CALIMA ENERGY LIMITED
ABN 17 117 227 086
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
CORPORATE INFORMATION
Directors & Officers
Registered Office
Contact information
Auditor
Bankers
Share registry
Securities exchange listing
TABLE OF CONTENTS
Name
Glenn Whiddon
Karl DeMong
Lonny Tetley
Mark Freeman
Rod Monden
Perth, Australia
(Corporate headquarters)
Suite 4, 246-250 Railway Parade
West Leederville WA
6007
Telephone: +61 (0) 8 6500 3270
Facsimile: +61 (0) 8 6500 3275
Title
Chairman
Executive Director
Non-Executive Director
Finance Director & Company Secretary
CFO, Canada
Calgary, Alberta
(Operations headquarters)
Suite 1000, 205 5 Ave SW
Calgary, Alberta
T2P 0M9
Telephone: +1 403 460 0031
Email: info@calimaenergy.com
Website: www.calimaenergy.com
BDO Audit Pty Ltd
Level 9
Mia Yellagonga Tower 2
5 Spring Street
PERTH WA 6000
Australian Bankers
National Australia Bank
Level 14, 100 St Georges Terrace
Perth WA 6000
Computershare Investor Services Pty Ltd
Level 11, 172 St. Georges Terrace,
Perth WA 6000
Telephone: +61 (0) 8 9323 2000
Facsimile: +61 (0) 8 9323 2033
The Company is listed on the Australian Securities Exchange (ASX) and the
OTC.
ASX Code: CE1 OTC: CLMEF
Canadian Bankers
National Bank of Canada
Suite 1800, 311 – 6th Avenue SW
Calgary, Alberta T2P 3H2
Section
Highlights for the year ended 31 December 2023
Chairman letter
About Calima Energy Limited
Operational and financial results
Directors’ report
Consolidated financial statements and notes
Director’s declaration
Independent auditor’s report
Auditor’s independence declaration
Securities exchange information
Advisories & guidance
Appendix A: Schedule of interests in tenements
Page
2
3
4
4
8
20
47
48
54
55
57
60
1
HIGHLIGHTS
For the year ended 31 December 2023
Operational & Financial Results
(A$ thousands, unless otherwise noted)
Sales volumes
Total sales volume (boe)
Average daily sales volume (boe/d) (1)
Liquids percentage
Oil and natural gas sales A$ thousands)
Oil
Natural gas
Natural gas liquids
Total oil and natural gas sales (1)
Earnings
Cash provided from operating activities
Adjusted EBITDA (1)
Net income (loss) (1)
Capital investments
Year
ended
31 December
2023
Year
ended
31 December
2022
1,476,712
4,046
62%
1,431,288
3,921
66%
$
$
$
$
80,170
10,640
2,556
93,366
38,235
33,564
(41,395)
$
$
$
$
$
101,606
18,269
2,590
122,465
50,279
67,225
22,807
47,816
Investments in oil and natural gas assets (1)
$
26,394
Statement of financial position
Available funding (1)
Net working capital / (deficit) (1)
(1) Refer to Advisories & Guidance on page 55 and the Operational and Financial Results section on pages 4-7 for additional information regarding the Company’s GAAP and
18,619
(7,434)
22,159
3,781
$
$
$
$
non-GAAP financial measures.
HIGHLIGHTS FOR THE COMPANY DURING THE 2023 FINANCIAL YEAR WERE:
• Calima made significant progress during the 2023 financial year with the sale of the Montney Assets to Advantage
Energy for total asset sales of $12.0 million that closed during the year and signing a definitive agreement on
December 27, 2023 for the sale of Blackspur Oil Corp to Astara Energy Corp for $81.6 million which closed on
February 27, 2024.
The Company has returned $10 million to shareholders and is presently finalising an ATO ruling to return a further
$80 million (12.6 cents per share) subject to shareholder approval.
Post distribution, Calima will have ~A$5-6 million in cash and on-going production from the Paradise Field in British
Columbia.
•
•
2
CHAIRMAN LETTER
For the year ended 31 December 2023
It is with great pleasure that we present to you our annual report for the 2023 financial year. We are pleased to report that
it was a year of significant progress for Calima Energy Limited (ASX: CE1) (“Calima”, “Calima Group”, “the Company”).
After many years investing and operating in Canada, we disposed of our two primary assets; the Montney gas condensate
acreage in North-East British Columbia in July 2023 and the Blackspur Oil production business in Alberta in February 2024.
Canada has world class energy assets, great experienced people and very strong environmental, social and governance,
however for some time our market capitalization was substantially less than the intrinsic value of our assets resulting in a
disconnect for stakeholders.
Our asset sales have generated in excess of A$93 million in sales proceeds, of which over 94% has or will be returned to
shareholders as a capital distribution.
Post capital distribution, which we anticipate will occur in 2nd quarter 2024, Calima Energy Limited will be seeking new
investment opportunities with a remaining cash balance of approximately A$5 – 6 million. Due to ASX listing rules in
Australia, should we not acquire a suitable asset by 2 July 2024, the ASX has advised us that our securities will be suspended
from trading until we do so.
I would like to thank all our stakeholders for their support over the years. To our Canadian employees, contractors, advisors
and others, thank you for your great efforts and contribution to the business.
Thank you for your continued support.
Glenn Whiddon
Executive Chairman
3
ABOUT CALIMA ENERGY LIMITED
Following the sale of Blackspur Oil Corp and the Montney Assets, the Company's focus has shifted to maintaining production
from the Paradise Field in British Columbia and acquiring additional oil and gas assets. The Company is dedicated to
responsible corporate practices, and places high value on adhering to strong Environmental, Social and Governance ("ESG")
principles.
OPERATIONAL AND FINANCIAL RESULTS
For the year ended 31 December 2023
Production and sales
Sales volumes
Oil (bbl)
Natural gas (Mcf)
Natural gas liquids (bbl)
Total sales volume (boe)
Average daily sales volume (boe/d)(1)
Liquids percentage
Realised prices and sales
Realised prices
Oil (A$/bbl)
Natural gas (A$/Mcf)
Natural gas liquids (A$/bbl)
Oil and natural gas sales (A$ thousands)
Oil
Natural gas
Natural gas liquids
Total oil and natural gas sales
Adjusted EBITDA
Year
ended
31 December
2023
876,285
3,364,818
39,624
1,476,712
4,046
62%
Year
ended
31 December
2022
909,666
2,942,815
31,153
1,431,288
3,921
66%
Year
ended
31 December
2023
Year
ended
31 December
2022
$
$
$
$
91.49 $
3.16
64.51 $
80,170 $
10,640
2,556
93,366 $
111.70
6.11
81.86
101,606
18,269
2,590
122,465
(A$ thousands)
Oil and natural gas sales
Royalties
Operating and transportation expenses
General and administrative expenses
Adjusted EBITDA(1)
(1) Refer to Advisories and Guidance on page 55 for additional information regarding the Company’s GAAP and non-GAAP measures.
$
$
Year
ended
31 December
2023
93,366
(19,246)
(31,623)
(8,933)
33,564
Year
ended
31 December
2022
122,465
(23,567)
(26,307)
(5,366)
67,225
$
$
4
Net income (loss)
For the year ended (A$ thousands)
Adjusted EBITDA (1)
Financing and interest
Deferred income tax (expense) recovery
Depletion and depreciation
Exploration expense
Impairment loss
Loss on equity investment
Realised loss on risk management contracts
Unrealised gain on risk management contracts
Share-based compensation
Foreign exchange and other
Net income / (loss)
Year
ended
31 December
2023
33,564
(1,296)
(2,104)
(21,538)
(1)
(48,333)
(4)
(623)
1,691
(2,743)
(8)
(41,395)
Year
ended
31 December
2022
67,225
(1,170)
(8,142)
(18,945)
(180)
-
(415)
(16,326)
3,219
(2,459)
-
22,807
$
$
$
$
(1) Refer to Advisories and Guidance on page 59 for additional information regarding the Company’s GAAP and non-GAAP measures.
Development update
Year
ended
31 December
2023
26,394
$
Year
ended
31 December
2022
47,816
$
Acquisition
Gas
(mmcf)
Oil/NGL
(mbbl)
Oil/NGL
(mbbl)
31-Dec-22
Gas
(mmcf)
Boe
(mboe)
(A$ thousands)
Total investment in oil and natural gas assets
Reserves update
Oil/NGL
(mbbl)
3,756
9,511
2,505
12,016
2,258
14,274
PDP
1P
Probable
2P
Possible
3P
Reserves as at 31 December 2023 (working interest after royalties)
Production
31-Dec-23
Gas
Gas
(mmcf)
(mmcf)
Additions
Gas
(mmcf)
Oil/NGL
(mbbl)
Oil/NGL
(mbbl)
Boe
(mboe)
Revisions
Gas
(mmcf)
Oil/NGL
(mbbl)
16,454
35,477
10,035
45,512
8,820
54,332
6,481
15,470
4,117
19,586
3,711
23,297
-760
-760
0
-760
0
-760
-2,782
-2,782
0
-2,782
0
-2,782
405
174
30
204
25
229
1,413
1,144
141
1,285
182
1,466
-125
-66
-245
-310
-242
-552
1,266
1,912
-505
1,407
-286
1,122
0
0
0
0
0
0
0
0
0
0
0
0
4,236
10,163
2,720
12,883
2,474
15,357
16,454
35,477
10,035
45,512
8,820
54,332
6,978
16,076
4,392
20,468
3,944
24,412
Development Plan
The development plan in the 31 December 2023 Reserve Report consists of 54 (gross) wells, 45 PUD’s and 6 probable
locations, to be drilled over 5 years. The schedule and breakdown in each reserve category is summarised in the table
below. The development plan is scheduled for proved and probable well locations to be drilled within a 5-year period. All
future development capital (“FDC”) for the TP and P+P reserve categories is included and reflects an increase year over year
due to inflation.
Period
Rig Count Proved
(PUD)
Development Well Count
Probable Possible Total
2024
2025
2026
2027
2028
2
2
2
1
1
10
16
12
7
0
0
0
0
2
4
0
0
0
0
0
10
16
12
9
4
Table 2: Rig and gross well count for each year
5
Insite Assumptions
InSite assessed all future locations they determined to be commercial. The key assumptions used by InSite to generate the Reserve Report were:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
The majority of the reserve estimates were prepared using deterministic methods that do not provide a mathematically derived quantitative
measure of probability. In principle, there should be no difference between estimates prepared using probabilistic or deterministic methods.
The oil price used for all reserves analysis in this report is stated in the table at the end of this release. The reserves are disclosed net to the point of
sale (reference point) and are reported net of lease fuel.
The Company is the operator for materially all its producing wells and all the future drills.
Operating costs for developed producing wells are based on actual costs incurred through YE2023. Operating costs for future wells and years are
based on the same data and estimated following a review of operating statements, operating budgets, as well as review of public records where
available. Cross checks were conducted between the revenue statements and land data to ensure they agreed. Fixed and variable costs have been
assigned to the Company’s active assets with remaining reserves. Operating costs associated with inactive assets as well as producing wells with no
reserves assigned have been entered as separate entities at the property level.
In conducting InSite’s reserve analysis, proved, probable and possible reserve volumes were determined by volumetric, material balance, and
production decline curve methods. The volumetric reserves were determined by reviewing all well logs, core, and geological data. Recovery factors
were assigned after analyzing the performance of similar wells in the area. Historical well production was reviewed to determine reserves calculated
by production decline curve analysis. The order of preference in choosing the methodology to be used was primarily production decline curve
analysis or material balance where sufficient data was available for such analysis with volumetrics being used where there was a lack of historical
data.
100% of the proved producing reserves were calculated based on decline analysis, oil-cut analysis and other performance/volumetric related
prediction methods, compared to 45% (44% net) of the total proved reserves and 40% (40% net) of the proved plus probable reserves, and 40%
(40% net) of proved plus probable plus possible reserves which used these methods. Volumetrics/simulation/analogy/type curve analyses were used
to calculate the remaining percentages of reserves in each category.
The EUR assignments are largely influenced by the production performance of existing producing wells and their associated volumetric recovery. In
the case of undeveloped drilling locations, reserve assignments and production profiles are based on analogy to the offsetting producers in the
nearby vicinity and/or other analogous pools.
The probable reserves contained in the report consist of two general types:
o
Performance-related (i.e. Proved plus Probable Developed) reserves represent the best estimate overall. Proved reserves are a more
conservative estimate of the recovery from wells where Possible reserves represent a more optimistic and lower probability estimate.
Proved plus probable reserves can also include enhanced recovery reserves which are only partially recognized under proved reserves. The
“wedge” or difference between the Proved Developed and Proved plus Probable Developed cases represents 25% (26% net) of the
Company’s Probable reserves. The “wedge” between Proved plus Probable Developed and Proved plus Probable plus Possible Developed
cases represents 37% (38% net) of the Company’s Possible reserves.
o
Future horizontal step-out wells represent 73% (73% net) of the Company’s probable reserves.
Future vertical step-out wells represent 1.7% (1.7% net) for the Company’s probable reserves.
The oil and gas reserve calculations and income projections upon which this report is based were determined in accordance with generally accepted
evaluation practices and evaluation process was consistent with prior years.
Proposed future well locations are allocated a reserve category based on proximity to existing wells and production.
Probable reserves were assigned such that there is a 50% probability that the assigned reserves could be recovered, or more on an aggregated basis.
Proved plus Probable plus Possible reserves were assigned such that there is a 10% probability that the assigned reserves could be recovered, or
more on an aggregated basis.
The production and revenue forecasts contained in the 31 December 2023 evaluation include abandonment and reclamation costs for each of the
Company’s existing and proposed wells that were assigned reserves in this report. These costs were determined using the Alberta Energy Regulator’s
Directive 011 as a base. The costs associated with abandonment, decommissioning, reclamation, and salvage of facilities, as well as inactive assets,
have been entered as separately.
The five-year development plan used for this reserve report is detailed above and assumes a multi rig program to develop a total of 54 gross well
locations. The development plan assumes 2-6 wells per standard development unit and approximately 128 - 160 acre spacing.
Anticipated drilling, completion & tie-in well costs range from C$0.8 to C$4.5 million depending on whether it’s a Sunburst, Glauconitic or Sparky
well.
The development plan assumes an initial estimate of 6-14 days respectively to drill new wells.
Average royalties payable on future well locations that were allocated reserves in this report is ~16% over the life of the wells. The land type and
related royalties are either Crown or Freehold and the average royalty for the PDP forecast for 2023 is 19%.
6
•
Each year, for the purposes of estimating undeveloped reserves, a development schedule is generated which must be appropriate and reasonable
for the Company to execute on. This development plan is prepared in consultation with InSite and takes into consideration market conditions and
the Company’s operational capacity, including financing and historical drilling activity. The plan must also conform to the various ASX and SPE-PRMS
requirements, the key points of which are:
o
o
o
o
the development plan is executed over a 5-year period from the effective date.
proved well locations must be drilled within 5 years of the date they were first certified as a reserve in previous reports.
The InSite evaluation has been prepared for the Company in accordance with reserves definitions, standards and procedures contained in
the Canadian Oil and Gas Evaluation (“COGE”) Handbook and have been classified in accordance with the Society of Petroleum Engineers’
Petroleum Resources Management System (SPE-PRMS) and reported in the most specific resource class in which the prospective resource
can be classified under 2018 SPE-PRMS. The reserves presented in the InSite report are based on forecast prices and costs. The price forecast
used for the reference price of oil based on Cushing, Edmonton and Western Canadian Select benchmarks, as well as the netback prices for
natural gas for the major purchasers. All oil prices used in the evaluation have been adjusted from the reference price for quality and
transportation; gas prices have been adjusted for heating value. Please note that the effects of any oil or gas hedging activities by the
Company have not been included in this report. The reserves are disclosed net to the reference point.
In the context of belonging to a larger portfolio of properties and coupled with the principal of aggregation of reserves, the total portfolio
reserves estimate carries a higher degree of confidence than the estimates for the individual properties.
Forward Looking Statements
This release may contain forward-looking statements. These statements relate to the Company’s expectations, beliefs, intentions
or strategies regarding the future. These statements can be identified by the use of words like “anticipate”, “believe”, “intend”,
“estimate”, “expect”, “may”, “plan”, “project”, “will”, “should”, “seek” and similar words or expressions containing same. These
forward-looking statements reflect the Company’s views and assumptions with respect to future events as of the date of this
release and are subject to a variety of unpredictable risks, uncertainties, and other unknowns. Actual and future results and
trends could differ materially from those set forth in such statements due to various factors, many of which are beyond our ability
to control or predict. These include, but are not limited to, risks or uncertainties associated with the discovery and development
of oil and natural gas reserves, cash flows and liquidity, business and financial strategy, budget, projections and operating results,
oil and natural gas prices, amount, nature and timing of capital expenditures, including future development costs, availability and
terms of capital and general economic and business conditions. Given these uncertainties, no one should place undue reliance
on any forward-looking statements attributable to Calima, or any of its affiliates or persons acting on its behalf. Although every
effort has been made to ensure this release sets forth a fair and accurate view, we do not undertake any obligation to update or
revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Qualified petroleum reserves and resources evaluator statement
The petroleum reserves and resources information in this announcement in relation to Blackspur Oil Corp is based on, and fairly
represents, information and supporting documentation in a report compiled by InSite Petroleum Consultants Ltd. (InSite) for the
December 31, 2023 Reserves Report. InSite is a leading independent Canadian petroleum consulting firm registered with the
Association of Professional Engineers and Geoscientists of Alberta. These reserves were subsequently reviewed by Mr. Graham
Veale who is the VP Engineering with Blackspur Oil Corp. The InSite December 31, 2023 Reserves Report and the values contained
therein are based on InSite’s December 31, 2023 price deck (https://www.insitepc.com/pricing-forecasts). Mr. Veale holds a BSc.
in Mechanical Engineering from the University of Calgary (1995) and is a registered member of the Alberta Association of
Professional Engineers and Geoscientists of Alberta (APEGA). He has over 27 years of experience in petroleum and reservoir
engineering, reserve evaluation, exploitation, corporate and business strategy, and drilling and completions. InSite and Mr. Veale
have consented to the inclusion of the petroleum reserves and resources information in this announcement in the form and
context in which it appears.
Liquidity and capital resources
As at 31 December 2023, the Calima Group had available funding of A$22.1 million which primarily consisted of available credit
under the Credit Facility, partially offset by the Company’s working capital deficit at the end of the quarter:
As at (A$ thousands)
Available funding
Adjusted working capital (1)
Undrawn Credit Facility capacity
Available funding (1)
1 The Completion of the sale of BSO on 27 February 2024 terminated all banking facilities.
31 December
2023
31 December
2022
$
$
3,781
22,159
25,940
$
$
(7,434)
26,053
18,619
7
OUTLOOK
Calima confirmed the sale of Blackspur Oil Corp. to Astara Energy Corp. was completed and net proceeds of A$81.6 million
received, reflecting a provision for Canadian income tax and adjustment for Net Debt at closing. The Company intends to
distribute A$80 million from the Blackspur Sale to Calima shareholders and is seeking an ATO ruling to determine the most
tax effective form. A Notice of Meeting will be issued as soon as practicable following receipt of the Tax Ruling, which is
expected to take up to 3 months to complete. Post distribution, Calima will have approximately A$5-6 million cash and a
100% interest in the Paradise field in British Columbia which generates approximately A$350,000 in free cash flow annually.
DIRECTORS’ REPORT
For the year ended 31 December 2023
The Directors of Calima Energy Limited (ASX: CE1) (“Calima” or the “Company”) are pleased to present the Directors’ Report
for the year ended 31 December 2023. This Director’s Report primarily includes the financial results of Calima and its two
wholly-owned Canadian subsidiaries, Blackspur Oil Corp. (“Blackspur”) and Calima Energy Inc. (collectively, the “Calima
Group”). Dollar figures are expressed in Australian currency unless otherwise indicated.
Principal activities
Calima is a production-focused energy company pursuing the exploration and development of oil and natural gas assets in
the Western Canadian Sedimentary Basin. The Company disposed on its Montney Assets in July 2023 and sold Blackspur
Oil Corp for gross proceeds of over $93 million with 94% expected to be returned to shareholders. Post distribution, Calima
will have approximately A$5-6 million cash and a 100% interest in the Paradise field in British Columbia which generates
approximately A$350,000 in free cash flow annually.
Significant changes in state of affairs
During the year ended 31 December 2023, the following significant changes in the entity’s state of affairs occurred:
On 10 January 2023, 200,000 Class F performance rights, 305,000 Class D performance rights and 305,000 Class E
performance rights expired.
