Blue Star Helium Limited
And Controlled Entities
ABN: 49 623 130 987
ANNUAL REPORT
For the Year Ended 31 December 2021
CONTENTS
CORPORATE DIRECTORY
CHAIRMAN’S LETTER TO SHAREHOLDERS
DIRECTORS’ REPORT
CORPORATE GOVERNANCE
AUDITOR’S INDEPENDENCE DECLARATION
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
SHAREHOLDER INFORMATION
LIST OF INTERESTS
1
2
4
24
25
26
27
28
29
30
56
57
61
63
Blue Star Helium Limited and Controlled Entities
CORPORATE DIRECTORY
DIRECTORS
Ross Warner
Trent Spry
Neil Rinaldi
Executive Chairman
Managing Director and Chief Executive Officer
Non-Executive Director (appointed 15 April 2021)
SECRETARY
Amanda Wilton-Heald
REGISTERED OFFICE
Level 11, London House
216 St Georges Terrace
Perth WA 6000
BUSINESS OFFICE
194 Hay Street
Subiaco WA 6008
Telephone: +61 8 9481 0389
Facsimile: +61 8 9463 6103
WEBSITE & EMAIL
www.bluestarhelium.com
info@bluestarhelium.com
SHARE REGISTRY
Automic Registry Services Pty Ltd
Level 5
191 St Georges Terrace
Perth WA 6000
Telephone: +61 8 9324 2099
AUDITORS
Stantons International Audit & Consulting Pty Ltd
Level 2
40 Kings Park Road
West Perth WA 6005
STOCK EXCHANGE LISTING
Australian Securities Exchange
ASX Code: BNL
OTC Markets
Blue Star Helium Limited and Controlled Entities
1
CHAIRMAN’S LETTER TO SHAREHOLDERS
It is my pleasure to write to you following a productive and value-adding year for Blue Star. I would
like to start by welcoming newer shareholders who have joined the Blue Star register over the
past twelve months. I would also like to thank our longer-standing shareholders for their ongoing
support.
Blue Star has continued to steadily progress toward its goal of delivering low-cost, high-grade
helium production assets in the United States. 2021 was a transformational year for the Company
in many aspects.
We continued to amass prospective acreage in Las Animas County, Colorado, taking our
landholding to 271,960 acres gross (193,908 net). This also culminated in a significant increase in
the Company’s Prospective Helium Resources through the year, which now stand at 13.4 BCF
following the declaration of additional Prospective Resources at Galactica, Pegasus and Argo.
In January 2021, changes to the regulatory and operational environment in the United States at
both the Federal and State levels created significant uncertainty around permitting for oil and gas
exploration activities. Despite Blue Star’s pure play helium strategy meaning that it does not
expect to encounter meaningful hydrocarbons in its wells, our permitting process was slowed as
this new framework was enacted. However, we successfully navigated the revised permitting
processes and became the first helium operator in Las Animas County, Colorado to receive a
permit to drill under the new regulatory environment.
Having successfully completed the drill permitting process for our maiden Enterprise 16#1 well,
the implementation of our rolling permitting strategy is in full swing. The rolling permitting
strategy is designed to provide flexibility around well selection and allow for a progressive drilling
program with a substantial degree of embedded responsiveness to respective drilling outcomes.
At present, there are 47 potential wells in the permitting pipeline providing a significant and
exciting runaway ahead of us.
The Company’s water well initiative was implemented during the year. The program, which
involved funding a number of water wells drilled by local ranch holders, provided the Company
with the opportunity to develop important relationships with its stakeholders, while at the same
time providing valuable data to further delineate its helium prospects. The program was highly
successful, identifying a 134 ft gas column with a calculated air-free gas composition of 8.8%
helium in the BBB#1 water well upon its redrilling, one of the highest in-situ helium concentrations
globally. The risk-reward ratio of funding these low-cost shallow water wells has proven to be
highly attractive. The Company is in discussions with other ranchers who already have permits in
place regarding the funding of further low-cost water wells.
In December 2021, we announced an agreement to jointly develop leases in an area of mutual
interest, which includes the Company’s Serenity Prospect. The agreement increases our interest
in an area we believe is highly prospective, while providing additional exposure to expected near-
term drilling at Sammons Ranch. The agreement creates significant potential for synergies with
our joint development partners, Prospero Oil and Gas LLC and Vecta Oil and Gas Ltd, an
experienced helium producer and operator.
Blue Star Helium Limited and Controlled Entities
2
CHAIRMAN’S LETTER TO SHAREHOLDERS continued
At a corporate level, the Company also underwent changes to the Board and executive team. With
the departure of Joanne Kendrick from the business, Trent Spry was appointed as Managing
Director and CEO. Trent is well known to many shareholders having already been deeply
integrated in the Company as an Executive Director. He was instrumental in implementing Blue
Star’s current helium strategy and is recognised as one of the few highly skilled helium
explorationists in the world, making him a natural leader of our business.
Further bolstering the Board, Neil Rinaldi was appointed as a Non-Executive Director. Having deep
foundational experience as an executive and finance professional over his career, Neil’s expertise
in asset acquisition and disposal, company structuring and driving growth provides Blue Star with
valuable insights as we move ahead. On behalf of the Board, I would like to warmly welcome Neil
to the business.
I would like to thank our partners in the United States for their assistance. Their guidance has
been valuable and we look forward to our continued work together over the year ahead.
Additionally, I would like to thank the Colorado Oil and Gas Conservation Commission for their
professionalism and diligence in our interactions. We look forward to presenting further
applications over the coming year.
Finally, I would like to thank you, our shareholders, for your ongoing support. We are excited
about the path ahead as we continue to advance our premier helium assets in the United States
and look forward to the further realisation of the value in our acreage.
____________________
Ross Warner
Executive Chairman
29 March 2022
Blue Star Helium Limited and Controlled Entities
3
DIRECTORS’ REPORT
The Directors present their report, together with the financial statements, on the consolidated
entity (referred to hereafter as the 'Consolidated Entity') consisting of Blue Star Helium Limited
(referred to hereafter as the 'Company' or 'parent entity') and the entities it controlled at the end
of, or during, the year ended 31 December 2021 (‘FY21’).
DIRECTORS
The following persons were Directors of Blue Star Helium Limited during the whole of the financial
year and up to the date of this report, unless otherwise stated:
Name
Ross Warner
Trent Spry
Neil Rinaldi
Joanne Kendrick
Title
Executive Chairman
Managing Director and Chief Executive Officer (effective 14 April
2021; Executive Director up to and including 13 April 2021)
Non-Executive Director (appointed 14 April 2021)
Managing Director (resigned effective 14 April 2021)
PRINCIPAL ACTIVITIES
The principal activities of the Consolidated Entity during the year ended 31 December 2021 were
helium exploration. The Company is headquartered in Australia and its strategy is to provide its
shareholders with exposure to multiple high-value helium projects in North America.
REVIEW OF RESULTS
The loss after tax for the year ended 31 December 2021 was $1,395,783 (2020: loss of
$1,690,123).
The earnings of the Consolidated Entity for the past financial periods are summarised below:
Revenue (including other income)
EBITDA
EBIT
Loss after income tax
31 December
2021
$
66,834
(1,394,233)
(1,395,783)
(1,395,783)
31 December
2020
$
15,953
(1,688,667)
(1,690,123)
(1,690,123)
31 December
2019
$
62,715
(902,837)
(906,955)
(906,955)
The factors that are considered to affect total shareholders return are summarised below:
Share price at financial period end
31 December
2021
$
0.062
31 December
2020
$
0.044
31 December
2019
$
0.007
Blue Star Helium Limited and Controlled Entities
4
DIRECTORS’ REPORT continued
Operating Review
The Company increased its landholding to 271,960 gross (193,980 net) acres at the end of the
period. The increase resulted from the acquisition of additional mineral leases and also from the
acquisition of interests in mineral leases through the formation of a joint development
agreement.
Figure 1: Blue Star Las Animas County leasehold position. Joint development agreement AMI
shown by red outline.
Substantial Increase in Prospective Helium Resources
On 10 June 2021, following the issue of Federal leases to Blue Star, the Company’s total P50 net
unrisked prospective helium resource increased to 13.4 BCF (a further increase of 3.8 BCF). The
Company’s current prospective helium resources,
independently assessed by Sproule
Incorporated, are summarised in Table 1 below.
Net Recoverable Helium (mmcf)
1U (P90)
2U (P50)
3U (P10)
Galactica Prospect
Pegasus Prospect
Argo Prospect
Enterprise Prospect
Galileo Prospect
2,131
1,970
276
372
495
4,395
3,423
2,108
2,204
1,292
Total BNL Net Recoverable Helium
5,244
13,422
6,849
5,092
3,065
5,494
2,329
22,829
Blue Star Helium Limited and Controlled Entities
5
DIRECTORS’ REPORT continued
Note 1: The estimated quantities of helium that may potentially be recovered by the application of
a future development project relate to undiscovered accumulations. These estimates have both an
associated risk of discovery and a risk of development. Further exploration appraisal and evaluation
is required to determine the existence of a significant quantity of potentially moveable helium.
Note 2: The resource estimates have been prepared using the probabilistic method and are
presented on an unrisked basis. In a probabilistic resource distribution, 1U (P90), 2U (P50), 3U (P10)
estimates represent the 90% probability, 50% probability and 10% probability respectively that the
quantity recovered will equal or exceed the estimate assuming a success case in the prospect.
Resource totals have been arithmetically added.
Notes specifically in relation to Galactica, Pegasus and Argo
Note 3: The estimates of prospective resources in respect of Galactica, Pegasus and Argo prospects
are reported as at an evaluation date of 4 June 2021 and are more fully described in the Company’s
announcement of 10 June 2021. The Company is not aware of any new information or data that
materially affects the information included in that announcement and all the material assumptions
and technical parameters underpinning the estimates in that announcement continue to apply and
have not materially changed.
Notes specifically in relation to Enterprise and Galileo
Note 4: The estimates of prospective resources in respect of Enterprise and Galileo prospects are
reported as at an evaluation date of 1 November 2020 and are more fully described in the
Company’s announcement of 16 November 2020. The Company is not aware of any new
information or data that materially affects the information included in that announcement and all
the material assumptions and technical parameters underpinning the estimates
in that
announcement continue to apply and have not materially changed.
