SUBJECT TO DEED OF COMPANY ARRANGEMENT
2016 ANNUAL REPORT
ANTARES ENERGY LIMITED AND CONTROLLED ENTITIES
ABN 75 009 230 835
ANNUAL REPORT
FOR THE YEAR ENDED
31 DECEMBER 2016
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
ANTARES ENERGY LIMITED AND CONTROLLED ENTITIES
ABN 75 009 230 835
CONTENTS
Deed Administrators’ Report
Auditor’s Independence Declaration
Statement of Profit or Loss & Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Deed Administrators’ Declaration
Independent Audit Report
Shareholder Information
List of Interests
Page No.
1
6
7
8
9
10
11
39
40
43
42
45
44
i
COMPANY DIRECTORY
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
ADMINISTRATORS:
Quentin James Olde
Michael Joseph Ryan
REGISTERED OFFICE:
C/O FTI Consulting
Level 15, 50 Pitt Street
Sydney, NSW, 2000
Telephone: + 61 (02) 8247 8000
Email: mail@antaresenergy.com
Website: www.antaresenergy.com
ASX CODE:
AZZ
AUDITORS:
Stantons International
Level 2, 1 Walker Avenue
West Perth WA 6005
SHARE REGISTRY:
Security Transfer Registrars Pty Ltd
770 Canning Highway
Applecross WA 6153
Telephone: + 61 (0) 8 9315 2333
Facsimile: + 61 (0) 8 9315 2233
AUSTRALIAN COMPANY NUMBER:
ACN 009 230 835
AUSTRALIAN BUSINESS NUMBER:
ABN 75 009 230 835
ii
DEED ADMINISTRATOR’S REPORT
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
The Deed Administrators of Antares Energy Limited (Subject to Deed of Company Arrangement) (“Antares” or “the Company”) present their
report and the financial report of Antares and the entities it controlled ("the Consolidated Entity") at the end of, or during the year ended 31
December 2016.
DIRECTORS AND COMPANY SECRETARY
The directors in office at any time during the year to 31 December 2016 and until the date of this report are as follows. Directors were in
office for this entire period unless specified otherwise.
James Andrew Cruickshank, B.Com, GDipAppnFin, FAICD, ASA, F.Fin
Chairman, Managing Director & Chief Executive Officer (Resigned 27 April 2016)
Gregory David Shoemaker, B.Sc. Geosciences (Geophysics)
Director & Chief Scientist (Resigned 28 April 2016)
Vicky Ann McAppion, CSA (Certificate in Governance, Practice and Administration)
Director & Finance & Administration Manager (Resigned 28 April 2016)
Mark Gerard Clohessy, BA, GDippAppFin, F.FIN, Cert REM
Non Executive Director (Resigned 28 April 2016)
COMPANY SECRETARY
Graeme Smith, BEc, MBA, MComLaw, FCPA, FCIS, FGIA MAusIMM (Resigned 27 April 2016)
At the date of this report, there were no directors’in office.
PRINCIPAL ACTIVITIES
The principal activities of the Consolidated Entity during the financial year were hydrocarbon production and exploration in the United
States of America.
OPERATING REVIEW
The Company has approximately A$47.5 million of Convertible Notes. The redemption date for these Notes was 30 October 2015. The
Company had concluded a sale of a major asset, being its Southern Star Project, in October 2014 for which it received A$57 million in cash
and A$95 million in listed Breitburn Energy Partners LP shares (“Breitburn Shares”). Subsequently, the oil price dropped from over US$100
per barrel to a low of US $27 per barrel. This change in market conditions devalued the Breitburn shares to the point where the Company
was unable to meet its redemption obligations in relation to Convertible Notes due on October 2015.
As a result, on 30 October 2015, a meeting of Noteholders was convened and it was agreed to reset the redemption date to 31 March
2016 to give the Company time to pursue strategies to generate sufficient funds to meet the redemptions. The meeting of the 31 March
2016 was adjourned to reconsider a further extension of the reset date and was to be reconvened at 28 April 2016. The Board elected
to appoint administrators as the Convertible Notes were to become due and payable on the 29 April 2016.
On 28 April 2016 Messrs Bryan Kevin Hughes and Daniel Johannes Bredenkamp of Pitcher Partners were appointed as Joint and Several
Voluntary Administrators pursuant to section 436A of the Corporations Act 2001. On 10 May 2016 following a resolution passed at the
first meeting of Creditors, Messrs Quentin James Olde and Michael Joseph Ryan of FTI Consulting were appointed as replacement
Voluntary Administrators of the Company pursuant to section 436E of the Corporations Act 2001.
The Administrator subsequently pursued an asset sale strategy for the Company’s assets and/or a recapitalisation proposal for the
Company, or for a party to acquire the shares or assets of the Company’s US subsidiary, Antares Energy Company (“AEC”).
On 2 December 2016, the Creditors of the Company resolved to place the Company into a Deed of Company Arrangement (‘DOCA’) with
a view to implement a recapitalisation proposal put forward by Pager Partners. The DOCA to bring the recapitalisation proposal was
executed on 21 December 2016 with the following key terms:
·
·
·
The syndicate led by Pager Partners will inject A$1,876,875 cash into the Company in return for shares representing approximately
95% of the Company.
The Company would pay $500,000 to the Deed Administrator for distribution under the DOCA to a Creditors’ Trust in return for
secured and unsecured creditors releasing all claims against the Company and their charge over the Company.
Certain unencumbered assets are to be retained by the Company including the Company’s wholly owned subsidiary Antares Energy
Company and all the other subsidiaries, including the Big Star Project in the Permian Basin.
The syndicate will loan the Company to pay for the costs of settling the DOCA, drafting of the DOCA, Creditors Trust Deed,
Shareholder’s Meetings and Shareholder Notices, Prospectus, Independent Experts Report and preparing historical audited accounts.
The DOCA effectuation is subject to certain conditions precedent including the shareholders at an Extraordinary General Meeting
approving the recapitalisation proposal including:
·
·
·
consolidate the capital on a 1:15 basis;
elect Ross Warner, Joanne Kendrick and Michael Pollak as directors;
2016 Annual Report
1
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
·
authorise the issue of the following shares and options (including to related parties) to raise $1,876,875 before costs
o
o
o
150,000,000 shares at $0.0025 per share;
150,000,000 shares at $0.01 per share; and
75,000,000 options at $0.000025 per option.
At effectuation, the Company will be released from being subject to the DOCA.
SIGNIFICANT EVENTS AFTER BALANCE DATE
The Administrator sold seven well bores and associated acreage that was held in production in Antares’ Northern Star project in Dawson
County, Texas to Murphy Oil, a large public El Dorado, Arkansas based Oil and Gas Company effective 1 April 2017.
SIGNIFICANT CHANGES TO STATE OF AFFAIRS
There have been no further changes to the Company’s state of affairs, other than those disclosed in the Operations Review and Significant
Events After Balance Date.
FINANCIAL RESULTS
The net loss after income tax of the Consolidated Entity for the year ended 31 December 2016 was $6.672 million (2015: loss of $48.245
million).
DIVIDEND
No dividends have been paid or declared since the end of the previous financial period, or to the date of this report.
INCOMPLETE RECORDS
The management and affairs of the Company and all its controlled entities have not been under the control of the Directors of the Group
since it entered into voluntary administration on 28 April 2016.
To prepare the financial report, the Administrators have reconstructed the financial records of Antares Energy Limited (subject to Deed of
Company Arrangement) using data extracted from the Consolidated Entity’s accounting systems and the record of receipts and payments
during the Administration of the Company and relied on information provided by in – country management of the subsidiaries for the period
from their appointment.
Although due care has been taken in preparing the financial statements, based on the information available, it is not possible to state that
the financial information is complete or accurate. Neither is it possible to state that the financial information was subject to the accounting
and internal control processes that are relevant to the preparation and fair presentation of the financial reports.
Consequently, although the Administrators have prepared this financial report to the best of their knowledge based on the information
made available to them, they are of the opinion that it is not possible to state that this financial report has been prepared in accordance
with Australian Accounting Standards including Australian Accounting Interpretations, other authoritative pronouncements of the Australian
Accounting Standards Board and the Corporations Act 2001, nor is it possible to state this financial report gives a true and fair view of the
Consolidated Entity’s financial position.
LIKELY DEVELOPMENTS AND RESULTS
Subject to the successful recapitalisation of the Company will continue to pursue oil and gas opportunities.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Consolidated Entity is a party to various exploration and development licences or permits in the country in which it operates. In most
cases, these contracts and licences specify the environmental regulations applicable to oil and gas operations in the respective jurisdictions.
There have been no significant known breaches of the environmental obligations of the Consolidated Entity's licences.
AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
The independence declaration received from the auditor of Antares Energy Limited (Subject to Deed of Arrangement) is set out on page 6
and forms part of this Deed Administrators’ report for the year ended 31 December 2016.
The were no fees were paid or payable to the Company’s auditors Stantons International for non-audit services provided to the Company
during the year ended 31 December 2016.
2016 Annual Report
2
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
INDEMNIFICATION OF DIRECTORS, COMPANY SECRETARY AND AUDITORS
Due to the Company being in administration from the 28 April 2016, the Company does not have sufficient information to allow this level of
disclosure for the year ended 31 December 2016. No indemnities have been given during or since the appointment of Administrators for
any person who is or has been an officer of the Consolidated Entity. No Insurance premiums have been paid since the appointment of
administrators in respect of any director’s and officers’ insurance.
ROUNDING
The amounts contained in this report and in the financial report have been rounded to the nearest $1,000 (where rounding is applicable)
under the option available to the company under ASIC Class Order 98/0100. The company is an entity to which the Class Order applies.
DIRECTOR’S MEETINGS
Due to the Company being placed into voluntary administration on 28 April 2016, information on the attendance at Directors’ meetings is
not available.
2016 Annual Report
3
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
REMUNERATION REPORT (AUDITED)
This remuneration report for the year ended 31 December 2016 reflects the remuneration policies that were adopted by the directors
of the Company who were in office prior to the Company entering into administration. These policies applied until the Company
entered Voluntary Administration on 28 April 2016. The Administrators has had no involvement in adopting, implementing or
complying with these policies. These policies may or may not have been in place during the financial period.
If the recapitalisation proposal is successful, the proposed directors will adopt a new remuneration policy.
This remuneration report for the year ended 31 December 2016 outlines the remuneration arrangements in place for directors and
executives of the Company and Group in accordance with the requirements of the Corporations Act 2001 and its regulations.
The remuneration report details the remuneration arrangements for key management personnel who are defined as those persons having
authority and responsibility for planning, directing and controlling the major activities of the Consolidated Entity, directly or indirectly,
including any director (whether executive or otherwise).
Remuneration policies
The Remuneration Committee is responsible for making recommendations to the Board on remuneration policies applicable to directors and
executives of the Company.
Remuneration levels for directors and senior executives of the Consolidated Entity (“the key management personnel”) are competitively set
to attract and retain appropriately qualified and experienced directors and senior executives.
Fixed remuneration
Fixed remuneration consists of base remuneration (which is calculated on a total cost basis and includes any FBT charges related to
employee benefits), as well as employer contributions to superannuation funds where applicable.
Variable remuneration
Variable remuneration is designed to reward the Chairman and executive directors for meeting or exceeding financial, operational and/or
individual objectives or expectations. While these criteria are used as a guide, the awarding of variable remuneration is at the discretion
of the board. Those incentives are an “at risk” bonus provided in the form of cash and/or performance rights.
Other benefits
In accordance with generally acceptable work practices in the United States, medical insurance is provided to all executives.
Employment contracts
It is the Consolidated Entity’s policy that employment agreements for senior executives are unlimited in term but capable of termination with
twelve months’ notice and that the Consolidated Entity retains the right to terminate the contract immediately, by making payment in lieu of
notice.
Non-executive directors
Total remuneration for all non-executive directors, last voted upon by shareholders at the 2002 AGM, is not to exceed $250,000 per
annum.
Key management personnel
J.A. Cruickshank
G.D. Shoemaker
V.A. McAppion
M.G. Clohessy
Chairman appointed 16 October 2009 (Resigned 27 April 2016)
Managing Director and CEO appointed 1 July 2008
Executive Director appointed 8 October 2004
Director & Chief Scientist – appointed 16 October 2009 (Resigned 28 April 2016)
Director, Finance & Administration Manager– appointed 16 October 2009 (Resigned 28 April 2016)
Director (non-executive) – appointed16 October 2009(Resigned 28 April 2016)
Share holdings of Key Management Personnel
Balance at
1 January
On exercise of
performance
rights
Change due to
appointment /
(resignation)
On market
purchase
Balance at
31 December
2016
J.A. Cruickshank
G.D. Shoemaker
V.A. McAppion
M.G. Clohessy
10,500,000
825,000
198,226
2,865,000
14,388,226
-
-
-
-
-
(10,500,000)
(825,000)
(198,226)
(2,865,000)
(14,388,226)
-
-
-
-
-
-
-
-
-
-
2016 Annual Report
4
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
Balance at
1 January
On exercise of
performance
rights
Change due to
appointment /
(resignation)
On market
purchase
Balance at
31 December
2015
J.A. Cruickshank
G.D. Shoemaker
V.A. McAppion
M.G. Clohessy
10,500,000
825,000
198,226
2,865,000
14,388,226
Key management personnel remuneration
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,500,000
825,000
198,226
2,865,000
14,388,226
The following table sets out the remuneration of directors and executives of the Consolidated Entity during the reporting period.