On 11 January 2023, 280,000 Class F performance rights, 430,000 Class D performance rights and 430,000 Class E
performance rights were issued.
On 4 February 2023, 8,908,750 Class E performance rights vested.
On 24 February 2023, 180,000 Class D performance rights, 180,000 Class E performance rights and 120,000 Class F
performance rights were issued.
On 14 March 2023, 1,000,000 performance rights were converted to ordinary shares.
On 18 August 2023 the Company issued 12,970,000 ordinary fully paid shares pursuant to convertible securities being
converted as follows: 2,061,250 Class F performance rights, 8,908,750 Class E performance rights, and 2,000,000 Class
A and B performance rights.
On 22 August 2023, 609,000 Class F and 1,835,000 Class D performance rights expired
On 24 August 2023, 10,000 Class F performance rights lapsed.
On 25 August 2023 the Company announced the sale of the Tommy Lakes and Montney acreage for $12 million.
On 16 October 2023 shareholders approved a A$7.5 million (1.2c per share) capital return which was paid on 27
October 2023.
On 18 September 2023 the Company completed an unmarketable parcel sale of 2,111,774 shares comprising 1,329
shareholders.
On 18 December 2023 7,703,750 performance rights D expired
On 27 December 2023 the Company entered into an agreement with Astara Energy Corp to dispose of a 100% interest
in Blackspur Oil Corp. On 27 February 2024, the Calima Group completed the sale of BSO for net proceeds of $81.6
million.
Operational and financial results
The operational and financial results for the year ended 31 December 2023 have been presented on pages 4 through 7.
Principal Risks Affecting the Group
Calima’s management team is focused on long-term strategic planning and has identified the key risks, uncertainties and
opportunities associated with the Company’s business that can impact the financial results. They include, but are not limited
to, the items listed below.
8
Prices, Markets and Marketing
The Company’s operational results and financial condition, and therefore the amount of capital expenditures, are
dependent on the prices received for oil, natural gas, and natural gas liquids (“NGLs”) production. Prices for oil, natural gas
and NGLs are subject to large fluctuations in response to relatively minor changes in the supply of and demand for oil,
natural gas and NGLs, market uncertainty and a variety of additional factors beyond the control of the Company. A material
decline in prices could result in a reduction of net production revenue. The economics of producing from some wells may
change because of lower prices, which could result in reduced production of oil, natural gas or NGLs and a reduction in the
volumes of Calima’s reserves. Management might also elect not to produce from certain wells at lower prices.
The Company’s ability to market its oil and natural gas may depend upon its ability to acquire space on pipelines or rail cars
that deliver oil and natural gas to commercial markets. Deliverability uncertainties related to the distance that Calima’s
reserves are to pipelines, processing and storage facilities, operational problems affecting pipelines and facilities as well as
government regulation relating to prices, taxes, royalties, land tenure, allowable production, the export of oil and natural
gas and many other aspects of the oil and natural gas business may also affect the Company.
These factors could result in a material decrease in the Company’s expected net production revenue and a reduction in its
oil and natural gas acquisition, development, and exploration activities. Any substantial and extended decline in the price
of oil and natural gas would have an adverse effect on the Company’s carrying value of its assets and its borrowing capacity,
revenues, profitability, and funds from operations.
Inflation and Cost Management
Operating costs could escalate and become uncompetitive due to supply chain disruptions, inflationary cost pressures,
equipment limitations, escalating supply costs, commodity prices, and additional government intervention through
stimulus spending or additional regulations. Calima’s inability to manage costs may impact project returns and future
development decisions, which could have a material adverse effect on its financial performance and cash flows.
The cost or availability of oil and gas field equipment may adversely affect the Company’s ability to undertake exploration,
development, and construction projects. The oil and gas industry is cyclical in nature and is prone to shortages of supply
of equipment and services including drilling rigs, geological and geophysical services, engineering and construction services,
major equipment items for infrastructure projects and construction materials generally. These materials and services may
not be available when required at reasonable prices. A failure to secure the services and equipment necessary to Calima’s
operations for an expected price, on the expected timeline, or at all, may have an adverse effect on the Company’s financial
performance and cash flows.
Operational Matters
Drilling hazards, environmental damage and various field operating conditions could greatly increase the cost of operations
and adversely affect the production from successful wells. While diligent well supervision and effective maintenance
operations can contribute to maximizing production rates over time, it is not possible to eliminate production delays and
declines from normal field operating conditions, which can negatively affect revenue and cash flow levels to varying
degrees. Oil and natural gas exploration, development and production operations are subject to all the risks and hazards
typically associated with such operations, including, but not limited to, fire, explosion, blowouts, cratering, sour gas
releases, and spills or other environmental hazards. These typical risks and hazards could result in substantial damage to
oil and natural gas wells, production facilities, other property, the environment, and personal injury. As is standard industry
practice, Calima is not fully insured against all risks, nor are all risks insurable. Although the Company maintains liability
insurance in an amount that it considers consistent with industry practice, liabilities associated with certain risks could
exceed policy limits or not be covered. In either event, the Company could incur significant costs.
Reserve Estimates
The reserves and recovery information contained in Calima’s independent reserves evaluation is only an estimate. The
actual production and ultimate reserves from the properties may be greater or less than the estimates prepared by the
independent reserves evaluator. The reserves report was prepared using certain commodity price assumptions. If lower
prices for crude oil, natural gas and NGLs are realized by the Company and substituted for the price assumptions utilized in
those reserves reports, the present value of estimated future net cash flows as well as the amount of the reserves would
be reduced and the reduction could be significant.
9
Acquisitions
The price paid for acquisitions is based on engineering and economic estimates of the potential reserves made by
independent engineers modified to reflect the technical views of Management. These assessments include a number of
material assumptions regarding such factors as recoverability and marketability of oil, natural gas, and NGLs, future prices
of oil, natural gas and NGLs, and operating costs, future capital expenditures and royalties and other government levies
that will be imposed over the producing life of the reserves. Many of these factors are subject to change and are beyond
the control of Management. In particular, changes in the prices of and markets for oil, natural gas and NGLs from those
anticipated at the time of making such assessments will affect the value of Calima. In addition, all such estimates involve a
measure of geological and engineering uncertainty that could result in lower production and reserves. Actual reserves could
vary materially from these estimates.
Royalty Regimes
There can be no assurance that the federal government and the provincial governments of the western provinces will not
adopt new royalty regimes or modify the existing royalty regimes which may have an impact on the economics of the
Company’s projects. An increase in royalties would reduce Calima’s earnings and could make future capital investments, or
operations, less economic.
Variations in Foreign Exchange Rates and Interest Rates
World commodity prices are quoted in United States dollars. The Canadian/United States dollar exchange rate, which
fluctuates over time, consequently, affects the price received by Canadian producers of oil and natural gas. Material
increases in the value of the Canadian dollar negatively affects production revenues. Future Canadian/United States
exchange rates could accordingly affect the future value of reserves as determined by independent evaluators.
An increase in interest rates could result in a significant increase in the amount Calima pays to service debt, resulting in a
reduced amount available to fund its exploration and development activities.
Third Party Credit Risk
Calima assumes customer credit risk associated with oil and gas sales, financial risk management contracts and joint venture
participants. In the event that Calima’s counterparties default on payments to Calima, cash flows will be impacted. A
diversified customer base is maintained and exposure to individual entities is reviewed on a regular basis.
ENVIRONMENTAL RISKS
General Risks
All phases of the oil and natural gas business present environmental risks and hazards and are subject to environmental
regulation pursuant to a variety of federal, provincial and local laws and regulations. Environmental legislation provides for,
among other things, restrictions and prohibitions on spills, releases or emissions of various substances produced in
association with oil and natural gas operations. The legislation also requires that wells and facility sites be operated,
maintained, abandoned and reclaimed to the satisfaction of applicable regulatory authorities. The Company conducts its
operations with high standards in order to protect the environment, its employees and consultants, and the general public.
Although Calima believes that it is in material compliance with current applicable environmental regulations, no assurance
can be given that environmental laws will not result in a curtailment of production or a material increase in the costs of
production, development or exploration activities or otherwise have a material adverse effect on Calima’s business,
financial condition, results of operations and prospects.
There remains a great deal of uncertainty as to what regulatory measures will be developed by the provinces or in concert
with the federal government to address the decommissioning liabilities and environmental liabilities in the future. In
addition, the provincial and/or federal government decisions has had an impact and is expected to continue to have an
impact on how much credit lenders are willing to provide to oil and gas companies. This could impact Calima’s ability to
obtain financing on acceptable terms and the willingness of the Company’s lenders to continue to provide credit to the
Company.
Climate Change Risks
Our exploration and production facilities and other operations and activities emit greenhouse gasses ("GHG") which may
require us to comply with federal and/or provincial GHG emissions legislation. Climate change policy is evolving at
regional, national, and international levels, and political and economic events may significantly affect the scope and
timing of climate change measures that are ultimately put in place to prevent climate change or mitigate our effects. The
direct or indirect costs of compliance with GHG-related regulations may have a material adverse effect on our business,
financial condition, results of operations and prospects. Some of our significant facilities may ultimately be subject to
future regional, provincial and/or federal climate change regulations to manage GHG emissions. In addition, climate
10
change has been linked to long-term shifts in climate patterns and extreme weather conditions both of which pose the
risk of causing operational difficulties.
PROJECT RISKS
Calima manages a variety of small and large projects. Project delays may delay expected revenues from operations.
Significant project cost over-runs could make a project uneconomic. Calima’s ability to execute projects and market oil
depends upon numerous factors beyond the Company’s control, including:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
commodity prices and oil differentials;
the availability of processing capacity;
the availability and proximity of pipeline capacity;
the availability of storage capacity;
the availability of, and the ability to acquire, water supplies needed for drilling and hydraulic fracturing, or Calima’s
ability to dispose of water used or removed from strata at a reasonable cost and within applicable environmental
regulations;
the supply of and demand for oil;
the availability of alternative fuel sources;
the effects of inclement weather;
the availability of drilling and related equipment;
unexpected cost increases;
accidental events;
currency fluctuations;
changes in regulations;
the availability and productivity of skilled labour; and
the regulation of the oil industry by various levels of government and governmental agencies.
Because of these factors, Calima could be unable to execute projects on time, on budget, or at all, and may be unable to
market the oil that the Company produces.
CYBER-SECURITY
The Company employs and depends upon information technology systems to conduct its business. These systems have the
potential to introduce information security risks, which are growing in both complexity and frequency and could include
potential breakdown, invasion, virus, cyber-attack, cyber-fraud, security breach, and destruction or interruption of Calima’s
information technology systems by third parties or insiders. Unauthorized access to these systems by employees or third
parties could lead to corruption or exposure of confidential, fiduciary or proprietary information, interruption to
communications or operations or disruption to our business activities or our competitive position. Further, disruption of
critical information technology services, or breaches of information security, could have a negative effect on the Company's
assets, performance and earnings, as well as on the Company's reputation. The significance of any such event is difficult to
quantify but may in certain circumstances be material and could have a material adverse effect on the Company’s business,
financial condition and results of operations.
Environmental regulation and performance
The Calima Group’s operations are subject to Canadian Federal and Provincial environmental regulations. These regulations
govern the Company’s exploration, development and production of oil and gas reserves in the Western Canadian
Sedimentary Basin. The regulations include, among other things, standards for emissions management, hydrocarbon
handling and spill response as well as reclamation and abandonment requirements. Compliance with applicable standards
is addressed through regular monitoring by the Company and through external audits conducted by regulatory authorities
and consultants of Calima. There were no significant breaches of environmental regulations during the year ended 31
December 2023.
Events after the reporting period
The following events occurred subsequent to the year ended 31 December 2023:
• On 5 January 2024 the Company announced the sale of Blackspur Oil Corp. to Astara Energy Corp. On 27 February
2024, the Calima Group completed the sale of BSO for net proceeds of $81.6 million. An impairment loss of
$45.7million has been recognized in the 31 December 2023 financial statements related to this sale.
• On 26 February 2024 the Company issued 7,360,000 ordinary fully paid shares pursuant to convertible securities being
converted as follows: 7,230,000 Class G performance rights and 130,000 Class F performance rights.
11
Since the year ended 31 December 2023, the Directors are not aware of any other matter or circumstance that has
significantly or may significantly affect the operations of the Company that has not already been disclosed in this Annual
Report.
Likely developments and expected results
For 2024, the Calima Group intends to distribute A$80 million to shareholders. It is expected that on 2 July 2024, being six
months from the date of the announcement of the execution of the Sales Agreement with Astara Energy Corp, the ASX is
likely to suspend the Company’s securities from official quotation. Calima has made submissions to the ASX to extend this
timeframe.
Dividends
No dividend has been paid or declared by the Company to shareholders since the end of the financial year. The Company
may elect to pay future dividends during financial periods when it is considered appropriate to do so.
Stock options and performance rights
Equity compensation arrangements
As at 31 December 2023
Unlisted options – exercisable at $0.1838 per share (employees)
Unlisted options – exercisable at $0.1838 per share (service Providers)
Unlisted options – exercisable at $0. 1838 per share (employees)
Unlisted options – exercisable at $0.1438 per share (service provider-fully vested)
Unlisted options – exercisable at $0.14388 per share (service provider-fully vested)
Unlisted options – exercisable at $0.1838 per share (service provider-fully vested)
Class C Performance rights – May 2021 grant
Class F Performance rights – 2022 grant
Class G Performance rights - 2023 grant (vested)
Number
of unit
holders
17
6
3
1
1
1
2
28
18
Number of
unlisted
units
(thousands)
10,950
2,500
850
1,500
1,000
1,500
2,500
2,272
7,230
Date of
expiry
May 2026
April 2024
Jan 2027
Oct 2025
Nov 2024
Nov 2024
May 2026
Jun 2026
Dec 2026
Additional details regarding the Company’s outstanding unlisted options and performance rights are included in the
remuneration section of the Director’s report and in the consolidated financial statements for the year ended 31 December
2023.
Indemnification of officers and insurance
The Calima Group has indemnified Directors and certain officers against any claims and related expenses which arise
because of work completed in their respective capabilities. The Group has also 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 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 $196,904 (2022: $197,727).
Directors and Key Management Personnel (“KMP”)
The names of the Directors of Calima in office as of the date of this report are as follows:
Glenn Whiddon
BCom
Executive Chairman
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. Mr. Whiddon was formerly Executive
Chairman, Chief Executive Officer and President of
Grove Energy Limited, a European and Mediterranean
oil and gas exploration and development company.
Appointed 2 June 2015
Interest in Securities at 31 Dec. 2023
Direct shares
Indirect shares (1) 19,659,142
Performance rights 1,680,000
3,255,842
(unvested)
Other directorships held in listed
entities over the last 3 years
Minrex Resources Ltd - since June
2023
Caprice Resources Limited – since
January 2024
Carbine Resources Ltd – since August
2023
Karl DeMong
BSc (Mechanical
Karl is a Canadian oil and gas engineer based in
Calgary. He is an experienced technical advisor in
unconventional and conventional fields both domestic
Appointed 1 April 2022 and on 27 July
2023, Karl DeMong was appointed as
President & CEO of Blackspur Oil Corp
12
Engineering)
Executive Director
P.L. (Lonny) Tetley
Blaw, Bcom
Non-Executive Director
Mark Freeman
CA, F.Fin
Finance Director & Company
Secretary
(in the Brooks and Thorsby areas) and international.
He holds several patents in surface and downhole oil
and gas technologies. Mr. DeMong’s prior roles
include Apache Corporation, QuickSilver Resources
Canada, Inc, Quantum Reservoir Impact, Sabretooth
Energy and Halliburton Drilling Services.
Lonny Tetley is a securities lawyer and partner at
Burnet, Duckworth and Palmer LLP with over 15 years
of experience in corporate finance and the oil and gas
industry. Mr. Tetley serves on the Board of a number
of companies including Certarus Ltd., Beyond Energy
Services & Technology Corp. and Accelerate Financial
Technologies Inc. He is also a member of the Private
Funds Independent Review Committee of Deans
Knight Capital Management Ltd.
A Chartered Accountant with more than 20 years’
experience in corporate finance and the resources
industry. He has experience in strategic planning,
business development, mergers and acquisitions,
North American gas commercialisation, and project
development general management. Mr. Freeman has
worked with a number of successful public resource
companies. A graduate of the University of Western
Australia with a Bachelor of Commerce Mr. Freeman
also holds a Graduate Diploma in Applied Finance from
the Securities Institute of Australia.
Rod Monden
CFO
Mr. Monden is a chartered professional accountant
with 25 years of senior progressive financial
experience in the energy sector, holding such positions
as Manager Financial Reporting, Controller, VP Finance
and CFO, with private and publicly reported companies
in Canada.
Interest in Securities at 31 Dec. 2023
Direct shares
700,000
Performance rights
60,000
Other directorships held in listed
entities over the last 3 years
None
Appointed 28 May 2021
Interest in Securities at 31 Dec. 2023
Direct shares
470,000
Unlisted options 300,000
Performance rights
60,000
(unvested)
Other directorships held in listed entities
over the last 3 years
None
Appointed 23 June 2021
Interest in Securities at 31 Dec. 2023
Indirect shares
Performance rights
3,132,492
1,216,000
(unvested)
Other directorships held in listed entities
over the last 3 years
Doriemus Energy PLC – since 25 May
2022
Grand Gulf Energy Ltd – resigned
8/4/22
Pursuit Minerals Ltd – resigned 31/8/23
Roquefort Therapeutics PLC – resigned
16/09/22
Appointed as CFO 18 July 2023
Interest in Securities at 31 Dec. 2023
Performance rights 1,000,000 (vested)
* Glenn Whiddon: Please note that Mr. Whiddon only has a control in 5,791,549 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.
On 27 July 2023 Mr Jordon Kevol resigned from the Board as Managing Director. Mr Kevol was appointed on 30 April 2021
and served as Director until his resignation. On 5 July 2023 Mr Jerry Lam resigned as CFO.
Director meetings
Number of meetings held
Meeting attendance:
Glenn Whiddon
Jordan Kevol
Karl DeMong
Lonny Tetley
Mark Freeman
Remuneration report (audited)
Directors’
Meetings
8
8 of 8
4 of 4
8 of 8
8 of 8
8 of 8
Introduction
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.
13
The Board is responsible for remuneration policies and practices. The Board 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
Board, 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 Calima 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.
Remuneration strategy
At the Board’s discretion, the Calima Group’s remuneration practices are made available to the Company’s directors, senior
management, employees, consultants and other contractors that may perform work on behalf of the business (collectively,
the “Service Providers”). 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 Calima Group has the following remuneration plans in place. A summary of these Plans is set out below:
A Fixed remuneration Plan that provides for salaries or fees paid to Service Providers in respect of baseline
employment, consulting or contracting activities provided to the Calima Group,
A Short-Term Incentive Plan (“STIP”) that provides for cash bonuses to be paid annually based on a combination of
individual and corporate performance over the previous year,
A Stock Option Plan (“SOP”) that provides for short-term or long-term equity incentives that generally vest over
certain continuous employment conditions; and
A Performance Rights Plan (“PRP”) that provides for long-term equity incentives that may vest upon on the
achievement of certain performance-based thresholds or continuous employment conditions.
The Board is of the opinion that these incentive plans achieve the following outcomes:
Attract and retain staff and management to pursue the Group’s strategy and goals;
Align the interests of the Group’s employees with that of the Company’s shareholders;
Provide fair and reasonable reward for past individual and Group performance; and
Incentivise service providers to deliver future individual and Group performance.
Fixed remuneration
Fixed remuneration consists of the base remuneration paid to directors, offices and employees of the Calima Group (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.
Short Term Incentive Plan (STIP)
The STIP provides for the payment of discretionary cash bonuses to Service Providers of the Calima Group on an annual
basis in respect of their performance and the overall performance of the Company during the previous financial year. The
STIP 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 STIP.
Stock Option Plan (SOP)
The SOP provides for the issuance of stock options to Service Providers of the Calima Group on a periodic basis generally to
provide a long-term equity incentive. Stock options are issued for nil consideration and generally carry an exercise strike
price that is either at or above the Company’s share price at the date of grant. Subject to the satisfaction of the vesting
conditions given to eligible participants, each exercised stock option will be eligible to receive the equivalence of one
common share. In satisfaction of the share issuance from treasury, the option holder pays cash consideration to the
Company equal to exercised strike price.
The primary non-market-based vesting condition for the Company's SOP units issued to employees is generally continuous
employment. However, the Calima Group may also issue stock options to non-employee related Service Providers with
vesting terms that align to performance term under the service contract. Stock options grants may also be subject to certain
other market-based on non-market-based performance conditions, at the Board discretion. No stock options were issued
to key management personnel during the financial year.