Table 1: Blue Star total prospective helium resources, Las Animas County, Colorado
Blue Star Helium Limited and Controlled Entities
6
DIRECTORS’ REPORT continued
Changes to Operational and Regulatory Environment
On 27 January 2021, United States President, Joe Biden issued an Executive Order which together
with a related order issued by the Secretary of the Interior paused new oil and natural gas leases
on Federal land while further a review of Federal leasing and permitting practices was undertaken.
This was part of the new administration’s initial policy response to address the role of fossil fuels
in climate change. In addition to the changes to Federal leasing and permitting practices, new rules
and procedures relating to drilling permitting at state level came into effect in Colorado on
15 January 2021. The Colorado Oil and Gas Conservation Commission (COGCC) progressively
updated stakeholders in the following months, during which time there was an initial
comprehension period.
Blue Star does not anticipate that the Federal orders will impact the Company’s planned
exploration drilling program targeting private and State lands initially, particularly given Blue Star’s
pure play helium strategy means that its assets are not expected to encounter or produce any
associated hydrocarbons. The Biden administration was clear that the aim of the Federal changes
was to address climate change by limiting hydrocarbon production. At a state level, the COGCC’s
new rules and regulations are not expected to adversely affect the Company given planned wells
are technically simple, shallow and vertical, and low impact due to their rural location.
Maiden Drilling Program and Permitting
In late April 2021, Blue Star advised that its wholly owned subsidiary, BNL (Enterprise) Inc, had
submitted its initial application to the COGCC for an oil and gas development plan (OGDP) in
relation to the Enterprise 16#1 well together with the associated new location application
(Form 2A).
On 23 August 2021, the Company announced that its Form 2A had passed its completeness review,
a significant achievement given the uncertainty created by the aforementioned State and Federal
regulatory changes. On 28 October 2021, the Company advised that its OGDP application was
approved at an uncontested hearing held by the COGCC. Shortly after, the Company submitted its
final Form 2 permit to drill application. On 23 December 2021, Blue Star announced that it had
been issued an approved permit to drill the Enterprise 16#1 well. Blue Star understands that it was
the first helium operator in Las Animas County, Colorado to receive an approved Form 2 permit to
drill since the January rule changes.
The Company is seeking to permit multiple potential wells across its various Las Animas County
prospects on a rolling basis. This rolling permitting strategy is designed to give Blue Star significant
flexibility around well selection and is expected to allow a continual drilling program with a
substantial degree of embedded responsiveness to respective drilling outcomes.
During the period, the Company submitted new location applications (Form 2As) for four further
helium exploration wells, State 35 and State 36, located at the Company’s Pegasus Prospect and,
State 9 and State 16, located at the Company’s Galactica Prospect. Final approved permits to drill
(Form 2) for these four prospective wells are targeted for receipt by mid-CY2022. Blue Star also
expects to submit further Form 2A applications during Q1 CY2022 for five prospective helium
exploration well locations on the Voyager prospect. The selection of these well locations is heavily
informed by the 134ft helium bearing gas column identified in the BBB#1 water well. As a result
of recent and planned permitting activity, Blue Star had an interest in 5 wells that are permitted
or under permitting at the end of the period.
Blue Star Helium Limited and Controlled Entities
7
DIRECTORS’ REPORT continued
Agreement to Jointly Develop Serenity Prospect
On 22 December 2021, the Company announced that it had executed an agreement to jointly
develop helium leases in an Area of Mutual Interest (AMI) with private entities, Vecta Oil and Gas
Ltd and Prospero Oil and Gas LLC, in Las Animas County, Colorado. The AMI includes Blue Star’s
Serenity prospect, which is located immediately to the south-east of its Galactica and Pegasus
prospects.
The AMI covers 126 square miles and contains combined leased and optioned acreage of 14,551
net acres. Blue Star is contributing 4,334 net acres to the AMI and Vecta/Prospero are contributing
10,217 net acres, inclusive of lease options (see Figure 2). Each party shall have the right, but not
the obligation, to participate in any further leases acquired in the AMI prior to 14 December 2023
in proportion to their respective interests.
Figure 2: Blue Star’s landholding in Colorado, with AMI containing Serenity prospect outlined in
red
Formation of the AMI will see Blue Star take a 50% non-operated interest in all combined acreage
within the AMI. Vecta is to be the operator of the AMI and hold a 25% interest, while Prospero will
also hold a 25% interest.
Vecta currently has approved Form 2As in relation to four (4) helium exploration well locations
within the AMI, receiving approval subsequent to the end of the period. The first of these wells
(Sammons 315310C) is targeted to commence drilling as soon as permitting allows which is
anticipated to be early Q2 CY2022. As part of the Participation Agreement, all parties have agreed
to participate for their respective working interest shares in the drilling of the Sammons 315310C
well. Drilling and evaluation of this well is expected to cost less than US$150,000, net to Blue Star.
Blue Star Helium Limited and Controlled Entities
8
DIRECTORS’ REPORT continued
Enterprise 16#1 Well
Subsequent to the end of the period, Blue Star announced that it had successfully completed the
drilling phase of the Enterprise 16#1 helium exploration well and that wireline logs had been run.
The well was drilled to a total depth of 1,250 feet and identified a potential helium zone in the
targeted Lyons sandstone formation. Based on wireline logs, the top of the Lyons formation was
penetrated at 1,045 feet with an interpreted gas water contact (GWC) intersected at 1,058 feet
(equating to an approximate 13 feet gross and net gas column in the well bore). Some helium gas
was seen while drilling and the well was then suspended for future gas sampling, fluid level,
pressure monitoring and testing.
Implementation of this testing program is targeted for late Q1 CY2022. The top of the Lyons and
the interpreted GWC in the Enterprise 16#1 well are structurally below the equivalent depths in
the Hill#2 water well. The current interpretation is that the new GWC seen in the Enterprise 16#1
well replaces the interpreted GWC in the Hill#2 water well as the structural GWC across the
Enterprise structure. This results in a structural gas column for the Enterprise structure of
approximately 78 feet being calculated from the top of the Lyons formation at Hill#2 (currently
the highest penetration on the structure) to the GWC at Enterprise 16#1 (currently the lowest
interpreted GWC on the structure). See figure 3 below. An alternative interpretation is that the
two GWC’s seen in the Hill#2 and Enterprise 16#1 wells represent contacts in two different
structures. Although a less likely scenario given the proximity of the wells, this alternative will be
considered as the well data is integrated and the mapping in the area is updated. The Hill#2 and
Enterprise 16#1 wells are approximately 1.3 miles from each other.
Figure 3: Schematic of interpreted geology following drilling of Enterprise 16#1
Blue Star Helium Limited and Controlled Entities
9
DIRECTORS’ REPORT continued
Development of ESG Roadmap and Stakeholder Relationship Initiatives
Blue Star Helium plans to adopt an Environment, Social and Governance (ESG) roadmap to guide
the business as it grows, with the aim to become a leading supplier of helium utilising a best
practice approach to management of ESG risks and opportunities. We plan to invite views from
interested stakeholders to identify the material ESG topics and how they can be incorporated
within an ESG framework and roadmap. Additionally, the Company plans to utilise the services of
an independent advisor to ensure that risks and opportunities are updated and that risk
management practices with respect to ESG are effective and transparent.
During the year, Blue Star agreed to fund the drilling of water wells for local ranch holders. The
water well initiative aims to develop foundational relationships with its stakeholders, reinforcing
its commitment to the local community. These wells will be owned by the ranchers and Blue Star
does not have any interest in them. However, the Company does own a mineral lease interest at
each of the well locations. Blue Star will seek to gather data from the wells during drilling that
may aid in the further definition of its helium prospects and reduce potential surface disturbance
by utilising data gathered from the water wells that might otherwise have required exploratory
drilling. Water wells are drilled differently to the method the Company expects to use to drill
dedicated helium gas wells. Additionally, water wells cannot be conventionally tested.
Hill #2 water well
The Hill#2 water well, located approximately 1.3 miles north-east of the Enterprise 16#1 was
completed during October 2021. The Hill #2 well intersects the top of the Lyons formation at 809
feet depth, with wireline logs interpretation of a gas column in high quality reservoir from the top
of the Lyons formation to a depth of 838 feet (29 ft gas column).
BBB#1 water well
On 17 November 2021, the Company announced that drilling of the BBB#1 water well had been
completed by the ranch owner. The water well is located within Blue Star’s Voyager prospect and
approximately six miles north of the historic Model Dome helium field which produced raw gas
with an average helium content of 8%.
Subsequently, on 21 December 2021, the Company announced that the BBB#1 had been redrilled
(offset 40 ft to the south) and geologic and wireline logging completed. Wireline logs from the
original hole showed that it was still in the gas column at its total depth (TD) of 922 ft). The
redrilled well confirmed intersection of the top of the Lyons formation at 889 ft depth, with
wireline logs confirming a gas column in high quality reservoir from the top of the Lyons formation
to a depth of 1’023 ft (134 ft gas column). The well TD’ed at 1,054 ft in the lower Lyons formation.
Gas analysis of samples obtained in the original BBB#1 hole resulted in a calculated air-free gas
composition from the Lyons formation of 8.8% helium (He), 78.7% nitrogen (N) and 12.5% carbon
dioxide (CO2). This composition is very similar to the average historic Model Dome analogue
production. It also represents one of the highest in-situ helium concentrations found both in the
United States and globally.
No prospective resources associated with the Voyager prospect have been reported by Blue Star.
Any prospective resources at Voyager would be in addition to the Company’s stated prospective
helium resources of 13.4 BCF associated with the Enterprise, Galileo, Argo, Galactica and Pegasus
prospects.
Blue Star Helium Limited and Controlled Entities
10
DIRECTORS’ REPORT continued
Given the positive results of the acquired data, the Company has selected an initial five offset well
locations for appraisal and development drilling. The BBB#1 water well was not conventionally
tested. The Company ran a suite of logs including gamma ray, resistivity (induction), density and
neutron logs. Gas analysis of samples obtained while drilling was performed using mass
spectrometry. An estimated air-free gas composition from the Lyons formation in BBB#1 of 8.8%
helium (He), 78.7% nitrogen (N) and 12.5% carbon dioxide (CO2) has been calculated after backing
out air. The miniRuedi mass spectrometer was operated by Geochemical Insight. The instrument
was calibrated with a certified air standard comprised of 0.000524% He, 0.934% Ar, 0.05% CH4,
0.2%.