Short-Term
Salary
& Fees
$
Cash
Bonus
$
Non
Monetary
Benefits
$
Other
$
Long-
Term
Long-
Service
Leave
$
Post
Employ-
ment
Super-
annuation
$
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
Total
Total
Perform-
ance
Related
$
$
*
*
*
*
*
*
*
*
*
*
Year to
31 Dec 2016
Directors
J.A. Cruickshank
G D Shoemaker
M G Clohessy
V McAppion
Total
* The company was under External administration from the 28 April 2016, consequently the Company does not have sufficient
information to allow this level of disclosure in relation to the Directors’ Remuneration report as required for the year ended 31
December 2015.
Short-Term
Salary
& Fees
$
Cash
Bonus
$
Non
Monetary
Benefits
$
Other
$
Long-
Term
Long-
Service
Leave
$
Post
Employ-
ment
Super-
annuation
$
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
Total
Total
Perform-
ance
Related
$
$
*
*
*
*
*
*
*
*
*
*
Year to
31 Dec 2015
Directors
J.A. Cruickshank
G D Shoemaker
M G Clohessy
V McAppion
Total
During the year ended 31 December 2010 an interest free loan was provided to a Director (J.A. Cruickshank: USD 600,000), repayable
on demand if the Director ceases employment with Antares or ceases to be located in Dallas, Texas. The loan remains outstanding as at 31
December 2015 (600,000; A$821,243) The benefit to the Director of having an interest free loan was A$24,637 for the 2015 year. This
loan was repaid on 25 January 2016.
End of Remuneration Report
Signed by Quentin James Olde in his capacity as Deed Administrator.
17 October 2017
2016 Annual Report
5
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
17 October 2017
Antares Energy Limited (Subject to a Deed of Company Arrangement)
c/o FTI Consulting Limited
Level 15, 50 Pitt Street
Sydney, NSW 2000
Dear Sirs
RE: ANTARES ENERGY LIMITED (SUBJECT TO A DEED OF COMPANY ARRANGEMENT)
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the deed administrators of Antares Energy Limited
(Subject to a Deed of Company Arrangement).
As Audit Director for the audit of the financial statements of Antares Energy Limited (Subject to a
Deed of Company Arrangement) for the year ended 31 December 2016, I declare that to the best
of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
(ii)
any applicable code of professional conduct in relation to the audit.
Yours faithfully,
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LIMITED
(Trading as Stantons International)
(An Authorised Audit Company)
Samir Tirodkar
Director
Liability limited by a scheme approved
under Professional Standards Legislation
Statement of Profit or Loss & Other Comprehensive Income
Antares Energy Limited and its Controlled Entities
For the Year Ended 31 December 2016
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
Continuing operations
Revenue
Cost of sales
Gross (loss)/ profit
Other income
General & Administration Expense
Impairment of available for sale financial assets
Impairment of exploration and evaluation expenditure
Impairment of oil & gas properties
Impairment of property, plant & equipment
Depreciation & Amortisation
Finance costs
Loss before income tax
Income tax benefit
Loss from continuing operations
Discontinued operation
Net loss for the period
Other comprehensive loss
Amounts that may be subsequently recycled to profit or loss
Foreign currency translation
Other comprehensive profit for the period net of tax
Total comprehensive loss for the period
Loss per share (cents per share)
Loss from continuing operations:
Basic loss per share for the period
Diluted loss per share for the period
Loss from all operations:
Basic loss per share for the period
Diluted loss per share for the period
Notes
Consolidated
31 December
2016
$’000
31 December
2015
$’000
3
4(a)
4(b)
10
14
13
4(c)
683
(834)
(151)
-
(3,405)
(1,237)
-
-
-
-
(1,879)
3,905
(1,560)
2,345
258
(4,299)
(36,736)
(3,043)
(1,656)
(128)
(438)
(5,827)
(6,672)
(49,524)
5
-
1,279
(6,672)
(48,245)
-
(6,672)
-
(48,245)
2,253
2,253
(4,419)
4,998
4,998
(43,247)
6
6
6
6
(2.78)
(2.78)
(2.78)
(2.78)
(20.11)
(20.11)
(20.11)
(20.11)
The above statement of profit or loss & other comprehensive income should be read in conjunction with the accompanying notes.
2016 Annual Report
7
Statement of Financial Position
Antares Energy Limited and its Controlled Entities
As at 31 December 2016
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Prepayments
Available for sale financial assets
Oil & gas asset held for sale
Property, plant and equipment held for sale
Total current assets
NON-CURRENT ASSETS
Other receivable
Property, plant and equipment
Oil and gas properties
Total non-current assets
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Interest-bearing loans and borrowings
Provisions
Total current liabilities
NON-CURRENT LIABILITIES
Provisions
Total non-current liabilities
TOTAL LIABILITIES
NET (LIABILITIES)
EQUITY
Contributed equity
Reserves
Accumulated Losses
TOTAL (DEFICIENCY IN SHAREHOLDERS FUNDS)
Notes
Consolidated
31 December
2016
$’000
31 December
2015
$’000
7
8
9
10
11
12
8
12
13
15
16
17
17
18
19
145
1
-
-
146
2,727
-
2,873
-
-
411
411
3,284
784
47,500
276
48,560
173
173
48,733
(45,449)
84,436
32,859
(162,744)
(45,449)
1,389
927
41
3,943
6,300
-
44
6,344
-
-
3,085
3,085
9,429
1,227
47,500
1,291
50,018
441
441
50,459
(41,030)
84,436
30,606
(156,072)
(41,030)
The above statement of financial position should be read in conjunction with the accompanying notes.
2016 Annual Report
8
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
Statement of Changes in Equity
Antares Energy Limited and its Controlled Entities
For the Year Ended 31 December 2016
CONSOLIDATED
Ordinary
Share
Capital
$'000
Accumulated
Losses
$'000
Foreign
Currency
Reserve
$’000
Convertible
Note
Premium
Reserve
$’000
Share
Option
Reserve
$'000
AFS
Reserve
$’000
Balance at 1
January 2015
Loss for the
period
Other
comprehensive
profit
Increment in AFS
fair value
Impairment of
AFS financial
asset
Total
comprehensive
loss for the
period
Transactions
with owners in
their capacity as
owners:
Issue of
Convertible
Notes
Securities bought
back
Balance at 31
December 2015
Balance at 1
January 2016
Loss for the
period
Other
comprehensive
profit
Increment in AFS
fair value
Impairment of
AFS financial
asset
Total
comprehensive
loss for the
period
Transactions
with owners in
their capacity as
owners:
Securities bought
back
Balance at 31
December 2016
84,671
(107,827)
15,803
3,934
5,883
-
-
-
-
-
-
(235)
(48,245)
-
-
-
-
4,998
-
-
(48,245)
4,998
-
-
-
-
-
-
-
-
-
-
(12)
-
-
-
-
-
-
-
84,436
(156,072)
20,801
3,922
5,883
84,436
(156,072)
20,801
3,922
5,883
(6,672)
-
-
-
2,253
-
-
(6,672)
2,253
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
84,436
(162,744)
23,054
3,922
5,883
The above statement of changes in equity should be read in conjunction with the accompanying notes.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$'000
2,464
(48,245)
4,998
-
-
(43,247)
-
(247)
(41,030)
(41,030)
(6,672)
2,253
-
-
(4,419)
-
(45,449)
2016 Annual Report
9
Statement of Cash Flows
Antares Energy Limited and its Controlled Entities
For the Year Ended 31 December 2016
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Income taxes refunded
Interest paid
Net cash (outflows) from operating activities
Cash flows from investing activities
Dividend received
Proceeds from sale of shares
Proceeds property, plant and equipment
Exploration, evaluation and development expenditure
Net cash inflows/ (outflows) from investing activities
Cash flows from financing activities
Payments for share buy-back
Payment for convertible note buyback
Proceeds from repayment of loan
Proceeds from syndicate
Finance fees
Net cash inflows/ (outflows) from financing activities
Net (decrease) in cash and cash equivalents held
Cash and cash equivalents at the beginning of the period
Effects of exchange rate changes on cash
Cash and cash equivalents at the end of the period
Note
Consolidated
31 December
2016
$’000
31 December
2015
$’000
1,069
(5,775)
-
-
-
(4,706)
-
2,587
44
-
2,631
-
-
821
10
-
831
(1,244)
1,389
-
145
7
18
16
7
1,605
(5,959)
33
1,279
(4,982)
(8,024)
2,843
-
-
(5,025)
(2,182)
(235)
(4,378)
-
-
-
(4,613)
(14,819)
14,732
1,476
1,389
The above statement of cash flows should be read in conjunction with the accompanying notes.
2016 Annual Report
10
Notes to the Financial Statements
For the Year Ended 31 December 2016
NOTE 1 BASIS OF PREPARATION
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
Antares Energy Limited (Subject to Deed of Company Arrangement) is a company limited by shares incorporated and domiciled
in Australia whose shares are publicly traded on the Australian Stock Securities Exchange and is a for profit entity. The address of
the registered office and principal place of business is Level 15, 50 Pitt Street, Sydney, NSW, 2000.
The principal activity of Antares Energy Limited is the exploration and production of oil and gas, with current activities based
primarily in Texas in the United States of America.
(a)
Basis of preparation
The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the
Corporations Act 2001, applicable Australian Accounting Standards and other mandatory professional reporting requirements.
The financial report has been prepared in accordance with the historical cost convention other than available for sale financial
assets which are measured at fair value.
The financial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars ($'000) unless
otherwise stated under the option available to the company under ASIC Class Order 98/100. The Company is an entity to
which the class order applies.
Going Concern
The Administrators have prepared the financial report of the consolidated entity on the going concern basis.
On 28 April 2016, Messrs Bryan Kevin Hughes and Daniel Johannes Bredenkamp of Pitcher Partners were appointed as Joint
and Several Voluntary Administrators. Messrs Quentin James Olde and Michael Joseph Ryan of FTI Consulting were appointed
as replacement Voluntary Administrators of the Company on 10 May 2016 pursuant to section 436E of the Corporations Act
2001 (Clth) following a resolution passed at the first meeting of Creditors.
On 2 December 2016, the Creditors of the Company resolved to place the Company into a Deed of Company Arrangement
(‘DOCA’) with a view to implement a recapitalisation proposal put forward by Pager Partners. The DOCA to bring the
recapitalisation proposal was executed on 21 December 2016. Effectuation of the DOCA is subject to the satisfaction of
various conditions precedent at which point creditor claims against Antares Energy Limited (Subject to a Deed of Company
Arrangement) would be satisfied and extinguished.
Since the recapitalisation is incomplete, there is significant uncertainty as to whether the consolidated entity will continue as a
going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business.
The financial report contains adjustments relating to the recoverability and classification of recorded assets to the amounts or
classification of recorded assets or liabilities that might be necessary should the consolidated entity not be able to continue as
a going concern.
Statement of compliance
The financial report complies with Australian Accounting Standards and International Financial Standards (IFRS) as issued by
the International Accounting Standard Board except for the incomplete records noted below.
(b)
Incomplete records
The management and affairs of the Company and all its controlled entities have not been under the control of the Directors of
the Group since it entered into voluntary administration on 28 April 2016.
To prepare the financial report, the Administrators have reconstructed the financial records of Antares Energy Limited (subject
to Deed of Company Arrangement) using data extracted from the Consolidated Entity’s accounting systems and the record of
receipts and payments during the Administration of the Company and relied on information provided by in – country
management of the subsidiaries for the period from their appointment.
Although due care has been taken in preparing the financial statements, based on the information available, it is not possible
to state that the financial information is complete or accurate. Neither is it possible to state that the financial information was
subject to the accounting and internal control processes that are relevant to the preparation and fair presentation of the
financial reports.
Consequently, although the Administrators have prepared this financial report to the best of their knowledge based on the
information made available to them, they are of the opinion that it is not possible to state that this financial report has been
prepared in accordance with Australian Accounting Standards including Australian Accounting Interpretations, other
authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001, nor is it possible
to state this financial report gives a true and fair view of the Consolidated Entity’s financial position.
2016 Annual Report
11
Notes to the Financial Statements
For the Year Ended 31 December 2016
NOTE 1 BASIS OF PREPARATION (CONT.)
(c) New and amended accounting standards and interpretations
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
The accounting policies adopted are consistent with those of the previous financial year except as follows:
All new and amended Standards and Interpretations effective from 1 January 2015 have been adopted, including:
Reference
Title
Summary
AASB
2013-9
Amendments to Australian
Accounting Standards –
Conceptual Framework,
Materiality and Financial
Instruments
AASB
2014-1
Part A -Annual Improvements
2010–2012 Cycle
Amendments
to AASB
1053 –
Transition to and between
Tiers, and related Tier 2
Disclosure Requirements
[AASB 1053]
The Standard contains three main parts and makes amendments to a number of
Standards and Interpretations.
Part A of AASB 2013-9 makes consequential amendments arising from the
issuance of AASB CF 2013-1.
Part B makes amendments to particular Australian Accounting Standards to
delete references to AASB 1031 and also makes minor editorial amendments to
various other standards.
Part C makes amendments to a number of Australian Accounting Standards,
including incorporating Chapter 6 Hedge Accounting into AASB 9 Financial
Instruments.
AASB 2014-1 Part A: This standard sets out amendments to Australian
Accounting Standards arising from the issuance by the International Accounting
Standards Board (IASB) of International Financial Reporting Standards (IFRSs)
Annual Improvements to IFRSs 2010–2012 Cycle and Annual Improvements to
IFRSs 2011–2013 Cycle.
Annual Improvements to IFRSs 2010–2012 Cycle addresses the following items:
► AASB 2 - Clarifies the definition of 'vesting conditions' and 'market
condition' and introduces the definition of 'performance condition' and
'service condition'.
► AASB 3 - Clarifies the classification requirements for contingent
consideration in a business combination by removing all references to AASB
137.
► AASB 8 - Requires entities to disclose factors used to identify the entity's
reportable segments when operating segments have been aggregated. An
entity is also required to provide a reconciliation of total reportable
segment assets to the entity's total assets.
