CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
Annual report
30 June 2012
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
CONTENTS
Corporate Directory..........................................................................................................................................2
Chairman’s Letter.............................................................................................................................................3
CEO’s Letter.....................................................................................................................................................5
Directors’ Report ..............................................................................................................................................7
Auditor’s Declaration of Independence...........................................................................................................27
Corporate Governance Statement .................................................................................................................28
Financial Statements......................................................................................................................................34
Directors’ Declaration .....................................................................................................................................74
Independent Auditor’s Report.........................................................................................................................75
ASX Additional Information ............................................................................................................................77
Interests in Petroleum Permits and Mineral Licences.....................................................................................79
1
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
CORPORATE DIRECTORY
DIRECTORS
Henry J Askin BSc (Hons) PhD MPESA MSEG MEAGE, Non-executive Chairman
Richard I Cottee BA LLB (Hons), Executive Director and Chief Executive Officer
Michael R Herrington BE (Hons), MBS (Dist), Non-executive Director
Wrixon F Gasteen BE (Hons), MBA (Dist), Non-executive Director
William J Dunmore BSc MSc, Non-executive Director
Andrew P Whittle BSc (Hons), Non-executive Director and Deputy / Vice Chairman
CHIEF FINANCIAL OFFICER AND JOINT COMPANY SECRETARY
Bruce Elsholz BCom CA
GROUP GENERAL COUNSEL AND JOINT COMPANY SECRETARY
Daniel CM White LLB BCom LLM (Merit)
REGISTERED OFFICE
Suite 3, Level 4 South Shore Centre
85 South Perth Esplanade
South Perth
Western Australia 6151
Telephone; +61(0)8 9474 1444
Fax: +61(0)8 9474 1555
www.centralpetroleum.com.au
AUDITORS
PricewaterhouseCoopers
QV1
250 St Georges Terrace
Perth
Western Australia 6005
BANKERS
Westpac Banking Corporation
South Shore Centre
Mends Street
South Perth
Western Australia 6151
SHARE REGISTRAR
Computershare Investor Services Pty Limited
Level 2, 45 St Georges Terrace
Perth
Western Australia 6000
Telephone: +61(0)8 9323 2000
Fax: +61(0)8 9323 2033
www.computershare.com.au
STOCK EXCHANGE LISTING
Central Petroleum Limited shares and options are listed on the Australian Securities Exchange Limited under the
codes ‘CTP’ (shares) and ‘CTPO’ (options).
2
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
CHAIRMAN’S LETTER
Fellow Shareholders,
The year since our last annual report has been one of unprecedented change and development in the activities
and fortunes of your Company. Most of you will be familiar with the key issues, so in this review of the year I will
confine myself to an overview of these critical events.
First and foremost was the December 2011 re-entry of the Surprise-1 well and its completion with a horizontal leg,
following which flow rates on test of up to 380 bopd were reported to the ASX on 11 and 12 January 2012.
Despite this being the first free flow oil discovery in the Basin in almost 50 years, a Share Purchase Plan to
provide working capital, priced at 5.5 cents per share closed 2 weeks later with only 9% of shareholders
responding. The total raising was $7.15 million, and it was clear that the Company could not rely upon the market
at that time to support further meaningful exploration. Had a second well been drilled immediately, even in a
success case your Company would have faced a cash crisis long before attaining any cash flow from production.
The Board therefore determined that farmout was the only practical option available. Regrettably this was
followed by events that led to a Board resolution withdrawing all duties from the Managing Director, and
subsequently a further resolution to seek his removal as a Director of the company by shareholders.
On 16 March there was heavy unprecedented buying of CTP shares by Petroleum Nominees P/L (PNPL), a Clive
Palmer company, followed by negotiations on a possible Joint Venture and Placement with Central Petroleum.
These continued for several weeks, until the final offer was assessed to significantly undervalue the assets of
Central and negotiations were terminated in accordance with the terms of a deadline set by PNPL.
However these events resulted in a revival of market interest, and in the first week of April a placement of
approximately $11 million was concluded. This was followed by a series of legal injunctions and hearings initiated
by PNPL, now withdrawn. Additionally three General Meetings were held, one called by Directors and two
requisitioned by shareholder groups. The outcome of these proceedings was the appointment of Mr. Richard
Cottee as Chief Executive Officer, this being confirmed by his election as a Director at the 22 June GM, together
with the election of Mr. Herrington and Mr. Gasteen and the confirmation of Mr. Whittle as Directors. Mr. Elsholz
(CFO) and Mr. Faull, the latter a co-founder of your Company, voluntarily stepped down as directors to progress
this renewal.
With litigation at an end (other than that initiated by the previous Managing Director), your Company now looks
forward to a period of management stability, renewal and rejuvenation. In particular, this stability underpins the
progress of essential farmout discussions, and I anticipate concrete results to be on the very near horizon.
However, it focuses our attention on the up-coming vote on the Company Remuneration Report, which received a
“first strike” at the last Annual General Meeting. Under recent regulatory changes if a second strike occurs this
year then a Board spill is mandated. To revisit last year, this occurred on a vote of 25.89 % of votes cast. The
number cast being 11.42 % of the eligible total meant that the strike was triggered by a mere 2.89 % of total
possible shareholder votes.
I can assure you that this is a serious issue that is taken very seriously by your Board, and independent review
and benchmarking against industry peers has been undertaken to ensure that the Report presented is fully in line
with industry standards. It is also the case that the remuneration package awarded to Mr. Cottee as CEO and
Director has already been approved by the shareholders at a General Meeting. Our hard won stability is at risk
on this issue, and I unreservedly recommend this report to you for your approval.
In that regard, I believe that our company is on the verge of a major re-rating, in line with anticipated major
favourable developments in our ability to deploy enhanced exploration and development programs compatible
with the extent of our acreage holdings. In particular, operations and administration related to the application
areas in Queensland will be facilitated by the planned relocation of your Company’s office to Brisbane.
I do not minimise the challenges we face, including the management of our potential coal assets. The
maintenance of these Mineral Permits incurs a very significant cost for a resource that may not deliver a
commercial return for many years, possibly decades. Central Petroleum is not a company with market expertise
in coal, and as previously announced, the spin-off of these discoveries remains under investigation.
To address in passing an issue mentioned last year in my Letter, regarding a proposed listing on the Toronto
Stock Exchange (TSXV), as events have unfolded it is not likely that this initiative will be actively pursued.
Finally after a longer than usual letter, necessary I believe for you as shareholders to be able to put into
perspective the events of the last year and the significance of the overall outcomes, I return to where I started,
3
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
CHAIRMAN’S LETTER
with the Surprise-1 oil field discovery. This has been hugely important in highlighting the prospectivity of the
entire Amadeus Basin west of the Mereenie Oil Field. An active petroleum system has been proven, and
reservoirs have been shown to be of sufficient quality to allow free flow of hydrocarbons to surface at potentially
commercial rates. An application for a Production License has been submitted, a 3D seismic survey has been
completed and an Extended Production Test remains underway at the present, results of which will be reported
when completed.
Also not to be overlooked is the huge potential upside of the Pellinor carbonate play in the Pedirka Basin,
success in which would be an unequivocal company maker. The 2D seismic survey here has been completed
but data processing and structural interpretation takes considerably more time than the field acquisition of raw
data.
We should take confidence also from the continued strength of the oil price per barrel, given that prices have
been maintained throughout a period of global economic pessimism.
In conclusion, I would like to welcome our new Directors to the Board, with a special recognition of the
achievements of Richard Faull, a co-founder of your Company. For myself and on behalf of all Directors I would
like to express our appreciation and thanks for the efforts of our staff, who have kept our operations on track
throughout a period of disruption and considerable uncertainty.
Dr. Henry J. Askin
Chairman
Melbourne, 14 September 2012
4
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
CHIEF EXECUTIVE OFFICER’S LETTER
Dear shareholder,
The potential of Central Petroleum Limited with 68 million acres of prime exploration areas in central Australia has
never been in doubt. Recent major investments by experienced industry players in both the Amadeus and
Southern Georgina Basins provide independent verification of the unapplied potential of this acreage. The stock
market, however, appears to have taken the view that after 6 years the Company had not advanced sufficiently to
realise this potential. Personally I feel privileged to be given the opportunity by shareholders to rise to this
challenge. I am attracted to the prospect of being able to lead again a company which, with a fair wind, will
become a major player in the exciting Australian oil and gas industry.
Having first been involved in this sector some 30 years ago, experience taught me the key ingredients that will
enable this company to grow possibly into an ASX Top 100 company. History shows there are four pre-
conditions necessary for success. They are;
1. Three Generational Assets: There is no doubt that Central Petroleum Limited has acreage with great
potential to deliver resources, like Woodside, Santos, and QGC before it..
2. Clarity of Purpose: The Company needs to have a clear view on its investment proposition. In the past,
clarity was less than apparent, possibly opaque. Let me make it clear: Central Petroleum Limited is an
oil and gas explorer and soon to be producer in central Australia focussed primarily in the Amadeus and
Southern Georgina Basins.
3. Access to Expertise: All start-up companies find it difficult to initially attract the people and skills needed
to do justice to their assets. Great companies like Santos, Woodside and QGC initially leant on the
technical expertise of third party companies. Even well established companies such as BHP in the
1960’s elected to develop Bass Strait with outside expertise.
4. Access to Capital: Whilst the equity markets are an important source of capital especially on listing, it
provides generally a shorter time horizon than the industry requires. With three generational assets the
capital requirements are sufficiently large that the question of gaining access to capital is a choice
between dilution at the shareholder level, or at the asset level. To my mind the most beneficial option for
shareholders is for dilution to occur at the asset level, and preserving rights at the shareholder level.
Given the challenges above, it is clear that the Company must now embark aggressively to farm-out part of the
acreage to experienced industry players to harness their skills and capital to quickly develop our assets. This
was the path chosen by the Board in the first quarter of 2012, leading in part the collateral turmoil at the Board
level. The Board opened a data room but it was not until the shareholders resolved the company’s leadership in
June and July that active engagement occurred.
This farm-out process is being structured in a way that will de-risk and re-rate the Company. The objectives
which we wish to achieve are as follows;
1. Meet all our permit obligations.
2. Garnering access to capital for the rapid evaluation and development of the Amadeus and Southern
Georgina Basins.
3. Partnering technically with respected industry players that bring the Company access to expertise whilst
giving the Company sufficient areas of operatorship to organically grow its own technical capabilities.
4. Retain a majority interest in parts of both the Amadeus and Southern Georgina Basins to provide the
clarity of purpose mentioned above.
5. Retain an equity accounted investment in over half our acreage and allowing the Company to keep
about one-third of its acreage at 100% for future opportunities.
Whilst only time will tell whether we are able to achieve all our objectives, I have confidence in my management
team that the wait will not be too long.
Whilst the turmoil at Central Petroleum Limited may have taken the headlines, the real news was that the
Company announced its first surface oil flows from Surprise 1 RE H on 11 January 2012. We have applied for a
Production Licence over the Surprise Area. We have completed 3D Seismic over that area and are progressing
an Extended Production Test. By the fourth quarter of this year we should be in a position to plan the stages of
development and announce our plans.
5
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
CHIEF EXECUTIVE OFFICER’S LETTER
I am excited by the prospects of this company and relish the challenges ahead.
Richard Cottee
Chief Executive Officer
Perth, 14 September 2012
6
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
DIRECTORS’ REPORT
30 JUNE 2012
Your directors present their report on the consolidated entity, consisting of Central Petroleum Limited (“Company”
or “CTP”) and the entities it controlled (collectively “the Group” or “the Consolidated Entity”) at the end of, or
during the year ended 30 June 2012.
Directors
The names of the directors of the parent company in office at any time during or since the end of the financial
year are:
Henry J Askin
Richard I Cottee (appointed 22 June 2012)
William J Dunmore
Michael R Herrington (appointed 22 June 2012)
Wrixon F Gasteen (appointed 22 June 2012)
Andrew P Whittle (appointed 25 April 2012)
Bruce W Elsholz (appointed 25 April 2012, resigned 22 June 2012)
Richard W Faull (resigned 22 June 2012)
Edmund R T Babington (appointed as an alternative director to John Heugh 17 February 2012, resigned 10 April
2012)
John P Heugh (removed 22 June 2012)
Henry J Askin, Richard I Cottee, Michael R Herrington, Wrixon F Gasteen, Andrew P Whittle, William J Dunmore
held office at the date of this report.
Principal activities
The principal activity of the Consolidated Entity during the financial year was the exploration for hydrocarbons.
There was no significant change in the nature of the Consolidated Entity’s activities during the year.
Operating result
The Consolidated Entity had an operating loss after income tax for the year ended 30 June 2012 of $26,358,168
(2011: $36,643,523).
At 30 June 2012 consolidated cash and cash equivalents available totalled $12,105,232 (2011: $9,463,949).
Dividends
No dividends were paid or declared during the financial year (2011:Nil). No recommendation for payment of
dividends has been made.
Review of Operations
The Company’s focus for the year was fourfold:
(cid:190) preparing for and executing the re-entry and drilling and testing of the Surprise-1 RE H (“S1REH’) well in
EP115 [Central Petroleum Limited 100%];
(cid:190) appraising the new oil discovery at S1REH through an extended production testing in order to evaluate
the productivity and physical characteristics of the reservoir: and
(cid:190) continuing with the interpretation of seismic and other data to develop exploration plays throughout the
Company’s acreage and to establish optimal drilling locations.
(cid:190) an increased focus on the farm-out process
7
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
DIRECTORS’ REPORT
30 JUNE 2012
Surprise-1 RE H re-entry and horizontal drilling
The Surprise-1 well was re-entered on 18 November 2011 using Hunt Rig #3 and on 29 November 2011 the well
reached a depth of 2,672mRKB in the Pacoota Sandstone.
The results of electric log analysis, coring and visual observations of cuttings and mud flow indicated a
prospective oil flow from the well. The Company proceeded to drill an approximately 230m lateral which it then
tested. A number of dip changes were encountered during the horizontal drilling but the drill bit remained in
sandstone throughout and with continuous oil shows. Of the 230m section drilled, approximately 10m rated less
than good to excellent oil shows.
The first flow rates from testing were released to the market on 11 January 2012 with a maximum sustained flow
rate of 300 barrels of oil per day (BOPD) over a four-hour test period, with a 7.5% drilling fluid cut. The oil quality
encountered had an API gravity averaging 40 degrees-light sweet crude and low gas oil ratios.
On 13 January 2012 the Company advised that further initial flow testing had concluded after recording a
sustained flow rate via a 32/64” choke of 380 BOPD with a low 4.4% drilling fluid and/or water cut. The final PBU
(Pressure Build Up) was 523 PSI.
Independent consultants RPS Energy Pty Ltd (“RPS”) concluded that the well may access Stock Tank Oil Initially
In Place (STOIIP) in the range of 0.5 to 2 million barrels in an area proximal to the well. RPS based their
calculations on a 105m section of the horizontal well bore placed in the lower half of an 8m thick sandstone
reservoir section with an average permeability of 50 millidarcies and a vertical to horizontal permeability ratio of
10%. RPS used a vertical wellbore model; further definition may be available by using horizontal wellbore
modelling.
Following the completion of initial flow testing at the Surprise-1 well, the Hunt Rig #3 was released and was
temporarily stacked on site pending a determination of drilling plans going forward. The Company subsequently
elected not to exercise the option to retain Hunt Rig #3, thereby deferring the drilling of an appraisal well pending
the outcome of the planned Extended Production Test of the Surprise-1 RE H well and acquisition of 3D seismic
over the Surprise structure.
Surprise-1 RE H extended production testing
On 20 June 2012 following approval from the Northern Territory Department of Resources (NTDOR) the
Surprise Extended Production Test (‘EPT’) commenced with first oil delivered to market in early July 2012.
A Crude Oil Sale and Purchase Agreement was signed for the length of the EPT, which is three months, and
allows the Company to commence receiving its first oil sale cash flows. An application for a Production
Licence was made in August 2012 and if granted by the NTDOR then the Company intends executing a further
sale and purchase agreement to cover licence production.
EPT’s are an important part of appraising new oil discoveries. They are important for the evaluation of the
productivity and various physical characteristics of a reservoir. Understanding a reservoir's optimal potential
will help the Company reduce production and development risks. In particular, EPTs are used to:
•
•
•
•
estimate reservoir volume and confirm reserves for field development;
confirm long-term reservoir deliverability;
pilot future facility designs during actual field development; and
obtain additional production-related data, such as water cut, sand production, and well deliverability.
The Company believes undertaking an extensive EPT together with the seismic acquisition and interpretation
(see below) will assist in minimising risks related to developing the field for long-term, sustained production.
Meanwhile, infrastructure upgrades to assist our production aspirations continued with the completion of the
Kintore bypass road and improvement to the existing Surprise access road. These roads were completed in
early June and are currently being used to truck oil sales to market. In addition, Central recently purchased and
set up a 20-man camp at the Surprise location which is being used during the EPT and will be used for future
appraisal and drilling activity.
8
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
DIRECTORS’ REPORT
30 JUNE 2012
First load of crude oil from Surprise-1 RE H
Seismic data interpretation
The Company commissioned a 3D seismic program over the greater Surprise structure to assist with its
understanding of the discovery. Our technical teams carefully coordinated operations of the EPT with seismic
data collection to avoid seismic interference.
The 3D seismic program over 82km² of the Surprise structure in EP-115 in the Northern Territory was
completed in early July 2012. Data processing is currently underway.
With the information garnered from the EPT and from the seismic the Company will be in a position to
determine the requirements for the long term production of the Surprise discovery.
9
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
DIRECTORS’ REPORT
30 JUNE 2012
After finishing the 3D seismic acquisition programme in EP-115 in early July 2012 the seismic crew moved to the
EP-97 area and completed a 96 line km 2D seismic acquisition programme early August. Data processing is
currently underway.
The Company also completed further technical reports for use in planning for its forward exploration campaigns in
conventional and unconventional oil and gas horizons.
Farm-ins / Farm-outs
The Company opened a data room for potential farm-in parties in March this year with meaningful engagement
commencing in July of this year. The objective of the Company is to retain Operatorship over the majority of it
acreage whilst allowing a substantial portion to be operated by an experienced industry participant. Ideally our
focus will be in the Amadeus and Southern Georgina Basins and our objective will be to meet our tenement
commitments, substantially enhance our exploration expenditure to record levels, retain an equity interest in over
half of our acreage and 100% interest in about one-third. Presently indications are that our objectives are
achievable.
