. As Australia confronts the challenge of finding more domestic oil Bounty is increasing its acreage and
oil reserves and is well placed for growth. It will wherever possible focus on Bounty operated projects.
SW Queensland – Cooper Basin
Oil production increased to 13,162 bbls (2017: 11,058 bbls) and with steadily rising oil prices, revenues jumped 89%
to $1.22 million.
3
Bounty Oil & Gas NL Annual Report - 2018
On the production front the Santos Limited operated ATP 1189 Naccowlah Block has continued to provide oil
revenue. Revenue was impacted by lower rates due to the impact of lower oil prices in 2017 and deferral of
development drilling.
In July 2017 Bounty had success with the Irtalie East 6 appraisal well discovering good up dip oil in the Basal
Birkhead Formation. Three additional appraisal locations Watkins 2 and 3 at Watkins Field and Jarrar 4 at Jarrar Field
were drilled after the period.
SE Queensland – Surat Basin
Petroleum Lease 2 Alton (PL2) – see Map in Project and Operations Review below.
Bounty is now operator of Petroleum Lease 2 and holds:
100% of the Alton Oilfield and Alton Block.
•
• Alton is 440 km west of Brisbane and Alton oil will be transported and sold into the Brisbane Refinery.
• Development reserves: 167,000 bbls of recoverable oil in the early Triassic age Basal Evergreen sand
reservoir included with a potential 1.136 million bbls of 2P reserves located in the three sands of the
Boxvale/Evergreen Formations.
Production facilities at Alton Oilfield.
Surrounding exploration acreage where there is considerable potential for further reserve additions with
undrilled locations and attic oil in the Evergreen Formation and possibly extensive oil in the lower
Showgrounds Formation which has been proven as a high productivity sand in the area.
•
•
Bounty is now planning to commence oil production at Alton in 2019 which is expected to generate additional
revenue of up to $1 million per annum with significant upside from four undrilled locations; enhanced recovery and
later an appraisal well at Eluanbrook (see below).
Bounty holds an 81.75% interest in the Kooroon JV within PL2 Alton and thereby controls appraisal of the
Eluanbrook Updip target in PL2.
The main features of Eluanbrook Updip are:
• Development: The estimated recoverable resource is 186,000 bbls of oil from P50 OOIP of 625,000 bbls.
• Middle Triassic age Showgrounds Sandstone reservoir.
• Up dip from proven 53o API gravity oil with associated gas.
Oil Growth Projects - AC/P32 Timor Sea
AC/P32 is located in the Ashmore Cartier region in the oil prone and prolific Vulcan Graben region.
Bounty’s efforts at farming out AC/P 32 were made difficult by heavy oil price declines in 2016 and 2017 but we are
seeing signs of recovery in late 2017 and Bounty is aiming to obtain a farm-out and subsequent drill test of the
Azalea Prospect. The prospect is located 25 km northeast of the Montara Oil Development in the Timor Sea.
Bounty’s current assessment is that there are at least two major stratigraphic prospects in the area with the
potential to discover 500 mmbbls original oil in place in the Cretaceous age Puffin Sandstone in the Azalea area (just
to the west of where the Wisteria 1 well was drilled in 2008) with 100 mmbbls recoverable oil. There is also the
potential to discover additional resources in the Jurassic age formations.
Bounty is negotiating to acquire the Cygnus/Polarcus long offset 3D data set to maintain its work commitment
program. The permit is in good standing until mid-2019.
A discovery will lift Bounty into a major project and to being a mid-level Australian oil operator.
4
Bounty Oil & Gas NL Annual Report - 2018
Tanzania – Kiliwani North & Gas Commercialisation
Gas production from Kiliwani North 1 contributed net 88,768 mcf (15,303 boe) to Bounty during the year.
Production rates were under 10 MMcfg/d with the well shut-in in early 2018 for pressure build-up and testing.
Tanzania - Nyuni Area PSA
The Nyuni Area PSA was renewed in late 2011 for an eleven-year period.
The operator, Aminex PLC, was negotiating a work program variation with TPDC to enable the acquisition of deep
water 3D seismic in the outboard sector of the PSA area and the deferral of the two exploration well drilling
commitment.
Unconventional Gas Business
Looming gas supply shortages in eastern Australia continue to provide encouragement for the pursuit of
conventional and unconventional gas in PRL’s 33 – 49 (formerly PEL 218) (Nappamerri Project); Cooper Basin, South
Australia and for deep gas in some of Bounty’s other permits principally ATP 2028P (formerly ATP 754P); Surat Basin.
Conclusion
Oil revenue increases to $2.6 million are expected in 2019.
Management will pursue additional oil opportunities from within its own operated oil reserves at Alton in the Surat
Basin which will be placed on production in 2019. Further afield it will fully review the Rough Range permit and seek
parties for an exploration well in PL 16 Rough Range.
On the growth front Bounty is seeking additional opportunities so shareholders may also obtain good leverage
through a drill test in AC/P 32 Azalea. Bounty holds excellent Permits as has been demonstrated by the Naccowlah
Block successes.
PHILIP F. KELSO
Chief Executive Officer
29 October 2018
5
Bounty Oil & Gas NL Annual Report - 2018
PROJECT and OPERATIONS REVIEW
Bounty Projects
Bounty has production and exploration operations in Africa and Australia.
Summary Land Position
Offshore Australia
AC/P 32
PEP 11
Offshore Tanzania
Nyuni PSA
Kiliwani North
Onshore Australia
Naccowlah Block Eromanga Basin
Nappamerri South Australia
Surat Basin Queensland
Rough Range Carnarvon Basin
Equity
100.00%
15.00%
Gross Km2
336.0
4576.5
Net Km2
336.0
686.5
10.00%
9.50%
2.00%
23.28%
Various
Various
844.9
168.0
2556.3
1603.6
1003.3
873.9
84.5
16.0
51.1
373.3
559.2
799.7
Total
11,962.5
2,906.3
This table summarises Bounty’s land position as at 30 June 2018. Bounty’s full schedule of tenements as at 30 June
2018 is included in Additional Information Required by ASX Listing Rules at the end of this Annual Report.
Bounty projects not specifically referred to below in this Project Review are summarised in Bounty’s 2017/8
Quarterly Activity Reports to the ASX and on Bounty’s website: www.bountyoil.com
6
Bounty Oil & Gas NL Annual Report - 2018
OIL BUSINESS
Production
Bounty’s petroleum production and sales for the year ended 30 June 2018 are summarised in the Review of
Operations set out in the Directors Report.
Development
ATP 1189P (formerly ATP 259P) Naccowlah Block and Associated PL’s SW Queensland - Bounty 2%
Location: Surrounding Jackson, Naccowlah and Watson Oilfields
Background
The Naccowlah Block covers 2556 km2, 42% of which is covered by ATP 1189P and the remainder in 24 petroleum
leases (PL’s) and applications covering producing fields and one retention application (potential commercial areas).
There is significant production infrastructure and pipelines. The Naccowlah Block averaged just over 40 BOPD net to
Bounty in the last quarter and Bounty holds 2P + 2C (Contingent) reserves of 127,000 bbls. In past years the
7
Bounty Oil & Gas NL Annual Report - 2018
Operator (Santos Limited) has been very successful in maintaining production at a constant level through production
optimisation, completing oil behind pipe and successful near field exploration. An example of this action this year
was the outstanding success in conversion of the Cooroo NW 1 Well from a linear rod pump to a beam pump which
tripled production.
The Jackson and Jackson South fields and associated production facilities are one of the largest in onshore Australia.
2018/2019 Development
The Irtalie East 6 well was spudded on 17 July 2017 drilled to total depth of 2,070 metres and was cased and
suspended as a future Birkhead Formation oil producer. The joint venture has drilled 3 wells since June 2018 with
significant Birkhead zone discoveries at Watkins Field and Jarrar Field. A further 6 – 8 wells are planned.
Improving oil prices have allowed the JV to bring forward plans for up to eight wells to be drilled in 2018/19 at
locations tagged in the Figure above, potentially adding significantly to Bounty’s reserves and production from this
area.
Surat Basin, Southeast Queensland
Group Interests in this project are
Permit
ATP 471 SG
ATP 2028
Status
Granted
Renewed
Interest
24.75%
50.0%
PL 441
Renewing
100.0%
Alton Oilfield
PL 2 C
PL 2 Alton
Kooroon JV Block
PL 2 A
Renewing
Renewing
100.0%
100.0%
Renewing
8
81.75%
Bounty Oil & Gas NL Annual Report - 2018
PL 2 B
Renewing
81.75%
Location: From Surat to Alton Oil Field, SE Queensland
Background
Bounty initially gained an interest in the Surat Basin through the purchase of Ausam Resources Pty Ltd in 2009, and
has added to the acreage through strategic acquisition. In 2016 it acquired full control of PL 2. Hydrocarbons in the
southern part of the Surat Basin are generated in the underlying Bowen Basin Permian sequence and are liquids
rich. The oil is trapped in the Triassic age Showgrounds Sandstone and in the Evergreen Formation.
The northern section of Bounty's acreage includes the Permian age Tinowan Formation which frequently has a
liquids rich gas charge and in places, like Bounty's PL 441 (exPL119) Downlands property, good porosity and
permeability. Work continued on renewal of PL 441 during 2018 and at the end of the period the area received
native title clearance.2019 work will involve obtaining gas sales contracts and gas facilities upgrades.
PL 2 Alton - Bounty 100%
PL 2 Kooroon Block – Bounty 81.75%
Location: 70 km. East of St George SE Queensland
Background
PL 2 (Alton Field) has to date produced over 2 million barrels from the Jurassic Age Evergreen Formation. Bounty
estimates 2P reserves at Alton of 0.216 million bbls.
2019 Operations
Following regulatory clearances in 2019 Bounty will work over 2-3 wells at Alton and commence oil production while
it generates a full field development plan including a plan to drill an up-dip appraisal well at Eluanbrook in the
northwest section of PL2 and to drill up to 3 attic oil locations within the Alton pool.
Initial production of 45 bopd is expected from the Evergreen Formation and then moving to develop attic oil with
potential recoverable oil of 167,000 bbls. Bounty is commencing studies on the potential for significant resources in
the underlying Showgrounds Formation.
Exploration - Surat Basin, Queensland and Nappamerri Trough, South Australia
Other exploration projects in these Basins have been summarised in Bounty’s 2017/2018 Quarterly Activities
Reports to the ASX.
2018 Activities and Further Programmes
Growth Projects
AC/P 32 – Offshore Vulcan Sub-basin, Ashmore and
Cartier Territory - Bounty 100%
Location: Offshore 500 Km west of Darwin, NT.
Background
This permit is located within the Vulcan Sub-basin. In 2012
Bounty acquired a 100% interest in the permit and in June
2014 it was renewed for a further five years with a well
commitment in Year 2 and Year 5 if needed. The principal
target is the Azalea Prospect a 500 MMboip potential pool
with recoveries in the 20 - 40% range.
The Azalea Prospect is:
9
Bounty Oil & Gas NL Annual Report - 2018
•
•
•
•
•
•
•
Located in a prolific hydrocarbon province
Surrounded by multi-million barrel oil fields
One of the largest untested potential oil pools in the Timor Sea
Up dip from proven oil in Birch 1 and Swallow Oil Field 14 km to the west
Outlined by seismic amplitude and AVO anomalies
Associated with direct hydrocarbon indicators in the form of gas chimneys, diagenetic and shallow gas zones
overlying the up dip edge
Drill ready in water depths suitable for a jack up rig ~ 100 metres
2018 Exploration
Further interpretation and evaluation of the reprocessed seismic and inversion continued to define the
Azalea Prospect with a potential 500 million barrels of oil in place of which over 100 million barrels would
be recoverable.
In addition to Azalea; Bounty has established other new structural stratigraphic leads with potential in the
10 – 40-million-barrel recoverable range.
Bounty obtained an extension to the licence term from NOPTA to enable more definitive studies of the
potential fluid content of the Azalea Prospect and at the end of the period was negotiating to acquire the
long offset modern 3D seismic data recently acquired by Polarcus over the permit.
GAS/CONDENSATE BUSINESS
Development
Kiliwani North Development - Nyuni Block Offshore Mandawa Basin Tanzania – Bounty 9.5%
Location: 30 Km offshore from Rufiji Delta
Tanzania
Background
Kiliwani North 1 well was drilled in 2008 and
hit gas in Neocomian (Lower Cretaceous
age) Sands, the same reservoir as at the
adjacent Songo Songo Gas Field. The field
was tested at 40MMcfg/d and a reserve of
28 Bcf gas
(Bounty 2.66 Bcf) was
established. A 24-year production Licence
was issued in 2011.
2018
the
Gas production from Kiliwani North 1 was
it became
halted during the year as
reservoir was
apparent
that
compartmentalised with a very
slow
recharge into the well bore. Late in the
period testing also indicated that the lower
perforations may be compromised and that
a re-perforation may allow a further 8 BCF
gas to be extracted from the well.
10
Bounty Oil & Gas NL Annual Report - 2018
Future Development 2019
Reprocessing of the existing seismic and careful mapping was undertaken to attempt to delimit faults
compartmentalising the reservoir. The aim is to find a new drill location for another well to tap around 30 BCF
potentially still left in the pool.
Growth Projects
Nyuni PSA Block – Offshore Mandawa
Basin Tanzania - Bounty 10%
Location: 30 Km offshore from Rufiji
Delta Tanzania
Nyuni Block PSA Exploration – 2018
Planning for a 3D seismic survey over
the deep-water area
in the Permit
continued during 2018.
At the end of the period the operator,
Aminex PLC, was still negotiating a work
program variation with TPDC to enable
the acquisition of deep water 3D seismic
in the outboard sector of the PSA area
and the deferral of the two exploration
well drilling commitment.
the variation
the work
Once
commitment licence is granted, a re-
tender process is planned to select a 3D
seismic contractor capable of acquiring
high resolution 3D seismic over the key
Pande West lead in 2019 and to identify
other potential prospects in the deep
water section with a view to bringing them to drill-ready status. The survey was designed to detail the up-dip
extension of Lead 3 in the adjacent Ophir/RakGas East Pande permit which independent consultants suggest could
contain 1.3 TCF gas within Bounty’s Nyuni PSA area. There are numerous other deep-water channel/fan features
apparent from the limited seismic coverage available with associated seismic anomalies. The Exploration Licence is
in good standing.
to
PEP 11, Offshore Sydney Basin, New South Wales – Bounty 15%
Background
PEP 11 covers 4,576 km2 of the offshore Sydney Basin immediately adjacent to the largest gas market in Australia
and is a high impact exploration project.
