7 October 2015
PAGES (including this page): 105
ABN 45 066 383 971
ASX Market Announcements
ASX Limited
Exchange Centre
Level 4, 20 Bridge Street
Sydney NSW 2000
Annual Report 2014/15
Attached please find Cue Energy Resources Limited’s release with
respect to the above mentioned.
Yours faithfully
Andrew M Knox
Chief Financial Officer
CUE ENERGY OVERVIEW
Cue is an Australian based oil & gas
company with activities in Australia,
New Zealand, Indonesia and the
USA.
THE COMPANY HAS:
Long life production
A strong balance sheet
An active exploration program
CUE ENERGY DIRECTORS
Paul Foley (Chairman)
Stuart Brown
Peter Hazledine
Koh Ban Heng
Brian Smith
CUE ENERGY MANAGEMENT
David Biggs (CEO)
Andrew Knox (CFO)
Jeffrey Schrull (Exp Man)
OFFICE
Level 19
357 Collins Street
Melbourne Vic 3000
CONTACT DETAILS
Tel: +613 8610 4000
Fax: +613 9614 2142
EMAIL
mail@cuenrg.com.au
WEBSITE
www.cuenrg.com.au
LISTINGS
CUE
ASX:
ADR/OTC: CUEYY
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ABN 45 066 383 971
Level 19, 357 Collins Street,
Melbourne Victoria 3000 Australia
T: +61 3 8610 4000
F: 61 3 9614 2142
E: mail@cuenrg.com.au
www.cuenrg.com.au
IMPLEMENTING
OUR STRATEGY
ANNUAL REPORT 2014/15
ABOUT
CUE ENERGY
RESOURCES
CUE ENERGY RESOURCES LIMITED:
ANNUAL REPORT 2014/15
Cue Energy Resources Limited is an oil and
gas exploration and production company
with a focus on South East Asia, Australasia
and now the United States.
Cue Energy Resources has petroleum assets in New
Zealand, Indonesia, Australia and the USA. The company
has continuously grown over recent years through a mix of
acquisitions and discoveries.
It is Cue Energy Resources’ objective to develop a robust
and substantial E & P company with a focus on the SE Asia
and Australasia region through:
• maximising value of existing assets
• building organisational capability
•
aggressively pursuing the capture of new exploration
acreages
• developing a balanced portfolio of exploration,
development
and production assets
actively pursuing value accretive acquisitions
•
COMPANY SNAPSHOT
Ordinary Shares
698,119,720
12 Month Trading Range
7.8¢-12.8¢
Cash at 30 June 2015
$27.6 million
Debt
Nil
Avg FY15 Production
~1800 boe/day
CORPORATE DIRECTORY
AND CONTENTS
1
Share Registry
AUSTRALIA
Computershare Investor Services Pty Ltd
Yarra Falls, 452 Johnston Street
Abbotsford, Victoria 3067 Australia
GPO Box 2975
Melbourne, Victoria 3000 Australia
Telephone: 1300 850 505 (within Australia)
or +61 3 9415 4000 (outside Australia)
Email: web.queries@computershare.com.au
Website: www.computershare.com.au
CORPORATE
DIRECTORY
Directors
Paul G. Foley (Chairman) BCA, LL.B
Stuart A. Brown B.Sc (Hons)
C. Peter Hazledine B.Sc (Hons)
Stock Exchange Listings
AUSTRALIA
Australian Securities Exchange Ltd
525 Collins Street
Melbourne, Victoria 3000 Australia
Koh Ban Heng B.Sc
Brian L. Smith
Chief Executive Officer
D.A.J. Biggs LL.B
Chief Financial Officer/
Company Secretary
A.M. Knox B.Com
Co-Company Secretary
P.M. Moffatt B.Com
Registered Office
Level 19, 357 Collins Street
Melbourne Victoria 3000 Australia
Telephone: + 61 3 8610 4000
Facsimile: + 61 3 9614 2142
Website: www.cuenrg.com.au
Email: mail@cuenrg.com.au
ABN 45 066 383 971
UNITED STATES OF AMERICA
OTC
OTC Markets
304 Hudson Street 3rd Floor
New York, NY 10013 USA
Auditor
BDO East Coast Partnership
Level 14, 140 William Street
Melbourne Victoria 3000 Australia
Bankers
ANZ Banking Group Limited
91 William Street
Melbourne Victoria 3000 Australia
National Australia Bank Limited
Level 4, 330 Collins Street
Melbourne Victoria 3000 Australia
Green Bank
2900 North Loop West
Houston TX 77092 US
PT. Bank Mandiri (Persero) Tbk
Corporate Banking V Group
Plaza Mandiri, 1st Floor
Jl. Jend. Gatot Soebroto Kav 36-38
Jakarta 12190, Indonesia
CONTENTS
1
2
4
6
8
17
22
32
49
Corporate Directory
Snapshot of 2014/15
Joint Operations
Chairman’s Overview
Chief Executive Officer’s Review
Reserves and Resources
Corporate Governance Statement
Directors’ Report
Auditor’s Independence Declaration
Images courtesy of OMV and Santos
50
51
52
54
55
56
57
97
Directors’ Declaration
Financial Statements
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Independent Auditor’s Report
99
Shareholder Information
SNAPSHOT OF
2014/15
AT CUE ENERGY RESOURCES
CUE ENERGY RESOURCES LIMITED:
ANNUAL REPORT 2014/15
2
Cue Energy has delivered a strong financial result for the year ended 30 June 2015,
reporting gross profit from production, up on the previous year. The net profit result is
heavily influenced by non-cash items due principally to a 60% increase in the value of the
Mahakam Hilir PSC ($36.02 million) and a write down of $18.01 million on the carrying
value of the Maari oil field development in New Zealand.
50%
INCREASE
GROSS PROFIT
FROM
PRODUCTION
2015: $23.73 million
(2014: $15.79 million)
384%
INCREASE
IN EBITDA
TO $45.73 M
(2014: $9.44 million)
11%
INCREASE
PRODUCTION
REVENUE
2015: $37.67 million
(2014: $34.00 million)
$40.05
MILLION
NET PROFIT
AFTER TAX
(2014: Loss $2.17 million)
0.66
MILLION
BARRELS OF OIL
EQUIVALENT
PRODUCED
60%
ADDITIONAL
EQUITY IN
MAHAKAM
HILIR
$5.83
MILLION
PROFIT ON
SALE OF PNG
ASSETS
100PER CENT
RESERVES
REPLACEMENT
RATIO
SNAPSHOT OF
2014/15
3
ACTIVITY OVERVIEW
Indonesia
• The Sampang PSC well workover programme
in Indonesia, to increase production and
extend field life, concluded in August with the
Oyong-7 well brought on production, initially
as an oil producer. Installation of onshore gas
compression at the Grati gas plant was completed
in July. This will maintain gas production from
Oyong and Wortel and extend field life.
Preparations in Indonesia continue for drilling
in the Mahakam Hilir PSC with civil construction
activities commenced for the Naga Selatan-2
well, which is planned to be drilled in Q4 2015.
• Planning is underway by the operator to drill 2
•
wells in the Mahato PSC in Indonesia in early 2016.
Australia
• Cue has identified and matured a significant
Mungaroo formation gas prospect which
straddles both the WA-359-P and WA-409-P
permits offshore Western Australia (Cue 100% and
operator). A process has been initiated to farm-
out a material interest in both permits.
New Zealand
• The Maari Growth drilling campaign in New
Zealand was completed with the last of 4 new
wells, MR10, put on production in early July. The
Ensco 107 rig was demobilised in early July and
a multi well workover campaign commenced in
August 2015 to further increase production.
USA
• Cue finalised the purchase of an 80% working
interest in the conventional Pine Mills Woodbine
oilfield in the prolific East Texas Basin, USA. Cue is
operator of the field, which is currently producing
~80 bopd, and is implementing a plan to stabilise
and grow production over the coming months.
OUR JOINT
OPERATIONS
CUE ENERGY RESOURCES
CUE ENERGY RESOURCES LIMITED:
ANNUAL REPORT 2014/15
4
INDONESIA
Mahakam Hilir PSC
*Cue ...................................... 100%
Sampang PSC
*Santos ................................. 45%
SPC ...................................... 40%
Cue(i) ...................................... 15%
Mahato PSC
*Texcal ................................. 51%
Central Sumatra
Energy .................................. 11.5%
Bukit Energy ........................ 25%
Cue ...................................... 12.50%
AUSTRALIA
Carnarvon Basin Permits
WA-359-P
*Cue ...................................... 100%
WA-360-P
*MEO** ................................ 62.5%
Cue ...................................... 37.5%
WA-361-P
*MEO** ................................ 50%
Mineralogy .......................... 35%
Cue ...................................... 15%
WA-389-P
*BHP Billiton ....................... 60%
Cue ...................................... 40%
WA-409-P
*Cue ...................................... 100%
NEW ZEALAND
UNITED STATES
Maari and Manaia Oil Fields
PMP 38160
*OMV .................................... 69%
Todd ...................................... 16%
Horizon ................................ 10%
Cue ...................................... 5%
PEP 51149
*Todd .................................... 80%
Cue ...................................... 20%
PEP51313
*OMV .................................... 30%
Todd ...................................... 35%
Horizon ................................ 21%
Cue ...................................... 14%
PEP 54865
*Todd .................................... 80%
Cue ...................................... 20%
Pine Mills Permit
*Cue ...................................... 80%
Gale Force Petroleum ...... 20%
Additional Information
(i) 8.181878% in the Jeruk field
* Operator
** Title held by North West Shelf Exploration Pty Ltd
OUR JOINT
OPERATIONS
5
CUE ENERGY RESOURCES LIMITED:
ANNUAL REPORT 2014/15
6
CHAIRMAN’S
OVERVIEW
PAUL FOLEY
I am pleased to report that your company performed well in the year
to 30 June 2015, despite a difficult oil price environment for the latter
half of the financial year.
Dear Shareholder,
I am pleased to report that your company performed well
in the year to 30 June 2015, despite a difficult oil price
environment for the latter half of the financial year.
The company reported a gross profit of $23.73 million,
an increase of 50% over the prior year; and production
revenue of $37.67 million, an increase of 11% over the
prior year.
Cue reported a net profit after tax of $40.05 million,
including adjustments to reflect an impairment of
$18.01 million for Maari, a $36.02 million gain on the
acquisition of Singapore Petroleum’s 60% interest in the
Mahakam Hilir PSC in Indonesia, a profit on the sale of our
PNG assets and a foreign exchange gain.
The Maari impairment was principally due to a reserves
reduction as a result of lower than expected net outcomes
from the Maari Growth Project and due to a significantly
lower global oil price outlook. Overall however, during the
year Cue successfully replaced one hundred per cent of its
production over the previous 12 months.
During the year, there were also a number of changes at a
corporate level for the company.
New Zealand Oil and Gas Limited (NZOG) made an
on market take-over bid for the company in February
2015 which resulted in NZOG owning 48.11% of Cue.
Consequent upon NZOG’s shareholding in Cue, new
appointments were made to the Cue Board with the
appointment of Peter Hazledine, Brian Smith and myself
and the resignation of Rowena Sylvester, all in May 2015.
Subsequently in July 2015, I assumed Chairmanship with
the departure of Geoff King and Andrew Young from the
Board and we also welcomed Koh Ban Heng as a director.
On behalf of the Board and shareholders, I thank Geoff,
Andrew and Rowena for their service as directors of Cue.
The key focus for the Company in the 2015 financial year
was the capture of new growth opportunities and the
enhancement of our existing assets.
Consistent with the Company’s onshore focus for new
assets, Cue secured 100% of the Mahakam Hilir PSC
onshore Kalimantan in Indonesia and a 12.5% interest in the
Mahato PSC onshore Sumatra, Indonesia.
The decision to increase our interest in the Mahakam Hilir
PSC was taken after the Company carried out a technical
review of the prospectivity of the permit in 2014, post the
drilling of the Naga Utara -2 well, and identified a shallow
oil target which had not been tested by previous drilling in
the PSC. A well is planned to be drilled in the permit in the
fourth quarter of calendar 2015.
The Mahato PSC covers a highly prospective area onshore
central Sumatra, close to several large producing oil fields.
Multiple appraisal and exploration opportunities have been
mapped and we expect to drill two wells in the field in the
first half of calendar 2016.
Cue has also been working to maximize value from its
existing producing assets – Maari and Sampang.
During the year the Maari operator undertook a
development drilling programme which increased
production from the field to 16,000 barrels of oil per day,
although somewhat disappointingly with cost-overruns
due to a range of drilling and weather factors. Well
workovers currently underway are expected to further
increase daily production in the 2015/16 year.
At Sampang, well workovers and the installation of
compression has enabled an improvement in oil and gas
production and extended field life to at least 2018.
In early June 2015, Cue purchased an 80% interest in the
Pine Mills producing oil field in East Texas which was seen
as a suitable opportunity to increase our net oil production
and booked reserves at an acceptable cost. At acquisition,
this field was producing approximately 80 barrels of oil
per day and the Company is taking steps through well
interventions to increase production to around 130 barrels
per day. Cue is also reviewing the feasibility of undertaking
a 3D survey of the field to understand the production
potential of the deeper structures in the field.
CHAIRMAN’S
MESSAGE
7
The Company has recently launched the farm-out of
its 100% owned WA-359-P and WA-409-P permits in
the offshore Carnarvon Basin, promoting the Ironbark
prospect, a large gas opportunity which straddles both
permits. We recognise that we need significant partners in
anything we do in this basin, both for their expertise and for
their contribution to the costs of our activities. We should
have an indication of market interest in the farm-out by late
December 2015.
Cue’s balance sheet remains robust. At the end of the
financial year, Cue’s cash balance was $27.6 million and the
company has no debt. The Company is in a position to fund
its planned activities for the next year, even in the current
low oil price environment.
Your Board considers that we are likely to remain in a low
oil price environment for some time, or at very least that
we should plan on that basis. The resulting environment for
small to mid-cap exploration and production companies
is difficult but also presents opportunities, especially for
companies like Cue with cash reserves and production
revenue. As we have signalled, Cue is undertaking a review
of its strategy and its portfolio in light of the current market
conditions and I expect to be able to update you on this
work at the AGM in November.
I would like to thank both directors and staff for their
efforts and support during the year and look forward to
an active 2016.
Paul Foley
Chairman
29 September 2015
CUE ENERGY RESOURCES LIMITED:
ANNUAL REPORT 2014/15
8
CHIEF EXECUTIVE
OFFICER’S REVIEW
DAVID BIGGS
Cue’s priorities during the 2014/15 year were to capture new prospective exploration
acreage, work to maximise both the value of existing exploration acreage and work to
maximise the value of our producing assets.
The year was notable for considerable activity in all
these areas but was significantly impacted by a dramatic
reduction in the price of oil – falling from over US$100 per
barrel in mid 2014 to around US$50 per barrel by mid 2015.
In this environment, Cue has been deliberately selective
in its application of funds and is focusing on opportunities
with near term returns, consistent with a careful and
prudent management of its cash resources. Cue is
also focused on managing its costs in this low oil price
environment.
2014/15
Cue’s share of sales production for the year from our New
Zealand, Indonesian and Papua New Guinea fields was
0.66 mmboe. This was down on expectations due to the
sale of the PNG producing assets in December 2014 and
production interruptions at Maari due to a prolonged
development drilling campaign. The Maari development
drilling campaign in New Zealand was initially scheduled
to be completed in 11 months, but took 18 months due to
difficult drilling conditions.
The company’s principal focus for its application of cash
during the year was the Maari development drilling and well
workovers and the installation of compression at Sampang
in Indonesia. The Maari development drilling campaign
comprised 4 wells which boosted total field production
from ~9,000 bopd to ~16,000 barrels of oil per day (bopd).
The joint venture is currently undertaking a series of well
workovers which will further increase production by at least
another 2,000 bopd.
At Sampang, the joint venture carried out a programme
of well interventions at the Oyong field and installed
compression for the Wortel field, both of which will
maintain and enhance production until at least 2018. We
also received a significant increase in the price of gas sold
from Oyong from 1 July, 2015.
During the year, the company participated in one
exploration well. Disappointingly the Whio- 1 well, offshore
Taranaki, New Zealand, where we were free carried, was
unsuccessful.
In January 2015, Cue agreed to purchase the 60% of the
Mahakam Hilir PSC that it did not own from its joint venture
partner, Singapore Petroleum. The deep wells drilled in
the PSC by the joint venture during 2012-14 encountered
sub-commercial hydrocarbon shows, and Cue undertook
a complete review of the prospectivity of the PSC and
identified a number of shallow oil targets. The presence of
these targets influenced Cue to remain in the PSC and to
acquire a 100% interest. We expect to commence drilling
operations at Naga Selatan – 2 in December 2015.
Cue also acquired a 12.5% interest in the Mahato PSC
onshore Sumatra in Indonesia. The PSC sits close to several
large producing oil fields and a seismic programme has
been undertaken to establish optimum locations for two
wells to be drilled in 2016. The PSC comprises a large area
with multiple, independent oil targets.
During the year, Cue also undertook a review of its
position in its three PNG permits - PRL14, PRL9 and PDL3.
Considering the small interests held in some of these
permits and the upcoming commitments in others, a
decision was taken to sell Cue’s position. This transaction
closed in December 2014 and Cue took a profit on sale of
$5.83 million and avoided $14 million in future obligations
in the permits.
In June 2015, Cue finalised an agreement to purchase
an 80% working interest in a conventional Woodbine oil
field in the prolific East Texas Basin. Cue now operates the
field, which on acquisition was producing ~80 bopd, and
is implementing a plan to stabilise and grow production to
~130 bopd in the coming months.
As previously foreshadowed, we also received substantial
insurance recoveries during the year and post 2014/15 year
end in respect of the repairs to the Maari mooring system
and swivel which were undertaken in late 2013.
It is rare that a company can replace its production in a
year. Cue has managed to replace 100% of its 2014/15
production, despite a reserves reduction at Maari and sale
of the SE Gobe oilfield, due to reserves improvements at
Sampang and Pine Mills.
CHIEF EXECUTIVE
OFFICER’S REVIEW
9
2015/16
As a result of the development activities at Maari and
Sampang, and barring any production interruptions,
Cue can look forward to strong production for
2015/16.
With the ongoing well workovers at Maari, production
should increase post financial year end to over 16,000
bopd. The well workovers and the installation of
compression at Sampang has already enabled the
maintenance of gas production and the extension of
field life until at least 2018.
We plan to increase daily oil production at Pine Mills
by 60% with a series of well interventions and we are
looking at the feasibility of conducting a 3D seismic
survey to identify deeper oil targets.
In New Zealand, Cue is a 20% participant in the
planned Te Kiri well onshore Taranaki, which is due to
commence drilling in December 2015. The Operator
is planning a deviated well to intersect a potentially oil
bearing objective in the Miocene and a deeper Eocene
gas bearing objective.
Cue has also embarked on the farm-out of its 100%
owned WA-359-P and WA-409-P permits in the
offshore Carnarvon Basin, off the coast of Western
Australia. The Company is reviewing two of its other
permits in the area – WA-360-P and WA-361-P in order
to determine the best way to manage these assets
based on the results of the farm-out effort.
The Ironbark prospect in WA 359-P/WA-409-P is a
world class potential gas resource. At the time of
writing Cue has already received expressions of interest
from established LNG players and I expect we will be
able to provide a progress update in respect of the
farm-out effort at the Company’s upcoming annual
general meeting.
In summary, the Company’s focus in 2015/16 will be to
execute the work programme it currently has in front
of it, carefully managing its commitments and cash in a
very uncertain oil price environment.
Looking briefly at our current assets:
CUE ENERGY RESOURCES LIMITED:
ANNUAL REPORT 2014/15
10
CHIEF EXECUTIVE OFFICER’S REVIEW (CONT’)
AUSTRALIA
WA-360-P
Cue Interest: 37.5%
Operator: MEO Australia Limited
The WA-360-P Joint Venture is completing the reprocessing
of approximately 650 km² of existing 3D seismic data over
the Maxwell prospect to improve imaging of the structure.
There is no well commitment in the current licence term.
WA-361-P
Cue Interest: 15%
Operator: MEO Australia Limited
A work programme variation was approved to allow the
Joint Venture to complete geotechnical studies ahead of
deciding whether to make any commitment to drill a well.
The permit expires in January 2016.
WA-389-P
Cue Interest: 40%
Operator: BHP Billiton Petroleum (Australia) Pty Ltd
Reprocessing of existing 2D and 3D seismic data is
underway with results expected during 2016.
EXPLORATION
WA-359-P
Cue Interest: 100%
Operator: Cue Exploration Pty Ltd
Cue has evaluated the regional prospectivity in all of its
Western Australia offshore permits and has identified an
exciting new play type associated with the prolific gas-
bearing Mungaroo formation. The Ironbark prospect, a
Mungaroo formation prospect with multiple objectives,
has been identified as the primary candidate for drilling in
WA-359-P. Cue has received approval to have the Permit
Year 3 well commitment suspended to allow further time
to mature the prospect and plan for drilling. The well
is now required to be drilled by October 2016. Cue has
commenced a farm-out process to find suitable joint
venture partner(s) to participate in the drilling of the well.
WA-409-P
Cue Interest: 100%
Operator: Cue Exploration Pty Ltd
Cue acquired 100% of WA-409-P in February 2015 and
is now Operator of the permit. A 12 month extension to
Permit Year 6 until April 2016 has been granted to allow
further technical analysis of the Ironbark prospect which
has been mapped as straddling both WA-359-P and
WA-409-P. WA-409-P is included in the current farmout
process with WA-359-P, with the initial well planned for
WA-359-P and if successful, possible appraisal drilling in
WA- 409-P.
CHIEF EXECUTIVE
OFFICER’S REVIEW
11
CARNARVON BASIN LOCATION MAP
Australia
LEGEND
LEGEND
LEGEND
LEGEND
Cue Permit
Gas Field
Prospect
Cue Permit
Oil Field
Gas Field
Cue Permit
Oil Field
Gas Field
Gas Condensate Field
Onshore Gas
Cue Permit
Oil Field
Gas Field
Gas Discovery
SEG Unitisation
Gas Line
Liquids Line
WA-389-PWA-359-PWA-360-PWA-360-PWA-361-PWA-361-P25kmWA-389-PWA-389-PWA-409-PWA-359-PWA-361-PGoodwyn WheatstoneNorth RankinIronbarkAngelIagoPlutoEurytionWest Tryal RocksIo/Jansz CHIEF EXECUTIVE OFFICER’S REVIEW (CONT’)
NEW ZEALAND
CUE ENERGY RESOURCES LIMITED:
ANNUAL REPORT 2014/15
12
EXPLORATION
PEP 51149
Cue Interest: 20%
PRODUCTION
PMP 38160
Cue Interest: 5%
Operator: Todd Exploration Limited
Operator: OMV New Zealand Limited
Maari and Manaia Fields
The Maari development drilling programme is now
complete with production at ~16,000 barrels of oil per
day. Over the 18 month long project, a total of four new
production wells were drilled using the Ensco 107 jack-up
rig. The Joint Venture is planning to further increase
the field’s production rate up to 20,000 bopd with the
optimisation of production and an upcoming 2015 work-
over campaign which commenced in August with the
workover of the MR3 well.