14
Performance Rights Plan (PRP)
The PRP provides for the issuance of stock options to Service Providers of the Calima Group on a periodic basis generally to
provide a long-term equity incentive. The PRP 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 such grants under the PRP. The Performance Rights
are issued for nil cash consideration and no consideration will be payable upon the vesting of the Performance Rights.
Subject to the satisfaction of the vesting conditions given to eligible participants, each PRP unit will be eligible to receive
the equivalence of one common share. 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. Performance rights are subject to certain market-based on non-
market-based performance conditions, at the Board discretion, which generally include a share price target and/or
continuous employment obligations.
During the year ended 31 December 2023, Calima issued 7,230,000 million Class G performance rights to employees and
consultant, these securities were to vest following continued service of the holder for periods of two years from issue date
or on the sale of the BSO Assets exceeding $80 million. As at 31 December 2023, all of the units were vested. No directors
participated in this issue, 1,000,000 units were issued to a KMP, Mr Rod Monden.
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.
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. For executive employment contracts, at a minimum, employees must provide one months’
notice of departure and the employer must provide at least three-months’ notice (without cause). For non-executive
terminations, at a minimum, employees must give two-weeks’ notice and the employer must give statutory required 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 Board. Details of the remuneration of the Directors of the
Company and key management personnel are set out in the following tables below.
Key management personnel (“KMP”)
The key management personnel of the Company in 2023 included the following officers:
KMP
Glenn Whiddon
Karl DeMong
Mark Freeman
P.L. (Lonny) Tetley
Jordan Kevol
Rod Monden
Jerry Lam
Role at Calima
Executive Chairman
Managing Director Blackspur Oil Corp
Finance Director & Company Secretary
Non-Executive Director
CEO & Managing Director
CFO
VP Finance & CFO, Canada
2023 Update
-
Appointed MD of BSO on 27 July 2023
-
-
Resigned 27 July 2023
Appointed 18 July 2023
Resigned 5 July 2023
Remuneration overview
Amounts recognised in respect of remuneration plans are detailed in the table below. The STIP, SOP and PRP are considered
performance related. Although the stock options grants have no market-based performance conditions, they were issued
at an exercise price that was out of the money at grant date, which encourages the 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 Calima Group’s remuneration policy to contain a
discussion of the Company’s earnings, performance, and the effect of the performance on shareholder wealth during the
current reporting period and the four previous financial years.
15
The following table below provides a five-year financial performance summary to the end of 31 December 2023:
As at and for the year ended 31 December
Adjusted EBITDA (1)
Net income (loss)
Earnings (loss) per share (diluted) (2)
Working capital surplus (net debt) (1)
December 31 share price
2023
33,564
(41,395)
(0.07)
3,781
0.065
2022
67,225
22,807
0.04
(11,021)
0.13
2021
21,557
(31,980)
(0.08)
(27,805)
0.21
2020
(1,169)
(6,395)
(0.06)
(382)
0.16
2019
(2,582)
(1,584)
(0.02)
4,415
0.14
(1) Refer to Advisories and Guidance for additional information regarding the Company’s non-GAAP financial measures.
(2)
Information presented in this table, including comparative figures, have been adjusted to reflect the impact of the share consolidation on August 30, 2021, at a conversion rate of 20:1.
The payment of STIP bonuses are at the discretion of the Board, having regard to the overall performance of the Company
and the performance of the individual. The following tables summarise the remuneration accrued to KMP during the year
ended 31 December 2023 and 2022:
KMP
Glenn Whiddon
Karl DeMong (2)
Mark Freeman (3)
P.L. (Lonny) Tetley (4)
Rod Monden (5)
Jordan Kevol (6)
Jerry Lam (7)
Total
Salaries, fees
& benefits
233,600
341,940
216,000
48,000
106,644
237,084
145,546
Severance
Benefits
Perf.
rights (1)(8)
- 12,000 198,404
55,127
213,034
55,127
87,000
6,947
45,267
660,905
-
8,000
-
6,552
51,910
8,876
87,339
-
-
-
-
450,930
-
Stock
options (8)
-
-
-
4,408
-
(29,934)
-
(25,526)
Total
444,004
397,066
437,034
107,534
200,196
716,937
199,689
2,502,461
Performance
related (%)
45%
14%
49%
55%
43%
(3%)
23%
22%
1,328,814 450,930
(1) Vesting expense for the fair value of share-based awards determined at grant date in accordance with Australian Accounting Standards.
(2) Mr DeMong was appointed as a managing director on 27 July 2023.
(3) Excluded is $32,000 paid to Meccano Consulting Pty Ltd, a company controlled by Mr. Freeman for third party bookkeeping services.
(4) Excluded is $347,618 paid to Burnett, Duckworth & Palmer LLP, a legal firm which Mr. Tetley is a partner. These fees are in relation to legal services.
(5) Mr. Monden was appointed 18 July 2023.
(6) Mr Kevol resigned as a director on 27 July 2023. In accordance with his contract Mr Kevol severance payment was C$445,500.
(7) Mr. Lam was appointed 13 October 2022 and resigned on 5 July 2023.
The Performance Rights and Stock Options were Equity Settled
(8)
Stock
Options(8)
-
-
KMP
Glenn Whiddon
Mark Freeman (2)
Brett Lawrence (3)
P.L. (Lonny) Tetley (4)
Jordan Kevol
Karl DeMong (5)
Jerry Lam (6)
Braydin Brosseau (7)
Total
Salaries, fees
& benefits
186,400
207,000
9,000
41,333
311,836
161,959
109,157
106,141
1,132,826
Bonuses
30,000
30,000
-
-
66,425
-
13,838
-
140,263
Benefits
12,000
8,000
-
-
12,826
-
8,947
8,419
50,192
Perf.
rights (1)(8)
207,571
224,035
-
53,521
235,493
53,521
40,233
-
814,374
10,248
85,395
-
-
(13,464)
82,179
(1) Vesting expense for the fair value of share-based awards determined at grant date in accordance with Australian Accounting Standards.
(2) Excluded is $32,000 paid to Meccano Consulting Pty Ltd, a company controlled by Mr. Freeman for third party bookkeeping services.
(3) Mr. Lawrence resigned on 1 April 2022.
(4) Excluded is $118,033 paid to Burnett, Duckworth & Palmer LLP, a legal firm which Mr. Tetley is a partner. These fees are in relation to legal services. The salaries, fees & benefits reported in the
Total
435,971
469,035
9,000
105,102
711,975
215,480
172,175
101,096
2,219,834
Performance
related (%)
54%
54%
-
61%
54%
25%
31%
(13%)
47%
chart above represents the value of 180,000 common shares issued to Mr. Tetley as compensation for serving as a director.
(5) Mr. DeMong was appointed 1 April 2022.
(6) Mr. Lam was appointed 13 October 2022.
(7) Mr. Brosseau resigned on 16 May 2022.
(8) The Performance Rights and Stock Options were Equity Settled
The following table summarises the equity compensation units granted to directors and key management personnel during
the year ended 31 December 2023:
KMP
Rod Monden
Performance rights
Class G (1)
1,000,000
Year of
expiry
2027
(1) 50%/50% of the Class F performance rights become vested following continued service of the holder as a consultant or employee of the Company for 12/24 months from issuance date and in
the event the BSO assets sell for a value in excess of $80 million. These securities fully vested during the year.
16
The Class G performance rights that were issued to Management in November 2023 were granted primarily in order to
retain KMP and incentivise future short-term and long-term share price performance. The Class G performance rights vest
50% in year 1 and the balance in the second anniversary from issue and in the event the Company sells Blackspur Oil Corp
in excess of $80 million. This vesting hurdle was achieved. The performance-based compensation arrangements have
vested following the sale of Blackspur Oil Corp. The following table summarises the valuation assumptions utilised to
measure the value of equity compensation issued to KMP during the year ended 31 December 2023:
Valuation input assumptions
KMP
Performance Rights
R Monden
Equity unit type
Units granted to KMP
Grant date
Expiry date
Valuation model
Share price at grant date ($)
Exercise price ($/share)
Volatility (%)
Risk-free rate (%)
Expected life (years)
Fair value ($/share)
Class G
1,000,000
21 Nov
2023
21 Nov 2026
Black Scholes
0.087
Nil
85
4.316
3
0.087
The following tables summarise the changes in performance rights held by KMP during the year ended 31 December 2023:
KMP Performance
rights
Glenn Whiddon
Karl DeMong
Mark Freeman
P.L. (Lonny) Tetley
Rod Monden (1)
Jordan Kevol (2)
Jerry Lam (3)
Total
Balance
Jan. 1, 2023
4,300,000
600,000
4,160,000
600,000
-
2,640,000
1,500,000
13,800,000
(1) Mr. Monden was appointed 18 July 2023.
(2) Mr Kevol resigned on 27 July 2023.
(3) Mr. Lam resigned on 5 July 2023.
Units
granted
Units
Exercised
- (1,870,000)
-
(290,000)
- (2,044,000)
(290,000)
-
-
1,000,000
- (1,276,000)
-
-
Units
expired
(750,000)
(250,000)
(900,000)
(250,000)
KMP
resignation
-
-
-
-
Balance
Dec. 31, 2023
1,680,000
60,000
1,216,000
60,000
1,000,000
-
-
4,016,000
Units
Vested
-
-
-
-
1,000,000
-
-
1,000,000
-
-
1,000,000 (5,770,000) (2,150,000)
(1,364,000)
(1,500,000)
(2,864,000)
The following tables summarise the changes in options held by KMP during the year ended 31 December 2023:
KMP Options
P.L. (Lonny) Tetley
Jordan Kevol (1)
Total
Balance
Jan. 1, 2023
300,000
2,500,000
2,800,000
Units
granted
-
-
-
Units
Exercised
-
-
-
Units
expired
-
(850,000)
(850,000)
KMP
resignation
-
(1,650,000)
(1,650,000)
Balance
Dec. 31, 2023
300,000
-
300,000
Units
vested
200,000
-
200,000
(1) Mr Kevol resigned on 27 July 2023.
The following tables summarise the changes in shareholdings of KMP during the year ended 31 December 2023:
Shares
acquired
1,870,000
540,000
-
290,000
-
1,276,000
-
3,976,000
(1) Mr. Kevol resigned from the Board on 27 July 2023. Accordingly, Mr. Kevol’s shareholdings have been excluded from the KMP table disclosure as at 31 December 2023.
KMP Direct interest
Glenn Whiddon
Karl DeMong
Mark Freeman
P.L. (Lonny) Tetley
Rod Monden
Jordan Kevol (1)
Jerry Lam
Total
Shares Issued
in lieu of fees
-
-
-
-
-
-
-
-
Balance
Jan. 1, 2023
1,385,841
160,000
-
180,000
-
3,819,409
-
5,545,250
Shares
Disposed
-
-
-
-
-
-
-
-
-
-
-
-
-
(5,095,409)
-
(5,095,409)
KMP
resignation
Balance
Dec. 31, 2023
3,255,842
700,000
-
470,000
-
-
-
4,425,842
17
Balance
Dec. 31, 2023
19,659,142
-
3,132,492
-
-
-
-
22,791,634
(1) Mr Whiddon has control of 5,722,539 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
KMP Indirect interest
Glenn Whiddon (1)
Karl DeMong
Mark Freeman
P.L. (Lonny) Tetley
Rod Monden
Jordan Kevol
Jerry Lam
Total
Shares Issued
in lieu of fees
-
-
-
-
-
-
-
-
Balance
Jan. 1, 2023
16,940,132
-
638,492
-
-
319,359
-
17,897,983
KMP
resignation
-
-
-
-
-
(319,359)
-
(319,359)
Shares
acquired
2,719,010
-
2,494,000
-
-
-
-
5,213,010
Shares
Disposed
-
-
-
-
-
-
-
-
for good corporate governance purposes. Mr Whiddon has no relevant interest in the remaining indirect holdings.
Other transactions with KMP
For the year ended 31 December 2023, in addition to remuneration paid as disclosed above, $347,618 was paid to Burnett,
Duckworth & Palmer LLP,. A related party to Mr. Tetley, for legal services related to the sale of the Company’s assets and
A$32,000 was paid to Meccano Consulting Pty Ltd., a related party to Mr. Freeman, for bookkeeping services related to the
Company’s operations. As at 31 December $222,000 remained unpaid to Mr. Tetley and $nil remained unpaid to Mr.
Freeman.
For the year ended 31 December 2022, in addition to remuneration paid as disclosed above, $118,033 was paid to Burnett,
Duckworth & Palmer LLP,. A related party to Mr. Tetley, for legal services and $32,000 to Meccano Consulting Pty Ltd., a
related party to Mr. Freeman, for bookkeeping services related to the Company’s operations (not included in the table
above). As at 31 December $nil remained unpaid to Mr. Tetley and $nil remained unpaid to Mr. Freeman.
There were no other transactions with KMP.
Changes in Holdings subsequent to year end
Since 31 December 2023 the following changes have occurred:
- On 12 February 2024, Mr Glenn Whiddon transferred 500,000 shares to a related entity and acquired an additional
1 million shares directly and a further 1 million shares through a related entity.
- On 16 February 2024, Mr Glenn Whiddon through a related entity acquired 2,500,000 shares
END OF REMUNERATION REPORT (AUDITED)
Proceedings on behalf of the company
No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section 237 of
the Corporations Act 2001.
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. Details of the amount paid or payable
to the auditor for services provided during the year are set out in Note 22. For the year ended 31 December 2023, there
were non-audit related services provided by the Company’s auditors, PricewaterhouseCoopers (PwC) and BDO Audit Pty
Ltd (“BDO”).
The board of directors, are satisfied that the provision of the non-audit services is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision of non-
audit services by the auditor did not compromise the auditor independence requirements of the Corporations Act 2001 for
the following reasons:
•
•
all non-audit services have been reviewed by the board to ensure they do not impact the impartiality and
objectivity of the auditor, and
none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants.
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 48. No officer or director of Calima belonged to an audit practice that audited the Company during the year.
18
Rounding of amounts
The Company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the “rounding off” of amounts in
the Director’s Report and the financial report. Amounts in the Director’s Report and half year financial statements have
been rounded off to the nearest thousand dollars in accordance with the instrument unless otherwise specified.
Signed in accordance with a resolution of the Directors.
Glenn Whiddon
Executive Chairman
28 March 2024
19
CONSOLIDATED FINANCIAL STATEMENTS AND NOTES
For the year ended 31 December 2023 and 2022
_____________________________________________________
CALIMA ENERGY LIMITED
Consolidated Statement of Profit or Loss and Other Comprehensive Income (Loss)
(thousands of Australian dollars)
For the year ended
Continuing operations
Revenue
Oil sales
Royalties expense
Expenses
Operating
Transportation
Depletion and depreciation
General and administrative
Financing and interest
Share-based compensation
Foreign exchange gain
Net income (loss) before income taxes
Income tax (expense) benefit
Net income (loss) from continuing operations after tax
Net income (loss) from discontinued operations after tax
9
7
Net income (loss)
Other comprehensive income (loss)
Items that may be reclassified subsequently to profit and loss
Gain (loss) on foreign currency translations continuing operations
Gain (loss) on foreign currency translations discontinued operations
Total comprehensive income (loss)
Total comprehensive income for the year attributable to owners of
Calima Energy Limited arises from:
Continuing operations
Discontinuing operations
Total comprehensive income (loss)
Net income (loss) per share from discontinued operations
Basic
Diluted
See accompanying notes to the consolidated financial statements.
Notes
31 December
2023
31 December
2022 (1)
$
$
1,103
(51)
1,052
264
36
264
1,793
23
1,433
8
3,821
(2,769)
-
(2,769)
(38,626)
(41,395)
637
(38)
599
386
36
628
2,293
125
2,024
(28)
5,464
(4,864)
375
(4,489)
27,296
22,807
(157)
(883)
21,767
21
21
$
311
3,370
(37,714) $
(2,458)
(35,256)
(37,714) $
(4,646)
26,413
21,767
(0.06) $
(0.06) $
0.05
0.05
$
15 $
15 $
(1)
Comparative period has been restated to reflect the discontinued operations, see note 7
20
CALIMA ENERGY LIMITED
Consolidated Statement of Financial Position
(thousands of Australian dollars)
As at
Assets
Current assets
Cash and cash equivalents
Accounts receivable
Deposits and prepaid expenses
Risk management contracts
Assets classified as held for sale
Non current assets
Oil and natural gas assets
Long-term deposits
Investments
Deferred income tax asset
Liabilities
Current liabilities
Accounts payable and accrued liabilities
Term loan
Lease liabilities
Current restoration provisions
Liabilities classified as held for sale
Non current liabilities
Term loan
Restoration provisions
Shareholders’ equity
Share capital
Share-based payments
Foreign currency translations
Accumulated losses
See accompanying notes to the consolidated financial statements.
Notes
31 December
2023
31 December
2022
5 $
6
11
7
8
9
12
13
7
12
13
14
19
21
$
$
3,958
104
91
-
3,848
9,677
674
218
117,855
122,008
-
14,417
230
618
-
-
122,856
372
-
-
-
38,874
39,246
-
205
39,451
358,676
22,136
8,329
(305,736)
83,405
122,856
$
154,860
646
129
4,012
174,064
20,939
418
252
242
-
21,851
3,369
23,069
48,289
366,055
19,413
4,648
(264,341)
125,775
174,064
21
CALIMA ENERGY LIMITED
Consolidated Statement of Cash Flows
(thousands of Australian dollars)
For the year ended
Continuing operations
Operating activities
Net income (loss)
Items not affecting operating related cash flows:
Depletion and depreciation
Deferred income tax recovery
Share-based compensation
Accretion of liabilities
Non-cash expenses and other
Funds flow from operations
Changes in non-cash working capital
Cash provided by (used in) continuing operating activities
Cash provided by discontinued operating activities
Financing activities
Issuance of common shares
Share issuance costs
Purchase of common shares
Return of capital
Lease payments
Cash provided by (used in) continuing financing activities
Cash provided by (used in) discontinued financing activities
Investing activities
Investments in oil and natural gas assets
Proceeds from property disposal
Cash provided by (used in) continuing investing activities
Cash used in discontinued investing activities
Impact of foreign exchange translations
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
See accompanying notes to the consolidated financial statements.
Notes
31 December
2023
31 December
2022
$
(5,418)
$
(4,489)
8
9
19
7
14
14
7
8
7
264
1,433
67
-
(3,653)
7,508
3,855
34,380
38,235
-
-
(7,509)
(133)
(7,642)
(430)
(8,072)
(2,051)
11,208
9,157
(30,981)
(21,824)
(8,229)
110
3,848
3,958
$
5 $
628
(375)
1,932
95
27
(2,182)
(807)
(2,989)
53,268
50,279
20,153
(1,330)
(818)
(2,508)
(266)
15,231
(18,354)
(3,123)
(132)
-
(132)
(46,189)
(46,321)
(350)
485
3,363
3,848
22
CALIMA ENERGY LIMITED
Consolidated Statement of Changes in Equity
(thousands of Australian dollars)
For the year ended
Share capital
Balance, beginning of year
Issuance of common shares, net
Issuance of common shares on exercise of performance warrants
Purchase of common shares
Return of capital
Balance, end of year
Share-based payments reserve
Balance, beginning of year
Share-based compensation
Balance, end year
Foreign currency translation reserve
Balance, beginning of year
Other comprehensive income (loss)
Balance, end of year
Accumulated losses
Balance, beginning of year
Net income (loss)
Balance, end of year
Shareholders’ equity, beginning of year
Shareholders’ equity, end of year
See accompanying notes to the consolidated financial statements.
