Blue Star Helium Limited
And Controlled Entities
ABN: 49 623 130 987
ANNUAL REPORT
For the Year Ended 31 December 2022
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
26
27
28
29
30
31
32
60
61
66
68
Blue Star Helium Limited and Controlled Entities
Executive Chairman
Managing Director and Chief Executive Officer
Non-Executive Director
CORPORATE DIRECTORY
DIRECTORS
Ross Warner
Trent Spry
Neil Rinaldi
SECRETARY
Amanda Wilton-Heald
REGISTERED OFFICE
Level 8, 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
Level 2
40 Kings Park Road
West Perth WA 6005
STOCK EXCHANGE LISTING
Australian Securities Exchange
ASX Code: BNL
OTC Markets
OTCQB: BSNLF
Blue Star Helium Limited and Controlled Entities
1
CHAIRMAN’S LETTER TO SHAREHOLDERS
Dear Shareholders,
I am pleased to provide you with our Annual Report for 2022. This year has been productive for
Blue Star and provides significant promise moving forward.
Strong unfulfilled demand for helium provides a significant market opportunity to Blue Star as a
low-cost helium E&D business. With a large undrilled exploration portfolio and a clear pathway to
commercial helium production, we are strategically poised to be a primary producer of low-cost,
high-grade helium in the world’s biggest helium market, the United States.
Helium prices have doubled since the beginning of 2022 as a result of increasingly critical supply
shortfalls due to events including the fire at the Amur gas processing plant in Russia, the shutdown
of the US Bureau of Land Management’s pipeline for six months and geopolitical factors such as
the Ukraine war which have affected the development of new helium sources.
Our major focus in the first half of 2022 was to advance drill planning and permitting across our
key prospects and to participate in a mix of exploratory water wells and helium exploration wells.
The continuation of exploratory water well drilling was partly a function of the major success of
our similar activities in Las Animas County in the previous year.
We were able to steadily progress exploration and development works across our key highly
prospective Voyager and Galactica/Pegasus projects. We commenced drilling at the
Galactica/Pegasus prospects with the JXSN-1,2,3 and 4 exploratory water well program. This
drilling led to the declaration of four discrete discoveries at Galactica/Pegasus, with an expected
declaration of contingent resources in process at present. We also completed a helium
exploration well at Enterprise 16-1 and saw the Sammons 315310C well drilled by Vecta (at
Serenity), in which we hold a 50% interest.
Accompanying these drilling efforts, we announced our intention to develop the high-grade
Voyager discovery. We decided to focus on Voyager following the breakthrough success of the
BBB#1 exploratory water well completed in November 2021. The BBB#1 well returned an air-free
helium concentration of 8.8%, which represents a globally high in-situ helium grade with similar
gas composition to the historic Model Dome analogue production. The well also returned a 134
ft gas column – for comparison, the average gas column height at Model Dome was approximately
50 ft.
During the year, we engaged independent geological and engineering consultant, Sproule, to
prepare an independent resource assessment for the Voyager acreage. Sproule returned a 2C net
unrisked contingent helium resource of 643 MMscf. Additionally, we undertook a FEED study for
an initial facility at the Voyager prospect and commenced another study for subsequent facilities
at the Galactica/Pegasus and Serenity projects in the east. These studies, and the contingent
resource for Voyager, represent landmark milestones in the planned development of our Las
Animas acreage.
Blue Star Helium Limited and Controlled Entities
2
CHAIRMAN’S LETTER TO SHAREHOLDERS continued
The commercialisation pathway for Voyager involves a mid-stream company supplying and
operating a PSA plant facility with a raw gas throughput of 2 mmcf/day in return for monthly lease
payments. This solution is attractive in that it not only brings an experienced helium facility
operator to the Company’s first development, but it also minimises Blue Star’s up-front capital
commitments while still delivering highly attractive returns. Additionally, it enables Blue Star to
target the short-term contract market and spot sales in order to capitalise on current premium
pricing dynamics in the helium market.
We are in the final stages of permitting the first two development wells for Voyager, with a further
five permit applications in advanced preparation. We are targeting the drilling of the first
development well in Q2 2023, with pressure and flow testing to follow shortly thereafter.
Following confirmation of the Voyager process facility lease agreement, we are expecting
delivery, commissioning and first helium output from Voyager during H2 2023.
At the corporate level, we appointed our current senior management team comprising Mr Peter
Kondrat as Chief Operating Officer and Mr Scott Fenoglio as Chief Financial Officer. Subsequent
to the year end, this team was bolstered by the appointment of Mr Shane Gillespie as Landman.
This team has been instrumental in driving the assessment of various development scenarios.
I would like to thank our partners in the United States, whose guidance and continued assistance
has been crucial to our ongoing operations. In particular, I wish to express my gratitude to the
COGCC, who have consistently worked with us in a diligent and professional manner in
progressing our various permitting applications.
Finally, I wish to thank you, our shareholders for your steadfast, ongoing support. The year ahead
will be an exciting and momentous one for Blue Star as we rapidly progress to targeted first
production of helium at Voyager. I look forward to updating you along the journey towards first
helium production and the ongoing realisation of value in our world-class helium acreage.
____________________
Ross Warner
Executive Chairman
30 March 2023
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 2022 (‘FY22’).
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
Title
Executive Chairman
Managing Director and Chief Executive Officer
Non-Executive Director
PRINCIPAL ACTIVITIES
The principal activities of the Consolidated Entity during the year ended 31 December 2022 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 2022 was $6,016,745 (2021: loss of
$1,395,783).
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
2022
$
39,836
(6,012,531)
(6,016,742)
(6,016,745)
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)
The factors that are considered to affect total shareholders return are summarised below:
Share price at financial period end
31 December
2022
$
0.04
31 December
2021
$
0.062
31 December
2020
$
0.044
Blue Star Helium Limited and Controlled Entities
4
DIRECTORS’ REPORT continued
Operating Review
It has been a significant year for Blue Star. In 2022, the Company completed a preliminary plan of
development for its Voyager project where the Company is targeting first helium production and
sales for H2 CY2023, announced four helium discoveries at its Galactica/Pegasus project,
announced a maiden contingent helium resource following the helium discovery last year at the
Voyager project, and increased its total Las Animas landholding to 306,581 acres gross (224,316
net).
Figure 1: Blue Star Las Animas County leasehold position
VOYAGER PROJECT
On 19 December 2022, Blue Star announced the key outcomes of its Las Animas Plan of
Development, which included a mid-stream solution for its initial facility to be located on the high-
grade Voyager discovery. The plan involves an initial processing facility at Voyager, supplied and
operated by a mid-stream company in return for monthly lease payments from Blue Star. This
solution is highly attractive to the Company as it minimises up-front capital commitments while
delivering highly attractive returns.
An initial three to four development wells are planned at Voyager, the permitting of which is well
advanced ahead of targeted first production in H2 2023.
Blue Star Helium Limited and Controlled Entities
5
DIRECTORS’ REPORT continued
The initial Voyager development is planned to comprise a Pressure Swing Adsorption (PSA) plant
with a nameplate raw gas throughput of 2 mmcf/day for expected helium product gas output of
98.0%+ purity and targeted helium production of 38 mmcf net to Blue Star in the first full capacity
year.
The facility processing capacity is readily scalable at modest incremental capital by the addition
of membranes and/or further PSA units.
As part of the overall Voyager development, Blue Star will be responsible for the drilling and
completion of the development wells, installation and operation of the raw gas gathering system,
power and compression. The facility is planned to start up on site-generated power while the
availability of grid power is evaluated.
Helium volumes are planned, at least initially, to be sold via premium short term contracts or in
the spot market. Short term helium sales contracts are currently priced at a significant premium
to long term contracts and this differential is expected to persist.
Blue Star’s selected mid-stream supplier and operator expects to deliver, install and commission
the facility during H2 CY2023, subject to receipt of all necessary permits, surface use and access
agreements. First helium output and subsequent product sales are expected to commence
promptly after commissioning is complete.
