Cue Energy Resources Limited
Annual Report
2021
General Legal Disclaimer
Various statements in this document may constitute statements relating to intentions, opinion, expectations, present and future operations, possible future events and
future financial prospects. Such statements are not statements of fact, and are generally classified as forward looking statements that involve unknown risks, expectations,
uncertainties, variables, changes and other important factors that could cause those future matters to differ from the way or manner in which they are expressly or impliedly
portrayed in this document. Some of the more important of these risks, expectations, uncertainties, variables, changes and other factors are pricing and production levels
from the properties in which the Company has interests, or will acquire interests, and the extent of the recoverable reserves at those properties. In addition, the Company has
a number of exploration permits. Exploration for oil and gas is expensive, speculative and subject to a wide range of risks.
Individual investors should consider these matters in light of their personal circumstances (including financial and taxation affairs) and seek professional advice from their
accountant, lawyer or other professional adviser as to the suitability for them of an investment in the Company.
Except as required by applicable law or the ASX Listing Rules, the Company does not make any representation or warranty, express or implied, as to the fairness, accuracy,
completeness, correctness, likelihood of achievement or reasonableness of the information contained in this document, and disclaims any obligation or undertaking to
publicly update any forward-looking statement or future financial prospects resulting from future events or new information. To the maximum extent permitted by law, none
of the Company or its agents, directors, officers, employees, advisors and consultants, nor any other person, accepts any liability, including, without limitation, any liability
arising out of fault or negligence for any loss arising from the use of the information contained in this document.
Reference to “CUE” or “the Company” may be references to Cue Energy Resources Limited or its applicable subsidiaries.
About Us
Cue Energy Resources Limited is an oil and gas production and exploration
company with production assets in Australia, Indonesia and New Zealand
and exploration assets in Australia. Offices are located in Melbourne,
Australia and Jakarta, Indonesia.
Contents
Joint Operations
Chairman’s Overview
CEO Report and Overview of Operations and Finances
Reserves and Resources
Sustainability
Corporate Directory
Directors’ Report
Auditor’s Independence Declaration
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
WWW.CUENRG.COM.AU
FY 2021 Highlights
• $22.4 million Revenue
• First oil production from Mahato PSC
• Acquisition of interest in Mereenie, Palm
Valley and Dingo production fields
• $11.6 million gross profit from production
• 2P reserves increased to 6 million barrels
of oil equivalent (mmboe)
• Sustainability focus increased with
reporting against Taskforce on Climate
Related Financial Disclosures (TCFD)
2
3
5
10
14
24
25
39
40
41
42
43
44
70
71
77
1
Cue Energy Resources LimitedAnnual Report 2021 Joint Operations
INDONESIA
Mahato PSC
Texcal (Operator)
Central Sumatra Energy
Bukit Energy
Cue
Sampang PSC
Medco Energi (Operator)
Singapore Petroleum Company
Cue
51%
11.5%
25%
12.5%
45%
40%
15%
AUSTRALIA
Carnarvon Basin
WA-389-P
Cue (Operator)
WA-409-P
Cue
BP (Operator)
2 Cue Energy Resources Limited
Annual Report 2021
100%
20%
80%
Amadeus Basin*
Mereenie (OL 4/5)
Central Petroleum (Operator)
Macquarie Mereenie
New Zealand Oil & Gas
Cue
Palm Valley (OL 3)
Central Petroleum (Operator)
New Zealand Oil & Gas
Cue
Dingo (L7)
Central Petroleum (Operator)
New Zealand Oil & Gas
Cue
25%
50%
17.5%
7.5%
50%
35%
15%
50%
35%
15%
NEW ZEALAND
Maari and Manaia Oil Fields
PMP 38160
OMV (Operator)
Horizon Oil
Cue
69%
26%
5%
* Subject to completion of transaction announced
25 May 2021
SECTION HEADINGNEW ZEALANDINDONESIAAUSTRALIAHead OfficeMelbourneCue JakartaOffice
Chairman’s Overview
Alastair McGregor
Dear Shareholders,
At the time of last year’s letter, the COVID-19 pandemic was causing an unprecedented impact on our lives. A year on, the
world and our industry are still finding their footing with respect to living with the pandemic. While many parts of the world
are emerging from long and challenging restrictions, Australia and New Zealand have recently seen the reintroduction of
lockdowns. Although circumstances remain fluid, delays to oil and gas projects over the last 18 months and a potential near
term return to pre-COVID commodity demand levels are creating a positive backdrop for the products that we produce.
In the midst of this unprecedented period of uncertainty, I am happy to report on two significant achievements during the
year. First, production and revenue started from the Mahato PSC in Indonesia. Second, in May Cue signed an agreement
with Central Petroleum to acquire producing onshore gas assets with significant development potential in the Amadeus
Basin, Australia. These new sources of production will double Cue’s revenue streams to four, meaningfully enhancing our
diversification across products and geographies.
The PB field in the Mahato PSC is currently producing 3,600 barrels of oil per day, with further development wells currently
being drilled. In FY21, Cue received $2.4 million in revenue from the field following first oil at the start of the calendar year.
As development continues, we are benefiting from increased production rates as new wells are brought online and the oil
price remains strong.
We expect to complete the announced acquisition of interests in the Mereenie, Palm Valley and Dingo fields in the Amadeus
Basin, onshore Australia, around the time that this report is published. We were attracted to these assets because they
provide current production, supplying gas into a strong gas market in Eastern Australia. Each of the fields also provides near
term upside potential from development and exploration. Activity on these fronts is already underway.
With development activity continuing on both new projects in FY22, we are looking forward to an active fiscal year ahead.
Over the FY21 year Cue’s 2P reserves increased by 4.4 mmboe to 6 mmboe, an almost threefold increase. 4.1 mmboe is
attributable to the Amadeus Basin assets and 0.4 mmboe to the Mahato PSC, where we continue to undertake analysis to
update the reserves based on better than expected field performance. In addition, we have reported 5 mmboe of contingent
resource that can be unlocked through the Paus Biru development at our Sampang asset and through the further planned
work program at Mereenie, Palm Valley and Dingo fields.
Although the development of Paus Biru in the Sampang PSC has been delayed, the Indonesian regulator has identified
the likely buyer of the gas and commercial discussions have commenced. The joint venture is targeting a final investment
decision late in the current fiscal year, with first gas production expected twelve to eighteen months later.
This year, Cue has initiated reporting in line with the recommendations of the Task Force on Climate Related Financial
disclosures (TCFD) and has published a new Climate Change Policy. These documents reflect our planning related to the
business risks posed by climate change. Focus on these important issues will continue to be a priority moving forward.
Cue staff in both our Melbourne and Jakarta offices continue to do an outstanding job managing the challenges presented
by COVID-19. I thank them for their efforts during this difficult time and hope that we are all on a path towards a brighter
postpandemic future.
With multiple new production sources and a full plate of development activity, we have set the stage to meaningfully grow the
scale of the company. We look forward to keeping you updated on the exciting year ahead.
Sincerely
___________________________
Alastair McGregor
Non-Executive Chairman
21 September 2021
3
Cue Energy Resources LimitedAnnual Report 2021
Chairman’s Overview
4 Cue Energy Resources Limited
Annual Report 2021
Photo Credit: Central Petroleum
SECTION HEADING CEO Report and Overview
of Operations and Finances
Matthew Boyall
During the year, Cue achieved first oil production and revenue from the PB field in the
Mahato PSC, Indonesia and expanded our portfolio by announcing the acquisition of
interests in the Mereenie, Palm Valley and Dingo production fields in the Amadeus
Basin, onshore Australia from Central Petroleum. As a result of these activities, Cue
now has four independent revenue producing projects as we enter into FY2022.
Financials
In FY21, Cue added another revenue producing asset to the portfolio,
the PB field in the Mahato PSC and announced the acquisition of
interests in the Mereenie, Palm Valley and Dingo production fields in
the Amadeus Basin, onshore Australia from Central Petroleum.
The addition of Mahato production during the second half of the
year helped offset lower revenue from Maari, which was due to the
oil price remaining in the $40 range for most of the first half of the
year, and no production from the major MR6a production well due to
repairs, resulting in 6% lower revenue than the previous year.
Our assets performed well, recording $11.6m gross profit from
production with an 8% lower production costs (excludes amortisation).
Unfortunately, during the first half of the year the Ironbark-1 well
was unsuccessful and was plugged and abandoned. This was a
disappointing result for all stakeholders.
Cue’s finished the year with cash holdings of $17.6 m and no debt.
This strong position will allow the acquisition of onshore Australian
production assets to be paid from cash, with completion expected
during Q2 FY22.
Production
AUSTRALIAN ONSHORE ACQUISITION
On 25 May 2021, Cue announced the execution of a sale and purchase
agreement with Central Petroleum Limited (Central) (ASX:CTP) to
acquire interests in the Mereenie, Dingo and Palm Valley onshore
gas and oil fields, all located in the Amadeus Basin, onshore in the
Northern Territory, Australia.
On completion, Cue will acquire a 7.5% interest in the Mereenie gas
and oil field (OL4 and OL5 production licences), a 15% interest in the
Palm Valley gas field (OL3 production licence), and a 15% interest in
the Dingo gas field (L7 Production Licence).
Through the transaction Cue will acquire 4.4mmboe of 2P reserves,
with further upside potential from development and exploration
activities. Cue will pay Central $8.7m cash on completion and fund
$12m of Central’s exploration, appraisal, and development costs in
the fields.
On 2 July 2021, the Foreign Investment Review Board provided
a no-objections letter for the acquisition. Other conditions to the
transaction include approval by New Zealand Oil and Gas (NZOG)
shareholders for NZOG to also enter into a transaction with CTP,
which was satisfied on 24 June 2021, and other customary and
regulatory approvals.
5
Cue Energy Resources LimitedAnnual Report 2021 CEO REPORT AND OVERVIEW OF OPERATIONS AND FINANCES
Production
AUSTRALIAN ONSHORE ACQUISITION (CONTINUED)
Cue held a general meeting on 28 July 2021 to seek shareholder
approval to grant security to NZOG related to Deeds of Cross Security
as part of the asset acquisition. Shareholders approved the granting
of the security.
SAMPANG
Gas production from the Sampang PSC was 21% higher than the
previous year due to increased customer demand during the first
half of the year. $13.1 million revenue was received from Oyong and
Wortel production.
The Mereenie development program commenced with four
well recompletions conducted. The re-completions have added
incremental production. Long term performance is still undergoing
review.
Drilling of the WM-27 well commenced late in FY21 and the WM-28
well spud during July 2021 and was completed on 6 September.
The well was successfully completed as a dual zone production
well with good flow test results and is expected to be tied into
the gathering network during September. In addition to the main
production target, sustained flow rates were also encountered in
the Stairway Sandstone interval.
Preparation for the potential exploration and appraisal drilling at the
Palm Valley and Dingo fields in FY22 continues.
Completion of the transaction is expected to occur around 1 October
2021. The transaction has an effective date of 1 July 2020.
The Paus Biru Plan of Development (POD) was approved by
SKKMigas, the Indonesian upstream regulator and contingent
resource booked during the year. The field was discovered by the
Paus Biru-1 exploration well and announced as a gas discovery in
December 2018. The approved POD consists of a single horizontal
development well with an unmanned wellhead platform (WHP),
connected by a subsea pipeline to the existing WHP at the Oyong
field, approximately 27km away. From the Oyong WHP, gas from
Paus Biru will be transported using the existing pipeline to the Grati
Onshore Production Facility, which is operated by the Sampang PSC
joint venture, where it will be processed and sold.
COVID-19 related market demand challenges have impacted
finalising the gas sales agreement which is on the critical path to
a Final Investment Decision (FID) for Paus Biru. The joint venture
has been notified by the Indonesian regulator that Paus Biru gas
has been allocated to the market from 2023. This notification is a
significant step in the commercialisation of Paus Biru and customer
discussions will now take place.
Preliminary FEED and permitting activities are ongoing. FID is
currently targeted for 2022, with first gas in 2023.
AMADEUS BASIN LOCATION MAP – AUSTRALIA
SAMPANG PSC LOCATION MAP – INDONESIA
LEGEND
Cue Permit
Oil Field
G
as Field
Oil Pipeline
Gas Pipeline
OL4
Mereenie
OL5
Palm Valley
OL3
N
100km
6
Java
Madura Island
Alice Springs
Dingo
L7
East Java
Wortel
Maleo
Jeruk
Oyong
Paus Biru
Grati Onshore
Gas Facilities
30km
Peluang
LEGEND
Cue Permit
Oil Field
Gas Field
Cue Energy Resources LimitedAnnual Report 2021 CEO REPORT AND OVERVIEW OF OPERATIONS AND FINANCES
MAHATO
Revenue from the Mahato PSC to 30 June 2021 was $2.4 million.
Commercial oil production commenced from the PB field in the
Mahato PSC in Indonesia during the year from the first well, PB-1.
Three additional development wells, PB-3, PB-4 and PB-5 were
subsequently drilled and put into production along with PB-2
which was completed after being drilled as an exploration well.
At the end of the year, all five wells were in production totaling
approximately 3400 barrels of oil per day (gross), increasing to
3600 bopd (405 bopd net to Cue) in early July.
All five wells to date have encountered oil in the main Bekasap A,
B and C reservoirs as anticipated. PB-1 is producing oil from the
Bekasap B and PB-2, PB-3 and PB-5 are producing from Bekasap C
and PB-4 has commingled production from both Bekasap B and C
reservoirs. The unperforated reservoirs in all wells are candidates
for future production.
Results of the five wells drilled to date indicate further development
in the field, and the next phase of development
potential
drilling has commenced with PB-6 underway, to be followed by
PB-7 and PB-8.
On 17 July 2021, the PBE-1 interfield well commenced in the PB field.
The well did not encounter any hydrocarbons and was plugged and
abandoned in early September.
During the year, Cue announced the settlement of a dispute with
joint venture partners relating to the PB-1 and PB-2 wells.
MAARI
The Maari/Manaia fields provided $6.9 million of revenue to Cue during
the financial year, down 27% on the previous year due to a prolonged
period of lower oil prices and production disruptions from key wells.
Production expenses were down by 36% as the operator took action
to reduce expenditure and some operations were delayed due to
COVID-19 restrictions.
MR9 and MR7 production wells underwent workovers to replace
Electric Submersible Pumps which had reached their operative life
early in the year and were both back online by the second quarter.
MR6a, one of the most productive wells in the field was offline for
the whole of the year after being shut in during March 2020 due to
suspected failure of downhole sand screens.
Repairs to the MR6a well were completed during May 2021. For the
remainder of the year, the well was flowing clean up fluids, with no
increase in hydrocarbon production, as expected. In late June 2021,
low levels of sand were detected in the clean-up flows and the well was
shut-in as a precautionary measure. The operator is considering options,
which may include the installation of temporary de-sanding equipment.
On 18 November 2019, Jadestone Energy Inc. (AIM:JSE, TSXV:JSE),
announced that it had executed a sales and purchase agreement
with OMV to acquire OMV’s 69% operated interest in the PMP 38160
Permit, containing the Maari and Manaia fields. Conditions for com-
pletion of the acquisition include acceptance of Jadestone as operator
by the Joint Venture partners, and achieving regulatory approvals.
New Zealand regulatory approval remains pending. Jadestone
and OMV have amended the longstop date for the acquistion to
31 Dec 2021.
MAHATO PSC LOCATION MAP – INDONESIA
TARANAKI PENINSULA LOCATION MAP – NEW ZEALAND
Bangko
Balam South
Sumatra
New Zealand
Mahato
PSC
Duri
Libo SE
LEGEND
Cue Permit
PB Oil Field
Major Oil Fields
PB
Minas
Kotabatak
Petapahan
40km
LEGEND
Cue Permit
Oil Field
Gas Field
Taranaki
Peninsula
Tui
Maui
Maari
Manaia
PMP 38160
10km
7
Cue Energy Resources LimitedAnnual Report 2021 WA-389-P
WA-389-P adjoins WA-359-P to the East and is mapped to contain
part of a deep Mungaroo prospect which is the updip extension
of the Ironbark structure, with similar scale. Interpretation of 900
km2 of FWI PSDM reprocessed data was initiated with the goal of
exploring the updip extension of a possible success in the downdip
Ironbark-1 well in WA-359-P.
In April 2021, Cue was granted a 12-month suspension and
extension to the permit term until 8 April 2022.
Prospectivity assessment of the permit is continuing, taking into
account the results of the Ironbark-1 well.
MAHAKAM HILIR
An extension to the exploration period of the PSC was granted by
the Indonesian regulator, extending the end date to April 2021. As
part of the extension, a condition was placed on the PSC, restricting
title transfers during the extension period. After assessing the
impact of this and COVID-19 restrictions on any future dealings and
activities, Cue informed the Indonesian Regulator of its intention to
relinquish the permit on expiry in April 2021
Processes are underway for surrendering the permit. These
processes could take until the end of the calendar year.
CEO REPORT AND OVERVIEW OF OPERATIONS AND FINANCES
Exploration
WA-359-P
The Ironbark-1 exploration well in WA-359-P in the Carnarvon
Basin, offshore Western Australia, commenced on 31 October 2020
and drilled to a total depth of 5618m. The primary target interval
was intersected at a depth of 5275 metres, with no significant
hydrocarbon shows encountered in any of the target sands.