11
Bounty Oil & Gas NL Annual Report - 2018
of
These prospects remain
one
the most
significant untested gas
plays in Australia. The
PEP 11 joint venture has
demonstrated
gas
considerable
and
generation
migration in the offshore
Sydney Basin, with the
previously
observed
mapped prospects and
highly
being
leads
prospective for gas.
2018 Exploration
During the period the
operator completed a
small 2D seismic survey
at Baleen to attempt to define a drill location located approximately 30 km south east of Newcastle, New South
Wales in PEP 11, as a work commitment for the petroleum title. This “Baleen HR” survey covered approximately
200-line km and was also tied-in to the New Seaclem-1 well location to provide lithological control.
Bounty conducted a full review of the permit during the period. The title is in good standing.
Subsequent commitments in PEP 11 include an exploration well with a possible 3D seismic survey to be undertaken
in 2019/2020. The present gas shortage in NSW has provided increased interest in the offshore potential of PEP 11.
The Potential for discovery of commercial quantities of natural gas in PEP 11 provides an exciting prospect for the
PEP 11 Joint Venture including Bounty.
12
Bounty Oil & Gas NL Annual Report - 2018
Bounty Oil and Gas NL – Group Petroleum Reserves and Resources - at 30 June 2018
The Group has reviewed all Reserves and Resources to comply with Chapter 5 of the ASX listing rules, the result is
presented net to Bounty as at 30 June 2018:-
Discovered3
Producing4
Naccowlah
Kiliwani North
Total Producing
Contingent5
Alton Shut In
Alton Attic
Downlands Gas Field
Downlands Oil Leg
Eluanbrook
Kiliwani North
Naccowlah
Spring Grove
Total Contingent
Total Discovered
Undiscovered Prospective6
Surat (Mardi Prospect)
AC/P 32
Nyuni
PEP 11
Total Undiscovered
MMboe8 (Recoverable)
Note
1P
0.034
0.000
0.034
1C
0.048
0.020
0.101
0.018
0.187
0.221
Low
0.08
20
15
10.7
45.8
2P
0.081
0.000
0.081
2C
0.048
0.168
0.360
0.340
0.143
0.138
0.046
0.347
1.590
1.670
Best
0.21
113
24
128.8
266.2
3P
0.143
0.000
0.143
3C
0.048
0.168
0.360
0.340
0.197
0.501
0.122
0.347
2.083
2.227
High
0.42
302
44
128.8
475.4
1
1
1
1
1
2
2
2
1
2
2
2
2
2
Method / Notes
1.
2.
3.
4.
5.
6.
7.
8.
Deterministic Estimates – based on actual measurements of a petroleum reservoir and contained
petroleum.
Probabilistic Estimates (P90 ≡ 1P, P50 ≡ 2P, P10 ≡ 3P) – in probabilistic maths the solution or outcome
is a prediction with uncertainties that can be measured using chance or probability.
Drilled and proven moveable oil or gas
Discovered oil which is on production including nearby undeveloped oil
Discovered oil or gas whose commercial worth is contingent upon signing sales contract, production
testing and proving economic viability, shut in petroleum awaiting renewal of permit, or zones
adjacent to Discovered oil requiring further appraisal drilling
Specific targets for exploration based on volume estimation from seismic surveys and based on
untested models for hydrocarbon generation, migration and entrapment.
Estimates as at June 30, 2017
Converted at the rate of 182 boe = 1 MMcfg
Material Changes: Material changes from the prior period are:
1.
2.
3.
Failure of Kiliwani North well Tanzania reduced producing reserves, along with natural decline
The inclusion of Contingent Resources from Kilwani North due to well shut-in increased contingent
resources
Other changes due to production, and minor adjustments based on better data and slight changes in
categorisation of resources.
13
Bounty Oil & Gas NL Annual Report - 2018
CORPORATE GOVERNANCE STATEMENT
Bounty Oil and Gas NL’s Corporate Governance Statement is on its website www.bountyoil.com and has been
released to the ASX.
DIRECTORS’ REPORT
Your directors present their report on the consolidated entity Bounty Oil & Gas NL (“Bounty”, “company” or “the
group”) being the company and its controlled entities for the financial year ended 30 June 2018.
Directors
The names of the directors in office at any time during or since the end of the financial year are:-
•
•
•
G. C. Reveleigh
C. Ross
R. Payne
(Chairman)
(Non-executive Director)
(Non-executive Director)
Company Secretary
The following persons held the position of company secretary and chief financial officer of the group during the
financial year:
•
S. Saraf
Principal Activities
The principal activity of the company and the group during the financial year was that of exploration for,
development, production and marketing of oil and gas (petroleum). Investment in listed entities is treated as a
secondary activity and business segment.
There were no significant changes in the nature of the company’s principal activities during the financial year.
Operating Results
Consolidated loss of the group attributable to equity holders after providing for income tax amounted to $2.08
million (see comparative details below).
Profit/(loss) from ordinary activities before
income tax
Income tax attributable to loss
Net profit/(loss) after income tax
Consolidated
2018
$ million
(2.08)
-
(2.08)
Consolidated
2017
$ million
(0.39)
-
(0.39)
Revenue from continuing operations for the period was down 41% on the previous year (2017:
$2.7 million) primarily due to material decline in gas production in Tanzania.
The operating loss was determined after taking into account the following material items:
•
•
•
Petroleum revenue; (mainly from oil and gas sales) of $1.57 million
Direct petroleum operating expenses of $0.94 million
Employee benefits expense of $0.72 million
14
Bounty Oil & Gas NL Annual Report - 2018
•
Non-cash expenses for:
o
Impairment charge to oil and gas assets of
o Amortisation and depreciation expenses of
$1.38 million
$0.50 million
Details of drilling activity, exploration and development operations and cash flows for the year ended 30 June 2018
have been reported by the company to the Australian Securities Exchange in the Quarterly Activity Report and
Appendix 5B for each of the quarters during the year and in additional announcements on particular items.
A summary of revenues and results of significant business and geographical segments is set out in Note 4 to the
Financial Statements. Brief details are set out below:
Review of Operations
Production & Sales:
During the year ended 30 June 2018, the company:
•
•
Produced oil from several oil fields and leases operated by Santos Limited in ATP 1189P, Naccowlah Block, SW
Queensland.
Produced and sold natural gas from Kiliwani North Licence, Tanzania operated by Aminex PLC.
Petroleum revenue and production in barrels of oil equivalent (boe) are summarised below:-
Naccowlah
Block
Bounty Share
(2% interest)
Kiliwani North
Licence
Bounty Share
(10%)
Total
Revenue $
Production boe
$1.22 million
13,162
$0.35 million
15,303
$1.57 million
28,465
Exploration and Development
Significant exploration and development operations during the year under review were:
Australia
Onshore
Cooper Basin, South-western Queensland
•
ATP 1189P Naccowlah Block; SW Queensland: Oil production operations continued satisfactorily at the
producing fields including Jackson and from wells including recent wells in the Irtalie East, Watson and
Watkins Fields.
•
•
Most Later Development Plans had been filed for the Petroleum Leases within the Naccowlah Block
ATP 1189P.
Further development drilling was completed and new drilling planned by the operator Santos Limited
as oil prices recovered in 2018 and after cost cutting. During the period a new development well –
Irtalie East 6 was drilled and cased as a potential new producer from the Birkhead Zone. Further
appraisal wells in the Watkins project areas were committed at the end of June 2018.
15
Bounty Oil & Gas NL Annual Report - 2018
Surat Basin; Eastern Queensland
•
•
•
•
•
Petroleum Lease 2 Alton: Further planning is underway to develop these reserves in 2019 initially by
producing oil from Alton Oilfield.
Bounty group now holds 100% of the Alton Oilfield, 100% of the Alton JV Block and 81.75%% of the Kooroon
JV all within PL 2 Alton.
As a result Bounty group is holding in the Alton Oilfield; development reserves of 167,000 bbls of
recoverable oil in the early Triassic age Basal Evergreen sand reservoir plus a potential 1.136 million bbls of
2P reserves located in the three sands of the Boxvale/Evergreen Formations.
And an estimated recoverable resource of 186,000 bbls from P50 OOIP of 625,000 bbls in the Middle Triassic
age Showgrounds Sandstone reservoir at the Eluanbrook Prospect within that part of PL2 known as the
Kooroon JV.
Following commencement of oil production in early 2019 Bounty will continue development of these
resources.
ATP 2028P (formerly ATP 754P):
•
Bounty group as the operator of the ATP 754P joint venture co-operated with Armour Energy (Surat Basin)
Pty Ltd to file Later Work Programs for and obtain the grant of ATP 2028P covering the southern section of
former ATP 754P. The northern section was granted 100% to Armour as ATP 2029P and the group joint
venture interest in PL 71 (Exploration) was transferred to Armour. Armour has a seismic option aimed at
conducting a drill test of the Mardi Prospect in which Bounty group will be free-carried. Drilling of that multi-
zone test in ATP 2028P is planned for 2019 to test for oil and gas in several zones down to the Permian age
sequence.
Rough Range, Western Australia
•
During the period the group increased its interest in EP 435, EP 357 and Petroleum Licence L16 onshore
Carnarvon Basin and the Rough Range Oilfield and production tangibles to 100% by acquisition of Rough
Range Oil Pty Limited.
Offshore
AC/P 32 Ashmore Cartier Territory; Timor Sea: Bounty 100%
o
o
In 2012 Bounty acquired a 100% interest in the permit. The principal target is the Azalea Prospect a
500 MMbbl original oil in place potential pool with a recoverable oil estimate of 100 MMbbls.
During the period NOPTA granted an extension of the Year 1 to 3 program for Bounty to licence
and interpret 252km2 of the Polarcus Cygnus 3D Survey Data. This will enable more definitive
studies of the potential fluid content of the Azalea Prospect based on the long offset modern data
acquired over the area by that new 3D survey. Bounty was negotiating acquisition of this 3D data
at the end of the period.
o
The Azalea Prospect is:
Located in a prolific hydrocarbon province – the Vulcan Sub-basin.
Surrounded by multi-million barrel oil fields.
§
§
§ One of the largest untested potential oil pools in the Timor Sea.
§ Up dip from proven oil in Birch 1 and Swallow Oil Field 14 km. to the west.
§ Outlined by seismic amplitude and AVO anomalies.
§ Associated with direct hydrocarbon indicators in the form of gas chimneys, diagenetic
and shallow gas zones overlying the up dip edge.
§ Drill ready in water depths suitable for a jack up rig – i.e. 120 metres.
16
Bounty Oil & Gas NL Annual Report - 2018
PEP 11; New South Wales: Bounty 15% interest: The operator undertook a 2D seismic survey in early 2018 and the
permit is in good standing. With major gas supply issues developing in eastern Australia; the operator has identified
a new target at Baleen Prospect with AVO analysis of seismic data.
Other Properties
During the period, Bounty continued to fund exploration and development expenditure in connection with its other
operated and joint venture interests located in Queensland and South Australia and Western Australia. Bounty is
actively seeking additional projects.
Tanzania
Kiliwani North Development Licence
During the period Bounty continued gas production and sales in Tanzania with accrued sales of $0.35 million. Gas is
sold under a Gas Sales Agreement (“GSA”) to the Tanzania Petroleum Development Corporation (“TPDC”).
The operator of the Kiliwani North Development Licence JV is Ndovu Resources Ltd (a subsidiary of Aminex PLC).
TPDC was invoiced for gas produced at the end of each month and the JV received revenue during the period. There
were however material delays in receipt of revenue from TPDC under the GSA.
During the year ended 30 June 2018 gas production from the Kiliwani North-1 well was curtailed and the well shut in
for pressure build-up and studies aimed at recovering additional reserves.
Nyuni PSA:
Bounty’s interest decreased to 6.66% and new 3D seismic surveys were planned to image deep water turbidite gas
plays of up to 1.3 TCF potential.
A major gas target named Pande West has been identified in the deep water eastern section of the Nyuni PSA Block.
Corporate – Share Issues
During the year ended 30 June 2018 the company did not make any equity issues.
Dividends Paid or Recommended
No dividends have been paid or declared for payment for the year ended 30 June 2018 and no dividend is
recommended.
Financial Position
The net assets of the group reduced by $2.1 million in the period 1 July 2017 to 30 June 2018. The significant
underlying movements resulted from the following items:
o
Impairment of oil and gas assets of
$1.38 million.
o Amortisation of production assets
$0.5 million.
17
Bounty Oil & Gas NL Annual Report - 2018
At 30 June 2018 current assets were $2.5 million.
During the financial year the company invested:-
•
•
$ 0.34 million on petroleum development property acquisitions and in completions and surface production
facility upgrades mainly in ATP 1189P Queensland to further exploit its existing proved producing oil reserves
and to increase its oil reserves.
$ 0.49 million in petroleum exploration projects and acquisitions in Australia and Tanzania as summarised in
the Review of Operations above.
The directors believe the company is in a stable financial position to expand and grow its current operations.
Significant Changes in State of Affairs
There have been no significant changes in the state of affairs of the company during the financial year.
Contingent liabilities and Contingent Assets
As at the date this report, there were no contingent assets or liabilities, other than a disputed litigation claim for
$104,280 which has been included in capital commitments set out in Note 21.
There was no other litigation against or involving Bounty Oil & Gas N.L. or its subsidiaries.
Events after the Reporting Period
No matters or circumstances have arisen since the end of the financial year which have significantly affected or may
significantly affect the operations of the company, the results of those operations, or the state of affairs of the
company in future financial years.
Future Developments, Prospects and Business Strategies
Subject to the amount of its ongoing oil and gas revenues and the availability of new capital; consistent with that
income and the available cash reserves of the group, Bounty will continue:
•
•
•
Production, development and exploration for oil and natural gas (petroleum).
Expand in the business of the exploration for, development of and production of petroleum.
To conduct such operations principally in Australia and Tanzania.
In the coming year the group will focus on the:-
•
•
•
•
•
Development of its existing oil reserves in the Surat Basin and in the Cooper Basin, Queensland aimed at
increasing group oil revenue;
Financing and if successful preparing to drill its major offshore oil targets in AC/P32, Timor Sea;
Acquisition of additional petroleum properties with existing petroleum production or reserves and resources
considered to have potential to develop and/or produce petroleum within an acceptable time frame;
Production of its developed gas reserves and deep water gas exploration in the Kiliwani North and Nyuni
Blocks, Tanzania; and
Development of new business opportunities including other overseas projects.