On 10 May 2022, Blue Star announced its intention to advance the development of its Voyager
prospect. The Voyager prospect was chosen after the breakthrough success of BBB#1 exploratory
water well which returned a 134 ft gas column in the Lyons formation with a calculated air-free
helium concentration of 8.8%.
The Company engaged independent geological and engineering consultant, Sproule, to prepare
the first independent resource assessment for the Voyager prospect.
Sproule’s independent evaluation was announced on 27 September 2022, highlighting a 2C net
unrisked contingent helium resource of 643 MMscf for Voyager. The Voyager field’s resources
were independently evaluated and certified by Sproule in accordance with all guidelines and
definitions outlined by the Society of Petroleum Engineers Petroleum Resources Management
System (SPE-PRMS, 2018).
Table 1: Voyager Field Resource Estimates
Voyager Field
Net Recoverable Helium (MMscf)
Notes:
1C
299
2C
643
3C
1,228
1. The resource estimates have been prepared using the probabilistic method and
presented on an unrisked basis.
2. The resources estimates are presented on a net entitlements basis and represent Blue
Star group’s net economic interest in the contingent helium volumes after deductions
for the volume weighted royalty burden.
Blue Star Helium Limited and Controlled Entities
6
DIRECTORS’ REPORT continued
GALACTICA/PEGASUS PROJECT
The continuation of exploratory water well drilling in 2022 was a function of the substantial data
that may be obtained from the program and the success at the breakthrough BBB#1 well at the
Voyager prospect, allowing for confident acceleration of helium well location selections for
appraisal and development drilling.
Drilling of exploratory water wells by the rancher in a new 4 well program at the Galactica/Pegasus
prospects commenced on 27 April 2022. Blue Star successfully recovered helium from each of the
JXSN#1, JXSN#2 and JXSN#3 exploratory water wells drilled in the Galactica/Pegasus prospects.
Helium concentrations of up to 3.14% were reported in larger than expected gas columns of up
to 230 feet in the Lyons formation. These wells also proved the Company’s previous
interpretations of gas on logs at historic wells, Denton B #1 and Colorado #B-1, also located on
the Galactica/Pegasus structure.
Following these strong results from the JXSN#1, JXSN#2, and JXSN#3 wells, the JXSN#4 well was
spudded on 23 September. The well was drilled 1.7 miles to the northwest of JXSN#1 to further
test the area and continue to delineate its structural and stratigraphic prospectivity. Drilling was
completed the following week to a total depth of 1,043 feet encountering both the upper and
lower Lyons sands, which both flowed gas to the surface.
Well log analysis subsequently confirmed a 233.5ft gas column with 133.5 ft of net pay. Sampling
during the overnight flow of the comingled upper and lower Lyons reservoir yielded 6.06% helium,
while an individual sample taken for lab analysis yielded 4.20% helium. Both are considered high
concentration and are higher than the helium content yielded in the previous three wells on
Galactica/Pegasus. The well was recorded flowing at 124.6 mcf/d during drilling and sampling.
Shut-in pressures were the same as observed in the previous JXSN wells which flowed between
202 and 412 mcfd.
Table 2: Key results from recent Galactica/Pegasus exploratory water wells
Key parameters
JXSN#2
JXSN#1
JXSN#3
Helium concentration (%)
1.98
Gas column in Lyons formation (ft)
217.5
Net pay in Lyons formation (ft)
Stabilized initial flow rate (Mcfd)
143.5
412
3.14
101+
101
202
2.14
230
153.4
412
JXSN#4
4.20 & 6.06
233.5
133.5
125
Sproule is preparing a resource update for Galactica/Pegasus, which is expected to result in the
declaration of contingent helium and CO2 resources.
The Galactica/Pegasus development is a larger-scale project with multiple potential product
streams. Further engineering and market work is underway to refine the planned development
configuration and forecast helium and CO2 production and cost estimates. The Galactica/Pegasus
facilities are planned to be permitted in parallel with the Voyager development.
Blue Star Helium Limited and Controlled Entities
7
DIRECTORS’ REPORT continued
There are currently a range of development pathways under consideration, including a leased
plant and third party operated option. The final development is expected to include a CO2
extraction route and by-product stream. A final decision on the initial Galactica/Pegasus plant
configuration is expected in H1 CY2023.
OTHER EXPLORATION
Enterprise 16-1 exploration well
Following the permitting activities undertaken through H2 2021, Blue Star was given the approved
permit to drill for the Enterprise 16-1 helium exploration well on 23 December 2021. The well was
spudded on 16 February 2022, with drilling of the shallow section of the target Lyons formation
completed, cased and cemented the following week.
The objective of the well was to test an interpreted structural high within the Enterprise prospect
targeting a helium pay zone in the Lyons formation. On 1 March 2022, the well was drilled to a
total depth of 1,250 feet and a potential helium zone was identified in the targeted Lyons
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, however due to subsequent water invasion of the top
part of the Lyons formation where gas is interpreted from logs, no test was initially able to be
conducted to obtain a gas sample for compositional analysis.
In early July, the Enterprise 16-1 well was successfully cased and cemented across the Lyons and
perforated between 1,051 feet and 1,054 feet in the top of the gas zone. Swabbing operations
were completed. The well exhibited pressure build-up and flow on several occasions during
swabbing operations. At the conclusion of operations, the water level in the well stabilised above
the perforations.
Further potential drilling to the south-east, up-dip from Enterprise 16-1, where re-mapping shows
the structural high to lie is being planned. Follow-up wells are likely to target this structural high
where significantly larger gas columns are expected – initially via an exploratory water well and
then with further helium wells.
Sammons 315310C well
On 22 December 2021, Blue Star executed an agreement to jointly develop helium leases in an
Area of Mutual Interest (AMI) with two private entities, Vecta Oil & Gas (Vecta) (25%) and
Prospero Oil & Gas LLC (Prospero) (25%). The AMI includes Blue Star’s Serenity prospect, which is
located immediately to the south-east of its Galactica/Pegasus prospects. As part of the
agreement, Vecta retained the role of operator in the AMI.
Blue Star Helium Limited and Controlled Entities
8
DIRECTORS’ REPORT continued
On 25 February 2022, Blue Star advised that it had received Colorado Oil and Gas Conservation
Commission (COGCC) approval for the Sammons Ranch OGDP submitted by Vecta Oil and Gas Ltd
(Vecta) and authorisation of four proposed well locations within the AMI, the first of which
included Blue Star’s Sammons 315310C well. Approval at Vecta’s OGDP hearing of the Sammons
315310C well by the COGCC was the residual condition precedent to the formation of the AMI.
Approval of the OGDP and associated Forms 2A allowed Vecta to submit its final permit to drill
(Form 2) for the Sammons 315310C well, which was completed on 4 March 2022.
On 4 August 2022, the Sammons 315310C well was spudded and was drilled to 1,166 feet,
intersecting the Lyons formation at 1,155 feet. Initial testing confirmed high gas rates and
increasing flow pressure at the well. Further drilling commenced and penetrated the complete
upper Lyons sand, representing an 83-foot gas column of high-quality reservoir. The flowing
pressure was reportedly increasing, and gas rates were as high as 500 mmcf/d.
Casing was set at 1,270 feet in the shale separating the upper and lower Lyons sands. The lower
Lyons sand was penetrated at 1,308 feet and 15 feet of sand was drilled. The drilled section was
completely gas filled with no water being encountered during drilling. Initial flow testing was
conducted with gas rates of 115 mcf/d. The Company and Vecta are in discussions regarding the
future approach to commercialising this project.
Corporate
Appointment of Chief Operating Officer
On 30 June 2022, Blue Star appointed Mr Peter Kondrat as Chief Operating Officer (COO) of its US
helium business.
Peter is a seasoned helium executive and industry professional with over 25 years’ experience in
the development of oil, natural gas and helium from conventional and unconventional reservoirs.