Geothermal Permits
The Company relinquished its three geothermal exploration permits in May 2012. The geothermal permits were
considered to be non-core relative to Central’s other conventional and unconventional acreage holdings. They
contained heavy expenditure obligations over the next four years, including $7 million in the next two years, and
were viewed as not constituting the best use of Central’s financial and management resources.
The Company canvassed expressions of interest for both farm-in and acquisition opportunities as an
alternative to the relinquishment of the geothermal exploration permits and received no interest from any
party.
Petroleum and Mineral Granted Licence and Application Interests of Central Petroleum Limited
10
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
DIRECTORS’ REPORT
30 JUNE 2012
Information on directors
Henry J Askin BSc (Hons) PhD MSEG MEAGE MPESA
Non Executive Chairman 1,3
Dr Askin has over 40 years of experience in the oil exploration industry, of which some 25 years were with the
Shell Group of Companies, most recently as a consultant. He is based in Melbourne.
From 1990 until his retirement in December 1997, he was exploration manager with Shell Development
(Australia) Pty Ltd in Melbourne. Throughout this period he was Shell’s representative on the APPEA Exploration
Committee, and was a Director of the various Shell companies established pursuant to operations in the
Indonesia Australia Zone of Cooperation.
Dr Askin’s previous appointments with the Shell Group were in Australia, Oman, Norway, The Netherlands and
India. During this time he held various positions including seismic interpreter, chief geophysicist, seismic
processing manager, deputy head of new exploration ventures and, immediately prior to returning to Australia,
general manager of Shell India.
While his career has ranged from seismic interpretation and prospect generation to senior management, Dr Askin
has contributed to the practice of geophysics in the wider sense, most notably in the co-authorship of a paper
read at the EAEG meeting in Belgrade (1987) which received the inaugural best paper award. He is a life
member of the Society of Exploration Geophysicists, an active member of the European Association of
Geoscientists and Engineers, and a member of the Petroleum Exploration Society of Australia.
Dr Askin retired as a non-executive director of Bass Strait Oil Company Ltd on 31 December 2011. Within the last
three years, he has not been a director of any other listed public company.
Richard I Cottee BA LLB (Hons)
Executive Director and Chief Executive Officer 3
With a background in law and energy, Mr Cottee is a prominent figure in the Australian oil and gas industry having
taken QGC from an early stage explorer to a major non-conventional gas supplier sold to BG Group for $5.7
billion.
Mr Cottee has renowned international energy experience with an outstanding reputation for driving company
market development. An attorney, Mr Cottee has also served as the director of marketing and sales for Cyprus
Amax and then was named managing director of England, Wales, Scotland, Ireland and the Scandinavian and
Norway regions for NRG Energy. Previously he worked with Santos Oil and Gas. He was also chief executive
officer of CS Energy Ltd, a Queensland Government owned electricity generator.
Mr Cottee is currently a non-executive chairman of Austin Exploration Limited and is a principal of Freestone
Energy Partners Pty Ltd (“FEP”). Mr Cottee resigned as managing director of Nexus Energy Ltd on 22
September 2011. Within the last three years, he has not been a director of any other listed public company.
Michael R Herrington BE (Hons), MBS (Dist)
Independent Non Executive Director 3
Mr Herrington was recently upstream president for QGC, a BG Group Company, managing director for Jabiru
Energy and previously was managing director for Enron Exploration Australia Pty Ltd based in Queensland,
Australia and Enron Oil & Gas China Ltd based in Beijing, China. Mr Herrington has more than 30 years of
diversified petroleum industry experience, holds a BS degree in civil engineering from the University of Utah and
is a registered professional engineer. He has set up operations in Spain, France, Australia as well as China.
These efforts have been consistently results orientated and have been completed on time and under budget
invoking state of the art technology and developing new concepts where necessary incorporating such diverse
technologies as satellite imaging and drilling rig modifications. In particular he has managed efforts to establish
coal bed methane recovery leases in Europe, Australia and Asia.
Within the last three years, Mr Herrington has not been a director of any other listed public company.
11
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
DIRECTORS’ REPORT
30 JUNE 2012
Wrixon F Gasteen BE (Hons), MBA (Dist)
Independent Non Executive Director ²
Mr Gasteen is a director and co-founder of Ikon Corporate (Singapore), established in 2007 to provide corporate
advisory, capital raising and management consulting services. Mr Gasteen has a track record as a determined
“turnaround” specialist, change agent and business developer. He was appointed chairman of BCP Precast by
the major shareholder, private equity firm NBC Capital in 2007 and took on the executive chairman / chief
executive officer role in July 2008 when the company fell into serious financial difficulty. He has undertaken long
term management consulting projects for Rheem (Aust) 2006, Rinker China (2005) and WEM Civil (2005 – on
going). Previously Mr Gasteen was chief executive officer of Hong Leong Asia (HLA) where he presided over the
transformation and rapid development of the company by both acquisition and organic growth, from a loss making
South East Asian building materials company with $300m in annual sales to $2.2bn in annual sales. He was
director of Tasek Corporation (cement) (KLSE) and also chairman and president of China Yuchai International
(diesel engines) listed on the New York Stock Exchange (NYSE).
Within the last three years, Mr Gasteen has not been a director of any other listed public company.
Andrew P Whittle BSc (Hons)
Independent Non Executive Director and Vice Chairman¹
Mr Whittle has over 42 years of technical and managerial experience in the petroleum exploration and production
industry and is deemed an expert in the Otway Basin that was the subject of his thesis and in other worldwide
exploration with a focus on South East Asia and Australia. His experience includes over 21 years with several
affiliates of Exxon Corporation in Australia, Singapore, Malaysia, Canada and the US, finally in the position of
geological manager of Esso Australia. Thereafter, he was exploration manager for 5 years with GFE Resources
Ltd, Australia. He has over 15 years experience through PetroVal Australasian Pty Ltd, of which he is a founding
director, and his private consulting company Sheristowe Pty Ltd, in preparing independent technical reports and
in evaluating exploration and production assets and providing valuations, and expert opinions for a range of
clients. He was closely involved in the exploration that led to the identification and discovery of the Thylacine gas
field in the Otway Basin and in promoting Pexco into Indonesian deepwater exploration. He is also a member of
the American Association of Petroleum Geologists, the Society of Professional Well Log Analysts and the
Petroleum Exploration Society of Australia.
He was appointed a non-executive director of ASX listed Bass Strait Oil Ltd in 2011 and a director of Bumi
Armada Sdn Bhd, a major offshore service company which listed in Malaysia in mid 2011. Within the last three
years, he has not been a director of any other listed public company.
William J Dunmore BSc MSc
Independent Non Executive Director 3
Mr Dunmore is an experienced reservoir and production engineer with significant transaction, analysis and
financial modelling knowledge from consulting and employment with a number of petroleum companies and
financial institutions including Barclays Bank, Unicredit, HVB, British Gas, HBOS/BankWest, SMBC, BHP
Petroleum, Schlumberger, Hardman, Mobil, Petrobras, Total, Nippon Oil and Powergen.
Mr Dunmore has over 35 years of direct relevant experience in Australia, Europe and elsewhere. He actively
consults to a number of clients. Recent and current projects have included several very large gas and LNG
developments in Asia and Australia as well as oil and gas projects located around the world. He has also advised
on asset finance such as drilling rig conversions and FPSO new build and construction. He is a member of the
Society of Petroleum Engineers.
Within the last three years, Mr Dunmore has not been a director of any other listed public company.
¹ Member of the audit committee
² Chairman of the audit committee
3 Member of the nominations committee
12
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
DIRECTORS’ REPORT
30 JUNE 2012
Company secretaries
Bruce W Elsholz BCom CA
Mr Elsholz has around 30 years experience in the upstream oil and gas sector. He has held senior financial roles
with a number of exploration and production companies in Australia and Canada. He also has approximately
fifteen years experience as Company Secretary with a number of ASX listed entities.
Daniel CM White LLB BCom LLM (Merit)
Mr White has considerable experience in corporate finance transactions (including acquisitions and divestitures),
equity and debt capital raisings, joint venture and partnering agreements and litigation and international
commercial arbitration. He has held senior international based positions with Kuwait Energy Company and
Clough Limited.
Directors’ meetings
The number of directors’ meetings held and the number of meetings attended by each of the directors of the
Company during the financial year are:
Full Meeting of Directors
Audit Committee Meetings
Number of
meetings held
at which
eligible to
attend
17
Number of
meetings
attended
17
1
17
1
1
10
9
16
16
1
1
16
1
0
7
8
16
13
1
Number of
meetings held
at which
eligible to
attend
Number of
meetings
attended
2
N/A
2
N/A
N/A
N/A
N/A
2
N/A
N/A
2
N/A
1
N/A
N/A
N/A
N/A
2
N/A
N/A
Henry Askin
Richard Cottee
William Dunmore
Michael Herrington
Wrixon Gasteen
Andrew Whittle
Bruce Elsholz
Richard Faull
John Heugh
Edmund Babington¹
¹ appointed as an alternative director to John Heugh 17 February 2012, resigned 10 April 2012
Significant changes in the state of affairs
Significant changes in the state of affairs of the Consolidated Entity during the financial year were as follows:
•
The Company’s Surprise-1 REH well produced the first significant oil flow from an onshore discovery in
the Northern Territory since the discovery of the Mereenie oil and gas field almost fifty years ago. The
well is believed to be the first ever horizontal well completion producing oil onshore in Australia. The
Company believes this success at Surprise has materially enhanced the prospectivity of Central’s
extensive acreage in the western Amadeus Basin.
Matters subsequent to the end of the financial year
No matters or circumstances, besides those disclosed at note 31 to the financial statements, have arisen since
the end of the financial year which significantly affected or may affect the operations of the Consolidated Entity,
the results of those operations or the state of affairs of the Consolidated Entity in future financial years.
13
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
DIRECTORS’ REPORT
30 JUNE 2012
Likely developments and expected results of operations
Oil and Gas Interests
The Company is examining its options for the development of the Surprise structure. In addition to the extended
production testing of the discovery well, decisions on further drilling are under consideration.
As well as planning for the development of the Surprise structure, the Company is actively reviewing plans for
further drilling of a number of play types. The Company also plans to assess the conventional and
unconventional oil and gas potential within the Company’s application areas in the Southern Georgina and Wiso
Basins. Please refer to page 10 for likely development of farm-in and farm-out opportunities.
Mineral / Coal Interests
As previously advised to the market, the Company is evaluating alternative ways to deliver to shareholders
optimum value for its early stage coal discoveries in central Australia.
This may be a farm-out deal, a separate listing of the coal assets in a new corporate entity, or possibly an asset
sale or sales if that is deemed the best outcome.
With the Company moving towards a more focussed approach to its core business of oil and gas exploration and
development and given that its extensive coal assets are at an early stage of exploration, the coal assets are
viewed as non-core. The Company’s plan is to deliver maximum shareholder value in a manageable timeframe
and has consequently determined that its operational and financial resources need be applied to its core areas.
Environmental regulation
Central Australia Basins
14
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
DIRECTORS’ REPORT
30 JUNE 2012
The Consolidated Entity is subject to significant environmental regulation with regard to its exploration activities.
The Consolidated Entity aims to ensure the appropriate standard of environmental care is achieved, and in doing
so, that it is aware of and is in compliance with all environmental legislation. The directors of the Company and
the Consolidated Entity are not aware of any breach of environmental legislation for the year under review.
Insurance of directors and officers
During the financial year, the Group paid premiums to insure Directors and Officers of the Group. The contracts
include a prohibition on disclosure of the premium paid and nature of the liabilities covered under the policy.
Number of employees
The Company had 17 employees at 30 June 2012 (19 at 30 June 2011).
Proceedings on behalf of the Company
Except as referred below no person has applied for leave of Court to bring proceedings on behalf of the Company
or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf
of the Consolidated Entity for all or any part of those proceedings. The Consolidated Entity was a party to the
following proceedings during the year.
Legal Action
Legal Action with Drilling Contractor
During the Year the Company continued preparing for its arbitration proceedings against Century Energy
Services Pty Ltd and MB Century Drilling Pty Ltd in the matter of the unplanned incident which occurred during
the drilling of Surprise-1 in EP 115 whereby the monkey board and 129 stands of racked drill pipe twisted around
the rig mast by 30 degrees whilst the wireline sheaves were being repositioned. This incident resulted in the
Company having to necessarily terminate the drilling contract with Century Energy Services Pty Ltd for
performance related issues.
The matter is currently expected to proceed to an arbitration hearing in the first quarter of 2013.
Legal Actions with Petroleum Nominees Pty Ltd (a Clive Palmer company) (“PNPL”)
During the 2012 financial year various legal claims were made against the Company by Petroleum Nominees Pty
Ltd (“PNPL”), a Clive Palmer company.
On 31 August 2012 the Company announced to the Australian Stock Exchange that all legal proceedings with
PNPL had been settled with no material financial outflow to the Company incurred.
Legal Action with John Heugh
On 26 March 2012 the Company advised that it had terminated the employment of Mr John Heugh. Mr John
Heugh commenced an action in the Supreme Court of Western Australia against the Company disputing the
Company's termination of his employment. The Company is defending the action vigorously.
On 13 April 2012 the Company advised that Mr John Heugh had served an application seeking an injunction in
the Supreme Court of Western Australia to restrain the Company from:
•
•
taking any steps to call a general meeting of members of the Company to consider a resolution that
Mr John Heugh be removed as a director of the Company; or
further or alternatively from moving such resolution at any general meeting, pending the hearing and
determination of Mr John Heugh’s legal action disputing the Company's termination of his
employment (as announced on 26 March 2012).
On 17 April 2012 the Company advised that the injunction application brought by Mr John Heugh had been
dismissed by the Court. Mr John Heugh was ordered to pay the Company’s costs of the application.
15
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
DIRECTORS’ REPORT
30 JUNE 2012
Non-audit services
During the year the Company engaged the auditor, PricewaterhouseCoopers (PwC) on assignments additional to
their statutory audit duties where the auditor’s expertise and experience with the Company and/or the
Consolidated Entity was important.
Details of amounts paid or payable to the auditor (PwC) for non-audit services provided during the year are set
out below.
The board of directors is 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, as set out below, did not compromise the auditor independence
requirements of the Corporations Act 2001 and did not compromise the general principles relating to auditor
independence in accordance with APES 110 Code of Ethics for Professional Accountants set by the Accounting
Professional and Ethical Standards Board.
PwC Australian firm:
(i) Other assurance services
Review of governance processes, controls and systems
(ii) Taxation services
Tax compliance
International tax consulting and advice
(iii) Other services
EGM related costs
TSX listing consulting & advice
Corporate and strategic advice
Benchmarking services
CONSOLIDATED
2012
$
-
-
45,500
-
45,500
6,500
30,000
-
-
36,500
2011
$
45,500
45,500
300
47,319
47,619
-
-
25,500
5,950
31,450
Total remuneration for non-audit services
82,000
124,569
Auditor’s Independence
The directors received an Independence Declaration from the auditor of Central Petroleum Limited as required
under section 307C of the Corporations Act 2001 and this is set out on page 27.
16
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
DIRECTORS’ REPORT
30 JUNE 2012
Remuneration report
This remuneration report, which has been audited, outlines the remuneration arrangements in place for non-
executive directors, executive directors, other key management personnel of the Consolidated Entity and the
Company.
Directors and Key Management Personnel
The directors and key management personnel of the Consolidated Entity during the year were:
Directors
Henry Askin
Richard Cottee
William Dunmore
Michael Herrington
Wrixon Gasteen
Andrew Whittle
Richard Faull
Edmund Babington¹
Non-Executive Chairman
Executive Director and Chief Executive Officer
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director and Vice Chairman
Non-Executive Director
Non-Executive Director
John Heugh
Managing Director and Non-Executive Director
Other Key Management Personnel
Bruce Elsholz
Chief Financial Officer and Company Secretary
Daniel White
Dalton Hallgren
Group General Counsel and Company Secretary
Chief Operating Officer
Trevor Shortt
Exploration Manager
¹ appointed as an alternative director to John Heugh
Remuneration Policy
Appointed chief executive officer 5 June
2012 and executive director 22 June
2012
Appointed 22 June 2012
Appointed 22 June 2012
Appointed 25 April 2012
Resigned 22 June 2012
Appointed 17 February 2012, resigned
10 April 2012
Removed as Managing Director 26
March 2012 and removed as Non-
Executive Director 22 June 2012
Appointed as non-executive director 25
April 2012 and
resigned as non-
executive director 22 June 2012
Appointed Chief Operating Officer 21
November 2011
Appointed as acting Chief Executive
Officer 26 March 2012, resigned 5 June
2012
Appointed 25 August 2011
The remuneration policy of the Company is to pay its directors and executives amounts in line with employment
market conditions relevant to the oil exploration industry.
The performance of the Company depends upon the quality of its directors and executives and the Company
strives to attract, motivate and retain highly qualified and skilled management.
The remuneration of directors and executives consists of the following key elements:
Short term incentives
(i)
(ii)
(iii)
Annual salary and non-monetary benefits (executives and Managing Director only);
Directors fees (directors only);
Participation in performance-based bonuses over and above salary arrangements where applicable
and in line with key performance indicators.
Long term incentives
(i)
(ii)
Participation in the Incentive Option Scheme;
Payment of superannuation benefits in line with Australian regulatory guidelines
17
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
DIRECTORS’ REPORT
30 JUNE 2012
Salaries and directors fees are reviewed at least annually to ensure they remain competitive with the market.
There is no guaranteed base pay increases included in any executive’s contract.
Performance-based bonus
Participation in bonus schemes is at the discretion of the board of directors. In determining the extent of any
performance based bonus, the Company takes into consideration the key performance indicators and objectives
of the employee and the Company, as the Company may set from time to time, and any other matter that it
deems appropriate. Before establishment of any bonus scheme the board of directors will consider the
appropriate targets and key performance indicators (KPI’s) to link the bonus scheme and the level of payout if
targets are met. This includes setting any maximum payout under the scheme, and minimum levels of
performance to trigger payment of the bonus. As of the date of this report no bonus scheme has been established
for any director or employee.
Incentive Option Scheme
Non executive directors do not receive performance-based pay, however they, along with executives, do
participate in the Incentive Option Scheme which is designed to provide incentive to deliver long-term shareholder
returns.
At the discretion of the Company, performance criteria may or may not be established in respect of options that
vest under the Incentive Option Scheme. Options are granted for no consideration. Options that have been
granted to date to employees, excluding directors, have contained service conditions in respect of their vesting.