The Te Kiri North-1 well is planned to spud in calendar 2015.
The Operator has proposed a well which will be deviated
from the surface location to intersect a potentially oil-
bearing objective in the Miocene-age Mount Messenger
Formation and a deeper Eocene-age gas-bearing objective.
Te Kiri North-1 will be drilled to test an interval interpreted
by the Operator to be up-dip of hydrocarbon shows in the
Te Kiri-1 well.
Cue’s estimate of the mean prospective recoverable
resource is 2 million boe net to Cue. Existing infrastructure
nearby will facilitate early commercialisation in a success
case.
PEP 54865
Cue Interest: 20%
Operator: Todd Exploration Limited
The permit carries a minimum work program of 285 km² of
3D seismic to be acquired, processed and interpreted prior
to June 2016. The Joint Venture may elect to commit to a
well before December 2016 to test Early Tertiary and Late
Cretaceous reservoir objectives, or surrender the permit.
Planning for the 3D seismic survey has commenced and
is planned for early 2016 pending boat availability. The
Joint Venture is seeking a farminee to fund the seismic
programme.
PEP 51313
Cue Interest: 14%
Operator: OMV New Zealand Limited
The Joint Venture is focused on assessing the remaining
potential associated with the Matariki trend up-dip of the
Maari field. Studies are being completed by the Operator
to determine the feasibility of applying seismic inversion
technology to reduce the geologic risk of a potential
stratigraphic prospect, Matariki.
CHIEF EXECUTIVE
OFFICER’S REVIEW
13
TARANAKI PENINSULA LOCATION MAP
New Zealand
PEP 54865
Taranaki
Peninsula
Tui
PEP 51149
Maui
LEGEND
LEGEND
LEGEND
Maari
Manaia
PMP 38160
LEGEND
Cue Permit
Gas Field
Prospect
Cue Permit
Oil Field
Gas Field
Cue Permit
Oil Field
Gas Field
Gas Condensate Field
Onshore Gas
Cue Permit
PEP 51313
Oil Field
Gas Field
Gas Discovery
SEG Unitisation
Gas Line
Liquids Line
10km
CHIEF EXECUTIVE OFFICER’S REVIEW (CONT’)
INDONESIA
CUE ENERGY RESOURCES LIMITED:
ANNUAL REPORT 2014/15
14
EXPLORATION
Mahakam Hilir PSC - Kutei Basin
Cue Interest: 100%
Operator: Cue Kalimantan Pte Ltd
Cue now holds a 100% interest in, and is the Operator of,
the Mahakam Hilir PSC in the prolific Kutei Basin onshore
Kalimantan.
Extensive field mapping in the block has helped identify a
final location for the Naga Selatan-2 well. Field geologists
have identified several active oil seeps during their work
and this critical information has been used in updating the
structural interpretation of the prospect and selecting an
initial drill location.
Naga Selatan 2 well planning is progressing, with the
contract signed for the construction of the drilling pad and
access roads and tenders received for the drilling rig. The
well is planned to be drilled in December 2015.
This oil prospect lies along trend from the large Sei Nangka
and Pelarang Selatan oil fields. The prospect has multiple
shallow targets, located at depths down to 3000’ TVD.
Additional exploration objectives have also been identified
on the existing seismic data.
Mahato PSC - Central Sumatra Basin
Cue Interest: 12.5%
Operator: Texcal Mahato Ltd
The Mahato PSC covers a highly prospective area, close
to several large producing oil fields. Multiple appraisal and
exploration opportunities have been mapped and 2 wells
are currently planned for early 2016. A seismic programme,
in addition to the recently completed seismic programme
to identify well locations, will be undertaken in late 2015 to
high grade further exploration targets.
MAHAKAM HILIR PSC LOCATION MAP
MAHATO PSC LOCATION MAP
Pelarang Samarinda
Sambutan
Kalimantan
Mahakam Hilir
PSC
Sanga Sanga
5km
NS-2
Proposed NS-2 Well
Nangka
Pamaguan
Sumatra
Java
Bangko
Balam South
40km
Duri
Libo SE
Minas
Kotabatak
Petapahan
Mahato
PSC
Kalimantan
Sumatra
Java
CHIEF EXECUTIVE
OFFICER’S REVIEW
15
Kalimantan
Sumatra
Java
Maleo
LEGEND
Peluang
Cue Permit
Gas Field
Prospect
LEGEND
LEGEND
LEGEND
Cue Permit
Oil Field
Gas Field
Cue Permit
Oil Field
Gas Field
Gas Condensate Field
Onshore Gas
Cue Permit
Oil Field
Gas Field
Gas Discovery
SEG Unitisation
Gas Line
Liquids Line
PRODUCTION
Sampang PSC - Madura Strait
Cue Interest: 15%
Operator: Santos (Sampang) Pty Ltd
Oyong Field
A significant gas price increase has been negotiated with
the existing buyer with effect from 1 July 2015.
A programme of well interventions was finalised with the
completion of Oyong -7 in August, 2015. The Operator
is also finalising a permit wide assessment of the
exploration potential in Sampang.
Wortel Field
The installation of compression at the Grati gas plant
was completed in July 2015 and will ensure that the
Wortel project will continue to meet its gas sales contract
volumes and extend the life of the field until at least 2018.
SAMPANG PSC LOCATION MAP
Madura Island
East Java
Wortel
Oyong
Jeruk
Grati Onshore
Gas Facilities
30km
CUE ENERGY RESOURCES LIMITED:
ANNUAL REPORT 2014/15
16
CHIEF EXECUTIVE OFFICER’S REVIEW (CONT’)
UNITED STATES
OF AMERICA
PRODUCTION
Pine Mills – East Texas
Cue Interest: 80%
Operator: Cue Resources, Inc
On the 5 June 2015, Cue finalised an agreement to
purchase an 80% working interest in a conventional
Woodbine oilfield in the prolific East Texas Basin. Cue now
operates the field which is producing ~80 bopd (100%) and
is implementing a plan to stabilise and grow production
over the coming months.
David Biggs
Chief Executive Officer
29 September 2015
PINE MILLS LOCATION MAP
Wood County, Texas
Yantis
Winsboro
United States
LEGEND
LEGEND
Cue Permit
Gas Field
Prospect
Cue Permit
Oil Field
Gas Field
Quittman
Alba
LEGEND
Nola-Edwards
Cue Permit
Oil Field
Gas Field
McCrary
Pine Mills
LEGEND
Cue Permit
Oil Field
Gas Field
Gas Condensate Field
Haynesville Dome
Gas Discovery
Onshore Gas
10 km
Hawkins
SEG Unitisation
Gas Line
Liquids Line
RESERVES AND
RESOURCES
CHIEF EXECUTIVE
RESERVES AND
RESOURCES
OFFICER’S REVIEW
17
ANNUAL RESERVES AND RESOURCES SUMMARY
NET TO CUE ENERGY RESOURCES LIMITED AS AT 30 June 2015
RESERVES
PROVED (1P)
PROVED AND PROBABLE (2P)
DEVELOPED
UNDEVELOPED
DEVELOPED
UNDEVELOPED
CUE
INTEREST
OIL AND
CONDEN-
SATE
MMBBL
FIELD (LICENCE)
INDONESIA
Oyong (1) (2) (Sampang PSC)
Wortel (1)(5) (Sampang PSC)
15%
15%
0.002
0.005
NEW ZEALAND
Maari (4) (PMP 38160)
5%
0.885
US
Pine Mills (3) (TX)
Total Reserves
CONTINGENT RESOURCES
FIELD (LICENCE)
INDONESIA
80%
0.566
1.458
CUE
INTEREST
Jeruk (Sampang PSC)
8.18%
NEW ZEALAND
Maari (4) (PMP 38160)
5%
Total Contingent Resources
NOTE:
OIL AND
CONDEN-
SATE
MMBBL
OIL AND
CONDEN-
SATE
MMBBL
GAS
BSCF
GAS
BSCF
0.699
5.188
-
-
-
-
0.035
-
-
-
-
-
-
0.068
0.005
1.397
0.702
2.172
5.887
0.035
OIL AND
CONDEN-
SATE
MMBBL
GAS
BSCF
-
-
0.003
3.253
GAS
BSCF
2.784
5.188
-
-
0.343
-
-
-
7.972
0.346
3.253
BEST ESTIMATE (2C)
OIL AND
CONDENSATE
MMBBL
1.244
0.460
1.704
GAS
BSCF
-
-
-
(1)
(2)
(3)
CUE reserves are net of Indonesian government share of production.
Estimates of in-place and recoverable gas volumes include both free gas and solution gas.
Pine Mills reserves are CUE’s net entitlement and it has been reviewed by Christian Snyder, CUE Resources Inc. in July 2015.
(4) Maari/Manaia fields’ reserves is based on an independent technical review conducted by RISC. Economic cut-off being applied at 30/06/2024 (1P)
and 31/03/2032 (2P) based on RISC’s technical recoverable quantities, CUE’s OPEX and Oil future forward price assumptions.
(5) Wortel field reserves has been reviewed by CUE Energy Resources Ltd. in July 2015.
(6)
(7)
(8)
SE Gobe (PNG) asset has been divested on 20 Nov 2014.
Reserves Replacement Ratio (RRR) is calculated as the change in 2P reserves divided by the total production in the same period.
Some minor rounding errors are present.
18
RESERVES AND RESOURCES (CONT’)
GOVERNANCE ARRANGEMENTS
AND INTERNAL CONTROLS
CUE estimates and reports its petroleum reserves and
resources in accordance with the definitions and guidelines
of the Petroleum Resources Management
System 2007 (SPE-PRMS), published by the Society of
Petroleum Engineers (SPE).
All estimates of petroleum reserves reported by CUE
are prepared by, or under the supervision of, a qualified
petroleum reserves and resources evaluator.
To ensure the integrity and reliability of data used in the
reserves estimation process, the reserves and production
data is reviewed and quality controlled by senior
professional reservoir and geological staff at CUE. During
each petroleum reserves review, this data is updated,
analysed and reconciled against the previous year’s data.
CUE has engaged the services of RISC to independently
assess the Maari reserves.
CUE reviews and updates its oil reserves position on an
annual basis and reports the updated estimates as of 30
June each year. CUE reviews and updates its gas reserves
position as frequently as required by the magnitude of the
petroleum reserves and changes indicated by new data.
QUALIFIED PETROLEUM
RESERVES AND RESOURCES
EVALUATOR STATEMENT
The reserves and contingent resource report as at 30 June
2015 was prepared in accordance with the SPE-PRMS.
This reserve and resource information contained in this
summary is based on and fairly represents information
and supporting documentation prepared by, or under
the supervision of Aung Moe (Senior Petroleum Engineer)
who is a full time employee of the Company. Mr Moe is a
is a member of SPE and his qualifications include a Master
degree in Petroleum Engineering and has over 16 years
of experience in the Oil & Gas industry and is a qualified
petroleum reserves and resources evaluator (QPRRE) as
defined by ASX oil and gas listing rules.
Pine Mills Reserves review was carried out in accordance
with the SPE Reserves Auditing Standards and the SPE-
PRMS guidelines by Mr. Christian Snyder (Field Engineer)
who is contracted by CUE Resources Inc. Mr. Snyder holds
a Bachelor’s Degree in Petroleum Engineering from Texas
A&M University and has over 19 years of experience in
the Oil & Gas industry and is a member of the Society of
Petroleum Engineers. Mr. Snyder is a qualified person as
defined in the ASX Listing Rule 5.41.
RISC CONSENTS
Information on the Reserves and Contingent Resources
in this release relating to the Maari/ Manaia fields is based
on an independent review conducted by RISC Operations
Pty. Ltd (RISC) and fairly represents the information and
supporting documentation reviewed. The review was
carried out in accordance with the SPE Reserves Auditing
Standards and the SPE-PRMS guidelines under the
supervision of Mr. Geoffrey J Barker, a Partner of RISC, a
leading independent petroleum advisory firm.
Mr. Barker is a member of SPE and his qualifications include
a Master of Engineering Science (Petroleum Engineering)
from Sydney University. Mr Barker has more than 30
years of global experience in the upstream hydrocarbon
industry and is a qualified petroleum reserves and
resources evaluator (QPRRE) as defined by ASX oil and gas
listing rules. Mr Barker consents to the inclusion of this
information in this report.
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15 RESERVES AND
RESOURCES
19
SUMMARY OF MOVEMENTS IN RESERVES AND RESOURCES
TABLE 1: Oil and Condensate Reserves and Resources Reconciliation with 31 December 2013
Proved Oil and Condensate Reserves (MMbbls)
FIELD (LICENCE)
INDONESIA
CUE
INTEREST
END 2013
RESERVES
PRODUCTION
DISCOVERIES/
EXTENSIONS/
REVISIONS
ACQUISITIONS/
DIVESTMENTS
30 JUNE
2015
RESERVES
Oyong (1) (2) (Sampang PSC)
Wortel (1)(5) (Sampang PSC)
15%
15%
0.006
0.007
(0.093)
(0.003)
NEW ZEALAND
Maari (4) (PMP 38160)
5%
1.009
(0.234)
US
Pine Mills (3) (TX)
80%
-
-
3.286%
0.029
(0.015)
PNG
SE Gobe (6) (PDL 3)
Total Proved Oil and
Condensate Reserves
0.089
0.001
0.145
-
-
-
-
-
0.002
0.005
0.920
0.566
0.566
(0.014)
-
1.051
(0.345)
0.235
0.552
1.493
Proved & Probable Oil and Condensate Reserves (MMbbls)
FIELD (LICENCE)
INDONESIA
CUE
INTEREST
END 2013
RESERVES
PRODUCTION
DISCOVERIES/
EXTENSIONS/
REVISIONS
ACQUISITIONS/
DIVESTMENTS
30 JUNE
2015
RESERVES
Oyong (1) (2) (Sampang PSC)
Wortel (1)(5) (Sampang PSC)
15%
15%
0.034
0.010
(0.093)
(0.003)
0.128
0.002
NEW ZEALAND
Maari (4) (PMP 38160)
5%
2.344
(0.234)
(0.370)
-
-
-
0.068
0.008
1.740
US
Pine Mills (3) (TX)
80%
-
-
PNG
SE Gobe (6) (PDL 3)
3.286%
0.045
Total Proved & Probable Oil
and Condensate Reserves
2.431
(0.015)
(0.345)
-
-
0.702
0.702
(0.030)
-
(0.241)
0.672
2.518
2C Contingent Oil and Condensate Resources (MMbbls)
FIELD (LICENCE)
INDONESIA
CUE
INTEREST
END 2013
RESERVES
PRODUCTION
DISCOVERIES/
EXTENSIONS/
REVISIONS
ACQUISITIONS/
DIVESTMENTS
30 JUNE
2015
RESERVES
Jeruk (Sampang PSC)
8.18%
1.244
NEW ZEALAND
Maari (4) (PMP 38160)
Total Contingent Oil and
Condensate Resources
5%
-
1.244
-
-
-
-
0.460
0.460
-
-
-
1.244
0.460
1.704
RESERVES AND RESOURCES (CONT’)
20
TABLE 2: Gas Reserves and Resources Reconciliation with 31 December 2013
Proved Gas Reserves (BCF)
FIELD (LICENCE)
INDONESIA
Oyong (1) (2) (Sampang PSC)
Wortel (1)(5) (Sampang PSC)
NEW ZEALAND
Maari (4) (PMP 38160)
US
Pine Mills (3) (TX)
PNG
FIELD (LICENCE)
INDONESIA
Oyong (1) (2) (Sampang PSC)
Wortel (1)(5) (Sampang PSC)
NEW ZEALAND
Maari (4) (PMP 38160)
US
Pine Mills (3) (TX)
PNG
SE Gobe (6) (PDL 3)
2.606%
Total Proved Gas Reserves
Proved & Probable Gas Reserves (BCF)
CUE
INTEREST
END 2013
RESERVES
PRODUCTION
DISCOVERIES/
EXTENSIONS/
REVISIONS
ACQUISITIONS/
DIVESTMENTS
30 JUNE
2015
RESERVES
15%
15%
5%
80%
0.673
4.490
-
-
3.760
8.924
(1.515)
(2.986)
1.540
3.684
-
-
-
-
-
-
(4.501)
5.224
-
-
-
-
(3.760)
(3.760)
0.699
5.188
-
-
-
5.887
CUE
INTEREST
END 2013
RESERVES
PRODUCTION
DISCOVERIES/
EXTENSIONS/
REVISIONS
ACQUISITIONS/
DIVESTMENTS
30 JUNE
2015
RESERVES
15%
15%
5%
80%
2.825
5.940
-
-
(1.515)
(2.986)
1.474
5.487
-
-
-
-
-
-
-
-
-
-
(4.584)
2.784
8.441
-
-
-
SE Gobe (6) (PDL 3)
2.606%
4.584
Total Proved & Probable
Gas Reserves
13.349
(4.501)
6.961
(4.584)
11.225
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15
0.002
0.002
0.002
0.566
0.566
0.566
0.005
0.005
0.005
0.702
0.702
0.702
0.068
0.068
0.068
0.008
0.008
0.008
PROVED (1P)
Oil and Condensate Reserves (MMbbls)
PROVED & PROBABLE (2P)
Oil and Condensate Reserves (MMbbls)
RESERVES AND
RESOURCES
21
0.002
0.002
0.002
0.002
0.002
0.566
0.566
0.566
0.566
0.566
0.005
0.005
0.005
0.005
0.005
0.702
0.702
0.702
0.702
0.702
0.068
0.068
0.068
0.068
0.068
0.008
0.008
0.008
0.008
0.008
0.920
0.920
0.920
0.699
0.699
0.699
0.920
0.920
0.920
0.920
0.920
1.740
1.740
1.740
2.784
2.784
2.784
1.740
1.740
1.740
1.740
1.740
PROVED (1P)
Gas Reserves (BSCF)
PROVED & PROBABLE (2P)
Gas Reserves (BSCF)
0.699
0.699
0.699
0.699
0.699
2.784
2.784
2.784
2.784
2.784
5.188
5.188
5.188
8.441
8.441
8.441
0.460
0.460
0.460
5.188
5.188
5.188
5.188
5.188
8.441
8.441
8.441
8.441
8.441
Oyong (Indonesia)
Oyong (Indonesia)
Oyong (Indonesia)
Wortel (Indonesia)
Wortel (Indonesia)
Wortel (Indonesia)
Maari (New Zealand)
Maari (New Zealand)
Maari (New Zealand)
Pine Mills (US)
Pine Mills (US)
Pine Mills (US)
Oyong (Indonesia)
Oyong (Indonesia)
Oyong (Indonesia)
Oyong (Indonesia)
Oyong (Indonesia)
Wortel (Indonesia)
Wortel (Indonesia)
Wortel (Indonesia)
Wortel (Indonesia)
Wortel (Indonesia)
Maari (New Zealand)
Maari (New Zealand)
Maari (New Zealand)
Maari (New Zealand)
Maari (New Zealand)
Pine Mills (US)
Pine Mills (US)
Pine Mills (US)
Pine Mills (US)
Pine Mills (US)
Oyong (Indonesia)
Oyong (Indonesia)
Oyong (Indonesia)
Wortel (Indonesia)
Wortel (Indonesia)
Wortel (Indonesia)
Oyong (Indonesia)
Oyong (Indonesia)
Wortel (Indonesia)
Wortel (Indonesia)
Oyong (Indonesia)
Oyong (Indonesia)
Oyong (Indonesia)
Wortel (Indonesia)
Wortel (Indonesia)
Wortel (Indonesia)
2C CONTINGENT
Oil and Condensate Resources(MMbbls)
0.460
0.460
0.460
0.460
0.460
Jeruk (Indonesia)
Jeruk (Indonesia)
Jeruk (Indonesia)
Maari (New Zealand)
Maari (New Zealand)
Maari (New Zealand)
Jeruk (Indonesia)
Jeruk (Indonesia)
Maari (New Zealand)
Maari (New Zealand)
Jeruk (Indonesia)
Jeruk (Indonesia)
Jeruk (Indonesia)
Maari (New Zealand)
Maari (New Zealand)
Maari (New Zealand)
1.244
1.244
1.244
1.244
1.244
1.244
1.244
1.244
CUE ENERGY RESOURCES LIMITED:
ANNUAL REPORT 2014/15
22
CORPORATE
GOVERNANCE
STATEMENT
INTRODUCTION
The Directors of Cue Energy Resources Limited recognise
the need for high standards of corporate governance and
are focused on fulfilling their responsibilities individually
and as a Board to all of the Company’s stakeholders.
In addition to the information contained in this statement,
the Company’s website (www.cuenrg.com.au) contains a
dedicated corporate governance section which includes
copies of the key corporate governance policies adopted
by the Company.
The Company endorses the ASX Corporate Governance
Council’s Corporate Governance Principles and
Recommendations (with 2010 amendments) (“ASX
Principles”).
Unless otherwise disclosed, the Company has in place
corporate governance practices which comply with the ASX
Principles.
The following statement outlines the practices adopted by
the Company.
ASX CORPORATE
GOVERNANCE PRINCIPLES
AND RECOMMENDATIONS
In March 2014, the Australian Stock Exchange (ASX)
Corporate Governance Council released the third
edition of its Corporate Governance Principles and
Recommendations (Recommendations). The Company has
chosen to adopt the third edition of the Recommendations.
Throughout the year, Cue continued the corporate
governance practices disclosed in our 2014 Corporate
Governance Statement (which complied with the second
edition of the Recommendations) and, where appropriate,
updated its arrangements and reporting to reflect the new
Recommendations.
Principle 1: Laying solid foundations for
management and oversight
Recommendation 1.1: Companies should establish the
functions reserved to the board and those delegated to
senior executives and disclose those functions.
The role of the Board is to lead and oversee the
management and direction of the Company.
After appropriate consultation with Executive Management,
the Board:
• defines and sets the Company’s strategic direction
and business objectives and subsequently monitors
performance and achievement of those objectives;
• oversees the reporting on matters of compliance
with corporate policies and laws, takes responsibility
for risk management processes, review of Executive
management remuneration practices and insurance
needs of the Company;
• monitors financial performance and approves budgets;
and
reports to shareholders.
•
The Board has delegated authority for the running of the
day to day business to the CEO.
Recommendation 1.2: Companies should disclose
the process for evaluating the performance of senior
executives.
The performance of senior executives is reviewed annually
as part of the duties performed by the Remuneration
and Nomination Committee. Performance measures and
targets for the Company and individual personnel are
established annually. Company and individual performance
in achieving these targets is assessed by the Board and line
management.