This includes proven expertise in the identification, economic analysis, and exploitation of new
and additional helium from drilling, workover, recompletion, prospect development and deeper
play testing.
Most recently, Peter was President and COO of US helium exploration and production business,
Tacitus LLC (Tacitus). Under Peter’s direction, Tacitus built a significant helium business in the
Tocito Dome Field, New Mexico. This included leading Tacitus from operating at a loss to
substantial positive cash flow, driven by the company’s success in originating new helium
discovery wells with high concentration and flow rates. Tacitus was ultimately sold to the Navajo
Transitional Energy Company in October 2021 for an undisclosed consideration.
Peter will lead Blue Star’s on-the-ground efforts in the US from his base in Colorado. He will be
responsible for deployment of all aspects of the Company’s exploration, development and
production activities in Las Animas, Colorado. The timing of Peter’s appointment corresponds
with Blue Star’s recent helium discovery successes at Voyager and Galactica/Pegasus, and its
planned transition into development drilling and production operations while continuing to grow
its resource base.
Blue Star Helium Limited and Controlled Entities
9
DIRECTORS’ REPORT continued
Appointment of Chief Financial Officer
On 6 September 2022, the Company announced the appointment of Mr Scott Fenoglio as Chief
Financial Officer (CFO). Mr Fenoglio has over 20 years of oil and gas executive and finance
experience. He is also a CFA (Chartered Financial Analyst) Charterholder. Scott was previously CFO
of Ossidiana Energy LLC, a Colorado-based E&P business focussed on activities in the DJ Basin in
Wyoming. Prior to that he held senior finance executive roles at Colorado-based Bonanza Creek
Energy Inc. and Noble Energy Inc.
Business Risks
Our business involves a high degree of risk. If any of the following risks, or any risk described
elsewhere in this Annual Report, actually occurs, our business, financial condition, or results of
operations could suffer. The risks described below are not the only ones facing us. Additional risks
not presently known to us or which we currently consider immaterial also may adversely affect
us.
The drilling for and producing of helium are high risk activities. There are many uncertainties that
could adversely affect our business and financial condition. Many of our decisions to undertake
operations are based on geophysical and geological analysis and engineering studies that are
often times inconclusive.
The process of estimating helium resources is complex and requires interpretation of many
assumptions. The risk that these interpretations differ from actual results can significantly impact
the ultimate resource available and the number of potential development well locations.
The cost to drill, complete and operate wells is often uncertain before operations commence.
This can lead to budget overruns and result in a particular project being uneconomic. Additionally,
the continuing or worsening inflationary pressures, particularly in the Unites States, could result
in increases in our cost of goods, services, and personnel which in turn could cause our capital
expenditures and operating costs to rise.
With limited production data in our area of operations well results could differ materially from
our expectations.
We are highly dependent on many third parties to execute our plans for development of the asset.
These third parties include but are not limited to service providers for drilling, completion,
production, and construction services, equipment providers, and local, state, and federal
regulatory agencies in the United States.
We are subject to health, safety, and environmental laws and regulations that may expose us to
significant costs and liabilities.
Evolving legislation or regulatory initiatives, especially in the state of Colorado, could result in
increased costs and additional operating restrictions or delays.
Pricing in the helium markets is opaque and largely set by private party contracts. Therefore, the
prices we receive are at risk of being significantly different than we assumed. Additionally,
changes in the supply/demand balance due to new or returning sources of supply or economic
downturns could adversely affect the prices we are able to receive for helium.
Blue Star Helium Limited and Controlled Entities
10
DIRECTORS’ REPORT continued
The market for all labour in Colorado is competitive and the Company must compete to attract
and retain key employees.
COVID-19 Impacts
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 returning to nearly
normal working conditions. 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 50 helium wells.
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 2023 calendar year.
Blue Star Helium Limited and Controlled Entities
11
DIRECTORS’ REPORT continued
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
Trent Spry
Qualifications
Position
Appointment Date
Resignation Date
Length of Service
Biography
Current ASX Listed
Directorships
Details
B. Juris and LLB and LLM
Executive Chairman
23 March 2018
N/A
5 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
BSc (Hons), AICD
Managing Director and Chief Executive Officer (effective 14 April
2021)
29 April 2019
N/A
3 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
in
in the upstream oil, gas and helium
experience
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
Blue Star Helium Limited and Controlled Entities
12
DIRECTORS’ REPORT continued
Former ASX Listed
Directorships within
last 3 years
Neil Rinaldi
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
None
Non-Executive Director
14 April 2021
N/A
1 year 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
International Graphite Limited
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
13
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 Rinaldi
Board Meetings
7
7
7
7
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
PERFORMANCE RIGHTS
As at the date of this report:
No. Performance Rights
16,200,000
16,200,000
16,200,000
16,200,000
16,200,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
Tranche
1
2
3
4
5
1
2
3
4
5
Expiry Date
07-Jan-24
07-Jan-24
07-Jul-24
07-Jul-24
07-Jan-25
18-May-24
18-May-24
18-Nov-24
18-Nov-24
18-May-25
Listed / Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
SHARES ISSUED AS A RESULT OF THE EXERCISE OF OPTIONS OR CONVERSION OF PERFORMANCE
RIGHTS
Nil shares issued as a result of the exercise of the options or performance rights were issued as at
the date of this report.
Blue Star Helium Limited and Controlled Entities
14
DIRECTORS’ REPORT continued
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. 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. $Nil 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.
Blue Star Helium Limited and Controlled Entities
15
DIRECTORS’ REPORT continued
Key management personnel
Name
Ross Warner
Trent Spry
Neil Rinaldi
Peter Kondrat
Scott Fenoglio
Title
Executive Chairman
Managing Director and Chief Executive Officer
Non-Executive Director
Chief Operating Officer
Chief Financial Officer
Blue Star Helium Limited and Controlled Entities
16
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.
Non-Executive Director
Neil Rinaldi1
Total Non-Executive Directors
Executive Directors
Ross Warner
Trent Spry
Joanne Kendrick3
Total Executive Directors
Year
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Fixed
STI
LTI
Total
Proportion of
Remuneration
Salary fees
and leave
$
Bonus
$
Superannuation
$
Payments
$
Incentive
Security Based
Payments
$
Fixed
%
STI
%
$
LTI
%
60,000
42,833
60,000
42,833
310,930
192,131
314,824
197,987
-
32,0974
625,754
422,215
-
-
-
-
-
68,493
-
75,000
-
-
-
143,493
-
-
-
-
26,914
25,318
26,914
12,955
-
-
53,828
38,273
-
-
-
-
-
-
-
-
-
-
-
-
243,0652
-
243,065
-
729,1952
-
1,184,9422
-
-
-
1,914,137
-
303,065
42,833
303,065
42,833
1,067,039
285,942
1,526,680
285,942
-
32,097
2,593,719
603,981
20%
100%
20%
100%
32%
100%
22%
100%
-
100%
26%
100%
-
-
-
-
-
-
-
-
-
-
-
-
80%
-
80%
-
68%
-
78%
-
-
-
74%
-
1 Appointed 14 April 2021.
2 A total of 24,000,000 tranche 1-5 unlisted performance rights expiring 7 January 2024 to 7 January 2025 were granted to Ross Warner; a total of 39,000,000 tranche 1-5 unlisted
performance rights expiring 7 January 2024 to 7 January 2025 were granted to Trent Spry; a total of 8,000,000 tranche 1-5 unlisted performance rights expiring 7 January 2024 to
7 January 2025 were granted to Neil Rinaldi; and a total of 10,000,000 tranche 1-5 unlisted performance rights expiring 7 January 2024 to 7 January 2025 were granted to Peter
Kondrat on 7 July 2022. A total of 10,000,000 tranche 1-5 unlisted performance rights expiring 18 May 2024 to 18 May 2025 were granted to Scott Fenoglio on 18 November
2022. The performance rights granted to Ross Warner, Trent Spry and Neil Rinaldi were approved by shareholders at the 31 May 2022 annual general meeting. The performance
rights granted to Peter Kondrat and Scott Fenoglio were issued using the Company’s ASX LR 7.1 (15%) capacity.