The well was plugged and abandoned, and the Ocean Apex rig
departed the well location on 11 January 2021. Based on the well
results a decision was made not to renew the permit after expiry on
25 April 2021.
WA-409-P
WA-409-P adjoins the WA-359-P exploration permit and is mapped
as containing a portion of the Ironbark structure.
the prospectivity assessment of
Upon completion of
the
permit following the Ironbark-1 well results, the Operator BP,
recommended surrendering the permit. The joint venture is now
finalising this surrender.
CARNARVON BASIN LOCATION MAP – AUSTRALIA
Australia
WA-389-P
WA-389-P
WA-389-P
WA-409-P
North West Shelf
Angel
LEGEND
Cue Permit
Gas Field
Deep Mungaroo Leads
Wheatstone
Pluto
NWS LNG
Pluto LNG
N
25km
8
Cue Energy Resources LimitedAnnual Report 2021 CEO REPORT AND OVERVIEW OF OPERATIONS AND FINANCES
Corporate
In June 2018, Cue Energy Resources Ltd and Cue Resources
Inc. were named as defendants, along with a number of other
companies, in litigation in Texas, USA in relation to the Pine Mills
oilfield. The case is entitled Hammerhead Managing Partners, LLC
v. Nostra Terra Oil & Gas Company, PLC, et al., In the United States
District Court For the Northern District of Texas, No. 3:18-cv-1160.
In September 2020, the parties to the litigation entered into a
settlement agreement that fully and finally concluded the litigation
and dismisses it in its entirety. Cue’s financial contribution to the
settlement was US$350,000.
Cue is taking necessary precautions to look after the wellbeing of
staff during the COVID-19 outbreak, with all staff in Melbourne and
Jakarta offices working remotely as required by local restrictions.
9
Cue Energy Resources LimitedAnnual Report 2021 Reserves and
Resources
2P reserves have increased to 6 million barrels of oil equivalent (mmboe).
Cue has increased its 1P reserves by 400% and 2P reserves by 275% during the
financial year due to the announcement of an acquisition of interest in the Mereenie,
Palm Valley and Dingo fields in the Amadeus Basin, onshore Australia and the
development and production of oil from PB field in the Mahato PSC, Indonesia.
2P Reserves
mmboe
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
30 June 2020
30 June 2021
2P Reserves by Asset (mmboe)
Oil/Gas 2P Reserves (mmboe)
Mereenie 2.6
Dingo
0.9
Sampang 0.8
Maari
0.7
Palm Valley 0.6
Mahato
0.4
Oil
Gas
As at June 30, 2021 Cue has reported 4.4 mmboe of proven (1P)
reserves and 6.0 mmboe of Proven and Probable (2P) reserves. 80%
of reported 2P reserves are gas and 20% are oil.
The largest increase in reserves is due the acquisition of Amadeus Basin
assets, which is due to reach completion during October 2021 and
has an effective date of 1 July 2020. Meerenie has added 2P reserves
of 2.6 mmboe, Palm Valley 0.6 mmboe and Dingo 0.9 mmboe. In late
FY21, much of the development focus was on the program of well re-
completions (four) and infill drilling (two new wells) on the Mereenie
field. The re-completions were largely finished (‘first gas’ from three
wells) and sufficient commitment was present to progressing the infill
wells (rig in field, first gas expected in 1H FY22) that the associated
volumes have moved from Undeveloped to Developed categories.
Work continues to progress on the planned exploration and appraisal
drilling at Palm Valley and Dingo. Adjustments have been made to
reserves associated with actual production. Cue knows of no other
reason to change the current reserves bookings.
Cue has reported 0.4 mmboe of 2P reserves from the PB field in the
Mahato PSC. Due to ongoing development drilling, analysis is still
being undertaken into the field size. Until this analysis is complete, Cue
has adopted the reserves independently certified as part of the Plan of
Development (POD) approval. Five wells are currently producing oil,
with production well above POD forecast rates. A further development
well, PB-06, is currently being drilled and 2 more wells will follow.
Mahato reserves are reported net to Cue, exclusive of the Indonesian
Government allocation under the Production Sharing Contract.
Maari 2P reserves have increased by 18% due to better than expected
performance of existing wells and longer field life due to forecast oil
price. Oyong and Wortel fields in the Sampang PSC have performed
as expected during the year, with reserves adjusted for production
during FY21.
10
Cue Energy Resources LimitedAnnual Report 2021 RESERVES AND RESOURCES
NET TO CUE ENERGY RESOURCES LIMITED AS AT 30 JUNE 2021
1P
DEVELOPED
1P
UNDEVELOPED
OIL
EQUIVALENT
GAS
OIL
EQUIVALENT
MMSTB
MMBOE
2.0
0.6
0.3
0.3
0.4
0.3
3.9
0.1
-
-
0.3
0.0
0.3
0.7
2P
PJ
0.8
-
2.2
-
-
-
3.0
MMSTB
MMBOE
0.1
-
0.4
-
-
-
0.5
-
-
-
-
-
-
0.0
2P
DEVELOPED
UNDEVELOPED
OIL
EQUIVALENT
GAS
OIL
EQUIVALENT
MMSTB
MMBOE
0.1
-
-
0.7
0.0
0.4
1.2
2.3
0.6
0.5
0.7
0.8
0.4
5.2
PJ
1.7
-
2.4
-
-
-
4.1
MMSTB
MMBOE
-
-
-
-
-
-
0.0
0.3
-
0.4
-
-
-
0.7
GAS
PJ
12.5
3.5
4.3
-
2.4
-
22.6
GAS
PJ
15.2
3.9
5.3
-
5.1
-
29.5
GAS
PJ
11.7
3.5
2.0
-
2.4
-
19.6
GAS
PJ
13.5
3.9
2.9
-
5.1
-
25.4
1P
TOTAL
OIL
EQUIVALENT
MMSTB
MMBOE
2.2
0.6
0.7
0.3
0.4
0.3
4.4
0.1
-
-
0.3
0.0
0.3
0.7
2P
TOTAL
OIL
EQUIVALENT
MMSTB
MMBOE
0.1
-
-
0.7
0.0
0.4
1.2
2.6
0.6
0.9
0.7
0.8
0.4
6.0
RESERVES PROVEN (1P)
COUNTRY
FIELD/PERMIT
AUSTRALIA (1)
NEW ZEALAND
INDONESIA (2)
TOTAL RESERVES
Mereenie
Palm Valley
Dingo
Maari
Sampang
Mahato
RESERVES PROVEN & PROBABLE (2P)
COUNTRY
FIELD/PERMIT
AUSTRALIA (1)
NEW ZEALAND
INDONESIA (2)
TOTAL RESERVES
Mereenie
Palm Valley
Dingo
Maari
Sampang
Mahato
2C CONTINGENT RESOURCES
COUNTRY
FIELD/PERMIT
EQUIVALENT MMBOE
AUSTRALIA (1)
Mereenie
Palm Valley
Dingo
INDONESIA
Jeruk (Sampang PSC) (3)
Paus Biru (Sampang PSC) (4)
TOTAL CONTINGENT RESOURCES
2.3
0.3
-
1.2
1.1
5.0
PETAJOULES
PJ
MMSTB MILLION STOCK TANK BARRELS
MMBOE MILLION BARRELS OF OIL EQUIVALENT
(1) Australian Reserves are subject to the completion of the transaction announced on 25 May 2021.
(2) Indonesian Reserves are net of Indonesian Government share of production. Production Sharing Contract adjustments affect the net equity differently across the various
reserve categories.
(3) Cue interest in Jeruk is 8.18%.
(4) Paus Biru Contingent Resources have been sub-classified as “Development Unclarified” under the PRMS, which represents a discovered accumulation where project
activities are under evaluation and where justification as a commercial development is unknown based on available information and plans to develop are not yet
considered near-term. As such, further work is required on the development and commercialisation options before bringing forward to reserves status. The Contingent
Resource figures are gross, full well-stream gas, including all non-hydrocarbon components and potential gas utilities for field operation. The gas composition is 97.02%
methane. A deterministic methodology was used to categorise the contingent resources.
11
Cue Energy Resources LimitedAnnual Report 2021 RESERVES AND RESOURCES
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 2018 (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. Cue has
engaged the services of New Zealand Oil & Gas Limited (NZOG)
to independently assess the all reserves. Cue reviews and updates
its oil and reserves position on an annual basis, or as frequently as
required by the magnitude of the petroleum reserves and changes
indicated by new data and reports the updated estimates as of
30 June each year as a minimum.
RESERVES COMPLIANCE STATEMENTS
Oil and gas reserves, and contingent and prospective resources, are
reported as at 1 July 2021 and follow the SPE PRMS Guidelines (2018).
The volumes presented are net to Cue Energy. Cue currently holds
an equity position of 5%, 15% and 12.5% in the Maari, Sampang and
Mahato assets respectively, though Production Sharing Contract
adjustments at the Sampang & Mahato fields affect the net equity
differently across the various reserve categories. In the Amadeus
basin, all fields and prospects are non-operated, with the operator
being Central Petroleum Limited. Cue holds 7.5% equity in Mereenie
and 15% in Palm Valley and Dingo.
Mereenie, Palm Valley and Dingo reserves are based on historical
field production data and various well intervention and drilling
campaigns. This data has been combined with available seismic
data, analytical and numerical analysis methods and a set of
deterministic reservoir simulation and network models. In-place
volumes have been developed using probabilistic methods, with
deterministic workflows used for recoverable volumes. The reserves
and resource volumes stated have not been adjusted for risk.
In New Zealand, the Maari field is non-operated. The operator is
OMV. In Indonesia, all fields and prospects are non-operated, the
operator at Sampang is Medco and at Mahato is Texcal. For Sampang,
a combination of deterministic and analytical methods have been
applied in tandem with a review of the available simulation models,
by NZOG in determining remaining reserves.
At all fields, economic modelling has been conducted to determine
the economically recoverable quantities. For the conversion to
equivalent units, standard industry factors have been used of 6Bcf
to 1mmboe, 1Bcf to 1.05PJ, 1 tonne of LPG to 8.15 boe and 1TJ of
gas to 163.4 boe. Proven (1P) reserves are estimated quantities of oil
and gas which geological and engineering data demonstrate with
reasonable certainty (90% chance) to be recoverable in future years
from known reservoirs, under existing economic and operating
conditions. Probable (2P) reserves have a 50% chance or better of
being technically and economically producible using discounted
cashflows. The oil price assumptions are based on a futures price
12
curve, followed by a flat real price. For gas volumes in excess of
current contracts, a future base market price from an independent
expert report is assumed for gas sales.
Known accumulations are reserves or contingent resources that
have been discovered by drilling a well and testing, sampling or
logging a significant quantity of recoverable hydrocarbons.
Developed reserves are expected to be recoverable from existing
wells and facilities. Undeveloped reserves will be recovered through
future investments (e.g. through installation of compression, new
wells into different but known reservoirs, or infill wells that will
increase recovery). Total reserves are the sum of developed and
undeveloped reserves at a given level of certainty.
All reserves and resources reported refer to hydrocarbon volumes
postprocessing, net of fuel, and immediately prior to point of sale.
The volumes refer to standard conditions, defined as 14.7psia and
60°F. The extraction method is via the Mereenie and Palm Valley
Gas Plants which includes compression and dehydration.
Tables combining reserves have been calculated arithmetically and
some differences may be present due to rounding.
This reserves and resources statement for all fields except Mahato
(see below) is approved by, based on, and fairly represents
information and supporting documentation prepared by New
Zealand Oil & Gas Assets & Engineering Manager Daniel Leeman.
Daniel is a Chartered Engineer with Engineering New Zealand and
holds Master’s degrees in Petroleum and Mechanical Engineering
as well as a Diploma in Business Management and has over 10
years of experience. Daniel is also an active professional member
of the Society of Petroleum Engineers and the Royal Society of
New Zealand. New Zealand Oil & Gas reviews reserves holdings
twice a year by reviewing data supplied from the field operator and
comparing assessments with this and other information supplied
at scheduled meetings. Daniel is currently an employee of New
Zealand Oil & Gas Limited whom, at the time of this report, are
a related party to Cue Energy. Daniel has been retained under a
services contract by Cue Energy Resources Ltd (Cue) to prepare an
independent report on the current status of the entity’s reserves. As
of the 17th of January 2017, NZOG held an equity of 50.04% of Cue.
COMPLIANCE STATEMENT, MAHATO
The reserves stated for Mahato are effective 1 July 2021 and follow
the SPE PRMS Guidelines (2018). Net reserves are presented net of
equity, determined by economic modelling on discounted cash
flows performed at the gross field level as approved under the
standard SKK Migas Plan of Development process and exclude the
Government of Indonesia estimated share of reserves under the
Production Sharing Contract.
All reserves and resources reported refer to hydrocarbon volumes
postprocessing, net of fuel, and immediately prior to point of sale.
The volumes refer to standard conditions, defined as 14.7psia and
60°F. The extraction method is via EPF facilities which includes an
Cue Energy Resources LimitedAnnual Report 2021 RESERVES AND RESOURCES
oil and water separation system, with the oil then piped 6km to the
CPI operated Petapahan Gathering Station.
are not currently considered to be commercially recoverable owing
to one or more contingencies.
This resources statement is based on, and fairly represents
information and supporting documentation prepared by PT Gada
Energi, a company owned by the Institut Teknologi Bandung (ITB)
as the relevant certifying authority in accordance with the SPE PRMS
Guidelines (2018).
CONTINGENT RESOURCES
Contingent Resources are those quantities of petroleum estimated,
as of a given date, to be potentially recoverable from known
accumulations by application of development projects, but which
Prospective Resources are those quantities of petroleum that are
estimated, as of a given date, to be potentially recoverable from
undiscovered accumulations.
The estimated quantities of petroleum that may potentially be
recovered by the application of a future development project(s)
relate to undiscovered accumulations. These estimates have both
an associated risk of discovery and a risk of development. Further
exploration appraisal and evaluation is required to determine
the existence of a significant quantity of potentially moveable
hydrocarbons.
RESERVES AND RESOURCES RECONCILIATION WITH 30 JUNE 2020
1P PROVEN RESERVES (MMBOE)
COUNTRY
FIELD/PERMIT
AUSTRALIA
NEW ZEALAND
INDONESIA
TOTAL RESERVES
Mereenie
Palm Valley
Dingo
Maari
Sampang
Mahato
2P PROVEN & PROBABLE RESERVES (MMBOE)
COUNTRY
FIELD/PERMIT
AUSTRALIA
NEW ZEALAND
INDONESIA
TOTAL RESERVES
Mereenie
Palm Valley
Dingo
Maari
Sampang
Mahato
2C CONTINGENT RESOURCES (MMBOE)
COUNTRY
FIELD
30 JUNE 2020
RESERVES
ACQUISITIONS/
DIVESTMENTS
DISCOVERIES/
EXTENSIONS/
REVISIONS
PRODUCTION
30 JUNE 2021
RESERVES
-
-
-
0.2
0.6
-
0.9
2.1
0.6
0.7
-
-
-
3.4
0.2
-
-
0.1
-
0.4
0.7
0.1
0.1
0.0
0.1
0.3
0.0
0.6
2.2
0.6
0.7
0.3
0.4
0.3
4.4
30 JUNE 2020
RESERVES
ACQUISITIONS/
DIVESTMENTS
DISCOVERIES/
EXTENSIONS/
REVISIONS
PRODUCTION
30 JUNE 2021
RESERVES
-
-
-
0.6
1.1
-
1.6
2.8
0.7
0.9
-
-
-
4.4
-
-
-
0.2
0.0
0.5
0.6
0.1
0.1
0.0
0.1
0.3
0.0
0.6
2.6
0.6
0.9
0.7
0.8
0.4
6.0
30 JUNE 2020
CONTINGENT
RESOURCES
ACQUISITIONS/
DIVESTMENTS
DISCOVERIES/
EXTENSIONS/
REVISIONS
PRODUCTION
30 JUNE 2021
CONTINGENT
RESOURCES
AUSTRALIA
Mereenie
Palm Valley
Dingo
INDONESIA
Jeruk (Sampang PSC)
Paus Biru (Sampang PSC)
TOTAL CONTINGENT RESOURCES
-
-
-
1.2
1.1
2.4
2.3
0.3
-
-
-
2.6
-
-
-
-
-
-
-
-
-
-
-
-
2.3
0.3
-
1.2
1.1
5.0
13
Cue Energy Resources LimitedAnnual Report 2021 Sustainability
HEALTH SAFETY AND ENVIRONMENT
Cue operates under an HSE Policy approved by the Board of
Directors and a HSE Management system.
We are committed to achieving and maintaining good health, safety
and environmental performance, which we consider critical to the
success of our business.
The Operational Risk and Sustainability (ORS) committee of the
Board of Directors meets regularly to review the company’s HSE
activities and operational risks.
During the year there were zero lost time incidents (LTI) at Cue’s
operated projects and two LTIs at Cue’s non operated projects,
which occurred during the Ironbark-1 drilling and Maari operations.
Both incidents have been investigated by the Operators of the
projects and reviewed by Cue and other joint venture partners. Cue
regularly reviews all incidents and Health and Safety reporting at
our projects and provides input and feedback to assist with the safe
running of all operations.
COVID-19 has continued to require extra measures be taken
to protect Cue and partners. Our joint venture projects have
implemented COVID plans to reduce the risk to staff and minimise
the impact to operations. Cue staff in Melbourne and Jakarta offices
have continued to work remotely, in line with local government
regulations and company assessed risks.
Cue has an employee assistance program available to provide
support opportunities for employees.
