Annual Report
2024
CUE ENERGY RESOURCES LIMITED
ABN 45 066 383 971
About us
Cue Energy Resources Limited is an oil and gas
production and exploration company with production
assets in Australia, Indonesia and New Zealand.
Offices are located in Melbourne, Australia and
Jakarta, Indonesia.
Contents
1
Highlights
2
Chairman’s overview
4
Financial and operations review
10
Reserves and resources
14
Sustainability report
16
Taskforce on Climate–Related Financial Disclosures (TCFD) Statement
24 Directors’ report
42 Auditor’s Independence Declaration
43 Statement of profit or loss and other comprehensive income
44 Statement of financial position
45 Statement of changes in equity
46 Statement of cash flows
47
Notes to the financial statements
73
Consolidated entity disclosure statement
74
Directors’ declaration
75
Independent Auditor’s Report
79
Shareholder information
82 Corporate Directory
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, 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.
Highlights FY23
Revenue
$49.7m
EBITDAX
$32.8m
Net Cash
$16.3m
Net Profit After Tax
$14.2m
Production
631mboe
Dividends
3cps
Highlights
Indonesia: $28.2m
Australia: $11.3m
New Zealand: $10.1m
$21m declared over the year
1 cent/share final + 2 cents/share
special paid April 2024
1
Cue Energy Resources Limited
Annual Report 2024
Chairman’s overview
Alastair McGregor
I am pleased to present the Cue Energy Resources Limited Annual
Shareholder Report for 2024, a significant year in which the company
continued to deliver strong financial and operations results and
declared $21 million in dividends to shareholders.
Dear Shareholders,
Our revenue of $49.7 million was consistent with last
year, backed by our diversified portfolio, and production
remained consistent with the previous year at 631
thousand barrels of oil equivalent.
We continued to generate significant cashflow, delivering
net cash from operating activities of $26.9 million, up from
$12.7 million, which was used to retire $4 million in debt
and return $14 million to shareholders in April 2024.
Despite ongoing global economic uncertainty, and
growth of alternate energy sources, we continued to
see strong demand for our products at attractive prices
throughout the year. The Brent oil price, which underpins
our Mahato and Maari oil sales and accounts for 62% of
our revenue, remained relatively stable, trading in the
US$80-90/bbl range for most of the year.
In Australia, gas markets on the East Coast and in the
Northern Territory have been the subject of frequent
headlines, with predictions of shortages and potential
LNG imports in the coming years. The Mereenie and Palm
Valley fields are well-positioned to benefit from increased
gas demand, and Cue announced contracts during the
year with the Northern Territory Government and Arafura
Rare Earths Ltd., securing sales for gas production for
2026-2030. These contracts contribute to the regional
growth in the Northern Territory and mitigate Cue’s risk
associated with any future closures of the Northern Gas
Pipeline, like we are experiencing in 2024.
2
Cue Energy Resources Limited
Annual Report 2024
As I highlighted in last year’s report, the Board prioritised
early debt repayment, and Cue successfully repaid
$4 million in the first half of the year as part of our
Capital Management program. We also determined
that the company’s strong and stable cash flow position
warranted the initiation of a dividend strategy.
The announcement of the H1FY2024 special dividend
of 2 cents per share resulted in a $14 million return to
shareholders, attracted new investors, and subsequently
increased the share price by over 60%, a level that has
been sustained.
At the same time, we introduced a dividend policy to reflect
the Board’s intent for Cue to establish long term sustainable
returns to shareholders. Due to the size of the company and
the non-operated nature of our assets, it is not practical
to commit to a fixed payout ratio, but our commitment
is to review the financial position of the company every
six months with the aim of providing sustainable returns
to shareholder.
The final dividend of 1 cent per share announced in
our FY2024 results means that we will return a total
of $21 million to shareholders during the year.
Monitoring and managing changes in the regulatory
landscape where we operate remains a critical aspect of
our business management. The ACCC Gas Mandatory
Code of Conduct has become integral to our operations,
with the exemption from the price cap continuing to
apply to Cue as a small producer. I believe that addressing
the supply shortage is a more effective approach than
regulatory interference in solving the gas supply issue.