18
Bounty Oil & Gas NL Annual Report - 2018
Environmental regulations or Issues
The company’s operations are subject to significant environmental regulation under the law of the Commonwealth
of Australia and its States and Territories in respect of its operated and non-operated interests in petroleum
exploration, development and production. Its oil and gas production interests in the State of Queensland are
operated by Bounty group companies, AGL Energy Limited, Armour Energy (Surat Basin) Pty Ltd and Santos Limited
who comply with all relevant environmental legislation. Its offshore exploration operations in AC/P 32 Timor Sea are
conducted by the company in full compliance with all relevant environmental legislation of the Commonwealth of
Australia. Its non-operated offshore operations in PEP 11, NSW are similarly conducted by Asset Energy Pty Ltd a
competent operator. Its non-operated interests in Tanzania are operated by a company incorporated in that
jurisdiction which is a wholly owned subsidiary of a United Kingdom based operator. It complies with all relevant
environmental legislation.
Information on Directors
The names and particulars of the directors of the company during or since the end of the financial year ended 30
June 2018, are:-
Graham Reveleigh
Qualifications
Experience
Special responsibilities:
Charles Ross
Qualifications
Experience
— Non-Executive Director
— BSc. MSc, M. Aus IMM.
— Mr Reveleigh is a professional geologist and has nearly 49 years’ experience in the
resources industry both in Australia and overseas. Early in his career, he worked in
the oil industry, then spent most of his career in exploration, mine management
and construction in the mineral industry. Mr Reveleigh has had extensive
experience in petroleum in recent years as a director of Drillsearch Energy Limited
and its Canadian subsidiary. He retired as a director of those companies in late
2007. He is a Member of the Australasian Institute of Mining and Metallurgy and a
member of the Petroleum Exploration Society of Australia. He was appointed a
director and chairman in 2005.
Chairman of the company; geotechnical advice.
— Non-Executive Director
— BSc.
Mr Ross has had extensive experience in the private and public equity and
corporate finance market in Canada, USA and Europe for 24 years. He has
operated extensively in corporate asset acquisition and divestiture, review and
development of corporate financing strategies, administration, compliance
procedures and investor relations in North America and the Euro zone. He was a
director of Circumpacific Energy Corporation (a subsidiary of Drillsearch Energy
Limited) from 1992 until 2008. This required management involvement in most
aspects of petroleum exploration, development and production operations in the
Western Canada Basin and other areas. He was appointed a director in 2005.
Special responsibilities:
Audit reviews; corporate strategy.
Roy Payne
Qualifications
Experience
— Non-Executive Director
—
Solicitor, Queensland.
Mr Payne is a commercial lawyer with over 33 years’ experience. Prior to working
in private practice as a lawyer he worked for the Department of Justice’,
Queensland for 13 years where he qualified to be a Clerk of the Court and a
Magistrate.
Mr Payne has many years of experience in the corporate world. He has been the
chairman of a listed mining exploration company. He is currently the chairman of
the board of a private ship maintenance and repair company and was the chairman
19
Bounty Oil & Gas NL Annual Report - 2018
Special responsibilities:
and director for many years of two limited liability, not for profit companies that
operate a public art gallery and a gallery foundation. He has a wealth of knowledge
and experience with corporate governance and mining exploration.
Commercial law and Queensland statutory compliance.
Directorships of other listed companies
Directorships of other listed companies currently held by the directors or held in the 3 years immediately before the
end of the financial year are as follows:
Name
Company
Mr G. Reveleigh
Hill End Gold Limited
Mr C. Ross
TSX Listed Companies; Canada:
Goldex Resources Corporation, Norzan Enterprises Ltd.,
Halio Energy Inc. and Tearlach Resources Limited.
Mr R. Payne
Nil
Directors shareholdings
Period of directorship
1 July 2015 to present
1 July 2015 to present
NA
The following table sets out each Directors interest in shares and options over shares of the Company or a related
body corporate as at the date of this report:-
Mr G. Reveleigh
Mr C. Ross
Mr R. Payne
Meetings of Directors/Committees
Bounty Oil & Gas NL
Fully paid ordinary shares
Number
Share options
Number
23,377,928
3,200,000
-
-
-
-
During the financial year, ten (10) meetings of directors were held. Attendances by each director during the year
were as follows:-
Directors’ Meetings
Number eligible to attend
Number attended
Mr G. Reveleigh
Mr C. Ross
Mr R. Payne
10
10
10
10
10
10
The company does not have separate audit or remuneration committees.
Indemnifying Officers or Auditor
During the financial year ended 30 June 2018 the company has not entered indemnity and access deeds with any of
the directors indemnifying them against liabilities incurred as directors, including costs and expenses in successfully
defending legal proceedings. The company has not, during or since the financial year, in respect of any person who
is or has been an auditor of the company or a related body corporate indemnified or made any agreement for
indemnifying against a liability incurred as an auditor, including costs and expenses in successfully defending legal
proceedings.
20
Bounty Oil & Gas NL Annual Report - 2018
The company has paid premiums to insure each of the directors and officers in office at any time during the financial
year against liabilities up to a limit of $5 million for damages and for costs and expenses incurred by them in
defending any legal proceedings arising out of their conduct while acting in the capacity of director of the company,
other than conduct involving a wilful breach of duty in relation to the company. The amount of the premium was
$15,400 for all nominated directors.
Share Options
All options over ordinary shares or securities of Bounty Oil & Gas NL issued in a prior period have lapsed
unexercised. No options were issued during the year ending 30 June 2018 or have since been issued up to the date
of this report.
Accordingly at balance date on 30 June 2018 and at the date of this report, no unissued ordinary shares or securities
of Bounty Oil & Gas NL or any other entity comprising the consolidated entity were under option. No ordinary shares
of the company were issued pursuant to exercise of options during the year ending 30 June 2018.
Legal Matters or Proceedings on Behalf of Company
No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any
proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all
or any part of those proceedings.
The company was not a party to any such proceedings during the reporting period.
Non-Audit Services
The independent auditor to the company; Mr William Moyes has not provided non-audit services to the company
during or after the end of the financial year.
Remuneration of Directors and Management
Information on the remuneration of directors and other key management personnel is contained in the
Remuneration Report which forms part of this Directors Report and is set out on the following pages.
Auditor’s Independence Declaration
The auditor’s independence declaration for the year ended 30 June 2018 has been received and can be found on
Page 15.
Signed in accordance with a resolution of the Board of Directors made pursuant to s. 298(2) of the Corporations Act
2001.
On behalf of the Directors.
GRAHAM REVELEIGH
Chairman
Dated: 28 September 2018
21
Bounty Oil & Gas NL Annual Report - 2018
REMUNERATION REPORT
This remuneration report forms part of the Directors Report for the year ended 30 June 2018 and details the nature
and amount of remuneration for the Bounty Oil & Gas NL non-executive directors and other key management
personnel of the group.
The prescribed details for each person covered by this report are detailed below under the following headings:
• Director and senior management details
• Remuneration policy
• Non-executive directors policy
•
• Remuneration of directors and key management
•
Senior management personnel policy
Key terms and employment contracts
Directors and Key Management details
The term “key management” as used in this remuneration report to refers to the following directors and executives.
Directors
The following persons acted as directors of the company during or since the end of the financial year:-
• Mr G. C. Reveleigh
• Mr C. Ross
• Mr R. Payne
(Chairman)
(Non-Executive Director)
(Non-Executive Director)
Executives
The following persons acted as senior management of the company during or since the end of the financial year:
• Mr P. F. Kelso
(Chief Executive Officer)
The company does not consider other employees and consultants to be Key Management Personnel.
Remuneration policy
The remuneration policy of Bounty Oil & Gas NL has been designed to align key management personnel objectives
with shareholder and business objectives by providing a fixed remuneration component and bonuses issued at the
discretion of the board of the company. The board of Bounty Oil & Gas NL believes the remuneration policy to be
appropriate and effective in its ability to attract and retain the best key management personnel to run and manage
the company, as well as create goal congruence between directors, executives and shareholders.
All remuneration paid to key management personnel (directors and others) is valued at the cost to the company and
expensed or where appropriate transferred to capital items. Shares issued to key management personnel are
valued as the difference between the market price of those shares and the amount paid by the key management
person. Share options are valued using the Black- Scholes methodology. Shares and options granted to key
management personnel (directors and others) are subject to any necessary approvals required by the ASX Listing
Rules.
Performance-based remuneration
Given the long-term nature of and risk variables involved in exploration and development of petroleum resource
projects as compared to other sectors e.g. retail revenues; remuneration of directors or other key management
personnel is not performance based.
22
Bounty Oil & Gas NL Annual Report - 2018
Non-executive directors’ policy
The board policy is to remunerate non-executive directors at market rates for time, commitment and
responsibilities. The maximum aggregate amount of fees that can be paid to non-executive directors is within the
maximum amount specified in the company's Constitution. Any increase of that amount is subject to approval by
shareholders at the Annual General Meeting. Fees for non-executive directors are not linked to the performance of
the company.
Remuneration of non-executive directors is determined by the Board exclusive of the director under consideration
after considering the individual time commitment, duties and function of the subject Director. Further
considerations of the amount of remuneration are made by referral to amounts paid to Directors, both executive
and non-executive, by other listed entities of comparable size to the Company in the oil and gas exploration
industry.
The board of directors as a whole determines the proportion of any fixed and variable compensation for each other
key management person.
Any consulting fees payable to Directors as to specific projects outside the normal day to day duties of the Directors
are agreed upon prior to commencement of work on the specific projects.
The company makes cash bonus payments to key directors from time to time. Bonus payments by way of share
based payments are made from time to time subject to any necessary shareholder approval. All such payments are
expensed at the time of issue at the prevailing market price.
Each director is paid in cash. Shares and share options have on occasions been granted to directors as part of their
remuneration.
Senior management personnel policy
The board's policy for determining the nature and amount of remuneration of key management personnel who are
senior management executives of the company is as follows:-
The remuneration structure comprises a combination of, short term benefits including base fees and long-term
incentives and is based on a number of factors, including length of service, particular experience of the individual
concerned, and overall performance of the company. The contracts for service between the company and key
executive management personnel are for fixed terms which may continue at the end of the term. There were no
provisions for retirement benefits in contracts with senior management executives of the company made or
continued during the year ended 30 June 2018.
The company may make cash bonus payments to senior management executives and to selected employees from
time to time. Bonus payments and long-term incentives by way of share-based payments are classed as long-term
incentives and are made from time to time subject to any necessary shareholder approval. All such payments are
expensed at the time of issue at the prevailing market price.
Key management personnel who are employees receive a superannuation guarantee contribution required by the
government and do not receive any other retirement benefits. Some individuals, however, have chosen to sacrifice
part of their salary to increase payments towards superannuation.
The chief executive officer, Mr P. F. Kelso, is engaged through a fixed term service agreement with a personally
related entity containing the following material conditions:
• Management fees of $398,000 per annum payable by equal monthly instalments.
•
•
•
•
Payment of lease fees for a motor vehicle and parking.
Escalation of fees of 3% from 1 July 2019.
Bonuses at the discretion of the board of directors and there are no retirement or other fixed benefits.
The personally related entity is responsible for all statutory entitlements.
23
Bounty Oil & Gas NL Annual Report - 2018
•
Services: To include non-exclusive executive management, capital raising, communication, management
strategy, budgets, investment policy and all other duties normally incidental to the position of chief
executive officer.
Other than the directors and the chief executive officer, at the date of this Report all other personnel are permanent
or part time employees of the company and not classified as key management personnel.
Key Management Remuneration
Details of the remuneration of directors and the other key management personnel of the group (as defined in AASB
124 Related Party Disclosures) and the one highest paid executive of Bounty Oil & Gas N.L. are set out in the
following tables.
Key Management Remuneration
2018
Key Management Person
Short-term Benefits
$
Cash, salary and
commissions
Consulting
Fees + Other
Cash bonus
and Non-
cash
benefits (2)
Post-
employment
Benefits
Super-
annuation
Share based
payment
Total
Options
Non-Executive Directors
Mr G. Reveleigh (1)
Mr C. Ross (1)
Mr R. Payne
Other Key Management
Personnel – Chief Executive
officer
Mr P.F. Kelso (1)
60,000
30,000
-
-
-
-
-
-
-
-
-
20,000
398,000
11,237
8,400
-
-
-
-
-
60,000
30,000
20,000
417,637
1.
2.
Paid to a personally related entity of the director/executive.
Compensation for the 2018 financial year as set out in this column included only non-cash benefits of $11,237
Key Management Remuneration
2017
Key Management Person
Short-term Benefits
$
Cash, salary and
commissions
Consulting
Fees + Other
Cash bonus
and Non-
cash
benefits (4)
Post-
employment
Benefits
Super-
annuation
Share based
payment
Total
Options
Non-Executive Directors
Mr G. Reveleigh (3)
Mr C. Ross (3)
Mr R. Payne
Other Key Management
Personnel – Chief Executive
officer
Mr P.F. Kelso (3)
60,000
30,000
-
-
-
-
-
-
-
-
-
20,000
398,000
52,212
17,868
-
-
-
-
-
60,000
30,000
20,000
468,080
3.
4.
Paid to a personally related entity of the director/executive.
Compensation for the 2017 financial year as set out in this column included only non-cash benefits of $52,212.
No director or senior management person appointed during the above periods received a payment as part of his
consideration for agreeing to be appointed to that position.
24
Bounty Oil & Gas NL Annual Report - 2018
Share–based payments
During the financial year ended 30 June 2018 no share-based payments were made to Key Management Persons.
Fully paid ordinary shares
No fully paid ordinary shares were issued to Key Management Persons during the period.
Share Options
1. No share options were issued to directors or other key management persons or executives as part of their
remuneration during the year ended 30 June 2018 or since that date.
2. During the year, no directors or senior management held or exercised options that were granted to them as
part of their compensation in previous periods.
Loans to directors and executives
No loans were made to key management personnel including their personally related entities during the financial
year ended 30 June 2018 and no loans were outstanding at the end of the prior period, except that during the
previous year, the Group advanced sums totalling $104,107 to the operator of joint operations in which the Group
has petroleum interests. During the financial year this balance and any further advances made, were converted into
intercompany loans upon acquisition of the operator Rough Range Oil Pty Ltd by the Group as its 100% controlled
subsidiary. Refer to note 26 for further details.