SUPPORTING COMMUNITIES
Cue continues to support the local communities in which we
operate and are proud to support our partners in their community
activities. Through our Capturing Local Economic Benefits Policy
Cue aims to actively promote, and encourage our partners to
promote, opportunities for economic benefits to be realised locally
and regionally.
During the year, surplus office equipment, including portable
offices from Cue’s Mahakam Hilir field office was donated to a
number of community schools and kindergartens in the Sambutan
village area, East Kalimantan.
The Sampang joint venture provided funding for a number of
activities in the Camplong District including the construction of
sanitation facilities, road paving and building irrigations wells.
Fishing equipment, including nets and scales, were also donated
to a number of local villages as part of Medco Energi Sampang
Community Development program.
OMV NZ, the operator of the Maari field actively supports a number
of community initiatives in the Taranaki region, including large scale
tree planting programme in Taranaki and the Wairarapa, recycling
and tree planting in Taranaki Schools and WISE better Homes and
job training.
The WA-359-P joint venture supported the Native ARC (Animal
Rehabilitation Centre) in Perth, and contributed to the Indigenous
Preferential Procurement Programs Research Project, led by the
University of Melbourne, which measured the economic impacts of
Indigenous Procurement Policies and assisted in understanding the
contribution Indigenous businesses make to the Australian Economy.
14
Cue Energy Resources LimitedAnnual Report 2021 SUSTAINABILITY
Cue donation of office equipment to the Baiturrahman Mosque, Sambutan village.
OMV NZ participating in tree planting in the Taranaki area.
Distribution of Fishing equipment in Camplong district by the Sampang joint venture
15
Cue Energy Resources LimitedAnnual Report 2021 SUSTAINABILITY
TASKFORCE ON CLIMATE-RELATED FINANCIAL
DISCLOSURES (TCFD) STATEMENT
THIS SECTION OUTLINES THE CUE ENERGY RESOURCES
APPROACH TO CLIMATE CHANGE.
It is structured to provide an overview of the core elements of the Task
Force on Climate-related Financial Disclosures (TCFD):
Governance
Strategy
Risk management, and
Metrics and Targets
STATEMENT ON CLIMATE CHANGE FROM RESPONSIBLE
SENIOR EXECUTIVE
Cue acknowledges the 2021 assessment of the Intergovernmental
Panel on Climate Change. It reported that climate change is
widespread, rapid, and intensifying. Climate change is already
affecting every region on Earth, in multiple ways, while some of the
changes already set in motion, such as continued sea level rise, are
irreversible over hundreds to thousands of years. In response, rapid,
and sustained reductions in greenhouse gas emissions are necessary.
Cue manages its emissions in support of these goals.
As an explorer and producer of hydrocarbons, relevant emissions
are those from our own activities, such as operating our offices and
travel, carbon emitted in the process of producing oil and gas, and
emissions by users of the oil and gas we produce.
Our strategy is to manage our own emissions responsibly, and to
provide energy options that allow the world to transition to a lower
carbon future.
The credibility and success of the transition depends on global
populations being able to access secure and affordable energy while
economies decarbonise. Ensuring that energy is affordable requires
carbon emissions to be allocated to uses that have the highest
economic value.
Cue’s production is subject to emissions pricing in New Zealand.
Under the New Zealand Emissions Trading Scheme, Cue purchases
credits that offset emissions from our share of the Maari production
facilities.
Indonesia is a developing economy, with a rapidly growing
population demanding much more energy from year to year.
It faces profound challenges to decarbonise. Cue is helping by
making available lower-emission fuels and supporting economic
development. The Sampang PSC supplies gas to Indonesia Power’s
Grati power plant. The electricity, which the plant supplies to East
Java, emits far fewer greenhouse gas than other non-renewable
alternatives in a market which is dominated by coal fired generation.
16
Cue offices have reduced greenhouse gas emissions by replacing
ageing IT infrastructure with lower power consumption equipment
and installing low-energy LED lighting. We have begun to offset
emissions from our Melbourne and Jakarta offices by planting trees.
Cue is continuing to increase its focus on measuring and disclosing
our climate performance.
This year we implemented a TFCD reporting framework. Emissions
from our Sampang and Maari assets are reported. In the coming
year we will add emissions from Mahato, which entered production
during the year, and the Amadeus Basin after completion of the asset
acquisition.
We are also disclosing a comprehensive summary of climate-related
risks. Our board Operational Risk and Sustainability Committee
reviews and manages climate risks within our broader risk
management framework.
We considered weather events that may become more severe, the
potential for structural change in long term demand and prices, and
risks to accessing capital as investors seek alternative sectors.
The TCFD process identifies the explicit risks as climate-related. We
are pleased to present this report below.
Matthew Boyall
Chief Executive
Cue Energy Resources LimitedAnnual Report 2021
SUSTAINABILITY
GOVERNANCE
TCFD CHECKLIST
TCFD CATEGORY
GOVERNANCE
RECOMMENDATION
EXPLANATION FOR NON-COMPLIANCE
Disclose the organisation’s governance around cli-
mate-related risks and opportunities
Describe the board’s oversight of climate related risks and
opportunities
Describe management’s role in assessing and managing
climate-related risks and opportunities
CLIMATE-RELATED RISK GOVERNANCE PROCESS
BOARD OF DIRECTORS
•
•
•
•
Board Charter
Cue Risk Management System
ASX Listing Rules and Corporate Governance Code
(E.g. Principle 7, Recognise and Manage Risk)
Reviews reports from Operational Risk and Sustainability
Committee and manages response
BOARD OPERATIONAL RISK AND SUSTAINABILITY COMMITTEE
•
•
Reviews risks, including changes in risks reported from risk
owners and management
Reports risks and opportunities to Board
CUE MANAGEMENT
Regularly reviews and updates risk register
Allocates risks to risk owners
Reports risk register to ORSC
•
•
•
• Manages TCFD processes and reporting
STAFF HEALTH, SAFETY AND ENVIRONMENT
PROCESS
•
Identifies and reviews site HSE incidents and
risks and incorporates these into the risk register
17
Cue Energy Resources LimitedAnnual Report 2021 SUSTAINABILITY
The board has responsibility for reviewing all risks, including climate-
related risk and opportunities, and ensuring these are appropriately
managed to support delivery of our business strategy.
Cue’s risk register assesses risks related to climate policy, climate-
related events, and public perception. Examples of risks are disclosed
below.
Management is responsible for identifying, assessing and managing
risk and reporting this to the Board through the ORS committee.
Management risk owners identify and manage risks. Management
regularly reviews the corporate risk framework, including the risk
register. The ORS committee receives a report on updates to the
register.
Management retains specialist expertise to review risk management,
including advice from Cue’s major shareholder.
At an operational level, responsibility for day-to-day oversight of
climate risk and opportunity (including managing climate objectives
and targets) rests with the chief executive.
Recognising and managing
accountability under its charter (Board Charter 2.2 (h)
Link to Cue Board Charter.
risks
is an overarching board
The Board reserves to itself specific responsibility to:
“Understand the material risks faced by the Company and
ensure the Company has appropriate risk management
strategies and control measures in place and is actively
managing these.”
—Board Charter, 3.3 (h).
The process for considering risks is set out in the company’s
risk management system framework. The framework meets the
requirements of the ASX Corporate Governance Principles and
Recommendations, Principle 7: Recognise and Manage Risk.
The Board Operational Risk and Sustainability Committee sets, reviews
and agrees relevant risk policies, practices, frameworks, targets and
performance. Its Charter includes climate change responses. ORSC
Charter, Schedule 1, #2:
Link to Cue Board Charter.
18
Cue Energy Resources LimitedAnnual Report 2021
SUSTAINABILITY
STRATEGY
TCFD CHECKLIST
TCFD CATEGORY RECOMMENDATION
EXPLANATION FOR NON-COMPLIANCE
STRATEGY
Disclose the actual and potential impacts of climate-related risks and
opportunities on the organisation’s businesses, strategy and financial
planning where such information is material.
Describe the climate related risks and opportunities the organisation has
identified over the short, medium and long term.
Describe the impact of these risks on businesses, strategy and financial
planning.
Describe the resilience of the organisation’s strategy, taking into
consideration different climate related scenarios including a 2 degree
Celsius or lower scenario.
Actual and potential
impacts of climate-related risks and
opportunities on the organisation’s businesses, strategy and
financial planning
Climate change and climate-related financial and regulatory behaviour
creates opportunities for production of natural gas. The Company’s
Sampang and Amadeus Basin assets comprise a significant portion
of its production earnings. These are mainly natural gas-producing
properties, where the natural gas is used to generate electricity in
markets that would otherwise be likely to generate electricity from coal.
The Company believes its strategy best positions it for realistic policy
and economic scenarios, including a 2 degree warming pathway.
1. Gas demand is expected to increase.
While global gas demand fell by 2.5%, or 100 billion cubic metres in
2020 as a result of the pandemic suppressing demand, the IEA forecasts
an increase in demand over the 2020s. Under policies pledged by
governments globally, gas demand will increase by 7 per cent to 2025,
and by 15% to 2030. (Data from International Energy Agency, World
Energy Outlook 2020, Annex A. For discussion, see pages 187-194).
In the IEA’s ‘sustainable development’ scenario, in which sustainable
energy objectives including net zero emissions by 2050 are met in full,
global gas demand is projected to remain steady through the 2020s.
In the net zero to 2050 pathway, the IEA forecasts that demand for gas
will be around 10% lower than today (assuming the global economy is
recovering from the pandemic).
Demand for gas is affected by factors pulling in different directions. In
developing countries, renewables will replace some use of gas, but this
will be largely cancelled out by increased demand for natural gas to
replace the higher emissions of coal. In developing countries, rapidly
growing economies will create more demand for energy. LNG import
capacity in Asia in 2020 and 2021 grew strongly, to accommodate
forecast increasing demand.
2. Regulation is likely to increase in Australia and New Zealand,
carbon prices are likely to rise, and limits are likely to be imposed on
emissions from domestic consumption.
In anticipation of higher carbon prices, the Company applies a shadow
carbon price to screening of new investments and impairment testing of
existing assets.
The Company applies sensitivity testing to its assets and reviews assets
for impairment as part of its financial audit and assurance processes. This
testing reviews whether asset valuations have been materially affected by
climate-created conditions, including effects on prices, costs, insurance,
financing and abandonment. Sensitivity and impairment testing manages
economic risks to assets. Where those risks change materially, immediate
disclosure
is made under the Company’s continuous disclosure
obligations.
Resilience to physical risks, such as weather events, is conducted as a
normal part of engineering risk management.
Regulatory risks are mitigated by diversifying jurisdiction risk.
The Company offsets its emissions in New Zealand. A carbon price
is applied to emissions from use of the oil and gas in New Zealand
through the New Zealand Emissions Trading Scheme. Emissions from
use in Australia and Indonesia are not currently measured but would
be expected to be lower than emissions that would be generated from
alternative non-renewable sources if natural gas were not available or
if heavier oils were substituted.
3. Resilience in alternative scenarios
The Company monitors the International Energy Agency’s World Energy
Outlook, and models produced by industry leaders such as the BP Energy
Outlook, the IPCC and international consultancies. In all scenarios, we
expect to see increased demand for gas in Asian markets. A more rapid
decarbonisation outlook implies a faster switch to gas in Asian markets,
and reduced or stable use in Australia and New Zealand. In Indonesia we
see a faster switch to natural gas from coal, and steady demand for oil as
the economy develops economically.
To further support our modelling assumptions, we seek information
from our JV partners on potential commercial opportunities relating
to management of climate change risk, including undertaking scenario
analysis following the structure of TCFD.
Engineering resilience is assured and regularly updated at scheduled
joint venture Technical Committee Meetings.
Resilience to financial or economic changes is tested as part of our financial
audit and assurance processes, which includes impairment testing.
Financial planning incorporates expected prices and revenues, including
carbon costs, insurance costs, maintenance costs, and the availability of
corporate finance. Specific material risks or changes to financial outlooks
are disclosed in financial reports where these are material.
19
Cue Energy Resources LimitedAnnual Report 2021 SUSTAINABILITY
RISK MANAGEMENT
TCFD CHECKLIST
TCFD CATEGORY
RISK MANAGEMENT
RECOMMENDATION
EXPLANATION FOR NON-COMPLIANCE
Disclose how the organisation identifies, assesses and
manages climate-related risks
Describe the process for identifying and assessing
climate risks.
Describe processes for managing climate risks.
Describe how processes for identifying, assessing and
managing are integrated into overall risk management.
How we identify, assess and manage climate-related risks
How we model climate risk
The Company’s Risk Management System Framework applies
consistent and comprehensive risk management practices. Climate
risks are recorded in the central risk register, which considers the
risks, reviews the controls, assigns ownership of a risk and tracks
treatment plans.
Climate risks are identified on an ongoing basis. Consideration is
given to industry and peer information and expertise, shareholder
and community feedback, regulatory changes, and analysis by our
own staff and contractors.
Risk assurance and oversight of climate risk management is provided
through internal review by the board Operation Risk and Sustainability
committee.
The chief executive has responsibility for climate risk, including risks
to individual assets and financial and investment risks associated with
climate change.
Potential risks to Cue Energy from climate change are assessed under
the following headings:
• Policy and Legal,
• Physical (acute and chronic),
• Financial and Market,
• Social/Political/Regulatory, and
• Technological.
All these risks have potential financial and operational implications
due to lost profitability and increased delays. Financial and market
risks, and social/political risks also present opportunities associated
with more rapid uptake of natural gas as a lower-carbon replacement
for coal.
Maari
For our New Zealand Maari asset, Cue uses the New Zealand ETS
market pricing for carbon emissions. The Company purchases
emissions credits annually and the price of these credits is modelled in
Maari performance forecasts and impairment testing. For impairment
testing, prices are derived from market prices.
Amadeus Basin
For investment into Amadeus basin assets, Cue’s advisers used an
internal price to test the economics of investments based on market
prices in other comparable international regimes. Expectations
of forward prices reflect the market consensus on the likelihood
and level of future carbon charges and market demand. Potential
increased carbon pricing or reduced prices are part of the Company’s
sensitivity testing. For example, the Californian-Quebec May auction
prices were USD18.80 per tonne of carbon. Korean prices were
around USD35 per tonne prior to COVID-19 effects, and the European
ETS units were trading historically at around USD30 per tonne prior to
COVID-19 effects (although after changes to the European scheme
and a colder than normal winter heating season, carbon prices
increased to ca. USD65/tonne).
Currently, Cue tests Australian investment economics with a price
of USD20 per tonne, with scenarios testing this price increasing to
USD60 per tonne by 2040.
Sampang
Emissions from the company’s interest in the Sampang PSC are
considered in performance forecasts and impairment testing. There
is currently no carbon cost mechanism in Indonesia. The Company
monitors the economic effects of climate-related policy and climate
conditions on the value and operation of its asset.
Mahato
Production from Mahato is not currently reported. To model emissions
and conducts sensitivity and impairment testing the Company is
evaluating benchmarks for calculating emissions from a comparable
onshore oil field based only on production data. This evaluation
model is expected to be introduced in the current financial year.
20
Cue Energy Resources LimitedAnnual Report 2021 SUSTAINABILITY
CLIMATE RELATED RISKS
The table of risks below uses the following time horizon categories:
Short (s) – 0-5 years,
Medium (m) – 5-10,
Long (l) – 10+ years.
RISK TYPE
DESCRIPTION
TIME
CONTROL
Non-physical
risks
Policy and
legal risks
Reputational
and social
license risks
Litigation against companies and/
or directors on climate grounds
(claiming causation or seeking greater
action to mitigate effects) could
have reputational, development and
operating cost impacts.
Changing regulations including bans
and restrictive regulations, taxes and
emissions limits across all jurisdictions
risk viability of projects
Stakeholder disengagement and
oppositional activism. Loss of social
license, leading to project delays or
stoppages.
Recruitment and retention risk.
s, m, l. Board and management understand their fiduciary duties
around climate change risk.
Update internal processes, including due diligence and joint
venture processes, identify and manage climate risk.
Monitor the jurisdictions where we undertake activities.
Strategy of diversifying jurisdictions to mitigate changes on any
individual regulatory environment.
TCFD compliant reporting.
s, m, l. Manage environmental performance.
Due diligence screening of commercial opportunities and joint
ventures.
Financial
risks
ESG investing affects availability and
cost of capital.
s, m, l.
Shadow price on carbon to sensitivity testing in investment
decisions.
Insurance premiums increase. Potential
for classes of assets and locations to
become uninsurable.
Capital cost increases if new
environmental standards require
more expensive supplies relative to
alternatives.
Carbon pricing adopted across
jurisdictions, or inconsistently between
them.
Changes to price and cost forecasts
result in stranded assets or reserves.
Physical assets may be subject to
increased frequency and intensity of
extreme weather events such as storms,
flooding, coastal inundation, lack of
water availability, or slips.
Offshore drilling and production
delayed or shut in by increased weather
events.
Global reduction in high carbon
sources such as coal is increasing
demand for natural gas as a lower
carbon partner to renewables.
Due diligence screening of commercial opportunities and joint
venture processes.
s, m, l.
Assurance relating to insurance forecasts.
Access to a range of funding options.
TCFD compliant reporting.
Jurisdictional diversification to avoid impact of sudden,
unilateral changes, confiscation or value destruction by
regulation.
m, l.
s, m, l.
s, m, l.
m, l.
Engineering anticipates environmental conditions.
Carbon policy provides for review of climate issues in strategic
and operational decisions.
s, m, l. Strategic preference for natural gas.
