More annual reports from Broadstone Net Lease:
2023 ReportBlue Star Helium Limited
And Controlled Entities
ABN: 49 623 130 987
ANNUAL REPORT
For the Year Ended 31 December 2023
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
29
30
31
32
33
34
35
62
63
68
70
Blue Star Helium Limited and Controlled Entities
Non-Executive Chairman
Managing Director and Chief Executive Officer
Non-Executive Director
CORPORATE DIRECTORY
DIRECTORS
Neil Rinaldi
Trent Spry
Gregg Peters
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 Blue Star Helium’s Annual Report for 2023, which provides
a comprehensive summary of our operations, exploration activities and financial position for
what has been a highly transformational year, not just for our Company but in the broader
helium market.
With its keystone application in the production of semiconductors, fibre optics and its use in
medical cryogenics, many global counterparties are waking up to the importance of helium as
a critically important manufacturing component. At the same time, long-standing systemic
supply issues that have affected market dynamics have been exacerbated by the US Bureau
of Land Management (BLM)’s landmark decision to offload its helium inventory. As a result of
this confluence of factors, helium prices have reacted by soaring to record highs.
Since joining the Blue Star Board in April 2021, I have been part of Blue Star’s crucial first steps
in transitioning from a purely exploration-focused business, which began in earnest with the
Las Animas Plan of Development in December 2022. Over the course of 2023, your Company
has taken active steps to position itself as the next major helium producer in this supply-
constricted market.
In June 2023, we executed a Master Services Agreement with IACX, a highly reputable, fully
integrated and proven helium production and processing business. With the agreement
signed, we took immediate action in laying the foundation for a maiden helium processing
facility at the Voyager Project. Field development activities commenced with two initial wells
at BBB #33 and Bolling #4 at Voyager, designed to produce into the proposed helium
processing facility.
Voyager was initially selected for Blue Star’s maiden project given its demonstrated high
helium concentration, with the BBB #1 discovery exploration well returning an interpreted
8.8% He, as well as the proven high-concentration (average 8% He) and robust flow rates (up
to 2,000 mcf/d) from the historic Model Dome production field analogue wells located only 6
miles from the project acreage.
As a result of this context, it was naturally disappointing to report that the initial flow and
pressure results from BBB #33 and Bolling #4 were highly anomalous, with little to no flow
observed from the Lyons reservoir at both wells. Subsequent testing of the wells ultimately
confirmed the high-quality flow potential historically observed from the Lyons sand, but at
significantly higher compression and vacuum requirements than expected. These results are
expected to have implications for forecast production volumes per well, and on estimated
operating cost estimates, requiring a detailed re-evaluation of project economics under a
range of revised development and operating parameters (which is currently in progress). It
was a tough decision, but these results informed our decision in March 2024 to pause
development of the Voyager project, including the planned mobilisation and installation of
the IACX helium process plant to site.
In the interim, we have elected to move forward with a maiden development well at our
Galactica/Pegasus Project. This strategy offers an immediate pathway to advancing our
Company’s production ambitions, and longer-term value potential at Las Animas, as well as
offering optionality in implementing the IACX helium process facility, which remains ready to
be deployed with all principal plant components acquired.
Blue Star Helium Limited and Controlled Entities
2
CHAIRMAN’S LETTER TO SHAREHOLDERS continued
Galactica/Pegasus benefits from four previously drilled exploration well discoveries, which
returned strong helium concentrations of 2.0 - 6.1% helium at flow rates of between 125 –
412 mcf/d. These wells also proved the Company’s previous interpretations of gas on logs at
historic wells, Denton B#1 and Colorado #B-1. The Galactica/Pegasus project is drill-ready with
eleven potential well locations permitted, with four currently fully permitted for drilling by
the ECMC.
It is important to note that Galactica/Pegasus was already in our project pipeline – it was being
designed as a larger-scale project, with multiple potential product streams, to follow the
planned smaller-scale Voyager development. The Company is currently working on refining
the initial planned development configuration for Galactica/Pegasus, which, pending
successful development well drilling, is still expected to include a CO2 extraction route and by-
product stream.
Importantly also, any potential project development at Galactica/Pegasus is already
significantly de-risked by the successful third-party commercialisation of the Red Rocks helium
project, which adjoins our Galactica/Pegasus acreage and has also utilised an IACX midstream
leased process facility arrangement.
From an internal management perspective, we were pleased to welcome Mr Gregg Peters to
the Blue Star Board during the year as a non-executive director. Gregg has extensive
experience in managing all aspects of commercial helium operations, including price strategy,
contracting, supply system development, marketing and technical support across all modes of
supply, both liquid and gaseous.
With two independent non-executive directors sitting on the Blue Star Board, Mr Ross Warner
elected to step down as Executive Chairman in September 2023, thereby allowing the Board
to be comprised of a majority of independent directors. I would like to thank Ross for his
service as Chairman. His ongoing dedication to the Company in the executive role of President,
Commercial and Legal is a testament to his sustained belief in the Blue Star journey.
On behalf of the Blue Star team, I would like to thank our partners in the United States for
their ongoing support and guidance, which has become increasingly crucial to our operations
as we advance project development workstreams across Las Animas. I also wish to express my
heartfelt thanks to our shareholders, who have continued to support us along the journey.
The outlook for the current year remains strong and I look forward to updating you on our
progress as we advance closer to achieving our ultimate goal of providing a sustainable, low-
cost, high-grade helium supply in the United States.
____________________
Neil Rinaldi
Non-Executive Chairman
28 March 2024
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 2023 (‘FY23’).
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
Neil Rinaldi
Ross Warner
Trent Spry
Gregg Peters
Title
Non-Executive Chairman (from 10 September 2023)
Non-Executive Director (to 10 September 2023)
Executive Chairman (resigned 10 September 2023)
President, Commercial & Legal (from 10 September 2023)
Managing Director and Chief Executive Officer
Non-Executive Director (appointed 10 September 2023)
PRINCIPAL ACTIVITIES
The principal activities of the Consolidated Entity during the year ended 31 December 2023
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 2023 was $3,125,659 (2022: loss of
$6,016,745).
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
2023
$
68,947
(3,115,867)
(3,125,607)
(3,125,659)
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)
The factors that are considered to affect total shareholders return are summarised below:
Share price at financial period end
31 December
2023
$
0.022
31 December
2022
$
0.04
31 December
2021
$
0.062
Blue Star Helium Limited and Controlled Entities
4
DIRECTORS’ REPORT continued
Operating Review
PROJECTS
It has been a significant year for Blue Star Helium. Following the release of the Las Animas
Plan of Development in December 2022, the Company has focused its efforts throughout
CY2023 on the advancement and target development of a maiden helium development.
In addition to these development activities, the Company increased its landholdings to
312,042 acres gross (224,103 net).
Figure 1: Blue Star Las Animas County leasehold position
Voyager Project
In November 2021, exploration well BBB#1 encountered a calculated air-free gas
concentration of 8.8% helium in a 134ft gas column interpreted in the Lyons formation.
Voyager is located only 6 miles from the historic Model Dome production field analogue which
produced at a similar high helium gas composition (averaging 8% He) and robust well flow
rates.
Further leases and additional access acquired at Voyager
Blue Star acquired additional strategic mineral leases and access rights across the Voyager
field during the year. The additional surface access provided enhanced optionality in the
planned siting of a helium processing facility and enabled a more efficient gas gathering
system layout and well optionality.
Blue Star Helium Limited and Controlled Entities
5
DIRECTORS’ REPORT continued
Figure 2: Field view of Voyager Project, proposed helium wells and facility
Permitting
During 2023, Blue Star received final approval from the Colorado Energy and Carbon
Management Commission (ECMC), formerly known as Colorado Oil & Gas Conservation
Commission (COGCC) in respect to two Oil and Gas Development Plans (OGDP).