Recommendation 1.4 Company Secretary.
The appointment and removal of a Company Secretary is a
matter for decision by the Board. The Company Secretaries,
Andrew Knox and Pauline Moffatt, are accountable directly
to the Board (through the Chairman) on all matters to do
with the proper functioning of the Board.
Details of the Company Secretaries are set out in the Annual
Report.
Principle 2: Structure the Board to add value
Recommendation 2.1: A majority of the board should be
independent directors.
Recommendation 2.2: The Chair should be an
independent director.
Recommendation 2.3: The role of the Chairman and the
CEO should not be exercised by the same individual.
CORPORATE
GOVERNANCE
STATEMENT
23
The current Board is made up of 5 independent non-
executive Directors. The Chairman is non-executive and
independent
• Paul G. Foley (Chairman)
Stuart A. Brown
•
• C. Peter Hazledine
• Koh Ban Heng
• Brian L. Smith
The Board comprises a broad base of industry, business,
technical, administrative, corporate skills and experience
considered necessary to represent the shareholders and
fulfil the business objectives of the Company. The details
of background, experience and professional skills of each
Director are set out on the Company’s website and on
pages 32 to 33 of this report.
Each of the Directors is entitled to seek independent advice
at the Company’s expense to assist them to carrying out
their responsibilities.
The Board reviews, at least annually, the composition of the
Board to determine if additional core strengths are required
to be added in light of the nature of the Company’s
businesses and its objectives.
One third of the Directors retires annually and is free to
seek re-election by shareholders.
Recommendation 2.4: The board should establish a
nomination committee.
The Board has established a Remuneration and Nomination
Committee charter. The charter outlines the responsibilities
of the committee, and is available on the Company’s
website.
The committee is comprised of:
Stuart A. Brown (Chairman)
•
• C. Peter Hazledine
Andrew Young was also Chairman of this committee whilst
a Director of the Company.
Recommendation 2.5: Companies should disclose the
process for evaluating the performance of the board, its
committees and individual directors.
The Board is responsible for evaluating Board candidates
and recommending individuals for appointment to the
Board. The Board may engage an independent recruitment
firm to undertake a search for suitable candidates.
Cue undertakes appropriate background and screening
checks prior to nominating a director for election by
shareholders, and provides to shareholders all material
information in its possession concerning the director
standing for election or re-election in the explanatory notes
accompanying the notice of meeting.
The Remuneration and Nomination Committee have
delegated responsibility to the chairman of the Board
to undertake annual performance evaluations. The
performance evaluations are designed to review the
board’s performance and effectiveness of achieving its set
objectives and targets. There are no written agreements
with Directors, however the Chairman discusses with each
Director their requirements, performance and aspects
of involvement in the Company. The Remuneration
and Nomination Committee is also responsible for
the performance evaluations of the senior executives,
individually and together. This is reviewed against the
discussed and agreed objectives of the Company and their
effectiveness in carrying out those objectives.
Recommendation 2.6: Company induction and
professional development of directors.
The Company has a program for the induction of
new Directors. This induction covers all aspects of the
Company’s operations so as to ensure that new Directors
are able to fulfil their responsibilities and contribute to
Board decisions.
Principle 3: Promote ethical and responsible
decision making
Recommendation 3.1: Companies should establish a
code of conduct and disclose the code or a summary
of the code as to the practices necessary to maintain
confidence in the Company’s integrity, the practices
necessary to take into account their legal obligations
and the reasonable expectations of their stakeholders
and the responsibility and accountability of the
individuals for reporting and investigating reports of
unethical practices.
The Company has established a code of conduct which
recognises the Company’s commitment to business
and corporate ethics and recognition of the interests of
shareholders. Directors, senior management, employees
and where relevant and to the extent possible, contractors
of the Company are required to comply with the code of
conduct.
CUE ENERGY RESOURCES LIMITED:
ANNUAL REPORT 2014/15
24
CORPORATE GOVERNANCE STATEMENT (CONT’)
Directors are required to disclose to the Board actual or
potential conflicts of interest that may or might reasonably
be thought to exist between the interests of the Director
or the interests of any other party in so far as it affects the
activities of the Company and to act in accordance with the
Corporations Act if conflict cannot be removed or persists.
That involves taking no part in the decision making process
or discussions where that conflict does arise.
Directors are required to make disclosure of any share
trading. The Company’s policy in relation to share trading
is that officers, employees and contractors are prohibited
from trading whilst in possession of unpublished price
sensitive information concerning the Company. That is
information which a reasonable person would expect
to have a material effect on the value of the Company’s
shares. An officer must discuss the proposal to acquire or
sell shares with the Chairman prior to doing so to ensure
that there is no price sensitive information of which that
officer might not be aware. The undertaking of any trading
in shares must also be notified to the Company Secretary
who makes disclosure to the ASX.
Recommendation 3.2: Companies should establish a
policy concerning diversity and disclose the policy or
a summary of that policy. The policy should include
requirements for the Board to establish measureable
objectives for achieving gender diversity for the board to
assess annually both the objectives in achieving them.
The Company established a formal policy on diversity
in June 2012. This policy supports the existing equal
opportunity policy and non discrimination policy as well
as states a commitment to improving gender diversity
within the Company. The Remuneration and Nomination
Committee has adopted the policy and set annual
objectives for achieving gender diversity.
Recommendation 3.3: Companies should disclose
in each annual report the measureable objectives
for achieving gender diversity set by the Board in
accordance with the diversity policy and progress
towards achieving them.
The measurable objectives set by the Board for achieving
gender diversity include:
adopting a Company wide Diversity policy
•
• disclosing the policy in the corporate governance
•
section on the Company’s website; and
tracking and reporting on the percentages of women
employed by the Company as a whole, in senior
management positions and on the Board.
Recommendation 3.4: Companies should disclose in
each annual report the proportion of women employees
in the whole organisation, women in senior management
and women on the board.
As at 30 June 2015 the proportion of women in the whole
organisation is 5 out of 14 (36%), the proportion of women
in senior executive positions is 0 of 3 (0%) and proportion
of women on the Board is 0 (0%).
Principle 4: Safeguarding integrity in financial
reporting
Recommendation 4.1: The board should establish an
audit committee.
Recommendation 4.2: The audit committee should be
structured so that it consists only of non-executive
directors, a majority of independent directors, is chaired
by an independent chair who is not the chair of the
board, and has at least two members.
Recommendation 4.3: The audit committee should have
a formal charter.
An Audit and Risk Committee and charter have been
established. The charter is available on the Company’s
website.
The Board has established an Audit and Risk Committee.
It consists of two independent non-executive members.
Two members is thought appropriate for the size of the
Company. The chair is independent and not the Chairman
of the overall Board.
The Committee consists of:
• Brian L. Smith (Chairman)
• Koh Ban Heng
Rowena Sylvester was also chairman of this committee
whilst a Director of the Company. Geoffrey King was
also a member of this committee whilst a Director of the
Company.
The primary role of the Audit and Risk Committee is
to assist the Board to fulfil its corporate governance
responsibilities relating to financial accounting practises,
external financial reporting, financial risk management and
internal control, the internal and external audit function,
compliance with laws and regulations relating to these
areas of responsibility and identification and development
of strategies and actions to manage business risk.
CORPORATE
GOVERNANCE
STATEMENT
25
Recommendation 4.4: External auditors
The Board ensures that a representative of the external
auditor of the Company attends the AGM to allow
shareholders to ask the external auditor any questions
about the conduct of the audit, the preparation and content
of the auditor’s report, the accounting policies adopted by
the Company in relation to the preparation of the financial
statements and the independence of the auditor in relation
to the conduct of the audit.
Principle 5: Make timely and balanced disclosure
Recommendation 5.1: Companies should establish
written policies designed to ensure compliance with
the ASX listing rules disclosure requirements and to
ensure accountability at a senior executive level for that
compliance and disclose those policies or a summary of
those policies.
The Company has in place an ASX Compliance procedure
which outlines the requirements to comply with the
ASX listing rules disclosure requirements and to ensure
accountability at the senior executive level for that
compliance.
The Public Officer, Company Secretary and Chief Financial
Officer, A.M Knox, has been nominated as the person
responsible for communications with the ASX. This role
includes responsibility for ensuring compliance with
the ASX listing rules and overseeing and co-ordinating
information disclosure to the ASX, analysts, brokers,
shareholders, secondary exchanges, the media and the
public.
Principle 6: Respect the rights of shareholders
Recommendation 6.1: Companies should design
a communications policy for promoting effective
communication with shareholders and encouraging
their participation at general meetings and disclose their
policy or a summary of that policy.
The Company has established a Communications Policy for
promoting effective communication with shareholders and
encouraging their participation at general meetings.
The Company maintains a website which is kept up to date
with all relevant announcements to the market and related
information after release to the ASX. The web address is
www.cuenrg.com.au.
A copy of the communications policy is available on the
Company’s website.
Principle 7: Recognise and manage risk
Recommendation 7.1 Companies should establish
policies for the oversight and management of material
business risks and disclose a summary of those policies.
Risk recognition and management are viewed by the
Company as integral to the Company’s objectives of
creating and maintaining shareholder value, and to the
successful execution of the Company’s strategies. The
Board is responsible for the overall risk management
framework and has delegated to the Audit and Risk
Committee the responsibility for:
•
•
reviewing the adequacy and effectiveness of CUE’s risk
management framework; and
assisting the Board with regards to oversight of CUE’s
risk management by gaining assurance that all major
identified risks are being adequately managed and that
mitigation practices are appropriate.
Recommendation 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 to the effectiveness of the Company’s management
of its material business risks.
Management is responsible for designing, implementing
and reporting on the adequacy of the Company’s risk
management and internal control system and has to report
to the Audit and Risk Committee on:
•
•
the risk management and internal control system
during the year; and
the Company’s management of its material business
risks.
The Company does not have an internal audit function.
Management of the Company annually perform an
assessment of Company’s risks and identify measures to
reduce the risk levels to as low as possible. A risk register
for the Company is maintained to document the risks
identified. Risk is reviewed as part of the Board meetings. A
risk assessment procedure is used to assess all risks when
the Company is contemplating a new business venture.
Should the risk profile of the Company change, the risk
register will be updated to reflect this accordingly and any
further controls required will be implemented.
CUE ENERGY RESOURCES LIMITED:
ANNUAL REPORT 2014/15
26
CORPORATE GOVERNANCE STATEMENT (CONT’)
Recommendation 7.3: The board should disclose
whether it has received assurance from the chief
executive officer and the chief financial officer that the
declaration provided in accordance with section 295A
of the Corporations Act is founded on a sound system
of risk management and internal control and that the
system is operating effectively in all material respects in
relation to financial reporting risks.
The CEO and CFO state in writing to the Board every
financial year that the statements made by them regarding
the integrity of the financial statements are founded on a
sound system of risk management, internal compliance
and control, which in all material respects implements
the policy as adopted by the Board and that the risk
management and internal compliance control to the
extent that they relate to financial reporting are operating
effectively and efficiently in all material respects.
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1: The board should establish a
remuneration committee.
Recommendation 8.2: The remuneration committee
should be structured so that it consists of a majority of
independent directors, is chaired by an independent
chair and has at least two members.
The Board has established a Remuneration and Nomination
Committee. It consists of two independent non-executive
members. Two members is thought appropriate for the
size of the Company. The chair is independent and not the
Chairman of the overall Board.
The committee consists of:
Stuart A. Brown (Chairman)
•
• C. Peter Hazledine
Andrew Young was also chairman of this committee whilst
a Director of the Company.
The Remuneration and Nomination Committee makes
recommendations to the full Board on remuneration
packages and other terms and conditions of employment
and reviews the composition of the Board having regard to
the Company’s present and future needs.
Remuneration and other terms and conditions of
employment are reviewed annually by the committee
having regard to the performance and relevant comparative
data. As well as a base salary, remuneration packages
include superannuation, termination entitlements, fringe
benefits, annual cash bonuses linked to short term
performance and shares and options linked to long term
Company’s performance.
Remuneration packages are set at levels that are intended
to attract and retain high calibre staff and align the interest
of the executives with those of the Company shareholders.
Recommendation 8.3: Companies should clearly
distinguish the structure of non-executive director’s
remuneration from that of executive directors and
senior executives.
Remuneration of Non-Executive Directors is determined
by the Board within the maximum amount approved by the
shareholders from time to time.
Further information on Directors and Executives
remuneration is set out in the Directors’ Report and
Remuneration Report on pages 39 to 46 of this report.
The Remuneration and Nomination Committee Charter is
available on the Company’s website.
ASX CORPORATE
GOVERNANCE COUNCIL
RECOMMENDATIONS
CHECKLIST
The following table cross-references the ASXCGC
Recommendations to the relevant sections of the
Corporate Governance Statement, the Directors’ Report
and the Remuneration Report.
CORPORATE
GOVERNANCE
STATEMENT
27
ASX CORPORATE GOVERNANCE COUNCIL RECOMMENDATIONS
REFERENCE
COMPLY
PRINCIPAL 1 – LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
1.1
A listed entity should disclose:
(a) the respective roles and responsibilities of its board and management; and
(b) those matters expressly reserved to the board and those delegated to
management.
1.2
A listed entity should:
(a) undertake appropriate checks before appointing a person, or putting forward to
security holders a candidate for election, as a director; and
(b) provide security holders with all material information in its possession relevant to
a decision on whether or not to elect or re-elect a director.
1.3
1.4
A listed entity should have a written agreement with each director and senior
executive setting out the terms of their appointment.
The company secretary of a listed entity should be accountable directly to the board,
through the chair, on all matters to do with the proper functioning of the board.
2.5
2.5
1.5
A listed entity should:
3.2, 3.3
(a) have a diversity policy which includes requirements for the board or a relevant
committee of the board to set measurable objectives for achieving gender
diversity and to assess annually both the objectives and the entity’s progress in
achieving them;
(b) disclose that policy or a summary of it; and
(c) disclose as at the end of each reporting period the measurable objectives for
achieving gender diversity set by the board or a relevant committee of the board
in accordance with the entity’s diversity policy and its progress towards achieving
them and either:
(1) the respective proportions of men and women on the board, in senior executive
positions and across the whole organisation (including how the entity has defined
“senior executive” for these purposes); or
(2)
if the entity is a “relevant employer” under the Workplace Gender Equality Act,
the entity’s most recent “Gender Equality Indicators”, as defined in and published
under that Act.
1.6
A listed entity should:
(a) have and disclose a process for periodically evaluating the performance of the
board, its committees and individual directors; and
(b) disclose, in relation to each reporting period, whether a performance evaluation
was undertaken in the reporting period in accordance with that process.
1.7
A listed entity should:
(a) have and disclose a process for periodically evaluating the performance of its
senior executives; and
(b) disclose, in relation to each reporting period, whether a performance evaluation
was undertaken in the reporting period in accordance with that process.
N/A
2.5
1.2
4
4
4
4
4
4
CORPORATE GOVERNANCE STATEMENT (CONT’)
CUE ENERGY RESOURCES LIMITED:
ANNUAL REPORT 2014/15
28
PRINCIPLE 2 – STRUCTURE THE BOARD TO ADD VALUE
2.1
The board of a listed entity should:
(a) have a nomination committee which:
2.4
(1) has at least three members, a majority of whom are independent directors;
and
(2)
is chaired by an independent director, and disclose;
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee
met throughout the period and the individual attendances of the members at
those meetings; or
(b)
if it does not have a nomination committee, disclose that fact and the processes it
employs to address board succession issues and to ensure that the board has the
appropriate balance of skills, knowledge, experience, independence and diversity
to enable it to discharge its duties and responsibilities effectively.
2.2
A listed entity should have and disclose a board skills matrix setting out the mix
of skills and diversity that the board currently has or is looking to achieve in its
membership.
2.3
A listed entity should disclose:
(a) the names of the directors considered by the board to be independent directors;
(b)
if a director has an interest, position, association or relationship of the type
described in Box 2.3 but the board is of the opinion that it does not compromise
the independence of the director, the nature of the interest, position, association
or relationship in question and an explanation of why the board is of that opinion;
and
(c) the length of service of each director.
2.4
A majority of the board of a listed entity should be independent directors.
2.5
2.6
The chair of the board of a listed entity should be an independent director and, in
particular, should not be the same person as the CEO of the entity.
A listed entity should have a program for inducting new directors and provide
appropriate professional development opportunities for directors to develop
and maintain the skills and knowledge needed to perform their role as directors
effectively.
PRINCIPLE 3 – ACT ETHICALLY AND RESPONSIBLY
3.1
A listed entity should:
(a) have a code of conduct for its directors, senior executives and employees; and
(b) disclose that code or a summary of it.
Directors’
Report
Directors’
Report
2.3
2.3
3.1
4
4
4
4
4
4
CORPORATE
GOVERNANCE
STATEMENT
29
PRINCIPLE 4 – SAFEGUARD INTEGRITY IN CORPORATE REPORTING
4.1
The board of a listed entity should:
(a) have an audit committee which:
4.3, Directors’
Report
(1) has at least three members, all of whom are non-executive directors and a
majority of whom are independent directors; and
(2)
is chaired by an independent director, who is not the chair of the board, and
disclose;
(3) the charter of the committee;
(4) the relevant qualifications and experience of the members of the committee;
and
(5)
in relation to each reporting period, the number of times the committee met
throughout the period and the individual attendances of the members at
those meetings; or
(b)
if it does not have an audit committee, disclose that fact and the processes it
employs that independently verify and safeguard the integrity of its corporate
reporting, including the processes for the appointment and removal of the
external auditor and the rotation of the audit engagement partner.
4.2
The board of a listed entity should, before it approves the entity’s financial statements
for a financial period, receive from its CEO and CFO a declaration that, in their
opinion, the financial records of the entity have been properly maintained and that
the financial statements comply with the appropriate accounting standards and give
a true and fair view of the financial position and performance of the entity and that
the opinion has been formed on the basis of a sound system of risk management and
internal control which is operating effectively.
7.3
4
4.3
A listed entity that has an AGM should ensure that its external auditor attends its AGM
and is available to answer questions from security holders relevant to the audit.
4.4
PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
5.1
A listed entity should:
(a) have a written policy for complying with its continuous disclosure obligations
under the Listing Rules; and
(b) disclose that policy or a summary of it.
PRINCIPLE 6 – RESPECT THE RIGHTS OF SECURITY HOLDERS
6.1
6.2
6.3
6.4
A listed entity should provide information about itself and its governance to investors
via its website.
A listed entity should design and implement an investor relations program to facilitate
effective two-way communication with investors.
A listed entity should disclose the policies and processes it has in place to facilitate
and encourage participation at meetings of security holders.
A listed entity should give security holders the option to receive communications
from, and send communications to, the entity and its security registry electronically.
6.1
6.1
6.1
6.1
4
4
4
4
4
4
CORPORATE GOVERNANCE STATEMENT (CONT’)
CUE ENERGY RESOURCES LIMITED:
ANNUAL REPORT 2014/15
30
4.3, Directors’
Report
PRINCIPLE 7 – RECOGNISE AND MANAGE RISK
7.1
The board of a listed entity should:
(a) have a committee or committees to oversee risk, each of which:
(1) has at least three members, a majority of whom are independent directors;
and
(2)
is chaired by an independent director, and disclose;
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee
met throughout the period and the individual attendances of the members at
those meetings; or
(b)
if it does not have a risk committee or committees that satisfy (a) above,
disclose that fact and the processes it employs for overseeing the entity’s risk
management framework.
7.2
The board or a committee of the board should:
(a) review the entity’s risk management framework at least annually to satisfy itself
that it continues to be sound; and
(b) disclose, in relation to each reporting period, whether such a review has taken
place.
7.3
A listed entity should disclose:
(a)
(b)
if it has an internal audit function, how the function is structured and what role it
performs; or
if it does not have an internal audit function, that fact and the processes it
employs for evaluating and continually improving the effectiveness of its risk
management and internal control processes.
N/A
7.2
7.4
A listed entity should disclose whether it has any material exposure to economic,
environmental and social sustainability risks and, if it does, how it manages or intends
to manage those risks.
4.3, 7.2, 7.3
4
4
4
CORPORATE
GOVERNANCE
STATEMENT
31
PRINCIPLE 8 – REMUNERATE FAIRLY AND RESPONSIBLY
8.1
The board of a listed entity should:
(a) have a remuneration committee which:
8.2, Directors’
Report
(1) has at least three members, a majority of whom are independent directors;
and
(2)
is chaired by an independent director, and disclose;
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee
met throughout the period and the individual attendances of the members at
those meetings; or
(b)
if it does not have a remuneration committee, disclose that fact and the
processes it employs for setting the level and composition of remuneration
for directors and senior executives and ensuring that such remuneration is
appropriate and not excessive.
8.2
A listed entity should separately disclose its policies and practices regarding the
remuneration of non-executive directors and the remuneration of executive directors
and other senior executives.
Remuneration
Report
4
8.3
A listed entity which has an equity-based remuneration scheme should:
N/A
(a) have a policy on whether participants are permitted to enter into transactions
(whether through the use of derivatives or otherwise) which limit the economic
risk of participating in the scheme; and
(b) disclose that policy or a summary of it.
CUE ENERGY RESOURCES LIMITED:
ANNUAL REPORT 2014/15
32
DIRECTORS’
REPORT
Your Directors present their report on the Company
and its controlled entities (“the Group” or “consolidated
entity”) consisting of Cue Energy Resources Limited (“the
Company” or “Parent Entity”) and the entities it controlled
at the end of, or during, the financial year
ended 30 June 2015.
DIRECTORS
The names of Directors of the Company in office during the
year and up to the date of this report were:
Paul G. Foley,
Chairman (appointed 13 April 2015)
Paul Foley is a corporate lawyer and company director and
in 2014 was made a Chartered Fellow of the New Zealand
Institute of Directors recognising his 14+ years’ experience
as a listed company director. He is currently Chairman of
Grosvenor Financial Services Group Limited and Chairman
of the Board of Governors of Queen Margaret College in
Wellington. He is also a former Director of New Zealand
Oil & Gas Limited. He is currently a corporate/commercial
partner at Minter Ellison Rudd Watts in Wellington. Mr Foley
provides advice on strategic transactions, mergers and
acquisitions, takeovers, equity capital raisings, and foreign
investment approvals.
Stuart A. Brown
(appointed 24 July 2014)
Stuart Brown has a BSc (First Class) Geology (Sydney) and
has held senior positions with Woodside Energy from 2002
to 2012, Shell International Exploration & Production from
1998 to 2002, Shell UK E&P from 1990 to 1998. Prior to
that he held various positions with Shell in Australia, The
Netherlands, Syria and Turkey.
From September 2012 he has been managing director of
International Oil and Gas Strategies Pty Ltd and is currently
a Non-Executive Director of Empire Oil & Gas and Non-
Executive Chairman of WHL Energy Ltd.
