2017 ANNUAL REPORT
ANTARES ENERGY LIMITED AND CONTROLLED ENTITIES
ABN 75 009 230 835
ANNUAL REPORT
FOR THE YEAR ENDED
31 DECEMBER 2017
ANTARES ENERGY LIMITED
ANTARES ENERGY LIMITED AND CONTROLLED ENTITIES
ABN 75 009 230 835
CONTENTS
Directors’ Report
Corporate Governance
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
Directors’ Declaration
Independent Audit Report
Shareholder Information
List of Interests
Page No.
1
7
8
9
10
11
12
13
34
35
38
39
i
COMPANY DIRECTORY
ANTARES ENERGY LIMITED
AUDITORS:
Stantons International
Level 2, 22 Pitt Street
SYDNEY NSW 2000
BANKERS:
Westpac Banking Corporation
94 Church Street
Middle Brighton, VIC, 3186
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
DIRECTORS:
Ross Warner
Joanne Kendrick
Michael Pollak
COMPANY SECRETARY
Andrew Whitten
REGISTERED OFFICE:
Level 29, 201 Elizabeth Street
Sydney, NSW, 2000
Telephone: + 61 (02) 8072 1400
SOLICITORS:
Whittens & McKeough
Lawyers & Consultants
Level 29, 201 Elizabeth Street
Sydney, NSW, 2000
Telephone: + 61 (02) 8072 1400
Website: www.antareslimited.com.au
ASX CODE:
AZZ
ii
ANTARES ENERGY LIMITED
DIRECTORS’ REPORT
The Directors’ of Antares Energy Limited (“Antares” or “the Company”) present the Directors’ 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 2017.
DIRECTORS AND COMPANY SECRETARY
The directors in office at any time during the year to 31 December 2017 and until the date of this report are as follows. Directors were in
office for this entire period unless specified otherwise.
Ross Warner (Appointed 23 March 2018)
Executive Director & Chairman
Joanne Kendrick (Appointed 23 March 2018)
Managing Director
Michael Pollak (Appointed 23 March 2018)
Non Executive Director
Andrew Whitten (Appointed 23 March 2018)
Company Secretary
James Andrew Cruickshank (Resigned 27 April 2016)*
Chairman, Managing Director & Chief Executive Officer
Gregory David Shoemaker (Resigned 28 April 2016)*
Director & Chief Scientist
Vicky Ann McAppion (Resigned 28 April 2016)*
Director & Finance & Administration Manager
Mark Gerard Clohessy (Resigned 28 April 2016)*
Non Executive Director
Graeme Smith (Resigned 27 April 2016)*
Company Secretary
* The directors formally ceased to be directors of the Company under the terms of DOCA on 23 March 2018, being the date the DOCA
effectuated.
INFORMATION ON DIRECTORS AND COMPANY SECRETARY
Ross Warner
Executive Director & Chairman
Ross is an experienced natural resources executive. He has held executive and non-executive director roles in several public companies
listed on AIM and ASX and a number of private companies. He has been involved in operated and non-operated oil and gas assets in
Texas, Louisiana and Oklahoma and gas to power in Indonesia. He practiced as a corporate finance lawyer with Mallesons Stephen Jaques
in Perth and Melbourne and Clifford Chance in London.
Other Current Directorships
None
Former Directorships in the Last Three Years
None
Special Responsibilities
Chairman
Interests in Shares and Options
None
Joanne Kendrick
Managing Director
Joanne is a seasoned industry professional with over 20 years of experience in technical and senior roles with Woodside Petroleum,
Newfield Exploration, Gulf Australia and Nido Petroleum. She is a Petroleum/Reservoir Engineer by background and has been responsible
for managing new venture activity, ongoing infield production operations and significant drilling and development projects for 15 years.
With significant ASX experience as the Deputy Managing Director whilst at Nido Petroleum for close to 7 years she is well placed to lead
an ASX listed company operating oil and gas assets.
Other Current Directorships
None
2017 Annual Report
1
DIRECTORS’ REPORT (CONT.)
ANTARES ENERGY LIMITED
Former Directorships in the Last Three Years
None
Special Responsibilities
Managing Director
Interests in Shares and Options
None
Michael Pollak
Non Executive Director
Michael Pollak holds a bachelor of Commerce is a chartered accountant and has an MBA in strategy from the Australian Graduate School
of Management. Michael commenced his career at PriceWaterhouseCoopers over 15 years ago. Michael has gained valuable experience
in both Sydney and London in general management, audit, insolvency, corporate advisory and strategy across a wide range of industries
including financial services, professional services, retail, mining, technology and manufacturing.
Michael is currently a director of MOQ Limited and was previously a director of various ASX listed entities including UCW Limited, Prospect
Resources Limited, Metalicity Limited, Rhipe Limited, and Janison Education Group Limited, being companies that he previously recapitalised.