In New Zealand, a change in government during
the year has altered the political stance on oil and
gas production in the country. A review has been
announced into the financial assurance laws and
regulations enacted by the previous government.
This review could confirm the requirement for
decommissioning funding at our Maari field,
however we await the outcome of this review.
Looking ahead for FY2025, we expect our
production assets to continue to perform and grow.
Three out of Cue’s four production areas have
growth activities either underway or planned. In
the Mahato PSC, we have commenced drilling new
oil production wells as part of an approved Field
Development Optimisation. Fourteen wells are
planned and drilling is expected to continue for the
next 12 to 18 months. We have also announced a
two-well gas development program in the Mereenie
field, likely to commence December or early 2025,
and the Sampang JV is working diligently to lay the
groundwork for a final investment decision on the
Paus Biru gas development.
I want to thank our shareholders for their continued
support and to our team for their ongoing
dedication. Together, we are well-positioned to
navigate any challenges ahead and capitalise on the
opportunities in the evolving energy landscape.
Alastair McGregor
Chairman
3
Cue Energy Resources Limited
Annual Report 2024
This figure was in line with the previous year, showing
only a 4% decrease. Revenue increases from Mahato
(5%) and Maari (6%) helped offset lower production
and cost recovery in the Sampang PSC. Short term
production and sales disruptions onshore Australia,
caused by the closure of the Northern Gas Pipeline,
also affected the overall revenue.
After tax profit reported of $14.2 million was 7% lower
than the previous year and EBITDAX increased by
6% to $32.8 million. Net cash from operations was
$27 million for the year, demonstrating the strength
of the Company’s diversified production projects.
This cash was utilised to make a $4 million early
payment to retire outstanding debt and return
$14 million to shareholders through a 2 cents/share
dividend paid in April 2024.
The Cue Board has approved a FY2024 final dividend
of 1 cent per share, returning an additional $7 million
to shareholders. Cue closed the year with a cash
balance of $16.3 million and no debt.
Gross margins from assets remained strong during the
year, with a gross margin of 60% across the portfolio.
Administration expenses remained low ($3 million), as the
Company efficiently managed non-operated projects.
In October 2023, Texcal, the Mahato PSC operator, and
Riau Petroleum, an Indonesian local government-owned
entity, signed an agreement to transfer a share of the
Mahato PSC’s participating interest to Riau Petroleum,
as required by the Production Sharing Contract (PSC)
and Government regulations. The Government approvals
process for this transfer is ongoing but the joint venture
accounting for Cue’s participating interest reduced from
12.5% to 11.25% effective 1 November 2023.
Annual production for the year was 631 mboe, consistent
with the previous year. Despite a reduced participating
interest from 1 November 2023, Cue recorded an 18%
increase in net production from the PB field in the Mahato
PSC. Maari net production to Cue also increased by 18%
due to high well uptime and field optimisation. These
gains were offset by lower gas production from the
Mereenie field, caused by the temporary closure of the
Northern Gas Pipeline, and natural field decline at the
Sampang PSC
Financial and operations review
Cue continued to generate strong cashflow from its
producing assets throughout the year, achieving a revenue
of $49.7 million from oil and gas production in Australia,
Indonesia, and New Zealand.