Other Key Management Personnel Disclosures:
Further information on disclosure in connection with Key Management Personnel and Share Base Payments are set
out in the following Notes to the Financial Statements:-
1.
2.
3.
Note 19: Share Based Payments
Note 20: Key Management Personnel Disclosures
Note 22: Related Party Transactions.
Performance income as a proportion of total remuneration
The percentage of remuneration paid to directors and key management personnel during the financial year ended
30 June 2018 which was performance based was: Nil.
Employee Share Scheme
Bounty Oil & Gas N.L. has a current Employee Share Plan (the Plan) approved by shareholders.
Under the Plan all share issues to directors or other Key Management Personnel must receive prior shareholder
approval.
No ordinary shares of the company were issued under the Plan during the year ending 30 June 2018.
25
Bounty Oil and Gas NL
Annual Report – 2018
Consolidated statement of profit and loss and other comprehensive income
for the year ended 30 June 2018
Petroleum revenue
Net Investment income
Other income
Direct petroleum operating expense
Changes in inventory
Employee benefits and contractor expense
Depreciation expense
Amortisation of oil producing assets
Occupancy expense
Corporate activity costs
Rehabilitation finance costs
Foreign exchange gain/(loss)
Impairment of oil and gas assets
Exploration expenses write off
General legal and professional costs
Other expenses
Loss before Tax
Income tax expense
Loss for the period from continuing operations
Loss for the year
Year-ended
Notes
30-Jun-18
$
30-Jun-17
$
5
5
5
5
6
13/14
1,572,593
10,068
6,462
(943,419)
10,173
(721,562)
(45,366)
(422,492)
(105,715)
(48,423)
(25,015)
90,806
(1,382,853)
(1,373)
(35,100)
(39,102)
2,677,801
8,775
12,992
(634,119)
(122)
(781,870)
(47,411)
(439,242)
(100,826)
(82,143)
(25,816)
(20,193)
(834,259)
(10,263)
(58,133)
(52,959)
(2,080,318)
(387,788)
7
-
-
(2,080,318)
(387,788)
(2,080,318)
(387,788)
Other comprehensive income for the year, net of income tax
-
-
Total Comprehensive loss for the period
(2,080,318)
(387,788)
Total comprehensive income/(loss) attributable to owners of
the parent
(2,080,318)
(387,788)
Earnings/(loss) per share
Basic (cents per share)
Diluted (cents per share)
(0.22)
(0.22)
0.04
0.04
The above consolidated statement of comprehensive income should to be read in conjunction with the
accompanying notes.
27
Bounty Oil and Gas NL
Annual Report – 2018
Consolidated statement of financial position
as at 30 June 2018
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current financial assets
Total current assets
Non-current assets
Trade receivables
Exploration and evaluation assets
Production and development assets
Property, plant and equipment
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Non-current liabilities
Unearned revenue
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained losses
Equity attributable to owners of the parent
Total equity
Notes
30-Jun-18
$
30-Jun-17
$
9
10
11
12
10
14 (b)
14(a)
13
15
16
16
17
541,124
1,870,546
20,229
45,816
2,477,715
19,972
9,758,171
5,939,819
854,573
1,024,462
1,319,983
26,270
24,939
2,395,654
39,943
9,688,826
7,329,025
559,403
16,572,535
17,617,197
19,050,250
20,012,851
1,867,404
34,708
1,902,112
783,882
24,162
808,044
2,944
1,317,121
1,320,065
5,888
1,290,528
1,296,416
3,222,177
2,104,460
15,828,073
17,908,391
43,440,163
201,600
(27,813,690)
15,828,073
43,440,163
201,600
(25,733,372)
17,908,391
15,828,073
17,908,391
The above consolidated statement of financial position should to be read in conjunction with the
accompanying notes.
28
Bounty Oil and Gas NL
Annual Report – 2018
Consolidated statement of changes in equity
for the year ended 30 June 2018
Balance at 1 July 2016
(Loss) for the year
Other comprehensive income for the period
Total comprehensive income for the period
Shares issued during the period
Balance at 30 June 2017
Balance at 1 July 2017
Loss for the period
Other comprehensive income for the period
Total comprehensive income for the period
Shares issued during the period
Balance at 30 June 2018
Notes
Ordinary share
capital
$
43,440,163
-
-
-
-
43,440,163
43,440,163
-
-
-
-
43,440,163
17
17
Retained
earnings/
(Accumulated
losses)
$
(25,345,584)
(387,788)
-
(387,788)
-
(25,733,372)
(25,733,372)
(2,080,318)
-
Total
$
18,296,179
(387,788)
-
(387,788)
-
17,908,391
17,908,391
(2,080,318)
-
(2,080,318)
(2,080,318)
-
-
(27,813,690)
15,828,073
Option reserve
$
201,600
-
-
-
-
201,600
201,600
-
-
-
-
201,600
The above consolidated statement of changes in equity should to be read in conjunction with the accompanying notes.
29
Bounty Oil and Gas NL
Annual Report – 2018
Consolidated statement of cash flows
for the year ended 30 June 2018
Cash flows from operating activities
Receipts from petroleum operations
Proceeds from sale of quoted investments
Payments for acquisition of quoted investments
Payments to suppliers and employees
Interest and dividend received
Year-ended
Notes
30-Jun-18
$
30-Jun-17
$
1,140,669
-
(10,809)
(1,498,769)
4,825
1,617,215
52,605
(44,319)
(2,002,886)
12,173
Net cash (used in) operating activities
18
(364,084)
(365,212)
Cash flows from investing activities
Payments for exploration and evaluation assets
Payments for oil production & development assets
Payments for property plant and equipment
Acquisition of subsidiaries,net of cash acquired
Loans repayment/(advanced)
Net cash (used in) investing activities
Net (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Effects of exchange rate changes on the balance
of cash held in foreign currencies
Cash and cash equivalents at the end of the period
(13,882)
(127,169)
(1,950)
(258)
-
(143,259)
(507,343)
(508,296)
244,030
(7,428)
-
(79,107)
(350,801)
(716,013)
1,024,462
1,760,668
9
24,005
541,124
(20,193)
1,024,462
The above consolidated statement of cash flow should be read in conjunction with the accompanying
notes.
30
Bounty Oil and Gas NL
Annual Report – 2018
Contents of the notes to the consolidated financial statements
1. Statement of compliance
2. Summary of significant accounting policies
3. Critical accounting estimates and judgments
4. Segment Information
5. Revenue and other income
6. Employee benefit expense
7. Income tax expense
8. Earnings/(loss) per share
9. Cash and cash equivalents
10. Trade and other receivables
11. Inventories
12. Other current financial assets
13. Property, plant and equipment
14. Non current assets
15. Trade and other payables
16. Provisions
17. Issued capital
18. Reconciliation of cash flow from continuing operations
19. Share based payments
20. Key management personnel
21. Commitments
22. Related party transactions
23. Financial instruments
24 . Controlled entities
25. Interest in joint operations
26. Business combination
27. Parent entity information
28. Contingent liabilities and contingent assets
29. Events occurring after the reporting period
30. Auditors remuneration
31. Company details
31
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
1. Statement of compliance
Bounty Oil and Gas N.L. Is a company incorporated in Australia and limited by shares which are publicly traded on the Australian
Securities Exchange.
This financial report includes the consolidated financial statements and notes of Bounty Oil & Gas NL (“parent entity”) and
controlled entities (“consolidated group” or “group”) and the Group’s interest in jointly controlled assets for the financial year
ended 30 June 2018. Supplementary financial information about the parent entity is disclosed in Note 26. The Financial
Statements are presented in Australian currency.
The group is a for-profit entity for financial reporting purposes under Australian Accounting Standards.
The financial report was authorised for issue by the directors on 28 September 2018.
2. Summary of significant accounting policies
The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting
Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards
Board (AASB), the Corporations Act 2001 and comply with other requirements of the law.
Compliance with AASB 101 ensures compliance with International Financial Reporting Standard IAS 1 Presentation of Financial
Statements.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report
containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance with
Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial
Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below.
They have been consistently applied unless otherwise stated.
a. Basis of preparation
The consolidated financial statements have 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.
The following significant accounting policies have been adopted in the preparation and presentation of the financial
reports. These accounting policies are consistent with Australian Accounting Standards and with International Financial
Reporting Standards.
The company is a company of the kind referred to in ASIC Class Order 98/100, dated 10 July 1998, and in accordance with that
Class Order amounts in the financial report are rounded off to the nearest dollar, unless otherwise indicated.
b. Application of new and revised accounting standards
None of the new standards and amendmends to standards that are mandatory for the first time for the financial year beginning
1 July 2017 affected any of the amounts recognised in the current period or any prior period and are not likely to affect future
periods.
32
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
b. Accounting standards and interpretations issued but not yet effective
At the date of authorisation of the financial statements, the Standards and Interpretations listed below were in issue but not
yet effective or early adopted by the Group.
Title
Application
date for the
Group
1 July 2018
1 July 2018
1 July 2019
1 July 2018
AASB 15 Revenue from Contracts with Customers
AASB 9 and relevant amending standards - Financial Instruments
AASB 16 Leases
AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an
Investor and its Associates or Joint Venture
AASB 2017-5 Amendments to Australian Accounting Standards – Classification and Measurement of Share-
based Payment Transactions
1 July 2018
AASB Interpretation 22 Foreign Currency Transactions and Advance Consideration
AASB 2018-2 Amendments to Australian Accounting Standards – Further Annual Improvements 2014-2017
Cycle
AASB 2017-2 Amendments to Australian Accounting Standards – Further Annual Improvements 2014-2016
Cycle
AASB Interpretation 23 Uncertainty over Income Tax Treatments
1 July 2018
1 July 2018
1 July 2018
1 July 2019
c. Basis of consolidation
(i) Controlled entities
The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Bounty Oil & Gas
NL at the end of the reporting period. A controlled entity is any entity over which Bounty Oil & Gas NL has the power to
govern the financial and operating policies so as to obtain benefits from the entity’s activities. Control will generally exist
when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. In
assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are also considered.
Where controlled entities have entered or left the Group during the year, the financial performance of those entities are
included only for the period of the year that they were controlled. A list of controlled entities is contained in Note 24 to the
financial statements.
In preparing the consolidated financial statements all inter-group balances and transactions between entities in the
consolidated group have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with those adopted by the parent entity.
For the reporting period the only controlled entities that Bounty Oil & Gas NL had were Ausam Resources Pty Limited (100%),
Interstate Energy Pty Limited (100%), Rough Range Pty Limited (100%) and Lansvale Oil & Gas Pty Ltd (100%).
33
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
c. Basis of consolidation (continued)
(ii) Joint arrangements
Under AASB 11 'Joint Arrangements' investments in joint arrangements are classified as either joint operations or joint
ventures depending on the contractual rights and obligations each investor has, rather than the legal structure of the joint
arrangement. Bounty Oil & Gas NL has assessed the nature of its joint arrangements and determined them to be joint
Bounty Oil & Gas NL 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 headings. Details of the joint operations are set out
in note 25.
(iii) Business combinations
The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the
Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred,
liabilities incurred and the equity interests issued by the Group, which includes the fair value of any asset or liability arising
from a contingent consideration arrangement. Acquisition costs are expensed as incurred.
The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether
they have been previously recognised in the acquiree’s financial statements prior to the acquisition. Assets acquired and
liabilities assumed are generally measured at their acquisition-date fair values.
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of: (a)
fair value of consideration transferred, (b) the recognised amount of any non-controlling interest in the acquire, and (c)
acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable
net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (i.e., gain on a
bargain purchase) is recognised in profit or loss immediately.
d. Interests in joint operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the
assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of
control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the
parties sharing control.
When a group entity undertakes its activities under joint operations, the Group as a joint operator recognises in relation to its
interest in a joint operation:
• its assets, including its share of any assets held jointly;
• its liabilities, including its share of any liabilities incurred jointly;
• its share of the revenue from the sale of the output by the joint operation; and
• its expenses, including its share of any expenses incurred jointly.
The Group accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint operation in accordance
with the AASBs applicable to the particular assets, liabilities, revenues and expenses. When a group entity transacts with a
joint operation in which a group entity is a joint operator (such as a sale or contribution of assets), the Group is considered to
be conducting the transaction with the other parties to the joint operation, and gains and losses resulting from the
transactions are recognised in the Group's consolidated financial statements only to the extent of other parties' interests in
the joint operation.
e. Income tax
The income tax expense / (income) for the year comprises current income tax expense / (income) and deferred tax expense
(income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable
income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured
at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as
well unused tax losses.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been
fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition
of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Current and deferred income tax expense / (income) is charged or credited directly to equity instead of the profit or loss when
the tax relates to items that are credited or charged directly to equity.
34
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
e. Income tax (continued)
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is
realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement
also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or
liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against which the benefits of deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures,
deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be
controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and
liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income
taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended
that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods
in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
Tax Consolidation - Bounty Oil & Gas NL and its wholly owned Australian subsidiary have not formed an income tax
consolidation group under tax consolidation legislation. Each entity in the Group recognises its own current and deferred tax
assets and liabilities. Such taxes are measured using the ‘stand alone taxpayer’ approach to allocation.
f. Going concern basis
The directors have prepared the financial report on a going concern basis, which contemplates the continuity of normal
business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.
For the period ended 30 June 2018, the Group realised a net loss after tax of $2,080,318 (2017: $387,788). This was largely as
a result of non-cash impairment of $1,267,000 to gas production assets. The net cash utilised by operating activities for the
period ended 30 June 2018 was $364,084 (2017: net cash utilised $365,212). The Group’s net asset position at 30 June 2018
was $15,828,073 (30 June 2017: $17,908,391) and its cash balance amounted to $541,124 (30 June 2017: $1,024,462).