► AASB 116 & AASB 138 - Clarifies that the determination of accumulated
depreciation does not depend on the selection of the valuation technique
and that it is calculated as the difference between the gross and net
carrying amounts.
AASB 124 - Defines a management entity providing KMP services as a related
party of the reporting entity. The amendments added an exemption from the
detailed disclosure requirements in paragraph 17 of AASB 124 Related Party
Disclosures for KMP services provided by a management entity. Payments made
to a management entity in respect of KMP services should be separately
disclosed.
The Standard makes amendments to AASB 1053 Application of Tiers of
Australian Accounting Standards to:
• Clarify that AASB 1053 relates only to general purpose financial
• Make AASB 1053 consistent with the availability of the AASB 108
statements.
Accounting Policies, Changes in Accounting Estimates and Errors option in
AASB 1 First-time Adoption of Australian Accounting Standards.
• Clarify certain circumstances in which an entity applying Tier 2 reporting
requirements can apply the AASB 108 option in AASB 1; permit an entity
applying Tier 2 reporting requirements for the first time to do so directly
using the requirements in AASB 108 (rather that applying AASB 1) when,
and only when, the entity had not applied, or only selectively applied,
applicable recognition and measurement requirements in its most recent
previous annual special purpose financial statements.
Application
date of
standard
Application
date for
Group
1 January
2015
1 January
2015
1 July
2014
1 January
2015
1 July
2014
1 January
2015
Specify certain disclosure requirements when an entity resumes the application
of Tier 2 reporting requirements.
Adoption of these Standards and Interpretations did not have any effect on the financial position or performance of the Group but did effect
disclosure. The Group has not elected to early adopt any new standards or amendments.
2016 Annual Report
12
Notes to the Financial Statements
For the Year Ended 31 December 2016
NOTE 1 BASIS OF PREPARATION (CONT.)
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
The following standards and interpretations have been issued by the AASB but are not yet effective for the period ending 31 December
2016.
The Group has not yet assessed the impact of these new standards and interpretations.
Application
date of
standard
Application
date for
Group
1 January
2018
1 January
2018
Reference
Title
Summary
AASB 9
Financial Instruments
AASB 9 (December 2014) is a new Principal standard which replaces AASB
139. This new Principal version supersedes AASB 9 issued in December 2009 (as
amended) and AASB 9 (issued in December 2010) and includes a model for
classification and measurement, a single, forward-looking ‘expected loss’
impairment model and a substantially-reformed approach to hedge accounting.
AASB 9 is effective for annual periods beginning on or after 1 January 2018.
However, the Standard is available for early application. The own credit
changes can be early applied in isolation without otherwise changing the
accounting for financial instruments.
The final version of AASB 9 introduces a new expected-loss impairment model
that will require more timely recognition of expected credit losses. Specifically,
the new Standard requires entities to account for expected credit losses from
when financial instruments are first recognised and to recognise full lifetime
expected losses on a more timely basis.
Amendments to AASB 9 (December 2009 & 2010 editions )(AASB 2013-9)
issued in December 2013 included the new hedge accounting requirements,
including changes to hedge effectiveness testing, treatment of hedging costs, risk
components that can be hedged and disclosures.
AASB 9 includes requirements for a simpler approach for classification and
measurement of financial assets compared with the requirements of AASB 139.
The main changes are described below.
a.
Financial assets that are debt instruments will be classified based on (1) the
objective of the entity's business model for managing the financial assets;
(2) the characteristics of the contractual cash flows.
b. Allows an irrevocable election on initial recognition to present gains and
losses on investments in equity instruments that are not held for trading in
other comprehensive income. Dividends in respect of these investments that
are a return on investment can be recognised in profit or loss and there is
no impairment or recycling on disposal of the instrument.
c.
Financial assets can be designated and measured at fair value through
profit or loss at initial recognition if doing so eliminates or significantly
reduces a measurement or recognition inconsistency that would arise from
measuring assets or liabilities, or recognising the gains and losses on them,
on different bases.
d. Where the fair value option is used for financial liabilities the change in
fair value is to be accounted for as follows:
►
The change attributable to changes in credit risk are presented in
other comprehensive income (OCI)
►
The remaining change is presented in profit or loss
AASB 9 also removes the volatility in profit or loss that was caused by changes
in the credit risk of liabilities elected to be measured at fair value. This change
in accounting means that gains caused by the deterioration of an entity’s own
credit risk on such liabilities are no longer recognised in profit or loss.
Consequential amendments were also made to other standards as a result of
AASB 9, introduced by AASB 2009-11 and superseded by AASB 2010-7,
AASB 2010-10 and AASB 2014-1 – Part E.
AASB 2014-7 incorporates the consequential amendments arising from the
issuance of AASB 9 in Dec 2014.
AASB 2014-8 limits the application of the existing versions of AASB 9 (AASB 9
(December 2009) and AASB 9 (December 2010)) from 1 February 2015 and
applies to annual reporting periods beginning on after 1 January 2015.
2016 Annual Report
13
Notes to the Financial Statements
For the Year Ended 31 December 2016
NOTE 1 BASIS OF PREPARATION (CONT.)
Reference
Title
Summary
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
AASB 2014-3 Amendments to Australian
Accounting Standards –
Accounting for Acquisitions of
Interests in Joint Operations
[AASB 1 & AASB 11]
AASB 2014-4 Clarification of Acceptable
Methods of Depreciation and
Amortisation (Amendments to
AASB 116 and AASB 138)
AASB 15
Revenue from Contracts with
Customers
AASB 2014-9 Amendments to Australian
Accounting Standards – Equity
Method in Separate Financial
Statements
AASB 2014-3 amends AASB 11 to provide guidance on the accounting
for acquisitions of interests in joint operations in which the activity
constitutes a business. The amendments require:
(a) the acquirer of an interest in a joint operation in which the activity
constitutes a business, as defined in AASB 3 Business Combinations, to
apply all of the principles on business combinations accounting in AASB 3
and other Australian Accounting Standards except for those principles
that conflict with the guidance in AASB 11; and
(b) the acquirer to disclose the information required by AASB 3 and other
Australian Accounting Standards for business combinations.
This Standard also makes an editorial correction to AASB 11.
AASB 116 and AASB 138 both establish the principle for the basis of
depreciation and amortisation as being the expected pattern of
consumption of the future economic benefits of an asset.
The IASB has clarified that the use of revenue-based methods to calculate
the depreciation of an asset is not appropriate because revenue
generated by an activity that includes the use of an asset generally
reflects factors other than the consumption of the economic benefits
embodied in the asset.
The amendment also clarified that revenue is generally presumed to be
an inappropriate basis for measuring the consumption of the economic
benefits embodied in an intangible asset. This presumption, however, can
be rebutted in certain limited circumstances.
In May 2014, the IASB issued IFRS 15 Revenue from Contracts with
Customers, which replaces IAS 11 Construction Contracts, IAS 18 Revenue
and related Interpretations (IFRIC 13 Customer Loyalty Programmes, IFRIC
15 Agreements for the Construction of Real Estate, IFRIC 18 Transfers of
Assets from Customers and SIC-31 Revenue—Barter Transactions Involving
Advertising Services).
The core principle of IFRS 15 is that an entity recognises revenue to depict
the transfer of promised goods or services to customers in an amount that
reflects the consideration to which the entity expects to be entitled in
exchange for those goods or services. An entity recognises revenue in
accordance with that core principle by applying the following steps:
(a) Step 1: Identify the contract(s) with a customer
(b) Step 2: Identify the performance obligations in the contract
(c) Step 3: Determine the transaction price
(d) Step 4: Allocate the transaction price to the performance obligations
in the contract
(e) Step 5: Recognise revenue when (or as) the entity satisfies a
performance obligation
Early application of this standard is permitted.
AASB 2014-5 incorporates the consequential amendments to a number
Australian Accounting Standards (including Interpretations) arising from
the issuance of AASB 15.
AASB 2014-9 amends AASB 127 Separate Financial Statements, and
consequentially amends AASB 1 First-time Adoption of Australian
Accounting Standards and AASB 128 Investments in Associates and Joint
Ventures, to allow entities to use the equity method of accounting for
investments in subsidiaries, joint ventures and associates in their separate
financial statements.
AASB 2014-9 also makes editorial corrections to AASB 127.
AASB 2014-9 applies to annual reporting periods beginning on or after
1 January 2016. Early adoption permitted.
Application
date of
standard
Application
date for
Group
1 January
2016
1 January
2016
1 January
2016
1 January
2016
1 January
2017
1 January
2017
1 January
2016
1 January
2016
2016 Annual Report
14
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
Application
date of
standard
1 January
2018
Application
date for Group
1 January
2018
Notes to the Financial Statements
For the Year Ended 31 December 2016
NOTE 1 BASIS OF PREPARATION (CONT.)
Reference
Title
Summary
AASB 2014-10 amends AASB 10 Consolidated Financial Statements and
AASB 128 to address an inconsistency between the requirements in
AASB 10 and those in AASB 128 (August 2011), in dealing with the
sale or contribution of assets between an investor and its associate or
joint venture. The amendments require:
(a) a full gain or loss to be recognised when a transaction involves a
business (whether it is housed in a subsidiary or not); and
(b) a partial gain or loss to be recognised when a transaction involves
assets that do not constitute a business, even if these assets are housed
in a subsidiary.
AASB 2014-10 also makes an editorial correction to AASB 10.
AASB 2014-10 applies to annual reporting periods beginning on or
after 1 January 2016. Early adoption permitted. AASB 2015-10 has
deferred the application date of AASB 2014-10 to amend the
application date of AASB 2014 -10 to annual reporting periods on or
after 1 January 2018.
AASB 2014-10
AASB2015-10*
Amendments to Australian
Accounting Standards –
Sale or Contribution of
Assets between an Investor
and its Associate or Joint
Venture
AASB 2015-1
Amendments to Australian
Accounting Standards –
Annual Improvements to
Australian Accounting
Standards 2012–2014
Cycle
The subjects of the principal amendments to the Standards are set out
below:
1 January
2016
1 January
2016
AASB 5 Non-current Assets Held for Sale and Discontinued Operations:
• Changes in methods of disposal – where an entity reclassifies an
asset (or disposal group) directly from being held for distribution to
being held for sale (or visa versa), an entity shall not follow the
guidance in paragraphs 27–29 to account for this change.
AASB 7 Financial Instruments: Disclosures:
• Servicing contracts - clarifies how an entity should apply the
guidance in paragraph 42C of AASB 7 to a servicing contract to
decide whether a servicing contract is ‘continuing involvement’ for the
purposes of applying the disclosure requirements in paragraphs
42E–42H of AASB 7.
• Applicability of the amendments to AASB 7 to condensed interim
financial statements - clarify that the additional disclosure required
by the amendments to AASB 7 Disclosure–Offsetting Financial Assets
and Financial Liabilities is not specifically required for all interim
periods. However, the additional disclosure is required to be given
in condensed interim financial statements that are prepared in
accordance with AASB 134 Interim Financial Reporting when its
inclusion would be required by the requirements of AASB 134.
AASB 119 Employee Benefits:
• Discount rate: regional market issue - clarifies that the high quality
corporate bonds used to estimate the discount rate for post-
employment benefit obligations should be denominated in the same
currency as the liability. Further it clarifies that the depth of the
market for high quality corporate bonds should be assessed at the
currency level.
AASB 134 Interim Financial Reporting:
• Disclosure of information ‘elsewhere in the interim financial report’ -
amends AASB 134 to clarify the meaning of disclosure of
information ‘elsewhere in the interim financial report’ and to require
the inclusion of a cross-reference from the interim financial
statements to the location of this information.
AASB 2015 -2 Disclosure Initiative
As part of the IASB’s Disclosure Initiative projects, the IASB issued
Amendments to IAS 1 in December 2014. The amendments are
designed to further encourage companies to apply professional
judgment in determining what information to disclose in the financial
statements. For example, the amendments make clear that materiality
applies to the whole of financial statements and that the inclusion of
immaterial information can inhibit the usefulness of financial
disclosures. The amendments also clarify that companies should use
professional judgment in determining where and in what order
information is presented in the financial disclosures.
1 January
2016
1 January
2016
2016 Annual Report
15
Notes to the Financial Statements
For the Year Ended 31 December 2016
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
NOTE 1 BASIS OF PREPARATION (CONT.)
Reference
Title
Summary
AASB 2015-3
Amendments to Australian
Accounting Standards
arising from the
Withdrawal of AASB 1031
Materiality
The Standard completes the AASB’s project to remove Australian
guidance on materiality from Australian Accounting Standards.
AASB 16
Leases
The key features of AASB16 are as follows:
Lessee accounting
Application
date of
standard
1 July 2015
Application
date for Group
1 January
2016
1 January
2019
1 January
2019
•
Lessees are required to recognise assets and liabilities for
all leases with a term of more than 12 months, unless the
underlying asset is of low value.
• A lessee measures right-of-use assets similarly to other non-
financial assets and lease liabilities similarly to other
financial liabilities.
• Assets and liabilities arising from a lease are initially
measured on a present value basis. The measurement
includes non-cancellable lease payments (including
inflation-linked payments), and also includes payments to
be made in optional periods if the lessee is reasonably
certain to exercise an option to extend the lease, or not to
exercise an option to terminate the lease.
• AASB 16 contains disclosure requirements for lessees.
Lessor accounting
• AASB 16 substantially carries forward the lessor accounting
requirements in IAS 17. Accordingly, a lessor continues to
classify its leases as operating leases or finance leases, and
to account for those two types of leases differently.
• AASB16 also requires enhanced disclosures to be provided
by lessors that will improve information disclosed about a
lessor’s risk exposure, particularly to residual value risk.