3 Resigned 14 April 2021.
4 Includes $12,097 payment on cessation of services.
Blue Star Helium Limited and Controlled Entities
17
DIRECTORS’ REPORT continued
2. Key management personnel remuneration (continued)
Key Management Personnel
Peter Kondrat
Scott Fenoglio
Total Key Management
Personnel
Total Directors & Key
Management Personnel
Year
2022
2021
2022
2021
2022
2021
2022
2021
Fixed
STI
LTI
Total
Proportion of
Remuneration
Salary fees
and leave
$
Bonus
$
Superannuation
$
Payments
$
Incentive
Security Based
Payments
$
Fixed
%
STI
%
$
LTI
%
83,366
-
65,674
-
149,040
-
834,794
465,048
-
-
-
-
-
-
-
143,493
-
-
-
-
-
-
53,828
38,273
-
-
-
-
-
-
-
-
286,5142
-
263,5532
-
550,067
-
2,707,269
-
369,880
-
329,227
-
699,107
-
3,595,891
646,814
23%
-
20%
-
21%
-
25%
100%
-
-
-
-
-
-
-
-
77%
-
80%
-
79%
-
75%
-
Blue Star Helium Limited and Controlled Entities
18
DIRECTORS’ REPORT continued
3. Service agreements (audited)
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 management personnel engaged by the Company other than
the Directors include the engagement of the Chief Operating Officer, Peter Kondrat and the Chief
Financial Officer, Scott Fenoglio.
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.
The Chief Operating Officer entered into a service agreement with effect from 30 June 2022 and
the Chief Financial Officer entered into a service agreement with effect from 6 September 2022
on the following terms:
Salary of US$180,000 per annum
the employment is “at-will” and the agreement may be terminated by either party
without notice.
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
/ Key
Manage
ment
Personnel
Ross
Warner
Directly
Indirectly
Trent
Spry
Directly
Indirectly
Neil
Rinaldi
Directly
Indirectly
Peter
Kondrat
Directly
Indirectly
Scott
Fenoglio
Directly
Indirectly
Total
No. Shares
Held at 31
December
2021
Share
Based
Payments
Exercise of
Options
Other
Changes
No. Shares
Held at 31
December
2022
No. Shares
Held at Date
of this Report
37,000,000
2,000,000
22,000,000
3,000,000
-
-
N/A
N/A
N/A
N/A
64,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
37,000,000
2,000,000
35,673,000
2,587,661
22,000,000
3,000,000
22,000,000
3,000,000
-
1,000,000
-
1,000,000
-
1,000,000
-
-
-
-
-
-
-
-
-
-
1,000,000 65,000,000
-
-
64,260,661
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 /
Key
Manage
ment
Personnel
Ross
Warner
Directly
Indirectly
Trent
Spry
Directly
Indirectly
Neil
Rinaldi
Directly
Indirectly
Peter
Kondrat
Directly
Indirectly
Scott
Fenoglio
Directly
Indirectly
Total
Share
Based
Payments
No.
Options
Held at 31
December
2021
Exercise of
Options
Other
Changes
No. Options
Held at Date
of this Report
No.
Options
Held at 31
December
2022
-
-
-
-
-
-
N/A
N/A
N/A
N/A
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Blue Star Helium Limited and Controlled Entities
21
DIRECTORS’ REPORT continued
Performance Rights held by Key Management Personnel
Share Based
Payments
Conversion of
Performance
Rights
Other
Changes
No.
Performance
Rights Held at
31 December
2021
-
-
-
-
-
-
N/A
N/A
N/A
N/A
-
24,000,0005
-
39,000,0005
-
8,000,0005
-
10,000,0005
-
10,000,0005
-
91,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Director / Key
Management
Personnel
Ross Warner
Directly
Indirectly
Trent Spry
Directly
Indirectly
Neil Rinaldi
Directly
Indirectly
Peter Kondrat
Directly
Indirectly
Scott Fenoglio
Directly
Indirectly
Total
No.
Performance
Rights Held at
31 December
2022
No.
Performance
Rights Held at
Date of this
Report
No.
Unvested
at 31
December
2022
Fair Value
of Grant
24,000,000
-
24,000,000 24,000,000
-
-
$729,195
-
39,000,000
-
39,000,000 39,000,000 $1,184,942
-
-
-
8,000,000
-
8,000,000
-
8,000,000
-
$243,065
-
10,000,000
-
10,000,000 10,000,000
-
-
$286,514
-
10,000,000
-
91,000,000
10,000,000 10,000,000
-
$263,553
-
91,000,000 91,000,000 $2,707,269
-
5 A total of 24,000,000 tranche 1-5 unlisted performance rights expiring 7 January 2024 to 7 January 2025 were granted
to Ross Warner; a total of 39,000,000 tranche 1-5 unlisted performance rights expiring 7 January 2024 to 7 January
2025 were granted to Trent Spry; a total of 8,000,000 tranche 1-5 unlisted performance rights expiring 7 January 2024
to 7 January 2025 were granted to Neil Rinaldi; and a total of 10,000,000 tranche 1-5 unlisted performance rights
expiring 7 January 2024 to 7 January 2025 were granted to Peter Kondrat on 7 July 2022. A total of 10,000,000 tranche
1-5 unlisted performance rights expiring 18 May 2024 to 18 May 2025 were granted to Scott Fenoglio on 18 November
2022. The performance rights granted to Ross Warner, Trent Spry and Neil Rinaldi were approved by shareholders at
the 31 May 2022 annual general meeting. The performance rights granted to Peter Kondrat and Scott Fenoglio were
issued using the Company’s ASX LR 7.1 (15%) capacity.
Blue Star Helium Limited and Controlled Entities
22
DIRECTORS’ REPORT continued
The following terms and conditions apply to each of the Performance Rights:
(Vesting Conditions): The Performance Rights will vest subject to the satisfaction of the
following performance milestones within that timeframe (each a Milestone):
Tranche Milestone
Vest and be convertible upon:
(A)
the Company publicly reporting
two (2)
independently certified
helium discoveries; and
the Company’s achieving a 20-day
VWAP of $0.10 or more,
(B)
(B)
issue of the
certified helium
within 18 months after
performance right
Vest and be convertible upon the
Company publicly reporting:
(A)
Independently
reserves; and
Independently
certified helium
reserves and resources including
net recoverable helium meeting at
least one of the following metrics:
(i) P90 greater than 10 Bcf; or (ii)
P50 greater than 20 Bcf; or (iii) P10
greater than 30 Bcf,
within 18 months after
performance right
Vest and be convertible upon the Company
having drilled five (5) separate prospects
within two (2) years after issue of the
performance right
issue of the
Vest and be convertible upon the Company
making a Final Investment Decision (FID) in
relation to the development of a facility for
the development of a helium project within
2 years after issue of the performance right
Vest and be convertible upon the Company
selling helium within 30 months after issue
of the performance right
1
2
3
4
5
Total
Number of
Performance
Rights
18,200,000
18,200,000
Vesting /
Expiry Date
Directors &
COO: 07-Jan-
24
CFO: 18-
May-24
Directors &
COO: 07-Jan-
24
CFO: 18-
May-24
Directors &
COO: 07-Jul-
24
CFO: 18-Nov-
24
Directors &
COO: 07-Jul-
24
CFO: 18-Nov-
24
Directors &
COO: 07-Jan-
25
CFO: 18-
May-25
18,200,000
18,200,000
18,200,000
91,000,000
Blue Star Helium Limited and Controlled Entities
23
DIRECTORS’ REPORT continued
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.
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.
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, the COO,
the CFO 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 High Court of Australia
dismissed Mr Cruickshank’s application for special leave to appeal on 17 November 2022.