C. Peter Hazledine
(appointed 13 April 2015)
Peter Hazledine is an advisor to the oil and gas industry
operating through his own consultancy business, Hazledine
Consulting Ltd. In this capacity he has provided services
to Genesis Energy, Origin Energy, Contact Energy Limited,
Todd Energy and New Zealand Oil and Gas. Prior to this Mr
Hazledine’s career includes 30 years with Shell in a number
of technical and commercial roles around the world
followed by a period with The Natural Gas Corporation
and Vector where he had responsibility for gas and LPG
businesses.
DIRECTORS’
REPORT
33
Geoffrey J. King (removed 29 July 2015)
Andrew A. Young (removed 29 July 2015)
Rowena A. Sylvester (resigned 10 April 2015)
MANAGEMENT
Chief Executive Officer
David A.J. Biggs
Chief Financial Officer/
Company Secretary
Andrew M. Knox
Co-Company Secretary
Pauline M. Moffatt
PRINCIPAL ACTIVITIES
The principal activities of the group are petroleum
exploration, development and production.
Cue Energy Resources Limited (‘Cue’) is listed on the
Australian Securities Exchange. The Company has an
American Depositary Receipt (ADR) programme sponsored
by the Bank of New York and these are traded via the OTC
Market in the US.
Principal Place of Business
Level 19
357 Collins Street
Melbourne 3000
Australia
Registered Office
Level 19
357 Collins Street
Melbourne 3000
Australia
DIVIDENDS
No dividends were paid during the financial year or have
been approved subsequent to the reporting date (2014: nil).
Koh Ban Heng
(appointed 29 July 2015)
Mr Koh joined Singapore Petroleum Co Ltd (SPC) in March
1974 and held several key positions in the company before
being appointed CEO in August 2003. He retired as CEO on
30 June 2011 and subsequently served as Senior Advisor
from 1 July 2011 until 31 December 2014. Currently Mr
Koh is an independent director of Keppel Infrastructure
Holdings Pte Ltd, a fully owned subsidiary of Keppel
Corporation, Independent Director and Non-Executive
Chairman of Keppel Infrastructure Fund Management Pte
Ltd as Trustee-Manager of Keppel Infrastructure Trust which
is listed on SGX and an independent director of Tipco
Asphalt PLC, a listed company in Thailand. In addition, Mr
Koh is the Chairman of the ASEAN Council of Petroleum
(ASCOPE) National Committee of Singapore. He also serves
as Advisor to the Chairman and CEO of Dialog Group
Berhad of Malaysia.
Brian L. Smith
(appointed 13 April 2015)
Brian Smith is a solicitor admitted to practice in 1975 who
has had more than 30 years’ experience in the energy
industry. Mr Smith has had experience working in private
practice, government and corporate fields and was
General Counsel to the Australian Gas Light Company, a
listed entity, for over 17 years. He currently runs his own
practice in Sydney specialising in commercial, energy and
corporations law.
DIRECTORS’ REPORT (CONT’)
34
REVIEW OF OPERATIONS
Production revenue from continuing operations for the
year ended 30 June 2015 was $36.93 million
(2014: $32.25 million).
Production and amortisation expenses from continuing
operations totalled $24.25 million for the year
(2014: $25.04 million).
Profit before income tax expense for the year was
$34.62 million (2014: $0.75 million). Tax benefit for the year
was $5.20 million (2014: expense $2.24 million), resulting in
profit after income tax benefit of $39.82 million for the year
(2014: loss $1.49 million).
Profit from discontinued operations amounted to
$0.23 million (2014: loss $0.68 million) resulting in profit
after income tax benefit for the year of $40.05 million
(2014: loss $2.17 million).
Further information on the operations and financial
position of the group and its business strategies and
prospects is set out in the Chairman’s Overview and Chief
Executive Officer’s Review sections of this annual report.
SIGNIFICANT CHANGES IN THE STATE OF
AFFAIRS
During the financial year the Company:-
•
•
•
•
sold the PNG asset portfolio
acquired additional 60% in Mahakam Hilir PSC,
Kalimantan, Indonesia
acquired 80% interest in Pine Mills production in East
Texas, USA; and
acquired 12.5% interest in Mahato PSC, Central
Sumatra, Indonesia
Apart from the above, there was no further significant
change in the state of affairs of the consolidated entity.
EQUITY AND CAPITAL STRUCTURE
Total equity as at 30 June 2015 was $171.90 million
(2014: $129.40 million). At the reporting date, Cue had
issued share capital of $152.42 million (2014: $152.42
million). No further shares have been issued subsequent
to the reporting date.
The total number of shares on issue at 30 June 2015 was
698,119,720 (2014: 698,119,720).
ENVIRONMENTAL REGULATION
Cues fully controlled operations are limited but it is
pleasing to report that during the period they involved zero
incidents, lossed time injuries or significant spills. Among
the joint venture operations there have been a number of
reportable but not major incidents that have been reported
and investigated by all the relevant parties. The increased
reporting is showing a growth in the reporting culture and
an openness to share learnings in order to reduce risk not
only within Cue Energy Resources but within the industry.
Cue Energy Resources continues to monitor the progress
and close out of these incidents and work with the joint
operation partners and operators to improve overall health
and safety and minimise any impact on the environment.
There have been a number of steps taken in order to
improve Health, Safety and Environment (HSE) and to
implement an HSE management system that is suitable for
all countries and all levels of operations that the business
may wish to be involved with. The overall aim of the
system is to not only meet legislative requirements but
to show a true commitment to HSE for the sake of Cue
Energy Resources personnel, contractors, assets and the
environment.
Throughout this year, internally the HSE management
system is in effect and beginning to grow a proactive safety
culture with the business in line with industry best practice.
While Cue is still a relatively small business, it has in place a
management system that is fit for purpose regardless of the
size of the company. The system will now be able to grow
with the business.
Through ongoing commitment by both senior
management and staff alike, this system will move
Cue Energy Resources forward and will continually
improve overall Health, Safety and Environmental risk
to the company. This will demonstrate that Cue Energy
Resources is a leader in all its current and projected fields
of expertise and will give Cue Energy Resources the ability
to remain competitive, whilst managing its risks to as low as
reasonably practicable.
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15 35
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The following activities may affect the expected results of operations:
Farming down WA-359-P permit, Carnarvon Basin
• Drilling in Mahakam Hilir PSC, Indonesia
•
• Actively seeking new exploration acreage onshore Australia and Asia
• Actively seeking to acquire additional production
DIRECTORS MEETINGS, QUALIFICATIONS AND EXPERIENCE
The following table sets out the number of meetings of the Board of Directors held during the year and the number of
meetings attended by each Director.
BOARD
AUDIT AND RISK
COMMITTEE
HELD
ATTENDED
HELD
ATTENDED
REMUNERATION AND
NOMINATION COMMITTEE
ATTENDED
HELD
14
2
2
-
2
15
15
13
13
2
2
-
2
15
15
13
-
-
-
-
-
2
-
2
-
-
-
-
-
2
-
2
2
-
-
-
-
-
2
-
2
-
-
-
-
-
2
-
Stuart A. Brown(i)
Paul G. Foley(ii)
C. Peter Hazledine(iii)
Ban Heng Koh(iv)
Brian L. Smith(v)
Geoffrey J. King(vi)
Andrew A. Young(vii)
Rowena A. Sylvester(viii)
(i)
(ii)
(iii)
(iv)
(v)
Stuart A. Brown (appointed 24 July 2014)
Paul G. Foley (appointed 13 April 2015)
C. Peter Hazledine (appointed 13 April 2015)
Koh Ban Heng (appointed 29 July 2015)
Brian L. Smith (appointed 13 April 2015)
(vi) Geoffrey J. King (removed 29 July 2015)
(vii)
Andrew A. Young (removed 29 July 2015)
(viii) Rowena A. Sylvester (resigned 10 April 2015)
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
DIRECTORS’ REPORT 36
Information on directors and executives, including qualifications and experience is as follows:
PARTICULARS OF INTERESTS
IN SHARES OF CUE ENERGY
RESOURCES LIMITED AT THE
DATE OF THIS REPORT
DIRECT
Nil
INDIRECT
Nil
SPECIAL
RESPONSIBILITIES
Chairman of Board of
Directors
Nil
Nil
Non-Executive Director
Chairman of
Remuneration and
Nomination Committee
DIRECTORS
QUALIFICATIONS AND EXPERIENCE
P.G. Foley
S.A. Brown
BCA, LL.B
Non-Executive Chairman of Cue Energy
Resources Limited(i)
-Appointed 13 April 2015
Non-Executive Director of New Zealand Oil &
Gas Limited(i)
-Appointed July 2000
-Resigned November 2014 (iii)
Chairman of Grosvenor Financial Services
Limited (ii)
-Appointed April 2012
Deputy Chairman of Board of the National
Provident Fund (ii)
-Appointed September 2012
-Resigned June 2015(iii)
Chairman of Racing Integrity Unit Limited (ii)
-Appointed February 2013
-Resigned January 2014(iii)
BSc Hons (First Class)
Non-Executive Director of Cue Energy
Resources Limited(i)
-Appointed 24 July 2014
Non-Executive Director of Galicia Energy Limited(i)
-Appointed February 2014
-Resigned 19 February 2015(iii)
Non-Executive Director of Empire Oil & Gas NL(ii)
-Appointed January 2014
Non-Executive Chairman of WHL Energy Limited(i)
-Appointed December 2013
C.P. Hazledine BSc (Hons)
Non-Executive Director of Cue Energy
Resources Limited(i)
-Appointed 13 April 2015
Nil
Nil
Non-Executive Director
Member of
Remuneration and
Nomination Committee
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15DIRECTORS’ REPORT (CONT’)
37
PARTICULARS OF INTERESTS
IN SHARES OF CUE ENERGY
RESOURCES LIMITED AT THE
DATE OF THIS REPORT
DIRECT
Nil
INDIRECT
Nil
SPECIAL
RESPONSIBILITIES
Non-Executive Director
Member of Audit and
Risk Committee
Nil
Non-Executive Director
Chairman of Audit and
Risk Committee
Non-Executive Director Nil
Nil
450,000
DIRECTORS
QUALIFICATIONS AND EXPERIENCE
B.H. Koh
B.L. Smith
A.A. Young
BSc (Hons)
Non-Executive Director of Cue Energy
Resources Limited(i)
-Appointed 29 July 2015
Non-Executive Director of Tipco Asphalt Ltd PLC
-Appointed 1 July 2011
Non-Executive Director of Keppel Infrastructure
Holdings (KIH) Pte Ltd
-Appointed 15 March 2013
Non-Executive Chairman of Keppel Infrastructure
Fund Management Pte Ltd
-Appointed 1 May 2015
Non-Executive Director of
Cue Energy Resources Limited(i)
-Appointed 13 April 2015
BE (Chemical Engineering), MBA (Hons)
Non-Executive Director of Cue Energy
Resources Limited(i)
-Appointed 13 December 2011
-Removed 29 July 2015(iii)
Non-Executive Director of New Guinea Energy
Limited(i)
-Appointed 20 October 2010
-Resigned 20 May 2015(iii)
Non-Executive Director of Cliq Energy Berhad(ii)
-Appointed May 2012
-Resigned 31 March 2013
-Re-appointed June 2013
Non-Executive Director of National Safety Council
of Australia Limited(ii)
-Appointed March 2009
-Resigned July 2014(iii)
Non-Executive Chairman of Real Energy
Corporation Limited(ii)
-Appointed 1 July 2012
-Resigned 31 March 2013(iii)
Non-Executive Chairman of Galilee Energy
Limited
-Appointed 19 August 2013(i)
-Resigned October 2013(iii)
DIRECTORS’ REPORT
38
Information on directors and executives, including qualifications and experience is as follows:
SPECIAL
RESPONSIBILITIES
Non-Executive Director
DIRECTORS
QUALIFICATIONS AND EXPERIENCE
G.J. King
BA, LLB
Non-Executive Chairman of Cue Energy
Resources Limited(i)
-Appointed 24 November 2011
-Removed 29 July 2015(iii)
Deputy Chairman and Non-Executive Director of
High Peak Royalties Limited (i)
-Appointed 17 December 2008
PARTICULARS OF INTERESTS
IN SHARES OF CUE ENERGY
RESOURCES LIMITED AT THE
DATE OF THIS REPORT
DIRECT
20,000
INDIRECT
2,500
R.A. Sylvester BBS
Non-Executive Director Nil
Nil
Non-Executive Director of Cue Energy
Resources Limited(i)
-Appointed 30 May 2014
-Resigned 10 April 2015(iii)
Non-Executive Director of Essential Energy(ii)
-Appointed March 2002
-Resigned June 2012(iii)
EXECUTIVES QUALIFICATIONS AND EXPERIENCE SPECIAL RESPONSIBILITIES
D.A.J. Biggs
A.M. Knox
LLB
BCom, CA, CPA, FAICD
Chief Executive Officer
Chief Financial Officer
Company Secretary
DIRECT
8,045
2,321,007
INDIRECT
Nil
2,137,244
J.L. Schrull
BSc, MSc
Non-Executive Director of WHL
Energy Limited(i)
-Appointed 17 April 2014
-Resigned 18 August 2014(iii)
Production and Exploration Manager
-Appointed 18 August 2014
308,797
Nil
D.B Whittam
BSc, MSc
Exploration Manager
Nil
Nil
-Appointed 18 June 2012
-Resigned 22 August 2014
(i)
(ii)
(iii)
Refers to ASX listed directorships held over the past three years.
Refers to unlisted public company directorships held over the past three years.
As at date of ceasing to be a director or executive.
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15DIRECTORS’ REPORT (CONT’)
39
OTHER
QUALIFICATIONS AND EXPERIENCE SPECIAL RESPONSIBILITIES
P.M. Moffatt
BCom, GIA(Cert)
Co Company Secretary
DIRECT
114,645
INDIRECT
Nil
No shares in subsidiary companies are held by the Directors and no remuneration or other benefits were paid or are due
and payable by subsidiary companies. No share options are held in the company by Directors or Executives. Performance
rights held by Executives are detailed in the Remuneration Report.
REMUNERATION REPORT (AUDITED)
This Remuneration Report which has been audited, and which forms part of the Directors’ Report, sets out information
about the remuneration of Cue Energy Resources Limited’s Directors and its senior management for the financial year
ended 30 June 2015, in accordance with the Corporations Act 2001 and its regulations.
The prescribed details for each person covered by this report are detailed below under the following headings:
A. Director and Executive Details
B. Remuneration Policy
C. Details of Remuneration
D. Equity Based Remuneration
E. Relationship between Remuneration Policy and Company Performance
A. DIRECTOR AND EXECUTIVE DETAILS
The following persons acted as Directors of the company during or since the end of the financial year:
P.G. Foley (Non-Executive Chairman) – appointed 13 April 2015
S.A. Brown (Non-Executive Director) – appointed 24 July 2014
C.P. Hazledine (Non-Executive Director) – appointed 13 April 2015
B.H. Koh (Non-Executive Director) – appointed 29 July 2015
B.L. Smith (Non-Executive Director) – appointed 13 April 2015
G.J. King (Non-Executive Director) – removed 29 July 2015
A.A. Young (Non-Executive Director) – removed 29 July 2015
R.A. Sylvester (Non-Executive Director) – resigned 10 April 2015
The term “Key Management Personnel” is used in this Remuneration Report to refer to the following persons:
D.A.J. Biggs (Chief Executive Officer)
A.M. Knox (Chief Financial Officer/Company Secretary)
J.L. Schrull (Production & Exploration Manager) – appointed 18 August 2014
D.B. Whittam (Exploration Manager) – resigned 22 August 2014
Unless otherwise stated the persons named above held their current position for the whole of the financial year and since
the end of the financial year.
DIRECTORS’ REPORT
40
B. REMUNERATION POLICY
The Board’s policy for remuneration of Executives and
Directors is detailed below.
C. DETAILS OF REMUNERATION
The structure of non-executive Director and Executive
remuneration is separate and distinct.
Remuneration packages are set at levels that are intended
to attract and retain high calibre directors and employees
and align the interest of the Directors and Executives with
those of the company’s shareholders. The Remuneration
policy is established and implemented solely by the
Remuneration and Nomination Committee which is
comprised of Non-Executive Directors only.
Remuneration and other terms and conditions of
employment are reviewed annually by the Remuneration
and Nomination Committee having regard to performance
and relevant employment market information. As
well as a base salary, remuneration packages include
superannuation, termination entitlements and fringe
benefits.
The Board is conscious of its responsibilities in relation to
the performance of the Company. Directors and Executives
are encouraged to hold shares in the Company to align
their interests with those of shareholders.
No remuneration or other benefits are paid to Directors or
Executives by any subsidiary companies.
Non-Executive Directors
Remuneration of Non-Executive Directors is determined
by the Board within the maximum amount approved
by the shareholders from time to time. The amount
currently approved is $700,000, which was approved at
the Annual General Meeting held on 24 November 2011.
The Company’s policy is to remunerate Non-Executive
Directors at a fixed fee based on their time involvement,
commitment and responsibilities. Remuneration for
Non-Executive Directors is not linked to individual or
company performance, however, to align Directors’
interests with shareholders’ interests, Non-Executive
Directors are encouraged to hold shares in the Company.
The Board retains the discretion to award options or
performance rights to Non-Executive Directors based on
the recommendation of the Remuneration and Nomination
Committee, which is always subject to shareholder
approval.
Executives
Executives receive a mixture of fixed and variable pay and
a blend of short and long term incentives as appropriate.
Remuneration packages contain the following key
elements:
•
Fixed compensation component inclusive of base
salary, superannuation and non-monetary benefits.
Short term incentive programme.
•
The Board is currently reviewing policies going forward in
relation to short and long term incentives.
The Remuneration and Nomination Committee is
responsible for determining and reviewing remuneration
arrangements. The Remuneration and Nomination
Committee assesses the appropriateness of the nature
and amount of remuneration of executives on a periodic
basis, by reference to relevant employment market
conditions, with the overall objective of ensuring maximum
stakeholder benefit from the retention of a high quality,
high performing Director and executive team. The charter
adopted by the Remuneration and Nomination Committee
aims to align rewards with achievement of strategic
objectives and creation of shareholder wealth.
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15DIRECTORS’ REPORT (CONT’) 41
Fixed compensation
Fixed compensation consists of base salary (which is calculated on a total cost base and including any FBT charges related
to employee benefits including motor vehicles), as well as employer contributions to superannuation funds.
The base salary is reflective of market rates for companies of similar size and industry which is reviewed annually to ensure
market competitiveness. During 2015, the Remuneration and Nomination Committee reviewed the salaries paid to peer
company executives in determining the salary of Cue’s Key Management Personnel. This base salary is fixed remuneration
and is not subject to performance of the company. Base salary is reviewed annually and adjusted as determined by the
Remuneration and Nomination Committee on 1 July each year. There is no guaranteed base salary increase included in any
executive’s contracts.
Long term incentives
Previously the Board implemented a Performance Rights Plan. As at 30 June 2015, all Performance Rights had lapsed.
Employment contracts
Remuneration and other terms of employment for key executives D.A.J. Biggs and J.L. Schrull is formalised in service
agreements. Details of the agreements are as follows:
D.A.J. Biggs
Title:
Agreement commenced: 22 April 2013
Details:
Chief Executive Officer
Base salary of $450,000 plus statutory superannuation to be reviewed annually by the
Remuneration and Nomination Committee. 6 months termination notice by either party.
J.L. Schrull
Title:
Agreement commenced:
Details:
Production and Exploration Manager
18 August 2014
Base salary of $425,000 including superannuation to be reviewed annually by the Remuneration
and Nomination Committee. 3 months termination notice by either party. Non solicitation and
non- compete clauses included.
Compensation levels are reviewed each year to take into account cost of living changes, any change in the scope of the role
performed and any changes to meet the principles of the compensation policy.
DIRECTORS’ REPORT 42
Details of the nature and amount of each major element of remuneration of each Director of the Company and other Key
Management Personnel of the consolidated entity are:
Compensation of Key Management Personnel – 2015:
2015
SHORT-TERM
POST-EMPLOYMENT
CASH
SALARY AND
FEES
$
21,703
87,785
21,703
21,703
130,000
100,000
48,750
431,644
NAME
P.G. Foley(ii)
S.A. Brown(iii)
C.P. Hazledine(iv)
B.L. Smith(v)
G.J. King(vi)
AA. Young(vii)
R.A. Sylvester(viii)
Total
Other Key Management Personnel
D.A.J. Biggs
A.M. Knox
J. Schrull(ix)
D. B. Whittam(x)
Total
Total
remuneration of
Executives and
Directors
433,792
255,509
353,802
59,759
1,102,862
1,534,506
CASH
BONUSES
$
-
-
-
-
-
-
-
-
NON
MONETARY
BENEFITS (i)
$
-
-
-
-
-
-
-
-
70,396
36,990
63,750
-
171,136
-
87,415
-
-
87,415
LONG
SERVICE
LEAVE
$
-
-
-
-
-
-
-
-
2,270
2,304
2,038
-
6,612
SUPER-
ANNUATION
$
-
5,965
-
-
-
-
28,723
34,688
TERMINATION
PAYMENTS
$
-
-
-
-
-
-
-
-
TOTAL
$
21,703
93,750
21,703
21,703
130,000
100,000
77,473
466,332
34,992
35,000
16,360
35,000
121,352
-
-
-
105,000
105,000
541,450
417,218
435,950
199,759
1,594,377
171,136
87,415
6,612
156,040
105,000
2,060,709
(i) Non performance based salary sacrifice benefits, including motor vehicle expenses.
(ii)
(iii)
(iv)
(v)
P.G. Foley appointed 13 April 2015.
S.A. Brown appointed 24 July 2014.
C.P. Hazledine appointed 13 April 2015.
B.L. Smith appointed 13 April 2015.
(vi) G.J. King removed 29 July 2015.
(vii)
A.A. Young removed 29 July 2015.
(viii) R.A. Sylvester resigned 10 April 2015.
(ix)
(x)
J.L. Schrull appointed 18 August 2014.
D.B. Whittam resigned 22 August 2014.
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15DIRECTORS’ REPORT (CONT’) 43
Compensation of Key Management Personnel – 2014:
2014
NAME
G.J. King
S.A. Brown(ii)
R.A. Sylvester(iii)
A.A. Young
T.E. Dibb(iv)
P.D. Moore(v)
Total
Other Key Management Personnel
D.A.J. Biggs
A.M. Knox
D.B. Whittam(vi)
Total
Total remuneration of Executives and Directors
SHORT-TERM
CASH
SALARY AND
FEES
$
100,000
-
8,791
100,000
83,167
87,363
379,321
NON
MONETARY
BENEFITS (I)
$
-
-
-
-
-
-
-
448,776
243,333
415,004
1,107,113
1,486,434
-
126,774
-
126,774
126,774
POST-EMPLOYMENT
SUPER-
ANNUATION
$
-
-
-
-
25,000
-
25,000
24,996
24,996
24,996
74,988
99,988
TOTAL
$
100,000
-
8,791
100,000
108,167
87,363
404,321
473,772
395,103
440,000
1,308,875
1,713,196
(i) Non performance based salary sacrifice benefits, including motor vehicle expenses.