Notes
31 December
2023
31 December
2022
$
14
14
14
$
366,055
-
130
-
(7,509)
358,676
19
21
19,413
2,723
22,136
4,648
3,681
8,329
(264,341)
(41,395)
(305,736)
125,917
83,405
$
$
$
$
$
$
350,461
18,920
-
(818)
(2,508)
366,055
16,839
2,574
19,413
5,688
(1,040)
4,648
(287,148)
22,807
(264,341)
85,840
125,917
23
CALIMA ENERGY LIMITED
Notes to the Consolidated Financial Statements
As at and for the year ended 31 December 2023 and 2022
Financial statement note
Nature of business
1
Basis of presentation
2
Significant accounting policies
3
Significant accounting judgements, estimates and assumptions
4
Cash and cash equivalents
5
Accounts receivable
6
Assets held for sale and discontinued operations
7
Oil and natural gas assets
8
Deferred income taxes
9
Credit facility
10
Risk management contracts
11
Term loan
12
Restoration provisions
13
Share capital
14
Per share amounts
15
Capital Management
16
Commitments and contingencies
17
Segment information
18
Share-based compensation
19
Related party transactions
20
Other comprehensive income
21
Auditor Remuneration
22
Supplemental cash flow information
23
Parent company financial information
24
Investment in controlled entities
25
Financial Risk Management
26
1. NATURE OF BUSINESS
Page
24
24
25
29
31
31
31
33
34
35
36
37
37
38
38
38
39
39
40
42
42
43
43
44
44
44
Calima Energy Limited (“Calima” or the “Company”) was incorporated under the Australian Corporations Act 2001. Calima
is a production-focused energy company pursuing the exploration and development of oil and natural gas assets in the
Western Canadian Sedimentary Basin. On 30 April 2021, Calima completed the acquisition of Blackspur Oil Corp.
(“Blackspur”), a company that is currently developing oil and natural gas plays at Brooks and Thorsby in southern and central
Alberta, Canada. Calima also holds an undeveloped Montney acreage position in northeastern British Columbia, Canada.
Calima’s Australian head office is domiciled at 4/46-250 Railway Parade, West Leederville WA 6007. The Company’s
Canadian headquarters are located at 1000, 205 - 5 Avenue SW Calgary AB T2P 2V7. Calima’s voting common shares are
publicly traded on the Australian Stock Exchange under the symbol “CE1” and on the OTC under the symbol “CLMEF”. These
audited consolidated financial statements for the year ended 31 December 2023 (the “annual financial statements”) were
approved and authorised by Calima’s Board of Directors on 28 March 2024.
2. BASIS OF PRESENTATION
These general-purpose financial statements consist primarily of the financial records of Calima and its two wholly-owned
Canadian subsidiaries, Blackspur and Calima Energy Inc. (the “Calima Group”). Blackspur owns and operates the Brooks
and Thorsby oil assets and Calima Energy Inc. owns and operates the undeveloped Tommy Lakes Montney acreage. All
intercompany transactions have been eliminated.
24
These annual financial statements have been prepared in accordance with Australian Accounting Standards and
interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. Compliance with
Australian Accounting Standards ensures that these annual financial statements comply with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Consequently, these annual
financial statements are compliant with IFRS. Calima is a for-profit entity for the purposes of preparing the financial
statements. The statements have been prepared on a historical cost basis except for certain financial instruments which
are measured at their estimated fair market value. These annual financial statements follow the same accounting policies
that were utilised to prepare the audited consolidated financial statements for the year ended 31 December 2022, other
than for the utilisation of certain other accounting policies and presentation formats that have been utilised to
accommodate the consolidation of Blackspur’s financial results. The details of these changes are discussed directly below.
The functional currency of Calima is the Australian dollar and the functional currency of both Blackspur and Calima Energy
Inc. is the Canadian dollar. All amounts reported have been in presented in Australian dollars (A$ or AUD) unless otherwise
noted. References to C$ denotes Canadian dollars and US$ denotes United States dollars.
3. SIGNIFICANT ACCOUNTING POLICIES
Oil and natural gas assets
Oil and natural gas assets are measured at historical cost less accumulated depletion, depreciation and impairment (net of
reversals). The Company begins capitalising oil and natural gas exploration costs after the right to explore has been obtained
and includes land acquisition costs, geological and geophysical activities, drilling expenditures and costs incurred for the
completion and testing of exploration wells. The Calima Group capitalises all subsequent investments attributable to the
development of its oil and natural gas assets if the expenditures are considered a betterment and provide a future benefit
beyond one year. The Company's capitalised costs primarily consist of pad construction, drilling activities, completion
activities, well equipment, processing facilities, gathering systems, pipelines and employee costs directly attributable to
development.
Capitalised costs are classified as exploration and evaluation assets (“E&E”) if technical feasibility and commercial viability
have not yet been established. Technical feasibility and commercial viability are generally deemed to exist when proved
and probable reserves are present. Generally, the acquisition of undeveloped mineral leases are initially capitalised as E&E
assets and will be expensed if the lease expires, becomes impaired or management determines that no further exploration
or evaluation activities are expected on the lease prior to expiry. If technical feasibility and commercial viability of E&E
assets are established, the E&E assets are tested for impairment and reclassified to property, plant and equipment
(“PP&E”). Costs are capitalised directly as PP&E if they are attributable to the development of oil and natural gas reserves
after technical feasibility and commercial viability have been achieved.
The majority of PP&E is depleted using the unit-of-production method relative to the Company's estimated total
recoverable proved plus probable reserves. For the purposes of the depletion calculation, natural gas reserves and
production are converted to barrels of oil equivalent based upon the relative energy content (6:1). The depletion base
consists of the historical net book value of capitalised costs, plus the estimated future costs required to develop the
Company's estimated recoverable proved plus probable reserves. The depletion base excludes E&E and the cost of assets
that are not yet available for use in the manner intended by Management.
Impairment
The Calima Group reviews its E&E and PP&E for indicators of impairment at each reporting period. For the purposes of the
review, the Company’s assets are grouped into cash-generating units ("CGUs") which are defined as the smallest group of
assets generating cash inflows that are largely independent from the cash inflows of other asset groups. The Calima Group’s
PP&E are currently held in two CGUs (Brooks and Thorsby). The majority of the Company’s E&E assets are held in one CGU
(Tommy Lakes Montney E&E). If impairment indicators exist, the CGU is tested for impairment and a loss is recognised to
the extent that the carrying amount exceeds its estimated recoverable value.
The recoverable amount of the CGU is determined as the greater of its fair-value-less-costs-of-disposal ("FVLCOD") and its
value-in-use ("VIU"). FVLCOD is based on the estimated recoverable amount from the sale of an asset or CGU in an arm’s
length transaction between knowledgeable parties, less the cost of disposal. In assessing VIU, the estimated future cash
flows of the CGU are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money, risks specific to the asset and overhead costs associated with operating the CGU.
The recoverable amount of the Calima Group’s CGUs is generally based on after-tax discounted future cash flows from the
Company’s proved plus probable reserves, contingent resources or by observable third-party land transactions adjacent to
the Company's assets (Level 3 valuations). Key assumptions used to determine the recoverable amount of the CGUs include
production rates, future commodity prices, discount rates and future royalty, operating and capital costs.
25
Following the recognition of an impairment loss, the Company reviews its CGU for indicators of impairment reversal at each
subsequent reporting period. If there is observable evidence that the value of the CGU has increased significantly since the
previous impairment loss, Calima performs a test for impairment reversal by comparing an updated estimate of the CGU’s
recoverable amount to its current carrying amount. If the Company concludes that there has been a material and
substantive change in the estimates used to assess the CGU’s recoverable amount, an impairment loss will be reversed to
the extent that the recoverable amount exceeds its carrying value, less the incremental value of depletion and depreciation
that otherwise would have been recognised by the Company, had the impairment loss not previously occurred.
Business combinations
The Company has recognised the acquisition of Blackspur utilising the acquisition method. The cost of the acquisition was
measured at the fair market value of the consideration paid and liabilities assumed under the terms of the business
combination agreement. Identifiable assets and liabilities acquired are generally measured and recognised at their fair value
and any deferred tax assets or liabilities arising from the business combination were recognised at the acquisition date. The
differential between the consideration paid and assessed fair market value of the assets and liabilities assumed is
recognised as either goodwill or a gain on acquisition. The remeasurement of acquired restoration provisions to the risk-
free discount rate is recognized in profit or loss as incurred. Transaction costs related to business combinations are
expensed.
Financial Instruments
The Company's financial instruments consist of cash and cash equivalents, accounts receivable, deposits, risk management
contracts, accounts payable, accrued liabilities, other indebtedness, investments, a term loan and a credit facility. The
Calima Group’s financial instruments are measured on the consolidated statement of financial position at either fair market
value or amortised cost. The carrying value of the Company's financial instruments generally approximate their fair market
value.
The fair value measurement of the Company's financial instruments are classified according to the following hierarchy
which is ranked based on the amount of publicly observable inputs available to value the instruments:
Level 1 - Quoted prices that are available in active markets for identical assets or liabilities at the reporting date
Level 2 - Values are based on various inputs, including quoted forward prices for commodities, time value of money
and volatility factors, which are observed in the marketplace but are not readily observable in an actively traded market
Level 3 - Valuation inputs that are not based on observable market data
The following table summarises the method by which the Calima Group measures its financial instruments on the
consolidated statement of financial position and the corresponding hierarchy rating for their derived fair value estimates:
Financial Instrument
Cash and cash equivalents
Accounts receivable
Deposits
Accounts payable and accrued liabilities
Credit facility
Risk management contracts
Term loan
Other indebtedness
Fair value
Hierarchy
Level 1
Level 2
Level 2
Level 2
Level 2
Level 2
Level 3
Level 3
Classification &
Measurement
Amortised cost
Amortised cost
Amortised cost
Amortised cost
Amortised cost
FV through profit and loss
Amortised cost
Amortised cost
The Calima Group’s risk management contracts are measured at fair market value at each reporting period. Realised gains
and losses from the settlement of risk management contracts as well as unrealised gains and losses from the
remeasurement of these financial instruments to fair market value at each reporting period are recognised in net income
(loss) as incurred. Transaction costs related to fair value through profit and loss financial instruments are immediately
expensed. Financial instruments recognised at amortised cost are accreted through net income (loss) towards their
settlement value over time. Transaction costs related to financial liabilities measured at amortised costs are initially
capitalised and then amortised to net income (loss) over the life of the related host instrument.
Any impairment loss of financial assets is determined by assessing and measuring the expected credit losses of the
instruments at each reporting period. The Calima Group measures expected credit losses using a lifetime expected loss
allowance model for all trade receivables and contract assets. The credit-loss model groups receivables based on similar
credit risk characteristics and the number of days past due in order to estimate and recognise bad debt expenses. When
measuring expected credit losses, the Company considers a variety of factors including evidence of the debtor's financial
condition, history of collections, the term of the receivable and any changes in economic conditions.
26
Cash and cash equivalents consist of cash on hand and other short-term liquid investments that carry a maturity term of
three months or less and presented as a current asset on the statement of financial position. All other financial instruments
are presented as a current asset or liability on the statement of financial position if they are expected to be settled within
12 months of the statement of financial position date unless there is an irrevocable right to defer settlement beyond 12
months from the statement of financial position date.
Foreign currency translations
With respect to transactions and balances of the Calima Group that are denominated in a foreign currency other than their
respective functional currency, monetary assets and liabilities are translated at the exchange rate in effect at the statement
of financial position date. Revenues and expenses are translated at the average foreign exchange rates during the period.
Non-monetary items are translated at the foreign exchange rate in effect at the historical date of their last fair value
measurement. The corresponding realised and unrealised gains and losses from these foreign currency translations are
recognised in net income (loss) as incurred.
For financial reporting purposes, the presentation currency of the Calima Group is the Australian dollar. Accordingly, the
Canadian dollar functional currencies of Blackspur and Calima Energy Inc. are translated to the Australian dollar
presentation currency upon consolidation. Revenues and expenses are translated at the average exchange rate during the
year and assets and liabilities are translated at the prevailing exchange rates at the reporting date.
The corresponding unrealised gains and losses stemming from the remeasurement of the subsidiary functional currencies
to the presentation currencies at each reporting period are recognised as other comprehensive income by Calima. The
corresponding cumulative foreign currency translation reserve is reflected in shareholder’s equity on the consolidated
statement of financial position until such time the subsidiary is disposed of, at which point, the balance is reclassified to net
income (loss).
Revenue recognition
Revenues primarily relate to the sale of oil, natural gas and natural gas liquids ("NGLs") in Canada from the Company's
Brooks and Thorsby assets. The products are classified and presented in the financial statements based on the physical
characteristics of the hydrocarbons at the time of sale. Liquids extracted from the natural gas stream are presented as
NGLs.
The Calima Group measures revenue from the sale of oil, natural gas and NGLs at the amount the Company expects to
receive, which is based on an agreed upon transaction volume and price with the customer. Revenue is recognised when
the Calima Group transfers control of products or provides services to a customer at the amount to which the Company
expects to receive. If the consideration includes a variable component, the Group estimates the amount of the expected
consideration receivable. Variable consideration is estimated throughout the contract and is constrained until it is highly
probable a significant revenue reversal in the amount of cumulative revenue recognised will not occur. In most cases,
revenue is recognised when the hydrocarbons have been delivered to the customer. Payment terms with the Company's
customers are generally within 30 days following the month of product delivery.
The Calima Group recognises realised and unrealised gains and losses from the Company’s risk management contracts
which are remeasured to fair market value at each reporting period (refer to the financial instruments accounting policy).
The Company also earns other income primarily from interest on its cash and cash equivalent balances held. Excluded from
revenues are amounts received in respect of government grants and subsidies that are instead reflected as a reduction to
the related expenditure to which the recoveries are intended to compensate.
Provisions
Provisions are liabilities that are recognised when the Calima Group has a present legal or constructive obligation as a result
of a past event and it is probable that the Company will be required to settle the obligation. The Calima Group’s provisions
primarily consist of restoration provisions associated with the dismantling, decommissioning and site disturbance
remediation activities for the Company's oil and natural gas assets.
At initial recognition, the Company recognises a restoration provision asset and corresponding liability on the statement of
financial position. Restoration provisions are measured at the present value of expected future cash outflows required to
settle the obligations. Restoration provisions are inflated based on the Bank of Canada's target inflation rate and then
discounted to net present value using a risk-free discount rate. The liabilities are accreted upwards towards their estimated
settlement value over the expected life of the assets in order to reflect the time value of money. Restoration provision
assets are depleted over the remaining useful life of the related assets in order to reflect the associated decommissioning
costs in net income (loss) over time. Restoration provision assets and liabilities are remeasured at each reporting period
primarily to account for any changes in estimates or discount rates. Actual expenditures incurred to settle the obligations
reduce the liability.
27
Income taxes
The Calima Group’s income taxes primarily relate to deferred income taxes that are recognised in respect of the Company’s
earnings, which are expected in future years under the Income Tax Act (Canada) and Income Tax Assessment Act (Australia).
Deferred income tax assets and liabilities are recognised on temporary differences between the current carrying value of
assets and liabilities for financial reporting purposes and their corresponding tax values. Deferred income taxes are
determined on an undiscounted basis using tax rates that have been enacted or substantively enacted and that are
expected to apply in future years when the temporary differences reverse. A deferred tax asset is only recognised to the
extent that it is probable that future taxable profits will arise, such that the available carry-forward tax deduction can be
utilised to shelter the taxable profits from income tax. The recoverability of deferred tax assets is assessed by comparing
the Calima Group’s tax pools to the future undiscounted cash flows from the Company's proved plus probable reserves,
less estimated financing and general and administrative expenses.
Income taxes are recognised in the statement of comprehensive income, except when they relate to share capital, in which
case, the taxes are recognised directly in shareholders equity. Current income tax expense (recovery) is the expected cash
tax payable or receivable on the Company's taxable income (loss) during the year, using tax rates that have been enacted
or substantively enacted.
Stock-based compensation
The Calima Group’s stock-based compensation expense primarily relates to stock options and performance rights that are
granted to employees, service providers and directors of the Company.
Grants issued under the Company’s plans are initially measured at their estimated fair market value and are expensed over
the vesting periods under the terms of the compensation arrangement. Upon exercise, the plans allow the holder of an
award to receive common shares or cash at the Company's discretion. The Company’s plans are all accounted for as equity-
settled share-based compensation arrangements based on their anticipated settlement option. Accordingly, when equity
compensation units are exercised or released, any consideration received, together with the expense previously recognised
as contributed surplus, is recorded as an increase to share capital.
The primary non-market-based vesting condition for all the Company's stock-based compensation plans is generally
continuous employment. An estimated forfeiture rate is applied to the valuation of the equity units over the vesting period
and is subsequently adjusted to reflect the actual number of equity awards that ultimately vest. In some cases, performance
rights are also granted with certain other market-based or non-market-based vesting conditions which are determined by
the Company's Board of Directors. The fair market value of these performance rights at the date of grant is initially adjusted
to reflect the probability of these possible outcomes.
Stock options and performance rights are valued at the date of grant primarily utilising a Black-Scholes pricing model.
Performance rights that are subject to a minimum share price vesting condition are valued utilising a binomial barrier pricing
model. Performance rights that vest immediately at issuance are valued at the Company's share price at the date of grant.
The stock-based compensation expense attributable to performance factors that are dependent upon market conditions
are not subsequently adjusted for actual results. The stock-based compensation expense attributable to performance
factors dependent upon non-market conditions are subsequently adjusted for actual results.
Leases
At the inception of a contract, the Calima Group assesses if an agreement contains a lease based on whether the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. For all in-scope
lease arrangements, a right-of-use asset and corresponding lease liability is initially recognised at the commencement date
of the lease and measured at the net present value of all future non-cancellable lease payments. The payments are
discounted using the rate implicit in the lease unless that rate is not readily determined, in which case, the Company's
incremental borrowing rate is utilised. The estimated lease term consists of all non-cancellable periods under the contract
and includes periods covered by an extension or termination option if the Calima Group is reasonably certain that it will
exercise the option.
28
Right-of-use assets are depreciated to net income (loss) over the expected utilisation period of the underlying assets using
the straight-line method. The depreciation of right-of-use assets that are utilised in respect of development activities are
initially capitalised to PP&E and then depleted to net income over the remaining life of the developed assets once they are
ready for use in the manner intended. Lease liabilities are accreted upwards toward their settlement value over the
expected life of the contract in order to reflect the cost of borrowing under the indebted contract. The interest portion of
the lease payment is recognised as an operating activity in the consolidated statement of cash flows. The principal portion
of the lease payment reduces the lease liability and is reflected as a financing activity in the consolidated statement of cash
flows. Right-of-use assets and lease liabilities are remeasured at each reporting period to reflect any contract modifications
or reassessments that impact the anticipated remaining cash outflows under the contract.
Jointly operated assets
The Calima Group’s oil and natural gas activities include jointly operated oil and natural gas assets and liabilities. These
annual financial statements only include the Company’s share of these jointly operated assets and liabilities and a
proportionate share of the related revenue and expenses.
Per share information
Basic per share information is calculated using the weighted average number of common shares outstanding during the
year. Diluted per share information is calculated using the basic weighted average number of common shares outstanding
during the year, adjusted for the number of shares which could have had a dilutive effect on net income during the year
had outstanding in-the-money equity compensation units been exercised.
Assets Held for Sale
PP&E and E&E assets are classified as held for sale if it is highly probable their carrying amounts will be recovered through
a capital disposition rather than through future operating cash flows. Before PP&E and E&E assets are classified as held for
sale, they are assessed for indicators of impairment or reversal of previously recorded impairments and are measured at
the lower of their carrying amount and fair value less costs of disposal. Any impairment charges or reversals are recognized
in net income. Assets held for sale are classified as current assets and are not subject to DD&A. Decommissioning liabilities
associated with assets held for sale are classified as current liabilities.
4. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
Significant judgements
Oil and natural gas assets
Oil and natural gas assets are grouped into CGUs based on their ability to generate largely independent cash flows. The
determination of the Calima Group’s CGUs are subject to judgment as the Company is required to define and establish
these asset groupings based on their specific nature and characteristics in a reasonable manner. The Calima Group applies
judgment when determining the classification of its oil and natural gas assets as either E&E or PP&E assets because it
requires the Company to define and establish thresholds for when a particular project has achieved technical feasibility and
commercial viability. When the Calima Group assesses its CGU for indicators of impairment or impairment reversal at each
reporting period, judgment is applied in establishing the qualitative and quantitative thresholds that are used to assess if
an indicator is present, such that an impairment test is then required.
Liquidity and access to Credit Facility and Term Loan
As at 31 December 2023, the Calima Group’s net debt was A$3.8 million (Note 16). The Company also had a net working
capital surplus of $3.8 million (current assets of $4.2 million in excess of current liabilities of $0.4 million). There was no
amount drawn under the C$20 million demand revolving credit facility with a Canadian chartered bank (the “Credit
Facility”).
Borrowings under the Credit Facility incur interest at a market-based interest rate plus an applicable margin which varies
depending on Blackspur’s net debt to cash flow ratio. As a demand facility, the Credit Facility does not have a specific
maturity date which means that the lender could demand repayment of all outstanding indebtedness or a portion thereof
at any time. If such an event were to occur, the Calima Group would be required to source alternative sources of capital or
sell assets to repay the indebtedness.