Helium Product Marketing
During the period, Blue Star commissioned and received a helium industry and product marketing
study from a specialist U.S. helium consultant. The report provided key inputs into the preliminary
engineering study and has facilitated further ongoing discussions with end-users as the Company
formulates its marketing strategy. As the Company progresses its exploration and drilling
program, it will continue to develop its product marketing program concurrently.
Preliminary Engineering Study and Development Planning
During the year, Blue Star commissioned a high-level engineering development study from a
leading consultant, set to evaluate a range of potential development scenarios for the
optimisation of Blue Star’s prospective helium resource base in Las Animas County. The findings
of the study will assist in planning the optimal means of commercialisation. In addition, the
Company’s surveyors undertook a preliminary assessment of a potential gathering system and
helium processing facility locations associated with the Galactica and Pegasus prospects.
Big Star Project – Texas, USA
Production continued from the Simmons well during the period until it was sold for nominal
consideration in September 2021. The Stuart and Cline wells did not produce during the period
and were plugged and abandoned. The Company subsequently reclaimed these sites and the
Esmond well site.
Corporate
Blue Star Commences Trading on the OTCQB Market
Subsequent to the end of the period, the Company announced that its ordinary shares had been
approved for trading on the OTCQB Venture Market (OTCQB) under the ticker “BSNLF”. The
OTCQB market (often referred to as a “QB” quotation) is a U.S. trading platform operated by OTC
Markets Group in New York, U.S. It is structured to provide live‐market trading during North
American business hours in early‐stage and developing companies that may hold primary listings
in non-US markets. A listing on the OTCQB market provides increased accessibility for North
American domiciled investors to the Company’s shares, as well as delivering potential for
enhanced overall liquidity in the trading of Blue Star. Compliance requirements for OTCQB
quotation require issuers to satisfy annual company verification and management certification
processes, financial reporting and transparency requirements, and ongoing compliance in relation
to the company’s capital structure and market capitalisation. All compliance requirements are
expected to be practically satisfied by Blue Star through existing satisfaction of ASX primary listing
obligations. Blue Star did not issue any new securities as part of the OTCQB listing process
Blue Star Helium Limited and Controlled Entities
11
DIRECTORS’ REPORT continued
Appointment of Managing Director
On 15 April 2021, the Company announced the appointment of Mr Trent Spry as Managing
Director and CEO of Blue Star Helium following the departure of Ms Joanne Kendrick. Mr Spry
previously held the role of Executive Director of Blue Star and had held that role since April 2019.
Mr Spry is a qualified geoscientist with over 25 years of practical experience in the oil, gas and
helium resources industries covering exploration, appraisal, operations and new ventures. He has
considerable experience in business development, strategy formulation and project execution.
This includes the origination of numerous projects from concept or acquisition through to
discovery, appraisal, and successful development or divestment, across the US onshore and Gulf
of Mexico, Australia, and southeast Asia. My Spry is recognised as one of the few highly skilled
helium explorationists in the world, and was invited to be a founding member of the American
Association of Petroleum Geologists (AAPG) EMD Critical Minerals Sub-Committee on Helium.
Appointment of Non-Executive Director
On 15 April 2021, the Company announced the appointment of Mr Neil Rinaldi as a Non-Executive
Director of Blue Start Helium. Mr Rinaldi is an executive leader and finance professional with over
20 years’ experience in capital raisings, asset acquisition and disposals, company structuring and
positioning companies for growth.
Changes to Executive Remuneration
On 31 May 2021, Blue Star announced changes to the executive remuneration packages of
Managing Director, Mr Trent Spry and Executive Chairman, Mr Ross Warner.
Since joining the Company as executive board members in 2018 and 2019, respectively, Mr
Warner and Mr Spry have been employed under contracts limiting annual base salary (including
Directors’ fees) to A$60,000 each. These arrangements were a function of both Mr Warner and
Mr Spry agreeing to a base salary level well below market rates to assist the Company as it
emerged from a restructure and recapitalisation process.
Following this process having fully run its course, the Blue Star Board commissioned an industry
peer benchmarking report from an independent remuneration consultant. Based on the
outcomes of the report, the Board updated the base salary (including Directors’ fees) component
of both Mr Warner and Mr Spry’s employment contracts. The changes to these base salary levels
(an increase in both to A$285,000, inclusive of statutory superannuation, allowances and salary
sacrifices) place Blue Star within the 50th percentile of its peer group, as determined by the report
of the independent consultant. This more accurately reflects industry benchmark salary levels and
the set of skills and relevant experience brought to the Company by these executives.
Blue Star Helium Limited and Controlled Entities
12
DIRECTORS’ REPORT continued
COVID-19 Impacts
During the year, the Coronavirus (COVID-19) pandemic had a significant impact on the global
operating and macroeconomic environments. To date the restrictions arising from the global
coronavirus pandemic have not materially affected the Company’s operations with staff and
consultants in Australia and the USA adapting to more isolated working conditions. The Company
notes that various staff of the Colorado Oil and Gas Conservation Commission (COGCC) had been
working from home which may have impacted the timing of interactions with COGCC. The
Company continues to actively monitor the situation, including assessing any impact it may have
on the Company’s operations.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no significant changes in the state of affairs during the year.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Consolidated Entity is undertaking activities to permit a further 46 helium wells.
DIRECTORS’ QUALIFICATIONS AND EXPERIENCE
The Directors’ qualifications and experience are set out below.
Current Directors
Director
Ross Warner
Qualifications
Position
Appointment Date
Resignation Date
Length of Service
Biography
Current ASX Listed
Directorships
Former ASX Listed
Directorships within
last 3 years
Details
B. Juris and LLB and LLM
Executive Chairman
23 March 2018
N/A
4 years
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 the US, UK and Indonesia. He practiced as a
corporate finance lawyer with Mallesons Stephen Jaques in Perth
and Melbourne and Clifford Chance in London. He has the following
qualifications: B. Juris and LLB (UWA); and LLM (Melb).
None
None
Blue Star Helium Limited and Controlled Entities
13
DIRECTORS’ REPORT continued
Trent Spry
Qualifications
Position
Appointment Date
Resignation Date
Length of Service
Biography
Current ASX Listed
Directorships
Former ASX Listed
Directorships within
last 3 years
Neil Rinaldi
Position
Appointment Date
Resignation Date
Length of Service
Biography
Current ASX Listed
Directorships
BSc (Hons), AICD
Managing Director and Chief Executive Officer (effective 14 April
2021)
29 April 2019
N/A
2 years 11 months
Trent brings to the Board significant ASX corporate experience,
expertise in geoscience, exploration and project development as well
as significant experience in the USA. Trent has over twenty years of
experience
in
in the upstream oil, gas and helium
exploration, appraisal and development. He holds a Bachelor of
Science (Hons) (National Centre for Petroleum Geology & Geophysics,
University of Adelaide) and is a graduate of the Australian Institute of
Company Directors. He has originated numerous projects from
concept or acquisition through to discovery, appraisal, successful
development and exit in Australia, SE Asia, the Gulf of Mexico and the
US onshore.
None
industry
None
Non-Executive Director
14 April 2021
N/A
11 months
Mr Rinaldi is an executive leader and finance professional with over
20 years’ experience. He has considerable expertise in capital raising,
asset acquisition and disposals, company structuring and positioning
companies for growth. Mr Rinaldi is currently the Chief Executive
Officer of International Graphite, which is an unlisted downstream
graphite processing business with pending operations in Collie,
Western Australia. Prior to this, Mr Rinaldi was a non-executive
director of Brainchip Holdings Limited, an artificial intelligence
business, and an Executive Director of Aziana Limited, a multi-
commodity exploration business with assets in Madagascar and
Louisiana. Prior to that, Mr Rinaldi was the Managing Director of
Truestone Capital Limited, a London based corporate advisory firm
focused on delivering results for companies in the Australian
resources sector. He commenced his professional career as an
Investment Advisor at Hartleys Limited.
None
Blue Star Helium Limited and Controlled Entities
14
DIRECTORS’ REPORT continued
Former ASX Listed
Directorships within
last 3 years
Former Directors
Joanne Kendrick
Qualifications
Position
Appointment Date
Resignation Date
Length of Service
Biography
Current ASX Listed
Directorships
Former ASX Listed
Directorships within
last 3 years
COMPANY SECRETARY
Company Secretary
Amanda Wilton-Heald
Qualifications
Position
Appointment Date
Resignation Date
Biography
Aziana Limited
Brainchip Holdings Limited
BChE, AICD
Managing Director
23 March 2018
14 April 2021
3 years 1 month
Joanne was directly responsible for managing production operations,
exploration drilling and development projects, capital raisings, asset
transactions and joint venture interests throughout her 25-year
career in upstream oil, gas and helium. She has served in a variety of
executive, operational and technical roles with Woodside Petroleum,
Newfield Exploration, Gulf Canada, including 7 years as Deputy
Managing Director at ASX-listed Nido Petroleum. She holds a Bachelor
of Chemical Engineering from the University of Adelaide and
specialises in Petroleum/Reservoir Engineering. Joanne is a member
of the Australian Institute of Company Directors (AICD).
N/A
None
Details
BCom, CA
Company Secretary
4 September 2020
N/A
Amanda Wilton-Heald is a Chartered Accountant with over 20 years
of accounting, auditing (of both listed and non-listed companies) and
company secretarial experience in both Australia and the UK.
Amanda has been involved in the listing of junior explorer
companies on the ASX and has experience in corporate advisory and
company secretarial services.
Blue Star Helium Limited and Controlled Entities
15
DIRECTORS’ REPORT continued
MEETINGS OF DIRECTORS
The number of meetings held during the year and the number of meetings attended by each
Director was as follows:
Number of Meetings Held
Number of Meetings Attended:
Ross Warner
Trent Spry
Neil Rinaldi1
Joanne Kendrick2
Board Meetings
10
9
9
7
2
All Directors were eligible to attend all Board Meetings held when they were in office.
SHARE OPTIONS
As at the date of this report:
No. Options
17,194,726
17,194,726
Exercise Price
$0.084
$0.112
Expiry Date
04-Nov-23
04-Nov-24
Listed / Unlisted
Unlisted
Unlisted
SHARES ISSUED AS A RESULT OF THE EXERCISE OF OPTIONS
85,250,000 shares issued as a result of the exercise of the options were issued as at the date of
this report.
REMUNERATION REPORT (AUDITED)
The remuneration report below reflects the remuneration policies that were adopted by the
Directors of the Company who were in office at the date of this report.
