ABN 17 117 227 086
ANNUAL REPORT
For the year ended 31 December 2020
Directors
Glenn Whiddon
Alan Stein Non-Executive Director
Non-Executive Director
Brett Lawrence
Chairman
Company Secretary
Mark Freeman
Registered Office – Perth Australia
Canadian Office
Suite 4, 246-250 Railway Parade
West Leederville WA 6007
Telephone:
Facsimile:
Email:
Website:
+61 (0) 8 6500 3270
+61 (0) 8 6500 3275
info@calimaenergy.com
www.calimaenergy.com
2500,639 5 Ave Calgary, A
B T2P 0M9 Canada
Telephone: +1 403 389 1226
Canadian Bankers
Royal Bank of Canada
Bankers Hall
339 8 Ave SW,
Calgary, AB T2P 1C4, Canada
Auditors
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008
Australian Bankers
National Australia Bank
Level 14
100 St Georges Tce
Perth WA 6000
Share registry
Computershare Investor Services Pty Ltd
Level 11, 172 St. Georges Terrace Perth WA 6000
Telephone:
Facsimile:
+61 (0) 8 9323 2000
+61 (0) 8 9323 2033
Stock exchange listing
The Company is listed on the ASX Limited (“ASX”)
Home branch: Perth, Western Australia
CE1
ASX Code:
Contents
Chairman’s Letter
Directors’ report
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 consolidated financial statements
Directors’ declaration
Independent audit report
Stock Exchange information
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53
Chairman’s Letter
Dear Shareholders
On behalf of the directors of Calima Energy Limited (Company), it is my pleasure to present this years’ Annual Report.
Calima is pleased to be participating in a transformational combination with the Canadian energy company, Blackspur Oil Corp
(Blackspur). Blackspur has been built from the ground up by a team of young, energetic oil and gas professionals with an impressive
track record as resource locators, and effective developers. The Blackspur team has assembled and de-risked their assets through
a combination of drilling and acquisitions over the past 8 years. The team remains dedicated to pursuing synergistic growth
opportunities across the top tier Western Canadian Sedimentary Basin and to advancing the Montney assets held by Calima in a
rising gas market.
The Blackspur team, supported by the existing Calima team, is well positioned to take advantage of strengthening fundamentals in
both oil & gas commodity markets in Canada. In addition to the first-class oil-focused assets within Blackspurs’ portfolio, our
combined team will be poised to unlock value from the Calima Montney Lands and buoyed by pending demand from the completion
of Canada’s first LNG export facility, LNG Canada, as well as the improved pipeline capacity providing increased access to US markets
and an expanding industrial base in Canada.
The junior energy sector in Canada has been starved for capital in recent years and is ripe for an active consolidator with available
capital. This merger will create a mid-tier, ASX listed company, with strong cash flow from highly economic oil assets that have been
undercapitalised in recent years. With the expertise of the Blackspur team, this combination also creates a foundation for the future
development of the massive undeveloped resource portfolio in the Montney that Calima holds. This compelling mix of portfolio
strength, strong production growth with cashflow along with Blackspurs’ experience at efficiently developing oil plays shall propel
the Company forward in parallel with rising commodity prices that we are experiencing as we enter a new cycle for oil and gas.
Finally, Blackspurs’ environmental commitment and focus on increased ESG performance provides a pathway for top quartile
performance amongst peers in the Canadian oil and gas sector. These last few months have been very exciting times for the Calima
team, and we look forward to navigating forward with all our committed shareholders, to create an entity that we can all be proud
owners of. The Blackspur acquisition has been competently executed by our phenomenal team both in Canada and Australia. I
would like to thank our Board, management, legal and commercial advisors and our brokers with their dedicated attention towards
a transaction that took the Company significant time and energy to put together during a challenging time.
Jordan Kevol, Blackspurs’ CEO, assumes the role of Managing Director of the consolidated Company. We look forward to Jordan and
his dedicated Blackspur team joining our ranks and Micheal Dobovich, our Canadian President together with Aaron Bauer will work
together to become an integrated team. We are confident that the energy sector is showing signs of an impending boom and we
expect it will deliver outstanding returns to investors over the coming years. We believe that jurisdictions like Western Canada with
proven reserves and significant infrastructure in place will outperform. All the signs point to a complete market reset with increased
demand and price rises following:
Substantial declines in global exploration;
•
• Majors investing in renewable energy;
•
Increasing US regulatory pressures
• Widespread Covid-19 inoculations;
•
•
Unprecedented fiscal stimulation; and
Low interest rates
With markets seeing an increase in oil demand we have witnessed the oil price rise from sub $40 to over US$60 per barrel and some
analysts are predicting oil above US$80/bbl. Pricing at US$60 per barrel creates significant cashflow for the new entity, however,
should US$80 oil become a reality, the impact will be incredibly positive on our future core production at Brooks and Thorsby.
Blackspurs’ low-cost oil producing assets provide recurring cash flow stream and exposure to improving oil prices, while the
significant resource base of the Calima Lands in the Montney provide upside to both improving oil and gas prices along with LNG
development in Canada. Our mission would not be possible without support of our shareholders in what has been a challenging, yet
exciting environment.
We look forward to a successful 2021 year.
Glenn Whiddon - Executive Chairman
3
Directors Report
The Directors of Calima Energy Limited (“Calima” or “the Company”) present their report, together with the financial
statements on the consolidated entity consisting of Calima Energy Limited and its controlled entities (the “Group”) for the
financial year ended 31 December 2020.
Directors
The names and details of the Company’s directors and key management personnel in office during the financial year and until
the 31 March 2021 are as follows. Directors were in office for the entire period unless otherwise stated.
G. Whiddon
A. Stein
J. Taylor
N. Hackett
B. Lawrence
Glenn Whiddon
Qualifications
Experience
Executive Chairman
Non-Executive Director
Technical Director (resigned 20 January 2020)
Independent Non-Executive Director (resigned 11 November 2020)
Non-Executive Director
Executive Chairman, appointed 2 June 2015
-
- BCom
- Mr Whiddon is based in Australia and is a significant shareholder of the Company. Mr.
Whiddon has an extensive background in equity capital markets, banking and corporate
advisory, with a specific focus on natural resources. Mr Whiddon holds a degree in
Economics and has extensive corporate and management experience. He is currently
Director of a number of Australian and international public listed companies in the
resources sector.
Interest in securities
- Direct 31,482,987 Shares, Indirect 78,240,732 shares
Directorships held in
listed entities
- Other current listed company directorships
Minrex Resources Ltd appointed 5 June 2020
Former listed company Directorships in last 3 years
Auroch Minerals Limited – resigned 31 October 2019
Fraser Range Metals Group Limited – resigned 20 June 2019
Doriemus PLC – resigned 30 July 2018
Hear Me Out Limited – appointed 11 September 2017, delisted
* Glenn Whiddon: Please note that Mr Whiddon only has a control in 888,888 shares in the indirect holdings. Mr. Whiddon does not
control the remaining indirect holdings. They are held independently of Mr. Whiddon and are only included for good corporate
governance purposes. Mr. Whiddon has no relevant interest in the indirect holdings.
Alan Stein
- Non-Executive Director appointed 25 August 2017
Qualifications
- BSc, PhD
Experience
- Dr Stein has more than 30 years’ experience in the international oil and gas industry. He
was one of the founding partners of the geoscience consultancy IKODA Limited based in
London and Perth and was the founding Managing Director of Fusion Oil & Gas plc and
Ophir Energy plc. Fusion was listed on the UK AIM market in 2000 and made several
discoveries offshore of Mauritania before being sold in 2003. In early 2004, following the
sale of Fusion, Dr Stein, together with Mr Jonathan Taylor, were one of the two founding
executive directors of Ophir Energy plc. Dr Stein held the position of Managing Director
until 2011. Ophir was involved in several discoveries in offshore Equatorial Guinea and
Tanzania, discovering more than 18 trillion cubic feet of gas.
Interest in securities:
Shares
Performance rights
Class A Options
Class B Options
-
-
-
-
Direct 24,640,526, Indirect 31,452,019
2,700,000 expire on or before 29 August 2021
3,300,000 expire on or before 25 August 2022 and exercisable @$.09
3,300,000 expire on or before 25 August 2022 and exercisable @$.12
Directorships held in
listed entities
- Other current listed company directorships - Nil
Former listed company Directorships in last 3 years - Nil
4
Brett Lawrence
- Non-Executive Director, appointed 29 October 2019
Qualifications
- MPetEng., BEng., BCom.
Experience
- Mr Brett Lawrence has 16 years of diverse experience in the oil and gas industry. Mr
Lawrence worked with Apache Energy for over eight years, performing roles in drilling
engineering, reservoir engineering, project development and commercial management
before seeking new venture opportunities with ASX listed companies.
Interest in securities
-
Indirect 7,172,681 shares
Directorships held in
listed entities
- Other current listed company directorships
Tamaska Oil and Gas Limited (ASX:TMK) - appointed 1 February 2015
Former listed company Directorships in last 3 years
Acacia Coal Ltd (ASX: AJC) - appointed 2 August 2016, resigned 20 November 2020
Neil Hackett
Non-Executive Director, resigned 11 November 2020
Qualifications
- BEcom, F.Fin
Experience
- Neil works closely with ASX boards, directors, CEO’s, government enterprises and private
boards on strategic and corporate governance requirements. Neil has project-managed
multiple corporate transactions, including public equity capital raisings, debt financing,
corporate takeovers, and business acquisitions. Neil has 25 years' ASX company
expertise.
Interest in securities
- Nil
Directorships held in
listed entities
- Other current listed company directorships
Ardiden Limited – appointed 5 June 2011
Hastings Technology Metals Limited – appointed 19 November 2018
Intelcare Ltd – Appointed 18 October 2019
Former listed company Directorships in last 3 years - Nil
Jonathan Taylor
- Non-Executive Director, resigned 20 January 2020
Qualifications
- BSc, MSc
Experience
Mr Taylor has more than 30 years’ experience in the international oil and gas industry.
He started his career with Amerada Hess in the UK before moving to Clyde Petroleum plc
where he was involved in international exploration including postings to Yemen and
Myanmar. Mr Taylor relocated to Perth in 1998 to take up the role of Technical Director
at Fusion Oil & Gas plc, which built an extensive portfolio focused on Northwest and West
Africa. Fusion was listed on the UK AIM market in 2000 and made several discoveries
offshore of Mauritania before being sold in 2003. Following the sale of Fusion, Mr Taylor,
together with Dr Alan Stein, was one of the two founding executive directors of Ophir
Energy plc serving initially as its Technical Director.
Interest in securities
- Nil
Directorships held in
listed entities
- Other current listed company directorships - Nil
Former listed company Directorships in last 3 years - Nil
Mark Freeman
- Company Secretary, Appointed 7 May 2020
Qualifications
- CA, F.Fin
Experience
- Mr Freeman is a Chartered Accountant and has more than 21 years' experience in
corporate finance and the resources industry. He has experience in project acquisitions
strategic planning, business development, M&A, asset
and management,
5
commercialisation, and project development. Prior experience with Mirabela Nickel Ltd,
Exco Resources NL, Panoramic Resources Ltd and Matra Petroleum Plc.
Meetings of Directors’
The following Directors’ meetings were held during the year and the number of meetings attended by each of the Directors
during the year was:
Number of meetings held
Number of meetings attended:
G Whiddon
N Hackett
A Stein
B Lawrence
J Taylor
Directors’ meetings
3
Remuneration
-
Audit
1
Meetings of committees
3
3
3
3
-
-
-
-
-
-
1
-
1
1
-
During the financial year the Board has held numerous face to face and conference call operational meetings to review
existing operations. Formal business during the period has also been implemented via Circular Resolutions of the Board.
Principal Activities
The principal activity during the year of the Company was oil and gas exploration and the continued review of opportunities
available to the Company.
REVIEW AND RESULTS OF OPERATIONS
During the year, the Company continued its principal activities in British Columbia, Canada. An overview of the Montney
assets is provided below followed by a summary of significant activities.
Montney Acreage and Assets
The Company owns and operates over 61,000 acres of drilling and production rights for the Montney Formation in British
Columbia (“Calima Lands”). The Company secured an initial interest in the Montney acreage in 2017 as part of an acquisition
with Havoc Partners. Subsequently in May 2018 the Company executed agreements to acquire the remaining interest to hold
100% through the acquisition’s of TSV Montney Ltd and TMK Montney Ltd. At the end of 2018 the Company undertook a
$25m raising which financed the majority of the 2019 three well drilling campaign.
Calima subsequently drilled one vertical well and two horizontal wells on the Calima Lands, of which two horizontal wells
were completed and tested. The upper and middle horizontal wells were completed and tested and McDaniel & Associates
Consultants Ltd. (“McDaniel”) prepared a report on the contingent and prospective resources of the Calima Lands based upon
the well results. This was a significant upgrade to Calima’s resource estimates.
Summary of 2020 activities
Tommy Lakes
On 15 April 2020, Calima acquired compression facilities, associated pipelines and related infrastructure at Tommy Lakes,
British Columbia from Enerplus Corp. (“Enerplus”) in an asset acquisition, for a nominal transaction fee (the “Tommy Lakes
Acquisition”). The Tommy Lakes Acquisition included three (3) compressor stations, approximately 30 km of pipeline, a camp,
sales gas meter (the “Tommy Lakes Facility”).