Options have vested progressively from grant date to, in some cases, an employee’s third anniversary of
employment. On 19 July 2012 shareholders approved 172,922,033 options for issue to FEP on 8 August 2012
exercisable at $0.09 subject to the satisfaction of various vesting hurdles. Mr Richard Cottee has a beneficial
equity interest in FEP. No other director or executive received options under the Incentive Option Scheme that
contained any performance criteria in respect of their vesting.
There are no rules imposing a restriction on removing the ‘at risk’ aspect of options granted to directors and
executives.
18
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
DIRECTORS’ REPORT
30 JUNE 2012
Details of remuneration
Details of the remuneration of the directors and the key management personnel of Central Petroleum Ltd and the
Consolidated Entity are set out in the following tables.
Table 1: Remuneration of Directors and Key Management Personnel
Short-term
Post-employment
Long-term
benefits
Share-
based
payments
Salary/
fees
$
Non-
monetary
benefits 8
$
Superannuation
contributions
$
Termination
Benefits
$
Long
service
leave
$
Options
$
Total
$
Value of
options as
proportion
of
remuneration
%
Non-Executive Directors
Henry Askin
William Dunmore
Michael Herrington1
Wrixon Gasteen1
Andrew Whittle2
Richard Faull3
Edmund Babington4
Sub-total
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
84,000
and
112,50011
80,500
60,000
57,500
1,475
-
1,475
-
11,000
-
60,000
57,500
-
-
330,450
195,500
Executive Directors and Other Key
Management Personnel
Richard Cottee5
Daniel White
Bruce Elsholz2/3
Dalton Hallgren6
Trevor Shortt7
John Heugh9
Sub-total
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
282,78010
-
370,660
340,630
234,911
207,231
229,303
-
287,662
-
309,355
423,555
1,714,671
971,416
Total
Remuneration
2012
2,045,121
2011
1,166,916
3,787
3,186
3,787
3,186
93
-
93
-
695
-
3,787
3,186
550
-
9,450
7,245
-
-
-
-
-
-
990
-
6,750
5,175
-
-
12,792
9,558
17,190
12,420
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
209,737
90,931
63,787
60,686
1,568
-
1,568
-
12,685
-
70,537
65,861
550
-
360,432
217,478
93
-
3,787
3,186
3,787
3,186
2,303
-
3,206
-
3,694
3,186
16,870
9,558
29,662
19,116
-
-
25,000
20,625
19,602
18,360
18,893
-
23,256
-
29,930
36,414
116,681
75,399
133,871
87,819
-
-
-
-
-
-
-
-
-
-
84,375
-
84,375
-
84,375
-
113
-
6,174
5,248
4,239
3,994
1,551
-
2,171
-
(2,647)
11,151
11,601
20,393
11,601
20,393
-
-
55,451
21,763
36,254
9,345
66,665
-
110,056
-
-
-
268,426
282,986
-
461,072
391,452
298,793
242,116
318,715
-
426,351
-
424,707
474,306
2,212,624
31,108
1,107,874
268,426
2,573,056
31,108
1,325,352
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
12%
6%
12%
4%
21%
-
26%
-
0%
0%
13%
3%
11%
2%
6 Appointed 21 November 2011
1 Appointed 22 June 2012
7 Appointed 25 August 2011
2 Appointed 25 April 2012
8 Represents directors and officers insurance premiums
3 Resigned 22 June 2012
9 Removed 22 June 2012
4 Appointed 17 February 2012 and resigned 10 April 2012
5 Appointed as Chief Executive Officer (“CEO”) 5 June 2012. Appointed as Executive Director 22 June 2012
10 Freestone Energy Partners Pty Ltd (“FEP”) have provided the services of Richard Cottee on the basis of a secondment. As such compensation is made to FEP
in line with Richard Cottee’s service agreement shown on page 25. Richard Cottee has a beneficial equity interest in FEP. The above Salary includes an accrual
for a $250,000 sign on payment in line with Richard Cottee’s service agreement.
11 Payment to director related entity Askin Nominees Pty Ltd for the provision of Executive Services provided during the period 26 March 2012 to 5 June 2012.
19
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
DIRECTORS’ REPORT
30 JUNE 2012
Details of remuneration (continued)
The fair values of options granted during 2012 were calculated at the dates of grant using a Binomial valuation
model. The values are allocated to each reporting period evenly over the period from grant date to vesting date.
The values disclosed for 2012 are the portions of the fair values applicable to and recognised in this reporting
period. The following factors and assumptions were used in determining the fair value of options at grant date:
Grant
date
Expiry
date
Fair value
per option
Exercise
price
Price of
shares at
grant date
Estimated
volatility
Risk free
interest
rate
Dividend
yield
19 Aug 11
19 Aug 16
$0.034
$0.115
$0.065
92.06%
3.74%
30 Aug 11
30 Aug 16
$0.035
$0.115
$0.066
92.16%
3.99%
15 Nov 11
15 Nov 16
$0.025
$0.095
$0.057
72.93%
3.60%
30 Nov 11
30 Nov 16
$0.024
$0.095
$0.057
70.04%
3.38%
-
-
-
-
No options were granted to key management personnel during 2011.
Table 2: Share based compensation – Options granted and vested during the year
Number of
options
granted
Grant
date
Average
fair value
at grant
date
Average
exercise
price per
option
Number of
options
vested
Proportion
of options
vested
%
Expiry
date
Non-Executive Directors
Henry Askin
William Dunmore
Michael Herrington¹
Wrixon Gasteen¹
Andrew Whittle²
Richard Faull3
Edmund Babington
4
Year
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
Executive Directors and Other Key
Management Personnel
Richard Cottee5/9
2012
2011
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Daniel White
2012
1,550,000
Bruce Elsholz²/³
Dalton Hallgren6
Trevor Shortt7
John Heugh8
Total compensation
options
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
-
1,000,000
-
4,000,000
-
4,000,000
-
-
-
10,550,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19 Aug 11
and
15 Nov 11
-
19 Aug 11
-
30 Nov 11
-
30 Aug 11
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$0.029
$0.010
-
$0.034
-
$0.024
-
$0.033
-
-
-
-
$0.115
-
$0.095
-
$0.115
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19 Aug 16
and
15 Nov 16
-
19 Aug 16
-
30 Nov 16
-
30 Aug 16
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,550,000
1,000,000
1,666,668
666,666
2,000,000
-
2,000,000
-
-
-
8,216,666
1,666,666
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
56%
33%
55%
33%
50%
-
50%
-
-
-
20
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
DIRECTORS’ REPORT
30 JUNE 2012
Details of remuneration (continued)
Table 2: Share based compensation – Options granted and vested during the year (continued)
1 Appointed 22 June 2012
2 Appointed 25 April 2012
3 Resigned 22 June 2012
4 Appointed 17 February 2012 and resigned 10 April 2012
5 Appointed as Chief Executive Officer (“CEO”) 5 June 2012. Appointed as
Executive Director 22 June 2012
6 Appointed 21 November 2011
7 Appointed 25 August 2011
8 Removed 22 June 2012
9 172,922,033 unlisted options exercisable at $0.09 on or before 15
November 2015 and 15 November 2017 were issued to FEP on 8 August
2012, a company in which Richard Cottee has a beneficial equity interest.
Table 3: Options granted as part of remuneration
2012
Non-Executive Directors
Henry Askin
William Dunmore
Michael Herrington
Wrixon Gasteen
Andrew Whittle
Richard Faull
Edmund Babington
Executive Directors and Other Key
Management Personnel
Richard Cottee
Bruce Elsholz
Daniel White
Dalton Hallgren
Trevor Shortt
John Heugh
2011
Non-Executive Directors
Henry Askin
William Dunmore
Michael Herrington
Wrixon Gasteen
Andrew Whittle
Richard Faull
Edmund Babington
Executive Directors and Other Key
Management Personnel
Richard Cottee
Bruce Elsholz
Daniel White
Dalton Hallgren
Trevor Shortt
John Heugh
Value of options
granted during the
year
($)
Value of options
lapsed during the
year
($)
Remuneration
consisting of options for
the year
(%)
-
-
-
-
-
-
-
-
34,206
48,299
90,743
132,303
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12%
12%
20%
25%
-
Value of options
granted during the
year
($)
Value of options
lapsed during the
year ($)
Remuneration
consisting of options for
the year
(%)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
No options were exercised during either year, and no shares were issued on exercise of compensation options.
21
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
DIRECTORS’ REPORT
30 JUNE 2012
Details of remuneration (continued)
Table 4: Shareholdings of key management personnel
Held at
beginning
of year
Held at
date of
appointment
Share
purchase plan
issue
Received on
exercise of
options
Net
change
other
Held at
date of
departure
Held at
end of
year
Non-Executive Directors
Henry Askin
2012
2011
William Dunmore
2012
2011
Michael Herrington
2012
2011
Wrixon Gasteen
2012¹
2011
Andrew Whittle
2012
2011
Richard Faull
2012
2011
Edmund Babington
2012
2011
3,600,000
3,600,000
766,666
766,666
N/A
N/A
N/A
N/A
N/A
N/A
2,386,100
2,386,100
N/A
N/A
N/A
N/A
N/A
N/A
-
N/A
-
N/A
-
N/A
N/A
N/A
-
N/A
Executive Directors and Other Key Management
Personnel
Richard Cottee
2012
2011
Daniel White
2012
2011
Bruce Elsholz
2012
2011
Dalton Hallgren
2012
2011
Trevor Shortt
2012
2011
John Heugh
2012
2011
N/A
N/A
1,440,000
1,440,000
-
-
N/A
N/A
N/A
N/A
5,741,429
5,703,693
-
N/A
N/A
N/A
N/A
N/A
-
N/A
-
N/A
N/A
N/A
¹200,000 ordinary shares purchased on 11 July 2012
272,728
-
-
-
-
N/A
-
N/A
-
N/A
90,910
-
-
N/A
-
N/A
-
-
-
-
-
N/A
-
N/A
272,728
-
22
-
-
-
-
-
N/A
-
N/A
-
N/A
-
-
-
N/A
-
N/A
-
-
-
-
-
N/A
-
N/A
-
-
-
-
-
-
-
N/A
-
N/A
400,000
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
3,872,728
3,600,000
776,666
776,666
-
N/A
-
N/A
400,000
N/A
-
-
2,477,010
N/A
N/A
2,386,100
-
N/A
-
N/A
-
-
-
-
-
N/A
-
N/A
-
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-
N/A
1,440,000
1,440,000
-
-
-
N/A
-
N/A
-
37,736
6,014,157
N/A
-
5,741,429
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
DIRECTORS’ REPORT
30 JUNE 2012
Details of remuneration (continued)
Table 5: Option holdings of key management personnel
Held at
beginning
of year
Options
exercised
Granted as
remuneration
Net
change
other
Held at
date of
departure
Held at
end of
year *
Non-Executive Directors
Henry Askin
2012
2011
William Dunmore
2012
2011
Michael Herrington
2012
2011
Wrixon Gasteen
2012
2011
Andrew Whittle
2012
2011
Richard Faull
2012
2011
Edmund
Babington
2012
2011
5,340,000
5,340,000
3,400,000
3,400,000
N/A
N/A
N/A
N/A
N/A
N/A
3,580,550
3,580,550
N/A
N/A
-
-
-
-
-
N/A
-
N/A
-
N/A
-
-
-
N/A
-
-
-
-
(2,000,000)
-
(2,000,000)
-
-
N/A
-
N/A
-
N/A
-
N/A
-
N/A
-
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
3,340,000
5,340,000
1,400,000
3,400,000
-
N/A
-
N/A
-
N/A
-
-
(2,000,000)
-
1,580,550
N/A
N/A
3,580,550
-
N/A
-
N/A
-
N/A
N/A
N/A
* All of the options had vested and were exercisable at the end of the year.
Held at
beginning
of year
Options
exercised
Granted as
remuneration
Net
change
other
Held at
date of
departure
Held at
end of
year
Executive Directors and Other
Key Management Personnel
Richard Cottee
2012 1
2011
Daniel White
2012
2011
Bruce Elsholz
2012
2011
Dalton Hallgren
2012
2011
Trevor Shortt
2012
2011
John Heugh
2012
2011
N/A
N/A
3,096,000
3,096,000
2,000,000
2,000,000
N/A
N/A
N/A
N/A
7,803,978
7,503,978
-
N/A
-
-
-
-
-
N/A
-
N/A
-
-
-
N/A
-
N/A
1,550,000
-
1,000,000
-
4,000,000
N/A
4,000,000
N/A
-
-
-
-
-
N/A
-
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-
N/A
4,646,000
3,096,000
3,000,000
2,000,000
4,000,000
N/A
4,000,000
N/A
-
-
(5,000,000)
300,000
2,803,978
N/A
N/A
7,803,978
1 172,922,033 unlisted options exercisable at $0.09 on or before 15 November 2015 and 15 November 2017
were issued to FEP on 8 August 2012, a company in which Richard Cottee has a beneficial equity interest.
23
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
DIRECTORS’ REPORT
30 JUNE 2012
Details of remuneration (continued)
The vesting profile for options held at the end of the year was as follows:
Executive
Holding at
end of year
Executive Directors and Other Key
Management Personnel
2012
Vested
during the
year
Exercisable
at end of
year
Holding at
end of year
2011
Vested
during the
year
Exercisable
at end of
year
Richard Cottee1
Daniel White
Bruce Elsholz
Dalton Hallgren
Trevor Shortt
-
4,646,000
3,000,000
4,000,000
4,000,000
-
2,550,000
1,666,668
2,000,000
2,000,000
-
4,646,000
3,000,000
2,000,000
2,000,000
N/A
3,096,000
2,000,000
N/A
N/A
N/A
1,000,000
666,666
N/A
N/A
N/A
2,096,000
1,333,332
N/A
N/A
For each grant of options included in the tables 1 to 5 above, the percentage of the grant that was vested in the
financial year and the percentage that was forfeited because the person did not meet the performance or service
criteria are set out below. The options vest over a range of time frames provided the vesting conditions are met.
No options will vest if the conditions are not satisfied (refer page 18), hence the minimum value of the option yet
to vest is nil. The maximum value of the options yet to vest has been determined as the amount of the grant date
fair value of the options that is yet to be expensed.
Name
Henry Askin
William Dunmore
Michael Herrington
Wrixon Gasteen
Andrew Whittle
John Heugh
Richard Faull
Edmund Babington
Richard Cottee1
Daniel White
Bruce Elsholz
Dalton Hallgren
Trevor Shortt
Year
Granted
2009
2008
2009
2008
-
-
-
2009
2008
2009
2008
-
-
2010
2012
2010
2012
2012
2012
Share based compensation benefits (options)
Financial years
in which
options may
vest
-
-
-
-
-
-
-
-
-
-
-
Forfeited
%
-
-
-
-
-
-
-
-
-
-
-
Vested
%
100
100
100
100
-
-
-
100
100
100
100
-
-
100
100
100
100
50
50
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30/06/2013
30/06/2013
-
24,075
22,246
Maximum
value of grant
yet to vest
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 172,922,033 unlisted options exercisable at $0.09 on or before 15 November 2015 and 15 November 2017 were
issued to FEP on 8 August 2012, a company in which Richard Cottee has a beneficial equity interest.
24
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
DIRECTORS’ REPORT
30 JUNE 2012
Service agreements
The details of service agreements of the key management personnel of Central Petroleum Limited and the
Consolidated Entity are as follows:
Richard Cottee, Executive Director and Chief Executive Officer
The term of the agreement is 3 years, commencing 5 June 2012;
•
• Mr Cottee’s base salary is presently $500,000 per annum. In addition, superannuation at the statutory 9%
rate is applicable up to a cap of $16,470 per annum.
In order to terminate employment, a 6 month period of notice is required by either party.
•
Bruce Elsholz, Chief Financial Officer and Company Secretary
The term of the agreement is 4 years, commencing 31 August 2009;
•
• Mr Elsholz’s base salary is presently $285,000 per annum. In addition, superannuation at 9% is applicable.
•
The salary is reviewed annually.
In order to terminate employment, increasing periods of notice are required by either party, depending on
the length of service, up to a maximum of 3 months’ notice or payment in lieu.
Daniel White, Group General Counsel and Company Secretary
The term of the agreement is 4 years, commencing 30 November 2009;
•
• Mr White’s base salary is presently $366,000 per annum. In addition, superannuation at 9% is applicable.
•
The salary is reviewed annually.
In order to terminate employment, increasing periods of notice are required by either party, depending on
the length of service, up to a maximum of 3 months’ notice or payment in lieu.
Dalton Hallgren, Chief Operating Officer
The term of the agreement is 4 years, commencing 21 November 2011;
•
• Mr Hallgren’s base salary is presently $350,000 per annum. In addition, superannuation at 9% is applicable.
•
The salary is reviewed annually.
In order to terminate employment, increasing periods of notice are required by either party, depending on
the length of service, up to a maximum of 3 months’ notice or payment in lieu.
Trevor Shortt, Exploration Manager
The term of the agreement is 4 years, commencing 25 August 2011;
•
• Mr Shortt’s base salary is presently $300,000 per annum. In addition, superannuation at 9% is applicable.
•
The salary is reviewed annually.
In order to terminate employment, increasing periods of notice are required by either party, depending on
the length of service, up to a maximum of 3 months’ notice or payment in lieu.
John Heugh, Formerly Managing Director:
• Mr Heugh’s employment was terminated on 26 March 2012.
• Mr Heugh’s base salary at the date of termination was $337,500 per annum. In addition, superannuation at
9% was applicable, and Mr Heugh received a directors fee of $60,000 per annum.
• Mr Heugh remained a non-executive director until his removal by shareholders on 22 June 2012.
25
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
DIRECTORS’ REPORT
30 JUNE 2012
•
Service agreements (continued)
Non executive directors
The Company has engaged Dr Henry Askin, Mr Michael Herrington, Mr Wrixon Gasteen, Mr Andrew Whittle and
Mr William Dunmore whereby they are appointed as non-executive directors of the Company. The terms of
appointment are subject to the Company’s Constitution. The Company maintains an appropriate level of Directors
and Officers’ Liability Insurance and provide rights relating to indemnity, insurance, and access to documents. Dr
Askin, chairman of the board, receives a non-executive directors fee of $95,000 per annum, plus superannuation
benefits. Messrs Herrington, Gasteen, Whittle and Dunmore receive non-executive directors fees of $65,000 per
annum. Mr Herrington and Mr Whittle also receive superannuation benefits. However, Mr Gasteen and Dunmore,
who reside outside of Australia, do not receive superannuation benefits.