Accordingly, the Company considers the matter has now been concluded.
Blue Star Helium Limited and Controlled Entities
24
DIRECTORS’ REPORT continued
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).
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 Corporate Finance Pty Ltd for non-audit services
provided to the Company during the year ended 31 December 2022 are $3,600 (2021: $800).
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
30 March 2023
Blue Star Helium Limited and Controlled Entities
25
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
26
PO Box 1908
West Perth WA 6872
Australia
Level 2, 40 Kings Park Road
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
30 March 2023
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 2022, 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 2022
Note
Consolidated
Entity
31 December
2022
$
Consolidated
Entity
31 December
2021
$
Revenue
Cost of goods sold
Gross loss
Other income
Other Expenses
Write-off 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
11
15
5
12,327
-
12,327
8,542
13,672
22,214
27,509
(206,580)
58,292
(547,600)
(1,570,853)
(182,807)
(753,783)
(2,707,269)
(455,262)
(180,027)
(6,016,745)
-
-
(279,181)
(400,953)
-
(60,553)
(188,002)
(1,395,783)
-
Net loss for the year from operations
(6,016,745)
(1,395,783)
Other comprehensive income
Exchange differences on translation of
foreign entities
133,481
(165,564)
Total comprehensive loss for the year
(5,883,264)
(1,561,347)
Basic and diluted loss per share (cents)
6
(0.38)c
(0.11)c
The accompanying notes form part of these financial statements.
Blue Star Helium Limited and Controlled Entities
28
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
Note
Consolidated Entity
31 December 2022
$
Consolidated Entity
31 December 2021
$
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Other assets
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
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
9
10
11
12
13
13
14
15
6,824,205
25,855
140,971
15,632,345
124,599
48,164
6,991,031
15,805,108
143,365
13,210
12,459,717
151,351
3,125
6,768,833
12,616,292
6,923,309
19,607,323
22,728,417
643,650
228,727
872,377
5,665
5,665
602,860
213,966
816,826
1,884
1,884
878,042
818,710
18,729,281
21,909,707
26,435,332
4,138,868
(11,844,919)
26,439,763
1,298,118
(5,828,174)
18,729,281
21,909,707
The accompanying notes form part of these financial statements.
Blue Star Helium Limited and Controlled Entities
29
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
Consolidated Entity
Contributed
Equity
$
Foreign
Currency
Translation
Reserve
$
Share
Option
Reserve
$
Share
Based
Payments
Reserve
$
Accumulated
Losses
Total
$
$
(5,828,174)
(6,016,745)
21,909,707
(6,016,745)
-
133,481
(6,016,745)
(5,883,264)
-
-
-
-
26,439,763
-
(79,443)
-
1,377,561
-
-
-
133,481
133,481
-
(4,431)
-
-
-
-
-
-
-
-
-
-
-
2,707,269
-
-
-
-
(4,431)
2,707,269
26,435,332
54,038
1,377,561
2,707,269
(11,844,919)
18,729,281
Contributed
Equity
$
Foreign
Currency
Translation
Reserve
$
Share
Option
Reserve
$
Share
Based
Payments
Reserve
$
12,569,133
-
86,121
-
191,125
-
-
-
(165,564)
(165,564)
-
-
16,023,000
(2,152,370)
-
-
-
-
-
-
1,186,436
26,439,763
(79,443)
1,377,561
-
-
-
-
-
-
-
-
Accumulated
Losses
Total
$
$
(4,432,391)
(1,395,783)
8,413,988
(1,395,783)
-
(165,564)
(1,395,783)
(1,561,347)
-
-
-
16,023,000
(2,152,370)
1,186,436
(5,828,174)
21,909,707
Balance at 1 January
2022
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 2022
Consolidated Entity
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
The accompanying notes form part of these financial statements.
Blue Star Helium Limited and Controlled Entities
30
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Note
Consolidated
Entity
31 December
2022
$
Consolidated
Entity
31 December
2021
$
12,327
(2,189,579)
27,509
(3)
8,542
(1,538,306)
581
-
Net cash (used in) operating activities
7
(2,149,746)
(1,529,183)
Cash flows from investing activities
Payment for plant and equipment
Exploration, evaluation and development
expenditure (including licenses acquisition costs)
(14,400)
(4,675)
(6,684,935)
(2,798,789)
Net cash (used in) investing activities
(6,699,335)
(2,803,464)
Cash flows from financing activities
Proceeds from share issues
Proceeds from option conversions
Payment for costs of equity issues
-
-
(4,431)
15,000,000
1,023,000
(965,934)
Net cash (used in) / from financing activities
(4,431)
15,057,066
Net (decrease) / increase in cash held
(8,853,512)
10,724,419
Cash and cash equivalents at beginning of the
year
Foreign exchange effect on cash and cash
equivalents
15,632,345
4,909,336
45,372
(1,410)
Cash and cash equivalents at the end of the year
7
6,824,205
15,632,345
The accompanying notes form part of these financial statements.
Blue Star Helium Limited and Controlled Entities
31
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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 2022 (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 30 March 2023 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 year ended 31 December 2022 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 2022 the consolidated entity incurred a total comprehensive
loss of $5,883,264 (31 December 2021: total comprehensive loss of $1,561,347) and had working
capital of $6,118,654 (31 December 2021: $14,988,282). 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 $6,824,205 (31 December
2021: $15,632,345). On this basis, the Directors consider there are reasonable grounds to believe
that the Consolidated Entity will be able to pay its debts as and when they become due and
payable, and therefore the going concern basis of preparation is considered to be appropriate for
the 31 December 2022 year financial report. In the event that the Consolidated Entity is not able
to continue as a going concern, it may be required to realise assets and extinguish liabilities other
than in the normal course of business and perhaps at amounts different to those stated in its
financial report.
Blue Star Helium Limited and Controlled Entities
32
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
2.
Accounting policies (continued)
c. Principles of consolidation
The consolidated financial statements comprise the financial statements of Blue Star Helium
Limited and its subsidiaries during the year ended 31 December 2022 (“the Consolidated Entity").
The financial statements of the subsidiaries are prepared for the same reporting year as the
parent company, using consistent accounting policies. In preparing the consolidated financial
statements, all inter-company balances and transactions, income and expenses and profit and
losses resulting from intra-group transactions have been eliminated in full. Subsidiaries are fully
consolidated from the date on which control is transferred to the Consolidated Entity and cease
to be consolidated from the date on which control is transferred out of the Consolidated Entity.
d. Foreign currency translation
Both the functional and presentation currency of Blue Star Helium Limited and its Australian
subsidiaries is in Australian dollars ($). 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 and Las Animas Leasing Inc 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
33
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
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 exploration and evaluation assets
The Consolidated Entity’s accounting policy for impairment is set out at Note 11. 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 13.
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
34
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
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
35
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
3.
Revenue and other income
Royalty
Interest income
Sale of Simmons project (including provision write-back)
Consolidated
Entity
31 December
2022
$
Consolidated
Entity
31 December
2021
$
12,327
27,509
-
39,836
8,542
581
57,711
66,834
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 costs6
-
-
(13,672)
(13,672)
6 2021 amount arose from credit note for prior year expenditure.
Blue Star Helium Limited and Controlled Entities
36
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
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% (2021: 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
2022
$
Consolidated
Entity
31 December
2021
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(6,016,745)
(1,805,024)
(1,395,783)
(418,735)
1,315,323
467,727
244,587
169,671
21,974
-
-
-
0%
4,477
-
-
-
0%
Blue Star Helium Limited and Controlled Entities
37
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
5.
Income tax (continued)
Unrecognised deferred tax asset
Tax losses- revenue
PPE
Expenses taken into equity
Other temporary differences
Temporary differences – tax capital losses
Off-set of deferred tax liabilities
Consolidated
Entity
31 December
2022
$
Consolidated
Entity
31 December
2021
$
16,137,619
-
-
43,163
1,250
16,182,032
-
15,684,831
-
-
16,050
1,250
15,702,131
-
Net deferred tax assets unrecognised
16,182,032
15,702,131
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
38
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
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
39
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
6.