The Tommy Lakes Facility is currently shut-in but may be brought back online pending a final investment decision. The Tommy
Lakes Facility processes gas and condensate and has an estimated replacement value of $80 million. Calima’s Montney lands
are now considered to be ready-for-development with all permits and authorisations in place, allowing production to
commence as early as 6 months from an FID and winter construction season.
6
The Facilities provide cost-efficient access to North River Midstream pipeline,
Jedney processing facility and access to regional markets via major pipeline
networks including NGTL, Alliance and T-North. The Tommy Lakes Infrastructure
includes gathering pipelines, compression facilities and associated facilities capable
of transporting up to 50 Mmcf/d of gas and 1,500-2,000 bbls/d of well-head
condensate.
The Tommy Lake infrastructure continues to be maintained by Sproule and
Associates with their local field operations staff. Work was completed throughout
the summer to ensure winterisation of camp facilities and preservation of
infrastructure. The solar power generation units that were installed utilised very
little external fuel to generate electricity over the summer months. The units are
required to maintain cathodic protection on the pipeline and facilities to prevent
corrosion by inducing an electrical current. These units offset the use of diesel
generators that would otherwise consume more than 50,000l of fuel annually.
Calima has obtained the necessary regulatory approvals to tie-in its wells to the
Tommy Lakes Facility. In December 2020, Calima elected not to exercise the option
to acquire the gas wells from Enerplus after receiving notice of an accelerated
timeline from Enerplus to abandon the wells.
Wellsite Production Facility Approval
The Company retains a permit from the OGC to construct a production facility at its Montney pad location. The facilities include
tankage, electrical generation metering and a control centre. The construction design is modular, allowing for the construction off-
site in a controlled environment only final tie-ins once placed on pre-set foundations at site. This ensures an efficient, cost-effective
installation within the winter.
While the initial approval is for the existing two liquids rich Montney wells drilled at the beginning of 2019, it is envisaged that
additional modules would be added to the pad site to accommodate a 20 well pad.
10-year Continuation Lease granted over Calima Lands
As a result of the 2019 drilling campaign, the Company converted 49 sections (33,643 acres) into 10 year Continuation Lease. This
represented 56% of Calima’s Core Lands. Importantly, there is no obligation to drill any further wells to hold the Lease until 2029.
The remainder of the Calima Lands are held under 5-year drilling licenses which require drilling to enable further conversions to be
made. Most of the remaining licences over the Core Lands mature in 2022.
Field Development Plan & Final Investment Decision
Completion of the Tommy Lakes acquisition is a necessary component of the Field Development Plan (“FDP”); elevating the Calima
Lands to being a project ready-for-development. Calima does not intend to undertake further development work until a Final
Investment Decision (“FID”) has been taken. Calima’s strategy is to develop its Montney acreage position through a strategic
partnership or funding arrangement. Calima continues to seek strategic partnership and looks towards a final investment decision
for project development within the next 18 months.
Independent Resource Report
On 14 July 2020 the Company announced that McDaniel’s had following the acquisition of Tommy Lakes advised that 248.9 billion
cubic feet of gas and 12.4 million barrels of light oil and natural gas liquids of Contingent Resources had been upgraded to
Development Pending. The Company now regards a significant portion its Montney acreage as being development ready subject
only to securing the necessary funding to construct a tie-in pipeline. Upon the Company securing funding then according to the
reporting standards these Development Pending resources could be classified as 2P reserves. The reserves were again recompleted
for the year ended 31 December 2020 and announced on 30 April 2021 with no material variances to the resources.
McDaniel have evaluated crude oil, natural gas and natural gas products prospective resources of the Calima Lands according to
2018 PRMS standards. McDaniel’s Best Estimates of total un-risked contingent and prospective resources within the Calima Lands
are summarised in Tables 1A/1B and Figure 1.
7
Figure 1 - Map of Calima Lands defining the areas of Prospective (purple) and
Contingent Development on hold (light pink) and Contingent Development pending (dark pink) Resources.
31-Dec-19
31-Dec-20
Movement
1A Gross Unrisked Contingent Resources 4 (2C) based
upon 124 wells over 20,517 acres
Development
on hold
Development
Pending
Total 2C
Development
on hold
Development
Pending
Total 2C
Developmen
t on hold
Development
Pending
Total 2C
Natural Gas (mmcf)
Condensate (mbbl)
Natural Gas Liquids1 (mbbl)
TOTAL LIQUIDS2 (mbbl)
TOTAL mboe3
Gross
639,208
248,904
888,113
638,220
248,401
886,621
(988)
(503)
(1,492)
Net after Royalties
551,779
217,618
769,397
538,136
212,752
750,888
(13,643)
(4,866)
(18,509)
Gross
Net after Royalties
Gross
Net after Royalties
Gross
Net after Royalties
14,201
12,244
17,746
15,301
31,947
27545
5,542
4,814
6,926
6,016
19,743
17,058
24,672
21,317
12,468
44,414
10,830
38,375
14,179
12,162
17,718
15,198
31,897
27360
5,530
4,782
6,912
5,976
12,442
10,758
19,709
16,944
24,630
21,174
44,339
38,118
Gross
138,481
53,952
192,433
138,267
53,842
192,109
(22)
(82)
(28)
(103)
(50)
(185)
(214)
Net after Royalties
119,509
47,100
166,608
117,050
46,217
163,267
(2,459)
(12)
(32)
(14)
(40)
(26)
(72)
(110)
(883)
(34)
(114)
(42)
(143)
(75)
(257)
(324)
(3,341)
1B Gross Unrisked Prospective Resources5 (2U) based
upon 234 wells over 58,974 acres
31-Mar-20
31-Dec-20
Movement
Natural Gas (mmcf)
Condensate (mbbl)
Natural Gas Liquids1 (mbbl)
TOTAL LIQUIDS2 (mbbl)
TOTAL mboe3
Gross
1,680,391
1,677,610
(2,781)
Net after Royalties
1,416,083
1,378,037
(38,046)
Gross
Net after Royalties
Gross
Net after Royalties
Gross
Net after Royalties
Gross
Net after Royalties
37,359
31,842
46,678
39,808
84,036
71,650
364,101
307,664
37,296
31,601
46,600
39,507
83,896
71,108
363,498
300,781
(62)
(241)
(78)
(301)
(140)
(542)
(603)
(6,883)
Table 1A – Best estimate Unrisked Contingent (2C) Resources and Table 1B - Prospective (2U) Resources of the Calima
Lands as estimated by McDaniel & Associates effective 31 March 2021
8
Notes to accompany Tables 1A & 1B
(1) Natural Gas Liquids refers to the product recovered after processing. Approximately 10 bbl/MMcf of the product recovered after processing is also condensate
(C5) see also Note 2.
(2) Sum of Condensate and Natural Gas Liquids. Based on Company drilling results public domain data and the results of wells drilled on adjacent land McDaniel
estimate that the average condensate to gas ratio for wells in the Calima Lands would be 22.5 bbl/MMcf (wellhead condensate/gas ratio) for the Middle Montney
and 17.5bbl/MMcf for the Upper Montney. Additional liquids 25bbl/MMCF would be stripped from the gas upon processing comprising 6 bbl/MMcf of C3, 9
bbl/MMcf of C4, and 10 bbl/MMcf of C5+ (Condensate).
(3) Barrels of Oil Equivalent based on 6:1 for Natural Gas, 1:1 for Condensate and C5+, 1:1 for Ethane,1:1 for Propane, 1:1 for Butanes. BOE's may be misleading,
particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the wellhead.
(4) Contingent Resources (2C) - Those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations by application
of development projects, but which are not currently considered to be commercially recoverable owing to one or more contingencies. Contingencies may include
factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets. Contingent resources are further categorized in accordance
with the level of certainty associated with the estimates and may be sub-classified based on project maturity and/or characterized by the economic status. The
Contingent Resources (2C) in Tommy Lakes have been sub-classified as a “Development on Hold” and “Development Pending” as the accumulation is well defined
and does represent a viable drilling target. The Contingent Resources have been classified using a deterministic method of estimation having an effective date of
31 March 2021.
(5) Prospective resources (2U) are the estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s)
related to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration appraisal and
evaluation is required to determine the existence of a significant quantity of potentially moveable hydrocarbon. The Prospective Resources (2U) in Tommy Lakes
have been sub-classified as a “Prospect” as the accumulation is well defined and does represent a viable drilling target. The prospective resources have also been
classified using a deterministic method having an evaluation date of 31 March 2021.
(6) Pre-Development – A pre-development study is an intermediate step in the development of a project scenario. The amount of information that is available for
the reservoir of interest is greater than for a conceptual study. In particular, the petroleum initially in place has been reasonably well defined and the remaining
uncertainty lies largely in the recovery factor and the economic viability.
(7) The resources have been calculated on a reduced land position of 58,981 acres in which Calima Energy holds a 100% working interest. This includes 33,643
acres (49 sections) held under a 10-year Continuation Lease (valid to 2029) and the balance held leases that expiring in 2021/2.
Paradise Well (100% WI)
The Paradise well (Official designation; Boundary 5-1-86-15 00/11-01-
08615W6/0) is located 40 kilometres to the northeast of Fort St John and
180 km to the southeast of the Company’s extensive Montney interests in
northeast British Columbia.
Quarterly Gross Production
Oil (bbls)
Calima undertook the installation of additional oil storage at this location in
September 2020 in advance of winter. This additional 800bbl of oil storage
on location will ensure a higher number of days on production, as the well
will not be shut in due to poor weather. The poor weather results in road
conditions that are unfavourable to the transport of oil, and creates damage
to the access roads that is costly to repair.
2,200
2,000
1,800
1,600
The well was placed on production in January 2019. In March 2019 the
Company, announced that it has forward sold CAD1,200,000 of net production revenue from the Paradise well for the
consideration of CAD1,000,000. The forward sale facility will be repaid monthly from net well production payments over a
period of 36 months maturing 1 April 2022. The Balance owing on the facility is C$~810,821, and in March 2021 both parties
agreed to convert the balance of the loan to equity subject to shareholder approval and completion of the Blackspur
acquisition. The well produced a total of 6,318 barrels of oil during the year ended 2020 averaging ~23barrels of oil per
producing day. Quarterly production is summarised below.
Mar Qtr
June Qtr
Sept Qtr
Dec Qtr
9
Paradise well reserves - McDaniel & Associates Resource Report
31-Dec-19
Reserves
31-Dec-20
Movement
Light & Medium Oil
Light & Medium Oil
Light & Medium Oil
Gross (1)
Net(2)
Gross (1)
Net(2)
Gross (1)
(Mbbl)
(Mbbl)
(Mbbl)
(Mbbl)
(Mbbl)
Net(2)
(Mbbl)
37.8
37.8
9.6
47.4
36.1
36.1
9.2
45.3
30.2
30.2
6.2
36.4
28.9
28.9
5.9
34.8
-7.6
-7.6
-3.4
-11
-7.2
-7.2
-3.3
-10.5
Reserves Category
Proved
Developed Producing
Total Proved
Total Probable
Total Proved & Probable
(1) Gross reserves are working interest reserves before royalty deductions.
(2) Net reserves are working interest reserves after royalty deductions plus royalty interest reserves.
(3) Natural Gas Liquids include Condensate volumes.
Acquisition of Blackspur Oil Corp.
On 25th February 2021 Calima announced it had entered into an acquisition agreement with to acquire 100% of the issued
share capital of Blackspur Oil Corp. ("Blackspur"), a privately held Canadian company which owns producing oil and natural
gas assets in two core areas within Alberta, at Brooks and Thorsby ("the Acquisition"). This acquisition was completed on
30th April 2021.
Blackspur’s operations include two high quality assets with 2P reserves of 22.5 MMboe, 1P reserves of 16.7 MMboe and PDP
reserves of 5.4 MMboe. Q4 2020 production average of 2,600 boe/d (70% oil). The successful merger with Blackspur has
transformed Calima to a high margin oil & gas producer leveraged to WTI pricing plus exposure to rising natural gas prices via
its strategic holdings in the Montney Formation.
Calima forecasts 3,000 boe/d average production rate for CY 2021 which at US$60 WTI is forecast to deliver ~C$28 million of
operating cash flow for the 8 months to December 2021. The forecast production exit rate for CY 2022 is 5,500 boe/d.
Recently Blackspur drilled two horizontal oil wells targeting the Sunburst Formation and performed one re-entry operation
adding a horizontal leg into an existing horizontal Sunburst producing well. The total cost for the three well program was
approximately C$2.2 million, which was 22% under budget. Stabilised flow results will be advised to the market shortly.
During May 2021, the Company will commence a 3 well drilling campaign in the Brooks (Sunburst) area followed by 3 well
campaign in the Thorsby (Sparky) area in June/ July.