Signed in accordance with a resolution of the Directors:
Richard Cottee – Executive Director, Perth 14 September, 2012
26
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
CORPORATE GOVERNANCE STATEMENT – 30 JUNE 2012
Introduction
The Company and the board are committed to achieving and demonstrating high standards of corporate
governance. The board continues to review the framework and practices to ensure they meet the interests of
shareholders. The Group seeks to follow the best practice recommendations for listed companies to the extent
that it is practicable.
The Company is required to disclose the extent to which they have not adopted with the ASX Corporate
Governance Principles and Recommendations. Set out below are the principal corporate governance practices of
the Company along with the reasons for non-adoption of the recommendations (including 2010 Amendments)
where applicable.
Principle 1: Lay solid foundations for management and oversight
Role of the board of Directors
The board of directors guides and monitors the business and affairs of the Company on behalf of its
shareholders, by whom the directors are elected and to whom they are accountable.
The board’s primary role is the protection and enhancement of long-term shareholder value. The board is
responsible for the overall corporate governance of the Company, including engaging with management in the
development of strategic and business plans, preparation of annual budgets and establishment of goals for
management and monitoring the achievement of those goals on a regular basis. Management will report to the
board and execute the directives of the board.
The board is also responsible for:
•
•
•
•
•
•
reviewing the performance of the managing director and senior management;
planning the development, retention and succession of the management team;
reviewing and ratifying systems of risk management and internal compliance, including approving and
monitoring the policies and procedures relating to occupational health and safety and the environment;
approving and monitoring financial and other reporting, including the progress of major capital
expenditure and capital management;
approving and monitoring acquisitions and divestitures; and
preparing, implementing and monitoring policies to ensure that all major developments affecting the
financial position and state of affairs of the Company and any subsidiaries are announced to the ASX in
strict accordance with the Listing Rules.
The board has also established a framework for the management of the Company, including a system of internal
control and business risk management and the establishment of appropriate ethical standards. The board
conducts annual reviews of its processes to ensure that it is able to carry out its functions effectively and in an
efficient manner.
The board from time to time carries out the process of considering and determining relevant KPI’s and other
measures to evaluate the performance of its senior executives.
Principle 1.1 recommendations not currently adopted:
Recommendation
Explanation/ Reference
Rec 1.1 Companies should establish
functions
reserved to the board and those delegated to
senior executives and disclose the functions.
the
formalised
The Company has not
the
functions reserved to the board and those
delegated to management. However, the
responsibilities of the board are set out
above.
28
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
CORPORATE GOVERNANCE STATEMENT – 30 JUNE 2012
Principle 2: Structure the board to add value
Structure and composition of the board
The board consists of six directors – an executive director and five non–executive directors. Details of their skills,
experience and expertise and the period of office held by each director have been included in the directors’
report. The number of board meetings and the attendance of the directors are set out in the directors’ report.
The Chairman, Dr Askin, is a non-executive director. Normally the roles of chairman and the executive director
are not exercised by the same individual as there is a clear division of responsibility between them. However, this
policy was departed from for a brief period of time during the year ended 30 June 2012. Further details are
provided in section ‘Independence of non-executive directors and the chairman of the board’ below.
Independence of non-executive directors and the chairman of the board
The Board monitors the independence of each board member on a regular ongoing basis.
The board has assessed the independence of the non-executive directors and the Chairman.
Although Messrs Askin, Dunmore, Whittle and Gasteen hold 3,872,728, 776,666, 400,000 and 200,000 fully paid
ordinary shares respectively, the board considers these holdings to be immaterial, being significantly below the
holdings threshold to be considered as substantial shareholders as defined by the Corporations Act.
During the year ended 30 June 2012 the Chairman provided executive services to the Company for the period
following termination of John Heugh as Managing Director until appointment of Richard Cottee as the Company’s
Chief Executive Officer. As disclosed in the Remuneration Report on page 19 the Chairman received $112,500
for these executive services. Therefore the Company has determined that the Chairman is not independent as
defined by the Corporations Act.
The remaining non-executive directors have no business or other relationship which is likely to compromise their
independence. Individual directors are required to keep the board advised of any interests that could potentially
create conflict with those of the Company.
Nominations Committee
The board has established a nominations committee which consists of the following directors; Henry Askin,
Richard Cottee, Michael Herrington and William Dunmore.
Details of these directors’ qualifications are set out in the directors’ report.
The role of the Nominations Committee is to review Board composition, performance and Board succession
planning. A copy of the charter is available on the Company’s website.
Conflict of Interest
Directors and senior management are required to advise the Chairman of any existing or potential conflict of
interest. When necessary, the Chairman will refer the matter to the board for determination.
Term of office
Under the constitution of the Company, the directors, other than the Managing Director, are obliged to present
one third of their company for retirement and potential re-election at each annual general meeting of the
Company.
Independent professional advice
In the proper performance of their duties, each director has the right to seek a reasonable level of independent
professional advice on matters concerning the Company at the Company’s expense, after obtaining the
Chairman’s approval, which will not be unreasonably withheld. Each director has the right of access to all relevant
Company information and to the Company’s executives.
Principle 2.5 recommendation is currently not adopted:
Recommendation
Explanation/ Reference
Rec 2.5 Companies should disclose the process for
evaluating the performance of the board, its
committees and individual directors
Given the size and nature of the Company a formal
process for performance evaluation has not yet been
developed.
29
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
CORPORATE GOVERNANCE STATEMENT – 30 JUNE 2012
Principle 3: Promote ethical and responsible decision making
Ethical standards and code of conduct
The directors acknowledge the need for, and continued maintenance of, the highest standards of ethical conduct
by all directors and employees of the Company. All directors, executives and employees are required to abide by
laws and regulations, to respect confidentiality and the proper handling of information and act with their highest
standards of honesty, integrity, objectivity and ethics in all dealings with each other, the Company, customers,
suppliers and the community.
The board has developed a code of conduct reflecting its high standards and expectations. The code of conduct
will be regularly reviewed and updated as necessary to ensure it reflects the highest standards of behaviour and
professionalism.
The code of conduct is available on the Central Petroleum Limited website.
Share trading
The Company has adopted a Share Dealing Code for the directors and employees, which is appropriate for a
Company whose shares are admitted to trading on the ASX, and the Company will take all reasonable steps to
ensure compliance by its directors and any relevant employees. The Share Dealing Code is summarised as
follows:
• Consistent with the legal prohibitions on insider trading contained in the Corporations Act, all employees,
officers and directors are prohibited from trading in the Company’s securities while in possession of
unpublished price sensitive information.
• Unpublished price sensitive information is information, which a reasonable person would expect to have
a material affect on the price or value of the Company’s securities. Examples may include:
o
o
o
o
the financial results of the Company and any of its subsidiaries;
projections of future earnings or losses;
changes in senior management; and
results of drilling and or production testing.
It should be noted that either positive or negative information may be material.
An employee, officer or director, whilst in possession of unpublished price sensitive information, is subject to
three restrictions:
•
•
•
they must not deal in securities affected by information;
they must not cause or procure anyone else to deal in those securities; and
they must not communicate the information to any person if they know or ought to know that the other
person will use the information, directly in directly, for dealings in securities.
Employees, officers, and directors are required to advise the Company Secretary of their intentions prior to
undertaking any transaction in the Company’s securities. If an employee, officer or director is considered to
possess unpublished price sensitive information, they will be precluded from making a security transaction until
one trading day after the time of public release of that information.
Related party matters
Directors and senior management are required to advise the Chairman of any related party contract or potential
contract. The Chairman will inform the board and the reporting party will be required to remove himself/herself
from all discussions and decisions involving the matter. Prior board approval will be required for all proposed
contracts.
Diversity
The Company values diversity and recognises the benefits it can bring to the organisation’s ability to achieve its
goals. The Company has formulated a diversity policy, which can be viewed on its website.
At the end of the current reporting period there were 4 women in the whole organisation representing 23% of total
employees. There were no women in senior executive or board positions.
30
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
CORPORATE GOVERNANCE STATEMENT – 30 JUNE 2012
Principle 4: Safeguard integrity in financial reporting
Reporting and assurance
When considering the financial reports, the board receives a written statement declaration in accordance with
section 295A of the Corporations Act, signed by the Chief Executive Officer and Chief Financial Officer that the
Company’s financial reports give a true and fair view, in all material respects, of the Company’s financial position
and its performance and comply in all material respects with relevant accounting standards. This statement also
confirms that the Company’s financial reports are founded on a sound system of risk management and internal
control and that the system is operating effectively in relation to financial reporting risks.
Similarly, in a separate written statement the Chief Executive Officer and Chief Financial Officer also confirm to
the board that the Company’s risk management and internal control systems are operating effectively in relation
to material business risks for the period, and that nothing has occurred since period-end that would materially
change the position.
Financial reporting
Monthly results are circulated to the board of directors and Chief Financial Officer for review. Rolling cash flow
forecasts are prepared on a regular basis. Exploration expenditure is measured against approved programme
budgets.
Audit committee
The board has established an audit committee which consists of the following non-executive directors:
Wrixon Gasteen (Chair)
Henry Askin
Andrew Whittle
Details of these directors’ qualifications are set out in the directors’ report.
The audit committee operates in accordance with a charter which is available on the Company’s website.
External Auditors
The Company and audit committee policy is to appoint external auditors who clearly demonstrate quality and
independence. The performance of the external auditor is reviewed regularly. PwC was appointed auditor for the
first time for the financial year ended 30 June 2011. It is PwC’s policy to rotate audit engagement partners on
listed companies at least every five years.
An analysis of fees paid to the external auditors, including a break-down of fees for non-audit services, is
provided in the directors’ report and in note 5 to the financial statements. It is the policy of the external auditors to
provide an annual declaration of their independence to the audit committee.
The external auditor will attend the annual general meeting and be available to answer shareholder questions
about the conduct of the audit and the preparation and content of the audit report.
Principle 5: Make timely and balanced disclosure
Continuous disclosure
The directors are committed to keeping the market fully informed of material developments to ensure compliance
with the listing rules and the Corporations Act. At each board meeting, specific consideration is given as to
whether any matters should be disclosed under the Company’s continuous disclosure policy.
The practice of senior management is to review and authorise any Company announcement to ensure that the
information is factual, timely, clearly expressed and contains all material information so that investors can make
appropriate assessments of the information for investment decisions.
31
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
CORPORATE GOVERNANCE STATEMENT – 30 JUNE 2012
Principle 5.1 recommendation is currently not adopted:
Recommendation
Explanation/ Reference
Rec 5.1 Companies should establish written policies
designed to ensure compliance with ASX
Listing Rule disclosure requirements and to
ensure accountability at a senior level for
that compliance and disclose those policies
or a summary of those policies.
The Company has established a practice of evaluating
continuous disclosure issues as a part of each formal
board meeting. The board is acutely aware of the
continuous disclosure regime and believes there are
strong informal systems in place to ensure compliance.
Disclosure of the Company’s approach to continuous
disclosure is set out above.
Principle 6: Respect the rights of shareholders
Shareholder relations
The directors aim to ensure that the shareholders, on behalf of whom they act, are informed of all information
necessary to assess the performance of the Company.
Information on all major developments affecting the Company is available to shareholders through:
•
•
•
the Company’s annual report;
quarterly and half yearly reports;
the annual general meeting of the Company and other meetings called to obtain approval for board
actions as appropriate. All shareholders who are unable to attend these meetings will be encouraged to
communicate issues or ask questions by writing or emailing to the Company; and
• mandatory ASX announcements on the Company website.
The Company will take advantage of technology, such as the Company website, to provide greater opportunities
for effective communication with shareholders and to encourage participation at meetings.
Information disclosed to the Australian Security Exchange (“ASX”) is available to shareholders via the ASX
website. In addition various reports and announcements are made available on the Company’s website where
there is also an option for shareholders to register their email address for updates made by the Company from
time to time. All shareholders are entitled to receive a copy of the Company’s annual and half-yearly reports and
these reports are also made available on the Company’s website.
Principle 7: Recognise and manage risk
The board is responsible for satisfying itself annually, or more frequently as required, that management has
developed and implemented a sound system of risk management and internal control. Detailed work on this task
is delegated to the audit committee for review by the full board.
The audit committee is responsible for ensuring there are adequate policies in relation to risk management,
compliance and internal control systems. In providing this oversight they review and obtain reasonable
assurance that the financial risk management, internal control and information systems are operating effectively
to produce accurate, appropriate and timely management and financial information
Business risk management
The board acknowledges that it is responsible for the overall internal control and risk management framework.
Accordingly, the board has implemented the following control framework:
Special functional reporting:
The board has identified a number of key areas which are subject to regular reporting to the board such as safety,
environmental, insurance and legal matters.
Investment appraisal:
The Company has set clearly defined guidelines for capital expenditure. These include annual budgets, detailed
appraisal and review procedures, levels of authority and due diligence requirements. Capital expenditure and
revenue commitments above a certain size require prior board approval. Procedures exist to ensure that business
transactions are properly authorised and executed.
The Board receives regular reports about the financial condition and operating results of the Group. The CEO
and CFO annually provide a declaration in the form required by section 295A of the Corporations Act.
32
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
CORPORATE GOVERNANCE STATEMENT – 30 JUNE 2012
Principle 7.1 and 7.2 recommendations not complied with:
Recommendation
Rec 7.1 Companies should establish policies
the
oversight and management of material business
risks and disclose a summary of those policies.
for
Rec 7.2 The Board should require management to design
and implement the risk management and internal
control system to manage the Company’s material
business risks and report to it on whether those
risks are being managed effectively. The board
should disclose that management has reported to it
as
the Company’s
the effectiveness of
management of its material business risks.
to
Principle 8: Remunerate fairly and responsibly
Explanation/ Reference
The Company has not established a formal,
written risk management policy. Disclosure of
the Company’s approach to risk management
is set out above.
The Company has not established a formal,
written risk management and internal control
system.
the Company’s
approach to risk management and internal
control is set out above.
Disclosure of
On matters of remuneration, the board has policies that were established to review the remuneration policies and
practices of the Company to ensure that it remunerates fairly and responsibly.
The remuneration policy of the board is designed to ensure that the level and composition of remuneration is
competitive, reasonable and appropriate for the results delivered and to attract and maintain talented and
motivated directors and employees. The policy is designed for:
•
•
•
•
decisions in relation to executive and non-executive remuneration policy;
decisions in relation to remuneration packages for executive directors and senior management;
decisions in relation to merit recognition arrangements and termination arrangements; and
ensuring that any equity-based executive remuneration is made in accordance with the thresholds set in
plans approved by shareholders.
Non-executive directors’ remuneration policy
The structure of non-executive directors’ remuneration is distinguished from that of executives. Remuneration for
non-executive directors is fixed. Total remuneration for all non-executive directors, as approved by shareholders,
is not to exceed $500,000 per annum. Neither the non-executive directors nor the executives of the Company
receive any retirement benefits, other than superannuation.
Executive directors’ remuneration policy
Executive directors are employed pursuant to employment agreements. A summary of the Executive Director’s
employment agreement is set out in the remuneration report.
Principle 8 recommendations not currently adopted:
Recommendation
Explanation/ Reference
Rec 8.1 The
board
should
remuneration committee.
establish
a
The Company currently does not have a remuneration
committee. Remuneration matters are reviewed and
approved by the board as a whole. Disclosure of the
Company’s remuneration policy is set out above.
33
CENTRAL PETROLEUM LIMITED
ABN 72 083 254 308
ANNUAL FINANCIAL REPORT – 30 JUNE 2012
Contents Page
Financial statements
Consolidated statement of comprehensive income.............................................................................35
Consolidated balance sheet................................................................................................................36
Consolidated statement of changes in equity......................................................................................37
Consolidated statement of cash flows.................................................................................................38
Notes to the consolidated financial statements ...................................................................................39
Directors’ declaration .....................................................................................................................................74
Independent auditor’s report to the members.................................................................................................75
These financial statements are the consolidated financial statements of the consolidated entity consisting of
Central Petroleum Limited and its subsidiaries. The financial statements are presented in Australian currency.
Central Petroleum Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered
office and principal place of business is:
Suite 3, Level 4 South Shore Centre
85 South Perth Esplanade
South Perth
Western Australia 6151.
A description of the nature of the consolidated entity’s operations and its principal activities is included in the
review of operations and activities on pages 7 to 14 and in the directors’ report on page 7, both of which are not
part of these financial statements.
The financial statements were authorised for issue by the directors on 14 September 2012. The directors have
the power to amend and reissue the financial statements.
Through the use of the internet we have ensured that our corporate reporting is timely and complete. Press
releases,
links on our website:
financial
www.centralpetroleum.com.au
information are available via
reports and other
the
34
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
C O N S O L I D AT E D S T AT E M E N T O F C O M P R E H E N S I V E I N C O M E
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
Other income
Share based employment benefits
General and administrative expenses
Depreciation & amortisation
Employee benefits and associated costs
Exploration expenditure
Finance costs
Loss before income tax
Income tax expense
Loss for the year
Note
2
28(c)
3
3
3
3
2012
$
1,548,206
(705,904)
(4,683,915)
(317,327)
(3,460,947)
(18,715,972)
(22,309)
2011
$
1,357,644
(129,668)
(3,357,254)
(264,894)
(2,903,215)
(31,342,975)
(3,161)
(26,358,168)
(36,643,523)
4
18
-
(26,358,168)
-
(36,643,523)
Other comprehensive loss for the year, net of tax
-
-
Total comprehensive loss for the year
(26,358,168)
(36,643,523)
Total comprehensive loss attributable to
members of the parent entity
(26,358,168)
(36,643,523)
Basic and diluted loss per share (cents)
19
(2.28)
(3.80)
The accompanying notes form part of these financial statements.
35
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
C O N S O L I D AT E D B AL AN C E S H E E T
AS AT 3 0 J U N E 2 0 1 2
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total current assets
Non-current assets
Property, plant and equipment
Exploration assets
Intangible assets
Other financial assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Non-current liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Accumulated losses
Total equity
Note
2012
$
2011
$
6
7
8
9
10
11
12
13
14
15
12,105,232
1,578,759
1,051,439
9,463,949
3,468,537
853,995
14,735,430
13,786,481
1,780,765
10,488,500
51,785
1,318,941
828,358
10,488,500
72,406
2,412,746
13,639,991
13,802,010
28,375,422
27,588,491
3,727,627
361,027
1,257,329
386,128
4,088,654
1,643,457
82,960
82,960
49,862
49,862
4,171,614
1,693,319
24,203,808
25,895,172
16
17
18
122,700,723
7,964,729
(106,461,644)
99,105,548
6,893,100
(80,103,476)
24,203,808
25,895,172
The accompanying notes form part of these financial statements.