The Calima Group manages liquidity risk by complying with the covenants of the Credit Facility agreement, however, there
can be no assurance that the amount or terms of the revolving credit facility will be maintained at the next annual borrowing
base review. The borrowing base review was completed as at 22 March 2023 and resulted in a decrease to the credit facility
from $24.2M to $20.0M as well as the removal of the affirmative covenant which had a mandatory hedging requirement if
the Company were to utilize the bank line at greater than 50% over any quarter end. The Company settled on the sale of
29
Blackspur Oil Corp. on 27 February 2024 resulting in a net $81.6M in cash being received by the Company. The Company
has reviewed its ability to continue as a going concern based on its cash flow forecast up to 31 March 2024 and concluded
there are reasonable grounds to believe that the Company will continue as a going concern based on the projected cash
flows and current access to funding. Management used significant judgements and assumptions in developing the cash
flow forecast. These assumptions included expected revenue, forecast of operating and capital expenditures, ability to
reduce capital and other operating expenditures as well as the ability to maintain existing funding.
On 31 January 2022 the Calima Group entered into a long-term financing arrangement with a strategic infrastructure and
midstream company to construct a pipeline connecting the Company’s 02-29 battery in the northern portion of its Brooks,
Alberta asset base to its wells, lands, and gathering system in the southern portion of the asset base. The Calima Group is
the sole owner of the pipeline and will repay the capital costs to construct the pipeline over a term of seven years at a 12%
cost of financing with fixed monthly payments of approximately C$65,000 based on the cost of the pipeline project of C$3.7
million.
Other significant judgements
The determination of the Company’s income tax and royalty expenses require interpretation of complex laws and
regulations and are subject to judgement. Judgement is also applied when interpreting contractual commitments to assess
whether or not they contain a lease arrangement.
Significant estimates
Depletion of oil and natural gas assets
Amounts recorded for the depletion of oil and natural gas assets rely on estimates and assumptions regarding the
Company's proved plus probable reserves and future development costs. Fair value estimates that are utilised in a test for
impairment or impairment reversal often rely upon estimates and assumptions regarding the future cash flows from the
Calima Group’s proved plus probable reserves as well as the recoverable resale value of undeveloped exploratory acreage.
Reserve estimates are primarily based on the Calima Group’s reserve reports prepared by an independent third-party
engineering firm. The reports include estimates for production rates, future commodity prices, discount rates, and future
royalty, operating and capital costs. These estimates were prepared by experts in accordance with the standards contained
in the Canadian Oil and Gas Evaluation Handbook but are still subject to measurement uncertainty. The Calima Group may
also utilise observable third-party land transactions adjacent to the Company's assets for estimating the value of
undeveloped exploration acreage. Actual results may differ from the Company's estimates.
Other significant estimates
Estimates and assumptions are utilised to assess the Company’s ability to continue as a going concern which includes future
cash flow projections for operating, investing and financing related activities. The value of the Company's restoration
provisions is based on estimates and assumptions regarding current legal requirements, future costs to settle the provisions
and the expected timing of the remediations. The valuation of level 2 and level 3 financial instruments are subject to
measurement uncertainty because there is no observable actively traded market and, therefore, estimates are required to
estimate their fair market value at each reporting period for the purposes of valuation or disclosure.
The Company records deferred income tax assets and liabilities using income tax rates that are enacted or substantively
enacted at the statement of financial position date, which are subject to change. The recoverability of loss carryforwards,
investment tax credits and royalty incentives require estimates and assumptions regarding future operating results that will
allow the Company to ultimately utilise those assets. All tax filings are also subject to audit and potential reassessment.
The Calima Group's stock-based compensation expense is subject to measurement uncertainty as a result of estimates and
assumptions related to volatility, forfeiture rates, expected life, market-based vesting conditions and non-market-based
vesting conditions. Estimates and assumptions are utilised in the Company's cash flows forecasts in assessing the Company’s
ability to continue as a going concern, future cash flows and access to credit.
30
5. CASH AND CASH EQUIVALENTS
As at 31 December 2023, the Calima Group held cash and cash equivalents of $4.0 million (31 December 2022 - $3.8 million).
The Company is exposed to credit risk associated with its cash and cash equivalent balances held by third party institutions.
The credit risk associated with the Calima Group’s cash and cash equivalents was considered low as the Company’s balances
were all held with three large chartered banks located in Australia and Canada.
6. ACCOUNTS RECEIVABLE
As at (A$ thousands)
Oil and natural gas sales
Joint venture billings
GST and other
Accounts receivable
31 December
2023
33
-
71
104
$
$
$
$
31 December
2022
7,480
1,513
684
9,677
The Calima Group is exposed to collection risk from receivables associated with the Company’s oil and natural gas sales.
The customer base primarily consists of integrated oil and natural gas producers, midstream and downstream companies
and energy traders. The Company manages credit risk by principally transacting with high-quality counterparties.
As at 31 December 2023, credit risk from outstanding accounts receivable was considered low given the history of
collections and because the majority of the Company’s outstanding receivables from oil and natural gas sales were held
with four investment-grade counterparties. Substantially all of the Company’s accounts receivable from oil and natural gas
sales were collected within 30 days following the month of sale or settlement date and there were no material amounts
past due as at 31 December 2023 or 2022.
7. ASSETS HELD FOR SALE AND DISCOUNTINUED OPERATIONS
On 27 December 2023, Calima announced it has entered into a binding definitive agreement with Astara Energy Corp.,
pursuant to which Calima had agreed to sell 100% of its ownership in its wholly owned Canadian subsidiary, Blackspur Oil
Corp., the owner of the Company’s Brooks and Thorsby production assets for a cash consideration of ~A$83.3 million (C$75
million) prior to customary completion adjustments for net debt. The transaction closed 23 February 2024. Calima received
cash proceeds of C$72.7 million (A$82.56 million).
An impairment loss of $46.2 million for write-downs of the disposal group to the lower of its carrying amount and its fair
value less costs to sell have been included in Impairment expense (see Note 8). The impairment loss has been applied to
reduce the carrying amounts of property, plant and equipment within the disposal group.
Financial information relating to the discontinued operations for the 12-month period ended 31 December 2023 and prior
year comparatives are set out below.
At 31 December 2023, the Blackspur subsidiary was stated at fair value less costs to sell and comprised the following assets
and liabilities. The assets and liabilities were reclassified as held for sale in relation to the discontinued operations of
Blackspur as at 31 December 2023.
31
As at (A$ thousands)
Assets classified as held for sale
Property, plant and equipment
Deferred income tax asset
Risk management contracts
Inventory
Accounts receivable
Prepaids and deposits
Cash
Total Assets of Blackspur held for sale
Liabilities classified as held for sale
Accounts payable
Risk management contracts
Term loan
Asset retirement obligation
Total Liabilities of Blackspur held for sale
Net assets
31 December
2023
102,053
1,774
2,514
902
6,257
612
3,743
117,855
13,639
435
2,968
21,832
38,874
78,981
$
$
$
$
$
The financial performance and cash flow information for the discontinued operations are presented are for the years
ended 31 December 2023 and 2022.
For the year ended (A$ thousands)
Revenue (point in time)
Oil and natural gas sales
Royalties expense
Risk management contracts
Realized loss
Unrealized gain (loss)
Expenses
Operating
Transportation
Depletion and depreciation
Impairment loss
General and administrative
Exploration expense
Financing and interest
Share-based compensation
Net income (loss) before the following
Loss on equity investment
Net income (loss) before income taxes
Income tax expense
Net Income (loss)
31 December
2023
31 December
2022
$
$
92,264
(19,196)
73,068
(623)
1,691
74,136
26,410
4,913
21,274
48,333
7,139
1
1,274
1,310
110,635
(36,517)
(4)
(36,521)
2,104
(38,626) $
$
121,828
(23,529)
98,299
(16,326)
3,219
85,192
20,849
5,037
18,316
-
3,102
180
1,046
435
48,964
36,228
(415)
35,813
8,518
27,296
32
For the year ended (A$ thousands)
Operating activities
Net income (loss)
Items not affecting operating related cash flows:
Impairment
Depletion and depreciation
Unrealised gain on risk management contracts
Deferred income tax expense
Share-based compensation
Accretion of liabilities
Non-cash expenses and other
Funds flow from operations
Changes in non-cash working capital
Cash provided by operating activities
Financing activities
Increase in (repayment of) credit facility
Term loan proceeds
Repayment of term loan
Cash provided by (used in) financing activities
Investing activities
Investments in oil and natural gas assets
Loss on equity investment
Changes in non-cash working capital
Cash used in investing activities
Impact of foreign exchange translations
8. OIL AND NATURAL GAS ASSETS
Continuity schedule (A$ thousands)
Investments in capital assets
Balance, 31 December 2021
Capital investments
Change in restoration provision (1)
Impact of foreign currency translations
Balance, 31 December 2022
Capital investments
Transfer to Assets Held for Sale (Note 7)
Montney Asset disposition
Change in restoration provision (1)
Impact of foreign currency translations
Balance, 31 December 2023
Accumulated depletion and depreciation
Balance, 31 December 2021
Depletion and depreciation
Impact of foreign currency translations
Balance, 31 December 2022
Depletion and depreciation
Impairment
Montney Asset disposition
Impact of foreign currency translations
Balance, 31 December 2023
Net book value
Balance, 31 December 2022
Balance, 31 December 2023
Notes
31 December
2023
31 December
2022
$
(35,977)
$
27,296
8
8
11
9
19
10
12
12
8
48,333
21,274
(1,691)
2,104
1,310
662
-
36,015
(1,635)
34,380
-
-
(430)
(430)
(22,232)
(4)
(8,744)
(30,981)
208
-
18,316
(3,219)
8,518
435
501
(36)
51,811
1,457
53,268
(22,142)
3,980
(192)
(18,354)
(47,684)
415
1,080
(46,188)
(345)
PP&E
assets
E&E
assets
120,055
47,751
(1,424)
(441)
165,941
24,222
(102,053)
-
971
3,829
92,910
69,406
65
(1,227)
(255)
67,989
2,172
-
(70,327)
100
1,574
1,508
$
(8,462) $
(52,510) $
(18,851)
432
(26,881)
(20,858)
(44,472)
-
(469)
(92,680)
-
194
(52,316)
(140)
(3,545)
55,700
(1,207)
(1,508)
ROU
assets
1,008
-
-
(3)
1,005
-
-
(943)
-
16
78
(788) $
(94)
4
(878)
(55)
-
873
(23)
(83)
Total
190,469
47,816
(2,651)
(699)
234,935
26,394
(102,053)
(71,270)
1,071
5,424
94,496
(61,760)
(18,945)
630
(80,075)
(21,053)
(48,017)
56,573
(1,699)
(94,272)
$
$
139,060
230
$
$
15,673 $
- $
127
-
$
$
154,860
230
(1) During the year ended 31 December 2023, the Calima Group recognised non-cash capitalised costs of $1.0 million (31 December 2022 - $3.1 million) primarily related to
restoration provisions added in respect of the Company’s drilling and development activities (Note 13).
33
The Calima Group’s PP&E primarily consists of the Brooks and Thorsby CGUs located in Southern and Central Alberta that
were acquired as part the Blackspur Acquisition on 30 April 2021. The Company’s exploration of evaluation assets (“E&E”)
primarily consists of capitalised costs associated with undeveloped Tommy Lakes Montney acreages in North-eastern
British Columbia.
On 27 December 2023, Calima announced it has entered into a binding definitive agreement with Astara Energy Corp.,
pursuant to which Calima had agreed to sell 100% of its ownership in its wholly owned Canadian subsidiary, Blackspur Oil
Corp., the owner of the Company’s Brooks and Thorsby production assets for a cash consideration of ~A$83.3 million (C$75
million)
An impairment loss of $45.7 million was recorded to reduce the carrying amounts of property, plant and equipment within
the disposal group to the lower of the carrying amount and the fair value less costs to sell. (see Note 7). The recoverability
of the carrying amounts of E&E assets is dependent on successful development and commercial exploitation, or
alternatively, the sale of the respective areas of interest.
During the year, the Company sold its Montney Assets including 33,643 net acres of Montney licenses/acreage and the
Tommy Lakes facilities for C$10.0 million (A$11.4 million). The Company recorded an impairment loss of $2.7 million as the
net book value of the Montney CGU exceeded its recoverable value.
2022 Impairment Charges and Reversals
During the year ended 31 December 2022, the Calima Group did not recognise any land expiry losses
As at 31 December 2022, an impairment test was conducted on the Company’s PP&E assets given the book value of the
Company’s net assets was greater than its market capitalization. This was performed on both of the PP&E CGUs based on
the fair value less costs of disposal method which uses after-tax, discounted future cash flows model using the CGU’s proved
plus probable reserves to estimate the CGU’s recoverable amounts (Level 3 valuations). Management applied a 16%
discount rate on both of the CGUs. Given the recoverable amount was greater than the carrying amount, no impairment
loss was recognized.
The following table summarizes the key forecast assumptions included in the Company’s impairment test:
($ thousands)
WTI (US$/bbl)
Hardisty Bow River (C$/bbl)
AECO (C$/GJ)
FX (C$ to US$)
2024
2025
2026
2023
2031
2027
80.00 77.00 75.50 77.01 78.55 80.12 81.72 83.36 85.03
78.67 79.67 79.67 82.18 83.73 85.41 87.12 88.86 90.64
4.82
4.45
4.33
1.33
1.33
1.33
4.50
1.33
4.30
1.33
4.73
1.33
4.54
1.33
4.63
1.33
4.37
1.33
2030
2029
2028
9. DEFERRED INCOME TAXES
(A$ thousands)
Non-capital losses
Oil and natural gas assets
Restoration provisions
Investments
Risk management contracts
Share issuance costs
Tax credits and other
Unrecognised deferred tax assets
Deferred income tax asset
$
31 December
2021
26,184
(3,312)
6,005
302
677
747
740
31,343
(19,189)
12,154
$
$
Change in
tax position
3,159
$
(8,136)
988
281
(742)
398
69
(3,983)
(4,159)
(8,142) $
31 December
2022
29,343
(11,448)
6,993
583
(65)
1,145
809
27,360
(23,348)
4,012
$
Change in
tax position
$
(21,415) $
13,001
(9,529)
476
65
-
(940)
(18,342)
14,330
$
(4,012) $
Thereafter
+2% per year
+2% per year
+2% per year
1.30 thereafter
31 December
2023
7,928
1,553
(2,536)
1,059
-
1,145
(131)
9,018
(9,018)
-
As at 31 December 2022, the Calima Group recognised a deferred income tax asset of $4.0 million primarily in respect of
Blackspur’s carry-forward tax pools in excess of the corresponding accounting values. The Calima Group also held
unrecognised deferred income tax assets of $9.0 million (31 December 2022 - $23.3 million) consisting primarily of carry-
forward tax losses held by Calima Energy Limited and Calima Energy Inc.
34
The following table reconciles the change in the deferred income tax asset during the years ended 31 December 2023 and
31 December 2022:
Continuity schedule (A$ thousands)
Deferred income tax asset, beginning of year
Deferred income tax expense recognised through profit or loss
Other
Impact of foreign exchange translations
Deferred income tax asset, end of year
31 December
2023
4,012
(2,104)
(1,656)
(252)
-
$
$
$
$
31 December
2022
12,154
(8,871)
-
729
4,012
The following table reconciles the Company’s consolidated income tax expense (recovery) compared to that computed
using the current effective Australian tax rate of 30% (31 December 2022 – 30%):
For the year ended (A$ thousands)
Net income (loss) from continuing operations before income taxes
Net income (loss) from discontinuing operations before income taxes
Statutory income tax rate
Expected income tax expense (recovery)
Adjustments related to the following:
Change in unrecognised deferred income tax assets
Foreign rate differential
Share-based compensation
Impact of foreign exchange translations and other
Deferred income tax expense (recovery)
Tax loss carryforwards by jurisdiction (A$ thousands)
Canada
Australia
Total tax losses
$
31 December
2023
(2,769)
(36,521)
(39,290)
30%
(11,787)
12,889
824
430
(252)
2,104
31 December
2023
-
7,928
7,928
$
$
$
$
$
$
$
31 December
2022
(4,864)
35,813
30,949
30%
9,285
513
(3,194)
809
729
8,142
31 December
2022
21,876
7,467
29,343
As at 31 December 2023, the Company had estimated non-capital losses (“NCL”) that may be applied to reduce future
Canadian taxable income, expiring starting in 2032. Non-capital losses in Australia can be carried forward indefinitely.
10. CREDIT FACILITY
As at (A$ thousands)
Credit facility details:
Credit facility draws
Issued letters of credit
Undrawn capacity
Credit facility capacity
Credit Facility maturity date
Effective annual interest rate on revolving draws
Covenants (1):
Working capital ratio
Financial
Covenant
31 December
2023
31 December
2022
$
$
- $
152
22,007
22,159 $
-
155
26,053
26,208
On demand
8.2%
On demand
8.3%
1:1
48.0:1.00
1.82:1.00
(1) The Credit Facility contains certain covenants that limit the Company’s ability to, among other things: incur additional indebtedness; create or permit liens to exist; and
make certain dispositions and transfers of assets.
As at 31 December 2023, the Calima Group held a C$20 million demand revolving credit facility with a Canadian chartered
bank (the “Credit Facility”). The borrowing base review was completed as at 22 March 2023 and resulted in a decrease to
the credit facility from $24.2M to $20.0M as well as the removal of the affirmative covenant which had a mandatory hedging
requirement if the Company were to utilize the bank line at greater than 50% over any quarter end.
Borrowings under the Credit Facility incur interest at a market-based interest rate plus an applicable margin which varies
depending on Blackspur’s net debt to cash flow ratio. Interest charges are between 150 bps to 350 bps on Canadian bank
prime borrowings and between 275 bps and 475 bps on Canadian dollar bankers’ acceptances. Any undrawn portion of the
demand facility is subject to a standby fee in the range of 20 bps to 45 bps. Security for the credit facility is provided by a
35
$150 million demand debenture.
Under the terms of the facility, a financial covenant must be maintained. The Company must not permit the working capital
ratio, as defined by the bank, to fall below 1:1. The bank defines the working capital ratio as the ratio of (i) current assets
plus any undrawn availability under the facility to (ii) current liabilities less any amount drawn under the facilities. For the
purposes of the covenant calculation, risk management contract assets and liabilities are excluded. At 31 December 2023
and 31 December 2022, the Company was in compliance with its banking covenants.
The following table summarises the change in the Credit Facility during the years ended 31 December 2023 and 31
December 2022:
For the year ended (A$ thousands)
Credit Facility, beginning of year
Credit Facility draws
Credit Facility repayment
Impact of foreign currency translations
Credit Facility, end of year
11. RISK MANAGEMENT CONTRACTS
For the year ended (A$ thousands)
Derivative liability, beginning of year
Realisation of derivative losses
Net unrealised decrease in fair value
Transferred to assets held for sale
Transferred to liabilities held for sale
Impact of foreign currency translations
Derivative asset (liability), end of year
31 December
2023
- $
(311,376)
311,376
31 December
2022
(21,739)
-
22,142
-
- $
(403)
-
31 December
2023
218 $
623
1,236
(2,514)
435
2
- $
31 December
2022
(2,941)
16,326
(12,822)
-
-
(345)
218
$
$
$
$
The Calima Group is exposed to commodity price fluctuations associated with the production and sale of oil and natural
gas. The Company executes a consistent and mechanical risk management program which is designed primarily to reduce
cash flow volatility, protect a sufficient level of cash flows to service debt obligations and fund a portion of the Company’s
development and operational programs. The Calima Group generally hedges oil pricing exposure on a forward rolling one
year basis.
The Company’s risk management portfolio consists of instruments that are intended to mitigate the Calima Group’s
exposure to commodity price risks in the Western Canadian Sedimentary Basin consisting primarily of the US$ WTI
benchmark price and the C$ WCS differential to US$ WTI. The net unrealized decrease in fair value is determined using
Level 2 prices sourced from observable data or market corroboration and are measured at mark to market.
The Company’s risk management contracts consisted of the following positions as at 31 December 2023:
Contract
Reference
Term
Swap
Swap
Swap
OIL-WTI-NYMEX
OIL-WTI-NYMEX
OIL-WTI-NYMEX
Mar. 2024 – Jun. 2024
Jul. 2024 – Feb. 2025
Mar. 2025 – Feb. 2026
Volumes
(bbl/day)
2,100
1,700
1,500
Price per Unit
(CAD$/Unit)
97.42
94.57
89.55
The Company also had the following foreign currency swap contracts in place as at 31 December 2023:
Term
Counterparty
Type Of Hedge
Notional Amount
(USD)
Forward Swap Rate
Nov 2023 – Mar 2024 National Bank
Nov 2023 – Mar 2024 National Bank
Avg Rate Fwd Currency Swap
Avg Rate Fwd Currency Swap
$700,000/month 1.3699 CAD per USD
$700,000/month 1.3750 CAD per USD
As at 31 December 2023, the fair value associated with Calima’s risk management contracts was an asset of $2.1 million
($0.2 million asset at 31 December 2022).