(ii)
(iii)
(iv)
(v)
S.A. Brown appointed 24 July 2014.
R.A. Sylvester appointed 30 May 2014.
T.E. Dibb resigned 20 February 2014.
P.D. Moore resigned 15 May 2014.
(vi) D.B. Whittam resigned 22 August 2014.
All remuneration paid to D.A.J. Biggs, J.L. Schrull, A.M. Knox and D.B. Whittam is incurred by the parent entity.
A.M. Knox is a Director of all the subsidiaries in the Group and an Executive of the parent company.
D.A.J. Biggs is a Director of Cue Resources, Inc and Buccaneer, Inc and an Alternate Director for other subsidiaries and an
Executive of the parent company.
DIRECTORS’ REPORT 44
NAME
Non-Executive Directors:
P.G. Foley
S.A. Brown
C.P. Hazledine
B.L. Smith
G.J. King
A.A. Young
R.A. Sylvester
P.D. Moore
T.E. Dibb
Other Key Management Personnel:
D.A.J. Biggs
A.M. Knox
J. Schrull
D.B. Whittam
FIXED REMUNERATION
2014
2015
100%
100%
100%
100%
100%
100%
100%
-
-
100%
100%
100%
100%
-
-
-
-
100%
100%
100%
100%
100%
100%
100%
-
100%
D. EQUITY BASED REMUNERATION
Overview of Share Options and Performance Rights
Historically, the Company has granted performance rights to certain Key Management Personnel. These performance rights
were granted under a Performance Rights Plan which was approved by shareholders at the Company’s Annual General
meeting on 24 November 2011. The Performance Rights Plan has a mechanism for providing a share based performance
incentive for Key Management Personnel and to achieve alignment between Key Management Personnel and Shareholder
objectives.
Performance rights were granted under the plan for no consideration, neither carry dividend or voting rights. No share
options or performance rights were granted during the financial year to 30 June 2015 (refer note 24).
The Plan was designed to align the interests of executives with shareholders by providing direct participation in the benefits
of future Company performance over the medium to long term.
The Board is currently reviewing policies going forward in relation to short and long term incentives.
Long term performance targets of the Company will be established every year and the future award of performance rights
may be made at the Board’s sole discretion.
All previously issued performance rights had lapsed as at 30 June 2014.
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15DIRECTORS’ REPORT (CONT’) 45
The following performance rights granted to Key Management Personnel of the Company lapsed during the 2014 financial
year as a result of a failure to meet a vesting condition (including employment conditions):
PARTICIPANT
A.M. Knox
D.B. Whittam
TRANCHE
2013/2014 Plan
2013/2014 Plan
NUMBER OF
PERFORMANCE
RIGHTS LAPSED
800,000
800,000
VALUE AT LAPSE DATE*
$96,000
$96,000
* The value is determined at the date of lapsing using the closing share price on the date of lapse multiplied by the number of performance rights assuming
the condition was satisfied. The performance rights lapsed due to the resignation of an employee or vesting conditions not being met.
The performance hurdles for the grant of performance rights under the Plan to participants, as described above, were
classified as market-based hurdles. In determining the value of the performance rights granted to participants, a risk based
statistical analysis was used that took into account, as at the grant date, the following variables and assumptions:
Expected life of the instrument – the performance rights would expire on 30 June 2014 should they not be exercised.
Share price of the underlying share on grant date of 14 cents.
Expected volatility – the price volatility of the shares was approximately 45%.
Expected dividends – there was no dividends presently expected to be paid in respect of the underlying shares.
•
•
•
•
• The risk free interest rate for the expected life of the instrument – the average risk free interest rate at grant date was 3%.
On the above basis, the implied value of the 2012/2013 performance rights at issue was 0.28 cents per right.
E. RELATIONSHIP BETWEEN REMUNERATION POLICY AND COMPANY PERFORMANCE
Company Performance Review
The tables below set out summary information about the company’s earnings and movements in shareholder wealth and
key management remuneration for the five years to 30 June 2015.
PROFIT PERFORMANCE
Production Income from continuing
operations
Profit/(loss) before income tax
expense from continuing operations
Profit/(loss) after income tax expense
Total Key Management Personnel
Remuneration
SHARE PERFORMANCE
Share price at start of year (cents)
Share price at end of year (cents)
Dividends (cents)
Basic (loss)/earnings per share (cents)
Diluted (loss)/earnings per share (cents)
30 JUNE 2015
$000’S
30 JUNE 2014
$000’S
30 JUNE 2013
$000’S
30 JUNE 2012
$000’S
30 JUNE 2011
$000’S
36,925
32,246
49,798
41,222
52,506
34,622
40,052
753
(2,166)
2,061
1,713
8,409
6,369
2,729
13,621
5,663
2,050
25,761
19,107
2,237
30 JUNE 2015 30 JUNE 2014 30 JUNE 2013 30 JUNE 2012 30 JUNE 2011
25.0
26.5
-
2.7
2.7
11.0
12.0
-
(0.31)
(0.31)
26.5
18.0
-
0.81
0.81
18.0
11.0
-
0.91
0.91
12.0
7.60
-
5.74
5.74
The company’s remuneration policy seeks to reward staff members for their contribution to adding shareholder value so
there is a direct link between a portion of remuneration and financial performance.
DIRECTORS’ REPORT 46
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the company held during the financial year by each director and other members of key
management personnel of the consolidated entity, including their personally related parties, is set out below:
Ordinary shares
Non-Executive Directors
Paul D. Foley
Stuart A. Brown
C. Peter Hazledine
Brian L. Smith
Ban Heng Koh
Geoffrey J. King
Andrew A. Young
Rowena A. Sylvester
Other Key Management Personnel
David A.J. Biggs
Andrew M. Knox
Jeffrey L. Schrull
BALANCE AT
THE START OF
YEAR (1)
ADDITIONS
DISPOSALS/
OTHER
BALANCE AT
THE END OF
THE YEAR (2)
-
-
-
-
-
22,500
150,000
-
-
-
-
-
-
-
300,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
22,500
450,000
-
8,045
4,458,251
-
-
-
1,433,797
-
-
(1,125,000)
8,045
4,458,251
308,797
Disposals represents disposal of 1,125,000 shares during the period.
(1)
(2)
or date of appointment
or date of resignation
This concludes the Remuneration Report which has been audited.
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15DIRECTORS’ REPORT (CONT’)
47
INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as
required under section 307C of the Corporations Act 2001,
is set out on page 49.
ROUNDING OFF OF AMOUNTS
The Company is a company of the kind referred to in ASIC
Class Order 98/100, dated 10 July 1998, and in accordance
with the Class Order amounts in the Directors’ Report
and the Financial Report are rounded off to the nearest
thousand dollars, unless otherwise indicated.
DIRECTORS’ INSURANCE AND
INDEMNIFICATION OF DIRECTORS
AND AUDITORS
During the financial year, the company paid a premium
in respect of a contract insuring the directors of the
company, the company secretary, and all executive
officers against a liability incurred as a director, company
secretary or executive officer to the extent permitted by
the Corporations Act 2001. In accordance with commercial
practice, the insurance policy prohibits disclosure of the
terms of the policy, including the nature of the liability
insured against and the amount of the premium.
The company has not otherwise, during or since the end
of the financial year indemnified or agreed to indemnify
an officer or auditor of the company or any related body
corporate against a liability incurred as an officer or auditor.
AUDITOR
In accordance with the provisions of the Corporations Act
2001 the Company’s auditor, BDO East Coast Partnership,
continues in office.
NON-AUDIT SERVICES
The Company may decide to employ the auditor on
assignments additional to its statutory audit duties where
the auditor’s expertise and experience with the Company
are important.
The Board of Directors has considered the position and
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 audit independence requirement, of the
Corporations Act 2001, based on advice received from the
Audit and Risk Committee, for the following reasons:
• All non-audit services have been reviewed by the
Board to ensure they do not impact the impartiality and
objectivity of the auditor.
• None of the services undermine the general principle
relating to auditor independence as set out in the
Code of Ethics for Professional Accountants, including
reviewing or auditing the auditor’s own work, acting
in a management or a decision making capacity for
the Company, acting as advocate for the Company or
jointly sharing economic risk and reward.
AUDIT SERVICES
Amounts paid or due and payable to the auditor – BDO East
Coast Partnership for:
Audit or review of the
financial statements
Other Services:
Advisory Services
Tax compliance and
other services
Total
2015
$
2014
$
115,500
87,000
1,000
7,000
36,900
153,400
31,000
125,000
DIRECTORS’ REPORT
DIRECTORS’ REPORT (CONT’)
48
PROCEEDINGS ON BEHALF
OF THE COMPANY
No person has applied to the Court under section
237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the company, or to intervene in
any proceedings to which the company is a party for the
purpose of taking responsibility on behalf of the company
for all or part of those proceedings.
On behalf of the Board
Paul G. Foley
Chairman
29 September 2015
MATTERS SUBSEQUENT TO
THE END OF THE FINANCIAL
YEAR
The Company has been notified by the National Offshore
Petroleum Titles Administrator of the approval of its
application for a suspension of the Permit Year 3 work
program commitment for WA-359-P. The Year 3 work
programme comprises the drilling of one exploration well
which is now due by October 2016.
As a result of an economic project arrangement in the
Jeruk field within the Sampang PSC, Indonesia, Cue may
in certain circumstances have an obligation to make
compensatory payments for monies spent by the incoming
party from future profit oil within the Sampang PSC. There
is a dispute between Cue and the incoming party as to the
quantum of monies that they may be entitled to claim by
way of such compensatory payments and when any such
amount would be payable. Last year an arbitration hearing
found in favour of Cue’s position however the incoming
party is commencing further arbitration proceedings. The
Company is of the view that any amount which might
eventually become payable would not be likely to exceed
the amount of USD4.4 million which has been provided
for in the accounts. Apart from the above, the Directors
are not aware of any matter or circumstance since the
end of the financial year, not otherwise dealt with in this
report that has significantly or may significantly affect the
operations of Cue Energy Resources Limited, the results of
those operations or the state of affairs of the Company or
Group.
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15
AUDITORS’ INDEPENDENCE
DECLARATION
AUDITORS’ INDEPENDENCE
DECLARATION
49
DIRECTORS’
DECLARATION
50
The directors of Cue Energy Resources Limited declare that:
(a)
in the Directors’ opinion the financial statements and notes and the Remuneration report in the Directors’ Report set
out on pages 39 to 46 are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and of its performance,
for the financial year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and
Corporations Regulations 2001.
(b) the financial report also complies with International Financial Reporting Standards as disclosed in note 1; and
(c) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become
due and payable.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 by the
Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2015.
Signed in accordance with a resolution of the Directors.
Dated in Melbourne 29th day of September 2015
Paul G. Foley
Chairman
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15
51
CUE ENERGY RESOURCES LIMITED
FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF PROFIT
OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
52
NOTE
2015
$000’S
2014
$000’S
Production revenue from continuing operations
Production costs
Gross profit from production
Other revenue
Loss on sale of fixed assets
Amortisation expense
Net foreign currency exchange gain
Impairment write down
Other expenses
Profit before income tax benefit/(expense) from continuing operations
Income tax benefit/(expense)
Profit/(loss) after income tax benefit/(expense) from continuing operations
Profit/(loss) after income tax benefit/(expense) from discontinued
operations
Profit/(loss) after income tax benefit/(expense) for the year
3
4
3
4
3
4
6
22
Other comprehensive income
Items that may be reclassified subsequent to profit or loss
Foreign currency translation
Total comprehensive income for the year
Profit for the year is attributable to:
Owners of Cue Energy Resources Limited
Non-controlling interest
Total comprehensive income for the year is attributable to :
Continuing operations
Discontinuing operations
Owners of Cue Energy Resources Limited
Continuing operations
Discontinuing operations
Non-controlling interest
36,925
(13,425)
23,500
41,986
-
(10,828)
6,911
(18,015)
(8,932)
34,622
5,200
39,822
230
40,052
2,448
42,500
40,050
2
40,052
42,268
230
42,498
2
-
2
32,246
(15,968)
16,278
162
(3)
(9,074)
81
-
(6,691)
753
(2,244)
(1,491)
(675)
(2,166)
-
(2,166)
(2,166)
-
(2,166)
(1,491)
(675)
(2,166)
-
-
-
The accompanying notes form part of and are to be read in conjunction with these Financial Statements.
42,500
(2,166)
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15 CONSOLIDATED STATEMENT OF PROFIT
OR LOSS AND OTHER COMPREHENSIVE INCOME (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
NOTE
2015
$000’S
CENTS
2014
$000’S
CENTS
53
Earnings per share for profit/(loss) from continuing operations
attributable to the owners of Cue Energy Resources Limited
Basic earnings per share
Diluted earnings per share
Earnings per share for profit/(loss) from discontinued operations
attributable to the owners of Cue Energy Resources Limited
Basic earnings per share
Diluted earnings per share
Earnings per share for profit/(loss) attributable to the owners of Cue
Energy Resources Limited
Basic earnings per share
Diluted earnings per share
20
20
20
20
20
20
The accompanying notes form part of and are to be read in conjunction with these Financial Statements.
5.71
5.71
0.03
0.03
5.74
5.74
(0.21)
(0.21)
(0.10)
(0.10)
(0.31)
(0.31)
FINANCIAL STATEMENTS 2014/15FINANCIAL STATEMENTS 54
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total Current Assets
Non-Current Assets
Property, plant and equipment
Deferred tax assets
Exploration and evaluation expenditure
Production properties
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Tax liabilities
Provisions
Total Current Liabilities
Non-Current Liabilities
Deferred tax liabilities
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Retained profits/(loss)
Equity attributable to the owners of Cue Energy Resources Limited
Non-controlling interest
Total Equity
NOTES
26(b)
8
10
9
6
12
13
15
6
16
6
16
7(a)
2015
$000’S
2014
$000’S
27,605
4,761
3,728
36,094
76
70
97,058
78,131
175,335
211,429
15,936
580
584
17,100
11,017
11,409
22,426
39,526
171,903
152,416
2,448
17,037
171,901
2
171,903
40,558
3,542
843
44,943
118
71
54,069
79,458
133,716
178,659
21,184
2,398
563
24,145
19,484
5,627
25,111
49,256
129,403
152,416
-
(23,013)
129,403
-
129,403
The accompanying notes form part of and are to be read in conjunction with these Financial Statements.
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
ISSUED
CAPITAL
$000’S
152,416
RETAINED
PROFITS
$000’S
(23,013)
FOREIGN
CURRENCY
TRANSLATION
RESERVE
$000’S
-
SHARE
BASED
PAYMENT
RESERVE
$000’S
-
NON-
CONTROLLING
INTEREST
$000’S
-
Balance at 1 July 2014
Profit after income tax benefit for
the year
Other comprehensive income for
the year, net of tax
Total comprehensive profit
for the year
-
-
-
40,050
-
40,050
-
2,448
2,448
Balance at 30 June 2015
152,416
17,037
2,448
Balance at 1 July 2013
Loss after income tax expense for
the year
Other comprehensive income for
the year, net of tax
Total comprehensive loss
for the year
Transactions with owners in their
capacity as owners:
Share based payments
Balance at 30 June 2014
152,416
(20,869)
-
-
-
(2,166)
-
(2,166)
-
152,416
22
(23,013)
-
-
-
-
-
-
The accompanying notes form part of and are to be read in conjunction with these Financial Statements.
-
-
-
-
22
-
-
-
(22)
-
2
-
2
2
-
-
-
-
-
-
55
TOTAL
$000’S
129,403
40,052
2,448
42,500
171,903
131,569
(2,166)
-
(2,166)
-
129,403
FINANCIAL STATEMENTS 2014/15FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
56
Cash Flows from Operating Activities
Receipts from customers
Interest received
Payments to suppliers
Income tax paid
Royalties paid
Net cash provided by operating activities
Cash Flows from Investing Activities
Payments with respect to exploration expenditure
Payments with respect to production properties
Payments for plant and equipment
Proceeds from sale of prospects, less costs of sale
Net cash used in investing activities
Net cash used in financing activities
Net Decrease in Cash Held
Cash and cash equivalents at the beginning of the year
Effect of exchange rate change on foreign currency balances held
at the beginning of the year
Cash and cash equivalents at the end of the year
NOTES
2015
$000’S
2014
$000’S
35,992
115
(28,680)
(5,159)
(998)
1,270
(13,602)
(17,927)
(7)
8,289
(23,247)
-
(21,977)
40,558
9,024
27,605
35,801
167
(23,319)
(6,298)
(731)
5,620
(9,666)
(14,035)
(155)
-
(23,856)
-
(18,236)
58,828
(34)
40,558
26(a)
26(b)
The accompanying notes form part of and are to be read in conjunction with these Financial Statements.
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
57
1 SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Cue Energy Resources Limited is a for-profit Public
Company listed on the Australian Securities Exchange
incorporated and domiciled in Australia. The financial
report was authorised for issue by the Directors on the date
the Directors’ Declaration was signed.
(a) Operations and principal activities
Operations comprise petroleum exploration, development
and production activities.
(b) Statement of compliance
The financial report is a general purpose financial report
presented in Australian dollars which has been prepared
in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting
Standards Board (“AASB”) and the Corporations Act 2001,
as appropriate for for-profit oriented entities. International
Financial Reporting Standards (“IFRSs”) form the basis of
Australian Accounting Standards adopted by the AASB. The
financial reports of the consolidated entity also comply
with IFRS and interpretations adopted by the International
Accounting Standards Board.
The accounting policies set out below have been applied
consistently to all periods presented in this report.
(c) Basis of preparation
The financial report has been prepared on a going concern
basis using the historical cost convention.
In accordance with the Corporations Act 2001, these
financial statements present the results of the consolidated
entity only. Supplementary information about the parent
entity is disclosed in note 27.
(d) Critical accounting estimates and judgements
The preparation of a financial report in conformity with
Australian Accounting Standards requires management
to make judgements, estimates and assumptions that
affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates
and associated 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 about
carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from
these estimates. These accounting policies have been
consistently applied by each entity in the consolidated
entity, and the estimates and underlying assumptions are
reviewed on an ongoing basis.
The judgements, estimates and assumptions that have
a significant risk of causing a material adjustment to the
carrying values of assets and liabilities within the next
financial year are discussed below.
(i) Recovery of Deferred Tax Assets
Deferred tax assets resulting from unused tax losses
have been recognised on the basis that management
considers it is probable that future tax profits will be
available to utilise the unused tax losses.
(ii) Impairment of Production Properties Assets
Production properties impairment testing requires an
estimation of the value-in-use of the cash generating
units to which deferred costs have been allocated. The
value-in-use calculation requires the entity to estimate
the future cash flows expected to arise from the cash
generating unit and a suitable discount rate in order to
calculate present value. Other assumptions used in the
calculations which could have an impact on future years
includes USD rates, available reserves and oil and gas
prices.
(iii) Useful Life of Production Property Assets
As detailed at note 1 (k) production properties are
amortised on a unit-of-production basis, with separate
calculations being made for each resource. Estimates
of reserve quantities are a critical estimate impacting
amortisation of production property assets.
(iv) Estimates of Reserve Quantities
The estimated quantities of Proven and Probable
hydrocarbon reserves reported by the Company
are integral to the calculation of the amortisation
expense relating to Production Property Assets,
and to the assessment of possible impairment of
these assets. Estimated reserve quantities are based
upon interpretations of geological and geophysical
models and assessments of the technical feasibility
and commercial viability of producing the reserves.
These assessments require assumptions to be made
regarding future development and production costs,
commodity prices, exchange rates and fiscal regimes.
The estimates of reserves may change from period to
period as the economic assumptions used to estimate
the reserves can change from period to period, and
as additional geological data is generated during the
course of operations. Reserves estimates are prepared in
accordance with the Company’s policies and procedures
for reserves estimation which conform to guidelines
prepared by the Society of Petroleum Engineers.
FINANCIAL STATEMENTS 2014/15FINANCIAL STATEMENTS
58
NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
1 SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONT’)
(v) Joint Arrangements
The entity is subject to a number of joint arrangements
in relation to both its production properties and
exploration assets. The joint arrangement agreements
require unanimous consent from all parties in some
instances for all relevant activities, all assets are held
jointly in common and all parties are severally liable for
the liabilities incurred.
These arrangements are therefore classified as Joint
Operations and the consolidated entity recognises its
direct rights to jointly held assets, liabilities, revenues
and expenses.
(vi) Restoration Provisions
Provisions for future environmental restoration are
recognised where there is a present obligation as
a result of exploration, development, production,
transportation or storage activities having been
undertaken, and it is probable that an outflow of
economic benefits will be required to settle the
obligation. The estimated future obligations include
the costs of removing facilities, abandoning wells and
restoring the affected areas.
(vii) Legal Claim
As a result of an economic project arrangement in the
Jeruk field within the Sampang PSC, Indonesia, Cue
may in certain circumstances have an obligation to
reimburse certain monies spent by the incoming party
from future profit oil within the Sampang PSC. There
is a dispute between Cue and the incoming party as
to the quantum of monies that they may be entitled
to claim by way of such reimbursement and when any
such reimbursement would be payable. The Company
is of the view that any amount which might eventually
become payable would not be likely to exceed the
amount of USD4.4 million which has been provided for
in the financial statements.
(e) New, revised or amending Accounting Standards and
Interpretations adopted
The consolidated entity has adopted all of the new, revised
or amending Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board
(“AASB”) that are mandatory for the current reporting period.
Any new, revised or amending Accounting Standards or
Interpretations that are not yet mandatory have not been
early adopted.
The adoption of these Accounting Standards and
Interpretations did not have any significant impact on the
financial performance or position of the consolidated entity.
The following Accounting Standards and Interpretations are
most relevant to the consolidated entity:
AASB 2012-3 Amendments to Australian Accounting
Standards - Offsetting Financial Assets and Financial
Liabilities
The consolidated entity has applied AASB 2012-3 from
1 July 2014. The amendments add application guidance to
address inconsistencies in the application of the offsetting
criteria in AASB 132 ‘Financial Instruments: Presentation’,
by clarifying the meaning of ‘currently has a legally
enforceable right of set-off’; and clarifies that some gross
settlement systems may be considered to be equivalent to
net settlement.
AASB 2013-3 Amendments to AASB 136 - Recoverable
Amount Disclosures for Non-Financial Assets
The consolidated entity has applied AASB 2013-3 from
1 July 2014. The disclosure requirements of AASB 136
‘Impairment of Assets’ have been enhanced to require
additional information about the fair value measurement
when the recoverable amount of impaired assets is based
on fair value less costs of disposals. Additionally, if
measured using a present value technique, the discount
rate is required to be disclosed.