The “BBB 2860” OGDP, relating to the proposed BBB 33#1 and BBB 34#1 helium development
wells received final Form 2 approval in April 2023.
Following the Company’s acquisition of further strategic mineral leases and surface access
agreements, Blue Star elected to revise and expand its second OGDP submission. The revised
OGDP, comprising four additional proposed helium well locations at Daniel 08 SWNE, Bolling
04 NWSE, Bolling 09 NWNW and Bolling 04 SESW, was subsequently submitted to the ECMC.
Following completion of the ECMC’s technical review of that application, a final approval
hearing date was set for 22 November 2023. The ECMC approved the OGDP and Blue Star
subsequently submitted the final Forms 2, which received final approval in December 2023.
Helium facility
In June 2023, Blue Star executed a Master Services Agreement (MSA) with experienced US
midstream provider, IACX, for the provision of helium recovery services through the delivery
and operation of a helium recovery plant at its planned maiden helium development at
Voyager.
Blue Star Helium Limited and Controlled Entities
6
DIRECTORS’ REPORT continued
IACX is a fully integrated helium production, processing and marketing company, with a fleet
of gas gathering and processing assets located across central Kansas, eastern New Mexico and
the Texas Panhandle. The company operates a number of standalone facilities across the
Midcontinent and Four Corners areas of the US. It currently operates fourteen discrete helium
recovery plants in seven states in the US and one Canadian province. One of the existing
helium facilities is located in Las Animas County, Colorado, neighbouring Blue Star’s Galactica
and Pegasus discoveries.
Under the agreement, Blue Star is responsible for providing a secure site, access to the facility
and delivering the raw gas to the facility inlet. The facility shall remain the property of IACX
throughout the term and subsequent to the termination of the MSA.
The execution process was thorough and included the appointment of a top tier
reserves/resource auditor to evaluate the Voyager resource. The result of this process allowed
Blue Star to mortgage the Voyager mineral leases as collateral to secure the required
payments.
At the time of execution, the PSA facility has the expected physical capabilities outlined in the
table below:
Table 1: PSA facility parameters
Plant metrics
Nameplate raw gas input
Helium recovery
Helium product purity
Plant run time
Unit
MMcf/d
%
% He
%
Value
2.0
90
98
95
Under the terms of the agreement, IACX is to be paid a monthly fee for its services. Aside from
this monthly fee, the Company is not liable for any capital costs associated with the fabrication
of the plant.
Following the signing of the MSA, the Company executed a lease agreement to secure the
generator package for the Voyager development with Red-D-Arc Inc, an experienced provider
of generators with officers in the US, Canada, the UK, France and the Netherlands.
After securing the feed compressor, helium recovery unit and power generator, the Company
concluded the acquisition phase of the principal plant components required for IACX to
complete installation of the helium recovery plant.
Blue Star Helium Limited and Controlled Entities
7
DIRECTORS’ REPORT continued
Figure 3: Voyager Development Plant Layout
Blue Star’s earth works contractor made significant progress on site preparation works
necessary for the IACX helium recovery unit to be deployed at Voyager. The site requirements
included a substantial pad, and part of the site planned to serve as a base of operations for
ongoing helium exploration and development.
Project development
Following the receipt of permitting approvals by the ECMC, Blue Star commenced field
development activities in late December 2023, with an initial focus on drilling the first two
development wells at the Voyager Project: BBB #33 and Bolling #4 SESW.
BBB #33 was designed as an offset well to the BBB #1 discovery well where drilling
encountered a calculated air-free gas concentration of 8.8% helium in a 134ft gas column
interpreted in the Lyons formation.
The air-corrected helium concentration seen at BBB#1 is comparable to that seen at the Model
Dome historic production field, which is located some six miles south on the same regional
structure and averaged approximately 8% helium.
Drilling site works were completed in December 2023. Drilling of BBB #33 was undertaken in
early 2024 to 935 feet, approximately 51 feet into the top of the high-quality Lyons formation.
Wireline logs were run and confirmed the high quality of the Lyons sand (average porosity of
approximately 28%) and that the reservoir was gas filled to TD as expected. No movable water
was observed during drilling or on the wireline logs.
Initial evaluation through the drill pipe was undertaken with limited-to-no flow observed from
the reservoir. Initially, well pressures that were monitored recorded minimal-to-no pressure
readings. Both these outcomes were considered highly anomalous given the gas saturation
seen in the wireline logs in this well and offset well evaluations suggesting reservoir pressure
additionally supported by flowing wells at the historic Model Dome field.
Blue Star Helium Limited and Controlled Entities
8
DIRECTORS’ REPORT continued
Blue Star immediately moved to commence drilling activities at Bolling #4 SESW. Drilling was
completed to 922 feet, approximately 48 feet into the top of the high-quality Lyons formation.
Wireline logs once again confirmed the high quality of the Lyons sand (average porosity of
approximately 27%) with the reservoir gas filled to TD. Initial flow and pressure outcomes
from Bolling #4 SESW were however similar to those returned from BBB#33.
Initial post well evaluation activities were undertaken for both the BBB #33 and Bolling #4
SESW wells. At BBB #33, flow of gas to surface was achieved by putting the well on a small
vacuum during an 8-hour test, where a constant -2 psi was held on the wellhead and a rate of
18 mscf/d was maintained (measured via an orifice metre using a ¼ chock). This resulted in
gas to surface containing approximately 3.0% helium (plus 92.4% nitrogen and 4.6% carbon
dioxide).
At Bolling #4 SESW, a variable vacuum test was conducted over a 24-hour period. Gas to
surface flow at Bolling #4 SESW contained approximately 4.1% helium, 83.1% nitrogen and
12.8% carbon dioxide.
The data collected from the testing of both BBB#33 and Bolling #4 wells was subsequently
integrated and evaluated by Sproule and Blue Star’s independent engineer. These results
confirmed the high-quality flow potential of the Lyons reservoir.
While post well testing on vacuum has yielded success in terms of flow rates, the anticipated
need for compression and vacuum at the wells earlier in field life (than previously anticipated)
has implications for forecast production volumes per well as well as operating cost estimates.
Blue Star therefore elected in March 2024 to pause its development of the Voyager project,
including the planned mobilisation and installation of the leased IACX helium process plant, in
order to conduct a detailed evaluation of these revised project economics under a range of
potential adjusted development and operating parameters.
Galactica / Pegasus Projects
The Galactica/Pegasus field, discovered by Blue Star in 2022, is a larger-scale project with
multiple potential product streams. Engineering and market work continues to refine the
initial planned development configuration and forecast helium and CO2 production and cost
estimates. There are currently a range of development pathways under consideration,
including a leased plant and third party operated option.
Four Blue Star discoveries at Galactica/Pegasus – exploration wells JXSN#1 to JXSN#4 -
delivered gas flowing at 125 - 412 mcf/d and high air-corrected concentrations of 2.0 – 6.1%
He.
These wells proved out 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.
Potential development of the Galactica/Pegasus project is further de-risked by the recent
successful third-party commercialisation of the adjoining Red Rocks helium project by a third
party, also via an IACX midstream leased process facility arrangement.
Blue Star Helium Limited and Controlled Entities
9
DIRECTORS’ REPORT continued
Figure 4: Field view of Galactica/Pegasus prospects
Well permitting
Blue Star currently has an inventory of 11 helium development well locations approved at
Galactica/Pegasus.
In January 2023, the ECMC approved the Forms 2 for two OGDPs pertaining to the State 09,
State 16, State 35 and State 36 development wells. This is the final approval required to drill
these wells.
Later in the year, the ECMC approved the OGDP relating to an additional three proposed
helium development wells – Jackson #01, Jackson #02 and Jackson #03. Blue Star is set to
submit the final Form 2s in respect of these wells. The Jackson #01, Jackson #02, Jackson #03
wells are planned to be drilled as offset development wells to the JXSN#1 and JXSN#2 helium
discoveries.