Support for our joint venture partners pursuing low carbon
innovations on sites.
Ongoing investigation of investment opportunities in lower
emission technologies, including carbon capture and storage.
21
Physical risks
Acute &
Chronic
Opportunities Commercial
Cue Energy Resources LimitedAnnual Report 2021
SUSTAINABILITY
MEASUREMENTS AND TARGETS
TCFD CHECKLIST
TCFD CATEGORY
RECOMMENDATION
EXPLANATION FOR NON-COMPLIANCE
TARGETS AND METRICS
Disclose the metrics and targets used to assess and
manage relevant climate-related risks and opportunities
where such information is material.
Disclose the metrics used by the organisation to assess
climate related risks and opportunities in line with its
strategy and risk management process.
Disclose Scope 1, Scope 2 and, if appropriate, Scope 3
greenhouse gas emissions, and the related risks.
The Company does not disclose Scope
3 emissions, as the information is not
obtainable.
Describe the targets used by the organisation to manage
climate-related risks and opportunities and performance
against targets.
The TCFD recommends disclosure of the measures we use to assess
climate-related risks and measure them, disclose emissions (by Scope
1,2 and 3), and describe the targets that we use to manage climate-
related risk.
Risk management systems are described above.
Emissions relate to Cue’s corporate office activities and emissions
from production facilities in New Zealand, Australia and Indonesia.
An annual estimate is prepared of carbon emissions from corporate
activity, using inputs such as electricity bills, air travel and rental car
use, waste disposal contracts, and government figures for average
building carbon intensity. The company purchases trees to offset
these emissions.
Emissions from producing oil and gas fields are reported below.
METRICS
TOTAL GREENHOUSE GAS EMISSIONS
YEAR TO 30 JUNE 2021
METRIC TONNES CO2e
Sampang
Maari
Mahato
Jakarta Office
Melbourne Office
Total
Scope 1
Scope 2
4447
4622
Not available*
12
5
9086
9069
17
*Mahato emissions are not compiled by the PSC operator. In future years, Cue intends to report estimated Mahato emissions derived from a comparable onshore oil field.
A suitable model is currently being evaluated.
The board Operational Risk and Sustainability Committee annually reviews sustainability targets and performance.
22
Cue Energy Resources LimitedAnnual Report 2021 SUSTAINABILITY
OUR RESULTS: TCFD TARGETS FOR 2020-21
2020-21 TARGETS
Establish and implement a TFCD framework to become compliant by
FY22.
Establish company reportable metrics
STATUS
Ongoing.
Complete for assets producing for the full year (Sampang and Maari).
Ongoing for Mahato, which started production during the year (in Jan
2021).
Ongoing for Amadeus Basin (acquisition expected to complete in
fourth quarter of calendar 2021).
Offset emissions from Melbourne and Jakarta offices by planting trees Completed and ongoing.
OUR INTENTIONS: TCFD TARGETS FOR FY2021-22
FOCUS AREA
TARGET
IMPACT
MEASURED BY
Reporting
Continue to report Scope 1 and 2 emissions
Reporting
Finalise TCF compliance and reporting
Disclosure of risks, impacts and
climate responsiveness
Publication in annual report.
Available on website
Disclosure of risks, impacts and
climate responsiveness
Publication in annual report.
Available on website
Reporting
Reporting
Maintain TCFD statements and reporting online
and in the 2022 Annual Report.
Disclosure of risks, impacts and
climate responsiveness
Publication in annual report.
Available on website
Incorporate Amadeus Basin and Mahato assets into
reporting
Disclosure of risks, impacts and
climate responsiveness
Publication in annual report.
Available on website
Policy and Legal
Adopt a discrete climate change policy
Disclosure of climate strategy
Publication on website by
Q1 FY22
Commercial
Emissions
reductions
Emissions
management
Emissions
reductions
Emissions
reductions
Emissions
reductions
Undertake analysis of an internal price on carbon
to inform TCFD risk and commercial decisions by
end FY 2022
Review potential for material emissions reductions
or offsets from producing sites
Management of carbon pricing risk
Report in 2022
Ongoing mitigation of emissions
Report in 2022
Benchmark emissions against comparable
production
Provides basis for evaluating
performance
Report in 2022
Offset emissions from head office and corporate
travel.
Initiate ongoing office sustainability improvement
opportunities.
Net zero from our own operations
Report in 2022
Sustained emissions reductions
Report in 2022
Investigate a carbon emission audit and reduction
plan.
Potential reductions and increased
confidence in reporting.
Publicly reported.
23
Cue Energy Resources LimitedAnnual Report 2021 CUE ENERGY RESOURCES LIMITED
CORPORATE DIRECTORY
30 JUNE 2021
Directors
Alastair McGregor (Non-Executive Chairman)
Andrew Jefferies (Non-Executive Director)
Peter Hood AO (Non-Executive Director)
Richard Malcolm (Non-Executive Director)
Rod Ritchie (Non-Executive Director)
Samuel Kellner (Non-Executive Director)
Marco Argentieri (Non-Executive Director)
Chief Executive Officer
Matthew Boyall
Chief Financial Officer and Company Secretary
Melanie Leydin
Registered office
Principal place of business
Share register
Auditor
Level 3, 10-16 Queen Street
Melbourne, VIC 3000
Australia
Telephone: +61 3 8610 4000
Fax: +61 3 9614 2142
Level 3, 10-16 Queen Street
Melbourne, VIC 3000
Australia
Telephone: +61 3 8610 4000
Fax: +61 3 9614 2142
Computershare Investor Services Pty Limited
Yarra Falls, 452 Johnston Street
Abbotsford, VIC 3067
Australia
Telephone: +61 3 9415 5000
Fax: +61 3 9473 2500
KPMG
Level 36, Tower Two, Collins Square
727 Collins Street
Melbourne, VIC 3008
Australia
Stock exchange listing
Cue Energy Resources Limited securities are listed on the
Australian Securities Exchange.
(ASX code: CUE)
Website
www.cuenrg.com.au
24
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
DIRECTORS’ REPORT
30 JUNE 2021
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter
as the ‘consolidated entity’) consisting of Cue Energy Resources Limited (referred to hereafter as the ‘company’ or
‘parent entity’) and the entities it controlled at the end of, or during, the year ended 30 June 2021.
Directors
The names of Directors of the Company in office during the year and up to the date of this report were:
Alastair McGregor
Andrew Jefferies
Peter Hood AO
Marco Argentieri
Richard Malcolm
Rod Ritchie
Samuel Kellner
Chief Executive Officer
Matthew Boyall
Chief Financial Officer and Company Secretary
Melanie Leydin
Principal activities
The principal activities of the group are petroleum exploration, development and production.
Corporate governance statement
Details of the Company’s corporate governance practices are included in the Corporate Governance Statement set out
on the Company’s website at: http://www.cuenrg.com.au/irm/content/corporate-directory.aspx?RID=295
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Financial performance
Production revenue for the year was $22.45 million, a decrease of $1.47 million from the previous period (2020: $23.92
million). Production costs decreased by $2.06 million to $10.88 million (2020: $12.94 million).
The consolidated entity reported a net loss after tax of $12.74 million for the year ended 30 June 2021, a decrease of
$14.06 million from its $1.31 million profit in 2020. The 2021 operating results included $12.32 million exploration and
evaluation expenses for the Ironbark-1 exploration well and $2.55 million in unrealised foreign currency translation
losses due to the strong Australian dollar through the year.
Excluding these one-off items, the operating profit of the company was $2.13 million for the year.
The net assets of the consolidated entity decreased by $13.64 million to $29.92 million for the year ended 30 June 2021
(2020: $43.56 million). This was primarily due to settlement of Ironbark-1 exploration expenditure, which resulted in the
decrease of restricted cash balances from $12 million at 30 June 2020 to $27,000 at 30 June 2021. Working capital,
being current assets less current liabilities, was $20.06 million (30 June 2020: $32.57 million).
The consolidated entity incurred cash outflows from operating activities of $8.03 million for the year ended 30 June 2021
and ended the year with a cash balance of $17.64 million. The consolidated entity has no debt.
Refer to the CEO Report preceding this Director’s Report for further details on the operations of the entity.
Significant changes in the state of affairs
On 16 July 2020, the Company issued 3,743,260 unlisted options to eligible employees under the share option scheme,
exercisable at $0.117 (11.7 cents). The options will vest on 1 July 2023 and expire on 1 July 2025.
On 19 August 2020, the Company announced the Indonesian Government approval of the Paus Biru gas field Plan of
Development in the Sampang PSC and an independent certification of the contingent resources in the field.
25
Cue Energy Resources LimitedAnnual Report 2021
On 29 December 2020, the Company provided an update on Ironbark-1 exploration well in WA-359-P in the Carnarvon
Basin, offshore Western Australia. The primary target interval was intersected at a depth of 5,275 metres, with no
significant hydrocarbon shows encountered in any of the target sands. The well was subsequently plugged and
abandoned.
On 15 January 2021, the Company announced that commercial production of oil had commenced from the PB field in
the Mahato PSC in Indonesia and the dispute between Cue and the joint operation partners had been settled.
On 25 May 2021, the Company announced that it had executed a sale and purchase agreement (the transaction) to
acquire interests in the Mereenie, Dingo and Palm Valley onshore gas and oil fields located in the Amadeus Basin in the
Northern Territory, Australia from Central Petroleum Limited (ASX:CPT) (Central) for an upfront payment of $8.7 million
and funding of $12 million of Central’s exploration appraisal and development costs in the fields.
There were no other significant changes in the state of affairs of the consolidated entity during the financial year.
Matters subsequent to the end of the financial year
As noted above, on 25 May 2021, Cue announced the execution of a sale and purchase agreement with Central
Petroleum Limited (Central) (ASX:CTP) to acquire interests in the Mereenie, Dingo and Palm Valley onshore gas and oil
fields, all located in the Amadeus Basin, onshore in the Northern Territory, Australia.
On completion, Cue will acquire a 7.5% interest in the Mereenie gas and oil field (OL4 and OL5 production licences),
a 15% interest in the Palm Valley gas field (OL3 production licence), and a 15% interest in the Dingo gas field (L7
Production Licence) with an effective date of 1 July 2020.
On 24 June 2021, NZOG shareholders voted 99.99% in favour of their entry into an agreement to also acquire interests
in the fields from Central, which satisfied a key condition precedent of the transaction.
On 2 July 2021, the Company announced that it and NZOG had received a No Objection Notice from the Australian
Foreign Investment Review Board in relation to the transaction to acquire Amadeus Basin Assets from Central Petroleum,
which satisfied a key condition precedent, and on 28 July 2021 the Company held a general meeting of shareholders
that approved the entry into deed of cross security with NZOG in relation to the transaction
As of the date this report was signed, conditions precedent which remain to be satisfied include regulatory approval by
the NT government, and assignment of major contracts.
On 30 July 2021, the Company released an independent resource report on the PB field in the Mahato PSC and
announced that the PBE-1 well in the field had commenced.
Likely developments and expected results of operations
The following activities may affect the expected results of operations:
• Results from the drilling on the PBE-1 well in the Mahato PSC and any subsequent drilling;
• The completion of the announced transaction to acquire Amadeus basin assets from Central Petroleum;
• Progress on Paus Biru Front End Engineering and Design and Final Investment Decision; and
• Actively seeking to acquire new production.
The Coronavirus/Covid-19 global pandemic presents strategic, operational and commercial uncertainties for the
Company. There are increased uncertainties around the duration, scale and impact of the Coronavirus/Covid-19 outbreak.
The Company is taking various measures to mitigate the impact on its operations including employees, partners and
customers. The Board and management team continue to assess the potential impacts on the business, however given
the continued uncertainties the future financial impact, if any, cannot be determined.
Environmental regulation
Within the last year there have been zero incidents, zero lost time injuries and zero significant spills within Cue Energy
Resources Limited. Among the joint operations there have been a number of incidents that have been reported and
investigated by all the relevant parties. Cue Energy Resources Limited continues to monitor the progress of reported
incidents and work with the joint operation partners and operators to improve overall health and safety and minimise any
impact on the environment.
26
CUE ENERGY RESOURCES LIMITED DIRECTORS’ REPORT 30 JUNE 2021Cue Energy Resources LimitedAnnual Report 2021
Information on directors
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Alastair McGregor
Non-Executive Chairman
BEng, MSc
Mr McGregor has been actively involved in the oil and gas sector since 2003.
He is currently chief executive of O.G. Energy, which holds Ofer Global’s
broader energy interests, and Oil & Gas Limited, a company that holds
directly or indirectly oil & gas exploration and production interests onshore and
offshore. He leads the O.G. Energy Senior Management Committee, driving
the strategy for Ofer Global’s energy activities. Mr McGregor is also a director
of New Zealand Oil & Gas Limited (NZOG). In addition, Mr McGregor is chief
executive of Omni Offshore Terminals Limited, a leading provider of floating,
production, storage and offloading (FSO and FPSO) solutions to the offshore
oil and gas industry. Omni’s operations have spanned the globe from New
Zealand, Australia, South East Asia, Middle East and South America. Prior to
entering the oil and gas industry Mr McGregor spent 12 years as a banker
with Citigroup and Salomon Smith Barney. Mr McGregor holds a BEng from
Imperial College, London and an MSc from Cranfield University in the UK.
New Zealand Oil & Gas Limited
None
Member, Remuneration and Nomination Committee
None
None
Andrew Jefferies
Non-Executive Director
BE Hons (Mechanical), MBA, MSc in petroleum engineering, GAICD, Certified
Petroleum Engineer
Mr Jefferies is managing director of New Zealand Oil & Gas Limited. He started
his career with Shell in Australia after graduating with a BE Hons (Mechanical)
from the University of Sydney in 1991, an MBA in technology management
from Deakin University in Australia, and an MSc in petroleum engineering
from Heriot - Watt University in Scotland. Mr Jefferies is also a graduate of the
Australian Institute of Company Directors (GAICD), and a Certified Petroleum
Engineer with the Society of Petroleum Engineers. He has worked in oil and
gas in Australia, Germany, the United Kingdom, Thailand and Holland.
NZOG Offshore Limited
New Zealand Oil & Gas Limited
Tuatara Energy Limited
None
Member, Audit and Risk Committee
Member, Remuneration and Nomination Committee
Member, Operational Risk and Sustainability Committee
8,000 fully paid ordinary shares
None
27
CUE ENERGY RESOURCES LIMITED DIRECTORS’ REPORT 30 JUNE 2021Cue Energy Resources LimitedAnnual Report 2021
Name:
Title:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
28
Peter Hood AO
Non-Executive Director
Mr Hood is a professional chemical engineer with 50 years’ experience in the
development of projects in the resources and chemical industries. He began
his career with WMC Ltd and then was chief executive officer of Coogee
Chemicals Pty Ltd and Coogee Resources Ltd from 1998 to 2009. He is a
graduate of the Harvard Business School Advanced Management Programme
and is currently Chairman of Matrix Composites and Engineering Ltd and a
Non-Executive Director of GR Engineering Ltd and a Non-Executive Director of
De Grey Mining Ltd. He has been Vice-Chairman of the Australian Petroleum
Production and Exploration Association Limited (APPEA), Chairman of the
APPEA Health Safety and Operations Committee, and is a past President of
the Western Australian and Australian Chambers of Commerce and Industry.
De Grey Mining Ltd
GR Engineering Ltd
Matrix Composites and Engineering Ltd
None
Member, Audit and Risk Committee
80,000 fully paid ordinary shares
None
Richard Malcolm
Non-Executive Director
Mr Malcolm is a professional geoscientist with over 40 years of varied oil and gas
experience within seven international markets including Australia/NZ/PNG, UK
North Sea/West of Shetlands, Gulf of Mexico and the Middle East/ North Africa.
His latter roles from 2006 to 2013 included Managing Director of OMV UK and
Managing Director of Gulfsands Petroleum, an AIM listed exploration and production
company with operations in Syria, Tunisia, Morocco, USA and Colombia.
He is currently a Non-executive Director of Larus Energy Limited.
Larus Energy Limited
Puravida Energy NL
Chairman, Remuneration and Nomination Committee
Member, Operational Risk and Sustainability Committee
None
None
Rod Ritchie
Non-Executive Director
B.Sc
Mr Ritchie is a director of NZOG. Mr Ritchie joined the board of NZOG in
2013. He began his career as a petroleum engineer with Schlumberger for
28 Years and then joined OMV where he worked for a further 12 years. Mr
Ritchie has over 40 years of global experience in leadership roles and as a
Health, Safety, Environmental and Security (HSSE) executive in the Oil and
Gas industry, including being the corporate Senior Vice President of HSSE and
Sustainability at OMV based in Vienna, Austria. He has also worked closely
with the International Association of Oil and Gas produces (IOGP) to create
Industry best practice standards for the Oil and Gas Industry. He is also an
active leadership and cultural change consultant, and an author on the subject
of Safety Leadership and several Society of Petroleum Engineers papers on
the subject of HSSE and safety Leadership.