Michael was also involved in the recapitalisation of various other companies listed on the ASX (via a DOCA and Creditors Trust).
Other Current Directorships
MOQ Limited (ASX: MOQ) (Non-executive director)
Former Directorships in the Last Three Years
Janison Education Group Limited (Non-executive director)
UCW Limited (ASX: UCW) (Non-executive director)
Special Responsibilities
None
Interests in Shares and Options
None
Andrew Whitten
Company Secretary
Andrew is a Solicitor Director of Whittens & McKeough, where he specialises in corporate finance and securities law. Andrew has been
involved in a comprehensive range of corporate and investment transactions including numerous initial public offerings on the ASX and NSX,
corporate reconstructions, reserve mergers and takeovers. At present, Andrew is company secretary of a number of public listed companies.
The above named directors held office during and since the financial year, except as otherwise indicated.
2017 Annual Report
2
ANTARES ENERGY LIMITED
PRINCIPAL ACTIVITIES
DIRECTORS’ REPORT (CONT.)
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 was suspended from trading on the ASX on 11 September 2015. On 28 April 2016 the Company was placed into voluntary
administration.
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 Company will raise 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 any charges over the Company.
Certain unencumbered assets are to be retained by the Company including the Company’s wholly owned subsidiary Antares Energy
Company (which owns the Big Star Project in the Permian Basin in Dawson Country, Texas, USA).
The syndicate will loan the Company the requisite funds 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 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.
Effective 17 October 2017, the Company changed auditors and appointed Stanton’s International Audit & Consulting.
SIGNIFICANT EVENTS AFTER BALANCE DATE
23 January 2018: 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;
authorise the issue of the following shares and options (including to related parties) to raise $1,876,875 before costs
•
•
•
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.
The capital of the company was consolidated on 25 January 2018. The DOCA was effectuated on 23 March 2018, and the Company was
released from being subject to the DOCA and any pre-administration creditor claims against Antares Energy Limited were compromised and
extinguished (and transferred across to the Antares Creditors Trust). The Syndicate loaned the Company $500,000 to effectuate the DOCA.
The new Board was appointed on 23 March 2018.
SIGNIFICANT CHANGES TO STATE OF AFFAIRS
There have been no further significant 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 total net loss after income tax of the Consolidated Entity for the year ended 31 December 2017 was $2.373 million (2016: loss of
$6.672 million).
DIVIDEND
No dividends have been paid or declared since the end of the previous financial period, or to the date of this report.
LIKELY DEVELOPMENTS AND RESULTS
Subject to the successful recapitalisation and relisting of the Company, Antares will continue to pursue oil and gas opportunities (including
via the Big Star Project).
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.
DIRECTOR’S MEETINGS
Due to the Company being placed into voluntary administration on 28 April 2016, no Director’s meetings were held during the period.
2017 Annual Report
3
ANTARES ENERGY LIMITED
DIRECTORS’ REPORT (CONT.)
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 Directors have reconstructed the financial records of Antares Energy Limited 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 prior to 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 Directors 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.
AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
The independence declaration as required under section 307C of the Corporations Act 2001 received from the auditor of Antares Energy
Limited is set out on page 8 and forms part of this Directors’ report for the year ended 31 December 2017.
Total fees paid or payable to the Company’s auditors Stantons International Audit & Consulting Pty Ltd for non-audit services provided to
the Company during the year ended 31 December 2017are $8,000 (2016:$NIL).
INDEMNIFICATION OF DIRECTORS, COMPANY SECRETARY AND AUDITORS
The Company has agreed to indemnify the current directors and company secretary of the Company against all liabilities that may arise
from their position as directors or officers of the Company.
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.
2017 Annual Report
4
ANTARES ENERGY LIMITED
DIRECTORS’ REPORT (CONT.)
REMUNERATION REPORT (AUDITED)
This remuneration report for the year ended 31 December 2017 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 Directors who are now in office have 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.
The current directors will adopt a new remuneration policy.
This remuneration report for the year ended 31 December 2017 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)**
* The directors who prepared this report were appointed on 23 March 2018.
**The directors formally ceased to be directors of the Company under the terms of DOCA on 23 March 2018, being the date the DOCA
effectuated.
Share holdings of Key Management Personnel
Balance at
1 January
(i)
10,500,000
825,000
198,226
2,865,000
14,388,226
2016
J.A. Cruickshank
G.D. Shoemaker
V.A. McAppion
M.G. Clohessy
Total
On exercise of
performance
rights
Change due to
appointment /
(resignation)
On market
purchase
Balance at
31 December
(i)
(10,500,000)
(825,000)
(198,226)
(2,865,000)
(14,388,226)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(i) Pre share consolidation undertaken on 25 January 2018.
2017 Annual Report
5
ANTARES ENERGY LIMITED
DIRECTOR’S REPORT (CONT.)