36
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
C O N S O L I D AT E D S T AT E M E N T O F C H AN G E S I N E Q U I T Y
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
Contributed
equity
$
Reserves
$
Accumulated
Losses
$
Total
$
Total equity at 1 July 2010
93,209,470
6,763,432
(43,459,953)
56,512,949
Total loss for the year
Other comprehensive loss
Total comprehensive loss for the year
Transactions with owners in their
capacity as owners
Share based payments
Share and option issues
Share issue costs
-
-
-
-
6,451,281
(555,203)
5,896,078
-
-
-
(36,643,523)
(36,643,523)
-
-
(36,643,523)
(36,643,523)
129,668
-
-
129,668
-
-
-
-
129,668
6,451,281
(555,203)
6,025,746
Balance at 30 June 2011
99,105,548
6,893,100
(80,103,476)
25,895,172
Total loss for the year
Other comprehensive loss
Total comprehensive loss for the year
Transactions with owners in their
capacity as owners
Share based payments
Share based capital raising costs
Share and option issues
Share issue costs
-
-
-
-
-
25,959,860
(2,364,685)
-
-
-
(26,358,168)
(26,358,168)
-
-
(26,358,168)
(26,358,168
705,904
365,725
-
-
23,595,175
1,071,629
-
-
-
-
-
705,904
365,725
25,959,860
(2,364,685)
24,666,804
Balance at 30 June 2012
122,700,723
7,964,729
(106,461,644)
24,203,808
The accompanying notes form part of these financial statements.
37
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
C O N S O L I D AT E D S T AT E M E N T O F C AS H F L O W S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
Note
2012
$
2011
$
Cash flows from operating activities
Interest received
GST refunds received
Other income
Interest paid
Payments to suppliers and employees (inclusive of GST)
548,410
4,238,151
9,774
(22,309)
(26,003,505)
940,776
2,674,149
358,829
(3,161)
(38,131,130)
Net cash outflow from operating activities
24
(21,229,479)
(34,160,537)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangible assets
Payments for exploration assets
Redemption of security deposits and bonds
(1,183,943)
-
-
1,093,805
(578,079)
(5,565)
(319,718)
1,016,177
Net cash (outflow)/inflow from investing activities
(90,138)
112,815
Cash flows from financing activities
Proceeds from the issue of shares, bonds and options
Payments for share issue and listing costs
25,959,860
(1,998,960)
6,451,281
(469,189)
Net cash inflow from financing activities
23,960,900
5,982,092
Net increase/(decrease) in cash and cash equivalents
2,641,283
(28,065,630)
Cash and cash equivalents at the beginning of the
financial year
9,463,949
37,529,579
Cash and cash equivalents at the end of the financial
year
6
12,105,232
9,463,949
The accompanying notes form part of these financial statements.
38
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
1.
Summary of significant accounting policies
The principal accounting policies adopted in the preparation of these consolidated financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise stated. The
financial statements are for the consolidated entity consisting of Central Petroleum Limited (“the Company”) and
its subsidiaries (collectively “the Group” or “Consolidated Entity”).
(a)
Basis of Preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations of the Australian Accounting Standards Board and the Corporations Act 2001.
Central Petroleum Limited is a for-profit entity for the purpose of preparing the financial statements.
(i)
Going concern
The consolidated financial statements of the Group have been prepared on a going concern basis, which
contemplates continuity of business activities and realisation of assets and the settlement of liabilities in the
ordinary course of business. For the year ended 30 June 2012 the Group incurred a loss before tax of
$26,358,168 and a cash outflow from operating activities of $21,229,479.
As at 30 June 2012 the Group had cash assets amounting to $12,105,232. Minimum cash requirements for the
period until 12 months from the signing date of this report are expected to be in the vicinity of $10,800,000.
Accordingly the financial statements have been prepared on a going concern basis.
Whilst the Group has exploration plans and commitments in excess of cash reserves (note 27), in the petroleum
industry it is common practice for entities to farm-out, transfer or sell a portion of their rights to third parties or
relinquish them altogether and, as a result, obligations may be significantly reduced or extinguished.
The directors, therefore, are of the opinion that no asset is likely to be realised for an amount less than the
amount it is recorded in the financial report at 30 June 2012. Accordingly no adjustments have been made to the
financial report relating to the recoverability and classification of the asset carrying amounts and classification of
liabilities that might be necessary should the Group not continue as a going concern.
(ii) Compliance with IFRS
The consolidated financial statements of the Central Petroleum Limited Group also comply with International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
(iii)
New and amended standards adopted by the Group
The following new and amendments to standards are mandatory for the first time for the financial year beginning
on 1 July 2011:
• AASB 124 (Revised) Amendments to Related Party Disclosures (December 2009)
• AASB 2009-12 AASBs 5, 8, 108, 110, 112, 119, 133, 137, 139, 1023 & 1031 and
Interpretations 2, 4, 16, 1039 & 1052
• AASB 2010-4 Amendments to Australian Accounting Standards arising from the Annual
Improvements Project, AASB’s 1, 7,101,134 and Interpretation 13
• AASB 2010-5 Amendments to Australian Accounting Standards
• AASB 1, 3, 4, 5, 101, 107, 112, 118, 119, 121, 132, 133, 134, 137, 139, 140, 1023 & 1038
and Interpretations 112, 115, 127, 132 & 1042
• AASB 1054 Australian Additional Disclosures
• AASB 1048 Interpretation of Standards
The adoption of these standards did not have any impact on the current period or any prior period and is not likely
to affect future periods.
39
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
1.
Summary of significant accounting policies (continued)
(iv)
Early adoption of standards
The Group has not applied any pronouncements to the annual reporting period beginning on 1 July 2011 where
such application would result in them being applied prior to them becoming mandatory.
(v)
Historical cost convention
These financial statements have been prepared under the historical cost convention.
(vi)
Critical accounting judgements and key sources of estimate uncertainty
In the application of the Group’s accounting policies, management is required to make judgements, estimates and
assumptions regarding carrying values of assets and liabilities that are not readily apparent from other sources.
The estimates and assumptions are based on historical experience and various other factors that are believed to
be reasonable under the circumstances, the results of which form the basis of making the judgements. Actual
results may differ from these estimates.
Key judgements in applying the entity’s accounting policies are required in the following areas:
Rehabilitation
The Group recognises any obligations for removal and restoration that are incurred during a particular
period as a consequence of having undertaken exploration and evaluation activity. The Group makes
provision for future restoration expenditure relating to work previously undertaken based on
management’s estimation of the work required.
Share-based payments
The Group is required to use assumptions in respect of their fair value models, and the variable
elements in these models, used in determining share based payments. The directors have used a
model to value options, which requires estimates and judgements to quantify the inputs used by the
model.
Impairment of capitalised exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number
of factors, including whether the Group decides to exploit the lease itself or, if not, whether it successfully
recovers the related exploration and evaluation expenditure through sale. Factors that impact
recoverability may include, but are not limited to, the level of resources and reserves, the cost of
production, legal changes and commodity price changes.
Acquisition expenditure is capitalised if activities in the area of interest have not yet reached a stage that
permits a reasonable assessment of the existence or otherwise of economically recoverable reserves.
To the extent that the capitalised acquisition expenditure is determined not to be recoverable in future,
profits and net assets will be reduced in the period in which this determination is made.
(b)
Principles of consolidation
(i)
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Central Petroleum
Limited (‘Company’ or ‘Parent Entity’) as at 30 June and the results of all subsidiaries for the year then ended.
Central Petroleum Limited and its subsidiaries together are referred to in this financial report as the Group or the
Consolidated Entity.
Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the
financial and operating policies, generally accompanying a shareholding of more than one-half of the voting
rights. The existence and effect of potential voting rights that are currently exercisable or convertible are
considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the Group. They are de-consolidated from the date control ceases.
40
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
1.
Summary of significant accounting policies (continued)
The acquisition method is used to account for business combinations by the Group.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of
the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
Non controlling interests (if applicable) in the results and equity of subsidiaries are shown separately in the
statement of comprehensive income, statement of changes in equity and balance sheet respectively.
(ii)
Joint Ventures
The proportionate interests in the assets, liabilities, revenue and expenses of a joint venture activity have been
incorporated in the financial statements under the appropriate headings.
(c)
Segment reporting
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 of the operating segments, has been identified as the Board of Directors.
(d)
Foreign currency translation
Functional and presentation currency
(i)
Items included in the financial statements of each of the Group’s entities are measured using the currency of the
primary economic environment in which the entity operates (“the functional currency”). The consolidated financial
statements are presented in Australian dollars, which is Central Petroleum Limited’s functional and presentation
currency.
Transactions and balances
(ii)
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in profit or loss, except when they are deferred in equity as qualifying cash
flow hedges and qualifying net investment hedges or are attributable to part of the net investment in a foreign
operation.
(e)
(i)
Revenue recognition
Interest Income
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the
financial assets.
(ii)
Government grants
Grants from the government, including research and development concessions, are recognised at their fair value
where there is a reasonable assurance that the grant or refund will be received and the Group has or will comply
with any conditions attaching to the grant or refund.
(f)
Income tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income
based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantially enacted at the
end of the reporting period in the countries where entities in the Group generate taxable income.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred
tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also
not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred
income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end
of the reporting period and are expected to apply when the related deferred income tax asset is realised or the
deferred income tax liability is settled.
41
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
1.
Summary of significant accounting policies (continued)
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and
tax bases of investments in foreign operations where the Company is able to control the timing of the reversal of
the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and
tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a
net basis, or to realise the asset and settle the liability simultaneously.
Central Petroleum Limited and its wholly-owned Australian controlled entities have implemented the tax
consolidation legislation. As a consequence, these entities are taxed as a single entity and the deferred tax
assets and liabilities of these entities are set off in the consolidated financial statements.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.
(g)
Leases
Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and rewards
of ownership, are classified as finance leases. Finance leases are capitalised at the lease's inception at the fair
value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding
rental obligations, net of finance charges, are included in other short-term and long-term payables. Each lease
payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over
the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for
each period. The property, plant and equipment acquired under finance leases is depreciated over the asset's
useful life or over the shorter of the asset's useful life and the lease term if there is no reasonable certainty that
the Group will obtain ownership at the end of the lease term. Capitalised leased assets are depreciated over the
shorter of the estimated useful life of the asset and the lease term if there is no reasonable certainty that the
Consolidated Entity will obtain ownership by the end of the lease term.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as
lessee are classified as operating leases (note 27). Payments made under operating leases (net of any incentives
received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease.
(h)
Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment or more frequently if events or changes in circumstances indicate that they might be
impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value
less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows
from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that
suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
(i)
Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of
three months or less that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value, and bank overdrafts. Bank overdrafts (if applicable) are shown within
borrowings in current liabilities in the balance sheet.
42
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
1.
(j)
Summary of significant accounting policies (continued)
Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less provision for impairment. Trade receivables are generally due for settlement within
30 days. They are presented as current assets unless collection is not expected for more than 12 months after
the reporting date.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are
written off by reducing the carrying amount directly. An allowance account (provision for impairment of trade
receivables) is used when there is objective evidence that the Group will not be able to collect all amounts due
according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the
debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30
days overdue) are considered indicators that the trade receivable is impaired. The amount of the impairment
allowance is the difference between the asset's carrying amount and the present value of estimated future cash
flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not
discounted if the effect of discounting is immaterial.
The amount of the impairment loss is recognised in profit or loss within other expenses. When a trade receivable
for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is
written off against the allowance account. Subsequent recoveries of amounts previously written off are credited
against other expenses in profit or loss.
Inventories
(k)
Inventories comprise hydrocarbon stocks, drilling materials and spare parts and are valued at the lower of cost
and net realisable value. Costs are assigned to individual items of inventory on a first in first out cost basis. Cost
of inventory includes the purchase price after deducting any rebates and discounts, as well as any associated
freight charges.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs
necessary to make the sale.
(l)
Other financial assets
Classification
The Group’s financial assets consist of loans and receivables. These are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active market. They are included in current assets,
except for those with maturities greater than 12 months after the reporting period which are classified as non-
current assets. Loans and receivables are included in trade and other receivables (note 7) and other financial
assets (note 12) in the balance sheet. Amounts paid as performance bonds or amounts held as security for bank
guarantees in satisfaction of performance bonds are classified as other financial assets.
Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset
not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the
financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in
profit or loss. Loans and receivables are subsequently carried at amortised cost using the effective interest
method.
(m)
Property, plant and equipment
All property, plant and equipment is stated at historical cost less depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity
of any gains or losses on qualifying cash flow hedges of foreign currency purchases of property, plant and
equipment.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset
is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the
reporting period in which they are incurred.
43
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
1.
Summary of significant accounting policies (continued)
Land is not depreciated. Depreciation of plant and equipment is calculated on a reducing balance basis so as to
write off the net costs of each asset over the expected useful life. The assets' residual values and useful lives are
reviewed, and adjusted if appropriate, at each balance sheet date.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are
included in the profit or loss.
The expected useful life for each class of depreciable assets is:
Class of Fixed Asset
Expected useful life
Buildings
40 years
Leasehold Improvements
2 – 6 years
Plant and Equipment
Motor Vehicles
2 – 10 years
5 – 10 years
(n)
Exploration expenditure
Exploration and evaluation costs are expensed as incurred. Acquisition costs of rights to explore are accumulated
in respect of each separate area of interest. Acquisition costs are carried forward where right of tenure of the area
of interest is current and these costs are expected to be recouped through sale or successful development and
exploitation of the area of interest or, where exploration and evaluation activities in the area of interest have not
yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.
When an area of interest is abandoned or the directors decide that it is not commercial, any accumulated costs in
respect of that area are written off in the financial period the decision is made. Each area of interest is also
reviewed at the end of each accounting period and accumulated costs written off to the extent that they will not be
recoverable in the future. Amortisation is not charged on costs carried forward in respect of areas of interest in
the development phase until production commences.
(o)
(i)
Intangible assets
Software
Costs incurred in acquiring software and licences that will contribute to future period financial benefits through
revenue generation and/or cost reduction are capitalised to software. Amortisation is calculated on a straight-line
basis over periods generally ranging from 3 to 5 years.
(ii)
Research and development
Research expenditure is recognised as an expense as incurred. Costs incurred on development projects (relating
to the design and testing of new or improved products) are recognised as intangible assets when it is probable
that the project will, after considering its commercial and technical feasibility, be completed and generate future
economic benefits and its costs can be measured reliably. The expenditure capitalised comprises all directly
attributable costs, including costs of materials, services, direct labour and an appropriate proportion of overheads.
Other development expenditures that do not meet these criteria are recognised as an expense as incurred.
Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset
is ready for use on a straight-line basis over its useful life, which varies from 3 to 5 years.
(p)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year
which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and
other payables are presented as current liabilities unless payment is not due within 12 months from the reporting
date. They are recognised initially at their fair value and subsequently measured at amortised cost using the
effective interest method.
44
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
1.
(q)
Summary of significant accounting policies (continued)
Provisions
Provisions for legal claims, restoration, and make good obligations are recognised when the Group has a present
legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be
required to settle the obligation and the amount has been reliably estimated. Provisions are not recognised for
future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is
determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of
an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required to
settle the present obligation at the end of the reporting period. The discount rate used to determine the present
value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific
to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
(r)
Employee benefits
(i)
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected
to be settled within 12 months after the end of the period in which the employees render the related service are
recognised in respect of employees' services up to the end of the reporting period and are measured at the
amounts expected to be paid when the liabilities are settled. The liability for annual leave and long service leave
is recognised in the provision for employee benefits. All other short-term employee benefit obligations are
presented as payables.
(ii)
Other long-term employee benefit obligations
The liability for long service leave and annual leave which is not expected to be settled within 12 months after the
end of the period in which the employees render the related service is recognised in the provision for employee
benefits and measured as the present value of expected future payments to be made in respect of services
provided by employees up to the end of the reporting period. Consideration is given to expected future wage and
salary levels, experience of employee departures and periods of service. Expected future payments are
discounted using market yields at the end of the reporting period on national government bonds with terms to
maturity and currency that match, as closely as possible, the estimated future cash outflows.
(iii)
Share-based payments
Share-based compensation benefits are provided to employees (including directors) by Central Petroleum
Limited.
The fair value of options granted is recognised as an employee benefits expense with a corresponding increase in
equity. The total amount to be expensed is determined by reference to the fair value of the options granted, which
includes any market performance conditions and the impact of any non-vesting conditions but excludes the
impact of any service and non-market performance vesting conditions.
Non-market vesting conditions are included in assumptions about the number of options that are expected to
vest. The total expense is recognised over the vesting period, which is the period over which all of the specified
vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of
options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the
revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
(iv)
Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or when an
employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination
benefits when it is demonstrably committed to either terminating the employment of current employees according
to a detailed formal plan without possibility of withdrawal or to providing termination benefits as a result of an offer
made to encourage voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting
period are discounted to present value.
45
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
1.
(s)
Summary of significant accounting policies (continued)
Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction,
net of tax, from the proceeds.
(t)
Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the
discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting
period.
(u)
Earnings per share
(i)
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the Company, excluding any
costs of servicing equity other than ordinary shares by the weighted average number of ordinary shares
outstanding during the financial year.
(ii)
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of additional ordinary shares that would have been outstanding
assuming the exercise of all dilutive potential ordinary shares.
(v)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset
or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of
GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the
balance sheet.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to the taxation authority, are presented as operating
cash flows.
(w)
Parent entity financial information
The financial information for the parent entity, Central Petroleum Limited, disclosed in note 21, has been prepared
on the same basis as the consolidated financial statements except as set out below.
(i)
Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial
statements of Central Petroleum Limited.
(ii)
Tax consolidation legislation
Central Petroleum Limited and its wholly-owned Australian controlled entities have implemented the tax
consolidation legislation. The head entity, Central Petroleum Limited, and the controlled entities in the tax
consolidated Group account for their own current and deferred tax amounts where recognition of such is
permitted under accounting standards. These tax amounts are measured as if each entity in the tax consolidated
Group continues to be a stand alone taxpayer in its own right.
In addition to its own current and deferred tax amounts, Central Petroleum Limited also recognises the current tax
liabilities or assets and the deferred tax assets arising from unused tax losses from controlled entities, where
permitted to recognise such assets under accounting standards.