New Zealand Oil & Gas Limited
None
Member, Remuneration and Nomination Committee
Chair, Operational Risk and Sustainability Committee
None
None
CUE ENERGY RESOURCES LIMITED DIRECTORS’ REPORT 30 JUNE 2021Cue Energy Resources LimitedAnnual Report 2021
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Name:
Title:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years):
Special responsibilities:
Interests in shares:
Interests in options:
Samuel Kellner
Non-Executive Director
BA, MBA
Mr Kellner has held a variety of senior executive positions with Ofer Global
since joining the group in 1980. He has been deeply involved in all Ofer Global’s
business lines, with a particular emphasis on offshore oil and gas, shipping and
real estate, and has advised Ofer Global companies on investments with a
variety of investment managers, hedge funds and private equity funds. Most
recently, Mr Kellner served as President of Global Holdings Management Group
(US) Inc. where he led North American real estate acquisition, development and
financing activities. Mr Kellner serves as a director of O.G. Energy, O.G. Oil &
Gas and NZOG, where he is Chairman of the Board of Directors. As a member
of the O.G. Energy Senior Management Committee, he helps drive strategy for
Ofer Global’s energy activities. He is also an Executive Director of the main
holding companies for the Zodiac Maritime Limited shipping group and Omni
Offshore Terminals Limited, a leading provider of floating, production, storage
and offloading (FSO and FPSO) solutions to the offshore oil and gas industry.
Mr Kellner graduated with a BA degree from Hebrew University in Jerusalem.
He has an MBA from the University of Toronto, and taught at the University of
Toronto while working toward a PhD in Applied Economics.
New Zealand Oil & Gas Limited
None
Chair, Audit and Risk Committee
None
None
Mr Marco Argentieri
Non-Executive Director
Mr Argentieri is a Director of New Zealand Oil and Gas Limited, Senior Vice
President and General Counsel for O.G. Energy, and a member of the Board
of Directors of both O.G. Energy and O.G. Oil & Gas. Prior to O.G. Energy, Mr
Argentieri worked extensively in finance, offshore oil services and shipping. Mr
Argentieri started his career as an attorney at the New York offices of Skadden,
Arps, Slate, Meagher & Flom LLP and Latham & Watkins LLP. He holds a B.A.
from the University of Rochester, a J.D. from New York University and an MBA
from Columbia University.
New Zealand Oil and Gas Limited
None
None
None
None
‘Other current directorships’ quoted above are current directorships for listed entities only and excludes directorships of
all other types of entities, unless otherwise stated.
‘Former directorships (last 3 years)’ quoted above are directorships held in the last 3 years for listed entities only and
excludes directorships of all other types of entities, unless otherwise stated.
29
CUE ENERGY RESOURCES LIMITED DIRECTORS’ REPORT 30 JUNE 2021Cue Energy Resources LimitedAnnual Report 2021
Company secretary
Ms Melanie Leydin, BBus (Acc. Corp Law) CA FGIA
Melanie Leydin holds a Bachelor of Business majoring in Accounting and Corporate Law. She is a member of the
Institute of Chartered Accountants, Fellow of the Governance Institute of Australia and is a Registered Company Auditor.
She graduated from Swinburne University in 1997, became a Chartered Accountant in 1999 and since February 2000
has been the principal of Leydin Freyer. The practice provides outsourced company secretarial and accounting services
to public and private companies across a host of industries including but not limited to the Resources, technology,
bioscience, biotechnology and health sectors.
Melanie has over 25 years’ experience in the accounting profession and over 15 years’ experience holding Board
positions including Company Secretary of ASX listed entities. She has extensive experience in relation to public company
responsibilities, including ASX and ASIC compliance, control and implementation of corporate governance, statutory
financial reporting, reorganisation of Companies and shareholder relations.
Meetings of directors
Full Board
Remuneration
and Nomination
Committee
Audit and Risk
Committee
Operational Risk
and Sustainability
Committee
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Alastair McGregor
Andrew Jefferies
Peter Hood AO
Richard Malcolm
Rod Ritchie
Samuel Kellner
Marco Argentieri
7
8
8
8
8
7
8
8
8
8
8
8
8
8
2
3
-
3
3
-
-
3
3
-
3
3
-
-
-
2
2
-
-
2
-
-
2
2
-
-
2
-
-
3
-
3
3
-
-
-
3
-
3
3
-
-
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
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 2021, in accordance with the Corporations Act 2001 and its regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling
the activities of the entity, directly or indirectly, including all directors.
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
30
CUE ENERGY RESOURCES LIMITED DIRECTORS’ REPORT 30 JUNE 2021Cue Energy Resources LimitedAnnual Report 2021
(A) Director and executive details
The following persons acted as Directors of the company during or since the end of the financial year:
● Alastair McGregor (Non-Executive Chairman)
● Andrew Jefferies (Non-Executive Director)
● Peter Hood AO (Non-Executive Director)
● Richard Malcolm (Non-Executive Director)
● Rod Ritchie (Non-Executive Director)
● Samuel Kellner (Non-Executive Director)
● Marco Argentieri (Non-Executive Director)
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.
The term “Executive” is used in this Remuneration Report to refer to the following persons:
● Matthew Boyall (Chief Executive Officer)
(B) Remuneration policy
The Board’s policy for remuneration of Executives and Directors is detailed below.
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 Board.
Remuneration and other terms and conditions of employment are reviewed annually by the Board 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.
(C) Details of remuneration
The structure of Non-Executive Director and Executive remuneration is separate and distinct.
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 Board, which is always subject
to shareholder approval.
Alastair McGregor, Andrew Jefferies, Samuel Kellner and Marco Argentieri have elected not to be paid by the Company.
31
CUE ENERGY RESOURCES LIMITED DIRECTORS’ REPORT 30 JUNE 2021Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
DIRECTORS’ REPORT
30 JUNE 2021
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, non-monetary benefits and consultancy fees
● Short term incentive programme
● Long term employee benefits
Fixed compensation
Fixed compensation consists of base salary (which is calculated on a total cost base and including any fringe benefits
tax (“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 the 2021 financial year, the Board reviewed the salaries paid to peer company
executives in determining the salary of the Company’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 on 1 July each year
as required. There is no guaranteed base salary increase included in any executive’s contracts.
Cash bonuses
A cash bonus was paid to the CEO during this financial year on the achievement of annual Short Term Incentive (STI)
KPI’s. Details are disclosed in remuneration table below.
Employment contracts
Remuneration and other terms of employment for key executive Matthew Boyall is formalised in a service agreement.
Details of the agreement is as follows:
Matthew Boyall
Title: Chief Executive Officer
Original Agreement effective from 1 July 2017, with salary terms revised on 1 October 2018.
Term: Permanent employment contract, no fixed terms.
Details: Base salary of $360,000 per annum plus superannuation to be reviewed annually by the Board. Mr Boyall is also
entitled to short-term incentive up to 30% (2020: 30%) of his base salary at the discretion of the Board at the end of each
financial year dependent on the success of meeting key deliverables.
Notice period: 3 months
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.
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:
32
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
DIRECTORS’ REPORT
30 JUNE 2021
Compensation of Key Management Personnel – 2021
Short-term benefits
Cash
bonuses
Cash salary
and fees
2021
$
$
Long-term
benefits
Long
service
leave
$
Post
employment
Superannuation
Share-based
payments
Equity-settled
Total
$
$
$
Directors
Alastair McGregor*
Andrew Jefferies*
Peter Hood AO
Richard Malcolm
Rod Ritchie
Samuel Kellner*
Marco Argentieri*
Other Key Management
Personnel:
Matthew Boyall**
-
-
45,610
43,330
47,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,390
4,170
-
-
-
-
-
-
-
-
-
-
-
-
50,000
47,500
47,500
-
-
356,694
493,134
64,260
64,260
5,218
5,218
25,000
33,560
62,693
513,865
62,693
658,865
*
**
Alastair McGregor, Andrew Jefferies, Samuel Kellner and Marco Argentieri have elected not to be paid by the Company.
Matthew Boyall’s cash bonus consists of $64,260 for achieving 59.5% weighting against 2020 key performance indicators (KPIs). The KPIs were
measured against the actual results for the calendar year ending 31 December 2020. Mr Boyall is entitled to up to 30% of base salary in short
term incentives.
33
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
DIRECTORS’ REPORT
30 JUNE 2021
Compensation of Key Management Personnel – 2020
Short-term benefits
Cash
bonuses
Cash salary
and fees
2020
$
$
Long-term
benefits
Long
service
leave
$
Post
employment
Superannuation
Share-based
payments
Equity-settled
Total
$
$
$
Directors
Peter Hood AO
Richard Malcolm
Rod Ritchie
Other Key Management
Personnel:
Matthew Boyall***
45,662
43,379
47,500
-
-
-
-
-
-
4,338
4,121
-
-
-
-
50,000
47,500
47,500
356,003
492,544
91,800
91,800
21,193
21,193
25,000
33,459
51,334
51,334
545,330
690,330
*
**
Alastair McGregor, Andrew Jefferies, Rebecca DeLaet, Samuel Kellner and Marco Argentieri have elected not to be paid by the Company.
Matthew Boyall’s cash bonus consists of $91,800 for achieving 85% weighting against 2019 key performance indicators (KPIs). The KPIs were
measured against the actual results for the calendar year ending 31 December 2019. Mr Boyall is entitled to up to 30% of base salary in short
term incentives.
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
2021
2020
2021
2020
2021
2020
Fixed
remuneration
At risk - STI
At risk - LTI
Directors:
Peter Hood AO
Richard Malcolm
Rod Ritchie
100%
100%
100%
100%
100%
100%
-
-
-
-
-
-
-
-
-
-
-
-
Other Key Management Personnel:
Matthew Boyall
75%
74%
13%
17%
12%
9%
34
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
DIRECTORS’ REPORT
30 JUNE 2021
(D) Equity based remuneration
Overview of share options
The Board in their meeting held on 24 June 2019 approved the Employee Share Option Plan (‘ESOP’), which was
subsequently approved by shareholders at 2019 Annual General Meeting.
The ESOP has been developed to provide the greatest possible flexibility in choice to the Board in implementing the
executive incentive schemes. The ESOP enables the Board to offer employees a number of Options.
A summary of material terms of the ESOP is set out as follows:
●
●
●
●
●
●
●
●
the ESOP sets out the framework for the offer of Options by the Company, and is typical for a document of this nature;
in making its decision to issue Options, the Board may decide the number of securities and the vesting conditions
which are to apply in respect of the securities. The Board has flexibility to issue Options having regard to a range
of potential vesting criteria and conditions;
in certain circumstances, unvested Options will immediately lapse and any unvested Shares held by the
participant will be forfeited if the relevant person is a “bad leaver” as distinct from a “good leaver”;
if a participant acts fraudulently or dishonestly or is in breach of their obligations to the Company or its subsidiaries,
the Board may determine that any unvested Options held by the participant immediately lapse and that any
unvested Shares held by the participant be forfeited;
in certain circumstances Options can vest early upon a change of control event as defined under the Plan rules.
the total number of Options and Shares which may be offered by the Company under these Rules shall not at
any time exceed 5% of the Company’s total issued Shares when aggregated with the number of Options and
Shares issued or that may be issued as a result of offers made at any time during the previous three year period
under an employee incentive scheme.
the Board has discretion to impose restrictions (except to the extent prohibited by law or the ASX Listing Rules)
on Shares issued or transferred to a participant on vesting of an Option or a Performance Right, and the
Company may implement appropriate procedures to restrict a participant from so dealing in the Shares;
the Board is granted a certain level of discretion under the EIP, including the power to amend the rules under
which the EIP is governed and to waive vesting conditions, forfeiture conditions or disposal restrictions.
The options will vest on the date determined by the Board and as specified in the Invitation Letter.
3,743,260 options were granted under the ESOP during the financial year to 30 June 2021 (2020: 8,131,186). No
options were forfeited due to employee departure from the Company during the year. These options did not have any
other vesting conditions other than time.
Share-based compensation
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during the year
ended 30 June 2021.
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of key management
personnel in this financial year or future reporting years are as follows:
Name
Number
of options
granted
Grant date
Vesting
date and
exercisable
date
Expiry date
Exercise
price
Fair value
per option at
grant date
Matthew Boyall
Matthew Boyall
Matthew Boyall
1,288,338
29 July 2019
1 July 2021
1 July 2023
1,399,595
4 October 2019
1 July 2022
1 July 2024
1,102,607
16 July 2020
1 July 2023
1 July 2025
$0.070
$0.090
$0.117
$0.040
$0.059
$0.000
Options granted carry no dividend or voting rights.
35
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
DIRECTORS’ REPORT
30 JUNE 2021
(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 2021.
Production income from continuing operations
Profit/(Loss) before income tax expense from continuing
operations
2021
$’000
2020
$’000
2019
$’000
2018
$’000
2017
$’000
22,449
(7,442)
23,916
5,099
25,730
12,856
24,547
5,058
35,000
(6,975)
Profit/(Loss) after income tax benefit/(expense)
Total Key Management Personnel Remuneration
(12,743)
659
1,313
690
8,549
651
7,739
(15,032)
525
2,264
Share price at start of year (cents)
Share price at end of year (cents)
Basic earnings/(loss) per share (cents)
Diluted earnings/(loss) per share (cents)
2021
2020
2019
2018
2017
9.50
6.00
(1.83)
(1.83)
8.30
9.50
0.19
0.19
5.70
8.30
1.22
1.22
5.50
5.70
1.11
1.11
8.10
5.50
(2.48)
(2.48)
The Company remuneration policy also seeks to reward staff members on achieving non-financial key performance
indicators, including safety and operational performance.
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
Andrew Jefferies
Peter Hood AO
Other Key Management
Personnel
Matthew Boyall
Balance at
the start of
the year
Balance on
date of Board
appointment
Additions
Disposals/
other
Balance at
the end of the
year
8,000
80,000
200,000
288,000
-
-
-
-
-
-
-
-
-
-
-
-
8,000
80,000
200,000
288,000
* Alastair McGregor, Richard Malcolm, Rod Ritchie, Samuel Kellner and Marco Argentieri do not hold any fully paid ordinary shares.
NZOG Offshore Limited (a related entity to Alastair McGregor, Andrew Jefferies, Rod Richie, Samuel Kellner and Marco
Argentieri) holds 349,368,803 fully paid ordinary shares in Cue.
36
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
DIRECTORS’ REPORT
30 JUNE 2021
Option holding
The number of options over ordinary 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:
Options over ordinary shares
Matthew Boyall
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
2,687,933
2,687,933
1,102,607
1,102,607
-
-
-
-
3,790,540
3,790,540
This concludes the remuneration report, which has been audited.
Shares under option
Unissued ordinary shares of Cue Energy Resources Limited under option at the date of this report are as follows:
Grant date
29/07/2019
04/10/2019
16/07/2020
Expiry date
01/07/2023
01/07/2024
01/07/2025
Vesting date
01/07/2021
01/07/2022
01/07/2023
Exercise
price
Number
under option
$0.07
$0.09
$0.12
3,784,025
3,853,298
3,743,260
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of
the company or of any other body corporate.
Shares issued on the exercise of options
There were no ordinary shares of Cue Energy Resources Limited issued on the exercise of options during the year
ended 30 June 2021 and up to the date of this report.
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 the
auditor of the company or any related body corporate against a liability incurred as an auditor.
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.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the
auditor are outlined in note 22 to the financial statements.
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 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:
37
Cue Energy Resources LimitedAnnual Report 2021
●
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity
of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including
reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the company,
acting as advocate for the company or jointly sharing economic risks and rewards.
Officers of the company who are former partners of KPMG
There are no officers of the company who are former partners of KPMG.
Rounding of amounts
The Company is a company of the kind referred to in ASIC Legislative Instrument 2016/191, 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.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this directors’ report and forms part of the directors’ report.
Auditor
In accordance with the provisions of the Corporations Act 2001 the Company’s auditor, KPMG, continues in office.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the Board
___________________________
Alastair McGregor
Non-Executive Chairman
18 August 2021
38
CUE ENERGY RESOURCES LIMITED DIRECTORS’ REPORT 30 JUNE 2021Cue Energy Resources LimitedAnnual Report 2021
Lead Auditor’s Independence Declaration under
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
Section 307C of the Corporations Act 2001
To the Directors of Cue Energy Resources Limited
To the Directors of Cue Energy Resources Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Cue Energy Resources
I declare that, to the best of my knowledge and belief, in relation to the audit of Cue Energy Resources
Limited for the financial year ended 30 June 2021 there have been:
Limited for the financial year ended 30 June 2021 there have been:
i.
i.
ii.
ii.
no contraventions of the auditor independence requirements as set out in the
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
KPMG
Vicky Carlson
Vicky Carlson
Partner
Partner
Melbourne
Melbourne
18 August 2021
18 August 2021
19
19
KPMG, an Australian partnership and a member firm of the KPMG global organisation of
KPMG, an Australian partnership and a member firm of the KPMG global organisation of
independent member firms affiliated with KPMG International Limited, a private English company
independent member firms affiliated with KPMG International Limited, a private English company
limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under
limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under
license by the independent member firms of the KPMG global organisation. Liability limited by a
license by the independent member firms of the KPMG global organisation. Liability limited by a
scheme approved under Professional Standards Legislation.
scheme approved under Professional Standards Legislation.