REMUNERATION REPORT (AUDITED) (CONT.)
Key management personnel remuneration
The following table sets out the remuneration of directors and executives of the Consolidated Entity during the reporting period.
No KMP received remuneration for the year ending 31 December 2017.
Short-Term
Salary
& Fees
$
Cash
Bonus
$
Non
Monetary
Benefits
$
Other
$
Long-
Term
Long-
Service
Leave
$
Post
Employ-
ment
Super-
annuation
$
*
*
*
*
*0
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
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 comparative year 31 December 2016.
End of Remuneration Report
Signed in accordance with a resolution of the Directors.
Ross Warner
Chairman
3 April 2018
2017 Annual Report
6
CORPORATE GOVERNANCE STATEMENT
ANTARES ENERGY LIMITED
The directors who are in office at the date of this report were not involved in adopting, implementing or complying with the Corporate
Governance policies that were adopted by the directors of the Company who were in office prior to the company entering administration
on 28 April 2016. These policies may or may not have been in place during the financial period. On entering administration, the
Administrators were responsible for the corporate governance of the Company.
The directors who are in office at the date of this report have adopted a new corporate governance policy. The new board of directors of
Antares Energy Limited are committed to achieving and demonstrating the highest standards of corporate governance.
The Company’s current Corporate Governance Statement is available on Antares Energy Limited’s website at: www.antareslimited.com.au
2017 Annual Report
7
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
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
3 April 2018
Antares Energy Limited
C/O Whittens & McKeough
Lawyers & Consultants
Level 29, 201 Elizabeth Street
Sydney, NSW, 2000
Dear Sirs
RE: ANTARES ENERGY LIMITED
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.
As Audit Director for the audit of the financial statements of Antares Energy Limited for the year
ended 31 December 2017, 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 2017
ANTARES ENERGY LIMITED
Continuing operations
Revenue
Cost of sales
Gross loss
Other income
General & Administration Expense
Impairment of available for sale financial assets
Impairment of oil & gas properties
Administration expenses
Legal expenses
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
2017
$’000
31 December
2016
$’000
3
4(a)
4(b)
10
4(b)
4(b)
4(c)
345
(487)
(142)
72
(952)
-
(86)
(830)
(435)
-
683
(834)
(151)
-
(3,405)
(1,237)
-
-
-
(1,879)
(2,373)
(6,672)
5
-
-
(2,373)
(6,672)
-
(2,373)
-
(6,672)
(385)
(385)
(2,758)
2,253
2,253
(4,419)
6
6
6
6
(0.99)
(0.99)
(0.99)
(0.99)
(2.78)
(2.78)
(2.78)
(2.78)
The above statement of profit or loss & other comprehensive income should be read in conjunction with the accompanying notes.
2017 Annual Report
9
Statement of Financial Position
Antares Energy Limited and its Controlled Entities
As at 31 December 2017
ANTARES ENERGY LIMITED
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Oil & gas asset held for sale
Total current assets
NON-CURRENT ASSETS
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
2017
$’000
31 December
2016
$’000
7
8
9
10
11
12
13
13
14
15
254
-
254
-
254
296
296
550
1,097
47,500
-
48,597
160
160
48,757
(48,207)
84,436
32,474
(165,117)
(48,207)
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)
The above statement of financial position should be read in conjunction with the accompanying notes.
2017 Annual Report
10
ANTARES ENERGY LIMITED
Statement of Changes in Equity
Antares Energy Limited and its Controlled Entities
For the Year Ended 31 December 2017
CONSOLIDATED
Ordinary
Share
Capital
$'000
Accumulated
Losses
$'000
Foreign
Currency
Reserve
$’000
Convertible
Note
Premium
Reserve
$’000
Share
Option
Reserve
$'000
Total
$'000
Balance at 1
January 2016
Loss for the
period
Other
comprehensive
profit
Total
comprehensive
loss for the
period
Transactions
with owners in
their capacity as
owners:
Issue of
Convertible
Notes
Balance at 31
December 2017
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
84,436
(162,744)
23,054
3,922
5,883
(45,449)
-
-
-
-
(2,373)
-
-
(385)
(2,373)
(385)
-
-
-
-
-
-
-
-
-
-
(2,373)
(385)
(2,758)
-
84,436
(165,117)
22,669
3,922
5,883
(48,207)
84,436
(156,072)
20,801
3,922
5,883
(41,030)
(6,672)
-
-
-
2,253
-
-
(6,672)
2,253
-
-
-
-
-
-
-
(6,672)
2,253
-
-
(4,419)
-
-
-
-
-
-
-
-
-
-
-
84,436
(162,744)
23,054
3,922
5,883
(45,449)
The above statement of changes in equity should be read in conjunction with the accompanying notes.