Net Reserves1
Acquisition Metrics
•
•
•
•
•
•
•
PDP: 5.4 MMboe – 3.29 MMbbl oil and 12.83 Bcfg
TP (1P): 16.7 MMboe - 11.0 MMbbl oil and 33.95 Bcfg
TPP (2P): 22.5 MMboe - 14.7 MMbbl oil and 47.01 Bcfg
EV/Production: C$23,077/boe
PDP: C$11.06/boe
TP (1P): C$3.59/boe
TPP (2P): C$2.66/boe
Over the past 7 years, Blackspur has invested over C$200 million acquiring and developing its assets while creating inventory
and infrastructure to accommodate growth to over 10,000 boe/d.
Key Terms of the Acquisition
The total consideration paid to Blackspur shareholders was C$21.5 million, comprised of C$16.6 million in Calima equity and
C$4.9 million in cash. In addition to Blackspur's credit facilities with National Bank of Canada have been reduced from C$40
million to C$13 million on a C$25 million revolving credit facility; providing an undrawn bank capacity of C$12 million to
achieve strategic goals.
1 Refer to announcement dated 25 February 2021 Appendix one
10
Calima has funded this acquisition via the issue of 5,425,783,115 fully paid ordinary shares under its retail offer pursuant to a
prospectus dated 10 February 2021 and institutional placement as confirmed on 26 April 2021 (Capital Raising). The Shares
were issued with an issue price of $0.007 per Share, raising A$37.9 million dollars (before costs). The post-completion capital
structure of the merged Company is set out below:
Shares
Options
2,221,779,618
20,000,000
Performance
Rights
19,450,000
5,589,175,780
Nil
Nil
7,810,955,398
2,460,243,360
50,000,000
Nil
70,750,000
Nil
Nil
96,000,000
115,450,000
Nil
354,500,000
50,000,000
Timetable
27 April
28 & 30 April
30 April
30 April
30 April
10 May
4 May / shareholder
approval
10,271,198,758
474,500,000
165,450,000
10 May
Previous shares on issue
Capital Raising and other share
issues
Broker Options
Plan Performance Rights
Total on issue at 30 April
Merger Consideration Shares
Plan Incentive Securities
Total on issue following merger
completion
Location of Merged Assets
Overview of Blackspur and its Assets
Blackspur was formed in 2012 and followed through with acquisitions of $74 million and drilled 59 oil wells funded via a
combination of equity and debt. In Q3 2018 Blackspur reached peak production of over 5,000 boe/d.
Blackspur has two core production areas in Southern Alberta; Thorsby and Brooks. The Brooks asset produced in Q4 2020
~1,860 boe/d and Thorsby ~740 boe/d. The combined assets have a liquids ratio of 70% and has a peer leading Liability
Management Ratio (LMR) rating of ~4.63 with undiscounted ARO estimated at ~$14.2 million.
11
Brooks
Blackspur has established a core position of land (~83 net sections)
and significant infrastructure that creates a foundation for growth
and expansion with year-round access. The Brooks asset averaged
production of a net ~1,860 boe/d in Q4 2020 with a 94% working
interest. Blackspur has drilled 48 wells to date.
Brooks production comes from the Sunburst and Glauconitic
formations. The Sunburst Formation can be developed at low cost
(
5,500 boe/d by December 2022. In additional, the Company will continue to develop its Montney acreage position through a
strategic partnership or funding arrangement. Calima continues to seek strategic partnership and looks towards a final
investment decision for project development within the next 18 months.
Environmental regulation and performance
There are no particular and significant environmental regulations that have affected the performance of the Group’s
operations.
Share options
At 31 March 2021 the Company has 20,000,000 options on issue. No options have been converted to ordinary shares since
the end of the financial period to the date of the report.
Number of Options
Exercise price
Expiry date
10,000,000
10,000,000
20,000,000
0.09
0.12
29-Aug-22
29-Aug-22
Performance rights
At 31 March 2021 the Company has 19,450,000 performance rights. No performance rights have been converted to ordinary
shares since the end of the financial period to the date of the report.
Number of rights
Exercise price
Expiry date
19,450,000
19,450,000
-
29-Aug-22
The Performance Rights will vest subject to completion of a minimum of 18 months’ continuous service, and on satisfaction of
at least two of the following three conditions:
13
•
•
•
The VWAP for Calima shares for any period of 30 consecutive trading days being above $0.15;
Calima raising more than $5 million (excluding the Public Offer) at an average price of $0.15; and
Calima’s market capitalisation exceeding $50 million (based on the VWAP for Calima shares for any period of 30
consecutive trading days).
The Performance Rights will vest immediately on a change of control of Calima that occurs at a price per share greater than
$0.15.
Performance Shares
On 31 December 2020, the Class A and Class C Performance Shares expired.
Officers’ indemnities and insurance
The Group has, during the financial year, entered into an agreement with the Directors and certain officers to indemnify these
individuals against any claims and related expenses which arise as a result of work completed in their respective capabilities.
During the financial year, the Group has paid premiums in respect of a contract insuring all the Directors and Officers of Calima
Energy Limited against costs incurred in defending proceedings except for conduct involving:
(a)
(b)
a wilful breach of duty; or
a contravention of sections 182 or 183 of the Corporations Act 2001,
as permitted by section 199B of the Corporations Act 2001. The total amount of insurance contract premiums paid in the year
was $49,350 (2019: $66,138).
Indemnification of auditors
The Group has agreed to indemnify its Auditors, BDO Audit (WA) Pty Ltd, to the extent permitted by law, against any claim by
a third party arising from Calima Energy Limited’s breach of their agreement. The indemnity stipulates that Calima Energy
Limited will meet the full amount of any such liabilities including a reasonable amount of legal costs.
Remuneration report (Audited)
The Directors and key management personnel have authority and responsibility for planning, directing and controlling the
activities of the Group. Remuneration levels for Directors and key management personnel are competitively set to attract and
retain appropriately qualified and experienced Directors and executives.
The Board is responsible for remuneration policies and practices. The Remuneration Committee assesses the appropriateness
of the nature and amounts of remuneration of officers and employees on a periodic basis and makes recommendations to
the Board. The Remuneration Committee, where appropriate, seeks independent advice on remuneration policies and
practices, including remuneration packages and terms of employment. No independent advice was received in the current
year. The Group’s securities trading policy regulates dealings by Directors, officers and employees in securities issued by the
Group. The policy imposes trading restrictions on all Directors, key management personnel and employees of the Group and
their related companies who possess inside information.
The remuneration structures are designed to attract suitably qualified candidates, reward the achievement of strategic
objectives, and achieve the broader outcome of creation of value for shareholders. The remuneration structures take into
account a number of factors, including length of service, particular experience of the individual concerned, and overall
performance of the Group.
The Group has in place the following incentive plans:
•
A Short-Term Incentive Plan providing for cash bonuses to be paid annually based on a combination of individual
and corporate performance over the previous year.
• Management options providing long term equity incentives vesting on the certain continuous employment
conditions; and
A Performance Rights Plan (the “ASIC Relief Plan”) for directors and employees
•
A summary of these Plans is set out below. The Board is of the opinion that these incentive plans achieve the following
outcomes:
•
•
•
•
Alignment of the interests of the Group’s employees with that of shareholders;
Retention of staff and management to pursue the Group’s strategy and goals;
Fair and reasonable reward for past individual and Group performance; and
Incentive to deliver future individual and Group performance.
14
Performance Rights Plan
The Plan is open to any eligible persons who are full-time or permanent part time employees of the Company, or a related
body corporate which includes directors, the company secretary and officers or other such persons as the Board determines
to be eligible to receive grants of Performance Rights under the Plan. Subject to the satisfaction of the vesting conditions
given to eligible participants, each Performance Right vest to one Share.
The Performance Rights are issued for nil cash consideration and no consideration will be payable upon the vesting of the
Performance Rights. Vesting conditions, if any, are determined by the Board from time to time and set out in individual offers
for the grant of Performance Rights. Shares issued upon vesting may be freely transferred subject to compliance with the
Group’s securities trading rules.
As part of the merger acquisition of Blackspur, it is proposed that 96,000,000, 100% of the Performance Rights will vest
following continued service of the holder as a consultant or employee of the Company for a period of 2 years from the date
of their appointment, but to the extent that has not been achieved the Incentive Performance Rights will vest as follows:
48,000,000 Class A performance rights (which vest upon the VWAP of Calima Shares trading on the ASX being at least 1.0
cents over 20 consecutive trading days (on which Calima Shares have actually traded)) and 48,000,000 Class B performance
rights (which vest upon the VWAP of Shares trading on the ASX being at least 1.5 cents over 20 consecutive trading days (on
which Calima Shares have actually traded)).
It is proposed that Messrs. Whiddon, Lawrence and Stein will be issued 20,000,000, 10,000,000 and 6,000,000 Performance
Rights respectively, subject to Calima Shareholder approval at the Calima General Meeting on 15 April 2021.
The vesting conditions applicable to all of the outstanding unvested Rights are set out below:
The Performance Rights will vest, subject to completion of a minimum of 18 months’ continuous service, on satisfaction of at
least two of the following three conditions:
•
•
•
The VWAP for Calima shares for any period of 30 consecutive trading days being above $0.15;
Calima raising more than $5 million (excluding the Public Offer) at an average price of $0.15; and
Calima’s market capitalisation exceeding $50 million (based on the VWAP for Calima shares for any period of 30
consecutive trading days).
The Performance Rights will vest immediately on a change of control of Calima that occurs at a price per share greater than
$0.15 and expire regardless on or before 29 August 2021.
Management Options
The management options were granted to the management team and provided long term equity incentives vesting on the
certain continuous employment conditions in 2017.
The Management Options were issued for nil cash consideration in two classes, Class A and Class B.
The Class A Management Options are exercisable at $0.09 per Option once vested. The Class B Management Options are
exercisable at $0.12 per Option once vested. All of the Management Options expire 25 August 2022.
The Management Options will vest, subject to completion of 18 months’ continuous service, on satisfaction of at least two of
the following three conditions:
•
•
•
The VWAP for Shares for any period of 30 consecutive trading days being above $0.09;
The Company raising more than $5 million at an average price of $0.09; and
The Company’s market capitalisation exceeding $50 million (based on the VWAP for Shares for any period of 30
consecutive trading days).
The Management Options will vest immediately on a Change of Control that occurs at an average price per share greater than
$0.09.
Short Term Incentive Plan
The Short-Term Incentive Plan provides for the payment of discretionary cash bonuses to Executive Directors, full time or part
time employees or contractors of the Group annually in respect of their performance and the overall performance of the
Group during the previous financial year. The Plan establishes maximum bonus levels as a percentage of salary by grade of
employee and a guideline framework for calibrating the actual bonus against the maximum according to certain parameters
of individual and corporate performance. However, all bonus payments are entirely at the discretion of the Board and there
are no contractual bonus entitlements under the Plan.
15
Non-executive Directors
There are no termination or retirement benefits for non-executive Directors (other than statutory superannuation). The
maximum available pool of fees is set by shareholders in general meeting and is currently $350,000 per annum.
Fixed remuneration for executives
Fixed remuneration for executives consists of base remuneration (which is calculated on a total cost basis and includes any
Fringe Benefit Tax charges related to employee benefits), as well as employer contributions to superannuation funds.
Remuneration levels are reviewed annually by the Board where applicable. The process consists of a review of Group and
individual performance, length of service, relevant comparative remuneration internally and externally and market
conditions.
Service contracts
Remuneration and other terms of employment for Executive Directors and other key management personnel are formalised
in service agreements and letters of employment (conditions of employment). All parties continue to be employed until their
employment is terminated. Employment contracts can be terminated by either party by providing 3 months’ written notice.
The Company may make payment in lieu of notice.
Key management personnel are entitled to receive, on termination of employment, statutory entitlements of vested annual
and long service leave, together with post-employment benefits. Any options or rights awarded but not vested at the time of
resignation will be cancelled unless the Board advises otherwise at its own discretion.
Employment contracts do not prescribe how remuneration levels are modified year to year. Remuneration levels are reviewed
each year with consideration of employment market conditions, changes in the scope of the role performed by the employee
and changes in remuneration policy set by the Remuneration Committee.
Remuneration
Details of the remuneration of the Directors of the Company and key management personnel are set out in the following
tables.
Glenn Whiddon
Alan Stein
Brett Lawrence
The key management personnel of the Company include the following Directors and executive officers:
•
•
•
• Neil Hackett - resigned 11 November 2020
•
Jon Taylor - resigned 20 January 2020
• Mark Freeman - appointed 7 May 2020
The cash bonus and share-based payment rights detailed in the table below are performance related. Share-based payment
options are related to ongoing service conditions with the Company. While options issued have no performance conditions,
they were issued at an exercise price out of the money at grant date, which encourages employees to remain with the
Company and work towards achieving share price growth. The value of options and rights shown in the tables below represent
the vesting expense, measured in accordance with Australian Accounting Standards, for awards granted in the current or
previous financial years.