AASB 2014-1 Amendments to Australian Accounting
Standards (Parts A to C)
The consolidated entity has applied Parts A to C of AASB
2014-1 from 1 July 2014. These amendments affect the
following standards: AASB 2 ‘Share-based Payment’:
clarifies the definition of ‘vesting condition’ by separately
defining a ‘performance condition’ and a ‘service
condition’ and amends the definition of ‘market condition’;
AASB 3 ‘Business Combinations’: clarifies that contingent
consideration in a business combination is subsequently
measured at fair value with changes in fair value recognised
in profit or loss irrespective of whether the contingent
consideration is within the scope of AASB 9; AASB 8
‘Operating Segments’: amended to require disclosures of
judgements made in applying the aggregation criteria and
clarifies that a reconciliation of the total reportable segment
assets to the entity’s assets is required only if segment assets
are reported regularly to the chief operating decision
maker; AASB 13 ‘Fair Value Measurement’: clarifies that the
portfolio exemption applies to the valuation of contracts
within the scope of AASB 9 and AASB 139; AASB 116 ‘Property,
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
59
1 SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONT’)
Plant and Equipment’ and AASB 138 ‘Intangible Assets’:
clarifies that on revaluation, restatement of accumulated
depreciation will not necessarily be in the same proportion
to the change in the gross carrying value of the asset; AASB
124 ‘Related Party Disclosures’: extends the definition of
‘related party’ to include a management entity that provides
KMP services to the entity or its parent and requires
disclosure of the fees paid to the management entity;
AASB 140 ‘Investment Property’: clarifies that the
acquisition of an investment property may constitute a
business combination.
(f) Principles of consolidation
The consolidated financial statements incorporate the
assets and liabilities of all subsidiaries of Cue Energy
Resources Limited (‘’company’’ or ‘’parent entity’’) as at
30 June 2015 and the results of all subsidiaries for the
year then ended. Cue Energy Resources Limited and its
subsidiaries together are referred to in this financial report
as the Group or the consolidated entity.
Subsidiaries are all those entities over which the Group has
control. The consolidated entity controls an entity when
it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect
these returns through its power to direct the activities of the
entity. 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 that control ceases.
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.
The acquisition of subsidiaries is accounted for using the
acquisition method of accounting. A change in ownership
interest, without the loss of control, is accounted for as
an equity transaction, where the difference between the
consideration transferred and the book value of the share
of the non-controlling interest acquired is recognised
directly in equity attributable to the parent.
A change in ownership interest, without the loss of control,
is accounted for as an equity transaction, where the
difference between the consideration transferred and the
book value of the share of the non-controlling interest is
recognised directly in equity attributable to the parent.
Non-controlling interest is the results in equity of
subsidiaries are shown separately in the statement of profit
or loss and other comprehensive income, statement of
financial position and statement of changes in equity of the
consolidated entity. Losses incurred by the consolidated
entity are attributed to the non-controlling interest in full,
even if that results in a deficit balance.
Investments in subsidiaries are accounted for at cost in the
individual financial statements of Cue Energy Resources
Limited.
(g) Revenue recognition
Revenue is recognised in profit or loss when the significant
risks and rewards of ownership have been transferred to
the buyer. Revenue is recognised and measured at the fair
value of the consideration or contributions received, net of
goods and service tax (“GST”), to the extent it is probable
that the economic benefits will flow to the Group and the
revenue can be reliably measured.
Sales revenue
Sales revenue is recognised on the basis of the Group’s
interest in a producing field (“entitlements” method), when
the physical product and associated risks and rewards of
ownership pass to the purchaser, which is generally at the
time of ship or truck loading, or in certain instances the
product entering the pipeline.
Revenue earned under a production sharing contract
(“PSC”) is recognised on a net entitlements basis according
to the terms of the PSC.
Interest income
Interest revenue is recognised as interest accrues using
the effective interest method. This is a method calculating
the amortised cost of a financial asset and allocating the
interest income over the relevant period using the effective
interest rate, which is the rate that exactly discounts
estimated future cash receipts through the expected life
of the financial assets to the net carrying amount of the
financial asset.
FINANCIAL STATEMENTS 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
60
An impairment loss is recognised whenever the carrying
amount of an asset or its cash generating unit exceeds the
recoverable amount. Impairment losses are recognised in
profit or loss, unless an asset has previously been revalued,
in which case the impairment loss is recognised as a
reversal to the extent of that previous revaluation with any
excess recognised through profit or loss.
Impairment losses recognised in respect of cash-generating
units are allocated to reduce the carrying amount of the
assets in the unit (group of units) on a pro rata basis.
(j) Calculation of recoverable amount
For oil and gas assets the estimated future cash flows
are based on value-in-use calculations using estimates
of hydrocarbon reserves, future production profiles,
commodity prices, operating costs and any future
development costs necessary to produce the reserves.
Estimates of future commodity prices are based on
contracted prices where applicable or based on forward
market prices where available. The recoverable amount
of other assets is the greater of their net selling price and
value-in-use.
In assessing value-in-use, the estimated future cash flows
are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset.
For an asset that does not generate largely independent
cash inflows, the recoverable amount is determined for the
cash-generating unit to which the asset belongs.
(k) Production properties
Production properties are carried at the reporting date
at cost less accumulated amortisation and accumulated
impairment losses. Production properties represent the
accumulation of all exploration, evaluation, development
and acquisition costs in relation to areas of interest in which
production licences have been granted.
1 SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONT’)
Other income
Other income is recognised in profit or loss at the fair value
of the consideration received or receivable, net of GST,
when the significant risks and rewards of ownership have
been transferred to the buyer or when the service has been
performed.
The gain or loss arising on disposal of a non-current asset
is included as other income at the date control of the
asset passes to the buyer. The gain or loss on disposal is
calculated as the difference between the carrying amount
of the asset at the time of disposal and the net proceeds on
disposal.
(h) Exploration and evaluation project expenditure
Costs incurred during the exploration, evaluation and
development stages of specific areas of interest are
accumulated. Such expenditure comprises net direct costs,
but does not include general overheads or administrative
expenditure not having a specific nexus with a particular
area of interest.
Expenditure is only carried forward as an asset where it
is expected to be fully recouped through the successful
development of the area, or where activities to date have
not yet reached a stage to allow adequate assessment
regarding existence of economically recoverable reserves,
and active and significant operations in relation to the area
are continuing. Ultimate recoupment of costs is dependent
on successful development and commercial exploitation,
or alternatively, sale of respective areas.
Costs are written off as soon as an area has been
abandoned or considered to be non-commercial.
No amortisation is provided in respect of projects in the
exploration, evaluation and development stages until they
are reclassified as production properties.
Restoration costs recognised in respect of areas of interest
in the exploration and evaluation stage are carried forward
as exploration, evaluation and development expenditure.
(i)
Impairment
The carrying amounts of the consolidated entity’s assets
are reviewed at each reporting date to determine whether
there is any indication of impairment. If any such indication
exists, the asset’s recoverable amount is estimated.
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
61
1 SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONT’)
Amortisation of costs is provided on the unit-of-production
basis, separate calculations being made for each resource.
The unit-of-production basis results in an amortisation
charge proportional to the depletion of economically
recoverable reserves (comprising both proven and
probable reserves), and is shown as a separate line item in
profit or loss.
Amounts (including subsidies) received during the
exploration, evaluation, development or construction
phases which are in the nature of reimbursement or
recoupment of previously incurred costs are offset against
such capitalised costs.
(l) Property, plant and equipment
CLASS OF FIXED ASSET
Office and computer equipment
DEPRECIATION
RATE
5-40%
Property, plant and equipment is carried at historical
cost less accumulated depreciation and accumulated
impairment losses. Depreciation is calculated on a
diminishing value basis so as to allocate the cost of each
item of equipment over its expected economic life. The
economic life of equipment has due regard to physical
life limitations and to present assessments of economic
recovery. Estimates of remaining useful lives are made on
a regular basis for all assets, with annual reassessment for
major items. Gains and losses on disposal of property, plant
and equipment are taken into account in determining the
operating results for the year.
(m) Cash and cash equivalents
For purposes of the statement of cash flows, cash includes
deposits at call which are readily convertible to cash on
hand and which are used in the cash management function
on a day-to-day basis, net of outstanding bank overdrafts.
(n) Trade and other receivables
Trade receivables due from related parties and other
receivables represent the principal amounts due at the
reporting date plus accrued interest and less, where
applicable, any unearned income and allowance for
doubtful accounts. Trade receivables are generally due for
settlement within 30 days.
(o) Inventories
Inventories consist of hydrocarbon stock. Inventories are
valued at the lower of cost and net realisable value. Cost
is determined on a weighted average basis and includes
direct costs and an appropriate portion of fixed production
overheads where applicable.
(p) Trade and other payables
These amounts represent the principal amounts outstanding
at the reporting date plus, where applicable, any accrued
interest. Trade payables are normally paid within 30 days,
and due to their short term nature are generally unsecured
and not discounted.
(q) Provisions
A provision is recognised in the statement of financial
position when the Group has a present legal or constructive
obligation as a result of a past event, it is probable that an
outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can
be made of the amount of the obligation. Provisions are
determined by discounting the expected future cash flows at
a pre-tax rate that reflects current market assessments of the
time value of money and, where appropriate, the risk specific
to the liability.
Restoration
Provisions for future environmental restoration are
recognised where there is a present obligation as a result
of exploration, development, production, transportation or
storage activities having been undertaken, and it is probable
that an outflow of economic benefits will be required to
settle the obligation. The estimated future obligations
include the costs of removing facilities, abandoning wells
and restoring the affected areas.
The provision of future restoration costs is the best estimate
of the present value of the future expenditure required to
settle the restoration obligation at the reporting date, based
on current legal requirements. Future restoration costs are
reviewed annually and any changes in the estimate are
reflected in the present value of the restoration provision at
the reporting date, with a corresponding change in the cost
of the associated asset.
The amount of the provision for future restoration costs
relating to exploration, development and production
facilities is capitalised and depleted as a component of the
cost of those activities.
FINANCIAL STATEMENTS 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
62
1 SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONT’)
(r) Employee benefits
The following liabilities arising in respect of employee
benefits are measured at their nominal amounts:
• wages and salaries and annual leave expected to be
settled within twelve months of the reporting date; and
• other employee benefits expected to be settled within
twelve months of the reporting date.
All other employee benefit liabilities expected to be settled
more than 12 months after the reporting date are measured
at the present value of the estimated future cash outflows
in respect of services provided up to the reporting date.
Liabilities are determined after taking into consideration
estimated future increase in wages and salaries and past
experience regarding staff departures. Related on-costs are
included.
(s) Joint operations
A joint operation is a joint arrangement whereby the parties
that have joint control of the arrangement have rights to
the assets, and obligations for the liabilities, relating to the
arrangement. The consolidated entity has recognised its
share of jointly held assets, liabilities, revenues and expenses
of joint operations. These have been incorporated in the
financial statements under the appropriate classifications.
(t) Income tax
The income tax expense for the year is the tax payable on
the current period’s taxable income based on the applicable
income tax rate for each jurisdiction adjusted by changes in
deferred tax assets and liabilities attributable to temporary
differences and to unused tax losses.
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. However,
deferred income tax is 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
reporting date and are expected to apply when the related
deferred income tax asset is realised or the deferred income
tax liability is settled.
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 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.
Current and deferred tax balances attributable to amounts
recognised directly in equity are also recognised directly in
equity.
Cue Energy Resources Limited (the ‘head entity’) and
its wholly-owned Australian controlled entities have
formed an income tax consolidated group under the tax
consolidation regime effective 1 July 2010. The head entity
and the controlled entities in the tax consolidated group
continue to account for their own current and deferred tax
amounts. The tax consolidated group has applied the group
allocation approach in determining the appropriate amount
of taxes to allocate to members of the tax consolidated
group.
In addition to its own current and deferred tax amounts,
the head entity also recognises the current tax liabilities
(or assets) and the deferred tax assets arising from unused
tax losses and unused tax credits assumed from controlled
entitles in the tax consolidated group.
Assets or liabilities arising under tax funding agreement with
the tax consolidated entities are recognised as amounts
receivable from or payable to other entities in the tax
consolidated group. The tax funding arrangement ensures
that the intercompany charge equals the current tax
liability or benefit of each tax consolidated group member,
resulting in neither a contribution by the head entity to the
subsidiaries nor a distribution by the subsidiaries to the
head entity.
(u) Foreign currency
Functional and presentation currency
The financial statements of each group entity are measured
using their relevant functional currency, which is the
currency of the primary economic environment in which
that entity operates. The consolidated financial statements
are presented in Australian dollars, as this is the parent
entity’s functional and presentation currency.
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
63
1 SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONT’)
Transactions and balances
Transactions in foreign currencies of entities within the
consolidated entity are translated into functional currency
at the rate of exchange ruling at the date of the transaction.
Foreign currency monetary items that are outstanding at
the reporting date (other than monetary items arising under
foreign currency contracts where the exchange rate for that
monetary item is fixed in the contract) are translated using
the spot rate at the end of financial year.
Resulting exchange differences arising on settlement or
re-statement are recognised as in profit or loss for the
financial year.
(v) Leases
Lease payments for operating leases where substantial
risks and benefits remain with the lessor are charged as
expenses in the periods in which they are incurred.
(w) Contributed equity
Ordinary share capital is recognised at the fair value of the
consideration received by the Company. Any transaction
costs arising on the issue of ordinary shares are recognised
directly in equity as a reduction of the share proceeds
received. Ordinary share capital bears no special terms or
conditions affecting income or capital entitlements of the
shareholders.
(x) Rounding
The amounts contained in this financial report have
been rounded to the nearest $1,000 (where rounding is
applicable) under the option available to the Company
under ASIC Class Order 98/100. The Company is an entity
to which the Class Order applies.
(y) Goods and Services tax (‘GST’) and other similar
taxes
Revenues, expense and assets are recognised net of the
amount of associated GST, unless the GST incurred is
not recoverable from the tax authority. In this case it is
recognised as part of the cost of the 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 tax authority
is included in other receivables or other payables in the
statement of financial position.
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 tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the
amount of GST recoverable from, or payable to, the tax
authority.
(z) New Accounting Standards and Interpretations not
yet mandatory or early adopted
Australian Accounting Standards and Interpretations
that have recently been issued or amended but are not
yet mandatory, have not been early adopted by the
consolidated entity for the annual reporting period ended
30 June 2015. The consolidated entity’s assessment of the
impact of these new or amended Accounting Standards and
Interpretations, most relevant to the consolidated entity, are
set out below.
AASB 9 Financial Instruments
This standard is applicable to annual reporting periods
beginning on or after 1 January 2018. The standard replaces
all previous versions of AASB 9 and completes the project
to replace IAS 39 ‘Financial Instruments: Recognition and
Measurement’. AASB 9 introduces new classification and
measurement models for financial assets. A financial asset
shall be measured at amortised cost, if it is held within a
business model whose objective is to hold assets in order
to collect contractual cash flows, which arise on specified
dates and solely principal and interest. All other financial
instrument assets are to be classified and measured at fair
value through profit or loss unless the entity makes an
irrevocable election on initial recognition to present gains
and losses on equity instruments (that are not held-for-
trading) in other comprehensive income (‘OCI’). For financial
liabilities, the standard requires the portion of the change
in fair value that relates to the entity’s own credit risk to
be presented in OCI (unless it would create an accounting
mismatch). New simpler hedge accounting requirements
are intended to more closely align the accounting treatment
with the risk management activities of the entity. New
impairment requirements will use an ‘expected credit loss’
(‘ECL’) model to recognise an allowance. Impairment will be
measured under a 12-month ECL method unless the credit
risk on a financial instrument has increased significantly
since initial recognition in which case the lifetime ECL
method is adopted. The standard introduces additional new
disclosures. The consolidated entity will adopt this standard
from 1 July 2018 but the impact of its adoption is yet to be
assessed by the consolidated entity.
FINANCIAL STATEMENTS 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
64
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’)
AASB 15 Revenue from Contracts with Customers
This standard is applicable to annual reporting periods beginning on or after 1 January 2017. The standard provides a single
standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue to depict the
transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services. The standard will require: contracts (either written, verbal or implied)
to be identified, together with the separate performance obligations within the contract; determine the transaction price,
adjusted for the time value of money excluding credit risk; allocation of the transaction price to the separate performance
obligations on a basis of relative stand-alone selling price of each distinct good or service, or estimation approach if no
distinct observable prices exist; and recognition of revenue when each performance obligation is satisfied. Credit risk will
be presented separately as an expense rather than adjusted to revenue. For goods, the performance obligation would
be satisfied when the customer obtains control of the goods. For services, the performance obligation is satisfied when
the service has been provided, typically for promises to transfer services to customers. For performance obligations
satisfied over time, an entity would select an appropriate measure of progress to determine how much revenue should be
recognised as the performance obligation is satisfied. Contracts with customers will be presented in an entity’s statement of
financial position as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity’s
performance and the customer’s payment. Sufficient quantitative and qualitative disclosure is required to enable users to
understand the contracts with customers; the significant judgments made in applying the guidance to those contracts; and
any assets recognised from the costs to obtain or fulfil a contract with a customer. The consolidated entity will adopt this
standard from 1 July 2017 but the impact of its adoption is yet to be assessed by the consolidated entity.
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
65
2 FINANCIAL INSTRUMENTS
The Group’s principal financial instruments comprise receivables, payables, cash and short term deposits.
The Group manages its exposure to key financial risks, including interest rate and currency risk through management’s
regular assessment of financial risks. The objective of the assessment is to support the delivery of the Group’s financial
targets whilst protecting future financial security.
The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk, commodity price
risk, credit risk and liquidity risk. The Group uses different methods to measure and manage different types of risk to which
it is exposed. These include monitoring levels of exposure to interest rate and foreign exchange risk and assessments of
market forecasts for interest rate, foreign exchange and commodity prices. These risks are summarised below.
Primary responsibility for identification and control of financial risks rests with the Chief Financial Officer under the authority
of the Board. The Board reviews and agrees management’s assessment for managing each of the risks identified below.
The carrying amounts and net fair values of the economic entity’s financial assets and liabilities at the reporting date are:
CARRYING AMOUNT
2015
2014
$000’S
$000’S
NET FAIR VALUE
2014
$000’S
2015
$000’S
27,605
4,761
32,366
15,936
580
16,516
40,558
3,542
44,100
21,184
2,398
23,582
27,605
4,761
32,366
15,936
580
16,516
40,558
3,542
44,100
21,184
2,398
23,582
CONSOLIDATED
Financial assets
Cash and cash equivalents
Trade and other receivables
Non-traded financial assets
Financial liabilities
Trade and other payables
Tax liabilities - current
Non-traded financial liabilities
Risk Exposures and Responses
(a) Fair Value Risk
The financial assets and liabilities of the Group are recognised in the statement of financial position at their fair value in
accordance with the accounting policies set out in note 1. In all instances the fair value of financial amounts and liabilities
approximates to their carrying value.
Basis for determining fair values
The following summarises the significant methods and assumptions used in estimating the fair values of financial
instruments:
Trade and other receivables
The carrying value less impairment provision of trade receivables is a reasonable approximation of their fair values due to
the short-term nature of trade and other receivables.
Financial liabilities
Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market
rate of interest at the reporting date. Where these cash flows are in a foreign currency the present value is converted into
Australian dollars at the foreign exchange spot rate prevailing at the reporting date.
Trade and other payables
The carrying value of trade payables is a reasonable approximation of their fair values due to the short term nature of trade
payables.
FINANCIAL STATEMENTS 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
66
2 FINANCIAL INSTRUMENTS (CONT’)
(b) Interest Rate Risk
The Group’s exposure to market interest rates is related primarily to the Group’s cash deposits.
At the reporting date, the Group had the following financial assets exposed to Australian and overseas variable interest rate
risk that are not designated in cash flow hedges:
Cash and cash equivalents
CONSOLIDATED
2014
$000’S
40,558
2015
$000’S
27,605
The Group constantly analyses its interest rate opportunity and exposure. Within this analysis consideration is given to
existing positions and alternative arrangement on fixed or variable deposits.
The following sensitivity analysis is based on the interest rate opportunity/risk in existence at the reporting date.
Based upon the average balance of net exposure during the year, if interest rates changed by +/-1%, with all other variables
held constant, the estimated impact on post-tax profit and equity would have been:
Impact on post-tax profit
Interest rates +1%
Interest rates –1%
Impact on equity
Interest rates +1%
Interest rates –1%
CONSOLIDATED
2014
$000’S
2015
$000’S
341
(341)
341
(341)
497
(497)
497
(497)
A movement of + and – 1% is selected because this is historically is within a range of rate movements and available
economic data suggests this range is reasonable.
(c) Foreign Exchange Risk
The Group is subject to foreign exchange risk on its international exploration and appraisal activities where costs are
incurred in foreign currencies, in particular United States dollars.
The Board approved the policy of holding certain funds in United States dollars to manage foreign exchange risk.
The Group’s exposure to foreign exchange risk at the reporting date was as follows (holdings are shown in AUD equivalent):
CONSOLIDATED
Financial assets:
Cash and cash equivalents
Receivables
Financial liabilities:
Current payables
30 JUNE 2015
NZD
$000’S
USD
$000’S
IDR
$000’S
30 JUNE 2014
NZD
$000’S
USD
$000’S
PNG KINA
$000’S
26,635
4,394
384
240
186
-
39,913
2,687
12,659
1,408
357
15,603
400
842
947
8
-
-
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
2 FINANCIAL INSTRUMENTS (CONT’)
At the reporting date, if the currencies set out in the table above, strengthened or weakened against the Australian dollar
by the percentage shown, with all other variables held constant, net profit for the year would increase/(decrease) and net
assets would increase / (decrease) by:
67
Impact on post-tax profit
Exchange rates +10%
Exchange rates -10%
Impact on equity
Exchange rates +10%
Exchange rates -10%
Impact on post-tax profit
Exchange rates +10%
Exchange rates -10%
Impact on equity
Exchange rates +10%
Exchange rates -10%
USD
$000’S
NZD
$000’S
IDR
$000’S
CONSOLIDATED
2015
TOTAL
$000’S
(1,837)
1,837
(1,837)
1,837
75
(75)
75
(75)
USD
$000’S
NZD
$000’S
(2,700)
2,700
(2,700)
2,700
(30)
30
(30)
30
17
(17)
17
(17)
(1,745)
1,745
(1,745)
1,745
CONSOLIDATED
2014
TOTAL
$000’S
PNG
KINA
$000’S
(1)
1
(1)
1
(2,731)
2,731
(2,731)
2,731
Management believes the risk exposures as at the reporting date are representative of the risk exposure inherent in the
financial instruments. A movement of +/– 10% is selected because a review of recent exchange rate movements and
economic data suggests this range is reasonable.