The directors’ cash flow forecasts project that the group will continue to be able to meet its liabilities and obligations
(including those exploration commitments as disclosed in Note 21) as and when they fall due for a period of at least 12
months from the date of signing of this financial report. The cash flow forecasts are dependent upon the generation of
sufficient cash flows from operating activities to meet working capital requirements; contemplating issue of additonal equity
by the Group; the ability of the Group to manage discretionary exploration and evaluation expenditure on non-core assets via
farmout or disposal of certain interests and or a reduction in its future work programmes. The directors are of the opinion
that the use of the going concern basis of accounting is appropriate as they are satisfied as to the ability of the Group to
g. Fair value measurement
AASB 13 establishes a single source of guidance for determining the fair value of assets and liabilites. AASB 13 does not
change when an entity is required to use fair value, but rather, provides guidance on how to determine fair value when fair
value is required or permitted. Application of this definition may result in different fair values being determined for the
relevant assets. AASB 13 also expands the disclosure requirements for all assets and liabilites carried at fair value. This
includes information about the assumptions made and the qualitative impact of those assumptions on the fair value
determined. Consequential amendmends were also made to other standards.
AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which categorises fair value
measurements into one of three possible levels based on the lowest level that a significant input to the measurement can be
categorised into as follows:
- level 1: Measurement based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity
can access at the measurement date.
-level 2: Measurements based on inputs other than quoted prices included in level 1 that are observable for the asset or
liability, either directly or indirectly.
-level 3: Measurements based on unobservable inputs for the asset or liability.
The carrying values of financial assets and liabilites recorded in the financial statements approximates their respective fair
values, determined in accordance with the acounting policies described above and adjusted for capitalised transaction costs, if
any.
35
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
h. Trade and other receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for
doubtful debts. Trade receivables are due for settlement no more than 30 days.
Collection of trade receivables is reviewed on an ongoing basis. Debts, which are known to be uncollectible, are written off. A
provision for doubtful receivables is established when there is objective evidence that the Group will not be able to collect all
amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset’s
carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash
flows relating to short-term receivables are not discounted if the effect of discounting is immaterial. The amount for the
provision is recognised in the income statement.
i. Property, plant and equipment
Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any
accumulated depreciation and impairment losses.
Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the
net amount is restated to the revalued amount of the asset.
Plant and equipment are measured on the cost basis.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable
amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be
received from the asset’s employment and subsequent disposal.
The cost of fixed assets constructed within the consolidated group includes the cost of materials, direct labour, borrowing
costs and an appropriate proportion of fixed and variable overheads.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be
measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in
which they are incurred.
j. Depreciation
The depreciable amount of all fixed assets including buildings and capitalised lease assets, but excluding freehold land, is
depreciated on a straight-line basis over the asset’s useful life to the Group from the time the asset is held ready for use.
Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful
lives of the improvements.
Depreciation on assets is calculated over their estimated useful life as follows:
Class of fixed asset
Office furniture and fittings
Computer equipment
Plant and equipment
Estimated useful life
5 years
4 years
5 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are
included in the income statement. When re-valued assets are sold, amounts included in the revaluation reserve relating to
that asset are transferred to retained earnings.
36
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
k. Exploration and evaluation expenditure
Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration and
evaluation asset in the year in which they are incurred where the following conditions are satisfied:
• the rights to tenure of the area of interest are current; and,
• at least one of the following conditions is also met:
i) the exploration and evaluation expenditures are expected to be recouped through successful exploration, development and
commercial exploitation of the area of interest, or alternatively, by its sale; or,
ii) exploration and evaluation activities in the area of interest have not, at the reporting date, reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable petroleum reserves or resources and active
and significant operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, geophysical
surveys, studies, exploratory drilling, sampling and associated activities and an allocation of depreciation and amortisation of
assets used in exploration and evaluation activities. General and administrative costs are only included in the measurement
of exploration and evaluation costs where they are related directly to operational activities in a particular area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying
amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the
exploration and evaluation asset (or the cash-generating unit(s) to which it has been allocated, being no larger than the
relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss
subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but
only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognised for the asset in previous years. Where a decision is made to proceed with
development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment
and the balance is then re-classified to development.
l. Production and development assets
The group follows the full cost method of accounting for production and development assets whereby all costs, less any
incentives related to the acquisition, exploration and development of oil and gas reserves are capitalised. These costs include
land acquisition costs, geological and geophysical expenses, the costs of drilling both productive and non productive wells,
non producing lease rentals and directly related general and administrative expenses. Proceeds received from the disposal of
properties are normally credited against accumulated costs.
When a significant portion of the properties is sold, a gain or loss is recorded and reflected in profit or loss.
With respect to production assets, depletion of production and development assets and amortisation of production facilities
and equipment are calculated using the unit of production method based on estimated proven oil and gas reserves. For the
purposes of depletion calculation proved oil and gas reserves before royalties are converted to a common unit measure.
The estimated costs for developing proved underdeveloped reserves, future decommissioning and abandonments, net of
estimated salvage values, are provided for on the unit of production method included in the provision for depletion and
amortisation.
In applying the full cost method of accounting, the capitalised costs less accumulated depletion are restricted from exceeding
an amount equal to the estimated discounted future net revenues, based on year end prices and costs, less the aggregate
estimate future operating and capital costs derived from proven and probable reserves.
Development expenditure is recognised at cost less accumulated amortisation and any impairment losses. Where commercial
production in an area of interest has commenced, the associated costs together with any forecast future capital expenditure
necessary to develop proved and probable reserves are amortised over the estimated economic life of the field on a units-of-
production basis.
Changes in factors such as estimates of proved and probable reserves that affect unit of production calculations are dealt with
on a prospective basis.
37
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
m. Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year, which
are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
n. Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of petroleum products includes direct
materials, direct labour and an appropriate portion of variable and fixed overheads.
o. Leased assets
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal
ownership that is transferred to entities in the Group, are classified as finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the
leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term.
p. Financial instruments
Recognition and Initial Measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity becomes a party
to the contractual provisions of the instrument. Trade date accounting is adopted for financial assets that are delivered
within timeframes established by marketplace convention.
Financial instruments are initially measured at fair value plus transaction costs where the instrument is not classified as at fair
value through profit or loss. Transaction costs related to instruments classified as at fair value through profit or loss are
expensed to profit or loss immediately. Financial instruments are classified and measured as set out below.
De-recognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to
another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated
with the asset. Financial liabilities are de-recognised where the related obligations are either discharged, cancelled or expire.
The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair
value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.
Classification and subsequent measurement
i) Financial assets at fair value through profit or loss
Financial assets are classified at fair value through profit or loss when they are held for trading for the purpose of short term
profit taking, where they are derivatives not held for hedging purposes, or designated as such to avoid an accounting
mismatch or to enable performance evaluation where a company of financial assets is managed by key management
personnel on a fair value basis in accordance with a documented risk management or investment strategy. Realised and
unrealised gains and losses arising from changes in fair value are included in profit or loss in the period in which they arise.
ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market and are subsequently measured at amortised cost using the effective interest rate method.
iii) Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable
payments, and it is the Group’s intention to hold these investments to maturity. They are subsequently measured at
amortised cost using the effective interest rate method.
iv) Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the
effective interest rate method.
38
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
q. Impairment of assets
Other assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purpose of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than
goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.
r. Foreign currency transactions and balances
Functional and presentation currency
The functional currency is measured using the currency of the primary economic environment in which the Group operates
(the “functional” currency). The financial statements are presented in Australian dollars which is the Group’s functional and
presentation currency.
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the
transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured
at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at
fair value are reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the income statement, except where
deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the
gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the income statement.
s. Employee benefits
Wages and salaries, annual leave
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to balance date.
Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid
when the liability is settled. Employee benefits payable later than one year have been measured at the present value of the
estimated future cash outflows to be made for those benefits. Those cash flows are discounted using market yields on
national government bonds with terms to maturity that match the expected timing of cash flows.
Share based payments – employee share plan
Share based compensation has from time to time been provided to eligible persons via the Bounty Oil & Gas N.L. Employee
Share Plan (“Plan”). Under AASB 2 “Share-based Payments”, the Employee Share Plan shares are deemed to be equity-settled
share-based remuneration.
Equity-settled share-based payments with employees and others providing similar services are measured at the fair value of
the equity instrument at the grant date. Fair value is measured by use of the quoted market price or binomial pricing model.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis
over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a corresponding
increase in equity.
t. Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is
probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions are
determined by discounting the expected future cash flows at a pre-tax discount rate that reflects current market assessments
of the time value of money and, where appropriate, the risks specific to the liability.
u. Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments
with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term
borrowings in current liabilities on the balance sheet.
39
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
v. Rehabilitation obligations
Provisions for future environmental restoration are recognised where there is a present obligation as a result of exploration,
development, production or storage activities having been undertaken and it is probable that an outflow of economic benefits
will be required to settle the obligation. The estimated future obligations include the costs of removing facilities, abandoning
wells and restoring the affected areas.
The provision for future restoration costs is the best estimate of the present value of the expenditure required to settle the
restoration obligation at the reporting date. Future restoration costs are reviewed annually and any changes in the estimate
are reflected in the present value of the restoration provision at reporting date, with a corresponding charge in the cost of the
associated asset.
The amount of the provision for future restoration costs relating to exploration, development and production facilities is
capitalised and depleted as a component of the cost of those activities.
The unwinding of the effect of discounting on the provision is recognised as a finance cost.
w. Revenue and other income
Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts
and volume rebates allowed. Any consideration deferred is treated as the provision of finance and is discounted at a rate of
interest that is generally accepted in the market for similar arrangements. The difference between the amount initially
recognised and the amount ultimately received is interest revenue.
Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risks and
rewards of ownership of the goods and the cessation of all involvement in those goods.
Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the rate
inherent in the instrument. Dividend revenue is recognised when the right to receive a dividend has been established.
All revenue is stated net of the amount of goods and services tax (GST).
x. Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not
recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of
the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing
activities, which are disclosed as operating cash flows.
y. Earnings per share
i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit/(loss) attributable to equity holders of the Group, excluding any
costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during
the financial year, adjusted for bonus elements in ordinary shares issued during the year.
ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
z. Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for
the current financial year.
aa. 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 from the proceeds.
40
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
3. Critical accounting estimates and judgments
In the application of the group’s accounting policies, which are described in Note 1, the directors are required to make
judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from
other sources. The estimates and associated assumptions are based on historical and industry experience and other factors
that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision
and future periods if the revision affects both current and future periods.
The following are the critical judgments that management has made in the process of applying the group’s accounting policies
and that have the most significant effect on the amounts recognised in the financial statements:
Exploration and evaluation assets
The group’s policy is discussed in Note 2(k) & (l). Its policy for production and development assets is discussed in Note 1(n).
The application of these policies requires management to make certain estimates and assumptions as to future events and
circumstances. Any such estimates and assumptions may change as new information becomes available. If after having
capitalised exploration and evaluation expenditure, management concludes that the capitalised expenditure is unlikely to be
recovered by future sale or exploitation, then the relevant capitalised amount will be written off through profit or loss.
Estimate of reserve quantities
The estimated quantities of proven and probably hydrocarbon reserves and resources reported by the group are integral to
the calculation of amortisation (depletion) and depreciation expense and to assessments of possible impairment of assets.
Estimated reserve quantities are based upon data from exploration and development drilling, interpretations of geological
and geophysical models and assessment of the technical feasibility and commercial viability of producing the reserves.
Management prepares reserve estimates which conform to guidelines prepared by the Society of Petroleum Engineers, USA.
Where appropriate these estimates are then verified by independent technical experts.
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 or reservoir data is generated
during the course of operations.
Provision for rehabilitation and decommissioning
The group estimates the future removal and decommissioning costs of oil and gas production facilities, wells, pipelines and
related assets at the time of installation of the assets. In most instances the removal of these assets will occur many years in
the future. The estimates of future removal costs therefore requires management to make adjustments regarding the
removal date, future environmental legislation, the extent of decommissioning activities and future removal technologies.
Impairment of production and development assets
The group assesses whether oil and gas assets are tested for impairment on a semi-annual basis. This requires an estimation
of the recoverable amount from the cash generating unit to which each asset belongs. The recoverable amount is assessed on
the basis of the expected net cash flows that will be received from the asset’s employment and or subsequent disposal. The
expected net cash flows are discounted to their present values in determining the recoverable amount.
During the year, the group carried out semi annual reviews of its petroleum production, development and exploration
properties. The reviews led to the recognition of an impairment loss of $1.38 million in relation to Kiliwani North joint
operations ($1.27 million) and Bakersfield ($0.11 million). This non-cash loss has been recognised in the Group's profit or loss
statement. These properties are reported as in the core oil and gas segment.
Business combination
Management uses valuation techniques in determining the fair values of the various elements of a business combination. See
Note 2(c)(iii).
41
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
4. Segment Information
Identification of Reportable Segments
Information reported to the Chief Operating Decision Maker, being the CEO, for the purposes of resource allocation and
assessment of the performance is more specifically focused on the category of business units. The Group’s reportable
segments under AASB 8 Operating Segments are therefore as follows:
Core Petroleum Segment - Oil and gas exploration, development and production
Secondary Segment - Investment in listed shares and securities.
Segment revenue and results
Segment revenue
Segment profit/(loss)
Core Oil & Gas Segment
Production projects
Development projects
Exploration projects
Secondary Segment
Listed securities
Total from continuing operations
Other revenue
Central admin costs and directors remuneration
Loss before tax
30-Jun-18
$
30-Jun-17
$
30-Jun-18
$
1,572,593
2,677,801
(1,095,362)
-
-
-
-
-
(117,226)
10,068
1,582,661
8,775
2,686,576
10,068
(1,202,520)
97,268
(975,066)
(2,080,318)
30-Jun-17
$
735,253
-
(10,263)
8,775
733,765
(7,201)
(1,114,352)
(387,788)
Segment revenue
Revenue reported above represents revenue/income generated from external sources. There were no intersegment sales
during the period (2017: nil).
Accounting policies of reportable segments
The accounting policies of the reportable segments are the same as the group’s accounting policies described in Note 1.
Segment profit/(loss) in this Note represents the profit/(loss) earned by each segment without allocation of central
administration costs and directors remuneration, other investment revenue such as interest earned, finance costs and
income tax expense. This is the measure reported to the Chief Operating Decision Maker for the purpose of resource
allocation and assessment of segment performance.
Information about major customers
Included in the revenue arising from direct sales of oil and gas of $1,572,593 (2017: $2,677,801) are revenues of
approximately $815,921 (2017: $2,031,018) which arose from sales to the Group’s largest customer. The revenue from the
Group’s second largest customer was approximately $347,302 (2017: $430,110). No other single customer contributed 10% or
more to the Groups revenue for both 2018 and 2017.