The Remuneration Report is set out under the following main headings:
1. Principles used to determine the nature and amount of remuneration;
2. Key management personnel remuneration;
3. Service agreements; and
4. Shareholding and option holding of Directors and other key management personnel.
The information provided under headings 1 to 4 below in the Remuneration Report has been
audited as required by Section 308(3C) of the Corporations Act 2001.
1 Appointed 14 April 2021.
2 Resigned 14 Aril 2021.
Blue Star Helium Limited and Controlled Entities
16
DIRECTORS’ REPORT continued
1. Principles used to determine the nature and amount of remuneration (audited)
The Company’s Constitution specifies that subject to the initial fixed annual aggregate sum of
$500,000, the aggregate remuneration of Non-Executive Directors shall not exceed the sum
determined by the shareholders of the Company in general meeting.
The Company may pay a performance-based bonus based on key performance indicators of the
Director and Company, set by the Company from time to time, and any matter that it deems
appropriate. $6,500 was paid to an independent remuneration consultant during the year.
Fees and payments to Directors:
are to reflect the demands which are made on, and the responsibilities of, the Directors;
and
are reviewed annually by the Board to ensure that Directors’ fees and payments are
appropriate and in line with the market.
Retirement allowances and benefits for Directors
There are no retirement allowances or other benefits paid to Directors.
Directors’ fees
The amount of remuneration of the Directors of the Company (as defined in AASB 124 Related
Party Disclosures) are outlined in the table below under the heading Key management personnel
remuneration.
Key management personnel
Name
Ross Warner
Trent Spry
Neil Rinaldi
Joanne Kendrick
Title
Executive Chairman
Managing Director and Chief Executive Officer (effective 14 April
2021)
Non-Executive Director (appointed 14 April 2021)
Managing Director (resigned effective 14 April 2021)
Blue Star Helium Limited and Controlled Entities
17
DIRECTORS’ REPORT continued
2. Key management personnel remuneration
The following table sets out the remuneration of Directors and executives of the Consolidated
Entity during the reporting year.
Fixed
STI
LTI
Total
Proportion of
Remuneration
Bonus
$
Super-
annuation
$
Security
Based
Payments
$
Incentive
Payments
$
Fair value
of Share
Options
(equity
settled)
$
Fixed
%
STI
%
$
LTI
%
Salary
fees
and
leave
$
42,833
-
27,397
42,833
27,397
Year
Non-Executive Directors
2021
2020
Neil Rinaldi3
Michael
Pollak4
Total Non-
Executive
Directors
Executive Directors
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
192,131
55,205
197,987
60,000
32,0977
60,000
422,215
68,493
100,046
75,000
136,500
-
110,000
143,493
Ross Warner
Trent Spry
Joanne
Kendrick6
Total
Executive
Directors
-
-
-
-
-
-
-
2,603
-
2,603
25,318
15,616
12,955
-
-
-
38,273
-
-
-
-
-
-
29,2605
-
29,2605
-
29,2605
-
2020
175,205
346,546
15,616
87,780
3. Service agreements (audited)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
42,833
-
100%
-
30,000
42,833
100%
100%
30,000
100%
285,942
200,127
285,942
225,760
32,097
199,260
603,981
100%
100%
100%
100%
100%
100%
100%
625,147
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The Directors serve until they resign, are removed, cease to be a Director or are prohibited from
being a Director under the provisions of the Corporations Act 2001, or are not re-elected to office.
The Directors are remunerated on a monthly basis with three months termination payments
payable. As at the date of this report there are no management personnel engaged by the
Company other than the Directors.
3 Appointed 14 April 2021.
4 Resigned 25 March 2020.
5 22,000,000 unlisted options exercisable at $0.012 per option, expiring on 31 December 2021 were issued to each of
Mr Warner, Ms Kendrick and Mr Spry (totalling 66,000,000) as approved by shareholders on 24 April 2020 under the
management incentive plan on 1 May 2020.
6 Resigned 14 April 2021.
7 Includes $12,097 payment on cessation of services.
Blue Star Helium Limited and Controlled Entities
18
DIRECTORS’ REPORT continued
The Executive Directors entered into service agreements with effect from 1 July 2021 on the
following terms:
Salary (including Director’s fees of $261,432 per annum (excluding superannuation or
similar contributions).
The Company will make contributions to the Executive’s nominated superannuation fund
in accordance with the minimum amount prescribed by relevant superannuation
legislation from time to time.
The Company may also, in its absolute discretion, provide a bonus, the value of which,
the conditions attached to and the frequency of such a bonus, remains matters over
which the Company exercises sole discretion.
Termination of the agreements requires three months’ notice in writing other than if the
termination is a result of unlawful conduct.
The Non-Executive Director does not have a service agreement.
Blue Star Helium Limited and Controlled Entities
19
DIRECTORS’ REPORT continued
4. Shareholding and option holding of Directors and other Key Management Personnel
(audited)
Share holdings of Key Management Personnel
The movement during the reporting period in the number of ordinary shares of the Company held
directly, indirectly or beneficially, by each Director or key management personnel, including their
personally-related entities is as follows:
Director
Ross
Warner
Directly
Indirectly
Trent
Spry
Directly
Indirectly
Neil
Rinaldi8
Directly
Indirectly
Joanne
Kendrick9
Directly
Indirectly
Total
No. Shares
Held at 31
December
2020
Share
Based
Payments
Exercise of
Options
Other
Changes
22,000,000
-
22,000,000
-
-
-
-
-
-
-
-
-
15,000,000
2,000,000
-
3,000,000
-
-
15,000,000
-
35,000,000
-
-
-
-
-
-
-
-
-
No. Shares
Held at 31
December
2021
No. Shares
Held at Date
of this Report
37,000,000
2,000,000
37,000,000
2,000,000
22,000,000
3,000,000
22,000,000
3,000,000
-
-
-
-
N/A
N/A
44,000,000
(15,000,000)10
N/A
N/A
N/A
(15,000,000) 64,000,000
N/A
N/A
64,000,000
8 Appointed 14 April 2021.
9 Resigned 14 April 2021.
10 Reconciling item as a result of Director resigning before year end.
Blue Star Helium Limited and Controlled Entities
20
DIRECTORS’ REPORT continued
Details of options over the ordinary shares in the Company provided to each director and key
management personnel of the Consolidated Entity is set out below. When exercisable, each
option is convertible into one ordinary share of the Company.
Options held by Key Management Personnel
Director
Ross
Warner
Directly
Indirectly
Trent
Spry
Directly
Indirectly
Neil
Rinaldi11
Directly
Indirectly
Joanne
Kendrick
12
Directly
Indirectly
Total
No.
Options
Held at 31
December
2020
22,000,000
-
22,000,000
-
-
-
22,000,000
-
66,000,000
Share
Based
Payments
Exercise of
Options
Other
Changes
No. Options
Held at Date
of this Report
No.
Options
Held at 31
December
2021
-
-
-
-
-
-
-
-
-
(22,000,000)
-
(22,000,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
N/A
N/A
(44,000,000)
(22,000,000)13
N/A
(22,000,000)
N/A
N/A
-
N/A
N/A
-
Transactions with related parties
During the reporting year, there were no related party transactions.
End of Remuneration Report
DIVIDENDS
No dividends were paid during the year and no recommendation is made as to payment of
dividends.
11 Appointed 14 April 2021.
12 Resigned 14 April 2021.
13 Reconciling item as a result of Director resigning before year end.
Blue Star Helium Limited and Controlled Entities
21
DIRECTORS’ REPORT continued
EVENTS SUBSEQUENT TO REPORTING DATE
There are no matters or circumstances that have arisen since the end of the year which will
significantly affect, or may significantly affect, the state of affairs or operations of the
Consolidated Entity in future financial years other than the following:
the Consolidated Entity drilled the Enterprise 16-1 well in February 2022. The well is
suspended pending further operations to obtain additional data.
the Consolidated Entity is undertaking activities to permit a further 46 helium wells.
INDEMNIFICATION OF DIRECTORS & COMPANY SECRETARY
The Company has agreed to indemnify the current directors and company secretary of the
Consolidated Entity against all liabilities that may arise from their position as directors or officers
of the Group to the maximum extent permitted by law.
INDEMNIFYING OFFICERS
During the year, the Company paid a premium to insure officers of the Consolidated Entity. The
officers of the Consolidated Entity covered by the insurance policy include all directors and the
company secretary. The liabilities insured are legal costs that may be incurred in defending civil
or criminal proceedings that may be brought against the officers in their capacity as officers of the
Consolidated Entity, and any other payments arising from liabilities incurred by the officers in
connection with such proceedings, other than where such liabilities arise out of conduct involving
a wilful breach of duty by the officers or the improper use by the officers of their position or of
information to gain advantage for themselves or someone else to cause detriment to the
Consolidated Entity or other otherwise excluded by the policy.
PROCEEDINGS ON BEHALF OF COMPANY
ASIC lodged proceedings in the Federal Court of Australia against the Company and one of its
directors, Mr James Cruickshank on 27 November 2017. The Court delivered its decision on 9
October 2020 and its final decision on relief on 16 December 2021. The Court did not impose a
pecuniary penalty, damages or an account of profits on the Company.
The proceedings were initiated when the Company was in administration and the Administrators
consented to the grant of leave being granted to ASIC to commence and maintain the proceedings
against the Company on and Mr Cruickshank on conditions that:
ASIC continues to seek only declaratory relief, but not pecuniary penalties, damages or
an account of profits from the Company;
ASIC is not entitled to seek to enforce any judgment or order against the Company,
without further leave of the Court;
ASIC will not require the Administrators or the Company to take any active step in the
proceedings (including, but not limited to, the filing of a defence); and
ASIC has agreed to cover the reasonable costs incurred by the Company in the
proceedings as a result of steps requested or required by ASIC itself in the proceeding (for
example, in relation to providing discovery).
Blue Star Helium Limited and Controlled Entities
22
DIRECTORS’ REPORT continued
AUDITOR’S DECLARATION OF INDEPENDENCE
A copy of the auditor's independence declaration as required under section 307C of the
Corporations Act 2001 is set out immediately after this Directors' report. 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 2021 are $800 (2020: $Nil).
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of
the Corporation Act 2001.
Signed in accordance on behalf of the Directors.