The Corporations Act requires disclosure of the Company’s remuneration policy to contain a discussion of the Company’s
earnings, performance and the effect of the Company’s performance on shareholder wealth in the reporting period and the
four previous financial years. The table below provides a five-year financial summary to 31 December 2020:
Dec-20
12 months
Dec-19
12 months
Dec-18
12 months
Dec-17
12 months
Dec-16
12 months
Net loss after tax
EPS (cents) Basic
Year-end share price
(6,394,743)
(1,583,603)
(3,127,298)
(2,449,932)
(1,274,284)
(0.29)
$0.008
(0.10)
$0.007
(0.40)
$0.055
(0.58)
$0.05
(0.33)
$0.008
16
Following is the table of remuneration for the year ended 31 December 2020:
Name
Directors
G Whiddon(a)
N Hackett(c)
A Stein
B Lawrence
J Taylor(d)
Executives
Mark Freeman
Total
Short-term
benefits (salaries
& fees)(e)
Share-based
payments (b)
(options)
Share-based
payments (b)
(performance
rights)
Total
Performance
Related
$
%
150,860
32,940
104,759
48,410
25,919
159,421
522,309
-
-
8,599
-
8,599
-
17,198
-
-
8,118
-
24,804
-
32,922
-
-
13.8
-
56.3
150,860
32,940
121,476
48,410
59,322
159,421
572,429
(a)
(b)
(c)
(d)
(e)
Mr Whiddon received $36,000 for Director’s fees and $114,860 for consulting fees.
Vesting expense for the fair value of share-based payment awards determined at grant date in accordance with Australian
Accounting Standards.
Mr Hackett resigned 11 November 2020
Mr Taylor resigned 20 January 2020
$268,753 of short-term benefits were paid in shares.
Following is the table of remuneration for the year ended 31 December 2019:
Name
Directors
G Whiddon(a)
N Hackett
A Stein
B Lawrence
J Taylor
Total
Short-term
benefits (salaries
& fees)
Share-based
payments (b)
(options)
$
Share-based
payments (b)
(performance
rights)
Total
$
Performance
Related
%
$
107,302
36,000
244,056
5,000
128,017
520,375
-
-
8,575
-
8,575
17,150
-
-
8,096
-
24,736
32,832
107,302
36,000
260,728
5,000
161,328
570,358
-
-
6.4
-
20.6
(a)
(b)
Mr Whiddon received $36,000 for Director’s fees and $71,302 for consulting fees.
Vesting expense for the fair value of share-based payment awards determined at grant date in accordance with Australian
Accounting Standards.
Bonuses
The payment of bonuses is at the discretion of the Board, having regard to the overall performance of the Company and the
performance of the individual. At the end of the financial year no bonuses were paid.
Employee share benefits plan
At the end of the financial year the following share-based payment arrangements were in existence. The Performance Rights
will vest subject to the satisfaction of certain performance criteria as disclosed above. The Management Options will vest
subject to the satisfaction of certain performance criteria as disclosed above.
17
Performance shares
Following is the table of performance shareholdings for the year ended 31 December 2020:
31 December 2020
Balance
1 January 2020
Exercised
Expired
Balance
31 December 2020
Direct interest
Directors
G Whiddon
A Stein
B Lawrence
J Taylor
N Hackett
Executives
Mark Freeman
-
14,912,276
-
292,398
-
-
15,204,674
-
-
-
-
-
-
-
-
(14,912,276)
-
(292,398)
-
-
(15,204,674)
-
-
-
-
-
-
-
Performance rights
The table below represents performance rights issued still in existence at the end of the financial year:
Grant date
29-Aug-2017
Grant date fair
value
0.015
Vesting dates
Total valuation ($)
% vested to date
29-Aug-22
164,250
67%
Following is the table of rights holdings for the year ended 31 December 2020:
31 December
2020
Direct interest
Directors
G Whiddon
A Stein
B Lawrence
J Taylor
N Hackett
Executives
Mark Freeman
Balance
1 January 2020
Granted as
remuneration
Exercised
Net change
Other
(i)
Balance
31 December
2020
Vested at
31 December
2020
-
2,700,000
-
8,250,000
-
-
10,950,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(8,250,000)
-
-
(8,250,000)
-
2,700,000
-
-
-
-
2,700,000
-
-
-
-
-
-
-
Management Options
The table below represents Management Options issued still in existence at the end of the financial year:
Tranche number
Grant date
1
2
29-Aug-2017
29-Aug-2017
Grant date fair
value
0.008
0.005
Vesting dates
Total value ($)
29-Aug-22
29-Aug-22
52,800
33,000
% vested to
date
67%
67%
Following is the table of rights holdings for the year ended 31 December 2020:
Balance
1 January
2020
-
6,600,000
-
6,600,000
-
-
13,200,000
31 December 2020
Directors
G Whiddon
A Stein
B Lawrence
J Taylor
N Hackett
Executives
Mark Freeman
18
Granted as
remuneration
Exercised
Net change
Other
Balance
31 December
2020
Vested at
31 December
2020
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,600,000
-
(6,600,000)
-
-
-
-
-
(6,600,000)
6,600,000
-
-
-
-
-
-
-
Shareholdings
Following is the table of shareholdings for the period ended 31 December 2020:
31 December 2020
Direct interest
Directors
G Whiddon
N Hackett (resigned 11 Nov 20)
A Stein
B Lawrence
J Taylor (resigned 20 Jan 20)
Executives
Mark Freeman
Indirect interest (i)
Directors
G Whiddon (ii)
A Stein
N Hackett(resigned 11 Nov 20)
J Taylor(resigned 20 Jan 20)
B Lawrence
Executives
Mark Freeman
Balance
1 January
Acquired
Disposed
Other
Granted as
compensation
Balance
31 December
14,074,472
314,073
31,499,182
-
18,251,421
-
64,139,148
-
-
-
-
-
-
-
10,273,057
24,347,529
(4,380,217)
(12,041,466)
-
(18,251,421)
-
4,066,144
6,864,226
-
-
26,321,942
-
-
-
-
-
(34,673,104)
21,203,427
50,669,471
68,240,732
10,000,000
13,333,833
666,666
-
1,540,217
-
12,041,091
-
-
-
-
83,781,448
22,041,091
-
-
(666,666)
-
-
-
-
-
-
78,240,732
25,374,924
-
-
5,632,464
7,172,681
555,555
(111,111)
1,719,670
2,275,225
7,352,134
113,063,562
(i)
(ii)
Indirect interests are shareholdings that the director has a relevant interest in but is not the registered
holder.
Glenn Whiddon: Please note that Mr Whiddon only has a control in 888,888 shares in the indirect
holdings. Mr. Whiddon does not control the remaining indirect holdings. They are held independently of Mr.
Whiddon and are only included for good corporate governance purposes. Mr. Whiddon has no relevant
interest in the indirect holdings.
Other Transaction with Key Management Personnel
During the year ended 31 December 2020, the Company had a consulting agreement with Havoc Partner Services (Havoc),
under which five Havoc members are engaged as members of the Company’s management team. The member includes
Director Alan Stein, Technical Director Jon Taylor and senior geoscientists Mark Sofield, Richard Higgins and Justin Norris.
Payments made to Havoc during the relevant period were $61,957 (2019: $361,796). The amounts owed to Havoc as at 31
December 2020 was nil (2019: $20,277). The services performed were on commercial terms and at arms lengths.
Voting of shareholders at last year’s annual general meeting
The Company received more than 99.75% of “yes” votes on its remuneration report for the 2019 financial year. The company
did not receive any specific feedback at the AGM or throughout the year on its remuneration practices.
End of audited remuneration report
Non-audit services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s
expertise and experience with the Company and/or Group are important. The Board of Directors are satisfied that the provision
of the non-audit services, during the year, by the auditor is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001.
Details of the amount paid or payable to the auditor for audit services provided during the year are set out in Note 23.
19
Auditor’s independence declaration
A copy of the Auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on
page 21.
Signed in accordance with a resolution of the Directors.
Glenn Whiddon
Chairman
30 April 2021
20
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY PHILLIP MURDOCH TO THE DIRECTORS OF CALIMA ENERGY
LIMITED
As lead auditor of Calima Energy Limited for the year ended 31 December 2020, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Calima Energy Limited and the entities it controlled during the period.
Phillip Murdoch
Director
BDO Audit (WA) Pty Ltd
Perth, 31 March 2021
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Consolidated statement of profit or loss and other comprehensive income
For the year ended 31 December 2020
Profit or Loss
Net Proceeds from the Paradise Oil Well
Profit on sale of Namibian assets
Other income
Interest income
Interest expense
General and administrative expenses
Site rehabilitation expense
Impairment - Investment
Impairment - Exploration
Loss before income tax
Income tax
Loss for the year attributable to the owners of the parent
Other Comprehensive Income
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation differences
Other comprehensive loss for the year, net of tax
12 Month
31 December
2020
$
12 Month
31 December
2019
$
Notes
3
4
261,998
-
17,924
1,028
(154,753)
(1,633,501)
(1,853,761)
(1,076,402)
(1,957,275)
(6,394,743)
-
(6,394,743)
233,276
1,427,343
48,780
11,383
(180,639)
(3,123,746)
-
-
-
(1,583,603)
-
(1,583,603)
(2,221,704)
(2,221,704)
2,129,754
2,129,754
Total comprehensive income/(loss) for the year attributable to the
owners of the parent
(8,616,447)
546,151
Loss per share
Basic and diluted loss per share
15
Cents
(0.29)
Cents
(0.10)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with
the notes to the financial statements.
22
Consolidated statement of financial position
As at 31 December 2020
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Total Current Assets
Non-Current Assets
Other Assets
Property, plant and equipment
Right of use asset
Exploration and evaluation expenditure
Investments
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Other liabilities
Lease liabilities
Borrowings
Total Current Liabilities
Non-Current Liabilities
Borrowings
Lease Liabilities
Restoration provisions
Total Non-Current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
31 December
2020
31 December
2019
Notes
$
$
5
6
7
11
8
9
10
11
11
11
11
12
1,697,087
91,763
1,788,849
3,661,879
1,834,451
5,496,330
534,563
480,977
649,975
60,267,588
-
61,933,104
63,721,954
-
12,121
27,150
62,862,296
1,126,089
64,027,656
69,523,986
504,461
138,458
209,423
857,212
1,709,554
201,456
-
29,104
-
230,560
-
460,569
4,676,261
5,136,830
6,846,384
56,875,569
851,248
-
3,255,663
4,106,911
4,337,471
65,186,515
13
14 (b)
14 (a)
296,329,242
15,714,572
(255,168,245)
296,108,276
17,851,741
(248,773,502)
56,875,569
65,186,515
The consolidated statement of financial position should be read in conjunction with the notes to the financial statements.
23
Consolidated statement of changes in equity
As at 31 December 2020
At 1 January 2019
Loss for period
Other comprehensive income/(loss)
Total comprehensive loss for the year
Transactions with owners in their capacity as owners
Issue of Share Capital
Less cost of the offer
Converted performance shares
Issue of shares to advisors
Share based payments
At 31 December 2019
At 1 January 2020
Loss for period
Exchange differences on foreign operations
Total comprehensive loss for the year
Transactions with owners in their capacity as owners
Shares issued to advisors
Share based payments – refer Note 21
At 31 December 2020
Share capital
Share-based
payment reserve
Foreign Exchange
Reserve
Accumulated
losses
$
$
$
$
284,246,600
-
-
-
12,700,067
(930,694)
71,052
21,251
-
296,108,276
296,108,276
-
-
-
25,000
195,966
296,329,242
15,652,075
-
-
-
-
-
-
-
84,304
15,736,379
15,736,379
-
-
-
-
84,535
15,820,914
(14,392)
-
2,129,754
2,129,754
(247,189,899)
(1,583,603)
-
(1,583,603)
-
-
-
-
-
2,115,362
2,115,362
-
(2,221,704)
(2,221,704)
-
-
-
-
-
(248,773,502)
(248,773,502)
(6,394,743)
-
(6,394,743)
-
-
(106,342)
-
-
(255,168,245)
Total
$
52,694,384
(1,583,603)
2,129,754
546,151
12,700,067
(930,694)
71,052
21,251
84,304
65,186,515
65,186,515
(6,394,743)
(2,221,704)
(8,616,447)
25,000
280,501
56,875,569
The consolidated statement of changes in equity is to be read in conjunction with the notes to the financial statements.
24
Consolidated statement of cash flows
For the year ended 31 December 2020
Cash flows from operating activities
Net receipts from operations of oil well
Payments to suppliers and employees
Interest received
Net cash flows used in operating activities
Cash flows from investing activities
Payments for exploration, evaluation and development expenditure
Proceeds from the sale of exploration and evaluation assets
GST /PST Refund
Net cash flows used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payments of Capital Raising costs
Investment Loan
Payment of lease liabilities
Payments of borrowings
Net cash flows used in financing activities
31 December
2020
$
31 December
2019
$
Notes
184,573
(846,618)
1,028
(661,017)
274,805
(2,411,241)
10,073
(2,126,363)
18
(2,156,331)
-
1,366,502
(789,829)
(31,296,767)
2,912,862
-
(28,383,905)
-
-
-
(259,488)
(232,431)
(491,919)
12,700,067
(930,694)
1,063,123
-
(244,601)
12,587,895
(1,942,765)
(22,027)
3,661,879
1,697,087
(17,922,373)
112,848
21,471,404
3,661,879
Net increase (decrease) in cash and cash equivalents
Net foreign exchange differences
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at end of the financial year
5
The consolidated statement of cash flows should be read in conjunction with the notes to the financial statements.