(d) Commodity Price Risk
The Group is involved in oil and gas exploration and appraisal, and since April 1998 has received revenue from the sale of
hydrocarbons. Exposure to commodity price risk is therefore limited to this production and from successful exploration and
appraisal activities the quantum of which at this stage cannot be measured.
The Group is exposed to commodity price fluctuations through the sale of petroleum products denominated in US dollars.
The Group may enter into commodity crude oil price swap and option contracts to manage its commodity price risk.
At 30 June 2015 the Group had no open oil price swap contracts (2014: nil).
FINANCIAL STATEMENTS 2014/15FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
68
2 FINANCIAL INSTRUMENTS (CONT’)
If the US dollar oil price changed by +/-20% from the average oil price during the year, with all other variables held constant,
the estimated impact on post-tax profit and equity would have been:
Impact on post-tax profit
US dollar oil price +20%
US dollar oil price –20%
Impact on equity
US dollar oil price +20%
US dollar oil price –20%
CONSOLIDATED
2014
$000’S
2015
$000’S
3,872
(3,872)
3,872
(3,872)
3,565
(3,565)
3,565
(3,565)
Management believes the risk exposures as at the reporting date are representative of the risk exposure inherent in the
financial instruments. A movement of + and – 20% is selected because a review of historical oil price movements and
economic data suggests this range is reasonable.
(e) Liquidity Risk
Liquidity Risk is the risk that the group, although balance sheet solvent, cannot meet or generate sufficient cash resources
to meet its payment obligations in full as they fall due, or can only do so at materially disadvantageous terms.
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who have established an appropriate
liquidity risk management framework for the management of the Group’s short, medium and long-term funding and
liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities
and reserve borrowing facilities and by continuously monitoring forecast and actual cash flows and matching the maturity
profiles of financial assets and liabilities.
The Group is consequently more than sufficiently solvent to meet its payment obligations in full as they fall due.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding
through an adequate amount of committed credit facilities and the ability to close out market positions. The Group aims to
maintain flexibility in funding to meet ongoing operational requirements, exploration and development expenditure, and
small-to-medium-sized opportunistic projects and investments, by keeping committed credit facilities available.
The following table analyses the contractual maturities of the Group’s financial liabilities into relevant groupings based on
the remaining period at the reporting date to the contractual undiscounted cash flows comprising principal and interest
repayments. Estimated variable interest expense is based upon appropriate yield curves existing as at 30 June 2015.
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
2 FINANCIAL INSTRUMENTS (CONT’)
69
12 MONTHS
OR LESS
$000’S
1 TO 2
YEARS
$000’S
2 TO 5
YEARS
$000’S
MORE THAN
5 YEARS
$000’S
15,936
580
16,516
21,184
2,398
23,582
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
CONSOLIDATED 2015
Non-derivative financial liabilities
Trade and other payables
Tax liabilities - current
CONSOLIDATED 2014
Non-derivative financial liabilities
Trade and other payables
Tax liabilities - current
(f) Credit Risk
Credit risk arises from the financial assets of the group, which comprise cash and cash equivalents and trade and other
receivables. The Group’s exposure to credit risk arises from potential default by the counter-party, with maximum exposure
equal to the carrying amount of these instruments. Exposure at the reporting date is addressed in each applicable note.
The Group does not hold any credit derivatives to offset its credit exposure.
The Group trades only with recognised, creditworthy third parties, and as such collateral is not requested nor is it the
Group’s policy to securitize its trade and other receivables.
It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures
including an assessment of their independent credit rating, financial position, past experience and industry reputation. The
risks are regularly monitored.
At the reporting date there are no significant concentrations of credit risk within the Group.
FINANCIAL STATEMENTS 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
70
3 REVENUE AND OTHER INCOME
Revenue from continuing operations:
Production income
Other income:
Interest from cash and cash equivalents
Joint Venture overhead charge
Overall gain as a result of acquisition
Gain on bargain purchase
Reversal of impairment of Exploration assets
Profit on sale of Cue PNG Oil Company Pty Ltd
Net foreign currency exchange gain
CONSOLIDATED
2014
$000’S
2015
$000’S
36,925
32,246
107
27
63
35,959
5,830
41,986
6,911
162
-
-
-
-
162
81
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
4 EXPENSES
Profit before income tax expense from continuing operations includes the following specific areas:
71
Operating Expenses
Production costs
Amortisation of production properties
Other Expenses
Depreciation of property, plant and equipment
Employee expense
Superannuation contribution expense
Operating lease expenses
Takeover defence related costs
Administrative expenses
Business development expenses
Other expenses
5 AUDITORS REMUNERATION
Amounts paid or due and payable to the auditor – BDO East Coast Partnership for:
CONSOLIDATED
2014
$000’S
2015
$000’S
13,425
10,828
15,968
9,074
49
4,150
221
265
2,003
765
1,479
8,932
100
3,582
170
793
-
910
1,136
6,691
2015
$
2014
$
Audit or review of the financial statements
115,500
87,000
Other Services:
Advisory Services
Tax compliance and other services
Total
1,000
36,900
153,400
7,000
31,000
125,000
No other services were provided by the auditor during the year, other than those set out above.
FINANCIAL STATEMENTS 2014/15FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
72
6 TAXATION
INCOME TAX (BENEFIT)/EXPENSE
Current tax
Adjustment recognised for prior periods
Deferred tax
Aggregate income tax (benefit)/expense
Income tax expense is attributable to:
Profit for the year
Deferred tax included in income tax comprises:
(Increase)/decrease in deferred tax assets
Increase/(decrease) in deferred tax liabilities
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit for the year before income tax expense
Tax expense at Australian tax rate of 30% (2014: 30%)
Unrealised timing differences
Difference in overseas tax rates
Allowable mining deductions
Tax losses carried forward
Adjustments to current tax from prior periods
Disallowable intercompany interest
Non-taxable gain on bargain purchase
Movements in deferred tax
Non-taxable gain on disposal of subsidiary
Unrealised foreign exchange movements
Income tax expense
Tax losses
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit at relevant local tax rates
CONSOLIDATED ENTITY
2014
$000’S
2015
$000’S
3,266
-
(8,466)
(5,200)
4,843
(120)
(2,479)
2,244
(5,200)
2,244
(8,164)
(302)
(8,466)
34,842
10,453
(13)
242
(4,011)
2,179
-
(86)
(10,805)
188
(1,681)
(1,666)
(5,200)
61,930
18,579
(2,773)
294
(2,479)
78
23
169
1,354
(1,824)
5,319
(120)
(174)
-
(2,479)
-
(24)
2,244
52,188
15,775
Current tax liabilities
580
2,398
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
73
6 TAXATION (CONT’)
Non-current assets – deferred tax assets
Movements - Consolidated
Opening balance
Credit to the income statement
Closing balance
Non-current liabilities – deferred tax liabilities
Movements - Consolidated
Opening balance
(Credit)/debit to the income statement
Net
(i) Presentation in the consolidated statement of financial position as follows:
Deferred tax asset
Deferred tax liability
Net
(i)
(i)
(i)
CONSOLIDATED ENTITY
2014
$000’S
2015
$000’S
11,573
8,164
19,737
8,800
2,773
11,573
(30,986)
302
(30,684)
(30,692)
(294)
(30,986)
(10,947)
(19,413)
70
(11,017)
(10,947)
71
(19,484)
(19,413)
FINANCIAL STATEMENTS 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
74
7 CAPITAL AND RESERVES
(a) Issued Capital
Issued and paid up ordinary fully paid shares
Balance at 1 July
Options exercised
Closing balance at 30 June
2015
$000’S
2014
$000’S
CONSOLIDATED
2014
SHARES ON
ISSUE
2015
SHARES ON
ISSUE
152,416
-
152,416
152,416
698,119,720
698,119,720
-
152,416
-
698,119,720
-
698,119,720
Ordinary shares entitle the holder to the right to receive dividends as declared and, in the event of winding up the Company,
to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid on the
shares held. Ordinary shares entitle holders to one vote, either in person or by proxy at a meeting of the Company. The
Company has an unlimited authorised capital and the shares have no par value.
(b) Share Based Payment Reserve
Balance at 1 July
Performance Share Rights payment expense
Performance Share Rights payment transferred
Closing balance at 30 June
Nature and purpose of reserve
CONSOLIDATED
2014
$000’S
2015
$000’S
-
-
-
-
22
-
(22)
-
This reserve is used to record the value of equity benefits provided as part of agreements entered into by the Company
during the year. Refer to note 24 and the Remuneration Report within the Directors’ Report for details.
The following reconciles the outstanding options and Performance Share Rights granted as remuneration in the current and
prior financial years at the beginning and end of the year:
Balance at beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year
Lapsed during the year
Balance at end of the year
2015
NUMBER OF
PERFORMANCE
SHARE RIGHTS
-
2015
NUMBER OF
OPTIONS
-
2014
NUMBER OF
PERFORMANCE
SHARE RIGHTS
1,600,000
2014
NUMBER OF
OPTIONS
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,600,000)
-
-
-
-
-
-
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
7 CAPITAL AND RESERVES (CONT’)
(c) Capital management
When managing capital, management’s objective is to ensure the entity continues as a going concern as well as maintaining
optimal return for shareholders and benefits for other stakeholders. Management also aims to maintain a capital structure
that ensures the lowest cost of capital available to the entity.
Management are constantly adjusting the capital structure of the entity to take advantage of favourable costs of capital or
high returns on assets. As the market is constantly changing, management may change the amount of dividends to be paid
to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
During 2015 management did not pay any dividends (2014: nil).
There has been no change during the year to the strategy adopted by management to control the capital of the entity.
The gearing ratios for the years ended 30 June 2015 and 30 June 2014 are as follows:
75
Trade and other payables
Tax liabilities
Total
Less cash and cash equivalents
Surplus cash
Total equity
Total capital
Gearing ratio
CONSOLIDATED
2014
$000’S
(21,184)
(2,398)
(23,582)
40,558
16,976
129,403
146,379
2015
$000’S
(15,936)
(580)
(16,516)
27,605
11,089
171,903
182,992
nil%
nil%
FINANCIAL STATEMENTS 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
76
8 TRADE AND OTHER RECEIVABLES
Current receivables
Trade receivables
Other receivables and prepayments
The ageing of trade receivables at the reporting date was as follows:
Less than one month
CONSOLIDATED
2014
$000’S
2015
$000’S
3,288
1,473
4,761
3,288
3,288
2,673
869
3,542
2,673
2,673
Trade receivables are non-interest-bearing and settlement terms are generally within 30 days.
Trade receivables are neither past due nor impaired and relate to a number of independent customers for whom there is no
recent history of default.
Impaired receivables
At 30 June 2015 there were no current trade receivables that were impaired (2014: nil).
The balance of the allowance for impairment in respect of trade receivables at 30 June 2015 was nil (2014: nil). There has
been no movement in the allowance during the year.
The Directors consider that the carrying value of receivables reflects their fair values.
9 PROPERTY, PLANT AND EQUIPMENT
Office and computer equipment
Cost
Accumulated depreciation
CONSOLIDATED
2014
$000’S
2015
$000’S
258
(182)
76
505
(387)
118
Reconciliation of the carrying amount of office and computer equipment at the beginning and end of the current financial
year is set out below:
Balance at beginning of year
Additions
Depreciation expense
Balance at end of year
CONSOLIDATED
2014
$000’S
63
155
(100)
118
2015
$000’S
118
7
(49)
76
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
10 INVENTORIES
Current Assets
Inventory
11 SHARES IN SUBSIDIARIES
Shares held by the parent entity at the reporting date:
SUBSIDIARY COMPANIES
Cue Mahato Pty Ltd
Cue Mahakam Hilir Pty Ltd
Cue Kalimantan Pte Ltd1
Cue (Ashmore Cartier) Pty Ltd
Cue Sampang Pty Ltd
Cue Resources, Inc
Buccaneer Operating LLC2
Cue Taranaki Pty Ltd
Cue PNG Oil Company Pty Ltd
Cue Exploration Pty Ltd
Less accumulated impairment
losses
2015
$
2
1
2
2
1
1,000
1
1
2014
$
-
1
-
2
INTEREST
HELD
100%
100%
100%
100%
COUNTRY OF
INCORPORATION
Australia
Australia
Singapore
Australia
1
-
-
1
100%
100%
100%
100%
100%
100%
Australia
USA
USA
Australia
Australia
Australia
-
1,929,077
1
1,929,077
(1,343,808)
585,269
(1,343,808)
585,269
Total
586,279
585,275
All companies in the Group have a 30 June reporting date.
1
2
shares held by Cue Mahakam Hilir Pty Ltd
shares held by Cue Resources, Inc
77
CONSOLIDATED
2014
$000’S
2015
$000’S
3,728
843
PARENT
PRINCIPAL
ACTIVITY
Petroleum exploration
Petroleum exploration
Petroleum exploration
Petroleum exploration
Petroleum production
and exploration
Petroleum production
and exploration
Petroleum production
and exploration
Petroleum production
and exploration
Petroleum production
and exploration
Petroleum exploration
FINANCIAL STATEMENTS 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
78
12 EXPLORATION AND EVALUATION EXPENDITURE
Costs carried forward in respect of areas of interest in exploration and evaluation phase
Expenditure incurred during the year
Reversal of impairment of exploration asset (note 21)
Less disposal of areas of interest (note 22)
Closing balance at 30 June
Accumulated costs incurred on current areas of interest net of amounts written off -
PNG PRL 9
PNG PRL14
PNG PDL 3 (non unitised)
Joint Venture assets:
-
Sampang PSC
- Mahato PSC
- Mahakam Hilir PSC
-
-
-
- WA-360-P
- WA-361-P
- WA-389-P
- WA-409-P
PEP 51313
-
PEP 51149
-
PEP 54865
-
Controlled assets:
- WA-359-P
- WA-409-P
- Mahakam Hilir PSC
CONSOLIDATED
2014
$000’S
36,944
17,125
-
-
54,069
2015
$000’S
54,069
9,891
35,959
(2,861)
97,058
8,827
5,381
-
-
-
-
2,084
565
3,097
-
6,239
2,210
169
28,572
2,919
864
64,703
68,486
97,058
8,862
-
27,017
2,221
416
209
1,979
561
2,888
201
6,073
1,889
83
52,399
1,670
-
-
1,670
54,069
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
13 PRODUCTION PROPERTIES
Balance at beginning of year
Expenditure incurred during the year
Acquisition of production asset (note 21)
Disposal of production asset (note 22)
Impairment provision
Amortisation expense
Balance at end of year
Net accumulated costs incurred on areas of interest
PNG PDL 3 (unitised)
Joint Venture assets:
-
- Oyong and Wortel – Sampang PSC
- Maari – PMP 38160
Controlled assets:
- Pine Mills
Total
79
CONSOLIDATED
2014
$000’S
73,935
14,785
-
-
-
(9,262)
79,458
2015
$000’S
79,458
24,163
3,906
(553)
(18,015)
(10,828)
78,131
-
13,075
61,132
74,207
3,924
78,131
512
15,677
63,269
79,458
-
79,458
14 IMPAIRMENT OF PRODUCTION PROPERTY ASSETS
At 30 June 2015 the Group reassessed the carrying amount of its oil and gas assets, Production Properties (refer note
13 and note 1(i)), for indicators of impairment such as changes in future prices, future costs and reserves. As a result, the
recoverable amounts of cash-generating units were formally reassessed. An impairment of the Maari oil field development
in New Zealand of $18.01 million, primarily as a result of significantly reduced oil prices, was recognised during the year
(2014: nil).
Estimates of recoverable amounts are based on the assets’ value-in-use, determined by discounting each asset’s estimated
future cash flows at asset specific discount rates. The pre-tax discount rates applied were 14.3% (2014: 14.3%) equivalent
to post-tax discount rates of 10% (2014: 10%) depending on the nature of the risks specific to each asset. Where an asset
does not generate cash flows that are largely independent from other assets or groups of assets, the recoverable amount is
determined for the cash-generating unit to which the asset belongs.
FINANCIAL STATEMENTS 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
80
15 TRADE AND OTHER PAYABLES
Current
Trade payables and accruals
Amounts due to directors and director related entities
CONSOLIDATED
2014
$000’S
2015
$000’S
15,637
299
15,936
21,119
65
21,184
The Directors consider the carrying amount of payables reflect their fair values. Trade creditors are generally settled within
30 days.
Included within trade payable and accruals is an amount of $6.1 million relating to liabilities associated with a dispute in
relation to the Jeruk field within the Sampang PSC. Refer to note 28 for more information.
16 PROVISIONS
Current
Employee benefits
Non-Current
Employee benefits
Restoration
CONSOLIDATED
2014
$000’S
2015
$000’S
584
96
11,313
11,409
563
64
5,563
5,627
Movements in each class of provision during the financial year, other than provisions relating to employee benefits are set
out below:
Consolidated
Balance at 1 July 2014
Provisions made during the year
Unused amounts reversed
Provisions used during the year
Balance at 30 June 2015
Restoration
EMPLOYEE
BENEFITS RESTORATION
$000’S
$000’S
627
344
-
(291)
680
5,563
8,213
(1,083)
(1,380)
11,313
Provisions for future removal and restoration costs are recognised where there is a present obligation as a result of
exploration, development, production, transportation or storage activities having been undertaken, and it is probable that
an outflow of economic benefits will be required to settle the obligation. The estimated future obligations include costs of
removing facilities, abandoning wells and restoring the affected areas. Expected timing of outflow of restoration liabilities is
not within the next 12 months from the reporting date.
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
17 INTERESTS IN JOINT OPERATIONS
PROPERTY
OPERATOR
CUE
INTEREST
(%)
GROSS AREA
(KM2)
NET AREA
(KM2)
PERMIT
EXPIRY DATE
81
Petroleum Exploration Properties
Carnarvon Basin – Western Australia
WA-359-P
WA-360-P
WA-361-P
WA-389-P
WA-409-P
New Zealand
PEP51313
PEP51149
PEP54865
Cue Exploration Pty Ltd
MEO Australia Limited
MEO Australia Limited
BHP Billiton (Australia) Pty Ltd
Cue Exploration Pty Ltd
OMV New Zealand Limited
Todd Exploration Limited
Todd Exploration Limited
Indonesia
Mahakam Hilir PSC Cue Kalimantan Pte Ltd
Mahato PSC
Texcal Mahato Pte Ltd
Petroleum Production Properties
New Zealand
100
37.50
15
40
100
14
20
20
100
12.50
645
643
644
1,939
565
819
217
2,475
222.14
5,600
645
241.10
96.60
775.60
169.50
163.80
43.40
495
25/10/2017
05/03/2017
30/01/2016
08/10/2018
29/04/2016
29/07/2021
22/09/2018
10/12/2017
88.90
700
12/11/2015
20/07/2018
PMP 38160
Madura - Indonesia
Sampang PSC
USA
OMV New Zealand Limited
5
80.18
4
01/12/2027
Santos (Sampang) Pty Ltd
15
(8.181818
Jeruk field)
534.50
80.20
04/12/2027
Pine Mills
Cue Resources, Inc
80
8,903.08
7122.47
N/A
FINANCIAL STATEMENTS 2014/15FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
82
17 INTERESTS IN JOINT OPERATIONS (CONT’)
The share of assets and liabilities of the joint operations and other financial liabilities
attributed to Joint Operations have been included under the relevant headings:
Current Assets:
Receivables
Inventory
Non-Current Assets:
Exploration and Evaluation Expenditure (note 12)
Deferred Tax Assets
Production Properties (note 13)
Total Assets
Current Liabilities:
Payables
Current Tax Liabilities
Non-Current Liabilities:
Restoration Provisions
Deferred Tax Liabilities
Total Liabilities
Net Assets
Income and expenses of the consolidated entity attributable to joint ventures:
Production Income
Expenses
Refer to note 28 in relation to contingent liabilities of the Group.
Commitments for expenditure are disclosed in note 18.
CONSOLIDATED
2014
$000’S
2015
$000’S
4,192
3,714
2,998
843
28,572
-
74,207
110,685
52,399
71
79,458
135,769
6,596
576
20,199
2,398
11,312
11,017
29,501
81,184
37,450
15,637
5,563
19,484
47,644
88,125
34,005
18,213
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
18 COMMITMENTS FOR EXPENDITURE
a) Exploration Tenements
In order to maintain current rights of tenure to petroleum exploration tenements, the Group has discretionary exploration
expenditure requirements up until expiry of the primary term of the tenements. These requirements, which are subject to
renegotiation and are not provided for in the financial statements, are payable as follows:
83
Not later than 1 year
Later than 1 year but not later than 2 years
Later than 2 years but not later than 5 years
Later than 5 years
CONSOLIDATED
2014
$000’S
9,480
28,641
740
-
38,861
2015
$000’S
21,260
413
-
-
21,673
If the economic entity decides to relinquish certain tenements and/or does not meet these obligations, assets recognised
in the Statement of Financial Position may require review in order to determine the appropriateness of carrying values.
The sale, transfer or farm-out of exploration rights to third parties could potentially reduce or extinguish these obligations.
All commitments relate to Joint Operation projects.
b) Production Development Expenditure
In order to maintain and improve existing production properties the Group has committed to expend funds as follows:
Not later than 1 year
Later than 1 year but not later than 2 years
Later than 2 years but not later than 5 years
Later than 5 years
All development expenditure commitments relates to the development of oil and gas fields.
CONSOLIDATED
2014
$000’S
15,406
4,945
266
-
20,617
2015
$000’S
4,982
-
-
-
4,982
FINANCIAL STATEMENTS 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
84
18 COMMITMENTS FOR EXPENDITURE (CONT’)
c) Operating Lease Commitments
Non-cancellable operating lease relating to rental of premises are payable as follows:
Not later than 1 year
Later than 1 year but not later than 2 years
Later than 2 years but not later than 5 years
Later than 5 years
CONSOLIDATED
2014
$000’S
2015
$000’S
217
276
383
-
876
-
265
611
-
876
Premises lease term for 5 years from the commencement date of 12 September 2013, with a fixed increase of 3.75% p.a.
and further option term of 5 years.
19 EVENTS SUBSEQUENT TO THE REPORTING DATE
The Company has been notified by the National Offshore Petroleum Titles Administrator of the approval of its application
for a suspension of the Permit Year 3 work programme commitment for WA-359-P. The Year 3 work programme comprises
the drilling of one exploration well which is now due by October 2016.
As a result of an economic project arrangement in the Jeruk field within the Sampang PSC, Indonesia, Cue may in certain
circumstances have an obligation to make compensatory payments for monies spent by the incoming party from future
profit oil within the Sampang PSC. There is a dispute between Cue and the incoming party as to the quantum of monies that
they may be entitled to claim by way of such compensatory payments and when any such amount would be payable. Last
year an arbitration hearing found in favour of Cue’s position however the incoming party is commencing further arbitration
proceedings. The Company is of the view that any amount which might eventually become payable would not be likely to
exceed the amount of USD4.4 million which has been provided for in the accounts.