2017 Annual Report
11
ANTARES ENERGY LIMITED
Statement of Cash Flows
Antares Energy Limited and its Controlled Entities
For the Year Ended 31 December 2017
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Net cash (outflows) from operating activities
Cash flows from investing activities
Proceeds from the sale of shares
Proceeds from Northern Star
Proceeds property, plant and equipment
Net cash inflows from investing activities
Cash flows from financing activities
Proceeds from repayment of loan
Proceeds from syndicate
Net cash inflows from financing activities
Net increase / (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
2017
$’000
31 December
2016
$’000
345
(2,616)
73
(2,198)
-
2,307
-
2,307
-
-
-
109
145
-
254
7
7
1,069
(5,775)
-
(4,706)
2,587
-
44
2,631
821
10
831
(1,244)
1,389
-
145
The above statement of cash flows should be read in conjunction with the accompanying notes.
2017 Annual Report
12
Notes to the Financial Statements
For the Year Ended 31 December 2017
NOTE 1 BASIS OF PREPARATION
ANTARES ENERGY LIMITED
Antares Energy Limited is a company limited by shares incorporated and domiciled in Australia whose shares are publicly traded
on the Australian Stock Securities Exchange and is a for profit entity. The address of the registered office and principal place of
business is Level 29, 201 Elizabeth Street, Sydney, NSW, 2000.
The principal activity of Antares Energy Limited is the exploration and production of oil and gas, with current activities based
primarily in Texas in the United States of America.
(a)
Basis of preparation
The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the
Corporations Act 2001, applicable Australian Accounting Standards and other mandatory professional reporting requirements.
The financial report has been prepared in accordance with the historical cost convention other than available for sale financial
assets which are measured at fair value.
The financial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars ($'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 directors have prepared the financial report of the consolidated entity on a 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.
On 23 March 2018 the DOCA was effectuated and the Company was released from the DOCA and any creditor claims
against Antares Energy Limited would be compromised and extinguished (and transferred across to the Antares Creditors
Trust).
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.
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 Directors have reconstructed the financial records of Antares Energy Limited 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 prior to 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 Directors 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.
2017 Annual Report
13
Notes to the Financial Statements
For the Year Ended 31 December 2017
NOTE 1 BASIS OF PREPARATION (CONT.)
(c)
New and amended accounting standards and interpretations
ANTARES ENERGY LIMITED
The following standards and interpretations have been issued by the AASB but are not yet effective for the period ending 31 December
2017. Although the directors anticipate that the adoption of these standards may have an impact on the Group's financial statements,
it is impracticable at this stage to provide a reasonable estimate of such impact.
There are no other standards that are not yet effective and that would be expected to have a material impact on the entity in the
current or future reporting periods and on foreseeable future transactions.
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 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 the profit or loss.
AASB 9 also removes the volatility in the 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.
2017 Annual Report
14
Notes to the Financial Statements
For the Year Ended 31 December 2017
NOTE 1 BASIS OF PREPARATION (CONT.)
(c)
New and amended accounting standards and interpretations (cont.)
Reference
Title
Summary
ANTARES ENERGY LIMITED
Applicatio
n date of
standard
1 January
2018
Applicatio
n date for
Group
1January
2018
1 January
2018
1 January
2018
1 January
2019
1 January
2019
AASB 15
Revenue from Contracts
with Customers
AASB 2014-10
AASB2015-10*
Amendments to Australian
Accounting Standards –
Sale or Contribution of
Assets between an Investor
and its Associate or Joint
Venture
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 2014-10 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 16
Leases
The key features of AASB16 are as follows:
Lessee accounting
•
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.
2017 Annual Report
15
Notes to the Financial Statements
For the Year Ended 31 December 2017
NOTE 1 BASIS OF PREPARATION (CONT.)
(d)
Principles of consolidation
ANTARES ENERGY LIMITED
The consolidated financial statements comprise the financial statements of Antares Energy Limited and its subsidiaries during the
year ended 31 December 2017 (“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.
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
2017 Annual Report
16
Notes to the Financial Statements
For the Year Ended 31 December 2017
NOTE 1 BASIS OF PREPARATION (CONT.)
(f)
Exploration and evaluation (cont.)
ANTARES ENERGY LIMITED
•
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.
(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.
2017 Annual Report
17
Notes to the Financial Statements
For the Year Ended 31 December 2017
NOTE 1
BASIS OF PREPARATION (CONT.)
(k) Cash and cash equivalents
ANTARES ENERGY LIMITED
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.
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.
2017 Annual Report
18
Notes to the Financial Statements
For the Year Ended 31 December 2017
NOTE 1 BASIS OF PREPARATION (CONT.)
(p) Revenue recognition (cont.)
ANTARES ENERGY LIMITED
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:
•
•
•
•
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 and its wholly-owned Australian controlled entities implemented the tax consolidation legislation as of 1
July 2002.