46
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
1.
Summary of significant accounting policies (continued)
(x)
New accounting standards and interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June
2012 reporting periods. The Group's assessment is that these standards are not expected to have a material
impact on the consolidated entity in the current or future reporting periods and on foreseeable future transactions,
other than as set out below.
AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management
Personnel Disclosure Requirements (effective 1 July 2013).
In July 2011 the AASB decided to remove the key management personnel (KMP) disclosure requirements from
AASB 124 Related Party Disclosures to achieve consistency with the international equivalent standard and to
remove a duplication of the requirements of the Corporations Act 2001. While this will reduce the disclosures that
are currently required in the notes to the financial statements, it will not affect any of the amounts recognised in
the financial statements. The amendments will apply from 1 July 2013 and cannot be adopted early. The
Corporations Act 2001 requirements in relation to remuneration reports will remain unchanged for now, but these
requirements are currently subject to review and may also be revised in the near future.
AASB 2011-9 Amendments to Australian Accounting Standards – Presentation of Other Comprehensive Income
AASB 1, 5, 7, 101, 112, 120, 121, 132, 133, 134, 1039 & 1049
In September 2011, the AASB made an amendment to AASB 101 Presentation of Financial Statements which
requires entities to separate items presented in other comprehensive income into two groups, based on whether
they may be recycled to profit or loss in the future. This will not affect the measurement of any of the items
recognised in the balance sheet or the profit or loss in the current period. The group intends to adopt the new
standard from 1 July 2012.
AASB 9 Financial Instruments, AASB 2009-11 Amendments to Australian Accounting Standards arising from
AASB 9 and AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December
2010) (effective for annual reporting periods beginning on or after 1 January 2013)
AASB 9 Financial Instruments addresses the classification, measurement and derecognition of financial assets
and financial liabilities. The standard is not applicable until 1 January 2013 but is available for early adoption.
When adopted, the Group does not expect the new standard to have an impact on its classification or
measurement of the group’s accounting for financial assets.
There will be no impact on the group's accounting for financial liabilities, as the new requirements only affect the
accounting for financial liabilities that are designated as at fair value through profit or loss and the group does not
have any such liabilities.
AASB 10 Consolidated Financial Statements
AASB 10 introduces a single definition of control that applies to all entities. It focuses on the need to have both
power and rights or exposure to variable returns before control is present. Power is the current ability to direct
the activities that significantly influence returns. Returns must vary and can be positive, negative or both. There
is also new guidance on participating and protective rights and on agent/principal relationships. The Group does
not expect the new standard to have an impact on its composition as it currently stands.
AASB 11 Joint Arrangements
AASB 11 introduces a principles based approach to accounting for joint arrangements. The focus is no longer on
the legal structure of joint arrangements, but rather how rights and obligations are shared by the parties to the
joint arrangement. Based on the assessment of rights and obligations, a joint arrangement will be classified as
either a joint operation or joint venture. Joint ventures are accounted for using the equity method, and the choice
to proportionately consolidate will no longer be permitted. Parties to a joint operation will account for their share
of revenues, expenses, assets and liabilities in much the same way as under the previous standard. IFRS 11
also provides guidance for parties that participate in joint arrangements but do not share joint control. The Group
is yet to evaluate its joint arrangements in light of the new guidance.
The group has yet to determine which, if any, of its current measurement techniques will have to change as a
result of the new guidance. It is therefore not possible to state the impact, if any, of the new rules on any of the
amounts recognised in the financial statements.
47
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
2.
Other income
Interest
Research and development refunds
Foreign exchange gains
Other
Total other income
3.
Expenses
Loss before income tax includes the following specific
expenses:
Depreciation
Buildings
Plant and equipment
Leasehold improvements
Total depreciation
Amortisation
Software
Write off of property, plant and equipment
Write off of intangible assets
Rental expense relating to operating leases –
Minimum lease payments
2012
$
2011
$
529,248
996,324
4,995
17,639
962,376
345,228
36,439
13,601
1,548,206
1,357,644
820
4,786
278,782
186,185
1,184
1,553
280,786
192,524
36,541
72,370
9,297
-
5,058
6,159
466,003
433,265
Interest paid to suppliers and joint venture partners
22,309
3,161
48
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
4.
Income tax
The Consolidated Entity is in a tax loss position and is not yet in a situation whereby it can
satisfy AASB 112 for the recognition of its tax losses. Accordingly, no current or deferred
income tax benefits have yet been brought to account.
2012
$
2011
$
(a) Income tax expense
Current tax
Deferred tax
(b) Numerical reconciliation of income tax expense and
prima facie tax benefit
Loss before income tax expense
Prima facie tax benefit at 30% (2011: 30%)
Tax effect of amounts which are not deductible in calculating
taxable income:
Depreciation on buildings
Non-deductible expenses
Share based payments
Movement in items of deferred tax not recognised:
Provisions and accruals
Blackhole expenditure
Accrued income
Capitalised exploration expenditure
Adjustment to current tax of prior periods relating to additional
exploration deductions available upon entry into tax
consolidation
Adjustment to deferred tax of prior periods relating to
provisions and accruals
Deferred tax assets not recognised
Income tax expense
-
-
-
-
-
-
(26,358,168)
(36,643,523)
7,907,451
10,993,057
(246)
(5,321)
(1,436)
(4,213)
(321,489)
(38,900)
(3,488)
(68,442)
5,749
-
737,276
(41,066)
6,480
75,302
7,514,214
11,726,500
-
-
3,578,268
(67,719)
(7,514,214)
(15,237,049)
-
-
49
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
4.
Income tax (continued)
(c) Amounts recognised directly in equity
Aggregate deferred tax arising in the reporting period and not
recognised in net profit or loss or other comprehensive income
but directly debited or credited to equity:
Net deferred tax – debited directly to equity
Deferred tax assets not recognised
Net amounts recognised directly in equity
2012
$
2011
$
221,315
181,281
(221,315)
(181,281)
-
-
(d) Tax losses
Unused tax losses for which no deferred tax asset has been
recognised
Potential tax benefit @ 30%
114,127,211
87,452,868
34,238,163
26,235,860
(e) Deferred tax assets and liabilities
Deferred tax assets
Provisions
Blackhole expenditure
Undeducted losses
Total deferred tax assets before set-offs
156,970
153,482
1,315,755
1,025,998
34,238,163
25,594,227
35,710,888
26,773,707
Set-off of deferred tax liabilities pursuant to set-off provisions
(3,147,281)
(3,153,030)
Net deferred tax assets not recognised
32,563,607
23,620,677
Deferred tax liabilities
Accrued income
Capitalised exploration expenditure
Total deferred tax liabilities before set-offs
731
6,480
3,146,550
3,146,550
3,147,281
3,153,030
Set-off of deferred tax liabilities pursuant to set-off provisions
(3,147,281)
(3,153,030)
Net deferred tax liabilities
-
-
50
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
2012
$
2011
$
5.
Remuneration of auditors
The following fees were paid or payable for services provided by PwC
Australia, the auditor of the Company, its related practices and non-related
audit firms:
(i) Audit and other assurance services
2012 Audit and review of financial statements
79,750
80,000
Under provision for 2011 audit and review of financial
statements
Other assurance services
Review of governance processes, controls and systems
(ii) Taxation services
Tax compliance
International tax consulting and advice
(iii) Other services
Benchmarking services
EGM related costs
TSX listing consulting & advice
Corporate and strategic advice
14,345
-
-
94,095
45,500
-
45,500
-
6,500
30,000
-
36,500
45,500
125,500
300
47,319
47,619
5,950
-
-
25,500
31,450
Total remuneration of PwC
176,095
204,569
6.
Cash and cash equivalents
Cash at bank and in hand
Risk exposure
The Group’s exposure to interest rate risk is discussed in Note 29. The
maximum exposure to credit risk at the end of the reporting period is the
carrying amount of cash and cash equivalents.
12,105,232
9,463,949
51
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
7.
Trade and other receivables
Current
Research and development refund from Australian Tax Office
Other receivables
GST receivables
Prepayments
The Group’s exposure to credit and currency risks and impairment losses
related to trade and other receivables is disclosed in Note 29.
8.
Inventories
Crude oil
Drilling materials and supplies at cost
2012
$
2011
$
987,023
79,353
296,945
215,438
-
37,446
3,250,856
180,235
1,578,759
3,468,537
76,159
975,280
1,051,439
-
853,995
853,995
9.
Property, plant and equipment
Freehold
Land
$
Freehold
Buildings
$
Plant and
equipment
$
Leasehold
Improvements
$
Total
$
Year ended 30 June 2011
Opening net book amount
-
-
440,570
4,542
445,112
-
-
578,079
(2,309)
Additions
230,000
191,452
156,627
Disposals, write offs and adjustments
Depreciation charge
-
-
-
(2,309)
(4,786)
(186,185)
(1,553)
(192,524)
Closing net book amount
230,000
186,666
408,703
2,989
828,358
At 30 June 2011
Cost
230,000
191,452
877,332
12,670
1,311,454
Accumulated depreciation
-
(4,786)
(468,629)
(9,681)
(483,096)
Net book amount
230,000
186,666
408,703
2,989
828,358
52
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
9.
Property, plant and equipment (continued)
Freehold
Land
$
Freehold
Buildings
$
Plant and
equipment
$
Leasehold
Improvements
$
Total
$
Year ended 30 June 2012
Opening net book amount
230,000
186,666
408,703
2,989
828,358
Additions
Disposals, write offs and adjustments
Depreciation charge
-
-
-
9,495
1,294,406
800
1,304,701
-
(71,508)
-
(71,508)
(820)
(278,782)
(1,184)
(280,786)
Closing net book amount
230,000
195,341
1,352,819
2,605
1,780,765
At 30 June 2012
Cost
230,000
200,947
2,100,231
13,470
2,544,648
Accumulated depreciation
-
(5,606)
(747,412)
(10,865)
(763,883)
Net book amount
230,000
195,341
1,352,819
2,605
1,780,765
2012
$
2011
$
10. Exploration assets
Acquisition costs of rights to explore
10,488,500
10,488,500
Movements for the year:
Balance at the beginning of the year
Expenditure incurred during the year
Expenditure written off during the year
Balance at the end of the year
10,488,500
10,237,492
-
-
319,718
(68,710)
10,488,500
10,488,500
53
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
11.
Intangible assets
Software
At the beginning of the year
Cost
Accumulated amortisation
Net book value
Movements for the year:
Opening net book amount
Additions
Disposals, write offs and other adjustments
Amortisation
Closing net book amount
At the end of the year
Cost
Accumulated amortisation
Net book value
2012
$
2011
$
264,456
269,174
(192,050)
(121,054)
72,406
148,120
72,406
16,803
(883)
(36,541)
51,785
148,120
5,565
(8,909)
(72,370)
72,406
280,376
264,456
(228,591)
(192,050)
51,785
72,406
12. Other financial assets
Security bonds on exploration permits
1,318,941
2,412,746
Security bonds are provided to State or Territory governments in respect of
certain performance obligations arising from awarded petroleum and
mineral tenements. The bonds are typically provided as cash or as bank
guarantees in favour of the State or Territory government secured by term
deposits with the financial institution providing the bank guarantee.
13.
Trade and other payables
Trade payables
Other payables
Trade payables are usually non-interest bearing provided payment is
made within the terms of credit. The consolidated entity’s exposure to
liquidity and currency risks related to trade and other payables is disclosed
in Note 29.
3,583,832
143,795
806,588
450,741
3,727,627
1,257,329
54
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
14. Current liabilities - Provisions
Employee entitlements
Restoration and rehabilitation
2012
$
2011
$
(b)
(a)
301,027
60,000
361,027
326,128
60,000
386,128
(a) Movements in restoration and rehabilitation provision
Carrying amount at start of year
Charged/(credited) to profit or loss
Carrying amount at end of year
60,000
-
60,000
-
60,000
60,000
(b) Amounts not expected to be settled within the next 12 months
The current provision for employee entitlements includes accrued annual
leave and long service leave. For long service leave it covers all
unconditional entitlements where employees have completed the required
period of service. The amount is presented as current, since the
consolidated entity does not have an unconditional right to defer
settlement for these obligations. However, based on past experience the
consolidated entity does not expect all employees to take the full amount
of accrued leave or require payment within the next 12 months. The
following amounts reflect leave that is not expected to be taken within the
next 12 months.
Leave obligations expected to be settled after 12 months
-
102,131
15. Non-current liabilities - Provisions
Employee entitlements – long service leave
82,960
49,862
16. Contributed equity
(a) Share Capital
1,383,376,265 (2011: 982,298,842) fully paid ordinary shares
122,700,723
99,105,548
55
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
16. Contributed equity (continued)
(b) Movements in ordinary share capital
Balance at start of year
Exercise of listed options at 16
cents per share
Placement of share to sophisticated
investors on 21 September 2011 at
5.5 cents
Share purchase plan placement of
share to existing shareholders on 3
February 2012 at 5.5 cents
Placement of share to sophisticated
investors on 3 February 2012 at 5.5
cents
Placement of share to institutional
investors on 4 April 2012 at 5.5
cents
Placement of shares to
sophisticated investors on 30
September 2010 at 8.6 cents per
share
Capital raising costs
Number of shares
2012
2011
$
2012
$
2011
982,298,842
907,289,333
99,105,548
93,209,470
6,000
9,509
960
1,281
91,000,000
130,071,423
50,000,000
130,000,000
-
-
-
-
5,005,000
7,153,900
2,750,000
11,050,000
-
-
-
-
-
-
75,000,000
-
-
(2,364,685)
6,450,000
(555,203)
1,383,376,265
982,298,842
122,700,723
99,105,548
(c) Options granted during the year
The following options over unissued ordinary shares were granted by the Company during the year:
Date of
Issue
Class
Expiry Date
Exercise Price
20 Jul 2011 Unlisted Employee options
19 Aug 2011 Unlisted Employee options
30 Aug 2011 Unlisted Employee options
15 Nov 2011 Unlisted Employee options
30 Nov 2011 Unlisted Employee options
20 Jul 2016
19 Aug 2016
30 Aug 2016
15 Nov 2016
30 Nov 2016
31 Mar 2012 Unlisted Shareholder options
31 Mar 2015
29 Jun 2012 Listed options (CTPO)
31 Mar 2014
$0.110
$0.115
$0.115
$0.095
$0.095
$0.125
$0.160
(d) Options exercised during the year
The following options over unissued ordinary shares were exercised during the year:
Class
Expiry Date
Exercise Price
Listed options (CTPO)
31 Mar 2014
$0.160
Number of
Options
7,646,665
2,000,000
4,000,000
12,993,335
6,000,000
65,000,000
28,571,431
Number of
Options
6,000
56
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
16. Contributed equity (continued)
(e) Options lapsed during the year
The following options over unissued ordinary shares lapsed during the year:
Class
Expiry Date
Exercise Price
Unlisted Employee Options
Unlisted Employee Options
Unlisted Employee Options
Unlisted Employee Options
Unlisted Employee Options
Unlisted Employee Options
Unlisted Director Options
Unlisted Employee Options1
31 Jul 2011
31 Aug 2011
17 Nov 2011
19 Jan 2012
16 Feb 2012
23 Feb 2012
3 Jan 2012
-
$0.330
$0.300
$0.250
$0.250
$0.250
$0.250
Various
$0.110
1 options forfeited during the year
(f) Unissued shares under option
At year end, options over unissued ordinary shares of the Company are as follows:
Class
Expiry Date
Exercise Price
Listed options (CTPO)
Unlisted Employee options
Unlisted Director options
31 Mar 2014
31 Mar 2014
31 Mar 2014
Unlisted Shareholder options
31 Mar 2015
Unlisted Employee options
Unlisted Employee options
Unlisted Employee options
Unlisted Employee options
Unlisted Employee options
Unlisted Employee options
Unlisted Employee options
Unlisted Employee options
31 May 2015
31 Oct 2015
12 May 2016
20 Jul 2016
19 Aug 2016
30 Aug 2016
15 Nov 2016
30 Nov 2016
$0.160
$0.200
Various
$0.125
$0.122
$0.110
$0.120
$0.110
$0.115
$0.115
$0.095
$0.095
Number of
Options
200,000
500,000
666,666
1,000,000
250,000
200,000
11,000,000
2,200,000
Number of
Options
302,875,956
8,366,666
7,500,000
65,000,000
6,340,000
600,000
300,000
5,646,665
2,000,000
4,000,000
12,993,335
6,000,000
None of the options entitle holders to participate in any share issue of the Company or any other entity.
(g) Capital risk management
The Group’s objective when managing capital is to safeguard the ability to continue as a going concern to
ultimately add value for shareholders through the exploitation of hydrocarbon resources. This is monitored
through the use of cash flow forecasts.
In order to maintain the capital structure, the Group may issue new shares or other equity instruments. Given
the Group is still in the exploration phase, equity is the sole source of funding. Debt is not a viable option and
therefore gearing ratios are not currently applicable.
57
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
2012
$
2011
$
17. Reserves
Share options reserve
7,964,729
6,893,100
Movements:
Balance at start of year
Share based payments costs
Share based capital raising costs
Balance at end of year
6,893,100
6,763,432
705,904
365,725
129,668
-
7,964,729
6,893,100
The reserve is used to record the value of share based payments provided to employees and
directors as part of their remuneration and underwriters of share placements. Refer to note 28
for further details of share based payments.
18. Accumulated losses
Movements in accumulated losses were as follows:
Balance at the start of the year
Net loss for the year
Balance at the end of the year
(80,103,476)
(43,459,953)
(26,358,168)
(36,643,523)
(106,461,644)
(80,103,476)
19.
Loss per share
(a) Basic loss per share (cents)
(2.28)
(3.80)
(b) Diluted loss per share (cents)
(2.28)
(3.80)
(c) Loss used in loss per share calculation
Loss attributable to ordinary equity holders of the Company
(26,358,168)
(36,643,523)
(d) Weighted average number of ordinary shares
Weighted average number of shares used as the denominator
in calculating basic and diluted earnings per share
1,157,003,501
963,598,282
Options on issue are considered to be potential ordinary shares and have not been included in
the calculation of basic earnings per share. Additionally, any exercise of the options would be
antidilutive as their exercise to ordinary shares would decrease the loss per share. In
accordance with AASB 133 they are also excluded from the diluted loss per share calculation.
Refer to Note 16 for details of options on issue.
58
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
20.