____________________
Ross Warner
Executive Chairman
29 March 2022
Blue Star Helium Limited and Controlled Entities
23
CORPORATE GOVERNANCE STATEMENT
The Board is committed to achieving and demonstrating the highest standards of corporate
governance. Blue Star Helium Limited and its subsidiaries have adopted the third edition of the
Corporate Governance Principles and Recommendations released by the ASX Corporate
Governance Council.
The Company’s corporate governance statement reflects the corporate governance policies that
were adopted by the directors of the Company who were in office at the date of this report. These
policies have applied since 29 March 2019.
The Company’s current Corporate Governance Statement is available on Blue Star Helium
Limited’s website at: https://www.bluestarhelium.com/corporate/governance/
Blue Star Helium Limited and Controlled Entities
24
PO Box 1908
West Perth WA 6872
Australia
Level 2, 40 Kings Park Rd
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
29 March 2022
Board of Directors
Blue Star Helium Limited
Level 11
216 St Georges Terrace
Perth WA 6000
Dear Directors
RE:
BLUE STAR HELIUM LIMITED
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of Blue Star Helium Limited.
As Audit Director for the audit of the financial statements of Blue Star Helium Limited for the year ended 31
December 2021, 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 sincerely
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(An Authorised Audit Company)
Martin Michalik
Director
Liability limited by a scheme approved under Professional Standards Legislation
Stantons Is a member of the Russell
Bedford International network of firms
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
Note
Consolidated
Entity
31 December
2021
$
Consolidated
Entity
31 December
2020
$
Revenue
Cost of goods sold
Gross loss
Other income
Other Expenses
Impairment of exploration and evaluation
assets
Rehabilitation costs
Employment expenses
Share based payment expense
Business development expenses
Legal expenses
Loss before tax
Income tax expense
3
4
3
12
16
5
8,542
13,672
22,214
5,635
(47,331)
(41,696)
58,292
(547,600)
10,318
(667,930)
-
(279,181)
(400,953)
-
(60,553)
(188,002)
(1,395,783)
-
(8,335)
-
(247,099)
(103,740)
(64,696)
(566,945)
(1,690,123)
-
Net loss for the year from operations
(1,395,783)
(1,690,123)
Other comprehensive income
Exchange differences on translation of
foreign entities
(165,564)
28,461
Total comprehensive loss for the year
(1,561,347)
(1,661,662)
Basic and diluted loss per share (cents)
6
(0.11)c
(0.19)c
The accompanying notes form part of these financial statements.
Blue Star Helium Limited and Controlled Entities
26
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
Note
Consolidated Entity
31 December 2021
$
Consolidated Entity
31 December 2020
$
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Held for sale asset – oil & gas properties
Total Current Assets
Non-Current Assets
Other assets
Plant and equipment
Exploration and evaluation assets
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Liabilities associated with asset held for sale
Provisions
Total Current Liabilities
Non-Current Liabilities
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Total Equity
7
8
9
10
9
11
12
13
10
14
14
15
16
15,632,345
124,599
48,164
-
4,909,336
88,341
15,910
15,943
15,805,108
5,029,530
151,351
3,125
6,768,833
32,459
-
3,982,025
6,923,309
4,014,484
22,728,417
9,044,014
602,860
-
213,966
816,826
1,884
1,884
818,710
342,263
99,458
70,112
511,833
118,193
118,193
630,026
21,909,707
8,413,988
26,439,763
1,298,118
(5,828,174)
12,569,133
277,246
(4,432,391)
21,909,707
8,413,988
The accompanying notes form part of these financial statements.
Blue Star Helium Limited and Controlled Entities
27
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
Consolidated Entity
Contributed
Equity
$
Foreign
Currency
Translation
Reserve
$
Share
Option
Reserve
$
Accumulated
Losses
Total
$
$
Balance at 1 January
2021
Loss for the year
Other comprehensive
income
Foreign exchange on
translation of
operations
Total comprehensive
loss for the year
Transactions with
owners in their
capacity as owners:
Equity issues
Equity issue expenses
Share based payments
Balance at 31
December 2021
Consolidated Entity
Balance at 1 January
2020
Loss for the year
Other comprehensive
income
Foreign exchange on
translation of
operations
Total comprehensive
loss for the year
Transactions with
owners in their
capacity as owners:
Equity issues
Equity issue expenses
Share based payments
Balance at 31
December 2020
12,569,133
-
86,121
-
191,125
-
(4,432,391)
(1,395,783)
8,413,988
(1,395,783)
-
-
(165,564)
(165,564)
-
-
-
(165,564)
(1,395,783)
(1,561,347)
16,023,000
(2,152,370)
-
-
-
-
-
-
1,186,436
-
-
-
16,023,000
(2,152,370)
1,186,436
26,439,763
(79,443)
1,377,561
(5,828,174)
21,909,707
Contributed
Equity
$
Foreign
Currency
Translation
Reserve
$
Share
Option
Reserve
$
Accumulated
Losses
Total
$
$
3,913,870
-
57,660
-
26,265
-
(2,742,268)
(1,690,123)
1,255,527
(1,690,123)
-
-
28,461
28,461
-
-
-
28,461
(1,690,123)
(1,661,662)
9,280,372
(625,109)
-
-
-
-
-
-
164,860
-
-
-
9,280,372
(625,109)
164,860
12,569,133
86,121
191,125
(4,432,391)
8,413,988
The accompanying notes form part of these financial statements.
Blue Star Helium Limited and Controlled Entities
28
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Note
Consolidated
Entity
31 December
2021
$
Consolidated
Entity
31 December
2020
$
8,542
(1,538,306)
581
5,635
(1,314,536)
612
Net cash (used in) operating activities
7
(1,529,183)
(1,308,289)
Cash flows from investing activities
Payment for plant and equipment
Exploration, evaluation and development
expenditure (including licenses acquisition costs)
(4,675)
-
(2,798,789)
(3,572,144)
Net cash (used in) investing activities
(2,803,464)
(3,572,144)
Cash flows from financing activities
Proceeds from share issues
Proceeds from option conversions
Payment for costs of equity issues
15,000,000
1,023,000
(965,934)
8,302,622
977,750
(564,990)
Net cash from financing activities
15,057,066
8,715,382
Net (decrease) / increase in cash held
10,724,419
3,834,949
Cash and cash equivalents at beginning of the
year
Foreign exchange effect on cash and cash
equivalents
4,909,336
1,138,089
(1,410)
(63,702)
Cash and cash equivalents at the end of the year
7
15,632,345
4,909,336
The accompanying notes form part of these financial statements.
Blue Star Helium Limited and Controlled Entities
29
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
1.
Corporate information
This Annual Report covers Blue Star Helium Limited and the entities it controlled at the end of, or
during, the year ended 31 December 2021 (the “Consolidated Entity”). The presentation currency
of the Consolidated Entity is Australian Dollars (“$”). A description of the Consolidated Entity’s
operations is included in the review and results of operations in the Directors’ Report. The
Directors’ Report is not part of the financial statements. The Consolidated Entity is a for-profit
entity and limited by shares incorporated in Australia whose shares are traded under the ASX code
“BNL”. The financial statements were authorised for issue on 29 March 2022 by the Directors.
The Directors have the power to amend and reissue the financial statements. The principal
accounting policies adopted in the preparation of the financial statements are set out below.
2.
Accounting policies
a. Basis of preparation
These general purpose financial statements for the interim year reporting period ended 31
December 2021 have been prepared in accordance with applicable Australian Accounting
Standards, the Corporations Act 2001 and other mandatory professional reporting requirements,
as appropriate for for-profit oriented entities. These financial statements are to be read in
conjunction with any public announcements made by the Company during the reporting period
in accordance with the continuous disclosure requirements of the Corporations Act 2001. The
principal accounting policies adopted are consistent with those of the previous financial year. The
financial report complies with Australian Accounting Standards and International Financial
Standards (IFRS) as issued by the International Accounting Standard Board.
b. Going concern
For the year ended 31 December 2021 the consolidated entity incurred a total comprehensive
loss of $1,561,347 (31 December 2020: total comprehensive loss of $1,661,662) and had working
capital of $14,988,282 (31 December 2020: $4,517,697). The Directors considered the subsequent
events, reviewed the cash flow forecasts and working capital requirements of the Consolidated
Entity in view of the Consolidated Entity’s existing cash resources of $15,632,345 (31 December
2020: $4,909,336). On this basis, and subject to the impact of COVID-19 pandemic on the
economy and the Consolidated Entity, the Directors consider there are reasonable grounds to
believe that the Consolidated Entity will be able to pay its debts as and when they become due
and payable, and therefore the going concern basis of preparation is considered to be appropriate
for the 31 December 2021 year financial report. In the event that the Consolidated Entity is not
able to continue as a going concern, it may be required to realise assets and extinguish liabilities
other than in the normal course of business and perhaps at amounts different to those stated in
its financial report.
Blue Star Helium Limited and Controlled Entities
30
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
Accounting policies (continued)
c. Principles of consolidation
The consolidated financial statements comprise the financial statements of Blue Star Helium
Limited and its subsidiaries during the year ended 31 December 2021 (“the Consolidated Entity").
The financial statements of the subsidiaries are prepared for the same reporting year as the
parent company, using consistent accounting policies. In preparing the consolidated financial
statements, all inter-company balances and transactions, income and expenses and profit and
losses resulting from intra-group transactions have been eliminated in full. Subsidiaries are fully
consolidated from the date on which control is transferred to the Consolidated Entity and cease
to be consolidated from the date on which control is transferred out of the Consolidated Entity.
d. Foreign currency translation
Both the functional and presentation currency of Blue Star Helium Limited and its Australian
subsidiaries is in Australian dollars ($). Entities within the Consolidated Entity that are based and
operate outside of Australia use the functional currency of the country in which they operate,
provided the local economy is not subject to hyperinflation. Each entity in the Consolidated Entity
uses its specific functional currency to measure the items included in the financial statements of
that entity. Transactions in foreign currency are initially recorded in the functional currency by
applying the exchange ruling at the date of the transaction or the average for the year 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 foreign operations, Antares
Energy Company, BNL (Enterprise) Inc, Las Animas Leasing Inc and BNL (Percy Creek) is United
States dollars (USD). As at the reporting date the assets and liabilities of this subsidiary were
translated into the presentation currency of Blue Star Helium Limited at the rate of exchange
ruling at the balance date and their profit or loss is translated at the average exchange for the
year. 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.
e. 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.