The head entity, Antares Energy Limited 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 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.
2017 Annual Report
19
Notes to the Financial Statements
For the Year Ended 31 December 2017
NOTE 1
BASIS OF PREPARATION (CONT.)
(r) Other taxes
ANTARES ENERGY LIMITED
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.
(t)
(u)
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.
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 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.
2017 Annual Report
20
Notes to the Financial Statements
For the Year Ended 31 December 2017
NOTE 1
BASIS OF PREPARATION (CONT.)
(y)
Foreign currency translation (cont.)
ANTARES ENERGY LIMITED
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.
(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.
2017 Annual Report
21
Notes to the Financial Statements
For the Year Ended 31 December 2017
NOTE 1
BASIS OF PREPARATION (CONT.)
(aa) Share-based payment transactions (cont.)
ANTARES ENERGY LIMITED
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:
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.
As at 31 December 2017 the Group impaired the value in use of its oil and gas properties, writing their carrying values to
$296 (2016:$411).
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 cash flows. 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 2017 and 31 December 2016 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
Consolidated
31 December
2017
$'000
31 December
2016
$'000
327
18
-
-
345
296
-
296
638
44
1
-
683
411
-
411
2017 Annual Report
22
Notes to the Financial Statements
For the Year Ended 31 December 2017
ANTARES ENERGY LIMITED
NOTE 3
REVENUE & INCOME
Revenue
Sale of product
Interest revenue
NOTE 4
EXPENSES AND LOSSES
Expenses
(a) Cost of sales:
Amortisation expenses
Other production costs
Total cost of goods sold
(b) Other expenses:
General expenses
Administration expenses
Legal expenses
Wages and salaries
Total employee benefits
Total other expenses
(c) Finance costs:
Interest paid/payable
NOTE 5
INCOME TAX
Consolidated
31 December
2017
$'000
31 December
2016
$'000
345
-
345
682
1
683
Consolidated
31 December
2017
$'000
31 December
2016
$'000
-
487
487
952
830
435
2,217
-
-
2,217
-
-
-
834
834
*
*
*
*
*
*
3,405
1,879
1,879
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
2017
$’000
31 December
2016
$’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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
(2,373)
(6,672)
At Group's statutory income tax rate of 28% (2016: 30%)
(664)
(2,002)
Adjustments in respect of current year income tax:
- Non deductible expense / assessable income
- Other
- Deferred tax asset not brought to account
- Prior year adjustments
Income tax benefit
*
*
664
*
-
*
*
(2,002)
*
-
2017 Annual Report
23
Notes to the Financial Statements
For the Year Ended 31 December 2017
NOTE 5
INCOME TAX (CONT.)
ANTARES ENERGY LIMITED
* 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 2017 and the comparative year 31
December 2016.
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
2017
$'000
31 December
2016
$'000
*
*
*
*
*
*
*
*
*
*
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 2017 and the comparative year 31
December 2016.
Tax consolidation
Effective 1 July 2002, for the purposes of income taxation, Antares Energy Limited 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.
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 does not have any franking credits at 31 December 2017 (2016: NIL).
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
2017
$’000
(2,373)
31 December
2016
$’000
(6,672)
31 December
2017
‘000
31 December
2016
‘000
240,000
240,000
In order for 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 2017 that have not been included in the calculation of diluted earnings per share. Convertible Notes
2017 Annual Report
24
Notes to the Financial Statements
For the Year Ended 31 December 2017
ANTARES ENERGY LIMITED
were compromised by the DOCA and extinguished against the Company (and transferred to the Antares Creditors
Trust).
NOTE 7 CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Consolidated
31 December
2017
$’000
31 December
2016
$’000
254
145
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.
Reconciliation of net loss after tax to net operating cash flows
Net loss
Non-cash Items and other adjustments:
Impairment of oil & gas properties
Foreign exchange translation
Loss on sale of shares
Change in operating assets and liabilities:
Decrease in receivables and prepayments
Increase in creditors and payables
(Decrease) in provisions
Net cash outflows from operating activities
Consolidated
31 December
2017
$’000
31 December
2016
$’000
(2,373)
(6,672)
86
62
-
1
313
(287)
(2,198)
-
-
1,237
967
1,045
(1,283)
(4,706)
NOTE 8
TRADE AND OTHER RECEIVABLES
Consolidated
Current
Other receivables (i)
(i) Other receivables include BAS refunds.
NOTE 9
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 of assets
Balance 31 December
31 December
2017
$’000
31 December
2016
$’000
-
-
1
1
Consolidated
31 December
2017
$’000
31 December
2016
$’000
2,727
2,727
-
(2,727)
-
2,727
-
2,727
The Northern Star project was sold effective 5 May 2017. The total proceeds on sale of raw lands was US$1,473,188.