25
Notes to the consolidated financial statements
For the year ended 31 December 2020
1.
Corporate information
The consolidated financial report of Calima Energy Limited for the year ended 31 December 2020 was authorised for issue in
accordance with a resolution of the Directors on 31 March 2021.
Calima Energy Limited is a Company limited by shares incorporated in Australia by shares which are publicly traded on the
Australian Securities Exchange. The nature of the operations and principal activities of the Group are described in the Directors’
report.
2.
Summary of significant accounting polices
Basis of preparation
The financial report is a general purpose financial report which has been prepared in accordance with the requirements of the
Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncement of the Australian Accounting
Standards Board. The financial report has been prepared on a historical cost basis, except where stated.
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher
degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are
disclosed where appropriate.
For the purpose of preparing the consolidated financial statements, the Group is a for-profit entity.
Except as disclosed the accounting policies set out below have been applied consistently to all periods presented in the
consolidated financial report and by all entities in the consolidated entity.
a) Compliance statement
The financial report complies with Australian Accounting Standards and International Financial Reporting Standards (‘IFRS’) as
issued by the International Accounting Standards Board.
b) Adoption of new and revised Accounting Standards
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by
the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
c) Going concern and basis of accounting
The financial report has been prepared on a going concern basis, which assumes continuity of normal business activities and
the realisation of assets and the settlement of liabilities in the ordinary course of business. The Directors are of the opinion that
the Group can meet its obligations as and when they fall due.
For the year ended 31 December 2020 the Group recorded a loss of ($6,394,743) (2019: $1,583,603) and had net cash outflows
from operating activities of $661,017 (2019: $2,126,363). The statement of financial position displays a net working capital
surplus of $79,295 (2019: $5,265,770). Included within this is cash on hand of $1,697,087 (2019: $3,661,879).
The ability of the Group to continue as a going concern is dependent on it completing the $37m raising as part of the Blackspur
acquisition or undertaking additional alternative fundraisings.
These conditions indicate a material uncertainty that may cast a significant doubt about the Group’s ability to continue as a
going concern and, therefore, it may be unable to realise its assets and discharge its liabilities in the normal course of business.
The Directors have reasonable grounds to believe that the Group will continue as a going concern due to the firm commitments
in place for $37m as part of the Blackspur acquisition and as announced on 16 March 2021.
Should the Group be unable to continue as a going concern, it may be required to realise its assets and discharge its liabilities
other than in the normal course of business and at amounts different to those stated in the financial statements. This financial
report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or liabilities
that may be necessary should the Group be unable to continue as a going concern.
26
Notes to the consolidated financial statements
For the year ended 31 December 2020
d) Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have, on the
Group based on known information. This consideration extends to the nature of the products and services offered, customers, supply
chain, staffing and geographic regions in which the Group operates. Other than as addressed in specific notes, there does not currently
appear to be either any significant impact upon the financial statements or any significant uncertainties with respect to events or
conditions which may impact the consolidated entity unfavourably as at the reporting date or subsequently as a result of the
Coronavirus (COVID-19) pandemic.
e) Basis of consolidation
The consolidated financial statements comprise the financial statements of Calima Energy Limited and its subsidiaries (as
outlined in Note 21) (the Group) as at and for the period ended 31 December each year.
Subsidiaries are all those entities over which the Group has power over the investee such that the Group is able to direct the
relevant activities, has exposure or rights to variable returns from its involvements with the investee and has the ability to use
its power over the investee to affect the amount of the investor’s returns. The financial statements of subsidiaries are
included in the consolidated financial statements from the date that control commences until the date that control ceases.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent
accounting policies. In preparing the consolidated financial statements, all intercompany balances, transactions, unrealised
gains and losses resulting from intra-group transactions have been eliminated in full.
Non-controlling interests are allocated their share of net profit after tax in the statement of comprehensive income and are
presented within equity in the consolidated statement of financial position, separately from the equity of the owners of the
parent. Losses are attributed to the non-controlling interest even if that results in a deficit balance.
A change in the ownership interest of a subsidiary that does not result in a loss of control is accounted for as an equity
transaction.
f) Foreign currency translation
Functional and presentation currency
Both the functional and presentation currency of Calima Energy Limited is Australian dollars ($). The Canadian subsidiary
functional currency is Canadian Dollars and the United Kingdom subsidiary functional currency is Great British Pounds which
are translated to the presentation currency.
Transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency by applying the average exchange rate
prevailing in the period of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated
at the rate of exchange ruling at the reporting date. Non-monetary items that are measured in terms of historical cost in a
foreign currency are translated using the exchange rate at the date of the initial transactions. Non-monetary items measured
at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
Translation of Group Companies’ functional currency to presentation currency
The results of the Canadian and United Kingdom subsidiaries are translated into Australian Dollars (presentation currency) as
at the date of each transaction, or the average exchange rate over the year. Assets and liabilities are translated at exchange
rates prevailing at reporting date.
Exchange variations resulting from the translation are recognised in the foreign currency translation reserve in equity until the
net investment is disposed, at which time, the cumulative amount is reclassified to the profit and loss.
g) Operating segments
An operating segment is a component of an entity that engages in business activities from which it may earn revenues and
incur expenses (including revenues and expenses relating to transactions with other components of the same entity), whose
operating result are regularly reviewed by the Group’s chief operating decision maker to make decisions about resources to be
allocated to the segment and assess its performance and for which discrete financial information is available.
Operating segments have been identified based on the information provided to the chief operating decision makers – being
the executive management team.
27
Notes to the consolidated financial statements
For the year ended 31 December 2020
The Group aggregates two or more operating segments when they have similar economic characteristics, and the segments
are similar in each of the following respects:
• Nature of the products and services
• Nature of the production processes
•
• Methods used to distribute the products or provide the services, and if applicable
• Nature of the regulatory environment
Type or class of customer for the products and services
Operating segments that meet the quantitative criteria as prescribed by AASB 8 are reported separately. However, an operating
segment that does not meet the quantitative criteria is still reported separately where information about the segment would
be useful to users of the financial statements.
h) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts of cash and which
are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in
current liabilities on the statement of financial position.
i) Exploration and evaluation expenditure
Exploration and evaluation expenditure, including the costs of acquiring the licences/permits, are capitalised as exploration
and evaluation assets on an area of interest basis. Costs incurred before the Group has obtained the legal rights to explore an
area are recognised in the profit and loss component of the consolidated statement of profit or loss and other comprehensive
income.
Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either:
(i)
the expenditures are expected to be recouped through successful development and exploitation or from sale of the
area of interest; or
(ii)
activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations
in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment if facts and circumstances suggest that the carrying amount
exceeds the recoverable amount (see impairment accounting policy (r). For the purposes of impairment testing, exploration
and evaluation assets are allocated to cash-generating units to which the exploration activity relates. The cash generating unit
shall not be larger than the area of interest.
Once the technical feasibility and commercial viability of the extraction of oil or gas in an area of interest are demonstrable,
exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to
oil and gas property and development assets within property, plant and equipment.
When an area of interest is abandoned or the Directors decide that it is not commercial, any accumulated costs in respect of
that area are written off in the financial period the decision is made.
Investments
j)
Investments are initially measured at fair value. Transaction costs are included as part of the initial measurement, except for
financial assets at fair value through profit or loss. Such assets are subsequently measured at either amortised cost or fair value
depending on their classification. Classification is determined based on both the business model within which such assets are
held and the contractual cash flow characteristics of the financial asset unless an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the
consolidated entity has transferred substantially all the risks and rewards of ownership.
The Group’s unlisted investment is held as a financial asset at fair value through profit or loss, whereby fair value movements
are recognised in profit or loss.
28
Notes to the consolidated financial statements
For the year ended 31 December 2020
k) Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment
losses. Cost includes expenditure that is directly attributable to the acquisition of the item.
The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an
item when that cost is incurred if it is probable that the future economic benefits embodied within the item will flow to the
Group and the cost of the item can be measured reliably. All other costs are recognised in profit or loss as an expense as
incurred.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items
of property, plant and equipment.
Depreciation
Depreciation is charged to profit and loss on a straight-line basis over the estimated useful lives of each part of an item of
property, plant and equipment. The estimated useful lives in the current and comparative periods are as follows:
•
Plant and equipment over 2 to 20 years
The residual value, the useful life and the depreciation method applied to an asset are reassessed at least annually.
Derecognition
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the
carrying amount of the item) is included in profit and loss in the period the item is derecognised.
l) Trade and other payables
Trade and other payables are carried at amortised cost and due to their short-term nature, they are not discounted. These
amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and which are
unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
m) Provisions and employee benefits
Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of a past
event, it is probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle
the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the
time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in
the provision resulting from the passage of time is recognised as a finance cost.
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave which are
expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees’
services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.
Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.
The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of
expected future payments to be made in respect of services provided by employees up to the reporting date using the
projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service.
Expected future payments are discounted using market yields at the reporting date on corporate bonds with terms to maturity
and currency that match, as closely as possible, the estimated future cash outflows.
Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee
accepts voluntary redundancy in exchange for these benefits. The Group recognised termination benefits when it is
demonstrably committed to either terminating the employment of current employees according to a detailed formal plan
without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary
redundancy. Benefits falling due more than 12 months after reporting date are discounted to present value.
29
Notes to the consolidated financial statements
For the year ended 31 December 2020
n) Share-based payments
The Group provides benefits to employees (including key management personnel) in the form of share-based payments,
whereby employees render services in exchange for shares or rights over shares. The fair value of equity instruments granted
is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and
spread over the period during which the employees become unconditionally entitled to the equity instruments.
The fair value of the performance rights and share options granted is measured using appropriate valuation methodology.
These models take into account the terms and conditions upon which the rights and options were granted and the probability
of achieving each required milestone.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, on straight-line basis
from the grant date to the date on which the relevant employees become fully entitled to the award (“vesting date”). The
amount recognised as an expense is adjusted to reflect the actual number that vest.
The dilutive effect, if any, of outstanding equity instruments is reflected as additional share dilution in the computation of
earnings per share.
o) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown
in equity as a deduction, net of tax, from the proceeds.
Income tax and other taxes
p)
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on the
notional income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary
differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused
tax losses.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of
investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets
are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction.
The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the
deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an
asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a
transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or
taxable profit or loss.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.
Other taxes
Revenues, expenses and assets are recognised net of the amount of Government Sales Tax (“GST”) except:
• Where the GST incurred on the 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
Receivable and payable are stated with the amount of GST included
•
The net amount of GST recoverable from the taxation authority is included as part of the receivables in the statement of
financial position. The amount of GST payable to the taxation authority is included as part of the 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.
30
Notes to the consolidated financial statements
For the year ended 31 December 2020
q) Earnings per share
Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Group, excluding any
costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during
the financial period, adjusted for bonus elements in ordinary shares issued during the period.
Diluted Earnings Per Share adjusts the figures used in the determination of basic earnings per share to take into account the
after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Impairment of non-financial assets
r)
Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows (cash
generating units).
s) Accounting for the Borrowings associated with the Paradise Well
On 20 March 2019, the company announced that it had forward sold C$1,200,000 of net production revenue from the Paradise
well. Calima owns 100% of the Paradise well (Official designation; Boundary 5-1-86-15 00/11-01-08615W6/0), located 40 km
to the northeast of Fort St John and 180 km to the southeast of the Company’s extensive Montney interests in northeast British
Columbia. The forward sale facility will be repaid monthly from net well production payments over a period of 36 months.
This transaction is accounted for as a borrowing which has been in part been set-off by the carrying amount of the oil and gas
property (which has thus been derecognised). Net proceeds from the operation of the well are recognised as a single line item
in Profit and Loss. The borrowing is accounted for as a financial liability at amortised cost with an interest expense being
calculated based on the effective interest rate. The effective interest rate was the rate that exactly discounts the carrying
amount of the borrowing and the expected payments against it over the life of the loan.
Significant accounting estimates and judgments
In the process of applying the Group’s accounting policies, management has made judgements that have significant effects on
the amounts recognised in the financial statements. In additions, the carrying amounts of certain assets and liabilities are often
determined based on estimates and assumptions of future events. The judgements and estimates which have the most
significant effect on the amounts recognised in the financial statements are as follows:
Asset acquisiton
The asset acquisition of the Tommy Lakes Infrastructure does not meet the definition of a business combination and as such
the transaction has been accounted for as an asset acquisition. Purchase prices related to asset acquisitions are allocated to
the underlying acquired assets and liabilities based on cost and/or their estimated fair value at the time of acquisition. The
determination of fair value requires the Company to make assumptions, estimates and judgements regarding future events.
The allocation process is inherently subjective and impacts the amounts assigned to individually identifiable assets and
liabilities. As a result, the purchase price allocated impact Calima Energy Limited’s reported assets and liabilities, future net
earnings due to the impact of future depreciation and amortisation expense and impairment tests. No goodwill or deferred tax
implications will arise on the acquisition and transaction costs of the acquisition will be included in the capitalised cost of the
asset.