Other segment information
Core Oil & Gas Segment
Production projects
Development projects
Exploration projects
Other
Total
Core Oil & Gas Segment
Production projects
Development projects
Exploration projects
Total
Amortisation, depreciation
& depletion
Additions to non-current
assets
30-Jun-18
$
465,586
-
-
2,272
467,858
30-Jun-17
$
479,074
-
-
30-Jun-18
$
223,857
113,388
486,571
7,579
486,653
1,951
825,767
30-Jun-17
$
722,626
78,057
117,621
7,427
925,731
Impairment losses
(expenses)
30-Jun-18
$
1,267,000
-
117,226
1,384,226
30-Jun-17
$
834,259
-
10,263
844,522
42
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
4. Segment Information (continued)
Segment assets are measured in the same way as in the financial statements. These assets are allocated based on the
operations of the segment and the physical location of the asset.
Segment liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the
operations of the segment. Segment liabilites incude trade and other payables and provisions.
The unallocated items include items that are not considered part of the core operations of any segment.
Core Oil & Gas Segment
Production projects
Development projects
Exploration projects
Secondary Segment
Listed securities
Unallocated
Total
Segment assets
Segment liabilities
30-Jun-18
$
5,575,835
1,211,534
9,758,171
30-Jun-17
$
6,782,937
1,098,146
9,688,826
30-Jun-18
$
2,800,274
8,734
23,796
30-Jun-17
$
1,842,602
8,734
23,796
45,816
2,458,894
19,050,250
24,939
2,418,003
20,012,851
-
389,373
3,222,177
-
229,328
2,104,460
Geographical Segment information
The following table details the group’s geographical segment reporting of revenue and carrying amount of assets in each
geographical region where operations are conducted.
Revenue
Carrying amounts of non
current assets
30-Jun-18
$
1,332,627
347,302
1,679,929
30-Jun-17
$
648,356
2,031,018
2,679,375
30-Jun-18
$
13,805,305
2,767,230
16,572,535
30-Jun-17
$
13,514,153
4,103,044
17,617,197
30-Jun-18
$
1,544,446
28,147
1,572,593
30-Jun-17
$
2,655,056
22,745
2,677,801
-
10,068
10,068
6,457
90,806
5
97,268
14,396
(5,621)
8,775
12,985
(20,193)
7
(7,201)
1,679,929
2,679,375
Australia
Tanzania
Total
5. Revenue and other income
Sales revenue:
Oil and gas sales
Revenue from tariffs
Total sales revenue
Investment income:
Investment income from financial assets at fair value through
Profit and loss (held for trading listed shares)
Realised gain
Unrealised gain/(loss)
Total investment income
Other income:
Interest income
Gains/(losses) on foreign currency
Other income
Total other revenue
Total revenue
43
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
6. Employee benefit expense
Directors fees
Consultancy fees - Internal
Wages & salaries
Other employee benefit expenses
Total Employee benefit expense
30-Jun-18
$
110,000
398,000
186,563
26,999
721,562
30-Jun-17
$
110,000
398,000
218,389
55,481
781,870
Recharge and recoveries
The Group has the policy to allocate a portion of employee benefit expense to production, development, exploration and
evaluation assets based on employee time committed to various projects.
7. Income tax expense
The prima facie tax on profit from ordinary activities before income tax is
reconciled to the income tax as follows:
Prima facie tax payable on profit/(income tax benefit) from continuing
operations before income tax at 27.5% (2017: 30%)
Consolidated group
Add: tax effect of non deductible expenses
Less: tax effect of expenditure claimed as deduction
Tax effect of Unused tax losses not recognised as deferred tax asset
Income tax expense attributable to loss from ordinary activities
$
(572,087)
637,834
(303,980)
$
(116,337)
303,801
(169,396)
(238,233)
18,068
-
-
The potential future income tax benefit arising from tax losses and timing differences has not been recognised as an asset
because recovery of tax losses is not probable and recovery of timing differences is not assured beyond reasonable doubt.
The potential future income tax benefit will be obtained if:
1) the relevant company derives future assessable income of a nature and an amount sufficient to enable the benefit to be
realised, or the benefit can be realised by another company in the Group in accordance with Division 170 of the Income Tax
Assessment Act 1997;
2) the relevant company and/or group continues to comply with the conditions for deductibility imposed by the Act; and
3) no changes in tax legislation adversely affect the Company and/or the group in realizing the benefit.
Bounty Oil and Gas NL and its wholly-owned subsidiaries have not formed a tax consolidation group.
8. Earnings/(loss) per share
Basic earnings/(loss) per share (cents per share)
Diluted earnings/(loss) per share (cents per share)
(0.22)
(0.22)
(0.04)
(0.04)
Net (loss)/profit used in the calculation of basic and diluted earnings/(loss) per share
(2,080,318)
(387,788)
Weighted average number of ordinary shares for the purposes
of basic and diluted EPS
9. Cash and cash equivalents
Deposits on call
Cash at bank
Total Cash and cash equivalents
No. of Shares No. of Shares
953,400,982
953,400,982
$
63,479
477,645
541,124
$
126,981
897,481
1,024,462
44
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
10. Trade and other receivables
Current
Trade receivables
Prepayments
Other receivables
GST receivable
Acquisition through business combination
Non-current
Trade receivables
Total trade and other receivables
30-Jun-18
$
30-Jun-17
$
1,859,171
3,926
2,086
-
5,363
1,208,775
2,686
105,376
3,146
-
19,972
1,890,518
39,943
1,359,926
The average credit period on sale of goods is 30 days. The Group generally recognise an allowance for doubtful debts for
receivables if management forms an opinion that receivable may not be recoverable. The balance of $1.86 million
outstanding at 30 June 2018 is primarily in relation to sales made to the major customers during the financial year, a
significant portion of which has been settled in September 2018. All other current trade receivables were outstanding for an
average period of 260 days as at 30 June 2018 but the customer is a sovereign nation and expected to pay the dues in near
future.
Ageing of past due but not impaired
60 – 90 days
90-120 days
120+ days
Total
$
46,147
64,396
1,381,164
1,491,707
$
372,681
57,302
119,783
549,765
In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade
receivable from the date credit was initially granted up to the end of the reporting period.
11. Inventories
Oil and other inventory
12. Other current financial assets
Financial assets at fair value through profit and loss - shares in
listed corporations
Total current financial assets
Note
23(d)
13. Property, plant and equipment
Plant and Equipment
Plant and equipment – at cost
Less accumulated depreciation
Total Property, plant and equipment
Movement in carrying amounts:
Movements in the carrying amounts for each class of property, plant and
equipment between the beginning and end of the financial year.
Opening Balance
Additions
Acquisition through business combination
Reclassification to receivables
Depreciation
Carrying amount at the end of the year
45
$
20,229
20,229
$
26,270
26,270
$
$
45,816
45,816
24,939
24,939
$
1,117,531
(262,958)
$
776,996
(217,593)
854,573
559,403
$
$
559,403
40,536
300,000
-
(45,366)
854,573
629,112
56,346
-
(78,644)
(47,411)
559,403
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
14. Non current assets
Note
30-Jun-18
30-Jun-17
(a): Production and development assets
SW Queensland
Joint operation interest in ATP1189 Naccowlah Block – at cost
Less: Amortisation
Less: Impairment
East Queensland - PL 441 (ex-PL119) Downlands – at cost
Less: Depletion and amortisation
Nyuni Block, Tanzania- Kiliwani North
Joint operation interest in Nyuni Block - Kiliwani North at cost
Less: Amortisation
Less: Impairment
Rehabilitation costs – all petroleum properties
All other development assets
Total production and development assets
25
25
$
$
2,463,113
(815,000)
-
3,123,441
(565,000)
(834,259)
3,828,635
(2,518,609)
3,818,960
(2,518,609)
2,637,479
(300,000)
(1,267,000)
699,667
1,211,534
5,939,819
2,635,813
(200,000)
-
770,533
1,098,146
7,329,025
Movement in carrying amounts of production & development assets:
$
$
Opening balance at the beginning of the year
Additions
Movement in rehabilitation
Reclassification to exploration asset of ATP1189 Naccowlah costs
Impairment of production and development assets (i)
Amortisation of production assets
Carrying amount at the end of the year
7,329,025
298,660
(70,866)
-
(1,267,000)
(350,000)
5,939,819
8,384,715
751,764
(77,342)
(456,611)
(834,259)
(439,242)
7,329,025
(i) In accordance with the Group's accounting policies and procedures, the Group performs its impairment testing at the end
of each reporting period. A number of factors presented indicators of impairment for the Kiliwani North Joint Operations
during the reporting period ended 30 June 2018, including low recovery of gas throughout the period. No other impairments
are recognised for this reporting period.
Key assumptions used:
Crude oil price (US$)
Average AUD:USD exchange rate
CPI (%)
Pre-tax discount rate (%)
(b): Exploration and evaluation assets
Exploration assets
Total exploration and evaluation assets
2018-2020
$72 increasing to $77
$0.730
2.5%
9.0%
25
Movement in carrying amounts of exploration and evaluation assets:
Opening balance at the beginning of the year
Additions
Acquisition through business combination
Reclassification from (to) development asset
Write off – Exploration and evaluation asset
Carrying amount at the end of the year
15. Trade and other payables
Current
Trade payables
Trade payables acquired through business combination
Amounts owing to Joint Operations
GST, FBT, PAYG & superannuation liability
Total trade and other payables
46
2021+
$82 increasing to $110
$0.75
2.5%
9.0%
$
$
9,758,171
9,758,171
9,688,826
9,688,826
$
$
9,688,826
90,634
95,937
-
(117,226)
9,758,171
9,124,857
117,621
-
456,611
(10,263)
9,688,826
$
$
203,627
121,280
1,542,136
361
1,867,404
171,597
-
597,682
14,603
783,882
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
16. Provisions
Current - Provision for employee leave entitlement
Non-current - Provision for employee leave entitlement
Non-current - Rehabilitation costs – petroleum properties
Movement in provisions
Opening balance
Unwinding of discount on provision
Net provisions recognised/(expensed)
Balance at the end of the period
30-Jun-18
$
30-Jun-17
$
34,708
34,708
24,162
24,162
9,827
1,307,294
1,317,121
1,290,528
25,015
1,578
1,317,121
8,598
1,281,930
1,290,528
1,256,114
25,816
8,598
1,290,528
The provision for rehabilitation costs represents the present value of the Directors’ best estimate of the future sacrifice of
economic benefits that will be required to remove the facilities and restore the affected areas at the Group’s operation sites.
The rehabilitation of the petroleum properties is expected to be undertaken between 1 to 20 years. The discount rate used in
the calculation of the provision as at 30 June 2018 was 3%, broadly equivalent to the Australian Government 10 year bond
17. Issued capital
A reconciliation of the movement in capital for the Company can be found in
the Consolidated Statement of Changes in Equity
953,400,982 fully paid ordinary shares (2017: 953,400,982)
Nil options transferred to share option reserve on expiry (2017: Nil)
(a) Movement in fully paid ordinary shares
Balance at beginning of period
Balance at end of period
$
$
43,440,163
201,600
43,641,763
43,440,163
201,600
43,641,763
No. of Shares No. of Shares
953,400,982
953,400,982
953,400,982
953,400,982
18. Reconciliation of cash flow from continuing operations
Reconciliation of Cash Flow from continuing operations with profit/(loss) after income tax.
Profit/(Loss) from continuing operations after income tax
$
$
(2,080,318)
(387,788)
Non-cash flows in profit/(loss) from continuing operations:
Unearned income on rental lease
Depreciation and amortisation
Fair value movement in quoted investments
Foreign exchange differences
Movement in employee obligation
Bad debt expense
Acquisition costs included in investing
Impairment and Write-off of exploration assets
Impairment of petroleum production assets
Accrued interest income
Change in trade and other receivables
Decrease in financial assets through profit and loss
Change in inventory
Change in rehabilitation obligation
Change in trade & other payables
Net Cash from continuing operations
(2,944)
467,858
(10,068)
(97,252)
11,774
-
323
117,226
1,267,000
(1,636)
(554,453)
(10,809)
6,041
97,507
425,667
(364,084)
8,832
486,653
5,621
20,193
5,996
13,000
-
10,263
834,259
(819)
(1,125,264)
(6,110)
122
100,058
(330,228)
(365,212)
47
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
19. Share based payments
No share based payment compensation was granted to directors or senior management during the financial year ended 30th
June 2018 and there was Nil expensed (2017: Nil). During the year, no directors or senior management exercised options that
were granted to them as part of their compensation in prior periods.
20. Key management personnel
a) Key Management Personnel Compensation
The aggregate remuneration made to Key Management
Personnel of the group is set out below:
Short term employee benefits
Share based payments
Total
30-Jun-18
$
30-Jun-17
$
527,637
-
527,637
578,081
-
578,081
Apart from the details disclosed in this note, no director or key management person has entered into a material contract with
the consolidated entity since the end of the previous financial year and there were no material contracts involving directors’ or
executives’ interests existing at year-end.
Information regarding individual directors' and executives' compensation and some equity instrument disclosures as permitted
by the Corporations Regulations 2M.3.03 is provided in the Remuneration Report section of the Directors' Report.
b) Equity Instrument Disclosures Relating to Key Management Personnel
i) Options provided as remuneration and shares issued on exercise of such options: Nil
ii) Share holdings
The movement during the reporting period in the number of ordinary shares in Bounty Oil and Gas N.L. held, directly, indirectly
or beneficially, by each key management person, inculding related parties, is as follows:
2018
Directors
G Reveleigh
R Payne
C Ross
Executives
P Kelso
2017
Directors
G Reveleigh
R Payne
C Ross
Executives
P Kelso
Balance at Start
of the Year
Purchases
Received on
exercise of
Options
Received other
Sales
Held at the end
of Year
23,377,928
-
3,200,000
- - - 23,377,928
- - - -
- - - 3,200,000
-
-
52,879,980 1,349,153 - - 3,250,000 50,979,133
23,377,928
- - - 23,377,928
- - - - - -
3,200,000 - - - - 3,200,000
52,040,836 839,144 - - - 52,879,980
No shares were granted to key management personnel during the financial year or during the previous financial year.
c) Key Management Personnel - other loans and advances
No loans were made to key management personnel including their personally related entities during the financial year ended 30
June 2018 and no loans were outstanding at the end of the prior period, except that during the previous year, the Group
advanced sums totalling $104,107 to the Operator of joint operations in which the Group has petroleum interests. During the
financial year this balance and any further advances made, were converted into consideration transferred upon acquisition of
the Operator Rough Range Oil Pty Ltd. by the Group as its 100% controlled subsidiary. Refer to note 26 for further details.