Segment reporting
Management has considered the operating segments based on the reports reviewed by the
chief operating decision maker, being the board of directors that are used to make strategic
decisions. As the consolidated entity is in the exploration phase of operations, the board
considers the business as a whole, and makes decisions on the allocation of resources based
on its strategic objectives.
The operations of the consolidated entity involve a single industry segment being that of
exploration for hyrdrocarbons. The consolidated entity’s operations are wholly in one
geographical location being Australia.
21.
Parent entity information
(a) Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
2012
$
2011
$
Balance Sheet
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Shareholders’ equity:
Issued capital
Reserves
Accumulated losses
Total equity
Loss for the year
Total comprehensive loss
11,448,146
5,582,000
12,569,131
12,994,160
24,017,277
18,576,160
(3,281,899)
(1,238,240)
-
(49,862)
(3,281,899)
(1,288,102)
20,735,378
17,288,058
122,700,723
99,105,548
7,964,729
6,893,100
(109,930,074)
(88,710,590)
20,735,378
17,288,058
(21,219,484)
(19,587,026)
(21,219,484)
(19,587,026)
(b) Guarantees entered into by the parent entity
No guarantees have been provided by the parent entity (2011: Nil).
(c) Contingent assets and liabilities of the parent entity
A contingent asset exists in relation to proceedings brought against a supplier. Details are set
out in Note 26 (b). There are no contingent liabilities (2011: Nil).
(d) Commitments of the parent entity
Operating lease commitments of the parent entity are set out in note 27 (b).
59
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
22. Related party transactions
(a) Parent entity
The parent entity is Central Petroleum Limited.
(b) Subsidiaries
The consolidated financial statements include the financial statements of Central Petroleum Limited and the
subsidiaries listed in the following table.
Name of entity
Place of
Incorporation
Merlin Energy Pty Ltd
Merlin West Pty Ltd
Western Australia
Western Australia
Helium Australia Pty Ltd
Victoria
Ordiv Petroleum Pty Ltd
Western Australia
Frontier Oil & Gas Pty Ltd
Western Australia
Central Green Pty Ltd
Western Australia
Central Geothermal Pty Ltd
Western Australia
Merlin Coal Pty Ltd
Western Australia
Central Petroleum Services Pty Ltd
Western Australia
Class of
Shares
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
(c) Key management personnel
Disclosures relating to key management personnel are set out in note 23.
Equity holding
2012
2011
%
100
100
100
100
100
100
100
100
100
%
100
100
100
100
100
100
100
100
100
(d) Transactions with other related parties
Superannuation contributions
2012
$
2011
$
Contributions to superannuation funds on behalf of employees
283,113
242,169
60
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
23. Key management personnel (continued)
(a) Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share based payments
2012
$
2011
$
2,074,783
1,186,032
218,246
11,601
268,426
87,819
20,393
31,108
2,573,056
1,325,352
Detailed remuneration disclosures are provided in the remuneration report on pages 17 to 26.
(b) Equity instrument disclosures relating to key management personnel
(i) Options provided as remuneration and shares issued on exercise of such options
Details of options provided as remuneration and shares issued on the exercise of such options, together with the
terms and conditions of the options, can be found in the remuneration report on pages 17 to 26.
(ii) Option holdings
The number of options over ordinary shares in the Company held during the financial year by each director of
Central Petroleum Limited and other key management personnel of the consolidated entity, including their
personally related parties, are set out below.
Balance
at start of
year
Granted as
compensation Exercised
Other
changes
Held at
date of
departure
Balance at
end of
year
Vested and
exercisable
Unvested
Non-Executive Directors
Henry Askin
2012
2011
William Dunmore
2012
2011
Michael Herrington
2012
2011
Wrixon Gasteen
2012
2011
Andrew Whittle
2012
2011
Richard Faull
2012
2011
Edmund Babington
2012
2011
5,340,000
5,340,000
3,400,000
3,400,000
N/A
N/A
N/A
N/A
N/A
N/A
3,580,550
3,580,550
N/A
N/A
-
-
-
-
-
-
-
-
-
-
N/A
N/A
-
N/A
-
N/A
-
-
-
-
N/A
-
N/A
-
-
-
(2,000,000)
-
(2,000,000)
-
-
N/A
-
N/A
-
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
3,340,000
3,340,000
5,340,000
5,340,000
1,400,000
1,400,000
3,400,000
3,400,000
-
N/A
-
N/A
-
N/A
-
N/A
-
N/A
-
N/A
N/A
(2,000,000)
1,580,550
N/A
-
-
N/A
3,580,550
3,580,550
-
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
61
-
-
-
-
-
N/A
-
N/A
-
N/A
N/A
-
N/A
N/A
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
23.
Key management personnel (continued)
(b) Equity instrument disclosures relating to key management personnel
Balance
at start of
year
Granted as
compensation Exercised
Other
changes
Held at date of
departure
Balance at
end of
year
Vested and
exercisable Unvested
Executive Directors and Other Key
Management Personnel
Richard Cottee
20121
2011
Daniel White
2012
2011
Bruce Elsholz
2012
2011
Dalton Hallgren
2012
2011
Trevor Shortt
2012
2011
John Heugh
2012
2011
N/A
N/A
-
N/A
-
N/A
-
N/A
3,096,000
1,550,000
3,096,000
-
2,000,000
1,000,000
2,000,000
-
-
N/A
-
N/A
4,000,000
N/A
4,000,000
N/A
7,803,978
7,503,978
-
-
-
-
-
-
-
N/A
-
N/A
-
-
-
-
-
-
-
N/A
-
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-
N/A
-
N/A
-
N/A
4,646,000
4,646,000
-
3,096,000
2,096,000
1,000,000
3,000,000
3,000,000
-
2,000,000
1,333,332
666,668
N/A
N/A
4,000,000
N/A
2,000,000
N/A
2,000,000
N/A
N/A
N/A
4,000,000
N/A
2,000,000
N/A
2,000,000
N/A
(5,000,000)
2,803,978
N/A
N/A
300,000
N/A
7,803,978
7,803,978
N/A
-
1 172,922,033 unlisted options exercisable at $0.09 on or before 15 November 2015 and 15 November 2017 were
issued to FEP on 8 August 2012, a company in which Richard Cottee has a beneficial equity interest.
62
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
23. Key management personnel (continued)
(iii) Share holdings
The number of shares in the Company held during the financial year by each director of Central Petroleum
Limited and other key management personnel of the consolidated entity, including their personally related parties,
are set out below. There were no shares granted as compensation during the year.
Held at
beginning
of year
Held at
date of
appointment
Share purchase
plan issue
Received on
exercise of
options
Net
change
other
Held at
date of
departure
Held at
end of
year
N/A
N/A
-
N/A
N/A
N/A
N/A
N/A
766,666
766,666
3,600,000
3,600,000
Non-Executive Directors
Henry Askin
2012
2011
William Dunmore
2012
2011
Michael Herrington
2012
2011
Wrixon Gasteen
2012¹
2011
Andrew Whittle
2012
2011
Richard Faull
2012
2011
Edmund Babington
N/A
2012
N/A
2011
Executive Directors and Other Key Management Personnel
2,386,100
2,386,100
N/A
N/A
N/A
N/A
N/A
N/A
-
N/A
-
N/A
-
N/A
Richard Cottee
2012
2011
Daniel White
2012
2011
Bruce Elsholz
2012
2011
Dalton Hallgren
2012
2011
Trevor Shortt
2012
2011
John Heugh
2012
2011
N/A
N/A
1,440,000
1,440,000
-
-
N/A
N/A
N/A
N/A
5,741,429
5,703,693
-
N/A
N/A
N/A
N/A
N/A
-
N/A
-
N/A
N/A
N/A
¹200,000 ordinary shares purchased on 11 July 2012
272,728
-
90,910
-
-
-
-
N/A
-
N/A
-
N/A
-
N/A
-
N/A
-
-
-
-
-
N/A
-
N/A
272,728
-
63
-
-
-
-
-
N/A
-
N/A
-
N/A
-
-
-
N/A
-
N/A
-
-
-
-
-
N/A
-
N/A
-
-
-
-
-
-
-
N/A
-
N/A
400,000
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
3,872,728
3,600,000
776,666
776,666
-
N/A
-
N/A
400,000
N/A
-
-
2,477,010
N/A
N/A
2,386,100
-
N/A
-
N/A
-
-
-
-
-
N/A
-
N/A
-
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-
6,014,157
N/A
N/A
-
N/A
1,440,000
1,440,000
-
-
-
N/A
-
N/A
-
37,736
N/A
5,741,429
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
(c) Other transactions with key management personnel
(i) During the year ended 30 June 2012 the consolidated entity paid $46,528 (2011: $59,423) to Dunmore
Consulting, a business in which Mr Dunmore is the principal, for the provision of technical and corporate advisory
services. This transaction was on normal commercial terms and conditions no more favourable than those available
to other parties.
(ii) During the year ended 30 June 2012 the consolidated entity paid $25,000 (2011: $nil) to Jabiru Energy,
Development and Innovation Pty Ltd, a business in which Mr Herrington is the principal, for the provision of corporate
advisory services prior to appointment to the board of directors of the Company. This transaction was on normal
commercial terms and conditions no more favourable than those available to other parties.
(iii) FEP has provided the services of Richard Cottee on the basis of a secondment to the Company. As such
compensation is made to FEP in line with Richard Cottee’s service agreement shown on page 25. Richard Cottee
has a beneficial equity interest in FEP.
During the year ended 30 June 2012 FEP have received compensation of $158,913 with $29,796 expensed for
services provided to 30 June 2012. $129,117 has been treated as a prepayment in the reporting period as it relates
to future service for the period 1 July 2012 to 30 September 2012. An accrual for $435,000 exists in relation to Mr
Cottee’s sign on payment of $250,000, and incidental expenses incurred by FEP of $185,000.
24. Reconciliation of loss after income tax to net cash outflow from operating activities
2012
$
2011
$
Loss after income tax
Adjustments for:
Depreciation and amortisation
Share-based payments
Write off of property, plant and equipment
Write off of intangible assets
Changes in assets and liabilities relating to operating activities:
Decrease in trade and other receivables
(Increase) / decrease in inventories
Decrease in exploration assets
Increase / (decrease) in trade and other payables
(Decrease) / increase in provisions
(26,358,168)
(36,643,523)
317,327
705,904
9,297
-
264,894
129,668
5,058
6,159
1,889,778
9,464,834
(197,444)
-
114,381
68,709
2,428,928
(7,780,978)
(25,101)
210,261
Net cash outflow from operating activities
(21,229,479)
(34,160,537)
25. Non-cash investing and financing activities
There were no non-cash investing and financing activities (2011: Nil).
64
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
26. Contingencies
(a) Contingent liabilities
(i) The consolidated entity had contingent liabilities at 30 June 2012 in respect of certain joint venture payments.
As partial consideration under the terms of the purchase agreement for EPs 105, 106 and 107, there is a
requirement to pay the vendor the sum of $1,000,000 (2011: $1,000,000) within twelve months following the
commencement of any future commercial production from the permits.
(ii) During the 2012 financial year various legal claims were made against the Company by Petroleum Nominees
Pty Ltd (“PNPL”), a Clive Palmer company.
On 31 August 2012 the Company announced to the ASX that all legal proceedings with PNPL had been settled
with no material financial outflow to the Company incurred.
(iii) On 26 March 2012 the Company advised that it had terminated the employment of Mr John Heugh. Mr John
Heugh commenced an action in the Supreme Court of Western Australia against the Company disputing the
Company's termination of his employment. The Company is defending the action vigorously.
On 13 April 2012 the Company advised that Mr John Heugh had served an application seeking an injunction in
the Supreme Court of Western Australia to restrain the Company from:
•
•
taking any steps to call a general meeting of members of the Company to consider a resolution that
Mr John Heugh be removed as a director of the Company; or
further or alternatively from moving such resolution at any general meeting, pending the hearing and
determination of Mr John Heugh’s legal action disputing the Company's termination of his
employment (as announced on 26 March 2012).
On 17 April 2012 the Company advised that the injunction application brought by Mr John Heugh had been
dismissed by the Court. Mr John Heugh was ordered to pay the Company’s costs of the application.
The directors believe that a favourable outcome to the dispute is probable and no material amounts will be
payable by the Company.
(b) Contingent assets
On 31 March 2011, the Company announced it had initiated legal proceedings against Century Energy Services
Pty Ltd to protect its interests.
The proceedings follow an unplanned incident which occurred during the drilling of Surprise-1 in EP 115 whereby
the monkey board and 129 stands of racked drill pipe twisted around the rig mast by thirty degrees whilst the
wireline sheaves were being repositioned. This incident resulted in the Company having to necessarily terminate
the drilling contract with Century Energy Services Pty Ltd for performance related issues.
The Company is currently preparing for its arbitration proceedings against Century Energy Services Pty Ltd and
MB Century Drilling Pty Ltd. The matter is currently expected to proceed to an arbitration hearing in the first
quarter of 2013.
The directors believe a favourable outcome is probable. However, the contingent asset has not been recognised
as a receivable at 30 June 2012 as receipt of the amount is dependent on the outcome of the proceedings.
There were no other contingent assets at 30 June 2012 (30 June 2011 - $nil).
65
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
2012
$
2011
$
27. Commitments
(a) Capital commitments
The consolidated entity has exploration expenditure commitments on the following permits:
Petroleum EPs 82, 93, 97, 105, 106, 107, 112, 115, 118, and 125.
Mineral ELs 27094, 27100, 27101, 27102, 27103, 27104, 27105, 27107, 27108, 27109, 27110, 27114, 28095,
28096 and 28097.
The following amounts are due:
Within one year
Later than one year but not later than five years
18,291,583
11,634,000
60,528,250
57,041,000
78,819,833
68,675,000
In the petroleum industry it is common practice for entities to farm-out, transfer or sell a portion of their rights to
third parties or relinquish them altogether and, as a result, obligations may be reduced or extinguished.
(b) Operating lease commitments
The consolidated entity, through its parent entity Central Petroleum
Limited, has non-cancellable operating leases for office premises in Perth,
Alice Springs and Brisbane. The leases have varying terms, escalation
clauses and renewal rights.
Commitments for minimum lease payments in relation to non-
cancellable operating leases are payable as follows:
Within one year
Later than one year but not later than five years
661,627
751,446
1,413,073
384,494
185,364
569,858
66
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
28.
Share based payments
(a) Employee options
An Incentive Option Scheme operates to provide incentives for employees. Participation in the plan is at the
board’s discretion; however the plan is open to all employees and directors of the Company.
At the discretion of the Company, performance criteria may or may not be established in respect of options that
vest under the Incentive Option Scheme. Options are granted for no consideration. Options that have been
granted to date to employees, excluding directors, have contained service conditions in respect of their vesting.
Options have vested progressively from grant date to, in some cases, an employee’s third anniversary. As of
the date of this report no options issued under the Incentive Option Scheme have contained any performance
criteria in respect of their vesting.
There are no rules imposing a restriction on removing the ‘at risk’ aspect of options granted to employees or
directors. One ordinary share is issued upon exercise of one option.
Set out below are summaries of options that have been granted to directors and employees.
Expiry Date
Exercise
price
Balance at
start of the
year
Number
Granted
during the
year
Number
Exercised
during the
year
Number
2012
31 July 2011
31 August 2011
17 November 2011
3 January 2012
3 January 2012
3 January 2012
3 January 2012
3 January 2012
19 January 2012
16 February 2012
23 February 2012
31 March 2014
31 March 2014
31 March 2014
31 March 2014
31 March 2014
31 March 2014
31 May 2015
31 October 2015
12 May 2016
20 Jul 2016
19 Aug 2016
30 Aug 2016
15 Nov 2016
30 Nov 2016
Totals
$0.33
$0.30
$0.25
$0.28
$0.33
$0.37
$0.43
$0.50
$0.25
$0.25
$0.25
$0.22
$0.25
$0.28
$0.32
$0.37
$0.20
$0.122
$0.11
$0.12
$0.11
$0.115
$0.115
$0.095
$0.095
200,000
500,000
666,666
2,200,000
2,200,000
2,200,000
2,200,000
2,200,000
1,000,000
250,000
200,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
8,366,666
6,340,000
800,000
300,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,646,665
2,000,000
4,000,000
12,993,335
6,000,000
37,123,332
32,640,000
Weighted average exercise price
$0.261
$0.102
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Expired or
forfeited
during the
year
Number
(200,000)
(500,000)
(666,666)
(2,200,000)
(2,200,000)
(2,200,000)
(2,200,000)
(2,200,000)
(1,000,000)
(250,000)
(200,000)
-
-
-
-
-
-
-
(200,000) 1
-
(2,000,000)1
-
-
-
-
Balance at
end of the
year
Number
Vested and
exercisable at
the end of the
year
-
-
-
-
-
-
-
-
-
-
-
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
8,366,666
6,340,000
600,000
300,000
5,646,665
2,000,000
4,000,000
-
-
-
-
-
-
-
-
-
-
-
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
8,366,666
6,290,000
433,333
200,000
4,431,110
2,000,000
2,000,000
12,993,335
12,993,335
6,000,000
3,000,000
(16,016,666)
53,746,666
47,214,444
$0.324
$0.146
$0.151
Weighted average remaining contractual life (years) at the end of the year
3.829
1 Options were forfeited during the year
67
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
28.
Share based payments (continued)
Expiry Date
Exercise
price
Balance at
start of the
year
Number
Granted
during
the year
Number
Exercised
during the
year
Number
Expired or
forfeited
during the
year
Number
Balance at
end of the
year
Number
Vested and
exercisable at
the end of the
year
2011
30 November 2010
20 February 2011
31 March 2011
31 July 2011
31 August 2011
17 November 2011
3 January 2012
3 January 2012
3 January 2012
3 January 2012
3 January 2012
19 January 2012
16 February 2012
23 February 2012
31 March 2014
31 March 2014
31 March 2014
31 March 2014
31 March 2014
31 March 2014
31 May 2015
31 October 2015
12 May 2016
Totals
$0.30
$0.20
$0.30
$0.33
$0.30
$0.25
$0.28
$0.33
$0.37
$0.43
$0.50
$0.25
$0.25
$0.25
$0.22
$0.25
$0.28
$0.32
$0.37
$0.20
$0.122
$0.11
$0.12
1,800,000
7,000,000
1,450,000
200,000
500,000
666,666
2,200,000
2,200,000
2,200,000
2,200,000
2,200,000
1,000,000
250,000
200,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
8,366,666
6,340,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
800,000
-
300,000
46,273,332
1,100,000
Weighted average exercise price
$0.258
$0.113
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,800,000)
(7,000,000)
(1,450,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
200,000
500,000
666,666
2,200,000
2,200,000
2,200,000
2,200,000
2,200,000
1,000,000
250,000
200,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
8,366,666
6,340,000
800,000
-
300,000
-
-
-
200,000
500,000
666,666
2,200,000
2,200,000
2,200,000
2,200,000
2,200,000
1,000,000
250,000
150,000
1,500,000
1,500,000
1,500,000
1,500,000
1,500,000
8,316,666
4,369,999
266,667
200,000
(10,250,000)
37,123,332
34,419,998
$0.232
$0.261
$0.271
Weighted average remaining contractual life (years) at the end of the year
2.330
68
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
28.