The new standard will be effective for annual periods beginning on or
after 1 January 2019. Early application is permitted, provided the
new revenue standard, IFRS 15 Revenue from Contracts with
Customers, has been applied, or is applied at the same date as IFRS
16.
(d)
Principles of consolidation
The consolidated financial statements comprise the financial statements of Antares Energy Limited (Subject to Deed of
Company Arrangement) and its subsidiaries during the year ended 31 December 2016 (“the Consolidated Entity").
The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using
consistent accounting policies.
In preparing the consolidated financial statements, all inter-company balances and transactions, income and expenses and
profit and losses resulting from intra-group transactions have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is transferred to the Consolidated Entity and cease to be
consolidated from the date on which control is transferred out of the Consolidated Entity.
(e)
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.
Oil and Gas Properties
Oil and gas properties include construction, installation or completion of infrastructure facilities such as pipelines and platforms,
capitalised borrowing costs, transferred exploration and evaluation costs, and the cost of development wells.
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 Consolidated Entity and the cost of the item can
be measured reliably. All other costs are charged to profit or loss during the financial period in which they are incurred.
2016 Annual Report
16
Notes to the Financial Statements
For the Year Ended 31 December 2016
NOTE 1 BASIS OF PREPARATION (CONT.)
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
Depreciation
Property, plant and equipment, other than freehold land, is depreciated to their residual values at rates based on the
expected useful lives of the assets concerned. Oil and gas properties are depreciated on the Units of Production (UOP) basis
using proven plus probable reserves.
The remaining assets use the straight line approach. The major categories of assets are depreciated as follows:
Category
Plant and equipment
Oil and gas properties
Method
Straight line at 20% to 33%.
Over the life of proved plus probable reserves on a units of production basis.
Leasehold improvements
Straight line over the shorter of useful life and the lease term.
Currently there are no buildings owned by the Consolidated Entity.
Work in progress assets are carried in the accounts at cost. They are not depreciated until they are installed at the intended
location and ready for use in the manner at which they were intended to be used.
Impairment
The carrying values of property, plant and equipment are reviewed for impairment at each reporting date, with the
recoverable amount being estimated when events or changes in circumstances indicate the carrying value may be impaired.
The recoverable amount of property, plant and equipment is the greater of fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-
generating unit to which the asset belongs, unless the asset's value in use can be estimated to be close to its fair value.
An impairment exists when the carrying value of an asset or cash-generating unit exceeds its estimated recoverable amount.
The asset or cash-generating unit is then written down to its recoverable amount.
For property, plant and equipment, impairment losses are recognised in profit or loss.
Disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are
expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between
the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is
derecognised.
(f)
Exploration and evaluation
Expenditure on exploration and evaluation is accounted for in accordance with the "area of interest" method.
Exploration licence acquisition costs are capitalised and subject to half-yearly impairment testing.
All exploration and evaluation costs, including general permit activity, geological and geophysical costs and new venture
activity costs, are expensed as incurred except where:
·
·
The expenditure relates to an exploration discovery where, at balance date, an assessment of the existence or otherwise
of economically recoverable reserves is not yet complete and significant operations in, or in relation to, the area of
interest are continuing; or
An assessment has been made and it is expected that the expenditure will be recouped through successful exploitation of
the area of interest, or alternatively, by its sale.
The costs of drilling exploration wells are initially capitalised pending the results of the well. Costs are expensed where the
well does not result in the successful discovery of economically recoverable hydrocarbons. Areas of interest may be recognised
at either the field or the well level, depending on the nature of the project. Subsequent to the recognition of an area of
interest, all further costs relating to the area of interest are capitalised.
Each potential or recognised area of interest is reviewed half-yearly to determine whether economic quantities of reserves
have been found or whether further exploration and evaluation work is underway or planned to support the continued carry
forward of capitalised costs.
Upon approval for the commercial development of an area of interest, accumulated expenditure for the area of interest is
transferred to oil and gas properties.
The recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful development
and commercial exploitation, or alternatively, sale of the respective areas of interest.
2016 Annual Report
17
Notes to the Financial Statements
For the Year Ended 31 December 2016
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
NOTE 1 BASIS OF PREPARATION (CONT.)
(g)
Impairment
Non-financial assets
At each reporting date, the Consolidated Entity assesses whether there is any indication that an asset may be impaired. If any
such indication of impairment exists, or when annual impairment testing for an asset is required, the Consolidated Entity makes
a formal estimate of the asset's recoverable amount.
An asset's recoverable amount is the higher of fair value less costs to sell and its value in use. It is determined for an individual
asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of
assets and the asset's value in use cannot be estimated to be close to its fair value. In such cases, the asset is tested for
impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating
unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its
recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to
continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the
asset is carried at a revalued amount (in which case the impairment loss is treated as a revaluation decrease).
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the
revised estimate of 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 (cash-generating
unit).
(h) Available for sale financial assets
Available for sale financial assets consist of equity investments. Equity investments classified as available for sale are those that
are neither classified as held for trading nor designated at fair value through profit or loss.
After initial measurement, available for sale financial assets are subsequently measured at fair value with unrealised gains or
losses recognised as OCI and credited in the available for sale reserve until the investment is derecognised, at which time the
cumulative gain or loss is recognised in other operating income in the statement of profit or loss, or the investment is determined
to be impaired when the cumulative loss is reclassified from the available for sale reserve to the statement of profit or loss.
(i)
Provision for restoration
The Consolidated Entity records the present value of the estimated cost of legal and constructive obligations to restore
operating locations in the period in which the obligation arises. The nature of restoration activities includes the removal of
facilities, abandonment of wells and restoration of affected areas.
Typically, the obligation arises when the asset is installed at the production location. When the liability is initially recorded,
the estimated cost is capitalised by increasing the carrying amount of the related oil and gas properties. Over time, the
liability is increased for the change in the present value based on a risk adjusted pre-tax discount rate appropriate to the
risks inherent in the liability. The unwinding of the discount is recorded as an accretion charge within finance costs. The
carrying amount capitalised in oil and gas properties is depreciated over the useful life of the related asset (refer Note 1(e)).
Costs incurred that relate to an existing condition caused by past operations, and do not have future economic benefit, are
expensed.
(j)
Trade and other receivables
Trade receivables, which generally have 30-90 day terms, are recognised and carried at original invoice amount less an
allowance for any uncollectible amounts.
An estimate for doubtful debts is made when there is objective evidence that the Consolidated Entity will not be able to collect
the full debt. Bad debts are written off when identified. Financial difficulties of the debtor and default payments are likely to
be considered objective evidence of impairment.
(k)
Cash and cash equivalents
Cash and short term deposits in the statement of financial position comprise cash at bank and in hand and short-term deposits
with an original maturity of three months or less.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined
above.
(l)
Trade and other payables
Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services provided
to the Consolidated Entity prior to the end of the financial year that are unpaid and arise when the Consolidated Entity
becomes obliged to make future payments in respect of the purchase of these goods and services.
(m) Provisions
Provisions are recognised when the Consolidated Entity has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.
2016 Annual Report
18
Notes to the Financial Statements
For the Year Ended 31 December 2016
NOTE 1
BASIS OF PREPARATION (CONT.)
(m) Provisions (cont.)
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
If the effect of the time value of money is material, provisions are discounted using a pre-tax rate that reflects the risks specific
to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as finance costs.
(n) Employee benefits
(i)
Short term benefits
Liabilities for wages and salaries, bonus payments, and other short term benefits expected to be settled within 12 months of the
reporting date are recognised in current provisions in respect of employees' services up to the reporting date. They are
measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are
recognised when the leave is taken and are measured at the rates paid or payable.
(ii)
Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of
expected future payments to be made in respect of services provided by employees up to the reporting date using the
projected unit credit method. Consideration is given to expected future wages and salary levels, experience of employee
departures, and periods of service. Expected future payments are discounted using market yields at the reporting date on
national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash
outflows.
(o) Leases
Consolidated Entity as a lessee
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires
an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the
arrangement conveys a right to use the asset.
Finance leases, which transfer to the Consolidated Entity substantially all the risks and benefits incidental to ownership of the
leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present
value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the
lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are
recognised as an expense in profit or loss.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is
no reasonable certainty that the Consolidated Entity will obtain ownership by the end of the lease term.
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating
leases. Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term.
(p) Revenue recognition
Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent that it is
probable that the economic benefits will flow to the Consolidated Entity and the revenue can be reliably measured. The
following specific recognition criteria must also be met before revenue is recognised:
Sales Revenue
Sales revenue is recognised when the significant risks and rewards of ownership have passed to the buyer and the costs incurred
or to be incurred in respect of the transaction can be measured reliably. Risks and rewards of ownership are considered passed
to the buyer at the time of "delivery of goods to the customer". Delivery of product is by pipeline and under well specific
contracts that define the place of transfer in ownership, the nominated transfer point has appropriate meter equipment installed.
Product pricing is dependent upon product quality and delivery volumes rates, and base price marked to an appropriate
commodity market benchmark.
Interest
Revenue is recognised as the interest accrues using the effective interest method. This is a method of calculating the amortised
cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the
rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying
amount of the financial asset.
Dividends
Revenue is recognised from dividends when the Company’s right to receive the dividend payment is established.
(q)
Income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from
or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted by the balance date.
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences; except:
2016 Annual Report
19
Notes to the Financial Statements
For the Year Ended 31 December 2016
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
NOTE 1 BASIS OF PREPARATION (CONT.)
(q)
Income tax (cont.)
·
·
·
·
when the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a
business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and
the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary differences will
not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and
unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences, and the carry-forward of unused tax assets and unused tax losses can be utilised; except:
when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; or
when the deductible temporary difference is associated with investments in subsidiaries, associates and interests in joint ventures,
in which case the deferred tax asset is only recognised to the extent that it is probable that the temporary differences will
reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be
utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has
become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset
is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantially enacted at the
balance date.
Income taxes relating to terms recognised directly in equity are recognised in equity and not in profit or loss.
Tax consolidation legislation
Antares Energy Limited (Subject to Deed of Company Arrangement) and its wholly-owned Australian controlled entities
implemented the tax consolidation legislation as of 1 July 2002.
The head entity, Antares Energy Limited (Subject to Deed of Company Arrangement) and the controlled entities in the tax
consolidated group continue to account for their own current and deferred tax amounts. The Consolidated Entity has applied
the Group allocation approach in determining the appropriate amount of current taxes and deferred taxes to allocate to
members of the tax consolidated group.
In addition to its own current and deferred tax amounts, Antares Energy Limited (Subject to Deed of Company Arrangement)
also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax
credits assumed from controlled entities in the tax consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts
receivable from or payable to other entities in the Consolidated Entity. Details of the tax funding agreement are disclosed in
note 5.
Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are
recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.
(r) Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
· when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority in which case the
GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
receivables and payables which are stated with the amount of GST included.
·
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables
in the Statement of Financial Position.
Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows arising from
investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating
cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
(s)
Interest bearing loans & borrowings
Convertible notes
The component of the convertible note that exhibits characteristics of debt is recognised as a liability in the Statement of
Financial Position, net of issue costs. The residual amount is recognised as equity in the Statement of Financial Position. The debt
component of the convertible note is initially measured at fair value and subsequently measured at amortised cost.
2016 Annual Report
20
Notes to the Financial Statements
For the Year Ended 31 December 2016
NOTE 1
BASIS OF PREPARATION (CONT.)
(s)
Interest bearing loans & borrowings (cont)
Convertible notes
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
Placement costs and interest may be payable on conversion or redemption. Such costs will be accrued as expenses until
conversion or redemption. In the case that any or all of these expenses are converted to ordinary shares, the amount that is
requested to be converted will be recognised against the issued capital at the time of conversion.
(t)
(u)
Borrowing costs
Borrowing costs incurred for the construction of qualifying assets are capitalised during the period of time that is required to
complete and prepare the asset for its intended use or sale. Assets are considered to be qualifying assets when this period of
time is substantial (greater than 12 months). The interest rate used to determine the amount of borrowing costs to be
capitalised is the weighted average interest rate applicable to the Consolidated Entity's outstanding borrowings during the
year.
Interest in joint operations
A joint operation is a type of 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.
Interests in joint operations are reported in the financial statements by including the consolidated entity’s share of assets
employed in the Joint Operations, the share of liabilities incurred in relation to the Joint Operations and the share of any
expenses and revenues in relation to the Joint Operations in their respective categories.
(v)
Contributed equity
Issued and paid up capital is recognised at the fair value of the consideration received by the Consolidated Entity. Any
transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the proceeds
received.
(w)
Earnings per share ("EPS")
Basic EPS is calculated as net profit attributable to members of the parent, adjusted to exclude costs of servicing equity (other
than dividends), divided by the weighted average number of ordinary shares, adjusted for any bonus element.
Diluted EPS is calculated as the net profit attributed to members of the parent, adjusted for:
·
·
costs of servicing equity (other than dividends);
the after-tax effect of dividends and interest associated with the dilutive potential ordinary shares that have been
recognised as expenses; and
· other non-discretionary changes in revenue and expenses during the period that would result from the dilution of potential
ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus
element.
(x)
Inventories
Inventories are valued at the lower of cost and net realisable value. Spares and consumables are valued at purchase cost on a
first-in first-out basis. Surplus and obsolete items are identified and disposed of, or written down to realisable value pending
disposal.
(y)
Foreign currency translation
Both the functional and presentation currency of Antares Energy Limited (Subject to Deed of Company Arrangement) and its
Australian subsidiaries is Australian dollars ($). Entities within the Consolidated Entity that are based and operate outside of
Australia use the functional currency of the country in which they operate, provided the local economy is not subject to
hyperinflation. Each entity in the Consolidated Entity uses its specific functional currency to measure the items included in the
financial statements of that entity.