Basic and diluted loss per share
Consolidated
Entity
31 December
2022
$
Consolidated
Entity
31 December
2021
$
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)
(6,016,745)
(1,395,783)
Consolidated
Entity
31 December
2022
No.
Consolidated
Entity
31 December
2021
No.
Weighted average number of ordinary shares
outstanding during the year used in calculating basic
and dilutive EPS
1,586,170,058
1,291,875,146
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. The Consolidated Entity is in a loss position therefore
the share based incentive plans do not affect the diluted earnings per share calculation as
potential ordinary shares will be treated as dilute when, and only when, their conversion to
ordinary shares would decrease earnings per share or increase loss per share from continuing
operations.
Blue Star Helium Limited and Controlled Entities
40
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
Consolidated
Entity
31 December
2022
$
Consolidated
Entity
31 December
2021
$
7.
Cash and cash equivalents
Cash at bank and on hand
6,824,205
15,632,345
6,824,205
15,632,345
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
Provisions
(Increase)/Decrease in receivables and prepayments
Increase/(Decrease) in creditors and payables
Increase/(Decrease) in provisions
(6,016,745)
1,570,853
4,211
2,707,269
(558,095)
142,670
5,937
(24,388)
18,542
(1,395,783)
-
1,550
-
(1,865)
-
(3,798)
(85,463)
(43,824)
Net cash (outflows) from operating activities
(2,149,746)
(1,529,183)
8.
Trade and other receivables
Other receivables
Bonds
GST refunds
-
-
25,855
25,855
(62)
34,398
90,263
124,599
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
41
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
9.
Other assets
Current
Prepaid expenses
Non-Current
Bonds
10.
Plant and equipment
Computer equipment
- At cost
- Accumulated depreciation
Reconciliation of the movements in plant and
equipment:
Balance at beginning of year
Additions
Depreciation
Exchange difference translation
Balance at end of year
Consolidated
Entity
31 December
2022
$
Consolidated
Entity
31 December
2021
$
140,971
140,971
48,164
48,164
143,365
151,351
143,365
151,351
27,499
(14,289)
13,210
3,125
14,400
(4,211)
(104)
13,210
4,675
(1,550)
3,125
-
4,675
(1,550)
-
3,125
Accounting policy:
Property, plant and equipment is stated at cost less accumulated depreciation and any
accumulated impairment losses.
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%.
Blue Star Helium Limited and Controlled Entities
42
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
10.
Plant and equipment (continued)
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.
Consolidated
Entity
31 December
2022
$
Consolidated
Entity
31 December
2021
$
11.
Exploration and evaluation assets
Capitalised expenditure
- At cost
- Accumulated amortisation and impairment
-
Exchange difference translation
13,159,073
-
(699,356)
6,893,891
-
(125,058)
Reconciliation of the movements in capitalised
expenditure:
Balance at beginning of year
Exploration and evaluation expenditure incurred during
the year
Write-off of exploration and evaluation assets
Exchange difference translation
12,459,717
6,768,833
6,768,833
3,982,025
7,961,093
(1,570,853)
(699,356)
2,911,866
-
(125,058)
Balance at end of period
12,459,717
6,768,833
Blue Star Helium Limited and Controlled Entities
43
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
11.
Exploration and evaluation assets (continued)
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 2023 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 2022 there was a total of $12,459,717 (31 December 2021: $6,768,833) 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.
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.
Blue Star Helium Limited and Controlled Entities
44
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
11.
Exploration and evaluation assets (continued)
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).
Consolidated
Entity
31 December
2022
$
Consolidated
Entity
31 December
2021
$
12.
Trade and other payables
Trade creditors and other accruals
643,650
602,860
643,650
602,860
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.
13.
Provisions
Current
Employee benefits
Restoration
Non-Current
Employee benefits
94,885
133,842
29,895
184,071
228,727
213,966
5,665
5,665
1,884
1,884
Blue Star Helium Limited and Controlled Entities
45
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
13.
Provisions (continued)
Reconciliation of the movements in the restoration
provision:
Balance at start of year
Additions during the year
Utilisation of provision
Reversal of provision
Foreign exchange movements
Balance at end of year
Consolidated
Entity
31 December
2022
$
Consolidated
Entity
31 December
2021
$
184,071
133,842
(119,927)
(70,789)
6,645
188,305
142,205
(125,972)
-
(20,467)
133,842
184,071
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, including removal of
intended to be removed. These provisions have been
facilities and equipment required or
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.
Blue Star Helium Limited and Controlled Entities
46
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
13.
Provisions (continued)
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.
Consolidated Entity
31 December 2022
Consolidated Entity
31 December 2021
No.
$
No.
$
1,586,170,058 26,439,763
1,233,062,915
12,569,133
-
-
-
-
-
-
-
-
-
-
-
-
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
-
(4,431)
55,250,000
-
663,000
(2,152,370)
14.
Contributed equity
Balance at beginning of year
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 26,435,332
1,586,170,058
26,439,763
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
47
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
14.
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 monitors 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 $6,824,205 (31 December 2021: $15,632,345)
and ability of the Company to raise capital as needed.
15.
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
Consolidated
Entity
31 December
2022
$
Consolidated
Entity
31 December
2021
$
(79,443)
133,481
86,121
(165,564)
54,038
(79,443)
1,377,561
-
191,125
1,186,436
Balance at end of period
1,377,561
1,377,561
Share based payments
Balance at beginning of period
Performance rights granted7
Balance at end of period
-
2,707,269
2,707,269
-
-
-
7 A total of 24,000,000 tranche 1-5 unlisted performance rights expiring 7 January 2024 to 7 January 2025 were granted
to Ross Warner; a total of 39,000,000 tranche 1-5 unlisted performance rights expiring 7 January 2024 to 7 January
2025 were granted to Trent Spry; a total of 8,000,000 tranche 1-5 unlisted performance rights expiring 7 January 2024
to 7 January 2025 were granted to Neil Rinaldi; and a total of 10,000,000 tranche 1-5 unlisted performance rights
expiring 7 January 2024 to 7 January 2025 were granted to Peter Kondrat on 7 July 2022. A total of 10,000,000 tranche
1-5 unlisted performance rights expiring 18 May 2024 to 18 May 2025 were granted to Scott Fenoglio on 18 November
2022. The performance rights granted to Ross Warner, Trent Spry and Neil Rinaldi were approved by shareholders at
the 31 May 2022 annual general meeting. The performance rights granted to Peter Kondrat and Scott Fenoglio were
issued using the Company’s ASX LR 7.1 (15%) capacity.
Blue Star Helium Limited and Controlled Entities
48
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
15.
Reserves (continued)
Total reserves
Unlisted options
Balance at beginning of period
Options granted
Options converted
Consolidated
Entity
31 December
2022
$
Consolidated
Entity
31 December
2021
$
4,138,868
1,298,118
Consolidated
Entity
31 December
2022
No.
Consolidated
Entity
31 December
2021
No.
34,389,452
-
-
85,250,000
34,389,452
(85,250,000)
Balance at end of period
34,389,452
34,389,452
Unlisted performance rights
Balance at beginning of period
Performance rights granted
Balance at end of period
-
91,000,000
91,000,000
-
-
-
Blue Star Helium Limited and Controlled Entities
49
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
15.