39
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2021
Revenue
Production revenue from operations
Production costs
Gross profit from production
Other income
Net foreign currency exchange gain / (loss)
Expenses
Impairment - Production properties
Exploration and evaluation expenditure
Administration expenses
Profit before income tax expense
Income tax expense
Profit after income tax expense for the year attributable to the owners
of Cue Energy Resources Limited
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to the owners
of Cue Energy Resources Limited
Note
5
13
7
6
8
Consolidated
2021
$’000
2020
$’000
22,449
(10,881)
11,568
220
(2,550)
-
(12,843)
(3,837)
23,916
(12,944)
10,972
831
79
(2,722)
(1,438)
(2,623)
(7,442)
5,099
(5,301)
(3,786)
(12,743)
1,313
(1,085)
(1,085)
691
691
(13,828)
2,004
Cents
Cents
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
30
30
(1.83)
(1.83)
0.19
0.19
40
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notesCue Energy Resources LimitedAnnual Report 2021 CUE ENERGY RESOURCES LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021
Assets
Current assets
Cash and cash equivalents
Restricted cash
Trade and other receivables
Inventories
Total current assets
Non-current assets
Other financial assets
Property, plant and equipment
Right-of-use assets
Exploration and evaluation assets
Production properties
Development assets
Deferred tax assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Lease liabilities
Tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Lease liabilities
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Total equity
Note
Consolidated
2021
$’000
2020
$’000
9
9
10
11
12
13
14
8
15
8
8
16
17
19
17,617
27
7,342
437
25,423
19,936
12,008
4,715
458
37,117
5,784
5,713
44
194
-
18,344
3,670
2,641
30,677
56,100
2,960
52
2,115
232
5,359
145
5,017
15,656
20,818
26,177
29,923
64
90
4,605
18,682
-
2,888
32,042
69,159
2,044
80
2,287
140
4,551
16
4,058
16,970
21,044
25,595
43,564
152,416
152,416
(815)
83
(121,678)
(108,935)
29,923
43,564
The above statement of financial position should be read in conjunction with the accompanying notes
41
Cue Energy Resources LimitedAnnual Report 2021 CUE ENERGY RESOURCES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2021
Consolidated
Balance at 1 July 2019
Contributed
Equity
$’000
Reserves
$’000
Accumulated
Losses
$’000
Total
Equity
$’000
152,416
(750)
(110,257)
41,409
Adjustment to opening accumulated losses upon adoption
of AASB 16
-
-
5
5
Balance at 1 July 2019 - restated
152,416
(750)
(110,252)
41,414
Profit after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Share-based payments (note 31)
Transfer
-
-
-
-
-
Balance at 30 June 2020
152,416
-
691
691
146
(4)
83
1,313
-
1,313
-
4
1,313
691
2,004
146
-
(108,935)
43,564
Consolidated
Balance at 1 July 2020
Loss after income tax expense for the year
Other comprehensive loss for the year, net of tax
Total comprehensive loss for the year
Transactions with owners in their capacity as owners:
Share-based payments (note 31)
Contributed
Equity
$’000
Reserves
$’000
Accumulated
Losses
$’000
Total
equity
$’000
152,416
83
(108,935)
43,564
-
-
-
-
-
(1,085)
(1,085)
(12,743)
-
(12,743)
(1,085)
(12,743)
(13,828)
187
-
187
Balance at 30 June 2021
152,416
(815)
(121,678)
29,923
The above statement of changes in equity should be read in conjunction with the accompanying notes
42
Cue Energy Resources LimitedAnnual Report 2021 CUE ENERGY RESOURCES LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2021
Cash flows from operating activities
Receipts from customers
Other receipts
Interest received
Payments to suppliers and employees
Payments for exploration and evaluation expenditure
Income tax paid
Royalties paid
Net cash from/(used in) operating activities
Cash flows from investing activities
Payments with respect to production and development properties
Payments for plant and equipment
Payments for exploration and evaluation (Capex)
Net cash used in investing activities
Cash flows from financing activities
Payments of principal element of lease liabilities
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents and restricted cash
Note
Consolidated
2021
$’000
2020
$’000
29
13
12
18,575
538
25
(10,541)
(12,186)
(4,033)
(408)
23,004
606
374
(9,298)
(1,496)
(4,314)
(1,476)
(8,030)
7,400
(3,510)
(7)
-
(881)
(62)
(729)
(3,517)
(1,672)
(84)
(84)
(11,631)
31,944
(2,669)
(85)
(85)
5,643
26,194
107
Cash and cash equivalents, including restricted cash, at the end of the financial year
9
17,644
31,944
The above statement of cash flows should be read in conjunction with the accompanying notes
43
Cue Energy Resources LimitedAnnual Report 2021 CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 1. General information
The financial statements cover Cue Energy Resources Limited as a consolidated entity consisting of Cue Energy
Resources Limited and the entities it controlled at the end of, or during, the year. The financial statements are presented
in Australian dollars, which is Cue Energy Resources Limited’s functional and presentation currency.
Cue Energy Resources Limited is a listed public company limited by shares, incorporated and domiciled in Australia,
whose shares are publicly traded on the Australian Securities Exchange.
A description of the nature of the consolidated entity’s operations and its principal activities are included in the directors’
report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 18 August 2021.
Note 2. Significant accounting policies
Significant accounting policies have been disclosed in the respective notes to the financial statements and below.
(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 Group is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191
and in accordance with that instrument, amounts in the consolidated financial statements and directors’ report have been
rounded off to the nearest thousand dollars, unless otherwise stated.
The consolidated financial statements 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 25.
(d) 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 2021 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
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.
44
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 2. Significant accounting policies (continued)
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.
Investments in subsidiaries are accounted for at cost in the individual financial statements of Cue Energy Resources
Limited.
(e) Production revenue
The consolidated entity generates production revenue from its interest in producing crude oil and gas fields. Revenue
from oil production is recognised at a point in time when crude oil is delivered to the buyer. Oil contract price is negotiated
when the operator lifts for the group. Revenue from gas production is recognised during the month when gas is delivered
to the buyer, based on fixed price contracts.
(f) 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.
(g) Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation
for the current financial year.
(h) Goods and Services Tax (‘GST’) and other similar taxes
Revenues, expenses 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.
(i) Foreign currency
Functional and presentation currency
The functional currencies of Group companies is the currency of the primary economic environment in which it operates.
The consolidated financial statements are presented in Australian dollars, as this is the Group’s presentation currency.
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. Non-monetary items measured at historical cost continue to be
carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at
the exchange rate at the date when fair values were determined.
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.
45
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 2. Significant accounting policies (continued)
Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive
income to the extent that the underlying gain or loss is recognised in other comprehensive income; otherwise the
exchange difference is recognised in profit or loss.
Foreign operations
The results and financial position of Cue’s foreign operations are translated into its presentation currency using the
following procedures:
(a)
(b)
(c)
assets and liabilities for each statement of financial position presented (i.e. including comparatives) shall be
translated at the closing rate at the date of that statement of financial position;
income and expenses for each statement presenting profit or loss and other comprehensive income (i.e.
including comparatives) shall be translated at average exchange rates for the year; and
all resulting exchange differences shall be recognised in other comprehensive income.
(j) New or amended Accounting Standards and Interpretations adopted
The Consolidated Entity has adopted all of the new or amended Accounting Standards and Interpretations issued by
the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period. There was no
impact upon adoption of these standards.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Note 3. 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 judgement 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 are only recognised if management considers it is probable that future tax profits will be available to
utilise the unused tax losses (refer to note 8).
(ii) Impairment of production properties
Production properties impairment testing requires an estimation of recoverable amount using a value-in-use model for
respective cash generating units. The recoverable amount 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 (refer to note 13).
(iii) Useful life of production properties
As detailed at note 13 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
46
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 3. Critical accounting estimates and judgements (continued)
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.
(v) 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.
(vi) Capitalised exploration and evaluation costs
Exploration and evaluation costs have been capitalised on the basis that the consolidated entity expects to commence
commercial production in the future, from which time the costs will be amortised in proportion to the depletion of the mineral
resources. Key judgements are applied in considering costs to be capitalised which includes determining expenditures
directly related to these activities and allocating overheads between those that are expensed and capitalised. In addition,
costs are only capitalised that are expected to be recovered either through successful development or sale of the
relevant mining interest. Factors that could impact the future commercial production at the mine include the level of
reserves and resources, future technology changes, which could impact the cost of mining, future legal changes and
changes in commodity prices. To the extent that capitalised costs are determined not to be recoverable in the future, they
will be written off in the period in which this determination is made.
(vii) Coronavirus (COVID-19) pandemic
In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic,
which continues to spread globally as well as in Australia. The spread of COVID-19 has caused significant volatility
in Australian and international markets, which coincide with the collapse of the global oil price. There is significant
uncertainty around the breadth and duration of business disruptions related to COVID-19. In order to protect the health
and maintain the safety of employees and comply with local regulations, the Company has closed its offices temporarily
and arranged for employees to work remotely. At the date of this report, the impact of these measures is not expected
to significantly affect the Company’s business operations.
Note 4. 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 Group financial statements.
At reporting date, the Group operates in three principle geographic segments: Australia, New Zealand and Indonesia.
These segments are based on the internal reports that are reviewed and used by the Board of Directors (who are
identified as the Chief Operating Decision Makers (CODM)) in assessment performance and in determining the allocation
of resources.
Australia
The parent entity resides in Melbourne, Australia. The Group, through its wholly owned subsidiary, Cue Exploration Pty
Ltd, holds exploration permits in the Carnarvon Basin, Offshore Western Australia.
New Zealand
The Group, through its wholly owned subsidiary, Cue Taranaki Pty Ltd, holds 5% interest in petroleum production
property, PMP38160 (Maari) in New Zealand.
47
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 4. Financial reporting by segments (continued)
Indonesia
The Group, through its wholly owned subsidiary, Cue Sampang Pty Ltd, holds 15% interest in gas production property in
Indonesia (Sampang). The Group also holds interest in exploration permits in East Kalimantan, through Cue Mahakam
Hilir Pty Ltd and Cue Kalimantan Pte Ltd (both wholly owned subsidiaries) and in Central Sumatra, through Cue Mahato
Pty Ltd.
Information regarding the Group’s reportable segments is presented below:
Australia
$’000
NZ
$’000
Indonesia
$’000
Total
$’000
-
-
-
(76)
(12,283)
(3,061)
(139)
(2,570)
6,945
(4,000)
2,945
(1,432)
-
201
-
25
15,504
(4,077)
11,427
(1,373)
(559)
(502)
(40)
(5)
(18,129)
1,739
8,948
22,449
(8,077)
14,372
(2,881)
(12,842)
(3,362)
(179)
(2,550)
(7,442)
(5,301)
(12,743)
Australia
$’000
NZ
$’000
Indonesia
$’000
Total
$’000
15,390
215
15,605
1,682
375
2,057
2,989
13,049
16,038
1,109
9,432
10,541
7,044
17,413
24,457
2,568
11,011
13,579
25,423
30,677
56,100
5,359
20,818
26,177
Consolidated - 2021
Revenue
Revenue from continuing operations
Production expenses (excluding amortisation)
Gross profit (excluding amortisation)
Depreciation and amortisation
Exploration and evaluation expenditure
Other income / expenditure
Share-based payments
Foreign exchange movement
Profit/(loss) before income tax expense
Income tax expense
Loss after income tax expense
30 June 2021
SEGMENT ASSETS
Current assets
Non-current assets
Total assets
SEGMENT LIABILITIES
Current liabilities
Non-current liabilities
Total liabilities
48
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 4. Financial reporting by segments (continued)
Consolidated - 2020
Revenue
Revenue from continuing operations
Production expenses (excluding amortisation)
Gross profit (excluding amortisation)
Depreciation and amortisation
Impairment of production properties
Exploration and evaluation expenditure
Other income / expenditure
Share-based payments
Foreign exchange movement
Profit/(loss) before income tax expense
Income tax expense
Profit after income tax expense
30 June 2020
SEGMENT ASSETS
Current assets
Non-current assets
Total assets
SEGMENT LIABILITIES
Current liabilities
Non-current liabilities
Total liabilities
Australia
$’000
NZ
$’000
Indonesia
$’000
Total
$’000
-
-
-
(73)
-
(747)
(1,966)
(106)
130
(2,762)
9,489
(6,227)
3,262
(3,032)
(2,722)
-
-
-
(192)
(2,684)
14,427
(2,577)
11,850
(1,108)
-
(691)
393
(40)
141
10,545
23,916
(8,804)
15,112
(4,213)
(2,722)
(1,438)
(1,573)
(146)
79
5,099
(3,786)
1,313
Australia
$’000
NZ
$’000
Indonesia
$’000
Total
$’000
28,982
123
29,105
536
97
633
789
14,970
15,759
692
10,315
11,007
7,346
16,949
24,295
3,323
10,632
13,955
37,117
32,042
69,159
4,551
21,044
25,595
Major customers
The Group has a number of customers to whom it provides oil products. The Group supplies a single external customer
with gas. That customer accounts for 100% of external gas revenue (2020: 100%).
Note 5. Production costs
Production costs
Amortisation of production properties
Consolidated
2021
$’000
8,077
2,804
2020
$’000
8,804
4,140
10,881
12,944
49
Cue Energy Resources LimitedAnnual Report 2021 CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 6. Administration expenses
Employee expenses
Superannuation contribution expense
Legal expenses*
Other expenses
Business development expenses
Share based payments
Total administration expenses
Consolidated
2021
$’000
2020
$’000
1,170
74
1,032
611
771
179
3,837
1,275
70
409
595
128
146
2,623
*This figure includes once-off expenses of:
-
$504k AUD ($380k USD) associated with the settlement of the dispute between Cue and the Mahato PSC joint
operation partners.
$464k AUD ($350k USD) associated with the settlement of the Hammerhead litigation in relation to the Pine Mills
oilfield.
-
Note 7. Exploration and evaluation expenditure
Profit/(loss) before income tax includes the following specific expenses:
Exploration Costs Expensed
Sampang PSC
Mahakam Hilir PSC
WA-359-P
WA-389-P
WA-409-P
Total exploration and evaluation expenditure
Consolidated
2021
$’000
2020
$’000
29
490
11,998
268
58
12,843
12
679
157
550
40
1,438
Accounting policy for exploration and evaluation project expenditure
AASB 6 Exploration for and Evaluation of Mineral Resources allows the Group to either capitalise or expense the
exploration and evaluation expenditure incurred. During the financial year the consolidated entity reviewed its criteria
under its successful efforts method of accounting. The costs of a successful exploration well are capitalised and carried
forward as exploration and evaluation assets pending the evaluation of the success of the well (refer note 12). If a well
does not result in a successful discovery, the previously capitalised costs are immediately expensed.
50
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 8. Income tax expense
Income tax expense
Current tax
Adjustment recognised for current tax in prior periods
Deferred tax – origination and reversal of temporary differences (i)
Aggregate income tax expense
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit/(loss) before income tax expense
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Unrealised foreign exchange movements
Unrecognised temporary differences
Unrecognised tax losses
Recognition of deferred tax (assets)/liabilities (ii)
Difference in overseas tax rates
Share-based payments
Other
Adjustment recognised for current tax in prior periods
Income tax expense
(i) Deferred tax included in income tax expense comprises:
Decrease/(increase) in deferred tax assets
Increase/(decrease) in deferred tax liabilities
Deferred tax – origination and reversal of temporary differences
Consolidated
2021
$’000
2020
$’000
4,322
(228)
1,207
5,301
(7,442)
(2,233)
809
(10)
3,642
1,207
1,865
42
207
5,529
(228)
5,301
4,217
(656)
225
3,786
5,099
1,530
(146)
(139)
1,756
225
985
32
199
4,442
(656)
3,786
Consolidated
2021
$’000
2020
$’000
247
960
1,207
114
111
225
During the prior year, Cue was notified that it had been successful in an Indonesian Tax Court case against the
Indonesian Tax Department for over-payment of AUD$659k in taxes relating to 2011, resulting in a partial refund of
AUD$451k which was received in December 2019. The remaining balance was accrued at year end.
(ii) During the prior year, the consolidated entity capitalised Mahato PB exploration wells drilling costs (refer note 13).
As a result, a deferred tax liability of $510k was recognised in the financial statements.
51
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 8. Income tax expense (continued)
Current tax liabilities
Consolidated
2021
$’000
2020
$’000
2,115
2,287
The Group has an ongoing Indonesian Tax matter relating to a notice of amended assessment which is being disputed
by Cue Kalimantan Pte Ltd on behalf of SPC E&P Pte Ltd (“SPC”). Cue is indemnified by SPC for any losses arising
from this disputed notice of assessment and has recognised a liability and receivable on the balance sheet.
Deferred tax assets recognised
Restoration provision - Maari
Deferred tax liability recognised comprise of:
Sampang:
Production property
Exploration and evaluation assets
Restoration provision offset
Right of use assets
Deferred tax liability
Deferred tax not recognised
Deferred tax not recognised comprises temporary differences attributable to:
Employee provisions
Tax losses
Less deferred tax liabilities not recognised - Production properties
Less deferred tax liabilities not recognised - Inventories
Net deferred tax not recognised
Consolidated
2021
$’000
2020
$’000
2,641
2,888
Consolidated
2021
$’000
2020
$’000
5,107
-
(105)
15
5,017
2,395
2,026
(377)
14
4,058
Consolidated
2021
$’000
2020
$’000
85
40,611
(1,752)
(122)
38,822
68
35,752
(1,695)
(128)
33,997
The above net potential tax benefit has not been recognised in the statement of financial position as the recovery of this
benefit is uncertain.
At 30 June 2021 no franking and imputation credits were held for subsequent reporting periods (2020: nil).
Accounting policy for 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.
52
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 8. Income tax expense (continued)
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.
Note 9. Current assets - cash and cash equivalents
Unrestricted operating accounts
Restricted - Ironbark Drilling Program Account*
Total as disclosed in the statement of cash flows
Consolidated
2021
$’000
17,617
27
2020
$’000
19,936
12,008
17,644
31,944
*Restricted cash in the year ended 30 June 2020 included cash held by the Company as required under the funding
arrangement of the WA-359-P Co-ordination Agreement for the Ironbark drilling program account. The majority of these
funds were drawn down over the period to settle exploration expenditure associated with the WA-359-P.