(i)
US$500,000 was applied from these proceeds to purchase a Macquarie Net Profit Interest which was a conditional sale term.
The net sale proceeds received by Antares were US$973,188.
The total proceeds for the well bores were for an agreed sales price of US$1,000,000.
2017 Annual Report
25
Notes to the Financial Statements
For the Year Ended 31 December 2017
ANTARES ENERGY LIMITED
NOTE 10
OIL AND GAS PROPERTIES
Oil and gas properties
- at cost
- accumulated amortisation & impairment
- transfer to disposal group held for sale assets
- exchange difference translation
Consolidated
31 December
2017
$’000
31 December
2016
$’000
411
(86)
-
(29)
296
28,549
(25,464)
(2,727)
53
411
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
Foreign exchange translation
Transfer to disposal group held for sale assets
Balance at end of period
411
-
(86)
(29)
-
296
3,085
-
-
53
(2,727)
411
Oil and gas properties consist of the Big Star project. These assets have been valued at market (sale) price.
NOTE 11
TRADE AND OTHER PAYABLES (CURRENT)
Trade creditors and accruals
Creditors Claims under Administration
Consolidated
31 December
2017
$’000
31 December
2016
$’000
487
610
1,097
174
610
784
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 12
INTEREST-BEARING LOANS AND BORROWINGS
Current
Convertible notes
Convertible Notes
Consolidated
31 December
2017
$’000
47,500
47,500
31 December
2016
$’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 2017, no convertible notes
were issued (2016: Nil). During 2017, no convertible notes were bought back, on market (2016: Nil).
As at 31 December 2017 there was a total of 23,750,000 notes on issue (31 December 2016: 23,750,000) with a face value
of $47,500,000 (31 December 2016: $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. At the date of effectuation of the DOCA on the 23 March 2018, Convertible Notes were compromised by the DOCA
and extinguished against the Company (and transferred to the Antares Creditors Trust).
2017 Annual Report
26
Notes to the Financial Statements
For the Year Ended 31 December 2017
NOTE 13
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
Consolidated
31 December
2017
$’000
31 December
2016
$’000
-
-
160
160
449
-
-
(287)
(2)
160
276
276
173
173
441
-
-
-
8
449
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).
NOTE 14
CONTRIBUTED EQUITY
Issued and paid up capital:
Fully paid ordinary shares
31 December
2017
$’000
31 December
2016
$’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
Movement
End of the period
Capital management
12 months to
31 December 2017
12 months to
31 December 2016
No. of shares
$’000
No. of shares
$’000
240,000,000
-
240,000,000
84,436
-
84,436
240,000,000
-
240,000,000
84,436
-
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 capital management of the Company.
The current Directors 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 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.
2017 Annual Report
27
Notes to the Financial Statements
For the Year Ended 31 December 2017
NOTE 14
CONTRIBUTED EQUITY (CONT.)
ANTARES ENERGY LIMITED
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. At the date of effectuation of the DOCA on the 23 March 2018,
Convertible Notes will be compromised by the DOCA and extinguished against the Company (and transferred across to the
Antares Creditors Trust).
Consolidated
31 December
2017
$’000
47,500
(254)
47,246
(48,207)
(961)
31 December
2016
$’000
47,500
(145)
47,355
(45,449)
1,906
Consolidated
31 December
2017
$’000
31 December
2016
$’000
5,883
3,922
22,669
32,474
5,883
3,922
23,054
32,859
Total borrowings
Less cash and cash equivalents
Net debt (minimum balance is nil)
Total deficiency in shareholders’ funds
Total capital and debt
NOTE 15
RESERVES
Option reserve
Convertible Note reserve
FX Translation 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 2017 or 2016.
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.
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
TOTAL RESERVES
Number
31 December
2017
$’000
23,750,000
-
-
23,750,000
5,883
-
5,883
3,922
-
-
3,922
23,054
(385)
22,669
32,474
Consolidated
Number
-
-
-
23,750,000
-
-
23,750,000
31 December
2016
$’000
5,883
-
5,883
3,922
-
-
3,922
20,801
2,253
23,054
32,859
2017 Annual Report
28
Notes to the Financial Statements
For the Year Ended 31 December 2017
NOTE 16
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
ANTARES ENERGY LIMITED
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 financial risk management of the Company.
The Administrators and current directors 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 current 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
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. These assets were sold in the year ended 31 December 2016. Therefore, as at 31 December 2017 there
is no material equity risk for the Company.
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. As at 31 December 2017 there is no material interest rate risk for the Company.
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.
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 2017 and 31 December 2016, 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 2017 and 31 December 2016 no forward
contracts were entered into and there were no open positions at 31 December 2017 or 31 December 2016.
2017 Annual Report
29
Notes to the Financial Statements
For the Year Ended 31 December 2017
NOTE 16
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT.)