Transactions in foreign currency are initially recorded in the functional currency by applying the exchange ruling at the date of
the transaction or the average for the period when translating a large number of transactions. Monetary assets and liabilities
denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date.
Non-monetary items that are measured in terms of historic cost in a foreign currency are translated using the exchange rate as
at the date of the initial transaction. Non-monetary items are measured at fair value in a foreign currency are translated using
the exchange rate as at the date when fair value was determined.
The functional currency of the Consolidated Entity’s material foreign operation, Antares Energy Company, is United States
dollars (USD).
As at the reporting date the assets and liabilities of this subsidiary were translated into the presentation currency of Antares
Energy Limited at the rate of exchange ruling at the balance date and their profit or loss is translated at the average
exchange for the period.
The exchange differences arising on the translation are taken directly to a separate component of equity. On disposal of a
foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised
in the statement of profit or loss and other comprehensive income.
2016 Annual Report
21
Notes to the Financial Statements
For the Year Ended 31 December 2016
NOTE 1
BASIS OF PREPARATION (CONT.)
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
(z) Non-current assets held for sale or for distribution to equity holders of the parent and discontinued operations
The Group classifies non-current assets and disposal groups as held for sale if their carrying amounts will be recovered
principally through sale or a distribution rather than through continuing use. Such non-current assets and disposal groups
classified as held for sale or for distribution are measured at the lower of their carrying amount and fair value less costs to sell
or to distribute. Costs to sell or distribute are the incremental costs directly attributable to the sale or distribution, excluding the
finance costs and income tax expense.
The criteria for held for sale or for distribution classification is regarded as met only when the sale or distribution is highly
probable and the asset or disposal group is available for immediate sale or distribution in its present condition. Actions
required to complete the sale or distribution should indicate that it is unlikely that significant changes to the sale or distribution
will be made or that the decision to sell distribute will be withdrawn. Management must be committed to the sale or distribution
expected within one year from the date of the classification.
Property, plant and equipment and intangible assets are not depreciated or amortised once classified as held for sale or
distribution.
Assets and liabilities classified as held for sale or distribution are presented separately as current items in the statement of
financial position.
A disposal group qualifies as a discontinued operation if it is a component of an entity that either has been disposed of, or is
classified as held for sale or distribution, and:
-
-
-
Represents a separate major line of business or geographical area of operations
Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of
operations or
Is a subsidiary acquired exclusively with a view to resale
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit
or loss after tax from discontinued operations in the statement or profit or loss.
All other notes to the financial statements include amounts for continuing operations, unless otherwise mentioned.
(aa) Share-based payment transactions
The Consolidated Entity provides benefits to directors and employees of the Consolidated Entity in the form of equity, whereby
directors and employees render services in exchange for shares, options to acquire shares or rights over shares.
There is currently no share based remuneration in place.
The cost of these equity-settled transactions with employees and directors is measured by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined using an appropriate model. In valuing
equity-settled transactions, account is taken of performance conditions where the conditions are linked to the price of the shares
of Antares Energy Limited.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which
the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully
entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the
extent to which the vesting period has expired and (ii) for non-market based hurdles, the extent to which the hurdle has been
satisfied.
Consolidated Entity’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is made for
changes in the likelihood of market performance conditions being met as the effect of these conditions is included in the
determination of the fair value at grant date. The profit or loss charge or credit for a period represents the movement in
cumulative expense recognised as at the beginning and end of that period.
The dilutive effect, if any, of outstanding securities is reflected as additional share dilution in the computation of earnings per
share.
(ab)
Critical accounting estimates, assumptions and judgements
Estimates and assumptions are periodically evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances. Equally, the Consolidated Entity
continually employs judgement in the application of its accounting policies.
(i) Critical Accounting Estimates and Assumptions
The Consolidated Entity makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
2016 Annual Report
22
Notes to the Financial Statements
For the Year Ended 31 December 2016
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
NOTE 1
BASIS OF PREPARATION (CONT.)
(ab)
Critical accounting estimates, assumptions and judgements (cont.)
Reserves
The assessed recoverable quantities of proven and probable reserves used in the future cashflow estimations include
assumptions regarding commodity prices, exchange rates, discount rates, production and transportation costs for future
cash flows. It also requires interpretation of complex and difficult geological and geophysical models in order to make an
assessment of the size, shape, depth and quality of reservoirs and their anticipated recoveries. The economic, geological
and technical factors used to estimate reserves may change from period to period. Estimated recoverable reserves and
their production profiles are integral to the amount of impairment, depreciation, depletion and amortisation charged to
profit or loss.
Impairment of oil and gas properties
The Consolidated Entity’s accounting policy for impairment is set out at Note 1(g).
Unless otherwise identified, the following discussion of impairment testing is applicable to the assessment of the
recoverable amount of all of the Consolidated Entity’s Oil and Gas Property assets.
At 31 December 2016, there was no impairment to the Consolidated Entity’s Oil and Gas Property assets. As at 31
December 2015 the Group impaired the value in use of its oil and gas properties, writing their carrying values to $3,085
The company has valued these assets at the fair value or market price for these assets.
Restoration obligations
Where a restoration obligation exists, the Consolidated Entity estimates the future removal costs of production facilities,
wells and pipelines at the time of installation of the assets. In most instances, removal of assets occurs many years into the
future. This requires judgemental assumptions regarding removal date, future environmental legislation, the extent of
reclamation activities required, the engineering methodology for estimating cost, future removal techniques in determining
the removal cost and asset specific discount rates to determine the present value of these cashflows. For more detail
regarding this policy in respect of the provision for restoration refer to Note 1(i).
NOTE 2
SEGMENT REPORTING
For management purpose, the Company is organised into one main operating segment, which involves oil and gas exploration,
development and production in the USA. All the Consolidated Entity's activities are interrelated, and discrete financial
information is reported to the Chairman and the management team (Chief Operating Decision Makers) as a single segment.
Accordingly, all significant operating decisions are based upon analysis of the Company as one segment. The financial results
from this segment are equivalent to the financial statements of the Consolidated Entity as a whole.
The Consolidated Entity derives its revenue primarily from the sale of oil and gas produced in the USA. During the years ended
31 December 2016 and 31 December 2015 external sales of oil and gas were made to customers solely located in the USA.
Analysis of revenue – Continued operations:
Oil
Gas
Interest
Dividend
Geographical split of non-current assets:
USA
Australia
NOTE 3
REVENUE & INCOME
Revenue
Sale of product
Dividend revenue
Interest revenue
Consolidated
31 December
2016
$'000
31 December
2015
$'000
638
44
1
-
683
435
-
435
682
-
1
683
991
38
33
2,843
3,905
3,638
-
3,638
1,029
2,843
33
3,905
2016 Annual Report
23
Notes to the Financial Statements
For the Year Ended 31 December 2016
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
NOTE 4
EXPENSES AND LOSSES/(GAINS)
Expenses
(a) Cost of sales:
Amortisation expenses
Other production costs
Total cost of goods sold
(b) Other expenses:
General and administrative expenses
Wages and salaries
Total employee benefits
Total other expenses
(c) Finance costs:
Interest paid/payable
Finance costs on extinguishment of debt
Loss on extinguishment of financial instrument
Unwinding of present value discount
NOTE 5
INCOME TAX
The major components of income tax expense are
Income Statement
Current Income Tax
Current income tax benefit
Prior year adjustment
Deferred Income Tax
Relating to origination and reversal of timing differences
Income tax benefit is attributable to:
Loss from continuing operations
Profit from discontinued operations
Consolidated
31 December
2016
$'000
31 December
2015
$'000
-
834
834
*
*
*
*
3,405
1,879
-
-
-
1,879
187
1,373
1,560
*
*
*
*
4,299
5,827
-
-
-
5,827
Consolidated
31 December
2016
$’000
31 December
2015
$’000
-
-
-
-
-
-
-
-
(1,279)
-
(1,279)
(1,279)
-
(1,279)
A reconciliation between tax expense and the product of accounting loss before income tax
multiplied by the Group's applicable income tax rate is as follows:
Accounting loss before income tax
At Group's statutory income tax rate of 30%
Adjustments in respect of current year income tax:
- Non deductible expense / assessable income
- Impact of foreign jurisdiction tax rate
- Sale of assets
- Other
- Deferred tax asset not brought to account
- Prior year adjustments
Income tax benefit
(6,672)
(48,245)
2,002
(14,474)
*
*
*
*
(2,002)
*
-
*
*
*
*
*
*
(1,279)
* The Company was under external administration from 28 April 2016, consequently the Company does not have sufficient
information to allow for the level of disclosure required for the year ended 31 December 2016.
2016 Annual Report
24
*
*
*
*
*
*
*
*
-
*
*
*
*
*
*
*
*
*
Notes to the Financial Statements
For the Year Ended 31 December 2016
NOTE 5
INCOME TAX (CONT.)
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
Charged to
income
$'000
Charged to
equity
$'000
Closing
Balance
$'000
Deferred tax balances
CONSOLIDATED
12 months to 31 December 2016
Taxable and deductible temporary differences arise from the following:
Deferred tax assets
Provisions
Opening
Balance
$'000
Financial assets
Oil and gas assets
Losses available for offset against future taxable income
(Australian)
Deferred tax liabilities
Convertible notes
Property, plant and equipment
Financial liabilities
Less Unrecognised Net Deferred Tax Assets
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
-
-
-
-
-
-
-
-
-
Opening
Balance
$'000
Deferred tax balances
CONSOLIDATED
12 months to 31 December 2015
Taxable and deductible temporary differences arise from the following:
Deferred tax assets
Provisions
Financial assets
Oil and gas assets
Losses available for offset against future taxable income
(Australian)
557
6,652
21,443
16,224
Deferred tax liabilities
Convertible notes
Property, plant and equipment
Financial liabilities
Less Unrecognised Net Deferred Tax Assets
(823)
(19)
(470)
(43,564)
-
Charged to
income
$'000
Charged to
equity
$'000
Closing
Balance
$'000
*
*
*
*
*
*
*
*
Consolidated
-
-
-
-
-
-
-
-
-
Unrecognised deferred tax balances
The following deferred tax assets have not been brought to account as follows:
Tax losses - revenue (Australian)
Temporary difference – oil and gas assets
Temporary differences – financial assets
Temporary differences – provisions
31 December
2016
$'000
31 December
2015
$'000
16,694
24,103
19,164
467
60,428
-
-
-
-
-
The deferred tax assets will only be obtained if:
i) Future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised;
ii) The conditions for deductibility imposed by tax legislation continue to be complied with; and
iii) No changes in tax legislation adversely affect the consolidated entity in realising the benefit.
* The Company was under external administration from 28 April 2016, consequently the Company does not have sufficient
information to allow for the level of disclosure required for the year ended 31 December 2016 and the comparative year 31
December 2015.
Tax consolidation
Effective 1 July 2002, for the purposes of income taxation, Antares Energy Limited (Subject to Deed of Company Arrangement)
and its 100% owned Australian controlled entities formed a tax consolidated group. Members of the group have entered into a
tax sharing arrangement. The tax sharing agreement provides for the allocation of income tax liabilities between the entities
should the head entity default on its tax payment obligations. At the balance date, the possibility of default is remote. The head
entity of the tax consolidated group is Antares Energy Limited.
2016 Annual Report
25
Notes to the Financial Statements
For the Year Ended 31 December 2016
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
NOTE 5
INCOME TAX (CONT.)
Tax consolidation (cont.)
Members of the tax consolidated group have entered into a tax funding agreement. Under the funding agreement the funding of
tax within the Group is determined with reference to the amount recognised by individual members. The tax funding agreement
requires payments to/from the head entity to be recognised via an inter-entity receivable (payable) which is at call. To the extent
that there is a difference between the amount charged under the tax funding agreement and the allocation under AASB
Interpretation 1052, the head entity accounts for these as equity transactions with the subsidiaries.
The amounts receivable or payable under the tax funding agreement are due upon receipt of the funding advice from the head
entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of
interim funding amounts to assist with its obligations to pay tax instalments.
Franking credits
Antares Energy Limited (Subject to Deed of Company Arrangement) does not have any franking credits at 31 December 2016.
NOTE 6
LOSS PER SHARE
Basic loss per share amounts are calculated by dividing net profit or loss for the period attributable to ordinary equity holders of
the parent by the weighted average number of ordinary shares outstanding during the period.
Diluted loss per share amounts are calculated by dividing the net profit or loss attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential
ordinary shares into ordinary shares
The following reflects the income and share data used in the basic
and diluted earnings per share computations:
Net loss attributable to ordinary equity holders of the parent (used in
calculating basic and diluted loss per share)
Weighted average number of ordinary shares outstanding during the
year used in calculating basic and dilutive EPS
Consolidated
31 December
2016
$’000
(6,672)
31 December
2015
$’000
(48,245)
31 December
2016
‘000
31 December
2015
‘000
240,000
240,000
In order for outstanding performance rights and convertible notes to be considered dilutive, they are required to be dilutive
to the continuing operations of the Consolidated Entity. There are 71,250,000 contingently issuable and anti-dilutive
potential shares outstanding at 31 December 2016 that have not been included in the calculation of diluted earnings per
share.
NOTE 7
CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Consolidated
31 December
2016
$’000
31 December
2015
$’000
145
1,389
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short-term deposits are made for varying periods of between 1 and 3 months depending on the cash requirements of the
Consolidated Entity. These deposits earn interest at the respective short term-deposit rates.
2016 Annual Report
26
Notes to the Financial Statements
For the Year Ended 31 December 2016
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
NOTE 7
CASH AND CASH EQUIVALENTS (CONT.)