Blue Star Helium Limited and Controlled Entities
31
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
Accounting policies (continued)
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:
Impairment of oil and gas properties
The Consolidated Entity’s accounting policy for impairment is set out at Note 10. 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 2021 the Consolidated Entity impaired the value in use of its oil
and gas properties, writing their carrying values down by $Nil (2020: $8,335). The Company
has valued these assets at the fair value or market price for these assets.
Impairment of exploration and evaluation assets
The Consolidated Entity’s accounting policy for impairment is set out at Note 12. 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 Exploration and
Evaluation assets. The Company has valued these assets at the fair value or market price for
these assets less impairment.
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. For more detail
regarding this policy in respect of the provision for restoration refer to Note 14.
f. Accounting Standards that are mandatorily effective for the current reporting year
The Consolidated Entity has considered the implications of new and amended Accounting
Standards which have become applicable for the current financial reporting period.
Initial adoption of AASB 2018-7: Amendments to Australian Accounting Standards – Definition
of Material
This amendment principally amends AASB 101 and AASB 108 by refining the definition of material
by improving the wording and aligning the definition across the standards issued by the AASB.
Initial adoption of AASB 2019-1: Amendments to Australian Accounting Standards – References
to the Conceptual Framework
This amendment amends Australian Accounting Standards,
Interpretations and other
pronouncements to reflect the issuance of Conceptual Framework for Financial Reporting by the
AASB.
Blue Star Helium Limited and Controlled Entities
32
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
Accounting policies (continued)
The standards listed above did not have any impact on the amounts recognised in prior periods
and are not expected to significantly affect the current or future periods.
Standards and Interpretations in issue not yet adopted
At the date of authorisation of the financial statements, the Consolidated Entity has not applied
the new and revised Australian Accounting Standards, Interpretations and amendments that have
been issued but are not yet effective. Based on a preliminary review of the standards and
amendments, the Directors do not anticipate a material change to the Consolidated Entity’s
accounting policies, however further analysis will be performed when the relevant standards are
effective.
Blue Star Helium Limited and Controlled Entities
33
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
3.
Revenue and other income
Sale of product
Interest income
Sale of Simmons project (including provision write-back)
Other income
Consolidated
Entity
31 December
2021
$
Consolidated
Entity
31 December
2020
$
8,542
581
57,711
-
66,834
5,635
612
-
9,706
15,953
Accounting policy:
Revenue is recognised when the Consolidated Entity transfers control of goods to a customer
at the amount to which the Consolidated Entity expects to be entitled. Where the
consideration promised includes a variable amount, the Consolidated Entity estimates the
amount of consideration to which it will be entitled to at the time the revenue is recognised.
The following specific recognition criteria must also be met before revenue is recognised:
Royalty Revenue – Oil sales
Revenue from royalties is recognised in the period of production of the underlying oil
or gas being produced. Royalty agreements that are based on production, sales and
other measures are recognised by reference to the underlying arrangements.
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 year 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.
4.
Cost of goods sold
Cost of sales: other production costs14
(13,672)
(13,672)
47,331
47,331
14 2021 amount arose from credit note for prior year expenditure.
Blue Star Helium Limited and Controlled Entities
34
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
5.
Income tax
Income tax expense / (benefit)
Current tax
Deferred tax
Under / (over provision) in prior years
Amounts recognised directly in equity
Aggregate current and deferred tax arising in the
reporting period and not recognised in net profit or loss
or other comprehensive income but directly debited or
credited to equity
Current tax
Net deferred tax
Reconciliation of income tax expense to prima facie tax
payable
Profit / (loss) from continuing operations before income
tax expense
Tax at the Australian tax rate of 30% (2020: 30%)
Tax effect of amounts which are non deductible
(taxable) in calculating taxable income:
Non-deductible expenses / assessable income
Deferred tax asset not brought to account
Movement in unrecognised temporary
differences
Non-assessable income
Deductible equity raising costs
The applicable weighted average effective tax rates
Consolidated
Entity
31 December
2021
$
Consolidated
Entity
31 December
2020
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,395,783)
(418,735)
(1,690,123)
(507,037)
244,587
169,671
4,477
-
-
-
0%
314,250
205,033
731
(3,841)
(9,136)
-
0%
Blue Star Helium Limited and Controlled Entities
35
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
5.
Income tax (continued)
Unrecognised deferred tax asset
Tax losses- revenue
PPR
Expenses taken into equity
Other temporary differences
Temporary differences – tax capital losses
Off-set of deferred tax liabilities
Consolidated
Entity
31 December
2021
$
Consolidated
Entity
31 December
2020
$
15,684,831
-
-
16,050
1,250
15,702,132
-
15,629,423
-
-
44,449
1,250
15,675,122
-
Net deferred tax assets unrecognised
15,702,132
15,675,122
Accounting policy:
Income tax
Current tax assets and liabilities for the current and prior years 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
Blue Star Helium Limited and Controlled Entities
36
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
5.
Income tax (continued)
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.
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
when the GST incurred on a purchase of goods and services is not recoverable from the
taxation authority in which case the GST is recognised as part of the cost of acquisition
of the asset or as part of the expense item as applicable; and
receivables and payables which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part
of receivables or payables in the Statement of Financial Position. Cash flows are included in the
Statement of Cash Flows on a gross basis and the GST component of cash flows arising from
investing and financing activities, which is recoverable from, or payable to, the taxation authority,
are classified as operating cash flows. Commitments and contingencies are disclosed net of the
amount of GST recoverable from, or payable to, the taxation authority.
Blue Star Helium Limited and Controlled Entities
37
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
6.
Basic and diluted loss per share
Consolidated
Entity
31 December
2021
$
Consolidated
Entity
31 December
2020
$
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)
(1,395,783)
(1,690,123)
Consolidated
Entity
31 December
2021
No.
Consolidated
Entity
31 December
2020
No.
Weighted average number of ordinary shares
outstanding during the year used in calculating basic
and dilutive EPS
1,291,875,146
903,606,566
Accounting policy:
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 year 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.
Blue Star Helium Limited and Controlled Entities
38
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
Consolidated
Entity
31 December
2021
$
Consolidated
Entity
31 December
2020
$
7.
Cash and cash equivalents
Cash at bank and on hand
15,632,345
4,909,336
15,632,345
4,909,336
Accounting policy:
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.
Reconciliation of net (loss) after tax to net operating cash
flows:
Net (loss) for the year
Impairment of oil & gas properties
Depreciation
Share based payment
Foreign exchange
(Increase)/Decrease in receivables and prepayments
Increase/(Decrease) in creditors and payables
Increase/(Decrease) in provisions
(1,395,783)
-
1,550
-
(1,865)
(3,798)
(85,463)
(43,824)
(1,690,123)
8,335
1,456
103,740
123,010
(14,074)
159,367
-
Net cash (outflows) from operating activities
(1,529,183)
(1,308,289)
8.
Trade and other receivables
Other receivables
Bonds
GST refunds
(62)
34,398
90,263
124,599
62,971
-
25,370
88,341
There are no receivables that are past due.
Accounting policy:
An estimate for expected credit loss is made when there is objective evidence that the
Consolidated Entity will not be able to collect the full debt. Expected credit losses are written
off when identified. Financial difficulties of the debtor and default payments are likely to be
considered objective evidence of impairment.
Blue Star Helium Limited and Controlled Entities
39
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
Consolidated
Entity
31 December
2021
$
Consolidated
Entity
31 December
2020
$
9.
Other assets
Current
Prepaid expenses
Non-Current
Bonds
Held for sale assets and liabilities associated
10.
with held for sale assets
Oil and gas properties – AEC
Restoration provisions
Trade payables
11.
Plant and equipment
Computer equipment
- At cost
- Accumulated depreciation
Reconciliation of the movements in plant and
equipment:
Balance at beginning of year
Additions
Disposals
Depreciation
Balance at end of year
Blue Star Helium Limited and Controlled Entities
48,164
48,164
151,351
151,351
-
-
-
-
4,675
(1,550)
3,125
-
4,675
-
(1,550)
3,125
15,910
15,910
32,459
32,459
15,943
(71,368)
(28,090)
(83,515)
8,528
(8,528)
-
1,456
-
-
(1,456)
-
40
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
11.
Plant and equipment (continued)
Accounting policy:
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 year in which they are incurred. Assets are transferred to held for sale
assets when there is a high likelihood of the assets being sold.
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. The remaining assets use
the straight-line approach at 50%.
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. 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. 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.
Blue Star Helium Limited and Controlled Entities
41
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
12.
Exploration and evaluation assets
Capitalised expenditure
- At cost
- Accumulated amortisation and impairment
-
Exchange difference translation
Reconciliation of the movements in capitalised
expenditure:
Balance at beginning of year
Exploration and evaluation expenditure incurred during
the year
Impairment
Exchange difference translation
Consolidated
Entity
31 December
2021
$
Consolidated
Entity
31 December
2020
$
6,893,891
-
(125,058)
3,966,472
-
15,553
6,768,833
3,982,025
3,982,025
778,559
2,911,866
-
(125,058)
3,196,248
(8,335)
15,553
Balance at end of period
6,768,833
3,982,025
Blue Star Helium Limited has secured leases in Las Animas County, Colorado, USA over a number
of prospects and leads to develop and deliver its helium strategy. This leased acreage is intended
to support a drilling programme in the 2021 calendar year. Currently Blue Star Helium Limited
has expended certain funds in connection with acquiring and exploring the lands for helium. As
at 31 December 2021 there was a total of $6,768,833 (31 December 2020: $3,982,025) of
expenditure directly connected with this asset which has been capitalised from 1 October 2019
in accordance with AASB 6 Exploration and Evaluation of Mineral Resources.
Accounting policy:
Expenditure on exploration and evaluation is accounted for in accordance with the "area of
interest" method. Exploration licence acquisition costs are capitalised and subject to half-yearly
impairment testing. All exploration and evaluation costs, including general permit activity,
geological and geophysical costs and new venture activity costs are expensed as incurred except
where:
The expenditure relates to an exploration discovery where, at balance date, an
assessment of the existence or otherwise of economically recoverable reserves is not yet
complete and significant operations in, or in relation to, the area of interest are
continuing; or
An assessment has been made and it is expected that the expenditure will be recouped
through successful exploitation of the area of interest, or alternatively, by its sale.
Blue Star Helium Limited and Controlled Entities
42
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
12.