In January 2024, the ECMC approved the OGDP relating to four further proposed helium
development wells, Jackson 05 SWNE, Jackson 07 NWNE, Jackson 29 SWSW and Jackson 33
SENE), at the Galactica/Pegasus project.
Blue Star Helium Limited and Controlled Entities
10
DIRECTORS’ REPORT continued
Following this approval, Blue Star will be able to submit the final drilling permit applications
(Form 2) in respect of these wells. This is the fourth OGDP to be approved at
Galactica/Pegasus.
The Jackson 05 SWNE, Jackson 07 NWNE, Jackson 29 SWSW and Jackson 33 SENE wells are
offset development wells to the JXSN#1, JXSN#2 and JXSN#4 helium discoveries.
Project development
Following Blue Star’s decision to pause the Voyager development, the Company has elected
to focus on drilling a maiden development well at the Company’s Galactica/Pegasus helium
project. This is targeted for Q2 2024.
This strategy offers an immediate pathway to further advancing our Company’s production
ambitions, and longer-term value potential at Las Animas, as well as offering optionality in
implementing the IACX helium process facility, which remains ready to be deployed with all
principal plant components acquired.
CORPORATE
Capital raising activities
Blue Star successfully completed an equity placement and share purchase plan (SPP) during
the year, raising new funds of approximately A$7.5 million.
In October 2023, the Company received firm commitments to raise A$7.0 million in gross
proceeds via an institutional placement of 333.33 million new ordinary shares to institutional
and sophisticated investors at an issue price of A$0.021 per share.
The Company also launched a SPP to eligible shareholders at the same offer price as the equity
placement. Eligible shareholders were granted the opportunity to apply for up to A$30,000 of
additional shares.
The SPP closed in November 2023 with applications received for a total of 22,761,889 ordinary
shares for gross subscription proceeds of A$478,000.
Board appointment and reorganisation
On 11 September 2023, the Company announced the appointment of Mr Gregg Peters as a
Non-Executive Director. Mr Peters brings a proven track record of commercial leadership in
the industrial gas sector with over 30 years of direct market experience. Most recently he was
Helium Director, North America for Linde PLC (Praxair Inc.). Gregg managed all aspects of
commercial helium operations (from mid-2010), including price strategy, contracting, client
portfolios, supply system development, as well as marketing and technical support to
operating business units, distributors, and end-users across all modes of supply, liquid and
gaseous.
Previously, Gregg spent six years as Director of Industrial Gas for Praxair Inc.’s packaged gas
business, responsible for the financial performance and development of all gas products,
including atmospherics, fuel gases, and CO2 (responsible for both the industrial and BevCarb
segments), and the rapid expansion of the MicroBulk initiative. Currently, he is COO for the
Edelgas Group and Managing Director of Disruptive Resources, LLC.
Blue Star Helium Limited and Controlled Entities
11
DIRECTORS’ REPORT continued
With Gregg’s appointment representing the addition of a second independent Non-Executive
Director to the Blue Star Board, Mr Ross Warner elected to step down from the Board effective
10 September 2023. This allowed the Board to be comprised of a majority of independent
directors. Ross remains with the Company in the executive role of President, Commercial and
Legal.
Mr Neil Rinaldi subsequently assumed the role of Non-Executive Chairman. Neil has been a
Non-Executive Director of the Company since April 2021.
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
incomplete data and 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 and to instal and operate a helium processing
facility 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
12
DIRECTORS’ REPORT continued
The market for all labour in Colorado is competitive and the Company must compete to attract
and retain key employees.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no significant changes in Blue Star’s state of affairs during the year other than the
results of the Voyager drilling programme, the capital raising activities and the changes to the
board each of which is more fully described in the Review of Operations.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Consolidated Entity is undertaking activities to permit further 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 2024 calendar year.
The Consolidated Entity is undertaking activities to ascertain its preferred location for
installation of its maiden helium processing facility in the 2024 calendar year.
Blue Star Helium Limited and Controlled Entities
13
DIRECTORS’ REPORT continued
DIRECTORS’ QUALIFICATIONS AND EXPERIENCE
The Directors’ qualifications and experience are set out below.
Current Directors
Director
Neil Rinaldi
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
Details
Non-Executive Chairman (from 10 September 2023)
Non-Executive Director (to 10 September 2023)
14 April 2021
N/A
2 years 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 was previously the Chief Executive
Officer of International Graphite, which is an unlisted downstream
graphite processing business with operations in Collie and Springdale
(Ravensthorpe), 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
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
experience
in
in the upstream oil, gas and helium
exploration, appraisal and development. He holds a Bachelor of
Science (Hons) (National Centre for Petroleum Geology & Geophysics,
University of Adelaide) and is a graduate of the Australian Institute of
Company Directors. He has originated numerous projects from
concept or acquisition through to discovery, appraisal, successful
development and exit in Australia, SE Asia, the Gulf of Mexico and the
US onshore.
industry
Blue Star Helium Limited and Controlled Entities
14
DIRECTORS’ REPORT continued
Current ASX Listed
Directorships
Former ASX Listed
Directorships within
last 3 years
Gregg Peters
Qualifications
Position
Appointment Date
Resignation Date
Length of Service
Biography
Current ASX Listed
Directorships
Former ASX Listed
Directorships within
last 3 years
Former Directors
Director
Ross Warner
Qualifications
Position
Appointment Date
Resignation Date
Length of Service
Biography
None
None
Bachelor's degree in marketing from Valparaiso University and an
MBA in Operations from Loyola University
Non-Executive Director
10 September 2023
N/A
6 months
Gregg brings a proven track record of commercial leadership in the
industrial gas sector with over 30 years of direct market experience.
Most recently he was Helium Director, North America for Linde PLC
(Praxair Inc.). Gregg managed all aspects of commercial helium
operations (from mid-2010), including price strategy, contracting,
client portfolios, supply system development, as well as marketing
and technical support to operating business units, distributors, and
end-users across all modes of supply, liquid and gaseous. Previously,
Gregg spent six years as Director of Industrial Gas for Praxair Inc.’s
packaged gas business, responsible for the financial performance and
development of all gas products, including atmospherics, fuel gases,
and CO2 (responsible for both the industrial and BevCarb segments),
and the rapid expansion of the MicroBulk initiative. Currently, he is
COO for the Edelgas Group and Managing Director of Disruptive
Resources, LLC. Gregg is based in the United States. He holds a
Bachelor's degree in Marketing from Valparaiso University and an
MBA in operations from Loyola University.
None
None
Details
B. Juris and LLB and LLM
Executive Chairman
23 March 2018
10 September 2023
5 years 5 months
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
Blue Star Helium Limited and Controlled Entities
15
DIRECTORS’ REPORT continued
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
and Melbourne and Clifford Chance in London. He has the following
qualifications: B. Juris and LLB (UWA); and LLM (Melb).
N/A
None
Details
BCom, CA
Company Secretary
4 September 2020
N/A
Amanda Wilton-Heald is a Chartered Accountant with over 20 years
of accounting, auditing (of both listed and non-listed companies) and
company secretarial experience in both Australia and the UK.
Amanda has been involved in the listing of junior explorer
companies on the ASX and has experience in corporate advisory and
company secretarial services.
Blue Star Helium Limited and Controlled Entities
16
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:
Neil Rinaldi
Ross Warner1
Trent Spry
Gregg Peters2
Board Meetings
6
6
5
6
2
All Directors were eligible to attend all Board Meetings held when they were in office.
SHARE OPTIONS
As at the date of this report:
No. Options
17,194,726
9,000,000
Exercise Price
$0.112
$0.028
Expiry Date
04-Nov-24
11-Sep-27
Listed / Unlisted
Unlisted
Unlisted
PERFORMANCE RIGHTS
As at the date of this report:
No. Performance Rights
18,200,000
18,200,000
18,200,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
Tranche
3
4
5
1
2
3
4
5
Expiry Date
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
Refer to page 51 for the terms and conditions that apply to each of the Performance Rights.