36
Subsequent to 31 December 2023, in support of the Blackspur transaction the Company was required to entered into the
following risk management contracts. These risk management contracts were assumed by Astara through the acquisition
of Blackspur.
Contract
SWAP
SWAP
SWAP
SWAP
Reference
US NGX Oil-WCS-Blended
US NGX Oil-WCS-Blended
US NGX Oil-WCS-Blended
US NGX Oil-WCS-Blended
Remaining term
Apr 2024 - Jun 2024
Jul 2024 - Sep 2024
Oct 2024 - Dec 2024
Jan 2025 - Dec 2025
Volume
(bbl/day)
1,200
1,100
1,000
750
Average Price per bbl
CAD$
($21,.90)
($19.55)
($22.15)
($20.30)
Subsequent to December 31, 2023, the Company unwound the remaining foreign currency contracts and recorded a gain
of A $150,000.
The Calima Group’s risk management contracts are subject to master netting agreements that create the legal right to settle
the instruments on a net basis. The following table summarises the impact of the netting agreements on the Company’s
consolidated statement of financial position presentation as 31 December 2023 and 2022:
(A$ thousands)
Current asset/(liability)
Net position
$
$
31 December 2023
31 December 2022
Asset
Liability
Net
Asset
Liability
- $
- $
- $
- $
- $
- $
653 $
653 $
(435) $
(435) $
Net
218
218
12. TERM LOAN
On 31 January 2022 the Calima Group entered into a long-term financing arrangement with a strategic infrastructure and
midstream company to construct a pipeline connecting the Company’s 02-29 battery in the northern portion of its Brooks,
Alberta asset base to its wells, lands, and gathering system in the southern portion of the asset base. The Calima Group is
the sole owner of the pipeline and will repay the capital costs to construct the pipeline over a term of seven years at a 12%
cost of financing with fixed monthly payments of approximately C$65,000 to a sum of C$457,206 for the year ended 31
December 2022 based on the cost of the pipeline project of C$3.7 million. The Company retains the right to payout the
financing on 180 days written notice starting on the 3rd anniversary of the agreement, subject to an early termination
penalty provision. At 31 December 2023, the remaining balance on this loan was C$3.2 million. Security for the term loan
is provided by a lien and security interest over the pipeline.
13. RESTORATION PROVISIONS
As at (A$ thousands)
Restoration provision, beginning of year
Development of oil and natural gas assets
Accretion
Changes in estimate and other
Restoration expenses
Transfer to liabilities held for sale (Note 7)
Monteny Asset disposition (Note 8)
Impact of foreign exchange translations
Restoration provision, end of year
Presented as:
Current restoration provisions (1)
Restoration provisions
31 December
2023
23,311
471
710
521
-
(21,832)
(3,659)
683
205
$
$
$
$
-
205
31 December
2022
25,905
904
593
(3,742)
(237)
-
-
(112)
23,311
242
23,069
(1) 2022 current restoration provisions presented as accounts payable and accrued liabilities previously
The Calima Group’s restoration provisions reflect the estimated cost to dismantle, abandon, reclaim and remediate the
Company's oil and natural gas assets at the end of their useful lives. As at 31 December 2023, the total estimated
undiscounted, uninflated cash flows required to settle the Calima Group’s asset retirement obligations was approximately
$305 thousand (31 December 2022 – $29.5 million). These liabilities are anticipated to be incurred over the next 15 years.
37
As at 31 December 2023, the Company valued the restoration provision by utilising a risk-free rate of 3.0% (31 December
2022 – 3.3%) and an inflation rate of 2.0% (31 December 2022 – 2.0%). A 100-basis point (1%) increase in the discount rate
would have no impact on the Company’s restoration provision.
14. SHARE CAPITAL
Equity unit continuity (thousands)
Balance, beginning of year
Shares issued on exercise of performance warrants
Shares issued in respect of private placement
Shares issued to repay other indebtedness
Preferred share conversion
Share buyback
Return of capital
Share issuance costs
Balance, end of year
$
31 December 2023
Shares
611,751
13,970
-
-
-
-
-
-
625,721
Amount
366,055
130
-
-
-
-
(7,509)
-
358,676
$
31 December 2022
Shares
514,084
-
100,000
788
1,800
(4,921)
-
-
611,751
$
$
Amount
350,461
-
20,000
153
180
(818)
(2,508)
(1,413)
366,055
On 17 February 2022, the Company completed a $20 million fundraising through the issuance of 100 million common shares
at $0.20 per share. Funds raised were used to retire borrowings under the credit facility and to fund the Company’s 2022
capital program. The Company incurred $1.4 million of transaction costs associated with the equity financing.
During the 2022 fiscal year, the Company commenced a share buyback program and bought back 4,921,521 shares at an
average price of $0.1688 each.
On 13 October 2022, the Company completed a return of capital dividend payment to shareholders of $2.5 million.
15. PER SHARE AMOUNTS
For the year ended (thousands)
Weighted average number of common shares – basic
Dilutive effect of outstanding equity compensation units
Weighted average number common shares - diluted
Net income (loss) from continuing operations
Net income (loss) per share (basic and diluted) from continuing operations
Net income (loss) from discontinued operations (Note 7)
Net income (loss) per share (basic and diluted) from discontinued operations
(Note 7)
$
$
$
$
31 December
2023
617,348
12,826
630,174
(2,769) $
(0.004) $
(38,626)
(0.06)
$
$
31 December
2022
600,260
3,433
603,693
(4,489)
(0.01)
27,296
0.05
16. CAPITAL MANAGEMENT
The Calima Group’s objective for managing capital is to maintain a strong statement of financial position in order to provide
financial liquidity to fund ongoing development programs.
The Calima Group manages liquidity risk by complying with debt covenants and designing field development plans in
conjunction with production, commodity price and available credit forecasting which provides the Company with an
opportunity to fund its investments in oil and natural gas assets and expenses within cash flows or available sources of
capital on hand. Calima also manages liquidity risk by preserving borrowing capacity under the Credit Facility.
Management believes the Company has sufficient funding to meet near-term liquidity requirements. As at 31 December
2023, the Calima Group had A$22.2 million of available credit under the Credit Facility. On 27 December 2023, Calima
announced it has entered into a binding definitive agreement with Astara Energy Corp., pursuant to which Calima had
agreed to sell 100% of its ownership in its wholly owned Canadian subsidiary, Blackspur Oil Corp., the owner of the
Company’s Brooks and Thorsby production assets for a cash consideration of ~A$83.3 million (C$75 million) prior to
customary completion adjustments for net debt. The transaction closed 23 February 2024. Calima received cash proceeds
of C$72.7 million (A$82.56 million).
38
On 17 February 2022, the Calima Group also completed a private-placement equity financing arrangement with investors
for gross proceeds of A$20 million (Note 14). Near-term development activities are anticipated to be funded by the
Company's funds flow, cash on hand, proceeds from the equity financing or draws under the Credit Facility (Note 10). In
the near term, the Company plans to utilise any funds flow in excess of investments in oil and natural gas assets to affect a
combination of net debt reduction and production growth.
The following tables reconciles the Company’s net debt and adjusted funds flow from operations as at 31 December 2023
and 31 December 2022:
As at (A$ thousands)
Long-term portion of term loan
Current assets
Other current liabilities
Exclude: current portion of risk management assets
Net debt
For the year ended (A$ thousands)
Funds flow from operations (per cash flow statement)
Cash related transaction costs
Adjusted funds flow from operations
31 December
2023
-
4,153
(372)
3,781
-
3,781
$
$
31 December
2023
38,234
-
38,234
$
$
31 December
2022
(3,369)
14,417
(21,851)
(10,803)
(218)
(11,021)
31 December
2022
49,628
-
49,628
$
$
$
$
The Company utilises net debt as an important measure to assess the Company's liquidity by incorporating long-term debt,
lease liabilities, the term loan and working capital. Adjusted funds flow from operations is utilised as a measure of
operational performance and cash flow generating capability which impacts the level and extent of funding available for
capital project investments, reduction of net debt or returning capital to shareholders. These measures are also consistent
with the formulas prescribed under the Company’s Credit Facility covenants.
Net debt and adjusted funds flow from operations are not standardised measures and may not be comparable with the
calculation of similar measures by other companies without also taking into account any differences in the method by which
the calculations are prepared.
17. COMMITMENTS & CONTINGENCIES
(A$ thousands)
Accounts payable and accrued
liabilities
Drilling well commitment
Total contractual cash outflows
2024
2025
2023
2027
2028
Thereafter
Total
$
$
393 $
831
1,224 $
- $
-
-
-
-
-
$
-
-
-
$
-
-
-
$
- $
-
- $
393
831
1,224
The accounts payable and accrued liabilities and the term loan are recognised on Calima’s consolidated statement of
financial position.
The Company entered into a 3-year Leasing Agreement, renewed annually, with the underlying mineral owner in the Brooks
area of Alberta to drill 21 commitment wells with a minimum royalty before May 31, 2025. In February 2023, the Company
notified the mineral owner of its intent to drill seven commitment wells in 2023. At 31 December 2023, there were three
commitment wells left to be drilled, with a penalty of C$250,000 each.
18. SEGMENT INFORMATION
The Group has identified its operating segments based on the internal management reports that are reviewed and used by
the executive management team in assessing the performance and in determining the allocation of resources. The
operating segments identified by management are based on the geographical locations of the business.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance
39
of the operating segments, has been identified as the Board. The Group operates as one segment being Oil & Gas Production
and Exploration in Canada.
19. STOCK-BASED COMPENSATION
The following table presents consolidated stock-based compensation for the current year of $2.7 million, which is made up
of $1.4 million related to continuing operations and $1.3 million related to discontinued operations (Note 7).
For the year ended (A$ thousands)
Stock options
Performance rights
Gross stock-based compensation cost
Capitalised stock-based compensation
Stock-based compensation expense
31 December
2023
162
2,581
2,743
-
2,743
$
$
31 December
2022
952
1,751
2,703
(244)
2,459
$
$
The following table summarises the changes in equity compensation units during the years ended 31 December 2023 and
2022:
Equity unit continuity (thousands)
Balance, 31 December 2021
Issuance of stock options to employees
Issuance of stock options to other service providers
Issuance of performance rights to employees
Conversion of performance rights to common shares
Forfeitures
Expiry
Balance, 31 December 2022
Issuance of stock options to other service providers
Issuance of performance rights to employees
Conversion of performance rights to common shares
Forfeitures
Expiry
Balance, 31 December 2023
Stock options
Stock
options
17,750
1,350
3,500
-
-
(2,650)
(2,150)
17,800
500
-
-
-
-
18,300
Performance
rights
8,273
-
-
25,361
(1,800)
-
(2,573)
29,261
-
8,850
(10,329)
-
(15,780)
12,002
Total
26,023
1,350
3,500
25,361
(1,800)
(2,650)
(4,723)
47,061
500
8,850
(10,329)
-
(15,780)
30,302
Grant date (1)
2023 grants (Service Providers)
2022 grants (Service Providers)
2022 grants (Employees)
2021 grants
Outstanding
Exercisable
Number of
options
(thousands)
500
2,000
612
10,939
14,939
Weighted
average
remaining
life (years)
1.8
1.3
3.1
1.8
1.73
Number of
options
(thousands)
500
2,000
612
10,939
2,500
Weighted
average
remaining
life (years)
1.8
0.9
3.09
1
1.73
Exercise price
(A$/share)
$ 0.144
0.144
0.1838
0.1838
$ 0.17
(1) All information presented in this table have been adjusted to reflect the impact of the Company’s share consolidation which occurred on August 30, 2021 at a conversion rate of 20:1 (Note 14).
During the year ended 31 December 2023, Calima’s board approved 0.5 million stock options for grant to service providers
of Calima and Blackspur. The primary vesting condition of the stock options is continuous employment or service and 1/3
of the options vest each year over three years and are exercisable at $0.144 per unit and $0.1838 per unit within five years
from the date of grant.
During the year ended 31 December 2022, Calima’s board approved 4.85 million stock options for grant to certain Officers,
Directors, employees and service providers of Calima and Blackspur. The primary vesting condition of the stock options is
continuous employment or service and 1/3 of the options vest each year over three years and are exercisable at $0.144 per
40
unit and $0.1838 per unit within five years from the date of grant. During the year, 3.8 million stock options were forfeited
due to staff departure. As a result of the sale of BSO the remaining employee option vested were 612,000.
Performance rights
Grant date(1)
2023 grants
2022 grants(4)
2021(2)
Outstanding
Exercisable
Number of
performance
rights/option
s (thousands)
7,360
527
2,500
10,387
Weighted
average
remaining
life (years)
2.9
2.4
2.3
2.73
Number of
performance
options
(thousands)
-
-
8,439
8,439
Weighted
average
remaining
life (years)
-
-
2.8
2.8
Exercise price
(A$/share)
$ -
-
-
$ -
1) All information presented in this table have been adjusted to reflect the impact of the Company’s share consolidation which occurred on 30 August 2021 at a conversion rate of 20:1 (Note 14).
2) Units all became fully vested during the year ended 31 December 2021.
3) Units are subject to a market-based and/or non-market based vesting condition.
4) At 31 December 2023 the Company had 2,272,250 performance class F rights on issue, these securities were tied to continued employment with the Company and would partially vest on 13 June 2024.
As a result of the sale of BSO, this vesting hurdle could not be met by the BSO employees and the majority of these securities expired with 657,250 remaining.
During the year ended 31 December 2023, Calima approved 8.9 million performance rights for grant to certain Officers and
employees of Calima. The vesting conditions of the performance rights were as follows:
• 610,000 Class D rights will vest following the Calima shares reaching a volume weighted average price of $0.25 per
share over 20 consecutive trading days on which the shares have actually traded. These rights expired on 13 December
2023.
• 610,000 Class E rights will vest following the Company achieving average production greater than 4,300 boe/day for a
total of 30 non-consecutive days over a 3-month period up to 30 April 2023. This condition was met subsequent to
the year end, and all performance rights vested and were converted to shares.
• 400,000 Class F rights will vest in tranches of 50% following continuous service of 12 months from issuance and the
remainder following continuous service of 24 months from issuance. Post sale of BSO the remaining securities that
could vest from this tranche was 130,000.
• 7,230,000 Class G rights will vest in tranches of 50% following continued service for 12 months from 1 December 2023
and for 24 months from 1 December 2023. All rights expire 3 years from issue date and vest immediately and become
exercisable upon a change of control or a sale with sales value exceeding A$80 million. These rights fully vested in the
period.
The following table summarises the weighted average assumptions utilised to value equity compensation grants during the
year ended 31 December 2023:
Weighted average valuation
assumptions
Valuation model
Number of units granted
(thousands)
Grant date
Share price at grant date ($)
Exercise price ($/share)
Volatility (%)
Risk-free rate (%)
Expected life (years)
Fair value ($/share)
Stock options
Performance rights
Black Scholes Monte Carlo
610
500
Black Scholes Black Scholes
400
610
11 Jan 24 10 Jan 24 – 24
Feb 24
0.12
-
90
3.203
1.0
0.065
0.12
0.16
90
3.28
2.7
$ 0.059
$
10 Jan 24 – 24
Feb 24
0.12
-
90
3.203
0.3
10 Jan 24 –
24 Feb 24
0.12
-
90
3.203
3.5
$ 0.12 $ 0.12
In determining the expected volatility of returns on Calima shares, as per AASB 2, both the historical volatility of the share
price over the most recent period commensurate with the expected term of the Performance Rights and Options, and the
tendency of volatility to revert to its mean. The historical volatility was calculated at each respective grant date over the 2,
3 and 5-year periods to each respective grant date.
During the year ended 31 December 2022, Calima approved 25.4 million performance rights for grant to certain Officers
and Directors of Calima. The vesting conditions of the performance rights were as follows:
41
• 9.2 million Class D rights will vest following the Calima shares reaching a volume weighted average price of $0.25 per
share over 20 consecutive trading days on which the shares have actually traded. These rights expired on 13 December
2023.
• 9.2 million Class E rights will vest following the Company achieving average production greater than 4,300 boe/day
for a total of 30 non-consecutive days over a 3-month period up to 30 April 2023. This condition was met subsequent
to the year end, and all performance rights vested and were converted to shares.
• 7 million Class F rights will vest in tranches of 50% following continuous service of 12 months from issuance and the
remainder following continuous service of 24 months from issuance.
With respect to the 1 million performance rights granted in 2017 (on a post share consolidation basis), the units are subject
to 18-month continuous service requirement and 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 $3.00;
Calima raising more than $5 million at an average price of $3.00; and
Market capitalisation exceeds $50 million (VWAP for Calima shares for any period of 30 consecutive trading days).
These securities expired in August 2022.
There were 10.3 million performance rights converted to common shares during the year ended 31 December 2023 (1.8
million during the year ended 31 December 2022).
20. RELATED PARTY TRANSACTIONS
The Calima Group’s related parties primarily consist of the Company’s directors and officers. Amounts paid to directors and
officers for the year ended 31 December 2023 and 2022 were as follows:
For the year ended
Short-term employer benefits
Post employment benefits
Other long-term benefits
Termination benefits
Stock-based compensation
Total remuneration paid to directors and officers
31 December
2023
1,328,814 $
$
-
87,339
450,930
635,379
2,502,461 $
$
31 December
2022
1,323,281
-
-
-
896,553
2,219,834
For the year ended 31 December 2023, in addition to remuneration paid as disclosed above, $347,618 was paid to Burnett,
Duckworth & Palmer LLP,. A related party to Mr. Tetley, for legal services related to the sale of the Company’s assets and
A$32,000 was paid to Meccano Consulting Pty Ltd., a related party to Mr. Freeman, for bookkeeping services related to the
Company’s operations. As at 31 December $222,000 remained unpaid to Mr. Tetley and $nil remained unpaid to Mr.
Freeman.
For the year ended 31 December 2022, in addition to remuneration paid as disclosed above, $118,033 was paid to Burnett,
Duckworth & Palmer LLP,. A related party to Mr. Tetley, for legal services and $32,000 to Meccano Consulting Pty Ltd., a
related party to Mr. Freeman, for bookkeeping services related to the Company’s operations (not included in the table
above). As at 31 December $nil remained unpaid to Mr. Tetley and $nil remained unpaid to Mr. Freeman.
21. OTHER COMPREHENSIVE INCOME
Continuity schedule (A$ thousands)
Foreign currency reserve, opening
Unrealised gain (loss) recognised through other comprehensive income
Foreign currency reserve, ending
31 December
2023
4,648 $
3,681
8,329 $
$
$
31 December
2022
5,688
(1,040)
4,648
Calima’s investments in its two Canadian subsidiaries, Blackspur and Calima Energy Inc., are exposed to fluctuations in
foreign currency exchange rates between the Australian and Canadian dollar. A foreign currency translation reserve is
utilised to record exchange differences arising from the translation of the financial statements of these foreign subsidiaries.
42
22. AUDITOR REMUNERATION
For the year ended
Pricewaterhouse Coopers
Audit and assurance related services
Tax and other non-assurance related services
Total remuneration of external auditors
BDO Audit Pty Ltd
Audit and assurance related services
Tax and other non-assurance related services
Total remuneration of external auditors
23. SUPPLEMENTAL CASH FLOW INFORMATION
For the year ended (A$ thousands)
Non-cash investing and financing activities
Issuance of common shares
Purchase of common shares
Increase in (repayment of) credit facility
Term loan proceeds
Repayment of term loan
Dividend paid Return of capital
Lease payments
Investments in oil and natural gas assets
Proceeds from property disposal
Gain (loss) on equity investment
Net debt
Cash and cash equivalents
Accounts receivable
Deposits and prepaid expenses
Accounts payable and accrued liabilities
Current restoration provisions
Net working capital
Term loan
Lease liabilities
Total indebtedness
Net debt
31 December
2023
31 December
2022
325,817 $
-
325,817 $
3,500 $
10,000
13,500 $
288,704
23,460
312,164
-
10,000
10,000
31 December
2023
31 December
2022
-
-
-
-
(430)
(7,509)
(133)
(24,283)
11,208
(4)
(21,151)
3,958
104
91
(372)
-
3,781
-
-
-
3,781
$
$
$
$
18,823
(818)
(22,142)
3,980
(192)
(2,508)
(266)
(47,816)
-
415
(50,524)
3,848
9,677
674
(20,939)
(242)
(6,982)
(3,787)
(252)
(4,039)
(11,021)
$
$
$
$
$
$
$
$
Liabilities arising from financing activities
(A$ thousands)
Total indebtedness – 1 January 2022 (1)
Financing cash flows
Foreign exchange adjustments
New leases
Payment on term loan
Total indebtedness – 31 December 2022 (1)
Financing cash flows
Foreign exchange adjustments
Transfer on disposition of property
Payment on term loan
Total indebtedness – 31 December 2023 (1)
Credit Facility
(21,739)
22,142
(403)
-
-
- $
-
-
-
-
- $
$
$
Term Loan/ Other
Indebtedness
-
(3,540)
(439)
-
192
(3,787) $
-
(91)
-
430
(3,448) (2) $
Leases
(265)
266
(18)
(235)
-
(252)
-
-
252
-
-
Total
Indebtedness
(22,004)
18,868
(860)
(235)
192
(4,039)
-
(91)
252
430
(3,448)
$
$
(1)
(2)
Interest expense and payments included in the operating cash flows were equivalent in the year and have not been included in the table above.