Reserves (continued)
Inputs
Number of
performance rights
Exercise price
Expiry date
Grant date
Vesting date
Vesting conditions
Director Performance Rights
Employee Performance Rights
Employee Performance Rights
71,000,000
$Nil
Varies between 7 January 2024 & 7 January
10,000,000
$Nil
10,000,000
$Nil
7 July 2022
Upon vesting conditions being met
Tranche 1: vest and be convertible upon:
the Company publicly reporting two (2)
independently certified helium discoveries; and
the Company’s achieving a 20-day VWAP of
$0.10 or more,
within 18 months after issue of the
performance right
Tranche 2: vest and be convertible upon the
Company publicly reporting:
Independently certified helium reserves; and
Independently certified helium reserves and
resources including net recoverable helium
meeting at least one of the following metrics:
(i) P90 greater than 10 Bcf; or (ii) P50 greater
than 20 Bcf; or (iii) P10 greater than 30 Bcf,
within 18 months after issue of the
performance right
Tranche 3: vest and be convertible upon the
Company having drilled five (5) separate
prospects within two (2) years after issue of the
performance right
Tranche 4: vest and be convertible upon the
Company making a Final Investment Decision
(FID) in relation to the development of a facility
2025 Varies between 7 January 2024 & 7 January 2025
7 July 2022
Upon vesting conditions being met
Tranche 1: vest and be convertible upon:
the Company publicly reporting two (2)
independently certified helium discoveries; and
the Company’s achieving a 20-day VWAP of $0.10
or more,
within 18 months after issue of the performance
right
Tranche 2: vest and be convertible upon the
Company publicly reporting:
Independently certified helium reserves; and
Independently certified helium reserves and
resources including net recoverable helium
meeting at least one of the following metrics: (i)
P90 greater than 10 Bcf; or (ii) P50 greater than
20 Bcf; or (iii) P10 greater than 30 Bcf,
within 18 months after issue of the performance
right
Tranche 3: vest and be convertible upon the
Company having drilled five (5) separate
prospects within two (2) years after issue of the
performance right
Tranche 4: vest and be convertible upon the
Company making a Final Investment Decision
(FID) in relation to the development of a facility
Varies between 18 May 2024 & 18 May 2025
18 November 2022
Upon vesting conditions being met
Tranche 1: vest and be convertible upon:
the Company publicly reporting two (2)
independently certified helium discoveries; and
the Company’s achieving a 20-day VWAP of $0.10
or more,
within 18 months after issue of the performance
right
Tranche 2: vest and be convertible upon the
Company publicly reporting:
Independently certified helium reserves; and
Independently certified helium reserves and
resources including net recoverable helium
meeting at least one of the following metrics: (i)
P90 greater than 10 Bcf; or (ii) P50 greater than
20 Bcf; or (iii) P10 greater than 30 Bcf,
within 18 months after issue of the performance
right
Tranche 3: vest and be convertible upon the
Company having drilled five (5) separate
prospects within two (2) years after issue of the
performance right
Tranche 4: vest and be convertible upon the
Company making a Final Investment Decision
(FID) in relation to the development of a facility
Blue Star Helium Limited and Controlled Entities
50
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
for the development of a helium project within
2 years after issue of the performance right
Tranche 5: vest and be convertible upon the
Company selling helium within 30 months after
issue of the performance right
for the development of a helium project within 2
years after issue of the performance right
Tranche 5: vest and be convertible upon the
Company selling helium within 30 months after
issue of the performance right
for the development of a helium project within 2
years after issue of the performance right
Tranche 5: vest and be convertible upon the
Company selling helium within 30 months after
issue of the performance right
Share price at grant
date
Risk free interest
rate
Volatility
Performance rights
value (total)
$0.03
2.725%
85%
$2,157,202
$0.03
2.725%
85%
$286,514
$0.03
3.053%
85%
$263,553
Blue Star Helium Limited and Controlled Entities
51
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
15.
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.
Options / performance rights reserve
The options / performance rights 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
52
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
16.
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 2022 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 2022 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 2022 the Consolidated Entity had no forward foreign
exchange contracts in place.
Commodity price risk
The Consolidated Entity is exposed to commodity price fluctuations through the sale of
petroleum products denominated in US dollars – specifically the natural gas, condensate and
oil prices in the USA. The Consolidated Entity will have a future price risk to helium prices
once any wells enter production.
Blue Star Helium Limited and Controlled Entities
53
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
16.
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
2022
$
Consolidated
Entity
31 December
2021
$
(643,650)
-
-
(602,860)
-
-
(643,650)
(602,860)
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 2022
Financial assets
Cash and cash
equivalents
Trade and other
receivables
Deposits
Financial liabilities
Trade and other
payables
Net inflow / (outflow)
6,824,205
25,855
-
6,850,060
(643,650)
(643,650)
6,206,410
-
-
-
-
-
-
-
-
-
143,365
143,365
-
-
143,365
-
-
-
-
-
-
-
6,824,205
25,855
143,365
6,993,425
(643,650)
(643,650)
6,349,775
Blue Star Helium Limited and Controlled Entities
54
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
16.
Financial risk management objectives and policies (continued)
<6 Months
6-12
Months
1-5 Years
>5 Years
Total
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
124,599
151,351
15,908,295
(602,860)
(602,860)
15,305,435
31 December 2021
Financial assets
Cash and cash
equivalents
Trade and other
receivables
Deposits
Financial liabilities
Trade and other
payables
Net inflow / (outflow)
Credit risk
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 2022 the only trade receivables and other receivable
is for GST receivable. 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
55
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
16.
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.
17.
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 gas, condensate & NGL’s produced in the
USA. During the reporting periods ended 31 December 2022 and 31 December 2021 external sales
of gas, condensate & NGL’s were made to customers solely located in the USA.
31 December 2022
Segment revenue
Segment assets
Segment liabilities
31 December 2021
Segment revenue
Segment assets
Segment liabilities
US
Corporate
Total
12,327
12,889,870
(601,546)
27,509
6,717,453
(276,496)
66,253
7,042,601
(704,916)
581
15,685,816
(113,794)
39,836
19,607,323
(878,042)
66,834
22,728,417
(818,710)
Blue Star Helium Limited and Controlled Entities
56
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
Consolidated
Entity
31 December
2022
$
Consolidated
Entity
31 December
2021
$
18.
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
50,469
36,673
50,469
36,673
Total fees paid or payable to the Company’s auditors Stantons Corporate Finance Pty Ltd for non-
audit services provided to the Company during the year ended 31 December 2022 were $3,600
(2021: $800).
19.
Director and KMP disclosures
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
Peter Kondrat
Scott Fenoglio
Title
Executive Chairman
Managing Director and Chief Executive Officer
Non-Executive Director
Chief Operating Officer
Chief Financial Officer
Compensation by Category: Key Management Personnel
Short-Term (including bonus)
Post-Employment
Long-Term
Share-based Payments
Consolidated
Entity
31 December
2022
$
Consolidated
Entity
31 December
2021
$
834,794
53,828
-
2,707,269
608,541
38,273
-
-
3,595,891
646,814
Blue Star Helium Limited and Controlled Entities
57
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
19.
Director and KMP disclosures (continued)
During the year ended 31 December 2022 and the year ended 31 December 2021 there were no
loans provided to Key Management Personnel. There was an amount of $9,027 accrued at 31
December 2022 (2021: $Nil) relating to business expenses incurred by Directors.
There were no transactions with Key Management Personnel other than those described above.
At 31 December 2022 and 31 December 2021 there were no balances outstanding in relation to
Key Management Personnel other than those described above and in the Remuneration Report.
20.
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
2022
$
Company
31 December
2021
$
6,704,244
876,998
7,581,242
15,682,691
526,719
16,209,410
345,465
5,665
351,130
165,608
1,884
167,492
7,230,112
16,041,918
26,435,332
4,084,830
(23,290,050)
7,230,112
26,439,763
1,377,561
(11,775,406)
16,041,918
(11,514,644)
(11,514,644)
(7,624,943)
(7,624,943)
There are no commitments or contingencies other than those disclosed in this report. There are
no guarantees.
21.
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.
Blue Star Helium Limited and Controlled Entities
58
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2022
Consolidated
Entity
31 December
2022
$
Consolidated
Entity
31 December
2021
$
Commitments and contingencies
22.