Apart from the above, the Directors are not aware of any matter or circumstance since the end of the financial year, not
otherwise dealt with in this report that has significantly or may significantly affect the operations of Cue Energy Resources
Limited, the results of those operations or the state of affairs of the Company or Group.
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
20 EARNINGS PER SHARE
85
Earnings/(loss) per share for profit/(loss) from continuing operations
Profit/(loss) after income tax
Non-controlling interest
Profit/(loss) after income tax attributable to the owners of Cue Energy Resources Limited
Weighted average number of ordinary shares used in calculating basic earnings per share
Option over ordinary shares
Convertible notes
Weighted average number of ordinary shares used in calculating diluted earnings
per share
Basic earnings per share
Diluted earnings per share
Earnings/(loss) per share for profit/(loss) from discontinued operations
Profit/(loss) after income tax attributable to the owners of Cue Energy Resources Limited
Weighted average number of ordinary shares used in calculating basic earnings per share
Option over ordinary shares
Convertible notes
Weighted average number of ordinary shares used in calculating diluted earnings
per share
Basic earnings per share
Diluted earnings per share
CONSOLIDATED
2014
$000’S
2015
$000’S
39,822
(2)
39,820
(1,491)
-
(1,491)
NUMBER
698,119,720
-
-
NUMBER
698,119,720
-
-
698,119,720
698,119,720
CENTS
5.71
5.71
CENTS
(0.21)
(0.21)
CONSOLIDATED
2014
$000’S
2015
$000’S
230
(675)
NUMBER
698,119,720
-
-
NUMBER
698,119,720
-
-
698,119,720
698,119,720
CENTS
0.03
0.03
CENTS
(0.10)
(0.10)
FINANCIAL STATEMENTS 2014/15FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
86
20 EARNINGS PER SHARE (CONT’)
Earnings/(loss) per share for profit/(loss)
Profit after income tax
Non-controlling interest
Profit/(loss) after income tax attributable to the owners of Cue Energy Resources Limited
Weighted average number of ordinary shares used in calculating basic earnings per share
Adjustment for calculation of diluted earnings per share:
Options over ordinary shares
Convertible notes
CONSOLIDATED
2014
$000’S
2015
$000’S
40,052
2
40,050
(2,166)
-
(2,166)
NUMBER
698,119,720
NUMBER
698,119,720
-
-
-
-
Weighted average number of ordinary shares used in calculating diluted earnings
per share
698,119,720
698,119,720
Basic earnings per share
Diluted earnings per share
CENTS
5.74
5.74
CENTS
(0.31)
(0.31)
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
21 BUSINESS COMBINATIONS
On 30 June 2015 Cue Mahakam Hilir Pty Ltd, a subsidiary of Cue Energy Resources Limited, acquired 100% of the ordinary
shares of Cue Kalimantan Pte Ltd, formerly SPC Mahakam Hilir Pte Ltd, for the total consideration transferred of USD 1. The
acquired business contributed revenues of $36.02 million and profit after tax of $36.01 million to the consolidated entity for
the period from 1 January 2015 to 30 June 2015. It is not possible to quantify what the revenues and loss would have been
had the entity been acquired as at 1 July 2014. The values identified in relation to the acquisition of Cue Kalimantan Pte Ltd
are calculated on a provisional basis as at 30 June 2015.
Details of the acquisition are as follows:
87
Cash and cash equivalents
Trade receivables
Prepayments
Other receivables
Trade payables
Net assets acquired
Gain on bargain purchase recognised
Acquisition date fair value of total consideration transferred
Representing:
Cash paid or payable to vendor
FAIR VALUE
$000’S
213
47
1
15
(213)
63
(63)
-
-
The gain on bargain purchase is included within the Other Income (refer note 3).
Subsequent to acquisition, the impairment previously recognised on the exploration asset in Cue Kalimantan Pte Ltd, was
reversed resulting in a further gain, relating to the acquired company, of $35,959,000 (refer note 3).
FINANCIAL STATEMENTS 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
88
21 BUSINESS COMBINATIONS (CONT’)
On 30 June 2015 Cue Resources, Inc a subsidiary of Cue Energy Resources Limited, acquired 80% of the Pine Mills
exploration license for the total consideration transferred of USD3 million. The acquired business contributed revenues of
$0.25 million and loss after tax of $0.15 million to the consolidated entity for the period from 15 May 2015 to 30 June 2015.
It is not possible to quantify what the revenues and loss would have been had the entity been acquired as at 1 July 2014. The
values identified in relation to the acquisition of the Pine Mills exploration asset are calculated on a provisional basis as at 30
June 2015.
Details of the acquisition are as follows:
Production property
Net assets acquired
Acquisition date fair value of the total consideration transferred
Representing:
Cash paid or payable to vendor
Acquisition costs expensed to profit or loss
22 DISCONTINUED OPERATIONS
Description
FAIR VALUE
$000’S
3,906
3,906
3,906
3,906
163
On 20 November 2014 the consolidated entity sold Cue PNG Oil Company Pty Ltd (incorporated in Australia), a subsidiary
of Cue Energy Resources Limited, for consideration of USD7.03 million resulting in a profit on disposal before income tax
of $5.83 million. Whilst Cue PNG Oil Company Pty Ltd was sufficiently profitable up to the date of sale, future losses were
projected due to reduced production and expected exploration expenditure.
Financial performance information
Production revenue
Total revenue
Operating expense
Total expenses
Profit/(loss) before income tax expense
Income tax expense
Profit/(loss) after income tax expense from discontinued operations
2015
$000’S
745
745
515
515
230
-
230
2014
$000’S
1,759
1,759
2,434
2,434
(675)
-
(675)
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
22 DISCONTINUED OPERATIONS (CONT’)
Carrying amounts of assets and liabilities disposed
89
Production income receivables
Deferred tax asset
Exploration permits
Production properties
Total assets
Trade and other payables
Abandonment provision
Loan from parent company
Total liabilities
Net assets
Details of the disposal
Total sale consideration
Carrying amount of net assets disposed
Disposal costs
Profit on disposal before tax
Income tax expense
Profit on disposal after income tax
2015
$000’S
126
71
2,861
553
3,611
(69)
(1,083)
-
(1,152)
2,459
2015
$000’S
8,536
(2,459)
(247)
5,830
-
5,830
FINANCIAL STATEMENTS 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
90
23 FINANCIAL REPORTING BY SEGMENTS
Segment Information
AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Group that
are regularly reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers
(“CODM”)) in assessing performance and in determining the allocation of resources.
The CODM assesses the performance of the operating segments based upon a measure of earnings before interest
expense, tax, depreciation and amortisation. The accounting policies adopted for internal reporting to the CODM are
consistent with those adopted in the financial statements.
The principal business of the group is the production and exploration for hydrocarbons in Australia, New Zealand,
Indonesia, USA and PNG. The Board considers the business from both a product and geographic perspective and has
identified four reportable segments. Information regarding the Group’s reportable segments is presented below:
2015
Production Revenue
Production Expenses
Gross Profit
Loss on sale of fixed assets
Other revenue
Foreign exchange movement
Earnings before interest
expense, tax, depreciation and
amortisation
2014
Production Revenue
Production Expenses
Gross Profit
Loss on sale of fixed assets
Other revenue
Foreign exchange movement
Earnings before interest
expense, tax, depreciation and
amortisation
Total segment assets
30 June 2015
30 June 2014
Total segment liabilities
30 June 2015
30 June 2014
AUSTRALIA
NZ
INDONESIA
$000’S
-
-
-
-
5,937
7,322
$000’S
14,269
(4,010)
10,259
-
-
-
$000’S
22,436
(8,978)
13,458
-
36,022
(405)
PNG
$000’S
745
(515)
230
-
-
-
USA
$000’S
220
(437)
(217)
-
27
(6)
TOTAL
$000’S
37,670
(13,940)
23,730
-
41,986
6,911
4,377
(7,756)
49,073
230
(195)
45,729
AUSTRALIA
NZ
INDONESIA
$000’S
-
-
-
(3)
162
(25)
$000’S
10,156
(5,688)
4,468
-
-
34
$000’S
22,090
(10,280)
11,810
-
-
72
PNG
$000’S
1,759
(2,245)
(486)
-
-
-
USA
$000’S
-
-
-
-
-
-
TOTAL
$000’S
34,005
(18,213)
15,792
(3)
162
81
(6,458)
4,502
11,882
(486)
-
9,440
35,935
47,200
2,043
1,927
71,369
73,342
20,058
15,582
99,667
54,282
15,813
30,477
-
3,835
-
1,270
4,458
-
1,612
-
211,429
178,659
39,526
49,256
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
23 FINANCIAL REPORT BY SEGMENT (CONT’)
Reconciliation of earnings before interest expense, tax, depreciation and amortisation (EBITDA) to Profit before Income Tax:
91
EBITDA
Depreciation
Amortisation
Profit before income tax expense
24 SHARE BASED PAYMENTS
Directors and Employee Benefits – Share Based Payment Plans
2015
$000’S
45,729
(49)
(10,828)
34,852
2014
$000’S
9,440
(100)
(9,262)
78
Performance rights over shares in Cue Energy Resources Limited were granted under the Cue Energy Resources Limited
Performance Rights Plan (the ‘Plan’) which was approved by shareholders at the general meeting held on 24 November
2011. The Plan is designed to align the interests of executives with shareholders by providing direct participation in the
benefits of future Company performance over the medium to long term.
Ownership based compensation payments for employees and executives of the group are made at the discretion of the
Board. At year end all outstanding performance rights had lapsed.
Under the Plan, participants were granted performance rights which only vest if certain performance standards (as disclosed
in the Remuneration Report) were met and the executive remained employed by the Company until the end of the vesting
period. The selection of suitable performance benchmarks was considered critical to securing the objectives of the Plan,
and benchmark price levels for vesting were set at significantly higher levels than those prevailing at the time of structuring
the Plan.
Performance rights are not listed and carry no dividend or voting rights. Upon exercise, each option or performance right
was convertible into one ordinary share to rank pari passu in all respects with the Company’s existing fully paid ordinary
shares.
In addition, the company historically had share options on issue to certain employees and other executives. As at 30 June
2014, all these options had either been exercised or had expired.
Share-based payments
The following reconciles the outstanding share options and performance rights granted as remuneration as at the
beginning and end of the year.
Balance at beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year
Lapsed during the year
Balance at end of the year
2015
NUMBER OF
SHARE RIGHTS
-
-
-
2015
NUMBER OF
OPTIONS
-
-
-
2014
NUMBER OF
SHARE RIGHTS
1,600,000
-
-
2014
NUMBER OF
OPTIONS
-
-
-
-
-
-
-
-
-
-
(1,600,000)
-
-
-
-
No performance rights were outstanding as at 30 June 2015.
FINANCIAL STATEMENTS 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
92
25 KEY MANAGEMENT PERSONNEL AND RELATED PARTY DISCLOSURES
The following were Directors of Cue Energy Resources Limited during the financial year:
Chairman
P.G. Foley – Non-Executive Director (appointed 13 April 2015)
Non-Executive Directors
C.P. Hazledine (appointed 13 April 2015)
B.L. Smith (appointed 13 April 2015)
G.J. King (removed 29 July 2015)
A.A. Young (removed 29 July 2015)
R.A. Sylvester (resigned 10 April 2015)
Post year end, S.A. Brown and B.H. Koh were appointed as Directors on 24 July 2014 and 29 July 2015, respectively.
Key Management Personnel
The following executives, in addition to those Directors identified above, comprise key management personnel:
NAME
D.A.J. Biggs
A.M. Knox
J. Schrull (appointed 18 August 2014)
D.B. Whittam (resigned 22 August 2014)
Remuneration
Management Personnel
POSITION
Chief Executive Officer
Company Secretary and Chief Financial Officer
Exploration and Production Manager
Exploration Manager
Total remuneration payments and equity issued to Directors and key management personnel are summarised below.
Elements of Directors and executives remuneration includes:
Short term employment benefits, including non monetary benefits
•
• Post employment benefits – superannuation
Short term employment benefits (including non-monetary benefits)
Long term benefits
Post employment benefits
Termination payments
CONSOLIDATED ENTITY
2014
$
2015
$
1,793,057
6,612
156,040
105,000
2,060,709
1,613,208
-
99,988
-
1,713,196
Refer to the Remuneration Report in the Director’s Report for detailed compensation disclosures on
key management personnel.
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
25 KEY MANAGEMENT PERSONNEL AND RELATED PARTY DISCLOSURES (CONT’)
Consolidated Entities
Details of controlled entities are shown in note 11.
Advances to/(from) controlled entities from/to Cue Energy Resources Limited, net of provisions for impairment, at the
reporting date are as follows:
93
Cue Exploration Pty Ltd
Cue (Ashmore Cartier) Pty Ltd
Cue Resources, Inc
Cue PNG Oil Company Pty Ltd
Cue Mahakam Hilir Pty Ltd
Cue Sampang Pty Ltd
Cue Mahato Pty Ltd
Cue Taranaki Pty Ltd
Total
2014
$
MOVEMENT
$
2015
$
6,480,841
(2,226,329)
-
3,314,711
18,987,663
9,294,916
-
24,401,076
60,252,878
2,396,680
-
2,997,629
(3,314,711)
7,154,260
(1,540,669)
5,380,786
8,422,286
21,496,261
8,877,521
(2,226,329)
2,997,629
-
26,141,923
7,754,247
5,380,786
32,823,362
81,749,139
Repayment of amounts owing to the Company as at 30 June 2015 and all future debts due to the Company, by the
controlled entities are subordinated in favour of all other creditors. Cue Energy has agreed to provide sufficient financial
assistance to the controlled entities as and when it is needed to enable the controlled entities to continue operations.
The parent company provides management, administration and accounting services to the subsidiaries. A management
fee of $186,667 (2014: $480,000) and interest of $180,121 (2014: $417,486) were charged by the parent company to
Cue PNG Oil Company Pty Ltd. Management fees of $3,714,214 (2014: $1,706,042) were charged by the parent company to
Cue Taranaki Pty Ltd.
The ultimate parent company for accounting purposes is New Zealand Oil and Gas Limited, a company incorporated in
New Zealand.
FINANCIAL STATEMENTS 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
94
26 NOTES TO THE STATEMENT OF CASH FLOWS
(a) Reconciliation of operating profit/(loss) to net cash flows
from operating activities:
Profit/(loss) after income tax expense for the year
Adjustments for:
Permit write down
Depreciation
Amortisation
Gain on purchase of assets
Profit on sale of assets
Loss on disposal of assets
Net gain on foreign currency conversion
Impact of changes in working capital items
(Decrease)/increase in assets
Increase in liabilities
Net cash flows from operating activities
(b) Cash comprises cash balances held in Australian dollars and foreign currencies,
principally US dollars, within Australia and overseas:
Australia
New Zealand
USA
Papua New Guinea
Indonesia
Cash and bank balances
CONSOLIDATED
2014
$000’S
2015
$000’S
40,052
(2,166)
18,015
49
10,828
(36,022)
(5,830)
-
(9,778)
(4,625)
(11,419)
1,270
26,197
384
261
-
763
27,605
-
100
9,262
-
-
3
(73)
2,008
(3,514)
5,620
39,873
400
-
8
277
40,558
Cash Flow Statement cash balance
27,605
40,558
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
27 PARENT ENTITY INFORMATION
PARENT ENTITY INFORMATION
Information relating to Cue Energy Resources Limited:
Financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Contributed equity
Reserves
Accumulated losses
Net assets
Financial performance
Profit/(loss) for the year
Total comprehensive income for the year
Capital Commitments
95
PARENT ENTITY
2014
$000’S
2015
$000’S
27,369
82,411
109,780
1,798
96
1,894
41,102
60,956
102,058
1,548
64
1,612
107,886
100,446
152,416
-
(44,530)
152,416
-
(51,970)
107,886
100,446
7,441
7,441
(3,955)
(3,955)
The parent entity has no commitments for the acquisition of capital assets as at 30 June 2015 (2014: nil).
Leases Commitments
The parent entity has no commitments in relation to leases as at 30 June 2015 other than disclosed in note 18.
The parent entity has no contingent assets.
FINANCIAL STATEMENTS 2014/15FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (CONT’)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
96
28 CONTINGENT LIABILITIES & ASSETS
Contingent Liabilities
As a result of an economic project arrangement in the Jeruk field within the Sampang PSC, Indonesia, Cue may in certain
circumstances have an obligation to reimburse certain monies spent by the incoming party from future profit oil within
the Sampang PSC. There is a dispute between Cue and the incoming party as to the quantum of monies that they may be
entitled to claim by way of such reimbursement and when any such reimbursement would be payable. The Company is of
the view that any amount which might eventually become payable would not be likely to exceed the amount of USD4.4
million which has been provided for in the accounts. Claims made by the incoming party are yet to be settled and hence
there is still significant judgement and estimation in relation to these legal claims.
During the year the Board introduced a retention bonus scheme for employees contingent on employees remaining with
the Company until the earlier of 1 February 2016 or upon a shareholder acquiring more than 50% of the voting shares in
Cue or a merger takes place resulting in the Directors of Cue, immediately prior to that merger, not being a majority of
the Directors of the Board of the merged entity. The amount which might eventually become payable would not be likely
to exceed the amount of $1.2 million. At balance date a present obligation to pay this bonus cannot be currently reliably
estimated and hence has not been recognised.
Contingent Assets
The Group has no contingent assets.
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15FINANCIAL STATEMENTS INDEPENDENT AUDITOR’S
REPORT
INDEPENDENT AUDITOR’S
REPORT
97
INDEPENDENT AUDITOR’S REPORT (CONT’)
98
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15 SHAREHOLDER
INFORMATION
99
SHAREHOLDER
INFORMATION
1) DISTRIBUTION OF EQUITY SECURITIES
The distribution of equity security holders of quoted shares
in the Company as at 6 October 2015:
2) UNMARKETABLE PARCELS
The number of shareholders holding less than a marketable
parcel as at 6 October is 1,556.
NUMBER HELD
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
Over 100,000
Total
ORDINARY
277
1,093
809
1,917
341
4,437
3) SUBSTANTIAL SHAREHOLDERS
The names and holdings of substantial shareholders in the
Company as at 6 October 2015:
QUOTED
SHARES
FULLY PAID
335,854,341
% OF ISSUED
ORDINARY
SHARES
48.11
112,996,671
16.19
NZOG Offshore Limited
Singapore Petroleum
Company Limited
4) REGISTERED TOP 20 SHAREHOLDERS
The registered names and holdings of the 20 largest holdings of quoted ordinary shares in the Company as at
6 October 2015:
SHAREHOLDER
NZOG Offshore Limited
UOB Kay Hian Private Limited
Portfolio Securities Pty Ltd
Citicorp Nominees Pty Limited
Custodial Services Limited
Reviresco Nominees Pty Ltd
Finot Pty Ltd
Grizzley Holdings Pty Limited
Berne No 132 Nominees Pty Ltd
HSBC Custody Nominees (Australia) Limited
Mr Richard Tweedie
J P Morgan Nominees Australia Limited
Lakemba Pty Ltd
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14. Ms Rachel Irene Alembakis
15. Milliara Nominees (Aust) Pty Limited
Brinkworth Investment Pty Ltd
16.
Mr Damiano Giorgio Pilla
17.
18.
Andrew Knox
19. Mr Koo Sing Kuang + Mrs Lai Wah Kuang
20. Mr Tze Min Goh
ORDINARY SHARES
335,854,341
113,286,671
10,000,000
8,725,190
7,714,955
7,500,000
5,000,000
4,312,604
4,300,000
3,948,137
3,363,477
3,122,478
3,024,051
2,960,000
2,699,169
2,300,000
1,996,427
1,721,007
1,709,788
1,700,000
525,238,295
% HELD
48.11
16.23
1.43
1.25
1.11
1.07
0.72
0.62
0.62
0.57
0.48
0.45
0.43
0.42
0.39
0.33
0.29
0.25
0.24
0.24
75.24
SHAREHOLDER INFORMATION (CONT’)
100
5) HOLDERS
The number of holders of each class of equity securities
as at 6 October 2015 was:
CLASS OF SECURITY
Ordinary Fully Paid Shares
NUMBER
4,437
6) VENDOR SECURITIES
There are no restricted securities on issue as at
6 October 2015.
7) VOTING RIGHTS
At meeting of members or classes of members:
(a) each member entitled to vote may vote in person or by
proxy, attorney or representative;
(b) on a show of hands, every person present who is a
member or a proxy, attorney or representative of a
member has one vote; and
(c) on a poll, every person present who is a member or a
proxy, attorney or representative of a member has:
(i)
for each fully paid share held by person, or in
respect of which he/she is appointed a proxy,
attorney or representative, one vote for the share;
(ii) for each partly paid share, only the fraction of one
vote which the amount paid (not credited) on the
share bears to the total amounts paid and payable
on the share (excluding amounts credited).
Subject to any rights or restrictions attached to any shares
or class or classes of shares.
8) ANNUAL GENERAL MEETING
Cue’s 2015 Annual General Meeting will be held at the
Flinders Room, The Langham Hotel Melbourne,
1 Southgate Avenue, Southbank 3006, Victoria, Australia
on Thursday 19th November 2015, commencing at
10:00am (AEDT).
9) SHARE REGISTRY
Enquiries
Cue’s share register is handled by Computershare. Please
contact Computershare for all shareholding and dividend
related enquiries.
Change of shareholder details
Shareholders should notify Computershare of any changes
in shareholder details via the Computershare website
(www.computershare.com.au) or writing (fax, email, mail).
Examples of such changes include:
• Registered name
• Registered address
• Direct credit payment details
Computershare Investor Services Pty Ltd
GPO Box 2975
Melbourne, Victoria 3001 Australia
Telephone: 1300 850 505 (within Australia)
or +61 3 9415 4000 (outside Australia)
Facsimile: +61 3 9473 2500
Email: web.queries@computershare.com.au
Website: www.computershare.com.au
10) SHARECODES
ASX Share Code: CUE
ADR Share Code: CUEYY
11) CUE ENERGY WEBSITE
A wide range of information on Cue Energy is available
on the Company’s website, at www.cuenrg.com.au.
The following information for investors is available:
Share price information
•
• Annual reports
• Quarterly reports
• Press releases
• Presentations
CUE ENERGY RESOURCES LIMITED: ANNUAL REPORT 2014/15 C
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ABN 45 066 383 971
Level 19, 357 Collins Street,
Melbourne Victoria 3000 Australia
T: +61 3 8610 4000
F: 61 3 9614 2142
E: mail@cuenrg.com.au
www.cuenrg.com.au
IMPLEMENTING
OUR STRATEGY
ANNUAL REPORT 2014/15