Accounting policy for cash and cash equivalents and restricted cash
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value. For the statement of cash flows presentation
purposes, cash and cash equivalents also includes bank overdrafts, which are shown within borrowings in current
liabilities on the statement of financial position.
53
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 10. Current assets - trade and other receivables
Trade receivables
Other receivables
Prepayments
Consolidated
2021
$’000
2020
$’000
5,205
2,031
7,236
106
7,342
1,970
2,596
4,566
149
4,715
Allowance for expected credit losses
The group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected
loss allowance for all trade receivables. To measure the expected credit losses, trade receivables have been grouped
based on shared credit risk characteristics and the days past due.
The consolidated entity has not recognised any losses in profit or loss in respect of the expected credit losses for the
year ended 30 June 2021 (2020: Nil).
The aging of trade and other receivables at the reporting date was as follows:
Not overdue
Less than one month
Consolidated
2021
$’000
2020
$’000
2,665
4,571
7,236
3,866
700
4,566
Trade and other receivables are not impaired and relate to a number of independent customers for whom there is no
recent history of default.
Accounting policy for trade and other receivables
Trade and other receivables are amounts due from customers for goods sold in the ordinary course of business. They are
generally due for settlement within 30 days and therefore are all classified as current. Trade receivables are recognised
initially at the amount of consideration that is unconditional unless they contain significant financing components, when
they are recognised at fair value.
Note 11. Non-current assets - other financial assets
Prepaid restoration fund - Sampang
Consolidated
2021
$’000
2020
$’000
5,784
5,713
Other financial assets are comprised of prepayments made to fund Cue Sampang’s share of rehabilitation obligations.
Cue Sampang contributed AUD$534k to the restoration fund for the Sampang PSC during the year ended 30 June 2021
(2020: AUD$435k)
Accounting policy for other financial assets
Other financial assets are initially measured at fair value and subsequently measured at amortised cost.
54
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 11. Non-current assets - other financial assets (continued)
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the
consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable
expectation of recovering part or all of a financial asset, it’s carrying value is written off.
Note 12. Non-current assets - exploration and evaluation assets
Exploration and evaluation – Paus Biru-1 Exploration well*
Exploration and evaluation – PB exploration wells**
Consolidated
2021
$’000
2020
$’000
-
-
-
3,446
1,159
4,605
Under the criteria the costs of a successful exploration well are capitalised and carried forward as exploration and
evaluation assets pending the evaluation of the success of the well. If a well does not result in a successful discovery,
the previously capitalised costs are immediately expensed.
*The plan of development (POD) for the Paus Biru discovery was approved on 30 July 2020. Nothing has come to the
attention of the Directors to indicate future economic benefits will not be achieved.
**Mahato PSC began production during the year and as such the costs associated with both Paus Biru-1 and PB
exploration wells have been transferred to production assets, refer to note 13 for details.
Note 13. Non-current assets - production properties
Net accumulated cost incurred on areas of interest
Joint operation assets
Oyong and Wortel - Sampang PSC
Maari - PMP 38160
Mahato
Balance as at 30 June
Consolidated
2021
$’000
2020
$’000
4,758
10,408
3,178
6,600
12,082
-
18,344
18,682
55
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 13. Non-current assets - production properties (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Balance at 1 July
Expenditure during the year
Changes in restoration provision – production (note 16)
Amortisation expense
Impairment of Maari production property*
Transfer in from development assets**
Changes in foreign currency translation
Closing balance 30 June
Consolidated
2021
$’000
2020
$’000
18,682
842
(81)
(2,804)
-
3,272
(1,567)
18,344
24,645
744
(691)
(4,140)
(2,722)
-
846
18,682
* At 30 June 2020, the Group reassessed the carrying amount of its oil and gas assets for indicators of impairment such
as changes in future prices, future costs and reserves. As a result, the recoverable amounts of Maari cash generating unit
were formally reassessed. An impairment of the Maari oil field development in New Zealand of $2.72 million, primarily
as a result of reduced oil prices, was recognised.
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 and based upon the Group’s long term pricing assumptions.
The post-tax discount rates applied were 10% (2020: 10%) equivalent to pre-tax discount rates of 14.3% (2020: 14.3%)
depending on the nature of the risks specific to each asset. Recoverable amounts are estimated as follows:
** Production assets transferred in relate to Mahato development assets include the PB-1 and PB-2 wells which were
drilled as exploration wells in late 2019 and early 2020. During calendar year 2021, these wells commenced commercial
oil production. PB-3, PB-4 and PB-5 wells were also drilled and brought into production by 30 June 2021.
Accounting policy for 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.
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 expensed through the statement of profit or loss and
other comprehensive income.
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.
Accounting policy for 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.
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.
56
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 13. Non-current assets - production properties (continued)
Accounting policy for 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 consensus estimates of forward market prices where available. The recoverable amount of other
assets is the greater of their fair value less cost to dispose and value-in-use.
In assessing value-in-use, the estimated future cash flows are discounted to their present value using a post-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.
The restoration provision is deducted from the carrying value of the asset as the cost of restoration is included in its cost
base. This adjustment is required to allow a true reflection of its carrying value against its recoverable value.
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.
Note 14. Non-current assets - development assets
Sampang Paus Biru
Consolidated
2021
$’000
2020
$’000
3,670
-
During the year ended 30 June 2021, Paus Biru gas field Plan of Development in the Sampang PSC was approved by
the Indonesian Government. The Company subsequently reclassified and transferred the exploration and evaluation
assets to Development assets.
As the Mahato assets entered the development phase during this reporting period, the Company had an obligation for
its share of restoration provision. However management do not believe this amount will be material, and as at 30 June
2021, the operator had not cash called for any restoration funds.
Note 15. Current liabilities - trade and other payables
Trade payables and accruals
Amounts due to directors and director related entities
Consolidated
2021
$’000
2020
$’000
2,274
686
2,960
1,945
99
2,044
Refer to note 20 for further information on financial instruments.
The Directors consider the carrying amount of payables reflect their fair values.
Accounting policy for 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.
57
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 16. Non-current liabilities - provisions
Employee benefits
Restoration provisions
Movements in restoration provision during the financial year are set out below:
Consolidated - 2021
Carrying amount at the start of the year
Additional provisions recognised
FX translation
Carrying amount at the end of the year
Consolidated
2021
$’000
2020
$’000
48
15,608
81
16,889
15,656
16,970
Restoration
provisions
$’000
16,889
136
(1,417)
15,608
Accounting policy for 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.
Abandonment provision
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 expected timing of outflows for
restoration liabilities is not within 12 months from the reporting date.
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.
Accounting policy for 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.
58
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 17. Equity - contributed equity
Consolidated
2021
Shares
2020
Shares
2021
$’000
2020
$’000
Ordinary shares - fully paid
698,119,720
698,119,720
152,416
152,416
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.
Accounting policy for 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.
Note 18. Equity - 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 will assess 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, or issue new shares.
During 2021 management did not pay any dividends (2020: nil).
There has been no change during the year to the strategy adopted by management to control the capital of the entity.
The gearing ratio is nil for both 2020 and 2021 financial year, as the Group does not have external debt.
Note 19. Equity - reserves
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2019
Foreign currency translation
Share-based payments
Transfer to accumulated losses
Balance at 30 June 2020
Foreign currency translation
Share-based payments
Balance at 30 June 2021
Foreign
currency
reserve
$’000
Options
reserve
$’000
Total
$’000
(784)
691
-
-
(93)
(1,085)
-
(1,178)
34
-
146
(4)
176
-
187
363
(750)
691
146
(4)
83
(1,085)
187
(815)
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars.
Options reserve
The reserve is used to recognise the value of equity benefits provided to employees under the Employee Share Option Plan.
59
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 20. Financial instruments
The Group’s principal financial instruments comprise receivables, payables, cash and cash equivalents (inclusive of
restricted balances).
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 rates, foreign exchange and commodity prices. These risks are summarised below.
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 Board reviews and agrees management’s assessment for managing each of
the risks identified below.
In all instances the fair value of financial assets and liabilities approximates to their carrying value.
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 these notes to the financial statements. The Group has no debt and
trade receivables, other financial assets and trade payables are a reasonable approximation of their fair values due to
their short-term nature. Therefore there is no significant fair value risk.
(b) Interest rate risk
The Group’s exposure to market interest rates is related primarily to the Group’s cash deposits.
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 impact of interest rate movement is not
material to the Group.
(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. However, given the group generates and holds significant balances of foreign currencies,
the Group foreign exchange risk exposures are mitigated through natural hedging.
The Group’s exposure to foreign exchange risk at the reporting date was primarily to the New Zealand Dollar (NZD) and
Indonesian Rupiah (IDR) and was as follows (holdings are shown in AUD equivalent):
Consolidated
30 June 2021
Financial assets
Trade and other receivables
Financial liabilities
Trade and other payables
Lease liabilities
60
NZD
$’000
IDR
$’000
150
991
-
19
1
13
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 20. Financial instruments (continued)
Consolidated
30 June 2020
Financial assets
Trade and other receivables
Financial liabilities
Trade and other payables
Lease liabilities
NZD
$’000
IDR
$’000
41
608
-
21
27
20
Management believes the risk exposures as at the reporting date are representative of the risk exposure inherent in the
financial instruments.
(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.
All gas contracts are fixed, limiting the Group’s exposure to fluctuations in gas price.
The Group is exposed to commodity price fluctuations through the sale of petroleum products denominated in US dollars.
Commodity price risks are measured by monitoring and stress testing the Group’s forecast financial position to sustained
periods of low oil and gas prices. This analysis is regularly performed on the Group’s portfolio and, as required, for
discrete projects and acquisitions.
(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 by continuously monitoring forecast and actual cash flows and matching the maturity profiles of
financial assets and liabilities.
The Group is consequently able to meet its payment obligations in full as they fall due.
Prudent liquidity risk management implies maintaining sufficient cash to meet the Group’s obligations. 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.
61
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 20. Financial instruments (continued)
30 June 2021
Non-derivative financial liabilities
Trade and other payable (Note 15)
Lease liabilities
30 June 2020
Non-derivative financial liabilities
Trade and other payable (Note 15)
Lease liabilities
(f) Credit risk
12 months
or less
$’000
2,960
52
12 months
or less
$’000
2,044
80
1 to 2 years
$’000
2 to 5 years
$’000
More than
5 years
$’000
-
62
-
83
-
-
1 to 2 years
$’000
2 to 5 years
$’000
More than
5 years
$’000
-
16
-
-
-
-
Credit risk arises from the financial assets of the group, which comprise cash and cash equivalents and restricted cash
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.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include
the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual
payments for a period greater than 1 year.
Note 21. Key management personnel disclosures and related party disclosures
Directors
The following persons were directors of Cue Energy Resources Limited during the financial year:
Alastair McGregor (Non-executive Chairman)*
Andrew Jefferies (Non-Executive Director)
Peter Hood AO (Non-Executive Director)
Richard Malcolm (Non-Executive Director)
Rod Ritchie (Non-Executive Director)
Samuel Kellner (Non-Executive Director)*
Marco Argentieri (Non-Executive Director)*
*Alastair McGregor, Andrew Jefferies, Samuel Kellner and Marco Argentieri have elected not to be paid by the Company.
Key management personnel
The following person also had the authority and responsibility for planning, directing and controlling the major activities
of the consolidated entity, directly or indirectly, during the financial year:
Matthew Boyall (Chief Executive Officer)
62
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 21. Key management personnel disclosures and related party disclosures (continued)
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 and consultancy fees
• Post-employment benefits – superannuation and long service leave entitlements
• Long term employee benefits
Consolidated
2021
2020
Short term employment benefits (including non-monetary benefits)
493,134
492,544
Cash bonuses
Long term benefits
Post-employment benefits
Share-based payments
Total employee benefits
Other related party transactions
64,260
5,218
33,560
62,693
91,800
21,193
33,459
51,334
658,865
690,330
Repayment of amounts owing to the Company as at 30 June 2021 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. No management
fees were charged to subsidiaries in the 2020 and 2021 financial years.
The ultimate parent company is O.G. Oil & Gas (Singapore) Pte. Ltd., a company incorporated in Singapore. The
immediate parent company is NZOG Offshore Limited, a company incorporated in New Zealand.
During the financial year, NZOG provided technical and legal services to the Group under consulting agreements. The
arrangements are on normal commercial terms. As at 30 June 2021, $661k was accrued for services rendered from the
immediate parent company (2020: $99k).
Note 22. Auditors remuneration
During the financial year the following fees were paid or payable for services provided by the auditor of the company:
Audit services - KPMG
Audit or review of the financial statements
Other assurance services
Other services - KPMG
Australian advisory services
Tax compliance
Overseas advisory services
Consolidated
2021
$
2020
$
122,986
8,280
131,266
33,027
12,938
17,338
97,290
8,280
105,570
7,349
12,500
-
63,303
19,849
194,569
125,419
No other services were provided by the auditor during the year, other than those set out above.
63
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 23. Contingent assets and liabilities
The Directors are not aware of any contingent assets or contingent liabilities as at 30 June 2021 (2020: Nil).
Note 24. Commitments for expenditure
a) Exploration tenements*
The Group participates in a number of licences, permits and production sharing contracts
for which the Group has made commitments with relevant governments to complete
minimum work programmes.
Within one year
One to five years
b) Production development expenditure**
The Group participates in a number of development projects that were in progress at
the end of the period. These projects require the Group, either directly or through joint
operation arrangements, to enter into contractual commitments for future expenditures.
Within one year
One to five years
Consolidated
2021
$’000
2020
$’000
414
-
414
24,593
-
24,593
2,319
-
2,319
817
-
817
* Cue has committed to Exploration and development expenditure as part of the Sales and Purchase agreement with
Central Petroleum over the Mereenie, Palm Valley and Dingo fields announced 25 May 2021.
As of 30 June 2021, completion of the transaction was still outstanding and the expenditure has not been included in
this table.
All commitments relate to Joint Operation projects.
** All development expenditure commitments relate to the development of oil and gas fields.
Note 25. Parent entity information
Cue Energy Resources Limited is the parent entity.
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Parent
2021
$’000
2020
$’000
(4,588)
(2,501)
(4,588)
(2,501)
Loss after income tax
Total comprehensive income
64
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 25. Parent entity information (continued)
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Contributed equity
Options reserve
Accumulated losses
Total equity
Parent
2021
$’000
2020
$’000
15,363
17,624
1,058
1,261
16,938
21,364
504
601
152,416
152,416
363
176
(136,418)
(131,828)
16,361
20,764
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2021 (2020: nil).
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2021 (2020: nil).
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for the acquisition of capital assets as at 30 June 2021 (2020: nil).
Note 26. Shares in subsidiaries
Shares held by parent entity at the reporting date:
Principal place of business /
Country of incorporation
2020
%
2019
%
Ownership interest
Name
Cue Mahato Pty Ltd
Cue Mahakam Hilir Pty Ltd
Cue Kalimantan Pte Ltd*
Cue (Ashmore Cartier) Pty Ltd
Cue Sampang Pty Ltd
Cue Taranaki Pty Ltd
Cue Exploration Pty Ltd
Cue Palm Valley Pty Ltd**
Cue Mereenie Pty Ltd**
Cue Dingo Pty Ltd**
Australia
Australia
Singapore
Australia
Australia
Australia
Australia
Australia
Australia
Australia
All companies in the Group have a 30 June reporting date.
* Shares held by Cue Mahakam Hilir Pty Ltd.
** New entities set-up by Cue Energy Resources Ltd, registered 21 May 2021.
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-
-
-
65
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 27. Interests in joint operations
Property
Operator
Petroleum exploration properties
Carnarvon Basin – Western Australia
WA-359-P
BP Developments Australia Pty Ltd
WA-389-P
WA-409-P
Cue Exploration Pty Ltd
BP Developments Australia Pty Ltd
Indonesia
Mahakam Hilir PSC Cue Kalimantan Pte Ltd
Petroleum production properties
Cue
Interest
2021 (%)
Cue
Interest
2020 (%)
Permit
expiry date
21.5*
100
20**
21.5
100
25/04/2021
08/04/2021
20
12/10/2022
100*
100
15/04/2021
OMV New Zealand Limited
5
5
02/12/2027
New Zealand
PMP38160
Indonesia
Sampang
Medco Energi Sampang Pty Ltd
Mahato PSC
Texcal Mahato EP Ltd
15 (8.18
Jeruk Field)
15 (8.18
Jeruk Field)
04/12/2027
12.5
12.5
20/07/2042
*During the year, the terms of exploration permits WA-359-P and Mahakam Hilir PSC expired and were not renewed.
** Subsequent to the year end, the company has announced an intention to surrender exploration permit WA-409-P.
Accounting policy for 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.
Note 28. Events after the reporting period
On 25 May 2021, Cue announced the execution of a sale and purchase agreement with Central Petroleum Limited
(Central) (ASX:CTP) to acquire interests in the Mereenie, Dingo and Palm Valley onshore gas and oil fields, all located
in the Amadeus Basin, onshore in the Northern Territory, Australia.
On completion, Cue will acquire a 7.5% interest in the Mereenie gas and oil field (OL4 and OL5 production licences),
a 15% interest in the Palm Valley gas field (OL3 production licence), and a 15% interest in the Dingo gas field (L7
Production Licence) with an effective date of 1 July 2020.