Includes long term portion of $2,967,736 and current portion of $480,203 included in accounts payable of discontinued operations, see Note 7.
43
24. PARENT COMPANY FINANCIAL INFORMATION
As at and for the year ended (A$ thousands)
Statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Net assets
Share capital
Share-based payments
Foreign currency translations
Accumulated losses
Total shareholders’ equity
Statement of profit or loss
Net loss
Total comprehensive loss
31 December
2023
31 December
2022
$
754 $
90,182
90,936
(232)
90,704
358,676
22,136
(118)
(289,990)
90,704 $
424
100,598
101,022
(375)
100,647
366,055
19,121
(118)
(284,411)
100,647
(4,429) $
(4,429) $
(3,769)
(3,769)
$
$
$
Guarantees
Calima Energy Ltd provided a guarantee to National Bank of Canada in respect of the unused loan facility of Blackspur Oil
Corp. This guarantee was extinguished following the sale of Blackspur Oil Corp.
Other Commitments and Contingencies
The parent has no commitments and/or contingencies as at 31 December 2023 (31 December 2022: Nil)
25. INVESTMENT IN CONTROLLED ENTITIES
Investments in controlled entities held by Calima
Energy Limited
Country
31 December
2023
31 December
2022
Calima Energy Inc
Calima Energy Holdings Ltd
Calima Energy Limited (Jersey)
Calima Energy (Namibia) Limited
Blackspur Oil Corp
Blackspur Holdings Inc.
H2Sweet Holdings Inc.
H2Sweet Inc
26. FINANCIAL RISK MANAGEMENT
Canada
Canada
Jersey
Namibia
Canada
Canada
Canada
Canada
100%
100%
-
-
100%
100%
-
-
100%
-
100%
100%
100%
100%
50%
50%
The Calima Group’s policies with regard to financial risk management are clearly defined and consistently applied. They are
a fundamental part of the Calima Group’s long term strategy covering areas such as foreign exchange risk, interest rate risk,
commodity price risk, credit risk and liquidity risk and capital management. The natural hedges provided by the relationship
between commodity prices and the US currency reduces the necessity for using derivatives or other forms of hedging. The
Group does not issue derivative financial instruments, nor does it believe that it has exposure to such trading or speculative
holdings through its investments in wholly owned subsidiaries. Risk management is carried out by the Board as a whole,
which provides written principles for overall risk management, as well as policies covering specific areas such as foreign
exchange risk, interest rate risk, credit risk and liquidity risk. The group uses different methods to measure different types
of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and
other price risks and aging analysis for credit risk.
44
Market Risk
(i)
Foreign exchange risk
The Group is exposed to material foreign currency exposure on a group or company level. Such exposure arises from sales
or purchases by an operating unit in currencies other than the unit’s functional currency. The Calima Group currently
engages in hedging and/or derivative transactions to manage foreign currency risk. Refer note 11 above.
(ii)
Commodity price risk
Due to the nature of the Calima Group’s principal operations being oil & gas exploration and production the Group is
exposed to the fluctuations in the price of oil & gas. The Group currently engages in hedging or derivative transactions to
manage foreign currency risk. Refer note 11 above.
(iii)
Interest rate risk
Interest rate risk relates to the statement of financial position values of the consolidated cash at bank at 31 December 2023
and 31 December 2022.
(iv)
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. 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 Bank of Canada and NAB which have government guarantees on deposits.
The maximum exposure to credit risk at the reporting date is the carrying amount of the assets as summarised below, none
of which are impaired or past due.
Carrying Amount (A$ thousands)
Statement of financial position
Cash
Receivables
(v)
Capital Risk and Liquidity Risk Management
31 December
2023
31 December
2022
$
3,958 $
104
3,848
9,677
The Calima Group’s overriding objectives when managing capital are to safeguard the business as a going concern; to
maximise returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure in order
to reduce the cost of capital. Prudent liquidity risk management implies maintaining sufficient cash and marketable
securities and the availability of funding through an adequate credit facility. The Group manages liquidity risk by
continuously monitoring forecast and actual cash flows. Surplus funds are generally only invested in instruments that are
tradeable in highly liquid markets.
Financing Arrangements
The Calima Group has access to borrowings refer note 10 above.
Maturities of financial liabilities
The tables below analyse the Group’s financial liabilities and relevant maturity groupings based on the remaining period at reporting
date to the contractual maturity date. The amounts disclosed are the contractual undiscounted cash flows.
At 31 December 2023
(A$ thousands)
Less than
6 months
6-12
months
Between 1
and 2 years
Between 2 and
5 years
Over 5 years
Total
contractual cash
flows
Carrying amount
liabilities
Financial Liabilities
Trade creditors
Total
372
372
-
-
-
-
-
-
-
-
372
372
372
372
45
At 31 December 2022
(A$ thousands)
Less than
6 months
6-12
months
Between 1
and 2 years
Between 2 and
5 years
Over 5 years
Total
contractual cash
flows
Carrying amount
liabilities
Financial Liabilities
Trade creditors
Total
20,939
20,939
-
-
-
-
-
-
-
-
20,939
20,939
20,939
20,939
46
DIRECTORS’ DECLARATION
The Directors of Calima Energy Limited declare that:
(a) In the Directors’ opinion, the annual financial statements and notes and the remuneration report, set out on pages
8 to 46, are in accordance with the Corporations Act 2001, including:
Complying with relevant Australian Accounting Standards
i.
Interpretations) and the Corporations Regulations 2001; and,
Giving a true and fair view of the Calima Group’s financial position as at 31 December 2023 and of its
performance for the financial year ended on that date.
(including the Australian Accounting
ii.
(b) In the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts
as and when they become due and payable.
Note 2 confirms that the consolidated financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
The Directors have been given the declarations by the Chief Executive Officer, Managing Director and Chief Financial Officer,
Canada required by Section 295A of the Corporations Act 2001 for the financial period ended 31 December 2023.
This Directors’ Declaration is made in accordance with a resolution of the Directors.
On behalf of the Board of Directors:
Glenn Whiddon
Executive Chairman
28 March 2024
47
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9
Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
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 2023, 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 material accounting policy information and the directors’ declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 31 December 2023 and of its
financial performance for the year 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.
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.
BDO Audit Pty Ltd ABN 33 134 022 870 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 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.
Discontinued operation of Blackspur Oil Corp
Key audit matter
How the matter was addressed in our audit
On December 27, 2023 the Group entered into a
Our audit procedures included, but were not limited
definitive agreement for the sale of Blackspur Oil Corp
to the following:
(“Blackspur”) a 100% owned subsidiary of the Group.
The carrying value of the net assets of Blackspur as at
• Assessing the key terms of the agreement;
31 December 2023 was $78.98 million representing a
• Assessing the fair value of consideration received
significant balance for the Group.
less costs of disposal;
This was a key audit matter as it was a significant
agreement entered into for the year and had a
considerable impact on the consolidated profit or
loss statement and the consolidated statement of
financial position.
• Considering the application of AASB 5 Non Current
Assets Held for Sale and Discontinued Operations
to the accounting of the assets and associated
liabilities as assets and liabilities held for sale and
the appropriateness of the classification of
discontinued operations;
• Agreeing the completeness and accuracy of the
Blackspur assets and liabilities classified as
discontinued operations;
• Assessing the carrying value of the net assets held
for sale and the resultant impairment recognised
during the year; and
• Assessing the adequacy of the related disclosures
in Note 7 to 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 2023, 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 13 to 18 of the directors’ report for the
year ended 31 December 2023.
In our opinion, the Remuneration Report of Calima Energy Limited, for the year ended 31 December
2023, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit Pty Ltd
Jarrad Prue
Director
Perth 28 March 2024
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9
Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY JARRAD PRUE TO THE DIRECTORS OF CALIMA ENERGY LIMITED
As lead auditor of Calima Energy Limited for the year ended 31 December 2023, 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.
Jarrad Prue
Director
BDO Audit Pty Ltd
Perth
28 March 2024
BDO Audit Pty Ltd ABN 33 134 022 870 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 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.
SECURITIES EXCHANGE INFORMATION
Additional information required by the ASX Listing Rules and not disclosed elsewhere in the Annual Report is set out below.
The information was applicable for the Company as at 26 March 2024:
Distribution of equity securities
Equity holders by size of holding of ordinary shares
1 to 1000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and above
Total(1)
Number of
Holders
100
56
297
864
435
1,752
Number of
shares on issue
22,797
185,134
2,398,783
41,724,463
588,749,592
633,080,769
(1) With respect to the voting rights of the Company’s ordinary shares, each shareholder is entitled to receive notice of, attend, and vote at general meetings. At a general
meeting, every shareholder present in person, or by proxy by representative of attorney, is entitled to vote by a show of hands and on a poll, one vote for each share held.
There were 141 holders of less than a marketable parcel of listed shares.
Substantial shareholders
Shareholders who hold greater than 5% issued capital
Harvest Lane Asset Management & its associated entities
Total
Twenty largest shareholders
Shareholder
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
PALM BEACH NOMINEES PTY LIMITED
BART SUPERANNUATION PTY LIMITED <4F INVESTMENTS SUPERFUND A/C>
BNP PARIBAS NOMS PTY LTD
HSBC CUSTODY NOMINEES LIMITED-GSCO ECA
MR CRAIG IAN BURTON
BNP PARIBAS NOMS (NZ) LTD
GETMEOUTOFHERE PTY LTD
ARROCHAR PTY LTD
MR KENNETH JOSEPH HALL
MR FREDERICK BART
MR JOHN PHILIP DANIELS
KOBIA HOLDINGS PTY LTD
WILHENLU PTY LTD
THE HOME SAVERS GROUP 2 PTY LTD
4F INVESTMENTS PTY LTD
ARREDO PTY LTD
Top 20 holders of common shares
Total remaining holders balance
Total common shares outstanding
Number of
shares held
73,921,356
73,921,356
% of
shares held
11.81
11.81
Number of
shares held
60,463,224
57,299,455
55,047,308
28,490,632
26,234,057
19,640,000
19,456,417
19,433,979
10,127,503
10,083,267
7,291,549
6,241,063
6,000,000
5,863,743
5,641,768
5,562,181
5,500,000
5,094,252
4,331,488
4,278,872
362,080,758
271,000,011
633,080,769
% of
shares held
9.66
9.16
8.80
4.55
4.19
3.14
3.11
3.11
1.62
1.61
1.17
1.00
0.96
0.94
0.90
0.89
0.88
0.81
0.69
0.68
57.19
42.81
100
55
Unlisted securities
Equity compensation arrangement
Broker options – exercisable at $0.1838 per share expiring 30/04/24
Stock options – exercisable at $0.1438 per share expiring 30/11/24
Stock options – exercisable to $0.1838 per share expiring 30/11/24
Stock options – exercisable at $0.1438 per share expiring 13/10/25
Stock options – exercisable at $0.1838 per share expiring 30/06/26
Stock options – exercisable at $0.1838 per share expiring 31/1/27
Class C Performance rights – May 2021 grant
Class F Performance rights – May 2022 grant
Unitholders with more than 20% of each equity security class
Equity compensation arrangement holder
Broker options – exercisable at $0.1838 per share expiring 30/4/24
LTL Capital Pty Ltd
Auctus Advisors LLP
Stock options – exercisable at $0.1438 per share expiring 30/11/24
RCA Financial Partners Inc.
Stock options – exercisable to $0.1838 per share expiring 30/11/24
RCA Financial Partners Inc.
Stock options – exercisable at $0.1438 per share expiring 13/10/25
Euroswiss Capital Partners
Stock options – exercisable at $0.1838 per share expiring 31/1/27
Shawn Lafleur
Cheryl Agnew
Jerianne Verhille
Unlisted Class F performance rights issued in 2022 (unvested)
Mark Freeman
Glenn Whiddon
Unlisted Class C performance rights issued in 2021 (unvested)
Glenn Whiddon
Mark Freeman
Number of
unit holders
Number of
unlisted units
Year of
expiry
6
1
1
1
15
3
2
5
2,500,000
1,000,000
1,500,000
1,500,000
7,286,000
612,000
2,500,000
527,250
2024
2024
2024
2025
2026
2027
2026
2026
Number of
shares held
% of
units held
1,085,000
750,000
1,000,000
1,500,000
1,000,000
264,000
198,000
150,000
216,000
180,000
1,500,000
1,000,000
43%
30%
100%
100%
100%
43%
32%
24%
41%
34%
60%
40%
56
ADVISORIES & GUIDANCE
Forward Looking Statements
This release may contain forward-looking statements. These statements relate to the Company’s expectations, beliefs, intentions or strategies
regarding the future. These statements can be identified by the use of words like “anticipate”, “believe”, “intend”, “estimate”, “expect”, “may”,
“plan”, “project”, “will”, “should”, “seek” and similar words or expressions containing same. These forward-looking statements reflect the
Company’s views and assumptions with respect to future events as of the date of this release and are subject to a variety of unpredictable risks,
uncertainties, and other unknowns. Actual and future results and trends could differ materially from those set forth in such statements due to
various factors, many of which are beyond our ability to control or predict. These include, but are not limited to, risks or uncertainties associated
with the discovery and development of oil and natural gas reserves, cash flows and liquidity, business and financial strategy, budget, projections
and operating results, oil and natural gas prices, amount, nature and timing of capital expenditures, including future development costs,
availability and terms of capital and general economic and business conditions. Given these uncertainties, no one should place undue reliance
on any forward-looking statements attributable to Calima, or any of its affiliates or persons acting on its behalf. Although every effort has been
made to ensure this release sets forth a fair and accurate view, we do not undertake any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
Non-GAAP measures
This annual report includes certain meaningful performance measures commonly used in the oil and natural gas industry that are not defined
under IFRS, consisting of "adjusted EBITDA”, "adjusted working capital", "available funding” and “net debt”. These performance measures
presented in this annual report should not be considered in isolation or as a substitute for performance measures prepared in accordance with
IFRS and should be read in conjunction with the financial statements. Readers are cautioned that these non-GAAP measures do not have any
standardised meanings and should not be used to make comparisons between Calima and other companies without also taking into account any
differences in the method by which the calculations are prepared. Refer to the other sections of this annual report and the definitions below for
additional details regarding the calculations.
Qualified petroleum reserves and resources evaluator statements1
The petroleum reserves and resources information in this announcement in relation to Blackspur Oil Corp is based on, and fairly represents,
information and supporting documentation in a report compiled by InSite Petroleum Consultants Ltd. (InSite) for the December 31, 2023 Reserves
Report. InSite is a leading independent Canadian petroleum consulting firm registered with the Association of Professional Engineers and
Geoscientists of Alberta. These reserves were subsequently reviewed by Mr. Graham Veale who is the VP Engineering with Blackspur Oil Corp.
The InSite December 31, 2023 Reserves Report and the values contained therein are based on InSite’s December 31, 2023 price deck
(https://www.insitepc.com/pricing-forecasts). Mr. Veale holds a BSc. in Mechanical Engineering from the University of Calgary (1995) and is a
registered member of the Alberta Association of Professional Engineers and Geoscientists of Alberta (APEGA). He has over 27 years of experience
in petroleum and reservoir engineering, reserve evaluation, exploitation, corporate and business strategy, and drilling and completions. InSite
and Mr. Veale have consented to the inclusion of the petroleum reserves and resources information in this announcement in the form and
context in which it appears.
Corporate governance
Information related to the Calima Group’s corporate governance practices can be found on the Company’s website located here:
(https://calimaenergy.com/corporate-governance/).
57
Oil and Gas Glossary and Definitions
Term
Adjusted EBITDA:
Adjusted working
capital:
ARO / Asset
Retirement Obligation:
Available funding:
Credit Facility Interest:
CO2e:
Conventional Well:
Compression:
Corporate Decline:
Exit Production:
Operating Income:
Financial Hedge:
Free Cash Flow (FCF):
Free Cash Flow Yield:
Funds flow from
operations:
Gathering &
Compression (G&C):
Gathering &
Transportation (G&T):
G&A:
Hyperbolic Decline:
LMR:
LOE:
Midstream:
Net Debt / working
capital surplus
NGL / Natural Gas
Liquids:
Net Debt/Adjusted
EBITDA (Leverage)
Net Revenue Interest:
Operating Costs:
Operating Netback:
Meaning
Adjusted EBITDA is calculated as net income (loss) before interest and financing expenses, income taxes, depletion,
depreciation and amortisation, and adjusted to exclude certain non-cash, extraordinary and non-recurring items
primarily relating to gains on acquisition, gains and losses on financial instruments, transaction and advisory costs,
exploration expenses and impairment losses. Calima utilises adjusted EBITDA as a measure of operational
performance and cash flow generating capability. Adjusted EBITDA impacts the level and extent of funding for
capital projects investments or returning capital to shareholders.
Adjusted working capital is comprised of current assets less current liabilities on the Company's statement of
financial position and excludes the current portions of risk management contracts and credit facility draws.
Adjusted working capital is utilised by Management and others as a measure of liquidity because a surplus of
adjusted working capital will result in a future net cash inflow to the business which can be used for future funding,
and a deficiency of adjusted working capital will result in a future net cash outflow which will require a future draw
from Calima’s existing funding capacity.
the process of permanently closing and relinquishing a well by using cement to create plugs at specific intervals
within a well bore
Available funding is comprised of adjusted working capital and the undrawn component of Blackspur’s credit
facility. The available funding measure allows Management and other users to evaluate the Company’s liquidity.