Reconciliation of net loss after tax to net operating cash flows
Net loss
(6,672)
(48,245)
Consolidated
31 December
2016
$’000
31 December
2015
$’000
Non-cash Items and other adjustments:
Depreciation and amortisation
Loss on sale of shares
Gain on sale of assets
Impairment of available for sale financial assets
Impairment of exploration and evaluation expenditure
Impairment of oil & gas properties
Impairment of property, Plant & equipment
Loss on convertible note buyback
Finance fee in financing activities
Unwinding of present value discount
Foreign exchange movement
Dividends in investing activities
Change in operating assets and liabilities:
Decrease in receivables and prepayments
Increase/(Decrease) in creditors and payables
(Decrease)/Increase in provisions
Increase in tax balances
Net cash outflows from operating activities
-
1,237
-
-
-
-
-
-
-
-
-
-
967
1,045
(1,283)
-
(4,706)
627
-
(88)
36,736
3,043
1,656
128
(38)
-
-
(168)
(2,843)
583
94
491
-
(8,024)
NOTE 8
TRADE AND OTHER RECEIVABLES
Consolidated
Current
Trade receivables (i)
Other receivables (ii)
Loan to related party (note 26)
Non-current
Loan to related party (note 26)
31 December
2016
$’000
31 December
2015
$’000
-
1
-
1
-
88
18
821
927
-
(i) Trade receivables are non-interest bearing and are generally 30-90 day terms. Trade receivables do
not include any impaired or past due amounts. It is expected that all amounts will be received when due.
(ii) Other receivables includes BAS refunds.
NOTE 9
PREPAYMENTS (CURRENT)
Prepayments
Consolidated
31 December
2016
$’000
31 December
2015
$’000
-
-
41
41
2016 Annual Report
27
Notes to the Financial Statements
For the Year Ended 31 December 2016
NOTE 10
AVAILABLE FOR SALE FINANCIAL ASSETS
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
Available For Sale Financial Assets at fair value
Quoted equity shares
Movement in AFS financial assets
Balance at start of period
Impairment
Disposal
Loss on disposal
FX variation
Balance 31 December
Consolidated
31 December
2016
$’000
31 December
2015
$’000
-
3,943
3,943
(1,237)
(2,587)
-
(119)
-
36,698
(36,736)
-
-
3,981
3,943
AFS financial assets comprise 4.3 million equity securities in Breitburn Energy Partners LP (NASDAQ:BBEP) received as part of the
sale of the Company’s Southern Star assets.
On acquisition the securities were valued at $90.645 million. In December 2014 their fair value was $36,698. In December 2015
an impairment of $36.736 million was made to the value of the securities to reflect their fair value based on the current quoted
market price of Breitburn securities at 31 December 2015. Fair value of available for sale financial assets is with reference to
quoted market prices (level 1 in the fair value hierarchy).
NOTE 11
HELD FOR SALE ASSETS
Held For Sale Assets at fair value
Oil and Gas Properties – Northern Star
Movement in HFS assets
Transfer from Oil & Gas assets
Disposal costs/Restoration
Balance 31 December
Consolidated
31 December
2016
$’000
31 December
2015
$’000
2,727
2,727
-
2,727
-
-
-
-
HFS financial assets comprise the seven well bores and associated acerage in Antares’ Northern Star project in Dawson County,
Texas.
Costs associated with the Northern star well bores such as the restoration/ plug costs of AUD $0.242 million and WTG gathering
line settlement liabilities of AUD $0.376 million have been included.
NOTE 12
PROPERTY, PLANT AND EQUIPMENT
Property, plant & equipment – cost
Accumulated depreciation
Impairment *
Disposal
Total Property, Plant and Equipment
Consolidated
31 December
2016
$’000
31 December
2015
$’000
929
(757)
(128)
(44)
-
929
(757)
(128)
44
Motor Vehicles were sold on the 16 June 2016 for AUD$0.44 million.
*An impairment charge was recorded against property, plant and equipment to reflect the market (sale) value.
2016 Annual Report
28
Notes to the Financial Statements
For the Year Ended 31 December 2016
NOTE 12
PROPERTY, PLANT AND EQUIPMENT (CONT.)
Reconciliation of the carrying amounts of property, plant and
equipment at the beginning and end of the current financial year:
Office equipment, vehicles and furniture
Balance at start of period
Additions
Disposals
Exchange differences from translation
Depreciation
Impairment*
Balance at end of period
NOTE 13
OIL AND GAS PROPERTIES
Oil and gas properties
- at cost
- accumulated amortisation & impairment
-transfer to disposal group held for sale assets
-exchange difference translation
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
Consolidated
31 December
2016
$’000
31 December
2015
$’000
44
-
(44)
-
126
104
(15)
21
(64)
(128)
44
Consolidated
31 December
2016
$’000
31 December
2015
$’000
28,549
(25,464)
(2,727)
53
411
28,549
(25,464)
-
-
3,085
Reconciliation
Reconciliation of carrying amounts of oil and gas properties at the beginning and end of the current financial
year:
Balance at start of period
Additions
Impairment
Restoration
Transfer from/(to) disposal group held for sale
Amortisation
Foreign exchange translation
Transfer to disposal group held for sale assets
Balance at end of period
3,085
-
-
-
-
-
53
(2,727)
411
3,700
-
(1,656)
-
-
(188)
1,229
-
3,085
Oil and gas properties consist of the Northern Star and Big Star projects. These assets have been valued at market (sale) price.
2016 Annual Report
29
Notes to the Financial Statements
For the Year Ended 31 December 2016
NOTE 14
DEFERRED EXPLORATION AND EVALUATION
EXPENDITURE
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
Consolidated
31 December
2016
$’000
31 December
2015
$’000
Exploration and evaluation costs carried forward in
respect of areas of interest:
Exploration and/or evaluation phase
-
-
The ultimate recoupment of costs carried forward for the exploration and evaluation phase is dependent
on the successful development and commercial exploitation or sale of the respective areas.
Reconciliation
Reconciliation of carrying amounts of exploration and evaluation expenditure at the beginning and end of
the current financial year:
Balance at start of period
Additions
Transfer from oil & gas properties disposal group held
for sale
Foreign exchange translation
Expenditure impaired
Balance at end of period
-
-
-
-
-
-
-
5,025
-
(1,982)
(3,043)
-
In 2015, the carrying value of the Big Star and Northern Star exploration assets was reviewed following transfer from non-
current assets held for sale. In aligning the exploration assets carrying value with their fair value, an impairment of $4.8 million
was made to their carrying values.
NOTE 15
TRADE AND OTHER PAYABLES (CURRENT)
Trade creditors and accruals
Creditors Claims under Administration*
Consolidated
31 December
2016
$’000
31 December
2015
$’000
174
610
784
1,227
-
1,227
Trade creditors are non-interest bearing and generally payable within 30 – 60 days.
Accruals include amounts payable as a result of cash calls made by operators of non-operated projects
for upcoming capital expenditure such as wells.
NOTE 16
INTEREST-BEARING LOANS AND BORROWINGS
Current
Convertible notes
Convertible Notes
Consolidated
31 December
2016
$’000
47,500
47,500
31 December
2015
$’000
47,500
47,500
The convertible notes are a financial instrument comprising a debt component and an equity component. Interest is recognised
using the effective interest method over the period to the next reset date of 31 March 2016 at which time noteholders can elect
to redeem their notes for $2 each.
On 31 March 2016, Noteholders approved an extension of the reset date to 31 March 2017. During 2016, no convertible
notes were issued (2015: 14,750,000). During 2016, no convertible notes were bought back, on market (2015: 2,250,000).
As at 31 December 2016 there was a total of 23,750,000 notes on issue (31 December 2015: 23,750,000) with a face value
of $47,500,000 (31 December 2015: $47,500,000). Notes are convertible to ordinary shares on a 1:3 ratio and have a
coupon rate of 10% per annum.
As a result of the Company entering external administration on 28 April 2016, the Convertible Notes are immediately due and
payable.
2016 Annual Report
30
Notes to the Financial Statements
For the Year Ended 31 December 2016
NOTE 17
PROVISIONS
Current
Employee leave benefits
Non-Current
Restoration
Reconciliation of the movements in the restoration
provision
Balance at start of period
Additions during period
Unwinding of present value discount
Transfer to disposal group held for sale
Foreign exchange movements
Balance at end of period
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
Consolidated
31 December
2016
$’000
31 December
2015
$’000
276
276
173
173
441
-
-
-
8
449
1,291
1,291
442
442
1,262
-
*
-
*
442
The restoration obligations are expected to be incurred over a period from 1 to 15 years.
The Company has recognised a provision for restoration related to the estimated cost of restoration work required at the end of
the useful life of the producing fields, including removal of facilities and equipment required or intended to be removed.
These provisions have been created based on the Company’s estimate. These estimates are reviewed regularly to take into
account any material changes to the assumptions. However actual decommissioning costs will ultimately depend upon future
market prices for the necessary decommissioning works required which will reflect market conditions at the relevant time.
Furthermore, the timing of the decommissioning is likely to depend on when the fields cease to produce at economically
viable rates. This, in turn, will depend upon future oil prices, which are inherently uncertain. These estimates of restoration are
subject to significant estimates and assumptions which are outlined in Note 1(ab).
* The Company was under external administration from 28 April 2016, consequently the Company does not have sufficient
information to allow for the level of disclosure required for the year ended 31 December 2016 and comparative year 31
December 2015.
NOTE 18
CONTRIBUTED EQUITY
Issued and paid up capital:
Fully paid ordinary shares
31 December
2016
$’000
31 December
2015
$’000
84,436
84,436
The only shares the Company has on issue are fully paid ordinary shares. These shares have the right to receive dividends as declared
and, in the event of a winding up of the Company, to participate in the proceeds of the sale of all surplus assets in proportion to the
number of and amounts paid up on shares held.
Ordinary shares entitle the holder to one vote, either in person or by proxy, at a meeting of the Company.
Movement in ordinary shares on issue:
Beginning of the period
Shares bought back on market
End of the period
Capital management
12 months to
31 December 2016
12 months to
31 December 2015
No. of shares
$’000
No. of shares
$’000
240,000,000
-
240,000,000
84,436
-
84,436
242,000,000
(2,000,000)
240,000,000
84,671
(235)
84,436
The capital management note below reflects the capital management policies that were adopted by the directors of the
Company who were in office prior to the Company entering into administration. These policies applied until the Company
entered Voluntary Administration on 28 April 2016. On entering administration, the Administrators were responsible for
the corporate governance of the Company.
The Administrators had no involvement in adopting, implementing or complying with these capital management policies.
These policies may or may not have been in place during the financial period.
If the recapitalisation proposal is successful, the proposed new directors will adopt a new capital management policy.
When managing capital, the Board’s objective is to ensure the Consolidated Entity continues as a going concern as well as to
maintain optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain a capital
structure that ensures the lowest cost of capital available to the entity.
2016 Annual Report
31
Notes to the Financial Statements
For the Year Ended 31 December 2016
NOTE 18
CONTRIBUTED EQUITY (CONT.)
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
In 2016, the Board did not buy back convertible notes (2015:2,250,000) convertible notes. No ordinary shares were bought
back in 2016 (2015: 2,000,000).
Management monitor capital by reviewing the level of cash on hand, future revenue streams from oil and gas reserves and
assessing the impact of possible future commitments in respect of the convertible notes and the potential capital structure that
would be required to meet those potential commitments.
Consolidated
31 December
2016
$’000
47,500
(145)
47,355
(45,449)
1,906
31 December
2015
$’000
47,500
(1,389)
46,111
(41,030)
5,081
Consolidated
31 December
2016
$’000
31 December
2015
$’000
5,883
3,922
23,054
-
32,859
5,883
3,922
20,801
-
30,606
Total borrowings
Less cash and cash equivalents
Net debt (minimum balance is nil)
Total (deficiency in shareholders’ funds) / equity
Total capital and debt
NOTE 19
RESERVES
Option reserve
Convertible Note reserve
FX Translation reserve
AFS Reserve
Nature and purpose of reserves:
Option reserve
The option reserve is used to record the value of share based payments provided to Key Management Personnel, as
part of their remuneration. There were no options on issue or issued in 2016 or 2015.
Convertible Note reserve
The convertible note reserve is used to record the equity portion of convertible notes issued by the Company.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the conversion of the financial
statement of foreign subsidiaries.
AFS financial assets reserve
Available for sale financial assets reserve is used to record fair value differences in available for sale financial assets until they
are disposed of.
Movement in Option reserve
Beginning of the period
Movement
End of the period
Movement in Convertible Note reserve
Beginning of the period
Issue of convertible notes
Buy back of convertible notes
End of the period
Movement in FX Translation reserve
Beginning of the period
Translation of foreign currency
End of the period
Number
31 December
2016
$’000
23,750,000
-
-
23,750,000
5,883
-
5,883
3,922
-
-
3,922
20,801
2,253
23,054
Consolidated
Number
-
-
-
26,000,000
-
(2,250,000)
23,750,000
31 December
2015
$’000
5,883
-
5,883
3,934
-
(12)
3,922
15,803
4,998
20,801
2016 Annual Report
32
Notes to the Financial Statements
For the Year Ended 31 December 2016
NOTE 19
RESERVES(CONT.)
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
Number
31 December
2016
$’000
Consolidated
Number
31 December
2015
$’000
Movement in AFS financial assets reserve
Beginning of the period
Increment in AFS fair value
Impairment of AFS financial asset
End of the period
-
-
-
-
-
-
-
-
TOTAL RESERVES
32,859
30,606
NOTE 20
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The financial risk note below reflects the financial risk management and policies that were adopted by the directors of the
Company who were in office prior to the Company entering into administration. These policies applied until the Company
entered Voluntary Administration on 28 April 2016. On entering administration, the Administrators were responsible for
the corporate governance of the Company.