ANTARES ENERGY LIMITED
(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
2017
$’000
31 December
2016
$’000
(48,597)
-
-
(48,597)
(48,284)
-
-
(48,284)
As a result of the Company entering external administration on 28 April 2016, the Convertible Notes are immediately due and payable.
At the date of effectuation of the DOCA on the 23 March 2018, Convertible Notes will be compromised by the DOCA and extinguished
against the Company (and transferred across to the Antares Creditors Trust).
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 2017
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Payables*
Convertible notes*
Net (outflow)
Consolidated
as at 31 December 2016
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Payables*
Convertible notes*
Net (outflow)
≤ 6 months
$’000
6 – 12 months
$’000
1 – 5 years
$’000
> 5 years
$’000s
Total
$’000
254
-
254
(1,097)
(47,500)
(48,597)
(48,343)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
254
-
254
(1,097)
(47,500)
(48,597)
(48,343)
≤ 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)
* As a result of the Company entering external administration on 28 April 2016, the Convertible Notes are immediately due and payable. At
the date of effectuation of the DOCA on the 23 March 2018, Convertible Notes will be compromised by the DOCA and extinguished against
the Company (and transferred across to the Antares Creditors Trust).
(c) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Consolidated Entity.
Credit risk arises from the financial assets of the Consolidated Entity, which comprise cash and cash equivalents, trade and other
receivables. 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.
2017 Annual Report
30
Notes to the Financial Statements
For the Year Ended 31 December 2017
NOTE 16
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT.)
(c) Credit risk (cont.)
ANTARES ENERGY LIMITED
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 2017 there were no trade receivables and other receivables.
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 values 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 (2016: $47,500,000).
NOTE 17
COMMITMENTS FOR EXPENDITURE AND CONTINGENCIES
There are no contingent liabilities pertaining to the Consolidated Entity as at 31 December 2017.
NOTE 18
INTEREST IN JOINT OPERATIONS
(i)
At 31 December 2017 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 2017
31 Dec 2016
-
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 2017. All joint operations are located onshore Texas, USA.
NOTE 19
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
2017
31 December
2016
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
2017 Annual Report
31
Notes to the Financial Statements
For the Year Ended 31 December 2017
NOTE 20 EVENTS AFTER THE BALANCE SHEET DATE
ANTARES ENERGY LIMITED
23 January 2018: 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;
• authorise the issue of the following shares and options (including to related parties) to raise $1,876,875 before costs
• 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.
The capital of the company was consolidated on 25 January 2018. The DOCA was effectuated on 23 March 2018, and the
Company was released from being subject to the DOCA and any pre-administration creditor claims against Antares Energy Limited
were compromised and extinguished (and transferred to the Antares Creditors Trust). The Syndicate loaned the Company
$500,000 to effectuate the DOCA. The new Board was appointed on 23 March 2018.
NOTE 21
AUDITOR’S REMUNERATION
The auditor of Antares Energy Limited 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
Current Year
Prior Years (2016 & prior)
-
tax and compliance services
Consolidated
31 December
2017
$’000
31 December
2016
$’000
7,500
22,500
-
30,000
*
*
*
*
Stanton’s international Audit and Consulting Pty Ltd are the Company’s current auditors and have provided non-audit services. The fee
for the completion of the IER for inclusion in the notice of extraordinary meeting is $8,000. In 2016, non-audit services were not
provided by Stantons.
*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 2017 and comparative year 31 December 2016.
NOTE 22
DIRECTOR AND EXECUTIVE DISCLOSURES
(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 March 2016)*
Director – Finance & Administration Manager (Resigned 28 April 2016)*
Non-Executive Director (Resigned 28 April 2016)*
*The directors formally ceased to be directors of the Company under the terms of DOCA on 23 March 2018, being the date the
DOCA effectuated.
On 23 March 2018 new directors were appointed. These include Ross Warner, Joanne Kendrick, and Michael Pollak.
(b)
Remuneration of Key Management Personnel
(i)
Compensation by Category: Key Management Personnel
Short-Term
Post Employment
Long-Term
Share-based Payments
Consolidated
2017
$
2016
$
-
-
-
-
-
*
*
*
*
*
* 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 2017 and comparative year 31
December 2016.
2017 Annual Report
32
Notes to the Financial Statements
For the Year Ended 31 December 2017
ANTARES ENERGY LIMITED
NOTE 22
DIRECTOR AND EXECUTIVE DISCLOSURES
(b)
Remuneration of Key Management Personnel ( cont.)
(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 prior 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.
(iii) Other transactions and balances with Key Management Personnel
During the year ended 31 December 2017 and the year ended 31 December 2016 there were no transactions
with Key Management Personnel other than those described above. At 31 December 2017 and 31 December
2016 there were no balances outstanding in relation to Key Management Personnel other than those described
above and in the Remuneration Report.