48
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
20. Key management personnel (continued)
d) Other transactions with key management personnel
Other than the transactions disclosed in the Remuneration Report contained in the Directors’ Report, during the financial year,
$33,000 was paid for office rent, and $8,400 for site management services to firms in which Mr. P. Kelso is a director.
Aggregate amounts of each of the above types of other transactions with entities associated with key management personnel
of Bounty Oil & Gas NL:
Legal, corporate fees
Site management services for PL2
Rent of office
21. Commitments
30-Jun-18
$
-
8,400
33,000
41,400
30-Jun-17
$
17,868
-
30,000
47,868
In order to maintain current rights of tenure to its licences and permits, the company has certain obligations to perform work in
accordance with the work programmes, as approved by the relevant statutory body, when the permits are granted. These work
programs form the capital commitment which may be renegotiated, varied between permits, or reduced due to farm-out, sale,
reduction of permit/licence area and/or relinquishment of non-prospective permits. Work in excess of the work programs may
also be undertaken.
The following capital expenditure requirements have not been provided for in the accounts:
Payable
Not longer than 1 year
Longer than 1 year and not longer than 5 years
There are no lease commitments at the balance date.
22. Related party transactions
a. The Group’s main related parties are as follows:
Key Management Personnel
$
1,776,833
4,442,082
6,218,915
$
1,236,046
3,090,115
4,326,161
Any person(s) having authority or responsibility for planning, directing and controlling the activities of the Group, directly or
indirectly, including any director (whether executive or otherwise) of the Group are considered as key management personnel.
Disclosures relating to key management personnel are set out in Note 20 and in the Directors Report.
Controlled entities
Details of the percentage of ordinary shares held in controlled entities are disclosed in Note 24.
All inter-company loans and receivables are eliminated on consolidation and are interest free with no set repayment terms.
b. Transactions with other related parties:
The Group has a related party relationship with its joint ventures/joint operations (note 25) and with its key management
personnel. The Company and its controlled entities engage in a variety of related party transactions in the ordinary course of
business. These transactions are generally conducted on normal terms and conditions.
There were no transactions with related parties other than as disclosed in Note 20 and this Note 22.
23. Financial instruments
a) Capital management:
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising
the return to stakeholders. The Group’s overall strategy remains unchanged from last financial year.The Group's capital
structure consists of equity (comprising issued capital, reserves and retained earnings as detailed in Consolidated Statement of
Changes in Equity) and no debt. The Group is not subject to any externally imposed capital requirements.
The Board reviews the capital structure of the Group on an on-going basis. As part of this review, the Board considers the cost
of capital and associated risks.
49
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
23. Financial instruments (continued)
The gearing ratio at the end of the reporting period was nil (2017: nil).
b) Categories of financial instruments:
Financial assets
Cash and cash equivalents
Loans and receivables
Available for sale financial assets designated as at FVTPL
Total financial assets
Note
12
Financial liabilities
Other amortised cost - trade creditors
Total financial liabilities
30-Jun-18
30-Jun-17
$
541,124
1,890,518
45,816
2,477,458
$
1,024,462
1,359,926
24,939
2,409,327
(1,867,404)
(1,867,404)
(783,882)
(783,882)
c) Financial risk management objectives:
The main risks the company is exposed to through its financial instruments are interest rate risk, foreign currency risk, liquidity
risk, credit risk and price risk.
Foreign currency risk:
Foreign currency risk is managed by retaining majority of its cash and payables in Australian currency. Petroleum sales are
received in USD with short term credit terms.
Liquidity risk:
The Group manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast
and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
Credit risk:
The Group has adopted a policy of only dealing with credit worthy counterparties and only transacts with financial institutions
that are rated the equivalent of AA and above. The Group’s exposure and the credit ratings of its counterparties are
continuously monitored and transactions concluded are spread amongst approved counterparties. Trade receivables consist
of a limited number of customers, all of which are large creditworthy organisations.
The Company does not have any material credit risk exposure to any single debtor or company of debtors under financial
instruments or collateral securities entered into by the Company.
Commodity risk:
The sales revenue of the company is derived from sales of oil at the prevailing TAPIS or Dated Brent oil price on the Singapore
market in USD. Natural gas sales are governed by a fixed price contract. Sales volumes are not sufficient to undertake the
expense of entering derivative contracts to manage that risk.
d) Fair value of financial instruments:
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).
The fair values of financial assets and liabilities with standard terms and conditions and traded on active liquid markets are
determined with reference to quoted market prices. The fair values of other financial assets and financial liabilities are
determined in accordance with generally accepted pricing models based on discounted cash flow analysis.
Except as detailed in the following table, the directors consider that the carrying amounts of financial assets and financial
liabilities recognised in the consolidated financial statements approximate their fair values.
Consolidated
Note
Fair value hierarchy
30-Jun-18
$
30-Jun-17
$
Financial assets at fair value
through profit or loss
Quoted bid prices
in an active market
12
Level 1
45,816
24,939
e) Sensitivity analysis
The company does not perform sensitivity analysis with respect to interest rate risk, foreign currency risk, liquidity risk, credit
risk or price risk.
50
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
24 . Controlled entities
The consolidated financial statements incorporate the assets, liabilities and results of the following controlled
entities in accordance with the accounting policy described in note 2 (c)(i).
30-Jun-18
30-Jun-17
Country of Incorporation
Name of entity
Ausam Resources Pty Ltd.
Interstate Energy Pty Ltd.
Rough Range Oil Pty Ltd.
Lansvale Oil & Gas Pty Ltd.
(1) The proportion of ownership interest is equal to the proportion of voting power held.
Class of shares
Ordinary
Ordinary
Ordinary
Ordinary
Australia
Australia
Australia
Australia
Equity holding % (1)
100
100
100
100
-
100
-
100
25. Interest in joint operations
Set out below are the joint arrangements of the Group as at 30 June 2018, which in the opinion of the directors are
material to the Group:
Name of the joint
arrangement
ATP 1189P Naccowlah
block
Nyuni PSA
Kiliwani North
ATP 2028P (ex-ATP 754P)
PEP11
Proportionate Dar es Salaam, Tanzania
Proportionate Dar es Salaam, Tanzania
Proportionate Brisbane, Australia
Proportionate Perth, Australia
Measurement
Method
Proportionate Adelaide, Australia
Exploration
Production
Exploration
Exploration
6.66%*
10%
50%
15%
Ownership interest (%)
(*approx)
Principal place of
business
Principal
activity
Production
10%
9.5%
50%
15%
2%
2%
The Group’s joint operations agreements require majority consent from all parties for all relevant activities. The
joint participants own the assets of the joint operations as tenants in common and are jointly and severally liable
for the liabilities incurred by the joint operations. These entities are therefore classified as joint operations and the
group recognises its direct right to the jointly held assets, liabilities, revenues and expenses as described in note
2(c)(ii) & 2(d).
The accounting policies adopted for the group’s joint operations are consistent with those in previous financial year.
The company’s share of revenue and expenses from joint operations are included in the Consolidated Statement of
Comprehensive Income. The company’s share of the assets and liabilities held in joint operations are included in
the Consolidated Statement of Financial Position.
The company holds significant petroleum production and development joint operations interests included in the
Consolidated Statements as follows:
(i) a 10% interest in Kiliwani Gas Development Block as part of larger, the Nyuni Block in Tanzania.
(ii) a 2% interest in various Petroleum Leases and part of ATP 1189P, Queensland and associated oil production
tangibles and pipelines referred to as the Naccowlah Block.
Details of the total revenue and expenses derived from or incurred in Kiliwani Gas Development Block and ATP
1189P joint operations and the company’s share of the assets and liabilities employed in these joint operations are
as follows:
$
$
Revenue from petroleum
Petroleum and all other expenses
Net Profit/(Loss) from joint operations
Current assets
Trade receivables
Inventories
Non current assets
Property, plant & equipment (net of accumulated depreciation)
Other non-current assets
Total assets in joint operations
Current liabilities - Trade and other payables
Non current liabilities - Provisions
Total liabilities in joint operations
Net interest in joint operations
51
1,572,593
(1,400,955)
171,638
2,677,801
(1,108,289)
1,569,512
1,823,959
20,229
1,169,722
26,270
502,533
3,418,259
5,764,980
1,432,481
1,062,806
2,495,287
504,228
4,926,296
6,626,516
525,832
1,049,917
1,575,749
3,269,693
5,050,767
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
25. Interest in joint operations (continued)
Interests in other joint operation entities
Also included in the Consolidated Financial Statements as at 30 June 2018, the group held interests in joint operations whose
principal activities were exploration, evaluation and development of oil and gas but not accruing material revenue.
The company contributes cash funds to the joint operations by way of cash calls for a specified percentage of total exploration
and development activities. Other than the ATP1189P Naccowlah Block and Kiliwani North, Tanzania production Joint
Operations none of the joint operations hold any material assets and accordingly the Company’s share of exploration,
evaluation and development expenditure is accounted for in accordance with the policy set out in Note 1.
26. Business combination
On 1 April 2018, the Group acquired 100% of the equity shares of Rough Range Oil Pty Ltd and its subsidiary Lansvale Oil & Gas
Pty ltd (Rough Range entities), a Western Australia focused oil exploration business, thereby obtaining control from Kestrel
Petroleum Pty Ltd., a personally related entity of the CEO. The acquisition was made to consolidate the Group’s position in the
EP435, EP359 oil exploration permits and L16 lease. Rough Range entities have approximately 90% interest in these licences.
Fair value of consideration transferred
Rough Range Oil Pty Ltd. including its 100% controlled subsidiary Lansvale Oil & Gas Pty Ltd. (Rough Range entities) were
acquired for a deferred cash consideration of $15,000 and fair value of advances made previously to the acquiree noted below.
Fair value of consideration on acquisition
Fair value of deferred consideration payable
Add: fair value of monies advanced previously to the acquiree
Recognised amounts of identifiable net assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Property, plant and equipment
Oil and gas assets
Total non-current assets
Trade and other payables
Total current liabilities
Identifiable net assets
Goodwill on acquisition
Consideration transferred settled in cash
Cash and cash equivalent acquired
Net cash outflow on acquisition
Acquisition costs charged to expenses
Net cash paid relating to the acquisition
Deferred cash consideration payable
31-Mar-18
$
15,000
267,455
282,455
65
5,363
5,428
300,000
95,938
395,938
(118,911)
(118,911)
282,455
-
-
(65)
(65)
323
258
15,000
The initial accounting for the acquisition has only been provisionally determined at the end of the reporting period. For tax
purposes, the tax values of assets are required to be reset based on market values. At the date of finalisation of these
consolidated financial statements, the necessary market valuations and other calculations had not been finalised and they
have therefore only been provisionally determined based on the directors’ best estimate of the likely tax values.
No goodwill arose on the acquisition based on the provisional calculation.
As at 30 June 2018, there have been no changes in the estimate of the probable cash outflow but the liability has increased to
$121,280 due to the accrual of interest expense on outstanding trade payables.
Acquisition-related costs amounting to $323 are not included as part of the consideration transferred and have been
recognised as an expense in the consolidated statement of profit or loss, as part of other expenses.
Identifiable net assets
The fair value of the trade payables acquired as part of the business combination amounted to $118,911. As of the acquisition
date, the Group’s advances to the acquiree company amounted to $267,455, and eliminated on combination.
52
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
26. Business combinations (continued)
Rough Range entities contribution to the Group results
Rough range entities incurred a loss of $3,271 from 1 April 2018 to the reporting date, primarily due to general administration
costs. If the acquisition had occurred on 1 July 2017, the contribution to revenue would have been nil and the loss would have
increased by $511,219.
27. Parent entity information
The accounting policies of the parent entity, which have been applied in determining the financial information shown below,
are same as those applied in the consolidated financial statements. Refer to Note 1 for a summary of the significant accounting
policies relating to the Group. After review of policies, the Board resolved to reclassify the intercompany loans to controlled
entities as non current assets.
The individual financial statements for the parent entity Bounty Oil & Gas NL show the following aggregate amounts:
Statement of Financial Position
Assets
Current assets
Non-current assets
Total Assets
2,366,392
17,581,371
19,947,763
2,173,027
18,839,432
21,012,459
30-Jun-18
$
30-Jun-17
$
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Retained earnings/Accumulated losses
Total Equity
Statement of Profit and Loss and other Comprehensive Income
Loss for the year
Other comprehensive income/(loss)
Total Comprehensive loss for the year
Commitments for Capital Expenditure
No longer than 1 year
Longer than 1 year and not longer than 5 years
Total
There are no operating lease commitments at the balance date.
28. Contingent liabilities and contingent assets
1,777,004
1,110,250
2,887,254
17,060,509
795,621
1,096,721
1,892,342
19,120,117
43,440,163
201,600
(26,581,254)
17,060,509
43,440,163
201,600
(24,521,646)
19,120,117
(2,059,608)
-
(2,059,608)
(345,401)
-
(345,401)
1,501,833
3,754,583
5,256,416
1,083,546
2,708,865
3,792,411
As at the date this report, there were no contingent assets or liabilities, other than a disputed litigation claim for $104,280
which has been included in capital commitments set out in Note 21.
There was no other litigation against or involving Bounty Oil & Gas N.L. or its subsidiaries.
29. Events occurring after the reporting period
No matters or circumstances have arisen since the end of the financial year which have significantly affected or may
significantly affect the operations of the company, the results of those operations, or the state of affairs of the company in
future financial years, other than those referred to in note 28 above.
53
Bounty Oil and Gas NL
Annual Report – 2018
Notes to the consolidated financial statements
for the year ended 30 June 2018
30. Auditors remuneration
Remuneration of the auditors of the Company for:
- Auditing or reviewing the financial reports for year
- Other services
30-Jun-18
$
26,500
-
26,500
30-Jun-17
$
26,500
-
26,500
The auditor to Bounty Oil & Gas NL is William M Moyes, Suite 1301, Level 13, 115 Pitt Street, Sydney NSW 2000.