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 conversion of performance rights
were issued as at the date of this report.
1 Resigned 10 September 2023.
2 Appointed 10 September 2023.
Blue Star Helium Limited and Controlled Entities
17
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
18
DIRECTORS’ REPORT continued
Key management personnel
Name
Neil Rinaldi
Ross Warner
Trent Spry
Gregg Peters
Peter Kondrat
Scott Fenoglio
Title
Non-Executive Chairman (from 10 September 2023)
Non-Executive Director (to 10 September 2023)
Executive Chairman (resigned 10 September 2023)
President, Commercial & Legal (from 10 September 2023)
Managing Director and Chief Executive Officer
Non-Executive Director (appointed 10 September 2023)
Chief Operating Officer
Chief Financial Officer
Blue Star Helium Limited and Controlled Entities
19
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.
Salary fees
and leave
$
Fixed
STI
Incentive
Bonus
$
Superannuation
$
Payments
$
LTI
Security Based
Payments
$
Fixed %
$
Total Proportion of Remuneration
Non-Executive Director
Neil Rinaldi
Gregg Peters5
Total Non-Executive Directors
Executive Directors
Ross Warner6
Trent Spry
Total Executive Directors
Year
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
91,000
60,000
18,500
-
109,500
60,000
300,704
310,930
324,014
314,824
624,718
625,754
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30,391
26,914
30,391
26,914
60,782
53,828
5,000
-
-
-
5,000
-
21,786
-
21,786
-
43,572
-
(89,465)3
243,0654
225,000
-
135,535
243,065
6,535
303,065
243,500
-
250,035
303,065
(268,395)3
729,195
(436,142) 3
1,184,942
(704,537)
1,914,137
84,486
1,067,039
(59,951)
1,526,680
24,535
2,593,719
1,392%
20%
8%
-
44%
20%
392%
32%
791%
22%
3,696%
26%
STI
%
77%
-
-
-
2%
-
26%
-
36%
-
176%
-
LTI
%
(1369%)
80%
92%
-
54%
80%
(318%)
68%
(727%)
78%
(2872%)
74%
3 Resulting from reversal of valuation of tranche 1-2 unlisted performance rights expiring 7 January 2024.
4 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.
5 Appointed 10 September 2023.
6 Resigned 10 September 2023 as Executive Chairman, appointed as President, Commercial & Legal from 10 September 2023.
Blue Star Helium Limited and Controlled Entities
20
DIRECTORS’ REPORT continued
2. Key management personnel remuneration (continued)
Fixed
STI
LTI
Total
Proportion of
Remuneration
Fixed
%
STI
%
$
LTI
%
187,054
369,880
210,015
329,227
397,069
699,107
671,639
3,595,891
20%
23%
145% 12%
-
129% 11%
-
137% 11%
21%
-
0% 13%
-
25%
(57%)
77%
(40%)
80%
(48%)
79%
(113%)
75%
Key Management Personnel
Peter Kondrat
Scott Fenoglio
Total Key Management Personnel
Total Directors & Key Management Personnel
Salary fees
and leave
$
270,986
83,366
270,986
65,674
541,972
149,040
1,276,190
834,794
Year
2023
2022
2023
2022
2023
2022
2023
2022
Bonus
$
Superannuation
$
Payments
$
Incentive
-
-
-
-
-
-
-
-
-
-
-
-
-
-
60,782
53,828
22,582
-
22,582
-
45,164
-
93,736
-
Security
Based
Payments
$
(106,514) 3
286,5142
(83,553) 3
263,5532
(190,067)
550,067
(759,069)
2,707,269
Blue Star Helium Limited and Controlled Entities
21
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 Non-Executive Directors do not have a service agreement.
The Executive Director entered into a service agreement 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 President, Commercial & Legal, entered into a service agreement with effect on the
following terms:
Salary (including fees of $261,432 per annum (excluding superannuation or similar
contributions).
The Company will make contributions to the President’s, Commercial & Legal
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 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 AU$264,243 (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
22
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
Neil
Rinaldi
Directly
Indirectly
Ross
Warner7
Directly
Indirectly
Trent
Spry
Directly
Indirectly
Gregg
Peters8
Directly
Indirectly
Peter
Kondrat
Directly
Indirectly
Scott
Fenoglio
Directly
Indirectly
Total
No. Shares
Held at 31
December
2022
Share
Based
Payments
Exercise of
Options
Other
Changes
No. Shares
Held at 31
December
2023
No. Shares
Held at Date
of this Report
-
1,000,000
37,000,000
2,000,000
22,000,000
3,000,000
-
400
-
-
-
-
65,000,400
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,000,000
-
2,000,000
-
2,000,000
(8,432,752)
587,661
28,567,248
2,587,661
11,411,849
2,587,661
(3,000,000)
3,000,000
19,000,000
6,000,000
11,601,658
6,000,000
-
-
-
-
-
400
-
-
-
400
-
-
-
-
(6,845,091) 58,155,309
-
-
-
-
33,601,568
7 Resigned 10 September 2023 as Executive Chairman, appointed as President, Commercial & Legal from 10
September 2023.
8 Appointed 10 September 2023.
Blue Star Helium Limited and Controlled Entities
23
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
Management
Personnel
Neil Rinaldi
Directly
Indirectly
Ross Warner9
Directly
Indirectly
Trent Spry
Directly
Indirectly
Gregg Peters10
Directly
Indirectly
Peter Kondrat
Directly
Indirectly
Scott Fenoglio
Directly
Indirectly
Total
No.
Options
Held at 31
December
2022
Share
Based
Payments
Exercise
of
Options
Other
Changes
No.
Options
Held at 31
December
2023
No.
Options
Held at
Date of this
Report
-
-
-
-
-
-
-
-
-
-
-
-
- 9,000,00011
-
-
N/A
N/A
N/A
N/A
-
-
-
-
-
9,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,000,000
-
9,000,000
-
-
-
-
-
-
-
9,000,000
-
-
9,000,000
9 Resigned 10 September 2023 as Executive Chairman, appointed as President, Commercial & Legal from 10
September 2023.
10 Appointed 10 September 2023.
11 Refer to Note 15 for details of valuation.
Blue Star Helium Limited and Controlled Entities
24
DIRECTORS’ REPORT continued
Performance Rights held by Key Management Personnel
Director / Key
Management
Personnel
Neil Rinaldi
Directly
Indirectly
Ross Warner13
Directly
Indirectly
Trent Spry
Directly
Indirectly
Gregg Peters14
Directly
Indirectly
Peter Kondrat
Directly
Indirectly
Scott Fenoglio
Directly
Indirectly
Total
No.
Performance
Rights Held at
31 December
2022
8,000,000
-
24,000,000
-
39,000,000
-
-
-
10,000,000
-
10,000,000
-
91,000,000
Share
Based
Payments
Conversion of
Performance
Rights
Other
Changes
No.
Performance
Rights Held at
31 December
2023
No.
Performance
Rights Held at
Date of this
Report
No.
Unvested
at 31
December
2023
Fair Value of
Grant
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,000,000
-
4,800,000
-
8,000,000
-
$243,06512
-
24,000,000
-
14,400,000 24,000,000
-
-
$729,19512
-
39,000,000
-
23,400,000 39,000,000
-
-
$1,184,94212
-
-
-
-
-
-
-
-
-
10,000,000
-
6,000,000 10,000,000
-
-
$286,51412
-
10,000,000
-
91,000,000
10,000,000 10,000,000
-
58,600,000 91,000,000
-
$263,55312
-
$2,707,269
12 Valued during FY22.
13 Resigned 10 September 2023 as Executive Chairman, appointed as President, Commercial & Legal from 10
September 2023.