Rehabilitation provision
As part of the acquisition the consolidated entity acquired the related environmental and rehabilitation liabilities. A provision
has been made for the present value of anticipated costs for future rehabilitation of the facilities. The consolidated entity's
exploration activities are subject to various laws and regulations governing the protection of the environment. The
consolidated entity recognises management's best estimate for assets retirement obligations and site rehabilitations in the
period in which they are incurred. Actual costs incurred in the future periods could differ materially from the estimates.
Additionally, future changes to environmental laws and regulations, life of facility estimates and discount rates could affect
the carrying amount of this provision.
Equity investments
The investment related to a shareholding of 8.5% interest in Bahari Holding Company Limited. In light of the current
economic and low oil price environment the company has taken a prudent view to impair its interest in Bahari Holding
Company Limited.
31
Notes to the consolidated financial statements
For the year ended 31 December 2020
Foreign currency translation
Under the Accounting Standards, each entity within the Group is required to determine its functional currency, which is the
currency of the primary economic environment in which the entity operates. In arriving at this determination, management
gives priority to the currency that influences the labour, materials and other costs of exploration activities as they consider this
to be a primary indicator of the functional currency.
Income and associated taxes
The Group estimates the existence and amount of its tax liabilities based on its understanding of the tax laws in the relevant
jurisdictions. In the case where the final tax outcomes are different from amounts initially assessed, such differences will impact
the amount of current and deferred tax liabilities and assets recorded. At 31 December 2020, no liability has been recorded in
respect of income or other associated tax obligations.
32
Notes to the consolidated financial statements
For the year ended 31 December 2020
3.
General and administrative expenses
Employee benefit and Director compensation expense
Directors’ share based payment expense
Other share based payments
Corporate overheads
Depreciation of property plant and equipment
4.
Income tax expense
Major components of income tax expense for the periods ended 31
December 2020 and 2019:
Statement of comprehensive income
Current income tax
- Current income tax credit
- Adjustments in respect of current income tax of previous years
Deferred income tax
- Relating to origination and reversal of temporary differences
Income tax expense reported in statement of comprehensive income
Reconciliation of income tax expense to prima facie tax:
Accounting loss before income tax
At the statutory income tax rate of 30%
(31 December 2019: 27.5%)
- Expenditure not allowable for income tax purposes
- Share based payment expense
- Temporary differences not recognised as deferred tax asset
- Current year losses not recognised as deferred tax asset
-
Foreign tax rate differential
Income tax reported in statement of comprehensive income
Deferred income tax
Recognised on the statement of financial position
Deferred income tax at 31 December relates to the following:
Deferred income tax assets
- Foreign exchange
- Accrued expenditure
- Tax losses
- Exploration
- Other
- Deferred tax assets not recognised
Net deferred tax asset/(liability)
33
2020
$
2019
$
375,893
280,501
656,393
25,000
899,218
52,890
1,633,501
318,373
84,304
402,676
92,303
2,509,147
119,620
3,123,746
2020
$
2019
$
-
-
-
-
-
-
-
-
(6,394,743)
(1,583,603)
(1,918,423)
(435,491)
123,557
25,360
(37,184)
1,352,988
453,702
-
363,423
48,567
(210,157)
257,458
(23,800)
-
2020
$
2019
$
(35,477)
13,500
12,597,972
(5,641,342)
503,758
(7,438,411)
-
-
6,934
6,325
6,665,618
(559,648)
335,514
(6,454,744)
-
-
Notes to the consolidated financial statements
For the year ended 31 December 2020
The deductible temporary differences and the tax losses do not expire under current tax legislation. Deferred tax assets have not
been recognised in respect of these items because it is not probable that future taxable profit will be available against which the
Group can utilise benefits. The Group has unrecognised tax losses of $7,438,411 (31 December 2019: $6,454,744). The
unrecognised losses for 2020 all originate in Australia. All losses are revenue in nature.
Tax consolidation
For the purposes of income taxation, the Group and its 100% controlled Australian entity have not elected to form a tax
consolidated group.
5. Cash and cash equivalents
Cash at bank and on hand
6. Trade and other receivables
GST/VAT receivable
Prepayments
Bank guarantees
Other
2020
$
1,697,087
1,697,087
2020
$
5,479
86,005
-
279
91,763
2019
$
3,661,879
3,661,879
2019
$
1,384,195
375,866
47,992
26,398
1,834,451
Trade and other receivables are neither past due nor impaired. These are non-interest bearing and generally have repayments
between 30-90 days. Their carrying values approximate their fair value.
7.
Other Assets
Balance at beginning of the year
Deposits
(i)
LMR Security Deposits with BC Oil & Gas Commission
8.
Exploration and Evaluation Expenditure
Balance at beginning of the year
Exploration expenditure incurred
(Disposal)/Acquisition of Namibian assets
Impairment(i)
Foreign exchange movements
2020
$
-
534,563
534,563
2019
$
-
-
-
2020
$
62,862,296
1,665,483
-
(1,957,275)
(2,302,916)
60,267,588
2019
$
32,438,808
30,053,809
(1,485,519)
-
1,855,198
62,862,296
(i)
The Company is not capitalising any additional Exploration and Evaluation Expenditure associated with
its Canadian Business.
34
Notes to the consolidated financial statements
For the year ended 31 December 2020
9. Investments
Balance at the beginning of the period
Impairment of investment
Foreign exchange movement
2020
$
1,126,089
(1,076,402)
(49,687)
-
2019
$
1,080,852
-
45,237
1,126,089
The investment related to a shareholding of 8.5% interest in Bahari Holding Company Limited. In light of the current
economic and low oil price environment the company has taken a prudent view to impair its interest in Bahari Holding
Company Limited.
10. Trade and other payables
Trade creditors and accruals
Trade creditors are non-interest bearing and are normally settled on 30-day terms
11. Loans & Lease Liabilities
Loan(i)
Loan amount
Offset against Oil and Gas property
Opening balance of loan
Payments
Interest Expense
Depletion
Foreign exchange movement
Lease Liabilities(ii)
2020
2019
$
504,461
504,461
$
201,456
201,456
2020
$
2019
$
851,248
-
851,248
(196,912)
157,846
52,890
(7,860)
857,212
1,055,893
(173,074)
882,818
(244,601)
180,639
-
32,392
851,248
669,992
-
(i)During the previous year, the Group entered into an arrangement to borrow CAD1,000,000. This facility, inclusive of
CAD200,000 cash interest, is repayable through monthly remittance of net cash flows from the Paradise Well (official
designation: Boundary 5-1-86-15 00/11-01-08615W6/0, located 40km north-east of Fort St. John and 180km southeast of
the Group’s core interests in the Montney) to the lender, over a maximum period of thirty-six (36) months to 1 April 2022.
At the end of the term, any sum that has not been settled through the net cash flows from the well are payable in cash upon
maturity.
Additionally, the loan contains a conversion feature. At any time between the 1 October 2021 and 1 April 2022, the lender
may convert the outstanding balance of the loan into shares in Calima Energy Limited (at a price of the 20-day VWAP prior
to such election), subject to shareholder approval. Furthermore, at any time, the lender may take ownership of the Well in
full and final settlement of any liability under this agreement.
35
Notes to the consolidated financial statements
For the year ended 31 December 2020
(ii)The Statement of Financial Position shows the following amounts relating to leases:
Right-of use assets
Equipment
Lease Liabilities
Current
Non-current
2020
$
2019
$
649,975
649,975
209,423
460,569
669,992
-
-
-
-
-
On 7 August 2020 the Company entered into a lease to buy agreement with New Wave Energy Services in respect of the 4
C-Rings on location at the Calima Lands. The agreement has an effective date of 1 January 2020 and requires monthly rental
payments of C$20,000 plus taxes payable. The acquisition price of the C-Rings is set at C$960,000 with any lease payments
offset against the acquisition price. As at 31 December 2020, the remaining lease to buy balance is $C720,000. In the event
the Company’s subsidiary in Canada, Calima Energy Inc, undertakes a fundraising greater than C$5,000,000 an acquisition
and payment of the remaining balance is required.
12. Restoration Provisions
Opening Balance
Additional provision
Restoration obligations assumed from acquisition
Fair value movement in restoration provision for existing wells
Foreign exchange movement
2020
$
3,255,663
-
1,853,761
(216,013)
(217,151)
4,676,261
2019
$
43,873
3,181,635
-
30,155
3,255,663
Calima estimates for abandonment and remediation for the current Calima assets sits at a combined total of CAD 4,591,153
The majority of this estimate relates to the cost of reclamation of the Montney padsite.
Calima Energy Inc currently holds the license to 3 wells in NE British Columbia as summarised below:
Paradise Well
The first of these wells is a producing oil well with a single well facility license associated with it. All of this equipment is
contained within a single surface lease at 5-1-86-15 W6M. This location is on flat ground and required minimal earth
movement during construction.
Montney wells and Pad
The second and third wells are the Montney gas wells located at A-54-C/94-G-9. These wells were drilled from one pad.
Adjacent to this pad is a water storage facility that houses 4 X 6,500m3 C-rings in a clay lined engineered berm. Two of these
C-rings currently contain produced flow back water from the wells and the other two have an inventory of fresh water.
36
Notes to the consolidated financial statements
For the year ended 31 December 2020
13.
Issued capital
(a)
Share capital
Ordinary shares fully paid
(b) Movements in ordinary shares on issue
Balance at 1 January 2020
Issued for services rendered to the Company – 14 July 2020(i)
Issued for services rendered to the Company – 18 September 2020
Issued for services rendered to the Company – 14 October 2020(i)
Costs associated for issuing shares in public offers
Balance at 31 December 2020
Balance at 1 January 2019
Conversion of Class B Performance Shares – 2 July 2019
Issued for services rendered to the Company – 2 July 2019
Issue of ordinary shares - 8 July 2019
Issue of ordinary shares - 5 August 2019
Issue of ordinary shares – 5 August 2019
Costs associated for issuing shares in public offers
Balance at 31 December 2019
Number
$
2,191,938,208
296,329,242
2,155,572,225
11,902,002
3,500,000
20,963,981
-
2,191,938,208
1,444,885,070
3,947,360
1,180,598
222,222,222
131,963,716
351,373,270
-
2,155,572,225
296,108,276
59,742
25,000
136,224
-
296,329,242
284,246,600
71,052
21,251
4,000,000
2,375,347
6,324,719
(930,693)
296,108,276
i)At the Annual General Meeting dated 29 May 2020 as per the AGM results lodged in ASX, shareholder approval was received
for each of the Directors to receive Shares in lieu of 100% of Director’s fees and consultancy fees payable to them in the
period 1 April 2020 to 31 March 2021 as part of the Company's strategy to sustain its business in the current volatile
commodity price environment. Consultants will also receive Shares in lieu of a portion of the consultancy fees payable to
them on similar terms as the Directors.
(c)
Terms and conditions of issued capital
Ordinary shares have the right to receive dividends as declared, and in the event of winding up the Group, to participate in
the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid upon on shares held.
(d) Movements in number of performance shares on issue
Number
Number
2020
2019
Balance 1 January
Vested and converted into ordinary shares
Performance shares expired
Balance at 31 December
16,081,866
-
(16,081,866)
-
20,029,226
(3,947,360)
-
16,081,866
2020
2019
(e) Movements in number of performance rights on issue
Number
Number
Balance 1 January
Balance at 31 December
19,450,000
19,450,000
19,450,000
19,450,000
The performance rights were granted to senior management, and vest into ordinary shares upon the satisfaction of certain
performance obligations. Please refer to Note 21 for further information.
37
Notes to the consolidated financial statements
For the year ended 31 December 2020
(f) Movements in number of options on issue
Balance 1 January
Options Expired
Balance at 31 December
14. Accumulated losses and reserves
(a) Movements in accumulated losses were as follows:
Balance 1 January
Net loss attributable to members
Balance at 31 December 2020
(b) Other reserves
2020
2019
Number
Number
30,750,000
(10,750,000)
20,000,000
32,750,000
(2,000,000)
30,750,000
2020
$
2019
$
248,773,502
6,394,743
247,189,899
1,583,603
255,168,245
248,773,502
At 31 December 2018
Foreign currency translation
Share based payments
At 31 December 2019
Share based payments
Foreign currency transition
At 31 December 2020
Nature and purpose of reserves
Foreign currency
translation
Share based
payment reserve
$
$
(14,392)
2,129,754
-
2,115,362
-
(2,221,704)
(106,342)
15,652,075
-
84,304
15,736,379
84,535
-
15,820,914
Total
$
15,637,683
2,129,754
84,304
17,851,741
84,535
(2,221,704)
15,714,572
Share-based payment reserve
The share-based payment reserve is used to record the value of equity instruments other than ordinary shares provided to
employees, as part of their remuneration, and others, for services rendered.
Foreign currency translation
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
statements of foreign subsidiaries.
15.
Loss per share
Basic and diluted loss per share (cents per share)
2020
(0.29)
2019
(0.10)
Losses attributable to ordinary equity holders of the parent used ($):
(6,394,743)
(1,583,603)
Weighted average number of ordinary shares used (Number):
2,166,692,490
1,752,526,058
As the Group is in a loss-making position, the potential ordinary shares, which include the Performance Shares, the
Performance Rights, and the Options, are not included in calculating diluted loss per share as they are anti-dilutive.
38
Notes to the consolidated financial statements
For the year ended 31 December 2020
16.