The Administrators had no involvement in adopting, implementing or complying with these financial risk management
and policies. These policies may or may not have been in place during the financial period.
If the recapitalisation proposal is successful, the proposed new directors will adopt a new financial risk policy.
Overview
The Company and the Consolidated Entity have exposure to the following risks from their use of financial instruments:
a) market risk;
b)
c)
liquidity risk; and
credit risk.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The
Board has established the Audit and Compliance Committee, which is responsible for developing and monitoring risk
management policies.
The Consolidate Entity’s principal financial instruments comprise cash and short-term deposits and convertible notes.
The main purpose of these financial instruments is to provide working capital for the Consolidated Entity’s operations.
The Consolidated Entity’s has various other financial instruments such as trade debtors and trade creditors, which arise directly
from its operations.
Throughout the period under review, the Consolidated Entity’s policy is that no trading in financial instruments shall be
undertaken.
The main risks arising from the Consolidated Entity’s financial instruments are market risk (which includes interest rate risk, foreign
currency risk and commodity risk), liquidity risk and credit risk. The Board reviews and agrees on policies for managing each of
these risks and they are summarised below:
(a) Market risk
Equity price risk
At balance date the Consolidated Entity’s exposure to equity price risk for changes in equity price relates primarily to the
Company’s available for sale financial assets.
The Board manages the potential risk by monitoring and stress testing the Consolidated Entity’s forecast financial position to
sustained periods of low and high equity prices. During the year to 31 December 2016 and 31 December 2015, no forward
contracts were entered into and there were no open positions at 31 December 2016 or 31 December 2015.
At balance date, the Consolidated Entity had the following financial assets and liabilities exposed to variable equity prices that
are not designated in cash flow hedges:
Financial Assets
Available for sale financial assets
Net exposure
Consolidated
31 December
2016
$’000
31 December
2015
$’000
-
-
3,943
3,943
2016 Annual Report
33
Notes to the Financial Statements
For the Year Ended 31 December 2016
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
NOTE 20
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT.)
(a) Market risk(cont.)
Equity price risk (cont.)
The following sensitivity analysis is based on the equity price risk exposures in existence at the
balance sheet date. The 20.0% sensitivity is based on reasonably possible changes, over a financial
year, using an observed range of historical price movements.
In the year to 31 December 2016 if equity prices had moved as illustrated in the table below, with
all other variables held constant, the post tax result relating to financial assets of the Consolidated
Entity would have been affected as follows:
Judgements of reasonably possible movements:
Post tax profit – higher/(lower)
+50.0% (2014: +20.0% per annum)
-50.0% (2014: -20.0% per annum)
Equity – higher/(lower)
+50.0% (2014: +20.0% per annum)
-50.0% (2014: -20.0% per annum)
Consolidated
31 December
2016
$’000
31 December
2015
$’000
*
*
*
*
*
*
*
*
* The Company was under external administration from 28 April 2016, consequently the Company does not have sufficient
information to allow for the level of disclosure required for the year ended 31 December 2016 and comparative year 31
December 2015.
Interest rate risk
At balance date the Consolidated Entity’s exposure to market risk for changes in interest rates relates primarily to the
Company’s short-term cash deposits and the term debt borrowing facility. The Consolidated Entity is not exposed to cash
flow volatility from interest rate changes on the convertible notes as they carry a fixed rate of interest of 10% per annum.
The Consolidated Entity constantly analyses its exposure to interest rates, with consideration given to potential renewal of
existing positions, the mix of fixed and variable interest rates and the period to which deposits may be fixed.
The Group’s policy is to select the most cost efficient mix of fixed and variable rate debt.
At balance date, the Consolidated Entity had the following financial assets and liabilities exposed to variable interest rates
that are not designated in cash flow hedges:
Consolidated
Financial Assets – interest bearing
Cash and cash equivalents
Net exposure
31 December
2016
$’000
31 December
2015
$’000
145
145
1,389
1,389
The following sensitivity analysis is based on the interest rate risk exposures in existence at the
balance sheet date. The 1.0% sensitivity is based on reasonably possible changes, over a
financial year, using an observed range of historical short term deposit rate movements over
the last 3 years.
In the year to 31 December 2016 if interest rates had moved as illustrated in the table below,
with all other variables held constant, the post tax result relating to financial assets of the
Consolidated Entity would have been affected as follows:
Judgements of reasonably possible
movements:
Post tax profit – higher/(lower)
Financial assets
+1.0% (2014: +1.0% per annum)
-1.0% (2014: -1.0% per annum)
Consolidated
31December
2016
$’000
31 December
2015
$’000
*
*
*
*
There would have been no other impact on equity (reserves) from movements in interest
rates relating to financial assets or liabilities of the Group.
2016 Annual Report
34
Notes to the Financial Statements
For the Year Ended 31 December 2016
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
NOTE 20
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT.)
(a) Market risk (cont.)
Interest rate risk (cont.)
* The Company was under external administration from 28 April 2016, consequently the Company does not have sufficient
information to allow for the level of disclosure required for the year ended 31 December 2016 and comparative year 31
December 2015.
Foreign currency risk
As a result of oil and gas exploration, development and production operations in the USA being denominated in USD, the
Consolidated Entity’s Statement of Financial Position can be affected significantly by movements in the USD/AUD exchange
rates. The Company does not hedge this translational risk exposure.
The Consolidated Entity manages its foreign exchange risk by constantly reviewing its exposure to commitments payable in
foreign currency and ensuring appropriate cash balances are maintained in United States Dollars, to meet current operational
commitments.
At 31 December 2016 and 31 December 2015, the Consolidated Entity had no forward foreign exchange contracts in place.
Commodity price risk
The Consolidated Entity is exposed to commodity price fluctuations through the sale of petroleum products denominated in US
dollars – specifically the natural gas, condensate and oil prices in the USA.
The Board manages the potential risk by monitoring and stress testing the Consolidated Entity’s forecast financial position to
sustained periods of low and high commodity prices. During the year to 31 December 2016 and 31 December 2015 no
forward contracts were entered into and there were no open positions at 31 December 2016 or 31 December 2015.
(b) Liquidity risk
The Consolidated Entity’s objective is to maintain a balance between continuity of funding and flexibility through the use of its
cash and funding alternatives.
The Consolidated Entity manages liquidity risk by maintaining adequate banking and borrowing facilities through the
monitoring of future rolling cash flow forecasts of its operations, which reflect management’s expectations of the settlement of
financial assets and liabilities.
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the
impact of any netting agreements.
0 – 6 months
6 – 12 months
1 – 5 years
Consolidated
31 December
2016
$’000
31 December
2015
$’000
(48,284)
-
-
(48,284)
(48,727)
-
-
(48,727)
* The Company was under external administration from 28 April 2016, consequently the Company does not have sufficient information to
allow for the level of disclosure required for the year ended 31 December 2016 and comparative year 31 December 2015.
The following table discloses the contractual maturity analysis of financial assets and liabilities as at the end of the financial
year:
Consolidated
as at 31 December 2016
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Payables
Convertible notes
Net inflow/(outflow)
≤ 6 months
$’000
6 – 12 months
$’000
1 – 5 years
$’000
> 5 years
$’000s
Total
$’000
145
1
146
(784)
(47,500)
(48,284)
(48,138)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
145
1
146
(784)
(47,500)
(48,284)
(48,138)
* The Company was under external administration from 28 April 2016, consequently the Company does not have sufficient information to
allow for the level of disclosure required for the year ended 31 December 2016 and comparative year 31 December 2015.
2016 Annual Report
35
Notes to the Financial Statements
For the Year Ended 31 December 2016
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
NOTE 20
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT.)
Consolidated
as at 31 December 2015
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Payables
Convertible notes
Net inflow/(outflow)
(c) Credit risk
≤ 6 months
$’000
6 – 12 months
$’000
1 – 5 years
$’000
> 5 years
$’000s
Total
$’000
1,389
927
2,316
(1,227)
(47,500)
(48,727)
(46,411)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,389
927
2,316
(1,227)
(47,500)
(48,727)
(46,411)
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Consolidated Entity.
Credit risk arises from the financial assets of the Consolidated Entity, which comprise cash and cash equivalents, trade and
other receivables and other financial assets. The carrying amount of financial assets recorded in the financial statements, net of
any provisions for losses, represents the Consolidated Entity’s maximum exposure to credit risk without taking account of the
value of any collateral or other security obtained. Exposure at balance date is addressed in each applicable note.
The Consolidated Entity does not hold any credit derivatives to offset its credit exposure.
The Consolidated Entity trades only with recognised, creditworthy third parties and has adopted a policy of dealing with
creditworthy counterparts and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the
risk of financial loss from defaults.
Receivable balances are monitored on an ongoing basis with the result that the Consolidated Entity’s exposure to bad debts is
not significant.
Specific concentration of credit risk exists primarily within cash and cash equivalents and trade receivables in respect of
receivables due from joint venture operators for the Consolidated Entity’s share of proceeds from the sale of oil and gas by
the operator, as well as cash held by joint venture operations in advance of operations being performed.
As at 31 December 2016 all trade receivables and other receivables relating to cash held in advance of operations were
receivable from joint operations operators who have no history of credit default with the Consolidated Entity, and no
allowance for impairment is considered necessary for potential default.
Other than the concentration of credit risk described above, the consolidated entity does not have any significant credit risk
exposure to any single counterparty or any group of counterparties having similar characteristics. The carrying amount of
financial assets recorded in the financial statements, net of any allowance for impairment losses, represents the consolidated
entity’s maximum exposure to credit risk.
(d) Fair Value
All assets and liabilities for which fair value is disclosed in the financial statements are categorised within the fair value
hierarchy, described below as follows, based on the lowest level input that is significant to the fair value measurement as a
whole:
-
Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities
- Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or
indirectly observable
- Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable
The Directors consider that the carrying amount of the financial assets, available for sale financial assets and liabilities
recorded in the financial statements approximate their fair values except for the convertible notes.
The fair value of convertible notes are determined as being zero. The Convertible notes have been suspended from trading
since September 2015 and there is no way to determine a fair value measurement under level 2. Under level 3, the fair value
estimate takes into account the net deficit position of the Group hence determining the fair value as nil. The carrying value of
the convertible notes is $47,500,000 (2015: $47,500,000).
NOTE 21
COMMITMENTS FOR EXPENDITURE AND CONTINGENCIES
The Company was under external administration from 28 April 2016, consequently the Company does not have sufficient
information to allow for the level of disclosure required for the year ended 31 December 2015.
We have not been able to ascertain the contingent liabilities, if any, pertaining to the Consolidated Entity as at 31 December
2016.
2016 Annual Report
36
Notes to the Financial Statements
For the Year Ended 31 December 2016
NOTE 22
INTEREST IN JOINT OPERATIONS
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
(i)
At 31 December 2016 the Consolidated Entity held the following interests in oil and gas production and
exploration joint operations:
Joint Operations
Oyster Creek – Texas
Big Star – Simmons Prospect – Texas
(ii)
Principal activities of joint operations
Working Interest
31 Dec 2016
31 Dec 2015
67.5%
72.0%
67.5%
72.0%
Petroleum exploration and production is the principal activity of all of the joint ventures that the Consolidated
Entity is a participant in at 31 December 2016. All joint operations are located onshore Texas, USA.
NOTE 23
RELATED PARTY DISCLOSURES
(i) ULTIMATE PARENT
Antares Energy Limited is the ultimate parent company.
(ii) CONSOLIDATED ENTITY
At year end the Consolidated Entity consisted of the subsidiaries listed in the following table:
Controlled entities of Antares Energy Limited:
Santa Energy Pty Ltd
Australia
Ord Shares
100%
100%
Country of
Incorporation
Class of
Share
Equity interest
31 December
2016
31 December
2015
Controlled entities of Santa Energy Pty Ltd:
Antares Energy Company
USA
Common
Stock
100%
100%
There are no restrictions on access to assets and liabilities of the subsidiaries
NOTE 24
EVENTS AFTER THE BALANCE SHEET DATE
The Administrator subsequently pursued an asset sale strategy for the Company’s assets and/or a recapitalisation proposal for
the Company, or for a party to acquire the shares or assets of the Company’s US subsidiary, Antares Energy Company (“AEC”).
The Administrator sold seven well bores and associated acreage that was held in production in Antares’ Northern Star project in
Dawson County, Texas to Murphy Oil, a large public El Dorado, Arkansas based Oil and Gas Company effective 1 April 2017.
NOTE 25
AUDITOR’S REMUNERATION
The auditor of Antares Energy Limited (Subject to Deed of Company
arrangement) was Stantons International.
Amounts received or due and receivable in relation to the entity or any other
entity in the Consolidated Entity:
- an audit or review of the financial report
-
tax and compliance services
Consolidated
31 December
2016
$’000
31 December
2015
$’000
*
*
*
*
*
*
Stanton’s international Audit and Consulting Pty Ltd are the Company’s current auditors and have not provided any non-audit services.
*The Company was under external administration from 28 April 2016, consequently the Company does not have sufficient information to allow
for the level of disclosure required for the year ended 31 December 2016 and comparative year 31 December 2015.
2016 Annual Report
37
Notes to the Financial Statements
For the Year Ended 31 December 2016
NOTE 26
DIRECTOR AND EXECUTIVE DISCLOSURES
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
(a)
Details of Key Management Personnel
Directors
J.A. Cruickshank
G.D. Shoemaker
V.A. McAppion
M.G. Clohessy
Chairman, Managing Director and Chief Executive Officer (Resigned 27 April 2016)
Director and Chief Scientist(Resigned 28 April 2016)
Director – Finance & Administration Manager(Resigned 28 April 2016)
Non-Executive Director (Resigned 28 April 2016)
There were no other changes in the key management personnel between the end of the financial year and the date of this report.