31. Company details
Bounty Oil & Gas NL’s registered office and its principal place of business are as follows:
Registered Office
Level 7, 283 George Street,
Sydney, NSW, 2000, Australia
Tel: (02) 9299 7200
Principal place of business
Level 7, 283 George Street,
Sydney, NSW, 2000, Australia
Tel: (02) 9299 7200
54
Bounty Oil and Gas NL
DIRECTORS’ DECLARATION
Annual Report – 2018
a) The directors of Bounty Oil and Gas NL (“the Company”) declare that the financial statements and notes, as set out on pages
16 to 43 are in accordance with the Corporations Act 2001:
(i) comply with Accounting Standards and the Corporations Regulations 2001; and
(ii) give a true and fair view of the financial position as at 30th June 2018 and of the performance for the year ended on that
date of the Company;
b) The Chief Executive Officer and the Chief Financial Officer have each declared that:
(i) The financial records of the company for the financial year have been properly maintained in accordance with Section 286 of
the Corporations Act 2001.
(ii) The financial statements and notes for the financial year comply in all material respects with the Accounting Standards;
(iii) The financial statements and notes give a true and fair view.
c) In the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as when they
become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Graham Reveleigh
Director
Dated: 28 September 2018
55
Bounty Oil and Gas NL Annual Report – 2018
1. Additional Information Required by ASX Listing Rules
The following is additional information provided in accordance with the Listing Rules of the Australian
Securities Exchange Limited.
Analysis of equity security holders as at 27 September 2018:
a) Analysis of numbers of holders of fully paid ordinary shares:
No. of Securities
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and above
No. of
Shareholders
209
123
432
1,669
1,019
3,452
b)
Twenty largest holders of quoted equity securities at 27 September 2018:
Ordinary Shareholders
Comadvance Pty Ltd.
Robert A Hutchfield
Red Kite Capital Inc.
David Alan McSeveny
G E Reveleigh
Bang Vi Khanh
Tri-Ex Holdings Pty Ltd.
WH Ave LLC
Kestrel Petroleum Pty Ltd.
Granborough Pty Ltd.
Barry Sheedy & Associates Pty
Level 1 PL
Simon Saliba
Jordan Vujic
Colin M & K S Roche
Ann Spooner
William John & S Tyler
GH Services Pty Ltd
Robert Cameron Galbraith
Milica Vujic
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Fully paid
number
46,490,563
41,580,200
27,022,000
24,663,006
23,377,928
21,880,000
19,177,778
18,000,000
15,175,000
15,000,000
13,893,700
11,284,254
10,000,000
9,160,690
8,900,000
7,772,217
7,000,000
6,783,061
6,500,000
6,017,870
%
4.88%
4.36%
2.83%
2.59%
2.45%
2.29%
2.01%
1.89%
1.59%
1.57%
1.46%
1.18%
1.05%
0.96%
0.93%
0.82%
0.73%
0.71%
0.68%
0.63%
Total Top 20 Holders
339,678,267
35.63%
c) Options as at 27 September 2018:
i)
ii)
there were no listed and quoted options over ordinary shares.
there were no unlisted options over ordinary shares.
60
Bounty Oil and Gas NL Annual Report – 2018
2.
Substantial Shareholders
As at 27 September 2018 there were no substantial shareholders as disclosed in substantial
shareholders notices given to the company.
3.
Issued Shares and Distribution
a) The total number of fully paid ordinary shares on issue on 27 September 2018 was 953,400,982.
b) There were 2,272 holders of less than a marketable parcel of ordinary shares, totalling 59,841,773
shares.
c) The percentage of the total holding of the 20 largest shareholders of ordinary shares was 35.63% of
issued capital.
4.
Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the company on the Australian Securities
Exchange (ASX) under the code BUY.
5.
Income Tax
The company is taxed as a public company.
6. Voting Rights
The voting rights attaching to ordinary shares are governed by the Constitution. At a meeting of
members every person present who is a member or representative of a member shall on a show of
hands have one vote and on a poll, every member present in person or by proxy or by attorney or duly
authorised representative shall have one vote for each share held. No options have any voting rights.
7. Additional Information
Information in these financial statements (or in the annual report) that relates to or refers to
petroleum exploration and prospectivity or petroleum or hydrocarbon reserves or resources is based
on information compiled and/or written by Mr Philip F Kelso the CEO of Bounty Oil & Gas NL. Mr Kelso
is a Bachelor of Science (Geology) and has practised geology and petroleum geology for in excess of 40
years. He is a member of the Petroleum Exploration Society of Australia and a Member of the
Australasian Institute of Mining and Metallurgy. Mr Kelso is a qualified person as defined in the ASX
Listing Rules: Chapter 19 and consents to the reporting of that information in the form and context in
which it appears in this report.
The company continues to comply with the ASX Listing Rules disclosure requirements. The company
reports to ASX which makes available all reports to those who wish to access them. All ASX releases
and other background information are posted regularly on the company’s website. The company
intends to post on its website its annual report and all other required notices to its shareholders.
The board reviews and receives advice on areas of operational and financial risks. Business risk
management strategies are developed as appropriate to mitigate all identified risks of the business.
The directors are aware of the guidelines for the content of a code of conduct to guide compliance
with legal and other obligations to shareholders but have not formally established such a code. Where
applicable to its activities, the directors ensure that the company is responsible to its shareholders,
employees, contractors, advisers, individuals and the community.
8.
Secretary
The name of the Secretary of the company is Mr. Sachin Saraf.
9.
Share Buy Back
There is no current on market share buy back.
61
Bounty Oil and Gas NL Annual Report – 2018
Schedule of Petroleum Tenements - 27 September 2018
Permit
Basin
Interest
Gross km2 Net km2 Operator
Ashmore Cartier
Territory - Vulcan Basin
100%
336
336
Bounty
NSW - Sydney Basin
15%
4,577
686.5
Asset
Energy PL8
SA – Cooper - Eromanga
Basin.
23.28%
1,603.5
373.3
Beach
Energy1
Australia Offshore
AC/P32
PEP 11
Australia Onshore
PRL 33 – PRL 49 FO
inclusive replacing EL 218
(Post Permian)
ATP 1189P (formerly 259P)
Naccowlah Block
PL 23
PL 24
PL 25
PL 26
PL 35
PL 36
PL 62
PL 76
PL 77
PL 78
PL 79
PL 82
PL 87
PL 105/PL 287
PL 496 (ex PL 107)
PL 495 (ex PL 109)
PL 133
PL 149
PL 175
PL 181
PL 182
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
PL 189/PL 1026
SW Qld – Cooper -
62
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
1,064.5
21.3
Santos 2
234.6
200.9
256
255.9
136.5
60.9
64.7
39.5
12.2
12.1
6.5
10.4
27.5
12.2
12.2
9.2
12.2
12.2
27.5
18.3
27.5
18.3
4.7
4.0
5.1
5.1
2.7
1.2
1.3
0.8
0.2
0.2
0.1
0.2
0.6
0.2
0.2
0.2
0.2
0.2
0.6
0.4
0.6
0.4
Santos 2
Santos 2
Santos 2
Santos 2
Santos 2
Santos 2
Santos 2
Santos 2
Santos 2
Santos 2
Santos 2
Santos 2
Santos 2
Santos 2
Santos 2
Santos 2
Santos 2
Santos 2
Santos 2
Santos 2
Santos 2
Santos 2
Bounty Oil and Gas NL Annual Report – 2018
PL 302
PL 1047
PCA 247
PL 2 Alton Oilfield
PL 2A
PL 2B
PL 2C
PL 441 (ex PL 119)
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
SW Qld – Cooper -
Eromanga Basin.
Qld - Surat Basin
Qld - Surat Basin
Qld - Surat Basin
Qld - Surat Basin
Qld - Surat Basin
2%
2%
2%
100%
81.75%
81.75%
100%
100%
ATP 1190 PCA (SG) (4)
Qld - Surat Basin
24.748%
12.2
30.6
127.8
16
66.8
136.7
45.2
21.4
13.2
0.2
0.6
2.6
16
54.6
111.7
45.2
21.4
3.3
ATP 2028
PPL 58 Pipeline Licence6
Qld - Surat Basin
Qld – Surat Basin
EP 359
EP 435
PL 104-L16 (Petroleum
Lease)
WA - Carnarvon Basin
WA - Carnarvon Basin
WA - Carnarvon Basin
50%
100%
10%
10%
10%
554.4
277.2
555
238
555
238
79.1
79.1
Santos 2
Santos 2
Santos 2
Bounty
Bounty
Bounty
Bounty
Ausam
AGL
Ausam7
Ausam7
Rough
Range 3
Rough
Range 3
Rough
Range 3
Tanzania Offshore
Nyuni Block
Kiliwani North
Development Block
Total
Mandawa Basin
Mandawa Basin
10%
9.5%
1,682
168.2
Ndovu5
168
16.8
Ndovu5
12,795
3,036
1. Beach Energy Limited
2. Santos Limited group companies
3. Rough Range Oil Pty Ltd. - is a wholly owned subsidiary of Bounty Oil & Gas NL
4. PCA (SG) – Potential Commercial Area Spring Grove joint venture block
5. Ndovu Resources Limited (a subsidiary of Aminex PLC)
6. Pipeline Licence 58
7. Ausam Resources Pty Ltd - is a wholly owned subsidiary of Bounty Oil & Gas NL
8. Asset Energy Pty Ltd is a wholly owned subsidiary of Advent Energy Ltd
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Bounty Oil and Gas NL Annual Report – 2018
ABBREVIATIONS
The following definitions are provided for readers who are unfamiliar with industry terminology:
AVO
Barrel (bbl/BBL)
Specialised analysis of seismic data comparing amplitude of sound waves versus
collection point offsets
A unit of volume of oil production, one barrel equals 42 US gallons, 35 imperial gallons
or approximately 159 litres
Basin
BCF/Bcf
BOPD/BPD
A segment of the earth’s crust which has down warped and in which sediments have
accumulated, such areas may contain hydrocarbons.
Billion cubic feet, i.e. 1,000 million cubic feet (equivalent to approximately 28.3 million
cubic metres) of gas.
Barrels of oil per day; barrels per day.
Contingent Resources
Discovered resources, not yet fully commercial
CSG
GIIP
Lead
License
MCF/Mcf
MDRT
MMB/mmb,
MMBO/mmbo
MMCF/mmcf,
MMCFG/mmcfg,
MMCFGPD/mmcfgpd
P10
P90
Coal seam gas.
Gas initially in place
A structural or stratigraphic feature which has the potential to contain hydrocarbons
An agreement in which a national or state government gives an oil Company the rights
to explore for and produce oil and/or gas in a designated area.
Thousand cubic feet – the standard measure for natural gas.
Measured depth below Rotary Table
Million barrels, million barrels of oil.
Million cubic feet, million cubic feet of gas, million cubic feet of gas per day
10% probability of occurrence
90% probability of occurrence
Permeability
The degree to which fluids such as oil, gas and water can move through the pore spaces
of a reservoir rock.
Permit
Play
A petroleum tenement, lease, licence or block.
A geological concept which, if proved correct, could result in the discovery of
hydrocarbons.
Plug and Abandon
(P&A)
The process of terminating operations in a well. Cement plugs are set in the borehole
and the rig moves off the location. The borehole is thus left in a safe condition. In some
cases, where the Operator considers it possible that the well may be re-entered at a
later date, the well may be only temporarily plugged and abandoned.
Pmean
The average (mean) probability of occurrence
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Bounty Oil and Gas NL Annual Report – 2018
Porosity
The void space in a rock created by cavities between the constituent mineral grains.
Liquids are contained in the void space.
Prospect (petroleum)
A geological or geophysical anomaly that has been surveyed and defined, usually by
seismic data, to the degree that its configuration is fairly well established and on which
further exploration such as drilling can be recommended.
Prospective Resources
Undisclosed resources
PSA
PSC
PRL
Reserves
Reservoir
Production Sharing Agreement
Production Sharing Contract
Petroleum Retention Lease
Quantities of economically recoverable hydrocarbons estimated to be present within a
trap, classified as prove, probably or possible.
A subsurface volume of rock of sufficient porosity and permeability to permit the
accumulation of crude oil and natural gas under adequate trap conditions.
Seal, Sealing Formation
A geological formation that does not permit the passage of fluids. Refer also to Cap
Rock.
Seismic Survey
A type of geophysical survey where the travel times of artificially created seismic waves
are measured as they are reflected in a near vertical sense back to the surface from
subsurface boundaries. This data is typically used to determine the depths to the tops
of stratigraphic units and in making subsurface structural contour maps and ultimately
in delineating prospective structures.
Spud
To start the actual drilling of a well.
Stratigraphic Trap
A type of petroleum trap which results from variations in the lithology of the reservoir
rock, which cause a termination of the reservoir, usually on the up dip extension.
Structure
Sub-basin
TCF/Tcf
TVDS
Up-dip
A discrete area of deformed sedimentary rocks, in which the resultant bed configuration
is such as to form a potential trap for migrating hydrocarbons.
A localised depression within a basin.
Trillion cubic feet.
Total vertical depth below Sea Level
At a structurally higher elevation within dipping strata.
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Bounty Oil and Gas NL Annual Report – 2018
CORPORATE DIRECTORY
Board of Directors
Share Registry
Graham C Reveleigh (Chairman)
Charles Ross
Roy Payne
Security Transfer Registrars Pty Ltd
770 Canning Highway
Applecross, WA, 6153
Chief Executive Officer
Philip F. Kelso
Company Secretary
Sachin Saraf
Telephone:
Facsimile:
Email: registrar@securitytransfer.com.au
+61 3 9628 2200
+61 8 9315 2233
Bankers
BankWest, Sydney
Commonwealth Bank of Australia, Sydney
Registered and Principal Office
Legal Counsel
Level 7 , 283 George Street,
Sydney, NSW, 2000, Australia,
Telephone: +61 2 9299 2007
+61 2 9299 7300
Facsimile:
corporate@bountyoil.com
Email:
www.bountyoil.com
Website:
Dentons Australia
77 Castlereagh Street
Sydney, NSW, 2000
Independent Consulting Petroleum Engineers
NauticAWT
Level 10, 300 Ann Street,
Brisbane, QLD, 4000.
Apex Energy Consultants Inc,
700, 815 8th Avenue S.W.
Calgary, Alberta, T2P 3P2
Canada
Auditors
Mr. William M Moyes
Moyes Yong & Co
Suite 1301 , Level 13
115 Pitt Street
Sydney NSW 2000
Telephone: +61 2 8256 1100
Facsimile: +61 2 8256 1111
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