Exploration and evaluation assets (continued)
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 or helium. 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, gas and helium 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.
Impairment
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, an assessment is made as to whether the Company intends to make
substantive expenditures on the asset and the carrying amount of the assets is assessed against
the market capitalisation of the Company. 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).
Blue Star Helium Limited and Controlled Entities
43
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
Consolidated
Entity
31 December
2021
$
Consolidated
Entity
31 December
2020
$
13.
Trade and other payables
Trade creditors and other accruals
602,860
342,263
602,860
342,263
Accounting policy:
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.
14.
Provisions
Current
Employee benefits
Restoration
Non-Current
Employee benefits
Restoration
Reconciliation of the movements in the restoration
provision:
Balance at start of year
Additions during the year
Utilisation of provision
Foreign exchange movements
29,895
184,071
-
70,112
213,966
70,112
1,884
-
1,884
188,305
142,205
(125,972)
(20,467)
-
118,193
118,193
214,102
-
-
(25,797)
Balance at end of year
184,071
188,305
Blue Star Helium Limited and Controlled Entities
44
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
14.
Provisions (continued)
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 wellbores it owns in Dawson County,
Texas, 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 consider 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.
These estimates of restoration are subject to significant estimates and assumptions which are
outlined in the accounting policy note.
Accounting policy:
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. Liabilities for wages and salaries, 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.
Restoration provision
The Consolidated Entity records the present value of the estimated cost of legal and constructive
obligations to restore operating locations in the year 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. Costs incurred that relate to an existing
condition caused by past operations, and do not have future economic benefit, are expensed.
Blue Star Helium Limited and Controlled Entities
45
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
Consolidated Entity
31 December 2021
Consolidated Entity
31 December 2020
No.
$
No.
$
1,233,062,915 12,569,133
733,747,255
3,913,870
-
-
-
-
-
-
-
-
-
-
-
-
98,062,088
980,622
2,250,000
22,500
94,625,000
946,250
132,200,000
1,322,000
750,000
9,000
171,428,572
6,000,000
22,000,000
264,000
2,000,000
24,000
3,500,000
42,000
267,857,143 15,000,000
2,500,000
30,000
55,250,000
-
663,000
(2,152,370)
-
-
-
-
-
-
-
-
-
-
-
(625,109)
15.
Contributed equity
Balance at beginning of year
Share issue from placement:
22-Jun-20
Share issue from option
conversion: 22-Jun-20
Share issue from option
conversion: 02-Jul-20
Share issue from placement:
07-Aug-20
Share issue from option
conversion: 15-Oct-20
Share issue from placement:
27-Nov-20
Share issue from option
conversion: 10-May-21
Share issue from option
conversion: 29-Jul-21
Share issue from option
conversion: 29-Sep-21
Share issue from placement:
04-Nov-21
Share issue from option
conversion: 15-Dec-21
Share issue from option
conversion: 31-Dec-21
Share issue costs
Balance at end of year
1,586,170,058 26,439,763
1,233,062,915
12,569,133
Accounting policy:
Issued and paid up capital is recognised at the fair value of the consideration received by the
Consolidated Entity. Any share issue costs arising on the issue of ordinary shares are recognised
directly in equity as a reduction of the proceeds received.
Blue Star Helium Limited and Controlled Entities
46
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
15.
Contributed equity (continued)
Capital management
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. Management monitor capital by reviewing the level of cash on
hand, cash flow forecasts and working capital requirements of the Consolidated Entity in view of
the Consolidated Entity’s existing cash resources of $15,632,345 (31 December 2020: $4,909,336)
and ability of the Company to raise capital as needed.
16.
Reserves
Foreign currency translation reserve
Balance at beginning of period
Foreign exchange on translation of operations
Balance at end of period
Options reserve
Balance at beginning of period
Options granted
Balance at end of period
Unlisted options
Balance at beginning of period
Options granted
Options converted
Options expired
Consolidated
Entity
31 December
2021
$
Consolidated
Entity
31 December
2020
$
86,121
(165,564)
(79,443)
191,125
1,186,436
1,377,561
Consolidated
Entity
31 December
2021
No.
85,250,000
34,389,452
(85,250,000)
-
57,660
28,461
86,121
26,265
164,860
191,125
Consolidated
Entity
31 December
2020
No.
101,875,000
86,000,000
(97,625,000)
(5,000,000)
Balance at end of period
34,389,452
85,250,000
Blue Star Helium Limited and Controlled Entities
47
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
16.
Reserves (continued)
Non-performance based options
Inputs
Number of options
Exercise price
Expiry date
Grant date
Vesting date
Share price at grant date
Risk free interest rate
Volatility
Option value
Broker Options
17,194,726
$0.084
04-Nov-23
04-Nov-21
N/A
$0.050
0.56%
142%
$0.030
Broker Options
17,194,726
$0.112
04-Nov-24
04-Nov-21
N/A
$0.05
0.89%
164%
$0.039
Accounting policy:
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. 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 Blue Star Helium Limited. The cost of equity-
settled transactions is recognised, together with a corresponding increase in equity, over the year
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 year
represents the movement in cumulative expense recognised as at the beginning and end of that
year. The dilutive effect, if any, of outstanding securities is reflected as additional share dilution in
the computation of earnings per share.
Option reserve
The option reserve is used to record the value of share-based payments and other options
purchased by/provided to Key Management Personnel, and other parties as part of their
remuneration, or for the provision of services.
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.
Blue Star Helium Limited and Controlled Entities
48
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
17.
Financial risk management objectives and policies
The Company and the Consolidated Entity have exposure to the following risks from their use of
financial instruments:
market risk;
liquidity risk; and
credit risk.
The Board of Directors has overall responsibility for the establishment and oversight of the risk
management framework. The Board is responsible for developing and monitoring risk
management policies. The Consolidate Entity’s principal financial instruments comprise cash at
bank. 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 creditors, which arise directly from its operations. Throughout the year 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 equity price risk, 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:
Market risk
Equity price risk
As at 31 December 2021 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 cash at bank. As at 31 December 2021 there is no material
interest rate risk for the Company.
Foreign currency risk
As a result of the Company’s 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 2021 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.
Blue Star Helium Limited and Controlled Entities
49
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
17.
Financial risk management objectives and policies (continued)
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 funds 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
Entity
31 December
2021
$
Consolidated
Entity
31 December
2020
$
(602,860)
-
-
(342,263)
-
-
(602,860)
(342,263)
The following table discloses the contractual maturity analysis of financial assets and liabilities as
at the end of the financial year:
<6 Months
6-12
Months
1-5 Years
>5 Years
Total
31 December 2021
Financial assets
Cash and cash
equivalents
Trade and other
receivables
Deposits
Financial liabilities
Trade and other
payables
Net inflow / (outflow)
15,632,345
-
-
90,201
-
15,722,546
-
34,398
34,398
-
151,351
151,351
(602,860)
(602,860)
15,119,686
-
-
34,398
-
-
151,351
-
-
-
-
-
-
-
15,632,345
90,201
185,749
15,908,295
(602,860)
(602,860)
15,305,435
Blue Star Helium Limited and Controlled Entities
50
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
17.
Financial risk management objectives and policies (continued)
<6 Months
6-12
Months
1-5 Years
>5 Years
Total
31 December 2020
Financial assets
Cash and cash
equivalents
Trade and other
receivables
Deposits
Financial liabilities
Trade and other
payables
Net inflow / (outflow)
Credit risk
4,909,336
88,341
-
4,997,677
(342,263)
(342,263)
4,655,414
-
-
-
-
-
-
-
-
-
32,459
32,459
-
-
32,459
-
-
-
-
-
-
-
4,909,336
88,341
32,459
5,030,136
(342,263)
(342,263)
4,687,873
Credit risk refers to the risk that 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. 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 2021 the only trade receivables and other receivable
are for GST receivable and refundable deposits. 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.
Blue Star Helium Limited and Controlled Entities
51
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
17.
Financial risk management objectives and policies (continued)
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:
o Level 1 – Quoted (unadjusted) market prices in active markets for identical assets
or liabilities
o Level 2 – Valuation techniques for which the lowest level input that is significant
to the fair value measurement is directly or indirectly observable
o 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 and liabilities
recorded in the financial statements approximate their fair values.
18.
Operating segments
For management purposes, the Company is organised into one main operating segment, which
involves helium (including oil and gas) exploration, development and production in the USA. All the
Company's activities are interrelated, and discrete financial information is reported to the
Chairman and the management team 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 from the sale of oil produced in the USA. During the
reporting periods ended 31 December 2021 and 31 December 2020 external sales of oil were made
to customers solely located in the USA.
31 December 2021
Segment revenue
Segment assets
Segment liabilities
31 December 2020
Segment revenue
Segment assets
Segment liabilities
US
Corporate
Total
66,253
7,042,601
(704,916)
581
15,685,816
(113,794)
5,635
3,997,968
(401,288)
10,318
5,046,046
(228,738)
66,834
22,728,417
(818,710)
15,953
9,044,014
(630,026)
Blue Star Helium Limited and Controlled Entities
52
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
Consolidated
Entity
31 December
2021
$
Consolidated
Entity
31 December
2020
$
19.
Auditor’s remuneration
The auditor of Blue Star Helium Limited is Stantons International. Amounts received or due and
receivable in relation to the entity or any other entity in the Consolidated Entity:
Audit or review of the financial report
Tax and compliance services
20.
Director and KMP disclosures
36,673
-
31,179
-
36,673
31,179
The following persons were Directors of Blue Star Helium Limited during the whole of the financial
year and up to the date of this report, unless otherwise stated:
Name
Ross Warner
Trent Spry
Neil Rinaldi
Joanne Kendrick
Title
Executive Chairman
Managing Director and Chief Executive Officer (effective 14 April
2021)
Non-Executive Director (appointed 14 April 2021)
Managing Director (resigned effective 14 April 2021)
Compensation by Category: Key Management Personnel
Short-Term (including bonus)
Post-Employment
Long-Term
Share-based Payments
Consolidated
Entity
31 December
2021
$
Consolidated
Entity
31 December
2020
$
608,541
38,273
-
-
549,148
18,219
-
87,780
646,814
655,147
During the year ended 31 December 2021 and the year ended 31 December 2020 there were no
loans provided to Key Management Personnel.
Blue Star Helium Limited and Controlled Entities
53
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
20.
Director and KMP disclosures (continued)
There were no transactions with Key Management Personnel other than those described above.