Share based payments (continued)
(b) Employee options granted during the year
Options granted during the year ended 30 June 2012 and 30 June 2011 were valued using a binomial option pricing
model. The model inputs for option issued during the year included:
Grant date
Expiry date
Number of
options
2012
20 Jul 2011
19 Aug 2011
30 Aug 2011
15 Nov 2011
30 Nov 2011
2011
20 Jul 2016
19 Aug 2016
30 Aug 2016
7,646,665
2,000,000
4,000,000
15 Nov 2016
12,993,335
30 Nov 2016
6,000,000
Average
fair
value
per
option
$0.0278
$0.0342
$0.0351
$0.0232
$0.0243
Exercise
price
Price of
shares on
grant date
Estimated
volatility*
Risk free
interest
rate
Dividend
yield
$0.110
$0.115
$0.115
$0.095
$0.095
$0.065
$0.065
$0.066
$0.057
$0.057
87.44%
92.06%
92.16%
72.93%
70.04%
4.37%
3.74%
3.99%
3.60%
3.38%
0.0%
0.0%
0.0%
0.0%
0.0%
9 Nov 2010
31 Oct 2015
800,000
12 May 2011
12 May 2016
300,000
$0.031
$0.029
$0.110
$0.120
$0.07
$0.07
85.56%
85.40%
5.10%
5.05%
0.0%
0.0%
* The estimated price volatility is based on the historical price volatility for the 12 months prior to the date of
granting of the options, adjusted for any expected changes to future volatility due to publicly available information.
(c) Expenses arising from share-based payment transactions
Total expenses arising from share based transactions recognised during the year were:
Options issued to directors and employees
2012
$
2011
$
705,904
129,668
69
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
29.
Financial risk management
The consolidated entity’s principal financial instruments are cash and short-term deposits. The consolidated entity also
has other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its
operations. The consolidated entity’s risk management objective with regard to financial instruments and other financial
assets include gaining interest income and the policy is to do so with a minimum of risk.
(a) Credit Risk
The credit risk on financial assets of the consolidated entity which have been recognised in the balance sheet is
generally the carrying amount, net of any provision for doubtful debts. The consolidated entity trades only with
recognised banks and it is considered that the credit risk is minimal. There are no significant concentrations of
credit risk within the consolidated entity.
The aging of the consolidated entity’s receivables at reporting date was:
Trade and other receivables
Gross
Past due: 0 – 30 days
Past due: 31 – 150 days
Past due: 151 – 365 days
Past due: More than 1 year
2012
$
1,104,007
229,226
30,074
-
2011
$
117,131
538,458
1,575,927
1,056,786
1,363,307
3,288,302
Impairment
2012
$
2011
$
-
-
-
-
-
-
-
-
-
-
Based on historic default rates, the consolidated entity believes that no impairment allowance is necessary in
respect of receivables past due by up to 150 days.
The receivables at 30 June 2012 relate predominantly to Research & Development and GST refunds due from the
Australian Tax Office. Over 97% of trade and other receivables have been received to date.
(b) Liquidity Risk
The following are the contractual maturities of financial assets and liabilities:
2012
Financial Assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Financial Liabilities
Trade and other payables
≤ 6 months
$
6 - 12
months
$
1 - 5 years
$
≥ 5 years
$
Total
$
12,105,232
1,363,307
-
13,468,539
(3,727,627)
(3,727,627)
-
-
-
-
-
-
-
-
1,318,941
1,318,941
-
-
-
-
-
-
-
-
12,105,232
1,363,307
1,318,941
14,787,480
(3,727,627)
(3,727,627)
70
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
29.
Financial risk management (continued)
≤ 6 months
$
6 - 12
months
$
1 - 5 years
$
≥ 5 years
$
Total
$
9,463,949
3,288,302
-
12,752,251
(1,257,329)
(1,257,329)
-
-
-
-
-
-
-
-
2,412,746
2,412,746
-
-
-
-
-
-
-
-
9,463,949
3,288,302
2,412,746
15,164,997
(1,257,329)
(1,257,329)
2011
Financial Assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Financial Liabilities
Trade and other payables
(c)
Interest Rate Risk
The consolidated entity’s exposure to interest rate risk, which is the risk that a financial instrument’s value
will fluctuate as a result of changes in market interest rates and the effective weighted average interest
rates on classes of financial assets and financial liabilities, is as follows:
Consolidated
Weighted
Average
Effective
Interest Rate
Floating interest rate
Fixed interest
Non-interest
bearing
Total
2012
%
2011
%
2012
$
2011
$
2012
$
2011
$
2012
$
2011
$
2012
$
2011
$
Financial Assets:
Cash and
cash equivalents
Trade and other
receivables
Other financial
assets
3.1
2.7
12,105,232
9,463,949
-
-
3.6
5.7
-
-
-
-
-
-
-
-
-
-
12,105,232
9,463,949
1,363,307
3,288,302
1,363,307
3,288,302
912,239
2,271,438
406,702
141,308
1,318,941
2,412,746
Financial Liabilities:
Trade and other
payables
-
-
Net Financial
Assets/(Liabilities)
12,105,232
9,463,949
912,239
2,271,438
1,770,009
3,429,610
14,787,480
15,164,997
-
-
-
-
-
-
-
-
3,727,627
1,257,329
3,727,627
1,257,329
3,727,627
1,257,329
3,727,627
1,257,329
12,105,232
9,463,949
912,239
2,271,438
(1,957,618)
2,172,281
11,059,853
13,907,668
Interest Rate Sensitivity
A sensitivity of 10 per cent has been selected as this is considered reasonable given the current level of
both short term and long term interest rates. A 10% movement in interest rates at the reporting date would
have increased (decreased) equity and profit and loss by the amounts shown below based on the average
amount of interest bearing financial instruments held. This analysis assumes that all other variables, in
particular foreign currency rates, remain constant. The analysis is performed only on those financial assets
and liabilities with floating interest rates and is prepared on the same basis as for 2011.
2012
Profit or Loss
Equity
10% Increase 10% Decrease 10% Increase 10% Decrease
Cash and cash equivalents
37,526
(37,526)
2011
Cash and cash equivalents
25,309
(25,309)
-
-
-
-
71
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
29.
Financial risk management (continued)
(d)
Currency Risk
The consolidated entity’s exposure to currency risk is limited due to its ongoing operations being in Australia
and all associated contracts completed in Australian dollars. A small foreign exchange risk arises from
liabilities denominated in a currency other than Australian dollars. The Group generally does not undertake
any hedging or forward contract transactions as the exposure is considered immaterial, however individual
transactions are reviewed for any potential currency risk exposure.
(e)
Fair Values
The carrying amounts of cash, cash equivalents, financial assets and financial liabilities, approximate their
fair values.
30.
Interests in joint ventures
Details of joint ventures in which the consolidated entity has an interest are as follows:
EP 97 Joint Venture (Rawson)
EP 82 Magee Joint Venture (OGE)
EP 125 Mt Kitty Joint Venture (OGE)
Principal activities
Oil & gas exploration
Oil & gas exploration
Oil & gas exploration
2012
%
80.00
86.12
76.54
2011
%
80.00
86.12
76.54
Rawson = Rawson Resources Limited
OGE = Oil and Gas Exploration Limited (formerly He Nuclear Limited)
The share in the assets and liabilities of the joint ventures where less than 100% interest is held by the Company
are included in the consolidated entity’s balance sheets in accordance with the accounting policy described in
note 1(b) under the following classifications:
2012
$
256,888
124,289
381,177
589,995
(208,818)
2011
$
228,707
371,323
600,030
87,919
512,111
20,323
110,021
(1,676,279)
(18,794,907)
(1,655,956)
(18,684,886)
Current assets
Cash and cash equivalents
Trade and other receivables
Total assets
Current liabilities
Trade and other payables
Net assets
Joint venture contribution to loss before tax
Revenue
Expenses
Loss before income tax
72
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
N O T E S T O T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S
F O R T H E Y E AR E N D E D 3 0 J U N E 2 0 1 2
31. Events occurring after the reporting period
Subsequent to 30 June 2012 the following events have occurred:
(i) Option issues
The Company issued unlisted options to FEP on 8 August 2012, a Company in which Mr Richard Cottee has a
beneficial interest. The issued unlisted options are set out below;
Grant Date
8 Aug 2012
8 Aug 2012
8 Aug 2012
Number of options
issued
48,418,169
55,335,051
69,168,813
Exercise price Fair value per option Expiry Date
$0.09
$0.09
$0.09
$0.022
$0.027
$0.024
15 Nov 15
15 Nov 17
15 Nov 17
(ii) Legal Actions with Petroleum Nominees Pty Ltd (a Clive Palmer company) (“PNPL”)
Please refer to note 26(a)(ii).
Other than the matters discussed above, there has not arisen in the interval between the end of the financial
year and the date of this report any item, transaction or event of a material or unusual nature likely, in the
opinion of the directors of the Company, to affect significantly the operations of the Group, the results of those
operations, or the state of affairs of the Group, in future financial years.
73
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
DIRECTORS’ DECLARATION
In the directors opinion:
a)
the financial statements and notes set out on pages 34 to 73 are in accordance with the Corporations
Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements, and
(ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2012 and
of its performance for the financial year ended on that date; and
b)
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 1(a) confirms that the financial statements also comply with the International Financial Reporting
Standards as issued by the International Accounting Standards Board.
The directors have been given the declarations by the chief executive officer and chief financial officer
required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors:
Richard Cottee
Executive Director
Perth, 14 September 2012
74
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
AS X AD D I T I O N AL I N F O R M AT I O N AT 3 1 AU G U S T 2 0 1 2
Details of shares and options as at 31 August 2012:
Top holders
The 20 largest registered holders of each class of quoted equity security as at 31 August 2012 were:
Ordinary fully paid shares
Name
Merrill Lynch (Australia) Nominees Pty Limited
Citicorp Nominees Pty Limited
National Nominees Limited
Petroleum Nominees Pty Limited
Marford Group Pty Limited
Brighten International Pty Limited
Mr Mark Philip Shawcross
JP Morgan Nominees Australia Limited
HSBC Custody Nominees (Australia) Limited
Franze Holdings Pty Limited
RBJ Nominees Pty Limited
Renlyn Bell Investments Pty Limited
AMG International Pty Limited
Petroleum Nominees Pty Limited
Salavente Pty Limited
Mr Geoffrey Rol
UBS Nominees Pty Limited
Brispot Nominees Pty Limited
EPS Management Pty Limited
Advent Energy Limited
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
No. of Shares
67,224,594
40,397,487
29,820,530
27,413,896
14,832,421
13,841,551
13,070,001
11,351,676
11,058,113
10,232,728
10,050,000
10,016,670
8,915,000
8,700,000
8,625,000
7,966,731
7,572,897
6,817,525
6,416,638
6,250,000
%
4.86
2.92
2.16
1.98
1.07
1.00
0.94
0.82
0.80
0.74
0.73
0.72
0.64
0.63
0.62
0.58
0.55
0.49
0.46
0.45
320,573,458
23.17
Options exercisable at $0.16 each on or before 31 March 2014
Name
No. of
Options
%
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Franze Holdings Pty Limited
Mr Philip Howard Robson
Avatar Equities Pty Limited
Victor M Lewis Pty Limited
Mrs Melanie Mullins
Mrs Yoke Khaw Lo + Dr Kelvin Lo
Mr James David Harry Boddam-Whetham
Renlyn Bell Investments Pty Limited
Dr Kelvin Lo + Mrs Yoke Lo
Citicorp Nominees Pty Limited
Madeiros Pty Limited
Mr Robert Baskerville Long
National Nominees Limited
Merrill Lynch (Australia) Nominees Pty Limited
Mr Terrence McCarthy
Advent Energy Limited
Mr Brian Douglas Hill
Dr Kelvin Lo
Atlantis Investigations Pty Limited
Mr David Christopher Kemp
9,230,000
6,671,446
5,662,526
5,000,000
4,952,663
4,500,000
4,443,898
4,350,000
4,250,000
4,245,606
4,125,000
3,617,929
3,279,750
3,255,563
3,250,000
3,125,000
3,000,000
3,000,000
2,906,904
2,904,423
3.05
2.20
1.87
1.65
1.64
1.49
1.47
1.44
1.40
1.40
1.36
1.19
1.08
1.07
1.07
1.03
0.99
0.99
0.96
0.96
85,770,708
28.32
77
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
AS X AD D I T I O N AL I N F O R M AT I O N AT 3 1 AU G U S T 2 0 1 2
Distribution schedules
A distribution schedule of each class of equity security as at 31 August 2012:
Ordinary fully paid shares
Range
Holders
Units
%
1
1,001
5,001
10,001
100,001
- 1,000
- 5,000
- 10,000
- 100,000
- Over
225
638
1,258
4,566
1,942
31,554
2,432,178
10,477,933
197,030,892
1,173,403,708
0.00
0.18
0.76
14.24
84.82
Total
8,629
1,383,376,265
100.00
Listed options exercisable at $0.16 each on or before 31 March 2014
Range
Holders
Units
%
1
1,001
5,001
10,001
100,001
- 1,000
- 5,000
- 10,000
- 100,000
- Over
605
782
362
772
406
379,488
2,150,069
2,814,549
30,145,040
267,386,810
0.13
0.71
0.93
9.95
88.28
Total
2,927
302,875,956
100.00
Substantial shareholders
As at 31 August 2012, there are no substantial shareholders in the Company.
Restricted Securities
As at 31 August 2012, the Company had no restricted securities.
Unmarketable parcels
Holdings less than a marketable parcel of ordinary shares (being 4,762 shares as at 31 August 2012):
Holders
Units
679
1,548,508
Holdings less than a marketable parcel of listed options exercisable at $0.16 each on or before 31 March 2014 (being 16,130
options as at 31 August 2012):
Holders
Units
1,918
7,576,240
Voting Rights
Subject to any rights or restrictions for the time being attached to any class or classes of shares, at meetings of shareholders
or classes of shareholders:
•
•
•
each shareholder entitled to vote may vote in person or by proxy, attorney or representative of a
shareholder;
on a show of hands, every person present who is a shareholder or a proxy, attorney or representative of a
shareholder has one vote; and
on a poll, every person present who is a shareholder shall, in respect of each fully paid share held by him,
or in respect of which he is appointed a proxy, attorney or representative, have one vote for their share, but
in respect of partly paid shares, shall have such number of votes being equivalent to the proportion which
the amount paid (not credited) is of the total amounts paid and payable in respect of those shares
(excluding amounts credited)..
On-Market Buy Back
There is no current on-market buy-back.
78
C E N T R AL P E T R O L E U M L I M I T E D
AB N 7 2 0 8 3 2 5 4 3 0 8
INTERESTS IN PETROLEUM PERMITS, MINERAL LICENSES AND GEOTHERMAL PERMITS
AT 31 AUGUST 2012
Permits and Licenses Granted
Location
Tenement
Operator
EP 82 (1)
EP 93
EP 97 (2)
EP 105
EP 106
EP 107
EP 112
EP 115
EP 118
EP 125 (1)
EL-27094
EL-27100
EL-27101
EL-27102
EL-27103
EL-27104
EL-27105
EL-27106
EL-27107
EL-27108
EL-27109
EL-27110
EL-27114
EL-28095
EL-28096
EL-28097
EL-28472
Amadeus Basin NT
Pedirka Basin NT
Pedirka Basin NT
Amadeus/Pedirka Basin NT
Amadeus Basin NT
Amadeus/Pedirka Basin NT
Amadeus Basin NT
Amadeus Basin NT
Amadeus Basin NT
Amadeus Basin NT
Pedirka Basin NT
Pedirka Basin NT
Pedirka Basin NT
Pedirka Basin NT
Pedirka Basin NT
Pedirka Basin NT
Pedirka Basin NT
Pedirka Basin NT
Pedirka Basin NT
Pedirka Basin NT
Pedirka Basin NT
Pedirka Basin NT
Pedirka Basin NT
Pedirka Basin NT
Pedirka Basin NT
Pedirka Basin NT
Pedirka Basin NT
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Permits and Licenses Under Application
Tenement
Location
Operator
EPA 92
EPA 111
EPA 120
EPA 124
EPA 129
EPA 130
EPA 131
EPA 132
EPA 133
EPA 137
EPA 147
EPA 149
EPA 152
EPA 160
ATP 909
ATP 911
ATP 912
PELA 77
16/08-9
17/08-9
18/08-9
EL 27095
EL 27096
EL 27097
EL 27098
EL 27099
Lander Trough NT
Amadeus Basin NT
Amadeus Basin NT
Amadeus Basin NT
Lander Trough NT
Pedirka Basin NT
Pedirka Basin NT
Georgina Basin NT
Amadeus Basin NT
Amadeus Basin NT
Amadeus Basin NT
Amadeus Basin NT
Amadeus Basin NT
Lander Trough NT
Georgina Basin QLD
Georgina Basin QLD
Georgina Basin QLD
Pedirka Basin SA
Amadeus Basin WA
Amadeus Basin WA
Amadeus Basin WA
Pedirka Basin NT
Pedirka Basin NT
Pedirka Basin NT
Pedirka Basin NT
Pedirka Basin NT
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
Central
CTP Consolidated Entity
Registered
Interest (%)
Other JV Participants
Participant Name
Beneficial
Interest (%)
Rawson Resources Ltd
20%
Beneficial
Interest (%)
100
100
80
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
80
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
CTP Consolidated Entity
Projected
Projected
Registered
Beneficial
Interest (%)
Interest (%)
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
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
(1) For the Magee prospect Block within EP 82 and the Mt Kitty prospect Block within EP 125 the beneficial interest is 86.12%
and 76.54% respectively. The remaining beneficial interest is held by Oil & Gas Exploration Limited (formerly known as He
Nuclear Limited).
(2) For the Simpson, Bejah and Pelinor Sub- Blocks within EP 97.
79