On 24 June 2021, NZOG shareholders voted 99.99% in favour of their entry into an agreement to also acquire interests
in the fields from Central, which satisfied a key condition precedent of the transaction.
On 2 July 2021, the Company announced that it and NZOG had received a No Objection Notice from the Australian
Foreign Investment Review Board in relation to the transaction to acquire Amadeus Basin Assets from Central Petroleum,
which satisfied a key condition precedent, and on 28 July 2021 the Company held a general meeting of shareholders
that approved the entry into deed of cross security with NZOG in relation to the transaction.
As of the date this report was signed, conditions precedent which remain to be satisfied include regulatory approval by
the NT government, and assignment of major contracts.
On 30 July 2021, the Company released an independent resource report on the PB field in the Mahato PSC and
announced that the PBE-1 well in the field had commenced production.
66
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 29. Reconciliation of profit/(loss) after income tax to net cash from/(used in) operating activities
Profit/(loss) after income tax expense for the year
Adjustments for:
Share-based payments
Abandonment provision expense
Impairment - production assets
Depreciation
Amortisation
Net (gain)/loss on foreign currency conversion
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
Decrease in inventories
Decrease in deferred tax assets
Increase/(decrease) in trade and other payables
(Decrease)/Increase in tax liabilities
Increase/(decrease) in deferred tax liabilities
Increase/(decrease) in provisions
Net cash from/(used in) operating activities
Note 30. Earnings per share
Consolidated
2021
$’000
2020
$’000
(12,743)
1,313
179
64
-
76
2,804
3,468
(2,627)
21
247
916
(172)
959
(1,222)
(8,030)
146
257
2,722
73
4,140
(95)
582
545
114
(327)
(1,940)
111
(241)
7,400
Consolidated
2021
$’000
2020
$’000
Profit/(loss) after income tax attributable to the owners of Cue Energy Resources Limited
(12,743)
1,313
Weighted average number of ordinary shares used in calculating basic earnings per share 698,119,720
Adjustments for calculation of diluted earnings per share:
698,119,720
Options over ordinary shares
-
1,692,411
Weighted average number of ordinary shares used in calculating diluted earnings per share 698,119,720
699,812,131
Number
Number
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
Accounting policy for earnings per share
Cents
Cents
(1.83)
(1.83)
0.19
0.19
Basic earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to the owners of the Company, excluding any
costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during
the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
67
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 31. Share-based payments
On 16 July 2020, the Company issued 3,743,260 unlisted options to eligible employee under the share option scheme. The
options are exercisable at $0.117 (11.7 cents) per option, and will vest on 1 July 2021 and expire on 1 July 2025.
The options were valued using Black-Scholes option pricing model. $47,740 of share-based payment expense was
recorded in relation to these options for the financial year ending 30 June 2021.
Set out below are summaries of options granted under the plan:
2021
Grant date
Expiry date
29/07/2019
01/07/2023
04/10/2019
01/07/2024
16/07/2020
01/07/2025
Exercise
price
$0.070
$0.090
$0.117
Balance at
the start of
the year
3,784,025
3,853,298
-
-
-
3,743,260
7,637,323
3,743,260
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
-
-
-
-
-
-
3,784,025
3,853,298
3,743,260
11,380,583
Weighted average exercise price
$0.080
$0.117
$0.000
$0.000
$0.092
2020
Grant date
Expiry date
Exercise
price
Balance at
the start of
the year
Granted
Exercised
29/07/2019
01/07/2023
04/10/2019
01/07/2024
$0.070
$0.090
4,277,888
-
-
3,853,298
4,277,888
3,853,298
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
-
(493,863)
3,784,025
-
3,853,298
(493,863)
7,637,323
Weighted average exercise price
$0.070
$0.090
$0.000
$0.070
$0.080
For the options granted during the current financial year, the valuation model inputs used to determine the fair value at
the grant date, are as follows:
Grant date
Expiry date
Share price
at grant
date
Exercise
price
Expected
volatility
Dividend
yield
Risk-free
interest rate
Fair value
at grant
date
16/07/2020
01/07/2025
$0.110
$0.117
57.00%
-
0.43%
$0.051
Accounting policy for share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for
the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount
of cash is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined
using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of
the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the
expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that
do not determine whether the consolidated entity receives the services that entitle the employees to receive payment.
No account is taken of any other vesting conditions.
68
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2021
Note 31. Share-based payments (continued)
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the
best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount
recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts
already recognised in previous periods.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made.
An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair
value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition
is treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not
satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting
period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled
and new award is treated as if they were a modification.
69
Cue Energy Resources LimitedAnnual Report 2021
CUE ENERGY RESOURCES LIMITED
DIRECTORS’ DECLARATION
30 JUNE 2021
In the directors’ opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Australian Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of the consolidated entity’s financial position
as at 30 June 2021 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become
due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Alastair McGregor
Non-Executive Chairman
18 August 2021
70
Cue Energy Resources LimitedAnnual Report 2021
Independent Auditor’s Report
Independent Auditor’s Report
To the shareholders of Cue Energy Resources Limited
To the shareholders of Cue Energy Resources Limited
Report on the audit of the Financial Report
Report on the audit of the Financial Report
Opinion
Opinion
We have audited the Financial Report of Cue
We have audited the Financial Report of Cue
Energy Resources Limited (the Company).
Energy Resources Limited (the Company).
In our opinion, the accompanying Financial
In our opinion, the accompanying Financial
Report of the Company is in accordance with
Report of the Company is in accordance with
the Corporations Act 2001, including:
the Corporations Act 2001, including:
•
•
•
•
giving a true and fair view of the Group’s
giving a true and fair view of the Group’s
financial position as at 30 June 2021 and
financial position as at 30 June 2021 and
of its financial performance for the year
of its financial performance for the year
ended on that date; and
ended on that date; and
complying with Australian Accounting
complying with Australian Accounting
Standards and the Corporations
Standards and the Corporations
Regulations 2001.
Regulations 2001.
The Financial Report comprises:
The Financial Report comprises:
• Consolidated statement of financial position as at 30
• Consolidated statement of financial position as at 30
June 2021
June 2021
• Consolidated statement of profit or loss and other
• Consolidated statement of profit or loss and other
comprehensive income, Consolidated statement of
comprehensive income, Consolidated statement of
changes in equity, and Consolidated statement of
changes in equity, and Consolidated statement of
cash flows for the year then ended;
cash flows for the year then ended;
• Notes including a summary of significant accounting
• Notes including a summary of significant accounting
policies; and
policies; and
• Directors’ Declaration.
• Directors’ Declaration.
The Group consists of Cue Energy Resources Limited
The Group consists of Cue Energy Resources Limited
(the Company) and the entities it controlled at the year-
(the Company) and the entities it controlled at the year-
end or from time to time during the financial year.
end or from time to time during the financial year.
Basis for opinion
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the Financial Report section of our report.
audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of
Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of
the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the
the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the
Code.
Code.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
a scheme approved under Professional Standards Legislation.
51
51
71
Cue Energy Resources LimitedAnnual Report 2021 Key Audit Matters
Key Audit Matters
The Key Audit Matters we identified are:
The Key Audit Matters we identified are:
• Carrying value of production properties;
and
• Carrying value of production properties;
• Restoration provisions
and
• Restoration provisions
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in
Key Audit Matters are those matters that, in our
our audit of the Financial Report of the current period.
professional judgement, were of most significance in
our audit of the Financial Report of the current period.
These matters were addressed in the context of our
audit of the Financial Report as a whole, and in forming
These matters were addressed in the context of our
our opinion thereon, and we do not provide a separate
audit of the Financial Report as a whole, and in forming
opinion on these matters.
our opinion thereon, and we do not provide a separate
opinion on these matters.
Carrying value of production properties
Carrying value of production properties
Non-current assets – production properties: $18.3m (refer to Note 13)
Non-current assets – production properties: $18.3m (refer to Note 13)
The key audit matter
How the matter was addressed in our audit
The key audit matter
We identified the assessment of possible indicators
of impairment and where required impairment
We identified the assessment of possible indicators
testing of Cash Generating Units (CGUs) as a key
of impairment and where required impairment
audit matter. This was due to the size of production
testing of Cash Generating Units (CGUs) as a key
properties and the complex auditor judgement and
audit matter. This was due to the size of production
level of specialised skills needed to evaluate certain
properties and the complex auditor judgement and
assumptions used in this process, and the
level of specialised skills needed to evaluate certain
impairment of the Maari CGU in the prior period.
assumptions used in this process, and the
impairment of the Maari CGU in the prior period.
In assessing indicators of impairment, or reversal of
previously recorded impairment, the Group
In assessing indicators of impairment, or reversal of
considers different internal and external factors.
previously recorded impairment, the Group
considers different internal and external factors.
The process for identifying determining the
recoverable amount of CGUs requires an estimate
The process for identifying determining the
of future cash flows using forward looking
recoverable amount of CGUs requires an estimate
assumptions which are inherently difficult to
of future cash flows using forward looking
determine with precision and require judgement to
assumptions which are inherently difficult to
be applied. These conditions require additional
determine with precision and require judgement to
scrutiny by us, in particular to address the
be applied. These conditions require additional
objectivity of the inputs, and their consistent
scrutiny by us, in particular to address the
application. Key inputs into these forward-looking
objectivity of the inputs, and their consistent
estimates that we focused on, include:
application. Key inputs into these forward-looking
estimates that we focused on, include:
•
Future oil and gas prices. The Group’s models
are sensitive to small changes in price
Future oil and gas prices. The Group’s models
assumptions;
are sensitive to small changes in price
assumptions;
• Reserves, future production volumes and
•
future capital expenditure and operating cash
• Reserves, future production volumes and
flows. These are determined by the Group
future capital expenditure and operating cash
based on historical performance adjusted for
flows. These are determined by the Group
expected changes. This drives additional audit
based on historical performance adjusted for
effort around the feasibility of forecasts; and
expected changes. This drives additional audit
effort around the feasibility of forecasts; and
• Discount rates. These are complicated in nature
• Discount rates. These are complicated in nature
52
52
72
•
•
•
•
•
•
•
•
How the matter was addressed in our audit
Our procedures included:
Our procedures included:
•
Testing key internal controls in the Group’s
impairment assessment process. This
Testing key internal controls in the Group’s
included the determination, review and
impairment assessment process. This
approval by the Group of indicators of
included the determination, review and
impairment or impairment reversals and key
approval by the Group of indicators of
impairment model inputs;
impairment or impairment reversals and key
impairment model inputs;
Assessing the appropriateness of the
impairment testing methodology applied by
Assessing the appropriateness of the
the Group against the requirements of
impairment testing methodology applied by
accounting standards;
the Group against the requirements of
accounting standards;
Evaluating the Group’s impairment indicator
assessment utilising our knowledge of the
Evaluating the Group’s impairment indicator
Group and the Oil and Gas industry;
assessment utilising our knowledge of the
Group and the Oil and Gas industry;
As part of the testing over CGUs with impairment
indicators, our procedures also included:
As part of the testing over CGUs with impairment
indicators, our procedures also included:
•
Assessing the integrity of the impairment
models including the accuracy of the
Assessing the integrity of the impairment
underlying calculation formulas;
models including the accuracy of the
underlying calculation formulas;
Evaluating key inputs used in the Group’s
impairment models by:
Evaluating key inputs used in the Group’s
impairment models by:
− Working with our valuation specialists
we evaluated future oil and gas prices by
− Working with our valuation specialists
comparing to published forecast
we evaluated future oil and gas prices by
commodity prices and views of market
comparing to published forecast
commentators on future trends;
commodity prices and views of market
commentators on future trends;
− Comparing future capital and operating
expenditures and reserves to board
− Comparing future capital and operating
approved asset plans and long-term
expenditures and reserves to board
approved asset plans and long-term
Cue Energy Resources LimitedAnnual Report 2021 and vary according to the conditions and
environment that the CGUs are subject to from
time to time.
We involved valuation specialists to supplement
our senior audit team members in assessing this
key audit matter.
budgets. We assessed the Group’s
ability to budget accurately by comparing
prior years’ estimated cash flows to
actual results;
− Evaluating the scope, competency, and
objectivity of the Group’s external
experts who produced reserve
estimates and future production
volumes used in the impairment model.
We assessed the methodology used
against industry accepted practice. We
assessed consistency of assumptions
used in the reserves estimate and future
production volumes to publicly available
information from joint operation partners
and other assumptions used in the
Group’s impairment model;
− Assessed the feasibility of future
operating and capital expenditure and
future production volumes by comparing
to publicly available information from
joint operation partners, past
performance and the Group’s long-term
budgets;
− Working with our valuation specialists
we analysed the Group’s discount rate
against publicly available risk-free rates
and data of a group of comparable
entities; and
− Considering the sensitivity of the model
by varying key assumptions, such as
future oil and gas prices, production
volumes, capital and operating
expenditures, and discount rates, within
a reasonably possible range. We did this
to identify those assumptions at higher
risk of bias or inconsistency in
application and to focus our further
procedures; and
•
Assessing the appropriateness of the Group’s
disclosures in the financial report using our
understanding obtained from our testing and
against the requirements of accounting
standards.
53
73
Cue Energy Resources LimitedAnnual Report 2021 Restoration provisions
Non-current liabilities – restoration provisions: $15.6m (refer to Note 16)
The key audit matter
How the matter was addressed in our audit
We identified restoration provisions as a key audit
matter due to:
•
•
The Group’s assets being long-life, which
increases estimation uncertainty relating to
forecast restoration cash flows which require
auditor judgement and specialised skills to
evaluate their appropriateness;
The significant size of the restoration provisions
relative to the Group’s financial position; and
The Group incurs obligations to close, restore and
rehabilitate its sites and associated facilities. We
focussed on the following key estimates made by
the Group in determining its restoration provision:
•
•
•
The useful life of asset including the economic
reserves and production profiles;
The interpretation of legislative regulatory
requirements governing its sites;
The cost and timing of future rehabilitation
costs; and
• Discount rates applied to the Group’s net
present value of forecast cash flows used to
determine the restoration provision.
Our procedures included:
•
•
•
•
•
•
Testing key controls in the Group’s process to
determine the restoration provision. This
included the determination, review and
approval by the Group of key inputs included
in the calculation such as life of asset
reserves and production profiles, discount
rates, future restoration costs, and timing of
future cash flows;
Assessing the nature and extent of the work
performed by the Group’s external expert in
identifying future restoration activities and
assessing the timing and likely cost of such
activities. We compared the nature and
extent of restoration work to the relevant
regulatory requirements, and inspected
relevant correspondence from government
and regulatory bodies. We compared the
timing of restoration activities to the Group’s
reserves and resources estimates, expected
production profile and useful life;
Using our knowledge of the Group and our
industry experience, and considering other
publicly available information from the joint
operation partners, we assessed the
feasibility of the future restoration costs and
their timing;
Evaluating the scope, competency and
objectivity of the Group’s external expert;
Evaluating the discount rates applied to the
Group’s net present value of the restoration
provision against publicly available data,
including risk free rates; and
Assessing the integrity of the provision
calculation including the accuracy of the
underlying calculation formulas.
.
74
54
Cue Energy Resources LimitedAnnual Report 2021 Other Information
Other Information is financial and non-financial information in Cue Energy Resources Limited’s annual
reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are
responsible for the Other Information.
The Other Information we obtained prior to the date of this Auditor’s Report was the Directors’ Report,
CEO Report and the Shareholder Information. The Chairman’s Overview, Reserves and Resources
Summary and Sustainability are expected to be made available to us after the date of the Auditor's
Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of
the Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report
or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information,
and based on the work we have performed on the Other Information that we obtained prior to the date of
this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001;
•
•
implementing necessary internal control to enable the preparation of a Financial Report that gives
a true and fair view and is free from material misstatement, whether due to fraud or error; and
assessing the Group and Company’s ability to continue as a going concern and whether the use
of the going concern basis of accounting is appropriate. This includes disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless they
either intend to liquidate the Group and Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
to obtain reasonable assurance about whether the Financial Report as a whole is free from
material misstatement, whether due to fraud or error; and
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the Auditing an
55
75
Cue Energy Resources LimitedAnnual Report 2021 Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our Auditor’s Report.
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report of
Cue Energy Resources Limited for the year
ended 30 June 2021, complies with Section
300A of the Corporations Act 2001.
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration
Report in accordance with Section 300A of the
Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in
the Directors’ report for the year ended 30 June 2021.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
KPM_INI_
KPMG
01
Vicky Carlson
Partner
Melbourne
18 August 2021
76
56
Cue Energy Resources LimitedAnnual Report 2021 CUE ENERGY RESOURCES LIMITED
SHAREHOLDER INFORMATION
30 JUNE 2021
Shareholder Information
1. Distribution of equitable securities
The shareholder information set out below was applicable as at 14 September 2021.
Ordinary shares
% of
total
shares
issued
Number
of holders
Options over
ordinary shares
Number
of holders
% of total
shares
issued
68
186
540
1,678
329
-
0.09
0.68
8.36
90.87
2,801
100.00
435
-
-
-
-
-
8
8
-
-
-
-
-
100.00
100.00
-
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
2. Registered Top 20 Shareholders
The registered names and holdings of the 20 largest holdings of quoted ordinary shares in the Company as at 14 September
2021:
Shareholder
1. NZOG Offshore Limited
2. BNP Paribas Noms Pty Ltd
Continue reading text version or see original annual report in PDF format above