(b)
Remuneration of Key Management Personnel
(i)
Compensation by Category: Key Management Personnel
Short-Term
Post Employment
Long-Term
Share-based Payments
Consolidated
2016
$
2015
$
*
*
*
*
*
*
*
*
*
*
* The Company was under external administration from 28 April 2016, consequently the Company does not have sufficient
information to allow for the level of disclosure required for the year ended 31 December 2016 and comparative year 31 December
2015.
(ii)
Loans to Key Management Personnel
During the year ended 31 December 2010 an interest free loan was provided to a Director J.A. Cruickshank,
repayable on demand if the Director ceases employment with Antares or ceases to be located in Dallas, Texas.
The Board considers the benefit reasonable remuneration within the meaning of Section 211 of the Corporations
Act. Mr Cruickshank repaid this loan in full on 25 January 2016. (2015: $821,243).
(iii) Other transactions and balances with Key Management Personnel
During the year ended 31 December 2016 and the year ended 31 December 2015 there were no transactions
with Key Management Personnel other than those described above. At 31 December 2016 and 31 December
2015 there were no balances outstanding in relation to Key Management Personnel other than those described
above and in the Remuneration Report.
NOTE 27
PARENT ENTITY INFORMATION
The following information relates to the parent entity, Antares Energy Limited (Subject to Deed of Company
Arrangement), at 31 December 2016. The information presented here has been prepared using accounting
policies consistent with those presented in note 1.
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Contributed equity
Reserves
Accumulated losses
Total equity
Loss for the year
Total comprehensive loss for the year
31 December
2016
$’000
31 December
2015
$’000
15
-
15
48,197
-
48,197
84,436
10,650
(143,268)
(48,182)
(95)
(95)
212
2
214
48,300
-
48,300
84,436
10,650
(143,173)
(48,087)
(53,088)
(53,088)
2016 Annual Report
38
ANTARES ENERGY LIMITED
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
ABN 75 009 230 835
DEED ADMINISTRATORS’ DECLARATION
This report and the financial information largely relates to a prior period to the Administrators appointment and by necessity the
Administrators’ had to rely upon the books and records of Antares Energy Limited (Subject to Deed of Company Arrangement) and
its subsidiaries, its staff and external service providers in this report and the financial accounts. All due care has been taken in
preparing the Report and financial information, however, the Administrators’ cannot give warranties in relation to the information in
this report.
The Administrators further note the Company's auditors makes clear that they cannot vouch for the correctness or completeness of
any of the information used in preparing this report. This report should not be relied on in making decisions about the Company.
Subject to the previous paragraph and set out in Note 1(b) to the Consolidated financial statements, in the opinion of the
Administrators of Antares Energy Limited (Subject to Deed of Company Arrangement):
(a)
Although the Administrators have taken all due care in preparing the Report and the financial statements to the best of
their knowledge based on the information given to them, they are of the opinion that it is not possible to state that the
Consolidated financial statements and Notes of Antares Energy Limited (Subject to Deed of Company
Arrangement),and the remuneration disclosures contained in the Remuneration Report for the financial year ended 31
December 2016 are in accordance with the Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the financial position as at 31 December 2016 and the performance for the
half-year ended on that date of the consolidated entity; and
complying with Accounting Standards (including Australian Accounting Interpretations) and the Corporations
Regulations 2001; and
the financial statements and notes also comply with International Financial Reporting Standards as disclosed in note
1(a); and
As at the date of this Report, the Administrators’ do not have reasonable grounds to believe that the Company will be
able to pay its debts as and when they become due and payable, unless there is a successful implementation of the
Deed of Company Arrangement. That is, if the Deed of Company Arrangement is not effectuated, then the Company is
not in a position to pay its debts as and when they become due and payable.
(b)
(c)
This report is made with the resolution of the Administrators’ of Antares Energy Limited (Subject to Deed of Company Arrangement).
Signed by Quentin James Olde in his capacity as Deed Administrator
Quentin James Olde
Sydney, NSW
17 October 2017
2016 Annual Report
39
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
ANTARES ENERGY LIMITED (SUBJECT TO A DEED OF COMPANY ARRANGEMENT)
Report on the Audit of the Financial Report
Disclaimer of Opinion
We have audited the financial report of Antares Energy Limited (Subject to a Deed of Company
Arrangement), the Company and its subsidiaries, (the Group), which comprises the consolidated
statement of financial position as at 31 December 2016, the consolidated statement of comprehensive
income, the consolidated statement of changes in equity and the consolidated statement of cash flows
for the year then ended, and notes to the financial statements, including a summary of significant
accounting policies, and the deed administrators’ declaration.
We do not express an opinion on the accompanying financial report of the Group. Because of the
significance of the matters described in the Basis for Disclaimer of Opinion section of our report, we
have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion
on the financial report, and whether the financial report of the Group is in accordance with the
Corporations Act 2001.
Basis for Disclaimer of Opinion
The Group was placed into voluntary administration on 28 April 2016. Consequently, the financial
information relating to the year under audit was not subject to the same accounting and internal controls
processes, which includes the implementation and maintenance of internal controls that are relevant to
the preparation and fair presentation of the financial report. Whilst the books and records of the
Company have been reconstructed to the maximum extent possible, we were unable to satisfy ourselves
as to the completeness of the general ledger and financial records as well as the relevant disclosures in
the financial report.
As stated in Note 1 (b), the deed administrators are unable to state that the financial report is in
accordance with all the requirements of the Corporations Act 2001 and the Australian Accounting
Standards.
Key Audit Matters
Except for the matter described in the Basis for Disclaimer of Opinion section, we have determined that
there are no other key audit matters to communicate in our report.
Responsibilities of Management and Those Charged with Governance for the Financial Report
The deed administrators are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the deed administrators determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error. In preparing the financial report, the deed administrators are responsible for assessing the
ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the deed administrators either intend to
liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Liability limited by a scheme approved
under Professional Standards Legislation
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 31 December 2016, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Deed administrators for the Financial Report
The deed administrators are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the deed administrators determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error. In note 1 (b), the deed administrators also state, in accordance with Australian Accounting
Standard AASB 101 Presentation of Financial Statements, that, where possible, the financial statements
have been reconstructed to comply with International Financial Reporting Standards, though financial
records are incomplete. Accordingly, the deed administrators disclaim any responsibility for the
completeness of the Financial Statements, and do not provide any statement to such effect in
accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. An audit involves performing
procedures to obtain audit evidence about the amounts and disclosures in the financial report.
The procedures selected depend on the auditor's judgement, including the assessment of the risks of
material misstatement of the financial report, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's preparation of the financial
report that gives a true and fair view in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's
internal control.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
the
An audit also includes evaluating
reasonableness of accounting estimates made by the Directors, as well as evaluating the overall
presentation of the financial report.
the appropriateness of accounting policies used and
We conclude on the appropriateness of the Directors' use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to
the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
We evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible for
the direction, supervision and performance of the Group audit. We remain solely responsible for our
audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit
engagements. We also provide the Directors with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore key audit matters.
We describe these matters in our auditor's report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Disclaimer of opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 4 to 5 of the directors’ report for the year
ended 31 December 2016.
Because of the existence of the limitation on scope of our work, as described in the Basis of Disclaimer
of Auditor’s Opinion, and the effects of such adjustments, if any, as might have been determined to be
necessary had the limitation not existed, we are unable to, and do not express, an opinion on the
remuneration report of Antares Energy Limited (Subject to a Deed of Company Arrangement) for the
year ended 31 December 2016 and whether it complies with Section 300A of the Corporations Act 2001.
Responsibilities
The deed administrators of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility is
to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Samir Tirodkar
Director
West Perth, Western Australia
17 October 2017
SHAREHOLDER INFORMATION
AS AT 16 OCTOBER 2017
ANTARES ENERGY LIMITED
ABN 75 009 230 835
Ordinary Shares
(a) Twenty Largest Shareholders
Rank
Holder Name
Securities %
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
J P MORGAN NOMINEES AUST LTD
HSBC CUSTODY NOMINEES AUST LIMITED
CITICORP NOMINEES PTY LTD
MR JAMES ANDREW CRUICKSHANK
NATIONAL NOMINEES LTD
ESSENTIAL EAST PTY LTD
TANGLED-BLUE INVESTMENTS PTY LTD
YANDAL INVESTMENTS PTY LTD
MR MARK CLOHESSY
JOHJAM PTY LTD
MR BRIAN HENRY MCCUBBING
BNP PARIBAS NOMS PTY LTD
VLANSAM PTY LTD
WESTBLOCK SERVICES PTY LTD
MR RODNEY ALEXANDER SHEA
KILLAWARRA PTY LTD
MR JONATHAN B KERR – SHEPPHARD
ONE MANAGED INV FUNDS LTD
BARTON & BARTON
MERRILL LYNCH (AUSTRALIA
(b) Distribution of Shareholdings
35,198,492 14.67%
25,453,412 10.61%
16,175,774
6.74%
10,500,000
4.38%
8,039,246
3.35%
3,500,001
1.46%
3,236,255
1.35%
2,988,006
1.25%
2,865,000
1.19%
2,795,000
1.16%
2,200,000
0.92%
2,168,800
0.90%
2,052,882
0.86%
1,938,334
0.81%
1,797,000
0.75%
1,700,000
0.71%
1,700,000
0.71%
1,513,725
0.63%
1,450,000
0.60%
1,443,137
0.60%
128,715,064 53.65%
Spread of Holdings
Holders
Securities
% of Issued Capital
NIL holding
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 9,999,999
0
991
1,052
611
1,098
223
0
313,228
3,039,557
5,029,525
34,771,966
196,845,724
TOTAL ON REGISTER
3,975
240,000,000
0.00%
0.13%
1.27%
2.10%
14.49%
82.02%
100%
2016 Annual Report
43
42
ANTARES ENERGY LIMITED
ABN 75 009 230 835
(c)
Substantial Shareholders
Number of Shares % of Issued Shares
J P Morgan Nominees Aust Ltd
HSBC Custody Nominees Aust Ltd
Citicorp Nominees Pty Ltd
35,198,492
25,453,412
16,175,774
14.67%
10.61%
6.74%
(d)
There were 828 members holding less than a marketable parcel of shares in the Company.
Unmarketable Parcels
Voting Rights
(e)
Voting rights of members are governed by the Company’s Constitution. In summary, on a show of hands, every member present in
person or by proxy shall have one vote and in the event of a poll every such member shall be entitled to one vote for each ordinary
fully paid share held.
(f)
Antares Energy Limited is listed on the Australian Securities Exchange. Ordinary shares are listed under the AZZ code.
Exchanges
(g)
On-market Share Buy-back
In the period from 1 January 2014 to 16 October 2017 the Company bought back 13,500,000 shares on-market.
Convertible Notes
(a) Twenty Largest Convertible Note Holders
Rank Holder Name
Securities
%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
HSBC CUSTODY NOMINEES AUST LIMITED
UBS NOMINEES PTY LTD
V S I HARDWARE PTY LTD
AUST EXECUTOR TRUSTEES LTD
THE ESTEEM FOUNDATION PTY LTD
BERGER GABRIEL
DENILLIQUIN PHARMACY NSW PTY LTD
CITICORP NOMINEES PTY LTD
BERGER EQUITIES PTY LTD
JAMES IAN DRYSDALE
AUST EXECUTOR TRUSTEES LTD
RIJEAN PTY LTD
JAMES WAYNE R + C M
CORINNE CALVERT PTY LTD
JOHN MATTHEW ROGAN
DUE DI DUE PTY LTD
BRISAN PROJECTS PTY LTD
TEO YEE TECK
BADGWORTHY PTY LTD
T C BAKER + TN + BJ
7,448,200
3,233,690
870,000
780,032
750,000
526,800
417,000
410,000
280,700
250,000
170,448
154,461
150,000
150,000
150,000
150,000
125,000
120,000
120,000
105,770
31.36%
13.62%
3.66%
3.28%
3.16%
2.22%
1.76%
1.73%
1.18%
1.05%
0.72%
0.65%
0.63%
0.63%
0.63%
0.63%
0.53%
0.51%
0.51%
0.45%
(b)
Spread of Holdings
Distribution of Convertible Note Holdings
Holders
Securities
% of Issued Capital
16,362,101
68.91%
NIL holding
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 9,999,999
TOTAL ON REGISTER
0
9
80
42
195
21
347
0
6,117
265,632
366,513
6,646,498
16,465,240
0.00%
0.03%
1.12%
1.54%
27.99%
69.33%
23,750,000
100%
2016 Annual Report
44
43
LIST OF INTERESTS - AS AT 16 OCTOBER 2017
USA Production
ANTARES ENERGY LIMITED
ABN 75 009 230 835
Project
Name
Big Star
Dawson/TX
Cline 46-1
County/State
Well Name
% Interest
Esmond 20-1
Simmons 27-2
Stuart 12-1
Woodward 7-1
Donnell 457 1&2
Donnell C-1H
Donnell C-2H
100
100
72
100
100
0.125
0.99345
1.06537
Donnell-Mulholland Unit 1&2
0.059553
Hawkville McMullen/TX
(ORRI Only)
USA Exploration
Project
Name
County/State
Land Holding
Expiry
Available for
Extension
Big Star
Dawson/TX
TOTAL
955.27 31/12/2017 955.27
458.79 31/01/2018 278.79
542.11 28/02/2018 499.04
2,166.05 31/03/2018 2,132.72
447.89 30/04/2018 76.04
285.59 31/05/2018 285.59
474.33 31/07/2018 167.24
178.61 31/08/2018 178.33
200.23 30/09/2018 116.90
160.00 31/10/2018 160.00
4,849.92
5,868.87
2016 Annual Report
45
44