NOTE 23
PARENT ENTITY INFORMATION
The following information relates to the parent entity, Antares Energy Limited at 31 December 2017. 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
2017
$’000
31 December
2016
$’000
82
-
82
48,496
-
48,496
84,436
10,650
(143,500)
(48,414)
(232)
(232)
15
-
15
48,197
-
48,197
84,436
10,650
(143,268)
(48,182)
(95)
(95)
2017 Annual Report
33
ANTARES ENERGY LIMITED
ABN 75 009 230 835
DIRECTORS’ DECLARATION
As set out in Note 1(b) to the Consolidated financial statements, in the opinion of the Directors of Antares Energy Limited:
(a)
Although the Directors 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, and the remuneration disclosures contained in
the Remuneration Report for the year ended 31 December 2017 are in accordance with the Corporations Act 2001,
including:
(i)
(ii)
(iii)
giving a true and fair view of the financial position as at 31 December 2017 and the performance for the
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 compliance of the financial statements and notes with International Financial Reporting Standards as
disclosed in note 1(a); and
(c)
As a result of the effectuation of the DOCA on 23 March 2018 and subject to completion of the proposed
recapitalisation of the Company, as at the date of this Report, the Directors have reasonable grounds to believe that
the Company will be able to pay its debts as and when they become due and payable.
Signed in accordance with a resolution of the Directors.
Ross Warner
Chairman
3 April 2018
2017 Annual Report
34
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
Report on the Audit of the Financial Report
Disclaimer of Opinion
We have audited the financial report of Antares Energy Limited, the Company and its subsidiaries, (the
Group), which comprises the consolidated statement of financial position as at 31 December 2017, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, and notes to
the financial statements, including a summary of significant accounting policies, and the directors’
declaration.
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 Group
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 Directors 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 Directors are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error. In
preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
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 2017, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and 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 Directors for the Financial Report
The directors are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error. In note 1
(b), the directors 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 directors 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 5 to 6 of the directors’ report for the year
ended 31 December 2017.
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 for the year ended 31 December 2017 and whether it
complies with Section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the remuneration
report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the remuneration report, based on our audit conducted in accordance with Australian
Auditing Standards.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Samir Tirodkar
Director
West Perth, Western Australia
3 April 2018
SHAREHOLDER INFORMATION
AS AT 3 APRIL 2018
(POST CONSOLIDATION)
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
YANDAL INVESTMENTS PTY LTD
MERRILL LYNCH (AUSTRALIA
TANGLED-BLUE INVESTMENTS PTY LTD
MR BRIAN HENRY MCCUBBING
JOHJAM PTY LTD
VLANSAM PTY LTD
WESTBLOCK SERVICES PTY LTD
KILLAWARRA PTY LTD
HSBC CUSTODY NOMINEES AUST LIMITED
ONE MANAGED INV FUNDS LTD
MR MARK CLOHESSY
MR JONATHAN B KERR – SHEPPHARD
BARTON & BARTON
MR NICHOLAS DRAPER
(b) Distribution of Shareholdings
2,415,700 15.10%
1,748,160 10.93%
1,081,145
6.76%
689,333
4.31%
243,395
1.52%
233,333
1.46%
199,200
1.24%
197,864
1.24%
164,084
1.03%
146,667
0.92%
140,000
0.87%
136,859
0.86%
129,222
0.81%
113,333
0.71%
104,496
0.65%
100,915
0.63%
100,000
0.62%
96,667
0.60%
96,667
0.60%
90,000
0.56%
8,227,040 51.42%
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
2,785
757
131
164
16
0
809,465
1,677,737
932,365
4,736,744
7,843,706
TOTAL ON REGISTER
3,853
16,000,017
0.00%
5.06%
10.49%
5.83%
29.6%
49.02%
100%
(c)
Substantial Shareholders
Number of Shares % of Issued Shares
J P Morgan Nominees Aust Ltd
HSBC Custody Nominees Aust Ltd
Citicorp Nominees Pty Ltd
2,415,700
1,748,160
1,081,145
15.10%
10.93%
6.76%
(d)
There were 3,809 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
2017 Annual Report
38
LIST OF INTERESTS - AS AT 26 MARCH 2018
USA Production
ANTARES ENERGY LIMITED
ABN 75 009 230 835
USA Exploration
Project Name County/State Land Holding
Expiry
Available for Extension
Big Star
Dawson/TX
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
TOTAL
3,912.70
3,116.82
2017 Annual Report
39
Project NameCounty/StateWell Name% InterestBig StarDawson/TXCline 46-1100Esmond 20-1100Simmons 27-272Stuart 12-1100Woodward 7-1100HawkvilleMcMullen/TXDonnell 457 1&20.125(ORRI Only)Donnell C-1H0.99345Donnell C-2H1.06537Donnell-Mulholland Unit 1&20.059553