Commitments
Land Rentals
The Group has the following obligations in respect of non-cancellable land rental over drilling rights
•
Later than one year but no more than five years: $140,924 (2019: $137,340)
The Company had no other commitments at the year-end that have not been disclosed elsewhere in this report.
17.
Segment reporting
AASB 8 Operating Segments requires operating segments to be identified on the basis of internal reports that are regularly reviewed
by the Chief Operating Decision Maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its
performance, and for which discrete financial information is available. In the case of the Group the CODM are the executive
management team and all information reported to the CODM is based on the consolidated results of the Group as one operating
segment, as the Group’s activities related to oil and gas exploration.
Accordingly, the Group has only one reportable segment and the results are the same as the Group results.
18.
Reconciliation of cash flows from operating activities
Cash flows from operating activities
Profit/(Loss) for the period
(6,394,743)
(1,583,603)
2020
$
2019
$
Adjustments for:
Deprecation
Share based remuneration
Other share-based payments
Interest expense
Site rehabilitation expenses
Impairment - investment
Impairment - exploration
Changes in assets and liabilities
Decrease/(increase) in trade receivables
Increase/(decrease) in trade creditors and accruals
Net cash used in operating activities
19.
Financial risk management objectives and policies
Overview
The Group have exposure to the following risks from their use of financial instruments:
•
•
•
•
Interest rate risk
Credit risk
Liquidity risk
Foreign currency risk
52,890
280,501
25,000
154,753
1,853,761
1,076,402
1,957,275
119,620
84,304
92,303
180,639
-
-
-
(79,215)
412,359
(661,017)
(300,198)
(719,428)
(2,126,363)
This note presents information about the Group’s exposure to each of the above risks, their objectives, policies and processes for
measuring and managing risk, and the management of capital.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.
39
Notes to the consolidated financial statements
For the year ended 31 December 2020
Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and
controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes
in market conditions and Group’s activities.
The Group Audit Committee oversees how management monitors compliance with the Group’s risk management policies and
procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.
The Group’s principal financial instruments are cash, short-term deposits, receivables and payables.
Interest rate risk
Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to
changes in market interest rates. Interest rate risk arises from fluctuations in interest bearing financial assets and liabilities that the
Group uses. Interest bearing assets comprise cash and cash equivalents which are considered to be short-term liquid assets. It is the
Group’s policy to settle trade payables within the credit terms allowed and therefore not incur interest on overdue balances. The
following table sets out the carrying amount, by maturity, of the financial instruments that are exposed to interest rate risk:
31 December 2020
Financial assets
Variable interest rate
Financial liabilities
Non-interest bearing
31 December 2019
Financial assets
Variable interest rate
Financial liabilities
Non-interest bearing
Weighted
average
effective
interest rate
%
1.00%
1,697,087
1,697,087
642,919
1.00%
3,661,879
3,661,879
230,560
1 Year or
Less
$
Over 1 to
5 years
$
More than
5 years
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
1,697,087
1,697,087
642,919
3,661,879
3,661,879
-
230,560
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets or liabilities at fair value through profit or loss. Therefore, a change in
interest rates at the reporting date would not affect profit or loss.
Cash flow sensitivity analysis for variable rate instruments
A change of 25 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the
amounts shown in the following.
31 December 2020
Financial assets
Cash and cash equivalents
Cash flow sensitivity (net)
40
Carrying value at 31
December
$
1,697,087
Profit or loss
25 bp increase
25 bp decrease
$
4,243
4,243
Profit or loss
$
(4,243)
(4,243)
Notes to the consolidated financial statements
For the year ended 31 December 2020
31 December 2019
Financial assets
Cash and cash equivalents
Cash flow sensitivity (net)
Carrying value at 31
December
$
3,661,879
25 bp increase
25 bp decrease
$
9,155
9,155
$
(9,155)
(9,155)
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group’s receivables from customers, cash and cash equivalents.
The Group trades only with recognised, creditworthy third parties. It is the Group policy that all customers who wish to trade on credit
terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result
that the Group’s exposure to bad debts is not significant. The maximum exposure to credit risk is the carry value of the receivable, net
of any allowance for doubtful debts.
With respect to credit risk arising from the other financial assets of the Group, which comprise cash and cash equivalents, the Group’s
exposure to credit risk arises from default of the counter party, with a maximum exposure equal to the carrying amount of these
instruments. The Group does not place funds on terms longer than 120 days and has the facility to place the deposit funds with more
than one bank.
Exposure to credit risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum exposure to
credit risk at the reporting date was:
Cash and cash equivalents
Trade and other receivables
2020
$
1,697,087
91,763
1,788,849
2019
$
3,661,879
1,834,451
5,496,330
The Group is not significantly exposed to credit risk from its operating activities, however the Board constantly monitors customer
receivables. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial asset. The Group
does not hold collateral as security. No material exposure is considered to exist by virtue of the possible non-performance of the
counterparties to financial instruments and cash deposits. Credit rating of cash is A+; all funds are held by Royal Bank of Canada and
NAB which have government guarantees on deposits.
Impairment losses
None of the Group’s receivables are past due. The Group’s trade receivables are all current at the reporting date.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to
managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both
normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group’s objective is to maintain a balance between continuity of funding and flexibility.
The following are the contractual maturities of financial liabilities:
Consolidated – 31 December 2020
Trade and other payables
Loan
Carrying
amount
$
504,461
857,212
1,361,673
Contractual cash flows
$
504,461
1,081,135
1,585,596
6 months
or less
$
504,461
-
504,461
6 Months –
3 Years
$
-
1,081,135
1,081,135
41
Notes to the consolidated financial statements
For the year ended 31 December 2020
Consolidated – 31 December 2019
Trade and other payables
Loan
Carrying
amount
$
201,456
851,248
1,052,704
Contractual cash flows
$
201,456
1,081,135
1,282,591
6 months
or less
$
201,456
-
201,456
6 Months –
3 Years
$
-
1,081,135
1,081,135
Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide
returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
The Group’s overall strategy remains unchanged from 31 December 2020.
The capital structure of the Group consists of net debt (trade payables and Income tax (receivable)/payable detailed in Notes 10 and
4 offset by cash and bank balances detailed in Note 5) and equity of the Group (comprising issued capital, reserves, offset by retained
losses detailed in Notes 13 and 14).
The Group is not subject to any externally imposed capital requirements.
The Group’s Board of Directors reviews the capital structure on an ongoing basis. As part of this review the Board considers the cost
of capital and the risks associated with each class of capital. In order to maintain the capital structure, the Group may issue fresh
equity, return capital to shareholders or farm out part of its assets.
Fair value of financial assets and liabilities
The fair value of cash and cash equivalents and non-interest bearing financial assets and financial liabilities of the Group approximate
their carrying value.
Foreign currency risk
Foreign currency risk is the risk that the fair values or future cash flows of a financial instrument will fluctuate because of changes in
foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily
to the Group’s previous operating activities (when revenue or expenses is denominated in a different currency from the Group’s
presentation currency) and the Group’s net investment in foreign subsidiaries. Due to previous operations, the majority of the cash
held at 31 December 2020 was denominated in Canadian Dollars
As a result of significant cash balance denominated in Canadian Dollars (CAD$), the Group’s statement of financial position can be
affected significantly by movements in the CAD$ / A$ exchange rates.
The Group had the following exposure to CAD$ foreign currency:
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Loan
2020
$
1,408,828
29,100
1,437,928
376,411
857,212
1,233,623
2019
$
1,060,017
1,685,027
2,745,044
15,402
851,248
866,650
The Group is mainly exposed to CAD$. The following table details the Group’s sensitivity to a 15% increase and decrease in the
Australian dollar against the CAD$. Management continually monitor exchange rate forecasts and assess the impact of possible
changes in foreign exchange rates. The sensitivity analysis only includes outstanding foreign currency denominated monetary items
and adjusted their translation at the period end of a 15% change in foreign currency rates. A positive number indicates a decrease in
loss where the Australian dollar weakens against the Canadian Dollar.
42
Notes to the consolidated financial statements
For the year ended 31 December 2020
Profit or loss: + 15%
Profit or loss: - 15%
2020
$
(142,313)
142,313
2019
$
(281,759)
281,759
20. Key management personnel disclosures
(a) The following were key management personnel of the Group at any time during the reporting period and unless otherwise
indicated were key management personnel for the entire period.
Directors
A Stein
G Whiddon
J Taylor
N Hackett
B Lawrence
M Freeman
Managing Director
Executive Chairman
Technical Director (resigned 20 Jan 2020)
Independent Non-Executive Director (resigned 11 Nov 2020)
Non-Executive Director
Company Secretary
(b) Key management personnel compensation
The key management personnel compensation included in employee benefit and Director compensation expenses are as
follows:
Short-term employee benefits
Equity compensation benefits
2020
2019
$
291,928
280,501
572,429
$
520,375
49,983
570,358
(c) Other transactions with key management personnel and their related parties
Information regarding individual Directors and executive’s compensation is provided in the Remuneration Report section of the
Directors’ Report.
During the year ended 31 December 2020, the Company had a consulting agreement with Havoc Partner Services (Havoc), under which
Director Alan Stein and Technical Director Jon Taylor(resigned), Havoc members are engaged as members of the Company’s
management team. Payments made to Havoc during the relevant period was $61,957 (2019: $361,796). The amounts owed to Havoc
as at 31 December 2020 was nil (2019: $20,277).
Apart from details disclosed in this note, no Director has entered into a material contract with the Group since the end of the previous
financial year and there were no material contracts involving Directors’ interests existing at year end.
43
Notes to the consolidated financial statements
For the year ended 31 December 2020
21. Share based payment
(i)
Recognised share-based payment expenses
The expense recognised for share based payments during the period is shown in the table below:
Management Options
Performance Rights
Conversion of Performance Shares
Ordinary shares issued
Total Share Based Payments
(ii)
Types of share-based payment plans
2020
$
26,057
58,478
-
195,966
280,501
2019
$
25,986
58,318
71,052
21,251
176,607
Share based payments are provided to Directors, employees, consultants and other advisors. The issue to each individual Director,
consultant or advisor is controlled by the Board and the ASX Listing Rules. Terms and conditions of the payments, including the grant
date, vesting date, exercise price and expiry date are determined by the Board, subject to shareholder approval where required.
Management Options
20,000,000 Management Options were granted on 29 August 2017, in two equally sized tranches with an exercise price of $0.09 and
$0.12 per share respectively. The Management Options vest upon the meeting of certain criteria. Each Management Option converts
into one ordinary share of Calima Energy Limited on exercise. No amounts are paid or are payable by the recipient on receipt of the
Management Option, and they carry neither rights of dividends nor voting rights. The expense recognised in the year relates to
spreading the fair value (measured at grant date) of these Management Options over the expected vesting period.
Performance Rights
19,450,000 Performance Rights were granted on 29 August 2017. The Performance Rights vest upon the meeting of certain criteria.
Each performance right converts into one ordinary share of Calima Energy Limited on vesting. No amounts are paid or are payable by
the recipient on receipt of the performance right. The performance rights carry neither rights of dividends nor voting rights. The
expense recognised in the year relates to spreading the fair value (measured at grant date) of these Performance Rights over the
expected vesting period.
Other options
On 6 November 2018, 2,750,000 options were granted to consultants for services rendered, with an exercise price of $0.07 per share.
Of these, 2,000,000 expired unexercised on 31 December 2019. No amounts are paid or are payable by the recipient on receipt of the
option. The options carry neither rights of dividends nor voting rights.
Ordinary Shares issued in consideration for services rendered
On 2 October 2020, 3,500,000 shares were issued at $0.00714 each to a Stocksdigital in lieu of marketing services valued at $25,000.
The Group considered this it is not possible to fair value the services rendered, and therefore the expense recognised is equal to the
fair value of the instruments granted.
At the Annual General Meeting dated 29 May 2020 as per the AGM results lodged in ASX, shareholder approval was received for
each of the Directors to receive Shares in lieu of 100% of Director’s fees and consultancy fees payable to them in the period 1 April
2020 to 31 March 2021 as part of the Company's strategy to sustain its business in the current volatile commodity price
environment. Consultants will also receive Shares in lieu of a portion of the consultancy fees payable to them on similar terms as the
Directors.
The expense recognised for share based payments during the period is shown in the table below:
Ordinary shares issued – 14 July 2020
Ordinary shares issued – 14 October 2020
44
Number
11,902,002
20,963,981
32,865,983
$
59,742
136,224
195,966
Notes to the consolidated financial statements
For the year ended 31 December 2020
Valuation
The assessed fair values of the rights were determined using a Binomial Barrier valuation model. Expected volatility was calculated
based on the historic volatility of a peer group of Companies over a period commensurate with the expected life of the awards.
The inputs to the model for the period to 31 December 2020 for the Rights and the Options were:
Number
Valuation model
Grant Date
Expiry Date
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected life of options (yrs.)