14 Appointed 10 September 2023.
Blue Star Helium Limited and Controlled Entities
25
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
1
2
3
4
5
Vest and be convertible upon:
(A)
the Company publicly reporting two (2)
independently
helium
discoveries; and
the Company’s achieving a 20-day VWAP
of $0.10 or more,
certified
(B)
within 18 months after issue of the performance
right
Vest and be convertible upon the Company
publicly reporting:
(A)
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,
(B)
within 18 months after issue of the 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
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
Number of
Performance
Rights
20,200,000
20,200,000
20,200,000
20,200,000
20,200,000
Vesting /
Expiry
Date
Directors,
COO &
Employee:
07-Jan-24
CFO: 18-
May-24
Directors,
COO &
Employee:
07-Jan-24
CFO: 18-
May-24
Directors,
COO &
Employee:
07-Jul-24
CFO: 18-
Nov-24
Directors,
COO &
Employee:
07-Jul-24
CFO: 18-
Nov-24
Directors,
COO &
Employee:
07-Jan-25
CFO: 18-
May-25
Total
101,000,000
Transactions with related parties
During the reporting year, there were no related party transactions.
End of Remuneration Report
Blue Star Helium Limited and Controlled Entities
26
DIRECTORS’ REPORT continued
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 other than the following:
Expiry of 18,200,000 Tranche 1 and 18,200,000 Tranche 2 performance rights on 7
January 2024.
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
There are no proceedings.
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 2023 are $1,000 (2022: $3,600).
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a)
of the Corporation Act 2001.
Blue Star Helium Limited and Controlled Entities
27
DIRECTORS’ REPORT continued
Signed in accordance on behalf of the Directors.
____________________
Trent Spry
Managing Director and Chief Executive Officer
28 March 2024
Blue Star Helium Limited and Controlled Entities
28
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
29
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
28 March 2024
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 2023, 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 2023
Note
Consolidated
Entity
31 December
2023
$
Consolidated
Entity
31 December
2022
$
Revenue
Cost of goods sold
Gross profit / (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
8,006
105,457
113,463
60,941
(1,334,046)
(372,032)
(86,867)
(1,707,037)
639,069
(321,641)
(117,509)
(3,125,659)
-
12,327
-
12,327
27,509
(206,580)
(1,570,853)
(182,807)
(753,783)
(2,707,269)
(455,262)
(180,027)
(6,016,745)
-
Net loss for the year from operations
(3,125,659)
(6,016,745)
Other comprehensive income
Exchange differences on translation of
foreign entities
(21,421)
133,481
Total comprehensive loss for the year
(3,147,080)
(5,883,264)
Basic and diluted loss per share (cents)
6
(0.19)c
(0.38)c
The accompanying notes form part of these financial statements.
Blue Star Helium Limited and Controlled Entities
31
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
Note
Consolidated Entity
31 December 2023
$
Consolidated Entity
31 December 2022
$
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
6,869,070
58,799
402,875
6,824,205
25,855
140,971
7,330,744
6,991,031
142,398
931,718
14,098,072
143,365
13,210
12,459,717
15,172,188
12,616,292
22,502,932
19,607,323
330,432
218,107
548,539
34,646
34,646
643,650
228,727
872,377
5,665
5,665
583,185
878,042
21,919,747
18,729,281
33,411,947
3,478,378
(14,970,578)
26,435,332
4,138,868
(11,844,919)
21,919,747
18,729,281
The accompanying notes form part of these financial statements.
Blue Star Helium Limited and Controlled Entities
32
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Consolidated Entity
Contributed
Equity
$
Foreign
Currency
Translation
Reserve
$
Share
Option
Reserve
$
Share
Based
Payments
Reserve
$
Accumulated
Losses
Total
$
$
Balance at 1 January
2023
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
(net)
Balance at 31
December 2023
Consolidated Entity
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
26,435,332
-
54,038
-
1,377,561
-
2,707,269
-
(11,844,919)
(3,125,659)
18,729,281
(3,125,659)
-
-
(21,421)
(21,421)
7,478,000
(501,385)
-
-
-
-
-
-
-
-
-
-
-
-
-
(639,069)
-
(21,421)
(3,125,659)
(3,147,080)
-
-
-
7,478,000
(501,385)
(639,069)
33,411,947
32,617
1,377,561
2,068,200
(14,970,578)
21,919,747
Contributed
Equity
$
Foreign
Currency
Translation
Reserve
$
Share
Option
Reserve
$
Share
Based
Payments
Reserve
$
26,439,763
-
(79,443)
-
1,377,561
-
-
-
133,481
133,481
-
(4,431)
-
-
-
-
-
-
-
-
-
Accumulated
Losses
Total
$
$
(5,828,174)
(6,016,745)
21,909,707
(6,016,745)
-
133,481
(6,016,745)
(5,883,264)
-
-
-
-
-
-
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
The accompanying notes form part of these financial statements.
Blue Star Helium Limited and Controlled Entities
33
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Note
Consolidated
Entity
31 December
2023
$
Consolidated
Entity
31 December
2022
$
8,006
(3,268,349)
60,941
(52)
12,327
(2,189,579)
27,509
(3)
Net cash (used in) operating activities
7
(3,199,454)
(2,149,746)
Cash flows from investing activities
Payment for plant and equipment
Exploration, evaluation and development
expenditure (including licenses acquisition costs)
Proceeds from disposal of leases
(926,477)
(14,400)
(2,656,527)
20,285
(6,684,935)
-
Net cash (used in) investing activities
(3,562,719)
(6,699,335)
Cash flows from financing activities
Proceeds from share issues
Payment for costs of equity issues
7,478,000
(501,385)
-
(4,431)
Net cash (used in) / from financing activities
6,976,615
(4,431)
Net (decrease) / increase in cash held
214,442
(8,853,512)
Cash and cash equivalents at beginning of the
year
Foreign exchange effect on cash and cash
equivalents
6,824,205
15,632,345
(169,577)
45,372
Cash and cash equivalents at the end of the year
7
6,869,070
6,824,205
The accompanying notes form part of these financial statements.
Blue Star Helium Limited and Controlled Entities
34
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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 2023 (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 28 March 2024 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 2023 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
Reporting Standards (IFRS) as issued by the International Accounting Standard Board.
b. Going concern
For the year ended 31 December 2023 the consolidated entity incurred a total comprehensive
loss of $3,147,080 (31 December 2022: total comprehensive loss of $5,883,264) and had
working capital of $6,782,205 (31 December 2022: $6,118,654). 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 $6,869,070
(31 December 2022: $6,824,205). On this basis, the Directors consider there are reasonable
grounds to believe that the Consolidated Entity will be able to pay its debts as and when they
become due and payable, and therefore the going concern basis of preparation is considered
to be appropriate for the 31 December 2023 year financial report. In the event that the
Consolidated Entity is not able to continue as a going concern, it may be required to realise
assets and extinguish liabilities other than in the normal course of business and perhaps at
amounts different to those stated in its financial report.
c. Principles of consolidation
The consolidated financial statements comprise the financial statements of Blue Star Helium
Limited and its subsidiaries during the year ended 31 December 2023 (“the Consolidated
Entity"). The financial statements of the subsidiaries are prepared for the same reporting year
as the parent company, using consistent accounting policies. In preparing the consolidated
financial statements, all inter-company balances and transactions, income and expenses and
profit and losses resulting from intra-group transactions have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is transferred to the
Consolidated Entity and cease to be consolidated from the date on which control is
transferred out of the Consolidated Entity.
Blue Star Helium Limited and Controlled Entities
35
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
2.
Accounting policies (continued)
d. Foreign currency translation
Both the functional and presentation currency of Blue Star Helium Limited and its Australian
subsidiaries is in Australian dollars ($). 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 recorded in the
functional currency by applying the exchange ruling at the average monthly rate. 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
(dissolved during the year), BNL (Enterprise) Inc and Las Animas Leasing Inc is United States
dollars (USD). As at the reporting date the assets and liabilities of these subsidiaries 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 monthly
exchange rate. The exchange differences arising on the translation are taken directly to the
consolidated statement of profit or loss and other comprehensive income. 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.