Borrowings under the Credit Facility incur interest at a market-based interest rate plus an applicable margin which
varies depending on Blackspur’s net debt to cash flow ratio. Interest charges are between 150 bps to 350 bps on
Canadian bank prime borrowings and between 275 bps and 475 bps on Canadian dollar bankers’ acceptances. Any
undrawn portion of the demand facility is subject to a standby fee in the range of 20 bps to 45 bps. Security for the
credit facility is provided by a C$150 million demand debenture
carbon dioxide equivalent
a well that produces gas or oil from a conventional underground reservoir or formation, typically without the need
for horizontal drilling or modern completion techniques
a device or facility located along a natural gas pipeline that raises the pressure of the natural gas flowing in the
pipeline, which in turn compresses the natural gas, thereby both increasing the effective capacity of the pipeline
and allowing the natural gas to travel longer distances
consolidated, average rate decline for net production from the Company’s assets
Exit production is defined as the average daily volume on the last week of the period
Oil and gas sales net of royalties, transportation and operating expenses
a financial arrangement which allows the Company to protect against adverse commodity price movements, the
gains or losses of which flow through the Company’s derivative settlements on its financial statements
represents Hedged Adjusted EBITDA less recurring capital expenditures, asset retirement costs and cash interest
expense
represents free cash flow as a percentage of the Company’s total market capitalisation at a certain point in time
Funds flow is comprised of cash provided by operating activities, excluding the impact of changes in non-cash
working capital. Calima utilises funds flow as a measure of operational performance and cash flow generating
capability. Funds flow also impacts the level and extent of funding for investment in capital projects, returning
capital to shareholders and repaying debt. By excluding changes in non-cash working capital from cash provided by
operating activities, the funds flow measure provides a meaningful metric for Management and others by
establishing a clear link between the Company's cash flows, income statement and operating netbacks from the
business by isolating the impact of changes in the timing between accrual and cash settlement dates.
owned midstream expenses; the costs incurred to transport hydrocarbons across owned midstream assets
third-party gathering and transportation expense; the cost incurred to transport hydrocarbons across third-party
midstream assets
general and administrative expenses; may be represented by recurring expenses or non-recurring expense
non-exponential with subtle multiple decline rates; hyperbolic curves decline faster early in the life of the well and
slower as time increases
The LMR (Liability Management Ratio) is determined by the Alberta Energy Regulator (“AER”) and is calculated by
dividing Blackspur’s deemed assets by its deemed liabilities, both values of which are determined by the AER.
lease operating expense, including base LOE, production taxes and gathering & transportation expense
a segment of the oil and gas industry that focuses on the processing, storing, transporting and marketing of oil,
natural gas, and natural gas liquids
Net debt/working capital surplus is calculated as the current and long-term portions of Calima’s credit facility
draws, lease liabilities, term loan and other borrowings net of adjusted working capital. The credit facility draws
are calculated as the principal amount outstanding converted to Australian dollars at the closing exchange rate for
the period. Net debt is an important measure used by Management and others to assess the Company's liquidity
by aggregating long-term debt, lease liabilities and working capital.
hydrocarbon components of natural gas that can be separated from the gas state in the form of liquids
a measure of financial liquidity and flexibility calculated as Net Debt divided by Hedged Adjusted EBITDA
a share of production after all burdens, such as royalty and overriding royalty, have been deducted from the
working interest. It is the percentage of production that each party actually receives
total lease operating expense (LOE) plus gathering & compression expense
Operating netback is calculated on a per boe basis and is determined by deducting royalties, operating and
transportation from oil and natural gas sales, after adjusting for realised hedging gains or losses. Operating netback
58
Term
Physical Contract:
Promote:
PDP/ Proved
Developed Producing:
PV10:
RBL / Reserve Based
Lending
Royalty Interest or
Royalty:
Terminal decline:
tCO2:
Unconventional Well:
Upstream:
Working Capital Ratio:
WI/ Working Interest:
Meaning
is utilised by Calima and others to assess the profitability of the Company’s oil and natural gas assets on a
standalone basis, before the inclusion of corporate overhead related costs. Operating netback is also utilised to
compare current results to prior periods or to peers by isolating for the impact of changes in production volumes.
a marketing contract between buyer and seller of a physical commodity which locks in commodity pricing for a
specific index or location and that is reflected in the Company’s commodity revenues Production Taxes: state taxes
imposed upon the value or quantity of oil and gas produced
an additional economic ownership interest in the jointly-owned properties that is conveyed cost-free to the
operator in consideration for operating the assets
a reserve classification for proved reserves that can be expected to be recovered through existing wells with
existing equipment and operating methods
a standard metric utilised in SEC filings for the valuation of the Company’s oil and gas reserves; the present value
of the estimated future oil and gas revenues, reduced by direct expenses, and discounted at an annual rate of 10%
a revolving credit facility available to a borrower based on (secured by) the value of the borrower’s oil and gas
reserves
Interest in a leasehold area providing the holder with the right to receive a share of production associated with the
leasehold area
represents the steady state decline rate after early (initial) flush production
Tonnes of Carbon Dioxide
a well that produces gas or oil from an unconventional underground reservoir formation, such as shale, which
typically requires hydraulic fracturing to allow the gas or oil to flow out of the reservoir
a segment of the oil and gas industry that focuses on the exploration and production of oil and natural gas
The working capital ratio as the ratio of (i) current assets plus any undrawn availability under the facility to (ii)
current liabilities less any amount drawn under the facilities. For the purposes of the covenant calculation, risk
management contract assets and liabilities are excluded.
a type of interest in an oil and gas property that obligates the holder thereof to bear and pay a portion of all the
property's maintenance, development, and operational costs and expenses, without giving effect to any burdens
applicable to the property
Abbreviation
1P
Abbreviation meaning
proved reserves
2P
3P
bbl or bbls
boe
d
GJ
mbbl
mboe
Mcf
MMcf
NGTL
PDP
PUD
C
Net
NPV (10)
EUR
WTI
WCS
1P or TP
2P or TPP
3P
EBITDA
Net Acres
IP24
TD
proved plus Probable reserves
proved plus Probable plus Possible reserves
barrel of oil
barrel of oil equivalent (1 bbl = 6 Mcf)
suffix – per day
gigajoules
thousands of barrels
thousands of barrels of oil equivalent
thousand cubic feet
million cubic feet
Nova Gas Transmission Line
proved developed producing reserves
Proved Undeveloped Producing
Contingent Resources – 1C/2C/3C – low/most
likely/high
Working Interest after Deduction of Royalty
Interests
Net Present Value (discount rate), before
income tax
Estimated Ultimate Recovery per well
West Texas Intermediate Oil Benchmark Price
Western Canadian Select Oil Benchmark Price
Total Proved
Total Proved plus Probable Reserves
Total Proved plus Probable plus Possible
Reserves
Earnings before interest, tax, depreciation,
depletion and amortisation
Working Interest
The peak oil production rate over 24 hours of
production
Total depth
Abbreviation
IP30
A$ or AUD
C$ or CAD
US$ or USD
($ thousands)
($ 000s)
Q1
Q2
Q3
Q4
YTD
YE
H1
H2
B
MM
M
/d
bbl
boe
scf
Bcf
tCO2
OCF
E
CY
Abbreviation meaning
Average oil production rate over the
first 30 days
Australian dollars
Canadian dollars
United states dollars
figures are divided by 1,000
figures are divided by 1,000
first quarter ended March 31st
second quarter ended June 30th
third quarter ended September 30th
fourth quarter ended December 31st
year-to-date
Year end
six months ended June 30th
six months ended December 31st
Prefix – Billions
Prefix - Millions
Prefix - Thousands
Suffix – per day
Barrel of Oil
Barrel of Oil Equivalent (1bbl = 6 mscf)
Standard Cubic Foot of Gas
Billion Standard Cubic Foot of Gas
Tonnes of Carbon Dioxide
Operating Cash Flow, ex Capex
Estimate
Calendar Year
59
SCHEDULE OF INTEREST IN TENEMENTS AS AT 31 DECEMBER 2023
Country
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
Lease name & number
CR PNG 0488120306
CR PNG 113922
FH PNG M077339 HERITAGE
FH PNG M077343 HERITAGE
CR PNG 0401070798
FH PNG M077354 HERITAGE
FH PNG M077355 HERITAGE
FH PNG M077362 HERITAGE
FH PNG M077365 HERITAGE
FH PNG M057552 HERITAGE
FH PNG M077369 HERITAGE
FH PNG M057230 HERITAGE
FH PNG M057231 HERITAGE
FH PNG M057228 HERITAGE
FH PNG M057229 HERITAGE
FH PNG M077379 HERITAGE
FH PNG M077381 HERITAGE
FH PNG M077383 HERITAGE
FH PNG M077384 HERITAGE
FH PNG M077385 HERITAGE
FH PNG M077387 HERITAGE
FH PNG M058439 HERITAGE
FH PNG M077388 HERITAGE
FH PET M083475 HERITAGE
FH PNG M057120 HERITAGE
FH PNG M057136 HERITAGE
FH PNG M064409 HERITAGE
CR PNG 0401110596
CR PNG 0489120182
CR PNG 6879A
CR PNG 5697A
FH PNG M087367 HERITAGE
CR PNG 0411110073
CR PNG 0411110085
CR PNG 0411110086
CR PNG 0412030144
FH PNG BENTLEY, CHERYL
FH PNG TKACHUK ET AL
FH PNG BENTLEY ET AL
CR PNG 0413080342
CR PNG 0413080343
CR PNG 0413120217
FH PNG BENTLEY, D.
FH PNG PEDERSON, V.
FH PNG JOHNSON, JO-ANNE
CR PNG 0404010158
CR PNG 0404010157
CR PNG 0414060022
CR PNG 0414070234
FH PNG M110518 HERITAGE
FH PNG M110083 HERITAGE
CR PNG 0499040052
CR PNG 0411090025
FH PNG M059623 HERITAGE
FH PET M200805 PRAIRIESKY
FH PET M201169 PRAIRIESKY
FH PET M201170 PRAIRIESKY
FH PET M201171 PRAIRIESKY
FH PET M201172 PRAIRIESKY
CR PNG 0479060095
CR PNG 0479060094
CR PNG 27346
CR PNG 4678
FH NG M115649 HERITAGE
FH PET M115657 HERITAGE
FH PET M115656 HERITAGE
CR PNG 124433
CR PNG 28705
CR PNG 121449
FH PNG M056870 HERITAGE
FH PNG M056871 HERITAGE
FH PNG M059315 HERITAGE
FH PNG M059316 HERITAGE
FH PNG M055940 HERITAGE
FH PNG M056875 HERITAGE
FH PNG M056876 HERITAGE
Working
interest
25%
100%
100%
50%
50%
50%
50%
50%
50%
50%
50%
100%
50%
50%
50%
50%
50%
100%
50%
50%
50%
50%
50%
75%
0%
0%
0%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
81%
100%
100%
100%
100%
100%
100%
100%
20%
49%
20%
68%
100%
100%
100%
81%
81%
49%
100%
100%
100%
100%
100%
100%
100%
Country
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
Lease name & number
CR PNG 0417070142
CR PNG 0417080003
CR PNG 0417080004
CR PNG 0417080005
CR PNG 0417080006
FH PET M118153 HERITAGE
FH PET M117918 HERITAGE
FH PET M118154 HERITAGE
FH PET M118155 HERITAGE
FH PET M117917 HERITAGE
CR PNG 0417090049
CR PNG 0417090098
CR PNG 0417090158
CR PNG 0417090164
CR PNG 0417090165
CR PNG 0417100063
CR PNG 0417100064
CR PNG 0417100067
FH PET M120054 HERITAGE
CR PNG 0417100153
CR PNG 0417100154
CR PNG 0417100155
CR PNG 0417100156
CR PNG 0417110088
CR PNG 0417110091
CR PNG 0417120003
CR PNG 0417120041
CR PNG 0417120042
CR PNG 0417120043
CR PNG 0417120044
CR PNG 0417120157
CR PNG 0417120165
CR PNG 0417120166
FH PNG GRITZFELDT, J & J
FH PNG KELSEY, CLIFFORD
FH PNG KELSEY, CLIFFORD
FH PNG OLSON, VIRGINIA
FH PNG OLSON, VIRGINIA
CR PNG 0417090160
CR PNG 0418040094
CR PNG 0404050042
CR PNG 0418070022
CR PNG 0418070024
CR PNG 0418070026
CR PNG 0418070027
CR PNG 0418080186
CR PNG 0418080187
CR PNG 0418080188
CR PNG 0418080189
CR PNG 0418100101
FH PNG WURBAN ET AL
FH PNG WURBAN, LAWRENCE
FH PNG WURBAN, KENNETH
CR PNG 0419010050
CR PNG 0419010051
CR PNG 0419010053
FH PNG FORTIER ET AL
FH PET M121570 HERITAGE
FH PET M121571 HERITAGE
FH PET M121572 HERITAGE
FH PET M121575 HERITAGE
FH PET M121576 HERITAGE
FH PET M121577 HERITAGE
FH PET M121587 HERITAGE
FH PET M121586 HERITAGE
FH PET M202676 HERITAGE
FH PET M203053 HERITAGE
CR PNG 0404050038
CR PNG 0418050149
CR PNG 0418010031
CR PNG 0418100105
CR PNG 0418080191
CR PNG 0419010054
CR PNG 0418050150
CR PNG 0417080122
CR PNG 0418010032
Working
interest
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
50%
100%
100%
100%
100%
100%
100%
100%
100%
50%
50%
50%
50%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
50%
50%
50%
50%
100%
100%
100%
100%
100%
100%
50%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
60
Country
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
Lease name & number
FH PNG M055910 HERITAGE
FH PNG M056877 HERITAGE
FH PNG M055912 HERITAGE
FH PNG M055911 HERITAGE
FH PNG M056878 HERITAGE
FH PNG M055915 HERITAGE
FH PNG M056879 HERITAGE
FH PNG M055916 HERITAGE
FH PNG M056880 HERITAGE
FH PNG M056881 HERITAGE
FH PNG M056883 HERITAGE
FH PNG M056882 HERITAGE
FH PNG M056884 HERITAGE
FH PNG M059251 HERITAGE
FH PNG M060433 HERITAGE
FH PNG M056886 HERITAGE
FH PNG M055922 HERITAGE
FH PNG M060434 HERITAGE
FH PNG M059253 HERITAGE
FH PNG M059255 HERITAGE
FH PNG M059252 HERITAGE
FH PNG M060435 HERITAGE
FH PNG M060437 HERITAGE
CR PNG 2543
FH PNG M059749 HERITAGE
FH PNG M060439 HERITAGE
FH PNG M059566 HERITAGE
FH PNG M060449 HERITAGE
FH PNG M056993 HERITAGE
FH PNG M059767 HERITAGE
FH PNG M060452 HERITAGE
FH PNG M059570 HERITAGE
FH PNG M060429 HERITAGE
FH PNG M059574 HERITAGE
FH PNG CANPAR
FH PET M115852 HERITAGE
FH PET M115854 HERITAGE
FH PNG NORRIS, PAUL J.
FH PNG SCHAFER, S.
FH PNG GAAL, B.
FH PNG JOHN WISE ESTATE
CR PNG 13796
FH PNG NORRIS ET AL
FH PNG NORRIS ET AL
FH PNG COVEY, W.
CR PNG 13803
CR PNG 13797
CR PNG 29277
CR PNG 105092
CR PNG 31715
CR PNG 1711
CR PNG 29278
CR PNG 0483120063
FH PET M114737 HERITAGE
FH NG M114992 HERITAGE
FH PET M115006 HERITAGE
FH PET M115008 HERITAGE
FH PET M115010 HERITAGE
FH PET M115012 HERITAGE
FH PET M115088 HERITAGE
FH PET M115550 HERITAGE
FH PET M115552 HERITAGE
FH NG M115620 HERITAGE
FH PET M115359 HERITAGE
CR PNG 0404050040
FH PET M207756 PRAIRIESKY
FH PET M207757 PRAIRIESKY
FH PET M207758 PRAIRIESKY
FH PET M207759 PRAIRIESKY
CR PNG 0415070077
CR PNG 0415070079
CR PNG 0415100024
FH PET M117777 HERITAGE
FH PET M117778 HERITAGE
FH PET M117779 HERITAGE
FH PET M117783 HERITAGE
FH PNG DOOL, DAVID
CR PNG 0415110019
CR PNG 0487060126
CR PNG 0413080292
Working
interest
100%
100%
100%
100%
100%
100%
100%
100%
50%
50%
100%
100%
100%
50%
50%
100%
100%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
100%
55%
50%
50%
50%
50%
100%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
100%
50%
50%
50%
50%
50%
50%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
50%
100%
100%
100%
100%
100%
100%
100%
50%
100%
Country
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
Lease name & number
FH NG M121990 HERITAGE
FH PET M121991 HERITAGE
CR PNG 0419090100
CR PNG 0419090124
FH PET M122146 HERITAGE
FH PET M122147 HERITAGE
FH PET M122148 HERITAGE
CR PNG 0419120098
FH PET M121624 HERITAGE
FH PET M121623 HERITAGE
CR PNG 0420020014
FH PET M122657 HERITAGE
FH PET PRAIRIESKY
FH PET PRAIRIESKY
FH PET PRAIRIESKY
FH PET PRAIRIESKY
FH PET PRAIRIESKY
FH PET PRAIRIESKY
FH OPTION DE NEVE, VIRGINIA
FH OPTION DE NEVE, VIRGINIA
FH PNG FUHR ET AL
FH PNG FUHR, DARRYL
CR PNG 0421050026
CR PNG 0421070003
CR PNG 0421070004
CR PNG 0421070018
CR PNG 0421070022
FH NG M235624 PRAIRIESKY
FH PET M235625 PRAIRIESKY
FH PET M235626 PRAIRIESKY
FH PET M235627 PRAIRIESKY
FH PET M235628 PRAIRIESKY
FH PET M123889 HERITAGE
FH PET M123890 HERITAGE
FH PET M123891 HERITAGE
FH PET M123892 HERITAGE
FH PET M123893 HERITAGE
FH PET M123894 HERITAGE
FH PET M123895 HERITAGE
FH PET M123896 HERITAGE
FH PET M123897 HERITAGE
FH PET M123898 HERITAGE
FH PET M123899 HERITAGE
FH PET M123900 HERITAGE
FH PET M123901 HERITAGE
FH PET M123902 HERITAGE
FH PET M123903 HERITAGE
FH PET M123904 HERITAGE
FH PNG CAMERON ET AL
FH PNG DAVIDSON, D & M
FH PNG OSLUND ET AL
CR PNG 0421090068
CR PNG 0421090086
CR PNG 0421100007
CR PNG 0421100016
CR PNG 0421100017
FH NG M124346 HERITAGE
FH NG M124756 HERITAGE
FH NG M124757 HERITAGE
CR PET M PSK
CR PET M PSK
CR PNG 0522010026
CR PNG 0522010027
CR PNG 0522010028
CR PNG 0422010100
FH PET M236390 PSK
FH PET M236391PSK
CR PNG 0422020002
FH PET M122323 HERITAGE
FH NG M122324 HERITAGE
CR PNG 65101
CR DRILL LIC 66338
CR DRILL LIC 66386
CR DRILL LIC 66419
CR DRILL LIC 66420
CR DRILL LIC 66421
CR DRILL LIC 66422
CR DRILL LIC 66441
CR DRILL LIC 66442
CR DRILL LIC 66443
Working
interest
100%
100%
100%
100%
100%
100%
100%
50%
100%
100%
50%
100%
50%
50%
50%
50%
50%
50%
100%
0%
50%
50%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
50%
50%
50%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
50%
50%
100%
87%
87%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
61
Country
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
Lease name & number
CR PNG 0490030039
CR PNG 0490030038
CR PNG 2544
FH PET M220458 PRAIRIESKY
FH PET M220457 PRAIRIESKY
FH PET M220456 PRAIRIESKY
FH PET M220455 PRAIRIESKY
FH PET M220453 PRAIRIESKY
CR PNG 0480070319
CR PNG 0493120104
CR PNG 0416080025
FH OPTION COMPUTERSHARE
CR PNG 0416090101
CR PNG 0413120218
CR PNG 0413120219
FH PET M118341 HERITAGE
FH PET M118342 HERITAGE
FH PET M118347 HERITAGE
FH PET M118348 HERITAGE
FH PET M118353 HERITAGE
FH PET M118356 HERITAGE
FH PET M118358 HERITAGE
FH PET M118359 HERITAGE
FH PET M118370 HERITAGE
FH PET M118371 HERITAGE
FH PET M118372 HERITAGE
FH PET M118373 HERITAGE
FH PET M118374 HERITAGE
FH PET M118375 HERITAGE
FH PET M118376 HERITAGE
FH PET M202723 HERITAGE
FH PET M201227 HERITAGE
FH PET M201223 HERITAGE
FH PET M201225 HERITAGE
FH PET M201221 HERITAGE
FH PET M201222 HERITAGE
FH PET M201026 HERITAGE
FH PET M201010 HERITAGE
FH PET M201015 HERITAGE
FH PET M201016 HERITAGE
FH PET M200640 HERITAGE
FH PNG GODKIN ET AL
FH PNG SPROWL ET AL
FH PNG WATKINS ET AL
Country
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
CANADA
Working
interest
100%
77%
77%
100%
100%
100%
100%
100%
100%
100%
50%
0%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Lease name & number
FH PNG WURBAN, FRANCES
CR PNG 0417030159
CR PNG 0417040004
CR PNG 0417040005
CR PNG 0417040006
CR PNG 0417040196
FH PNG HELM, JEFFREY
FH PNG HELM, CRAIG
CR PNG 0417050094
CR PNG 0417060132
CR PNG 0417060139
CR PNG 0496020408
CR DRILL LIC 66479
CR DRILL LIC 66480
CR DRILL LIC 66481
CR DRILL LIC 66515
CR DRILL LIC 66550
CR DRILL LIC 66581
CR PNG 67035
CR PNG 67036
CR PNG 67042
CR PNG 67043
CR PNG 67044
CR PNG 67045
CR PNG 67046
CR PNG 67047
CR PNG 67048
CR PNG 67049
CR PNG 67050
CR PNG 67026
CR PNG 67027
CR PNG 67028
CR PNG 67029
CR PNG 67031
CR PNG 67030
CR PNG 67032
CR PNG 67033
CR PNG 67034
CR PNG 0417070138
CR PNG 0417070139
Working
interest
100%
50%
100%
100%
100%
50%
100%
100%
100%
100%
100%
45%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
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