Right’s exercise price ($)
Barrier Price
Share price at grant date ($)
Fair value at grant date ($)
Performance Rights
Management Options
Other Options
19,450,000
Binomial Barrier
29-Aug-2017
29-Aug-2022
-
40%
2.03%
5.0
-
$0.15
$0.045
$0.015
20,000,000
Binomial Barrier
29-Aug-2017
29-Aug-2022
-
40%
2.03%
5.0
$0.09/$0.12
$0.09
$0.045
$0.008/$0.005
750,000
Black-Scholes(i)
06-Nov-2018
06-Nov-2021
-
50%
2.24%
3.0
$0.07
$0.07
$0.05
$0.012
(i)The Company used Black-Scholes to value the options due to not being able to value the service.
22. Related party disclosures
(a)
Subsidiaries
Name of entity
Country of incorporation
Equity interest
31 December 2020
%
31 December 2019
%
Parent entity
Calima Energy Limited
Subsidiaries
Calima Energy Inc
Calima Energy Limited (Jersey)
Calima Energy (Namibia) Ltd
Ultimate parent
(b)
Australia
Canada
Jersey
United Kingdom
100
100
100
100
100
100
Calima Energy Limited is the ultimate Australian parent entity and ultimate parent entity of the Group.
(c)
Key management personnel
Details relating to key management personnel, including remuneration paid are included in the Directors’ Report and Note 20.
45
Notes to the consolidated financial statements
For the year ended 31 December 2020
23. Auditor’s remuneration
Current auditors:
BDO Audit (WA) Pty Ltd
Amounts received or due and receivable by BDO Audit (WA) Pty Ltd for:
An audit or review of the financial report of the Group
Tax advice and related services
Total remuneration of BDO
24.
Contingent assets and liabilities
At 31 December 2020, there were no contingent assets or liabilities.
25. Events after the reporting date
2020
$
2019
$
53,717
5,150
58,867
49,512
5,100
54,612
• On 25 February 2021, the Company announced it has entered into a binding agreement to acquire 100% of the issued share
capital of Blackspur Acquisition, a privately held Canadian company which owns producing oil and natural gas assets in two core
areas within Alberta, at Brooks and Thorsby.
• On 11 March 2021 the Company issued its Notice of Meeting, requesting shareholder approval for:
o Acquisition of Blackspur
o Approval to issue up to A$38m of Shares to fund the acquisition and working capital
o
o
o
Issue up to 127 million shares convert all debt owing on the parade well
Issue 38.5 million shares to consultants in lieu of fees associated with the transaction
Issue 98 million performance rights to management and directors
• On 16 March 2021 the Company confirmed that it had A$37m of funding commitments meeting the minimum funding obligation
to proceed with the Blackspur acquisition of C$33.5 million.
• On 24 March 2021 the Company provided an update on the drilling of 3 Sunburst wells by Blackspur.
The Directors are not aware of any other matters or circumstances not otherwise dealt with in this interim report that have
significantly, or may significantly affect the operations, results or state of affairs of the Group.
46
Notes to the consolidated financial statements
For the year ended 31 December 2020
26.
Parent disclosure
Profit/(Loss) for the year
Total comprehensive loss
Current assets
Non-current assets
Total assets
Current liabilities
Non-current assets
Total liabilities
Net assets
Issued capital
Performance shares
Reserves
Accumulated losses
Total shareholders’ equity
Contingent liabilities of the parent entity
Refer to Note 24. The parent entity has not provided any guarantees to its subsidiaries.
2020
$
(9,138,934)
(9,138,934)
1,569,353
56,301,829
57,871,182
(226,520)
(1,021,976)
(1,248,496)
56,622,686
2019
$
(172,425)
(172,425)
3,682,826
63,024,888
66,707,712
(174,941)
(957,767)
(1,137,708)
65,570,004
296,329,242
-
15,702,711
(255,409,267)
56,622,686
296,015,973
-
15,819,114
(246,265,081)
65,570,004
47
Directors’ declaration
The Directors of Calima Energy Limited declare that:
(a)
in the Directors’ opinion the financial statements and notes and the Remuneration report in the Directors report set out on pages
5 to 20, are in accordance with the Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the consolidated entity’s financial position as at 31 December 2020 and of its performance,
for the financial period ended on that date; and
complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and Corporations
Regulations 2001.
(b)
(c)
the financial report also complies with International Financial Reporting Standards as disclosed in note 2; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
Note 2(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 by the chief executive officer and
chief financial officer for the financial period ended 31 December 2020.
This declaration is made in accordance with a resolution of the directors.
Signed in accordance with a resolution of the Directors.
Glenn Whiddon
Chairman
31 March 2021
48
Independent auditor’s report
INDEPENDENT AUDITOR’S REPORT
49
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Calima Energy Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Calima Energy Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 31 December 2020, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, 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 2020 and of its
financial performance for the year ended on that date; 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 Group in accordance with 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 (including Independence Standards) (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 confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 2(c) in the financial report which describes the events and/or conditions
which give rise to the existence of a material uncertainty that may cast significant doubt about the
group’s ability to continue as a going concern and therefore the group may be unable to realise its as
sets and discharge its liabilities in the normal course of business. Our opinion is not modified in respect
of this matter.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matters described Material uncertainty related
to going concern section, we have determined the matters described below to be the key audit matters
to be communicated in our report.
Recoverability of Exploration and Evaluation Expenditure
Key audit matter
How the matter was addressed in our audit
As disclosed in Note 8 of the financial report, the
carrying value of capitalised exploration and
evaluation expenditures represents a significant
asset of the Group.
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources (“AASB 6”), the
recoverability of exploration and evaluation
expenditure requires significant judgement by
management in determining whether there are
any facts or circumstances that exist to suggest
the carrying amount of this asset may exceed its
recoverable amount. As a result, this is
considered a key audit matter.
Our audit procedures included, but were not
limited to, the following:
• Critically evaluating management’s
impairment indicator assessment;
• Obtaining a schedule of areas of interest held
by the group, and agreeing these to Title
Information Reports from the Province of
British Columbia Ministry of Energy, Mines and
Low Carbon Innovation database;
• Assessing the ability to finance any planned
future exploration and evaluation activity;
• Considering whether any areas of interest had
reached a stage where a reasonable
assessment of economically recoverable
reserves existed;
• Holding discussions with management to
obtain an understanding of the nature of the
impairment expense during the year;
• Considering whether there were any other
salient facts or circumstances that existed to
indicate that further impairment testing was
required; and
• Assessing the adequacy of the related
disclosures included in the financial report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 31 December 2020, but does not include
the financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of 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.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 15 to 20 of the directors’ report for the
year ended 31 December 2020.
In our opinion, the Remuneration Report of Calima Energy Limited, for the year ended 31 December
2020, 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.
BDO Audit (WA) Pty Ltd
Phillip Murdoch
Director
Perth, 31 March 2021
Stock Exchange Information
As at 23 March 2021
Additional information required by the Australian Securities Exchange Limited and not shown elsewhere in this report is as follows. The information is
current as at 23 March 2021.
1.
Distribution of equity securities
Analysis of number of equity security holders by size of holding:
1
1,001
5,001
10,001
- 1,000
-
-
-
5,000
10,000
100,000
100,001 and above
Total
2.
Substantial shareholders
Substantial shareholders (i.e. shareholders who hold 5% or more of the issued capital):
Craig Ian Burton
3.
Voting rights
Holders
167
132
217
1,106
888
2,510
Number of
shares
Percentage
held
217,905,043
9.87%
a. Ordinary Shares - Each shareholder is entitled to receive notice of and attend and vote at general meetings of the Company. At a general
meeting, every shareholder present in person or by proxy, representative of attorney will have one vote on a show of hands and on a poll,
one vote for each share held.
b. Options & contractual rights - No voting rights
4.
Quoted securities on issue
The number of quoted shares issued by the Company are set out below:
Ordinary fully paid shares
5.
On-market buy back
There is no current on-market buy back.
6.
Top 20 Quoted Shareholders
Rank
1
2
3
4
5
6
7
8
8
10
11
12
13
14
15
16
17
18
19
Name
CRAIG IAN BURTON
HSBC CUSTODY NOMINEES LIMITED
WESTLAND GROUP HOLDINGS PTY LTD
BART SUPERANNUATION PTY LIMITED <4F INVESTMENTS
SUPERFUND A/C>
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
MR GLEN BULL
CITICORP NOMINEES PTY LIMITED
GURRAVEMBI INVESTMENTS PTY LTD
MR JAY EVAN DALE HUGHES
AVIEMORE CAPITAL PTY LTD
JUTLAND NOMINEES PTY LTD
MR ADONIS KIRITSOPOULOS + MS JENNIFER ANNE FORD
PETO PTY LTD <1953 SUPER FUND A/C>
6466 INVESTMENTS PTY LTD
FLOTECK CONSULTANTS LIMITED
NERO RESOURCE FUND PTY LTD
EQUITY TRUSTEES LIMITED
MR ALAN MCKELLAR STEIN
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
53
Number
2,207,124,112
Units
182,550,043
103,395,713
77,829,650
48,947,378
48,876,024
48,320,000
46,460,464
40,000,000
40,000,000
35,355,000
34,346,067
34,000,000
32,520,000
32,175,724
31,973,790
31,000,000
28,333,334
26,321,942
26,082,438
% Units
8.27
4.68
3.53
2.22
2.21
2.19
2.11
1.81
1.81
1.60
1.56
1.54
1.47
1.46
1.45
1.40
1.28
1.19
1.18
Stock Exchange Information
As at 23 March 2021
20
INKESE PTY LTD
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (Total)
Total Remaining Holders Balance
7.
Unquoted Securities
Class
Performance rights escrowed to 28 August 2019
Options exercisable at $0.09 on or before 25 August 2022
Options exercisable at $0.12 on or before 25 August 2022
8.
Holders of Unquoted Securities (holding more than 20% of each equity security class)
25,000,000
973,487,567
1,233,636,545
Performance Rights
Name
MR JONATHAN TAYLOR
MR ALAN STEIN
MR MARK SOFIELD + MS REBECCA SOFIELD
DECBEL PTY LTD
MR RICHARD HIGGINS
Unlisted Options exercisable at $0.09 on or before 25 August 2022
Name
MR ALAN STEIN
MR JONATHAN TAYLOR
MR MARK SOFIELD + MS REBECCA SOFIELD
DECBEL PTY LTD
MR RICHARD HIGGINS
Unlisted Options exercisable at $0.12 on or before 25 August 2022
Name
MR ALAN STEIN
MR JONATHAN TAYLOR
MR MARK SOFIELD + MS REBECCA SOFIELD
DECBEL PTY LTD
MR RICHARD HIGGINS
1.13
44.11
55.89
Quantity
19,450,000
10,000,000
10,000,000
Number
8,250,000
2,700,000
2,700,000
2,700,000
2,700,000
Number
3,300,000
3,300,000
1,333,334
1,333,333
1,333,333
Number
3,300,000
3,300,000
1,333,334
1,333,333
1,333,333
%
42%
14%
14%
14%
14%
%
33%
33%
11.3%
11.3%
11.3%
%
33%
33%
11.3%
11.3%
11.3%
54
Petroleum Leases
As at 23 March 2021
9.
Petroleum Lease Interests
Type
Expiry Date
Drilling Licence
PNG Lease
Drilling Licence
PNG Lease
PNG Lease
Drilling Licence
Drilling Licence
Drilling Licence
Drilling Licence
Drilling Licence
Drilling Licence
Drilling Licence
Drilling Licence
Drilling Licence
Drilling Licence
Drilling Licence
Drilling Licence
PNG Lease
PNG Lease
PNG Lease
PNG Lease
PNG Lease
PNG Lease
PNG Lease
Drilling Licence
Drilling Licence
Drilling Licence
Drilling Licence
PNG Lease
PNG Lease
PNG Lease
PNG Lease
PNG Lease
PNG Lease
PNG Lease
PNG Lease
Drilling Licence
PNG Lease
PNG Lease
PNG Lease
NA - Paradise well
NA - Paradise well
September 21, 2021
June 18, 2029
June 18, 2029
January 19, 2021
June 22, 2021
July 27, 2021
July 27, 2021
August 24, 2021
August 24, 2021
September 21, 2021
October 19, 2021
November 16, 2021
December 14, 2021
July 27, 2021
August 24, 2021
June 18, 2029
June 18, 2029
June 18, 2029
June 18, 2029
June 18, 2029
August 13, 2029
August 13, 2029
September 21, 2021
January 19, 2021
March 23, 2021
April 20, 2021
June 18, 2029
June 18, 2029
June 18, 2029
June 18, 2029
August 13, 2029
August 13, 2029
August 13, 2029
August 13, 2029
July 27, 2021
August 13, 2029
August 13, 2029
August 13, 2029
acres
326
326
684
684
687
1,369
1,369
1,369
1,369
1,369
1,369
1,369
1,369
1,369
1,369
1,371
1,371
1,371
1,371
1,371
1,374
1,374
1,374
1,374
2,053
2,056
2,056
2,056
2,058
2,058
2,058
2,058
2,058
2,061
2,061
2,061
2,063
2,063
2,063
2,750
PNG File Number
65101
67111
66481
67050
67048
66256
66386
66420
66421
66441
66442
66480
66515
66550
66581
66422
66443
67044
67045
67047
67035
67046
67028
67029
66479
66255
66313
66338
67036
67042
67043
67049
67032
67027
67030
67031
66419
67033
67034
67026
55