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.
Lease accounting
On 30 June 2023 the Company announced that it had entered into a Gas Processing
Services Agreement with a third-party midstream company based in the US, IACX Energy
LLC. The Company sought out the opinion of a third-party consulting firm as to the
accounting treatment for this agreement. It was advised that this agreement should be
accounted for as a lease in accordance with AASB 16 requirements once services had
commenced.
Blue Star Helium Limited and Controlled Entities
36
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
2.
Accounting policies (continued)
This agreement is not recorded as a lease in the financial statements for the fiscal year
2023 as service have not commenced. It does however represent a future obligation for
the Company and will be recorded as such once service commences.
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.
Share based payment transactions
The Company measures the cost of equity-settled transactions with employees by
reference to the fair value of the equity instruments at the date at which they are granted.
The fair value of the options issued are determined by using the Black-Scholes model
taking into account the terms and conditions upon which the instruments were granted.
The accounting estimates and assumptions relating to equity-settled share-based
payments would have no impact on the carrying amounts of assets and liabilities within
the next annual reporting period but may impact profit or loss and equity.
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.
AASB 2020-3: Amendments to Australian Accounting Standards – Annual Improvements
2018–2020 and Other Amendments
The Entity adopted AASB 2020-3 which makes some small amendments to a number of
standards including the following: AASB 1, AASB 3, AASB 9, AASB 116, AASB 137 and AASB
141. The adoption of the amendment did not have a material impact on the financial
statements.
AASB 2021-7a: Amendments to Australian Accounting Standards – Effective Date of
Amendments to AASB 10 and AASB 128 and Editorial Corrections
AASB 2020-7a makes various editorial corrections to a number of standards effective for
reporting periods beginning on or after 1 January 2022. The adoption of the amendment did
not have a material impact on the financial statements.
Blue Star Helium Limited and Controlled Entities
37
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
3.
Revenue and other income
Royalty
Interest income
Consolidated
Entity
31 December
2023
$
Consolidated
Entity
31 December
2022
$
8,006
60,941
68,947
12,327
27,509
39,836
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 and gas 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 costs
105,457
105,457
-
-
Blue Star Helium Limited and Controlled Entities
38
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
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
Loss from continuing operations before income tax
expense
Tax at the Australian tax rate of 30% (2022: 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
2023
$
Consolidated
Entity
31 December
2022
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,125,659)
(937,698)
(6,016,745)
(1,805,024)
727,550
189,666
20,482
-
-
-
0%
1,315,323
467,727
21,974
-
-
-
0%
Blue Star Helium Limited and Controlled Entities
39
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
5.
Income tax (continued)
Unrecognised deferred tax asset
Tax losses- revenue
Expenses taken into equity
Other temporary differences
Temporary differences – tax capital losses
Off-set of deferred tax liabilities
Consolidated
Entity
31 December
2023
$
Consolidated
Entity
31 December
2022
$
16,004,279
1,278
76,996
1,250
16,083,803
(1,164)
16,137,619
-
43,163
1,250
16,182,032
-
Net deferred tax assets unrecognised
16,082,639
16,182,032
The carried forward tax losses in the US total $4,857,395 (US$3,308,809) (31 December 2022:
$1,047,430 (US$708,686)).
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
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.
Blue Star Helium Limited and Controlled Entities
40
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
5.
Income tax (continued)
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.
Consolidated
Entity
31 December
2023
$
Consolidated
Entity
31 December
2022
$
6.
Basic and diluted loss per share
The following reflects the income and share data used in the basic and diluted loss per share
computations:
Net (loss) attributable to ordinary equity holders of the
parent (used in calculating basic and diluted loss per
share)
(3,125,659)
(6,016,745)
Consolidated
Entity
31 December
2023
No.
Consolidated
Entity
31 December
2022
No.
Weighted average number of ordinary shares
outstanding during the year used in calculating basic
and dilutive EPS
1,652,347,782
1,586,170,058
Blue Star Helium Limited and Controlled Entities
41
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
6.
Basic and diluted loss per share
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.
Consolidated
Entity
31 December
2023
$
Consolidated
Entity
31 December
2022
$
7.
Cash and cash equivalents
Cash at bank and on hand
6,869,070
6,824,205
6,869,070
6,824,205
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
Exploration expenditure
Depreciation
Share based payment
Foreign exchange
Provisions
(Increase)/Decrease in receivables and prepayments
Increase/(Decrease) in creditors and payables
Increase/(Decrease) in provisions
(3,125,659)
477,490
9,740
(639,069)
225,534
86,867
(294,849)
122,199
(61,707)
(6,016,745)
1,570,853
4,211
2,707,269
(558,095)
142,670
5,937
(24,388)
18,542
Net cash (outflows) from operating activities
(3,199,454)
(2,149,746)
Blue Star Helium Limited and Controlled Entities
42
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
8.
Trade and other receivables
Other receivables
GST refunds
Consolidated
Entity
31 December
2023
$
Consolidated
Entity
31 December
2022
$
1,726
57,073
58,799
-
25,855
25,855
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.
9.
Other assets
Current
Inventory15
Prepaid expenses
Non-Current
Bonds
10.
Plant and equipment
Computer equipment and asset under construction
- 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
216,440
186,435
-
140,971
402,875
140,971
142,398
143,365
142,398
143,365
953,923
(22,205)
931,718
13,210
926,477
(9,740)
1,771
931,718
27,499
(14,289)
13,210
3,125
14,400
(4,211)
(104)
13,210
15 Inventory relates to spare parts and other sundries to be used in future drilling programs.
Blue Star Helium Limited and Controlled Entities
43
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
10.
Plant and equipment (continued)
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%.
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
2023
$
Consolidated
Entity
31 December
2022
$
11.
Exploration and evaluation assets
Capitalised expenditure
- At cost
- Accumulated amortisation and impairment
-
Exchange difference translation
14,176,254
-
(78,182)
13,159,073
-
(699,356)
14,098,072
12,459,717
Blue Star Helium Limited and Controlled Entities
44
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
11.
Exploration and evaluation assets (continued)
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
Consolidated
Entity
31 December
2023
$
Consolidated
Entity
31 December
2022
$
12,459,717
6,768,833
2,086,298
(369,761)
(78,182)
7,961,093
(1,570,853)
(699,356)
Balance at end of year
14,098,072
12,459,717
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 2024 and beyond. Currently Blue Star Helium Limited has
expended certain funds in connection with acquiring and exploring the lands for helium. As at
31 December 2023 there was a total of $14,098,072 (31 December 2022: $12,459,717) 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.
Blue Star Helium Limited and Controlled Entities
45
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
11.
Exploration and evaluation assets (continued)
The recoverability of the carrying amount of the exploration and evaluation assets is dependent
on successful development and commercial exploitation, or alternatively, sale of the respective
areas of interest.
Impairment
At each reporting date, the Consolidated Entity assesses whether there is any indication that an
asset may be impaired. If any such indication of impairment exists, or when annual impairment
testing for an asset is required, the Consolidated Entity makes a formal estimate of the asset's
recoverable amount. An asset's recoverable amount is the higher of fair value less costs to sell
and its value in use. It is determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or groups of assets and the
asset's value in use cannot be estimated to be close to its fair value. In such cases, the asset is
tested for impairment as part of the cash-generating unit to which it belongs. When the carrying
amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-
generating unit is considered impaired and is written down to its recoverable amount.
In assessing value in use, an assessment is made as to whether the Company intends to make
substantive expenditures on the asset and the carrying amount of the assets is assessed against
the market capitalisation of the Company. Impairment losses relating to continuing operations
are recognised in those expense categories consistent with the function of the impaired asset
unless the asset is carried at a revalued amount (in which case the impairment loss is treated as
a revaluation decrease). Where an impairment loss subsequently reverses, the carrying amount
of the asset (cash-generating unit) is increased to the revised estimate of recoverable amount,
but only to the extent that the increased carrying amount does not exceed the carrying amount
that would have been determined had no impairment loss been recognised for the asset (cash-
generating unit).