At 31 December 2021 and 31 December 2020 there were no balances outstanding in relation to
Key Management Personnel other than those described above and in the Remuneration Report.
21.
Parent Entity information
Current Assets
Non-Current Assets
Total Assets
Current Liabilities
Non-Current Liabilities
Total Liabilities
Net Assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Total Equity
(Loss) for the year
Total comprehensive (loss) for the year
Company
31 December
2021
$
Company
31 December
2020
$
15,682,691
526,719
16,209,410
165,608
1,884
167,492
4,946,376
3,978,134
8,924,510
314,715
-
314,715
16,041,918
8,609,795
26,439,763
1,377,561
(11,775,406)
16,041,918
12,569,133
191,125
(4,150,463)
8,609,795
(7,624,943)
(7,624,943)
(1,594,821)
(1,594,821)
There are no commitments or contingencies other than those disclosed in this report. There are
no guarantees.
22.
Events after the end of the reporting period
There are no matters or circumstances that have arisen since the end of the period which will
significantly affect, or may significantly affect, the state of affairs or operations of the
Consolidated Entity in future financial years other than the following:
the Consolidated Entity drilled the Enterprise 16-1 well in February 2022. The well is
suspended pending further operations to obtain additional data.
the Consolidated Entity is undertaking activities to permit a further 46 helium wells.
Blue Star Helium Limited and Controlled Entities
54
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2021
Consolidated
Entity
31 December
2021
$
Consolidated
Entity
31 December
2020
$
Commitments and contingencies
23.
The Consolidated Entity is planning to undertake a drilling programme later this year but as at 31
December 2021 it is not formally committed. There were no material commitments relating to
operating and exploration expenditure other than the following:
< 1 year
1 – 5 years
> 5 years
349,031
1,396,125
-
1,745,156
-
-
-
-
a. Contingent assets
There are no contingent assets as at 31 December 2021.
b. Contingent liabilities
There are no contingent liabilities as at 31 December 2021.
24.
Interests in controlled entities
Company Name
Place of
Incorporation
31 December
2021
% Ownership
31 December
2020
% Ownership
Controlled by Blue Star Helium Limited:
Santa Energy Pty Ltd
BNL (USA Helium) Pty Ltd
Controlled by Santa Energy Pty Ltd:
Antares Energy Company
BNL (Percy Creek)
Controlled by BNL (USA Helium) Pty Ltd:
BNL (Enterprise) Inc
Las Animas Leasing Inc
Australia
Australia
USA
USA
USA
USA
100%
100%
100%
-%
100%
100%
100%
100%
100%
100%
100%
-%
Blue Star Helium Limited and Controlled Entities
55
DIRECTORS’ DECLARATION
In accordance with a resolution of Directors of Blue Star Helium Limited, the Directors declare
that:
they are of the opinion that the Consolidated financial statements and Notes of Blue Star
Helium Limited, and the remuneration disclosures contained in the Remuneration Report
for the year ended 31 December 2021 are in accordance with the Corporations Act 2001,
including:
o giving a true and fair view of the financial position as at 31 December 2021 and
the performance for the year ended on that date of the Consolidated Entity; and
(including Australian Accounting
o complying with Accounting Standards
Interpretations) and the Corporations Regulations 2001; and
the financial statements and notes also comply with International Financial Reporting
Standards as disclosed in Note 1; and
in the Directors’ opinion there are 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.
On behalf of the directors
____________________
Ross Warner
Executive Chairman
29 March 2022
Blue Star Helium Limited and Controlled Entities
56
PO Box 1908
West Perth WA 6872
Australia
Level 2, 40 Kings Park Rd
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
BLUE STAR HELIUM LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Blue Star Helium Limited the Company and its subsidiaries (“the Group”),
which comprises the consolidated statement of financial position as at 31 December 2021, the consolidated
statement of comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the Group’s financial position as at 31 December 2021 and of its financial
performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our
report. We are independent of the Company in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110: Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Liability limited by a scheme approved under Professional Standards Legislation
Stantons Is a member of the Russell
Bedford International network of firms
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matters
How the matter was addressed in the audit
Carrying Value of Exploration and Evaluation
Assets
As at 31 December 2021, Exploration and
Evaluation Assets totalled $6,768,833 (refer to Note
12 of the financial report).
The carrying value of exploration and evaluation
assets is a key audit matter due to:
•
•
•
The significance of the expenditure capitalised
representing approximately 30% of
total
assets;
to assess management’s
The necessity
the
requirements of
the
application of
accounting standard Exploration
for and
Evaluation of Mineral Resources (“AASB 6”), in
light of any indicators of impairment that may
be present; and
The assessment of significant judgements
made by management in relation to the
capitalised
evaluation
expenditure.
exploration
and
Inter alia, our audit procedures
following:
included
the
i. Assessing the Group’s right to tenure over
exploration assets by corroborating on sample
basis the ownership of the relevant licences for
mineral resources to government registries and
relevant third-party documentation;
ii. Reviewing the directors’ assessment of the
carrying value of the capitalised exploration and
evaluation costs, ensuring the veracity of the
data presented and assessing management’s
consideration of potential impairment indicators,
commodity prices and the stage of the Group’s
projects also against AASB 6;
iii. Evaluation of Group documents for consistency
with the intentions for continuing exploration and
evaluation activities in areas of interest and
corroborated in discussions with management.
The documents we evaluated included:
▪ Minutes of the board and management; and
▪ Announcements made by the Group to the
Australian Securities Exchange; and
iv. Consideration of the requirements of accounting
standard AASB 6 and reviewed the financial
statements to ensure appropriate disclosures
are made.
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 2021, 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 opinion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information, we are required to report that fact. We
have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with 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.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.
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
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 16 to 21 of the directors’ report for the year ended
31 December 2021.
In our opinion, the Remuneration Report of Blue Star Helium Limited for the year ended 31 December 2021
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
(An Authorised Audit Company)
Martin Michalik
Director
West Perth, Western Australia
29 March 2022
SHAREHOLDER INFORMATION
As at 23 March 2022
Issued Securities
Fully paid ordinary shares
$0.084 unlisted options expiring 04-Nov-23
$0.112 unlisted options expiring 04-Nov-24
Total
Distribution of Listed Ordinary Fully Paid Shares
Unlisted
Listed on ASX
1,586,170,058
Total
- 1,586,170,058
17,194,726
- 17,194,726
17,194,726
- 17,194,726
1,586,170,058 34,389,452 1,620,559,510
Spread of Holdings
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - and over
Total
Number of Holders Number of Units % of Total Issued Capital
0.00%
0.01%
0.10%
4.82%
95.07%
100.00%
46,054
94,601
1,589,228
76,459,593
1,507,980,582
1,586,170,058
173
40
176
1,748
1,109
3,246
Top 20 Listed Ordinary Fully Paid Shareholders
Rank
Shareholder
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
CS THIRD NOMINEES PTY LIMITED
PAMPLONA OPPORTUNITIES LTD
ELLIOT HOLDINGS PTY LTD
MS JOANNE KENDRICK
MR TIMOTHY WONG
ATGG ENTERPRISE PTY LTD
MS CHUNYAN NIU
TRDJS PTY LIMITED
CITICORP NOMINEES PTY LIMITED
EQUITY TRUSTEES LIMITED
PAMPLONA CAPITAL PTY LTD
OCEANVIEW SUPER FUND PTY LTD
MR SEBASTIAN MARR
AEI AUSTRALIA PTY LTD
UNITED EQUITY PARTNERS PTY LTD
MR HUGH DAVID WARNER & MRS DIANNE MICHELLE WARNER
OPTIM8 PTY LTD
SHELCO HOLDINGS PTY LTD
MR NIKOLA KRKOVSKI
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Total
Shares Held
% Issued
Capital
57,911,826
3.65%
57,611,572
38,500,000
28,825,000
28,600,000
28,500,000
28,281,722
28,280,433
26,850,000
26,733,868
25,714,286
24,700,000
22,721,522
22,000,000
21,000,000
20,500,000
20,200,000
20,000,000
19,911,721
15,095,434
561,937,384
3.63%
2.43%
1.82%
1.80%
1.80%
1.78%
1.78%
1.69%
1.69%
1.62%
1.56%
1.43%
1.39%
1.32%
1.29%
1.27%
1.26%
1.26%
0.95%
35.43%
Blue Star Helium Limited and Controlled Entities
61
SHAREHOLDER INFORMATION
The number of shareholdings held in less than marketable parcels is 431.
The Company has the following substantial shareholders listed in its register as at 23 March
2022:
Rank
1.
Shareholder
N/A
Shares Held % Issued Capital
N/A
N/A
Ordinary Shares Voting Rights - Subject to any rights or restrictions for the time being attached
to any class or classes of Shares, at general meetings of Shareholders or classes of Shareholders:
each Shareholder entitled to vote may vote in person or by proxy, attorney or
representative;
on a show of hands, every person present who is a Shareholder or a proxy, attorney or
representative of a Shareholder has one vote; and
on a poll, every person present who is a Shareholder or a proxy, attorney or
representative of a Shareholder shall, in respect of each fully paid Share held by him, or
in respect of which he is appointed a proxy, attorney or representative, have one vote
for the Share, but in respect of partly paid Shares shall have such number of votes as
bears the same proportion to the total of such Shares registered in the Shareholder’s
name as the amount paid (not credited) bears to the total amounts paid and payable
(excluding amounts credited).
The Company has no restricted securities on issue as at the date of this report.
Blue Star Helium Limited and Controlled Entities
62
LICENCE INFORMATION
Schedule of Licences
Helium Project, Colorado, USA
Counterparty
Fee Minerals Owners
Colorado State
Bureau of Land
Management
Location
Las Animas,
CO
Las Animas,
CO
Las Animas,
CO
Operator
Blue Star
Group
Blue Star
Group
Blue Star
Group
Total Net
Acres
Working
Interest
83,216
100%
42,280
100%
86,081
100%
Net Revenue
Interest
82.5% -
87.5%
80%
88%
Hawkeville Overriding Royalty Interest
Well Name
Donnell 457 1&2
Donnell C-1H
Donnell C-2H
Donnell-Mullholland Unit 1&2
Area
McMullen, TX
McMullen, TX
McMullen, TX
McMullen, TX
Royalty
Interest
0.125000%
0.993450%
0.993450%
0.059553%
Blue Star Helium Limited and Controlled Entities
63