The Consolidated Entity is planning to undertake a drilling programme later this year but as at 31
December 2022 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
392,844
846,629
5,247
349,031
1,396,125
-
1,244,720
1,745,156
a. Contingent assets
There are no contingent assets as at 31 December 2022.
b. Contingent liabilities
There are no contingent liabilities as at 31 December 2022.
25.
Interests in controlled entities
Company Name
Place of
Incorporation
31 December
2022
% Ownership
31 December
2021
% 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
Controlled by BNL (USA Helium) Pty Ltd:
BNL (Enterprise) Inc
Las Animas Leasing Inc
Australia
Australia
USA
USA
USA
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Blue Star Helium Limited and Controlled Entities
59
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 2022 are in accordance with the Corporations Act 2001,
including:
o giving a true and fair view of the financial position as at 31 December 2022 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
30 March 2023
Blue Star Helium Limited and Controlled Entities
60
PO Box 1908
West Perth WA 6872
Australia
Level 2, 40 Kings Park Road
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 2022, 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 2022 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
We have determined the matters described below to be Key Audit Matters to be communicated in our report.
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 2022, Exploration and
Evaluation Assets totalled $12,459,717 (refer to
Note 11 of the financial report).
The carrying value of exploration and evaluation
assets is a key audit matter due to:
•
•
•
significance
The
expenditure
of
capitalised representing 64% of total assets;
the
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 included the
following:
i. Assessing the Group’s right to tenure over
exploration assets by corroborating
the
ownership of the relevant licences for mineral
resources
registries and
relevant third-party documentation;
to government
ii. Reviewing the directors’ assessment of the
carrying value of the capitalised exploration
and evaluation costs, ensuring the veracity of
the
assessing
management’s consideration of potential
impairment indicators, commodity prices and
the stage of the Group’s projects also against
AASB 6;
presented
data
and
iii. Evaluation
documents
of Group
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
requirements of
the
accounting standard AASB 6 and reviewed the
financial statements to ensure appropriate
disclosures are made.
Key Audit Matters
How the matter was addressed in the audit
Share Based Payments
During the year, the Company granted various
performance rights to the directors and other key
management.
The key terms of the performance rights and the
valuation have been disclosed in Note 15 and is
considered a key audit matter due to:
•
•
The quantum of the valuation attributed
to the performance rights ($2,707,269);
and
The
the
application of AASB 2 Share based
payment (“AASB 2”).
judgement
required
in
AASB 2 required the Company to determine the
probability of the performance rights vesting,
which directly impacts the valuation of the share
based payments booked.
Going Concern
As at 31 December 2022 as detailed in Note 2(b)
of the financial report, the financial statements
were prepared on a going concern basis.
Going Concern is a key audit matter due to:
•
•
•
The loss before tax for year of $6,016,745;
The operating cash outflows of $2,149,746;
and
The inherent risk of exploration companies
needing
their
to
operations.
raise capital
fund
to
Inter alia, our audit procedures included the
following:
i. Verifying the key terms of the performance
award
to
underlying
granted
rights
documents;
ii. Assessing the fair value calculation of the
rights granted by verifying the independent
valuations obtained by management;
iii. Obtained representations from management
on the probabilities and assumptions used in
the valuation;
iv. Testing the accuracy of the share based
payments over
the vesting periods and
recording of expense in the profit or loss
statement and increment to share based
payment reserve; and
v. Considering the adequacy of the financial
report disclosures contained in Note 15 in
relation to AASB 2.
Inter alia, our audit procedures included the
following:
i. We have challenged the key assumptions
underpinning management’s forecasted cash
flows for the next 12 months;
ii. Considered the range of reasonable and
possible scenarios for the forecasted cash
flows; and
iii. Considered whether the disclosures relating to
going concern (Note 2(b)) in the financial
report, referred to in the basis of preparation
section of
the accounting policies, are
balanced, proportionate and clear.
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 2022, 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 15 to 24 of the directors’ report for the year ended
31 December 2022.
In our opinion, the Remuneration Report of Blue Star Helium Limited for the year ended 31 December 2022
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
30 March 2023
SHAREHOLDER INFORMATION
As at 24 March 2023
Issued Securities
Fully paid ordinary shares
$0.084 unlisted options expiring 04-Nov-
23
$0.112 unlisted options expiring 04-Nov-
24
Tranche 1 & 2 performance rights
expiring 07-Jan-24
Tranche 3 & 4 performance rights
expiring 07-Jul-24
Tranche 5 performance rights expiring
07-Jan-25
Tranche 1 & 2 performance rights
expiring 18-May-24
Tranche 3 & 4 performance rights
expiring 18-Nov-24
Tranche 5 performance rights expiring
18-May-25
Total
Listed on ASX
1,586,170,058
Unlisted
-
Total
1,586,170,058
-
-
-
-
-
-
-
17,194,726
17,194,726
17,194,726
17,194,726
32,400,000
32,400,000
32,400,000
32,400,000
16,200,000
16,200,000
4,000,000
4,000,000
4,000,000
4,000,000
-
1,586,170,058
2,000,000
125,389,452
2,000,000
1,711,559,510
Distribution of Listed Ordinary Fully Paid Shares
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%
0.08%
4.77%
95.14%
100.00%
42,477
95,757
1,189,055
75,599,465
1,509,243,304
1,586,170,058
174
41
132
1,720
1,169
3,236
Blue Star Helium Limited and Controlled Entities
66
SHAREHOLDER INFORMATION
Top 20 Listed Ordinary Fully Paid Shareholders
Rank
Shareholder
BUTTONWOOD NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
CITICORP NOMINEES PTY LIMITED
MR TIMOTHY WONG
MR NIKOLA KRKOVSKI
MS JOANNE KENDRICK
MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) PTY LIMITED
TRDJS PTY LIMITED
ELLIOT HOLDINGS PTY LTD ELLIOT HOLDINGS PTY
LTD
EQUITY TRUSTEES LIMITED
PAMPLONA OPPORTUNITIES LTD
AEI AUSTRALIA PTY LTD
OCEANVIEW SUPER FUND PTY LTD
MR SEBASTIAN MARR
MISS JUI-TING HSU & MISS YU-JU HSU
MR HUGH DAVID WARNER & MRS DIANNE MICHELLE WARNER
UNITED EQUITY PARTNERS PTY LTD
OPTIM8 PTY LTD
SHELCO HOLDINGS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Total
Shares Held
59,673,000
58,992,364
42,581,785
29,000,000
28,281,722
27,600,000
27,159,182
26,850,000
26,825,000
25,714,286
24,835,555
23,500,000
22,721,522
22,000,000
20,331,240
20,200,000
20,150,000
20,000,000
19,040,484
17,316,575
562,772,715
% Issued
Capital
3.76%
3.72%
2.68%
1.83%
1.78%
1.74%
1.71%
1.69%
1.69%
1.62%
1.57%
1.48%
1.43%
1.39%
1.28%
1.27%
1.27%
1.26%
1.20%
1.09%
35.48%
The number of shareholdings held in less than marketable parcels is 669.
The Company has the following substantial shareholders listed in its register as at 24 March
2023:
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
67
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
Hawkeville Overriding Royalty Interest
Well Name
Donnell 457 1&2
Donnell C-1H
Donnell C-2H
Donnell-Mullholland Unit 1&2
Total Net
Acres8
Working
Interest
95,955
100%
Net Revenue
Interest
80.0% -
87.5%
42,280
100%
80%
86,081
100%
87.5%
Area
McMullen, TX
McMullen, TX
McMullen, TX
McMullen, TX
Royalty
Interest
0.125000%
0.993450%
0.993450%
0.059553%
8 Includes BNL's WI portion of 640 acres held and operated by Vecta Oil & Gas Ltd (Vecta) pursuant to the
Participation Agreement between Vecta, Prospero Oil and Gas LLC and Las Animas Leasing Inc more fully described
in the Company’s announcement of 22 December 2021.
Blue Star Helium Limited and Controlled Entities
68