Consolidated
Entity
31 December
2023
$
Consolidated
Entity
31 December
2022
$
12.
Trade and other payables
Trade creditors and other accruals
330,432
643,650
330,432
643,650
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.
Blue Star Helium Limited and Controlled Entities
46
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
13.
Provisions
Current
Employee benefits
Restoration
Non-Current
Employee benefits
Restoration
Reconciliation of the movements in the restoration
provision:
Balance at start of year
Additions during the year
Utilisation of provision
Reversal of provision
Foreign exchange movements
Consolidated
Entity
31 December
2023
$
Consolidated
Entity
31 December
2022
$
170,856
47,251
94,885
133,842
218,107
228,727
9,761
24,885
34,646
133,842
24,884
(86,590)
-
-
5,665
-
5,665
184,071
133,842
(119,927)
(70,789)
6,645
Balance at end of year
72,136
133,842
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
facilities and equipment required or
intended to be removed. These provisions have been
created based on the Company’s estimate. These estimates are reviewed regularly to consider
any material changes to the assumptions. However actual decommissioning costs will
ultimately depend upon future market prices for the necessary decommissioning works
required which will reflect market conditions at the relevant time. These estimates of
restoration are subject to significant estimates and assumptions which are outlined in the
accounting policy note.
Blue Star Helium Limited and Controlled Entities
47
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
13.
Provisions (continued)
Accounting policy:
Provisions are recognised when the Consolidated Entity has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation and a reliable estimate can be made
of the amount of the obligation. If the effect of the time value of money is material, provisions
are discounted using a pre-tax rate that reflects the risks specific to the liability. When
discounting is used, the increase in the provision due to the passage of time is recognised as
finance costs. Liabilities for wages and salaries, and other short-term benefits expected to be
settled within 12 months of the reporting date are recognised in current provisions in respect of
employees' services up to the reporting date. They are measured at the amounts expected to be
paid when the liabilities are settled.
Restoration provision
The Consolidated Entity records the present value of the estimated cost of legal and constructive
obligations to restore operating locations in the year in which the obligation arises. The nature
of restoration activities includes the removal of facilities, abandonment of wells and restoration
of affected areas. Typically, the obligation arises when the asset is installed at the production
location. When the liability is initially recorded, the estimated cost is capitalised by increasing
the carrying amount of the related oil and gas properties. Costs incurred that relate to an existing
condition caused by past operations, and do not have future economic benefit, are expensed.
Consolidated Entity
31 December 2023
Consolidated Entity
31 December 2022
No.
$
No.
$
14.
Contributed equity
Balance at beginning of year
Share issue from placement:
23-Oct-23
Share issue from share
purchase plan: 23-Nov-23
Share issue costs
1,586,170,058 26,435,332
1,586,170,058
26,439,763
333,333,334
7,000,000
22,761,889
-
478,000
(501,385)
-
-
-
-
-
(4,431)
Balance at end of year
1,942,265,281 33,411,947
1,586,170,058
26,435,332
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
48
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
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 $6,869,070 (31 December 2022: $6,824,205)
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
Consolidated
Entity
31 December
2023
$
Consolidated
Entity
31 December
2022
$
54,038
(21,421)
(79,443)
133,481
32,617
54,038
1,377,561
1,377,561
Balance at end of period
1,377,561
1,377,561
Share based payments
Balance at beginning of period
Options granted
Performance rights granted16
Revaluation of performance rights
2,707,269
225,000
160,000
(1,024,069)
-
-
2,707,269
-
Balance at end of period
2,068,200
2,707,269
16 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. A total of 10,000,000 tranche 1-5 unlisted performance rights expiring
7 January 2024 to 7 January 2025 were granted to an employee on 27 October 2023. 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, Scott Fenoglio and the employee were issued
using the Company’s ASX LR 7.1 (15%) capacity.
Blue Star Helium Limited and Controlled Entities
49
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
15.
Reserves (continued)
Total reserves
Unlisted options
Balance at beginning of period
Options granted
Options expired
Consolidated
Entity
31 December
2023
$
Consolidated
Entity
31 December
2022
$
3,478,378
4,138,868
Consolidated
Entity
31 December
2023
No.
Consolidated
Entity
31 December
2022
No.
34,389,452
9,000,000
(17,194,726)
34,389,452
-
-
Balance at end of period
26,194,726
34,389,452
Unlisted performance rights
Balance at beginning of period
Performance rights granted
91,000,000
10,000,000
-
91,000,000
Balance at end of period
101,000,000
91,000,000
Blue Star Helium Limited and Controlled Entities
50
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
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
Employee Performance Rights
71,000,000
$Nil
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
10,000,000
$Nil
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
10,000,000
$Nil
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
10,000,000
$Nil
Varies between 7 January 2024 & 7
January 2025
27 October 2023
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
Blue Star Helium Limited and Controlled Entities
51
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
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 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
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 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
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 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
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 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
$0.03
2.725%
85%
$1,363,200 (Tranche 1 is not going to
vest and the fair value has been
adjusted to reflect updated
probabilities)
2.725%
85%
$180,000 (Tranche 2 is not going to
vest and the fair value has been
adjusted to reflect updated
probabilities)
$0.03
3.053%
85%
$0.02
4.282%
80%
$180,000
$120,000
Blue Star Helium Limited and Controlled Entities
52
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
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
$0.112
04-Nov-24
04-Nov-21
N/A
$0.05
0.89%
164%
$0.039
Director Options
9,000,000
$0.028
11-Sep-27
10-Sep-23
3,000,000 – 10-Sep-24
3,000,000 – 10-Sep-25
3,000,000 – 10-Sep-26
$0.025
3.85%
251%
$0.030
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
53
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
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 2023 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 2023 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 2023 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
54
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
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
2023
$
Consolidated
Entity
31 December
2022
$
(330,432)
-
-
(643,650)
-
-
(330,432)
(643,650)
The following table discloses the contractual maturity analysis of financial assets and liabilities
as at the end of the financial year:
31 December 2023
Financial assets
Cash and cash equivalents
Trade and other receivables
Deposits
Financial liabilities
Trade and other payables
Net inflow / (outflow)
<6
Months
6-12
Months
1-5
Years >5 Years
Total
6,869,070
58,799
-
6,927,869
330,432
330,432
6,597,437
-
-
-
-
- 142,398
- 142,398
-
-
-
-
- 142,398
- 6,869,070
58,799
-
142,398
-
- 7,070,267
-
330,432
330,432
-
- 6,739,835
Blue Star Helium Limited and Controlled Entities
55
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
16.
Financial risk management objectives and policies (continued)
<6
Months
6-12
Months
1-5
Years >5 Years
Total
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
31 December 2022
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 2023 the only trade receivables and other receivable
is for GST receivable and other receivables. The Consolidated Entity does not have any
significant credit risk exposure to any single counterparty or any group of counterparties
having similar characteristics. The carrying amount of financial assets recorded in the
financial statements, net of any allowance for impairment losses, represents the
Consolidated Entity’s maximum exposure to credit risk.
Blue Star Helium Limited and Controlled Entities
56
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
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 2023 and 31 December 2022 external sales
of gas, condensate & NGL’s were made to customers solely located in the USA.
31 December 2023
Segment revenue
Segment assets
Segment liabilities
31 December 2022
Segment revenue
Segment assets
Segment liabilities
US
Corporate
Total
8,006
15,358,306
(247,923)
60,941
7,144,626
(335,262)
12,327
12,889,870
(601,546)
27,509
6,717,453
(276,496)
68,947
22,502,932
(583,185)
39,836
19,607,323
(878,042)
Blue Star Helium Limited and Controlled Entities
57
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
Consolidated
Entity
31 December
2023
$
Consolidated
Entity
31 December
2022
$
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
51,495
50,469
51,495
50,469
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 2023 were $1,000
(2022: $3,600).
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
Neil Rinaldi
Ross Warner
Trent Spry
Gregg Peters
Peter Kondrat
Scott Fenoglio
Title
Non-Executive Chairman (from 10 September 2023)
Non-Executive Director (to 10 September 2023)
Executive Chairman (resigned 10 September 2023)
President, Commercial & Legal (from 10 September 2023)
Managing Director and Chief Executive Officer
Non-Executive Director (appointed 10 September 2023)
Chief Operating Officer
Chief Financial Officer
Blue Star Helium Limited and Controlled Entities
58
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
19.
Director and KMP disclosures (continued)
Compensation by Category: Key Management Personnel
Short-Term (including bonus)
Post-Employment
Long-Term
Share-based Payments
Consolidated
Entity
31 December
2023
$
Consolidated
Entity
31 December
2022
$
1,369,926
60,782
-
(759,069)
834,794
53,828
-
2,707,269
671,639
3,595,891
During the year ended 31 December 2023 and the year ended 31 December 2022 there were no
loans provided to Key Management Personnel. There was an amount of $Nil accrued at 31
December 2023 (2022: $9,027) relating to business expenses incurred by Directors. There were
no transactions with Key Management Personnel other than those described above. At 31
December 2023 and 31 December 2022 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
2023
$
Company
31 December
2022
$
6,236,138
4,247
6,240,385
289,236
9,762
298,998
6,704,244
876,998
7,581,242
345,465
5,665
351,130
5,941,387
7,230,112
33,411,947
3,445,761
(30,916,321)
5,941,387
26,435,332
4,084,830
(23,290,050)
7,230,112
(7,626,271)
(7,626,271)
(11,514,644)
(11,514,644)
Blue Star Helium Limited and Controlled Entities
59
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
20.
Parent Entity information (continued)
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 other than the following:
Expiry of 18,200,000 Tranche 1 and 18,200,000 Tranche 2 performance rights on 7 January
2024.
Consolidated
Entity
31 December
2023
$
Consolidated
Entity
31 December
2022
$
Commitments and contingencies
22.
The Consolidated Entity is planning to undertake a drilling programme later this year but as at 31
December 2023 it is not formally committed. The material commitments relating to operating and
exploration expenditure include leasehold and surface rental payments and monthly service
payments for the Helium Recovery Unit:
< 1 year
1 – 5 years
> 5 years
1,846,145
5,360,603
536,828
392,844
846,629
5,247
7,743,576
1,244,720
On 30 June 2023 the Company announced that it had entered into a Gas Processing Services
Agreement with a third-party midstream company based in the US, IACX Energy LLC. The Company
sought out the opinion of a third-party consulting firm as to the accounting treatment for this
agreement. It was advised that this agreement should be accounted for as a lease in accordance
with AASB 16 requirements once services had commenced. This agreement is not recorded as a
lease in the financial statements for the fiscal year 2023 as service have not commenced. It does
however represent a future obligation for the company and will be recorded as such once service
commences.
a. Contingent assets
There are no contingent assets as at 31 December 2023.
b. Contingent liabilities
There are no contingent liabilities as at 31 December 2023.
Blue Star Helium Limited and Controlled Entities
60
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 DECEMBER 2023
23.
Interests in controlled entities
Company Name
Place of
Incorporation
31 December
2023
% Ownership
31 December
2022
% 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%
Blue Star Helium Limited and Controlled Entities
61
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
in the
Star Helium Limited, and the remuneration disclosures contained
Remuneration Report for the year ended 31 December 2023 are in accordance with
the Corporations Act 2001, including:
o giving a true and fair view of the financial position as at 31 December 2023
and the performance for the year ended on that date of the Consolidated
Entity; and
o complying with Accounting Standards (including Australian Accounting
Interpretations) and the Corporations Regulations 2001; and
the financial statements and notes also comply with International Financial Reporting
Standards as disclosed in Note 1; 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
____________________
Trent Spry
Managing Director and Chief Executive Officer
28 March 2024
Blue Star Helium Limited and Controlled Entities
62
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 2023, 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 2023 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.
Material Uncertainty Relating to Going Concern
Without modifying our audit opinion expressed above, attention is drawn to the following matter.
As referred to in Note 2(b) to the financial statements, the consolidated financial statements have been prepared
on a going concern basis. At 31 December 2023, the Group had cash and cash equivalents of $6,869,070 and
incurred a loss after income tax of $3,125,659
The ability of the Group to continue as a going concern and meet its planned exploration, administration and
other commitments is dependent upon the Group raising further working capital and/or successfully exploiting
its mineral assets. In the event that the Group is not successful in raising further equity or successfully exploiting
Liability limited by a scheme approved under Professional Standards Legislation
Stantons Is a member of the Russell
Bedford International network of firms
its mineral assets, the Group may not be able to meet its liabilities as and when they fall due and the realisable
value of the Group’s current and non-current assets may be significantly less than book values.
Key Audit Matters
In addition to the matter described in the Material Uncertainty Related to Going Concern section, 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 2023, Exploration and
Evaluation Assets totalled $14,098,072 (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
of
capitalised representing 93% of total assets;
expenditure
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 on a
sample basis the ownership of the relevant
licences for mineral resources to government
registries
third-party
documentation;
relevant
and
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, 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
Lease with IACX Energy LLC
As disclosed in Note 22 of the financial report, the
company agreed during the year to lease a helium
recovery plant from IACX Energy LLC.
The application of AASB 16 (“Leases”) required
management to assess each active contract to
which the company is party to and to identify
whether it is, or it contains, a lease. Further,
management was also
to make
significant judgements in the initial accounting for,
and subsequently measurement of, these leases,
including:
required
➢ determining the commencement date of
the lease and its term;
➢ establishing the lease term including
any renewal options that are reasonably
certain to be elected;
➢ the evaluation of subsequent contract
modifications; and
➢ determining the incremental borrowing
rate to be applied to historic leases.
We considered this area to be a key audit matter
given the magnitude of the amounts involved, the
complex nature of these transactions and the
significant judgements in the application of lease
accounting.
Inter alia, our audit procedures included the
following:
i. Examining the contract with IACX Energy
LLC;
ii. Reviewing and assessing the independent
external
by
management from their accounting expert on
the application of the lease contract under
AASB 16 and its commencement date;
accounting
received
the
iii. Reviewing and assessing
revised
independent external accounting received by
management from their accounting expert on
the accounting implications under AASB 16 of
the delayed commence of helium production;
and
iv. Considering the adequacy of the financial
report disclosures contained in Note 22 in
relation to AASB 16.
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 2023 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 18 to 26 of the directors’ report for the year ended
31 December 2023.
In our opinion, the Remuneration Report of Blue Star Helium Limited for the year ended 31 December 2023
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
28 March 2024
SHAREHOLDER INFORMATION
As at 22 March 2024
Issued Securities
Fully paid ordinary shares
$0.112 unlisted options expiring 04-Nov-
24
$0.028 unlisted options expiring 11-Sep-
27
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
1,942,265,281
Unlisted
-
Total
1,942,265,281
-
-
-
-
-
-
17,194,726
17,194,726
9,000,000
9,000,000
36,400,000
36,400,000
18,200,000
18,200,000
4,000,000
4,000,000
4,000,000
4,000,000
-
1,942,265,281
2,000,000
90,794,726
2,000,000
2,033,060,007
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%
0.05%
3.72%
96.22%
100.00%
41,793
107,108
917,545
72,166,627
1,869,032,208
1,942,265,281
172
43
101
1,585
1,253
3,154
Blue Star Helium Limited and Controlled Entities
68
SHAREHOLDER INFORMATION
Top 20 Listed Ordinary Fully Paid Shareholders
Rank
Shareholder
BINVID PTY LTD
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