4
Cue Energy Resources Limited
Annual Report 2024
15.2
16.3
57
19
11
0
27
8
4
14
0
Opening
Cash 1 July
2023
Receipts
from
customers +
interest
Payments
to suppliers
Taxes,
Royalties
and Finance
Exploration
Net Cash
from
Operating
activities
Net Cash
used in
Investing
activities
Loan
repayment
Dividends
FX
Closing
Cash
30 June 2024
242
224
168
148
145
170
76
89
0
100
200
300
400
500
600
700
FY2023
FY2024
Onshore Australia
Sampang
Mahato
Maari
FY 2024 Cashflow
$ million
Cue Net Production
thousand barrels of oil equivalent (mboe)
5
Cue Energy Resources Limited
Annual Report 2024
Mahato PSC
Cue
11.25%*
Sampang PSC
Cue
15%
PMP38160 (Maari/Manaia)
Oil Production
Oil Production
Gas Production
Cue
5%
N
EALAND
AUSTRALIA
L
H ad Office
Melbourne
Cue
Jakarta
a
Office
Amadeus Basin
Mereenie (OL 4/5)
Cue
Gas Production
Palm Valley (OL 3)
Cue
Dingo (L7)
Cue
15%
7.5%
15%
Joint operations
Financial and operations
* Subject to Government Approval
6
Cue Energy Resources Limited
Annual Report 2024
Australia
MEREENIE,
PALM VALLEY
AND DINGO FIELDS
The Mereenie, Palm Valley, and
Dingo fields generated $11.3 million
in revenue for Cue, consistent with
the previous year.
Production and sale interruptions from the intermittent
closure of the Northern Gas Pipeline (NGP) was offset
by increased Dingo revenue due to increased production
and recognition of revenue from the release of previously
deferred take-or-pay balances.
The NGP was temporarily shut during Q2 FY2024 and
from March 2024 onwards due to low gas volumes from
other Northern Territory gas fields. During these periods,
the Mereenie and Palm Valley joint ventures were unable
to deliver gas to customers in the Eastern States and
sought as-available gas sales into the Northern Territory.
In April 2024, the Mereenie Joint Venture entered in
to an as-available gas supply agreement with Power &
Water Corporation (PWC) in the NT for the supply of gas
until the end of 2024. For the remainder of the year, the
Mereenie and Palm Valley fields operated at full capacity,
with brief turndowns in June and July due to seasonal
demand fluctuations.
The flare gas recovery compressor (FGRC) at Mereenie
was brought online in March. The FGRC captures low-
pressure waste gas and converts a portion to sales gas,
increasing gas sales and reducing total CO2-equivalent
emissions at Mereenie by approximately one-third.
Work continued on a helium recovery unit study
at Mereenie with Twin Bridges and a major helium
distributor, with the scope now expanded to consider
a helium liquefaction unit.
Several Gas Supply Agreements (GSA) were announced
during the year, including an agreement with Incitec Pivot
to supply gas during 2024 and an agreement with Arafura
Rare Earths Limited to supply its Nolans Project in the NT
with gas from 2026. This agreement was subsequently
amended to a supply period of 2028 to 2030 and remains
subject to conditions precedent until 31 December 2024.
In April 2024, Cue entered into an as-available gas supply
agreement with Power and Water Corporation for the
supply of gas into the NT until 31 December 2024. This
agreement largely mitigates the loss of contract sales due
to the ongoing closure of the NGP.
An Expression of Interest was released by the Mereenie
Joint Venture to gas buyers in the final quarter of the
year for gas supply from 2024-2030. Subsequent to the
year-end, Cue announced contracts with the Northern
Territory Government for the supply of up to 3.6 PJ of
gas for the period from 1 January 2025 to 31 December
2030. The contracts are for firm supply of gas from the
Mereenie and Palm Valley fields and mitigate the risk
of NGP closure in 2025 by increasing firm sales to the
Northern Territory Government if the pipeline is unable
to deliver gas to existing customers. Existing long-term
firm production from Mereenie and Palm Valley is now
contracted for the next six years.
In August 2024, the Mereenie joint venture announced a
Final Investment Decision to drill two development wells
in the Mereenie field. A rig contract has been signed, and
the wells are expected commence in late December or
early January 2025.
Financial and operations
CUE INTERESTS
Mereenie [OL4 & OL5]
7.5%
Palm Valley [OL3]
15%
Dingo [L7]
15%
Operator
Central Petroleum Limited
7
Cue Energy Resources Limited
Annual Report 2024
Indonesia
MAHATO PSC
The PB field in the Mahato
PSC continued to be a strong
contributor to Cue’s results during
the year, generating $19.7 million
in revenue, a 5% increase over
the previous period.
During the year, six wells were drilled, completing the
June 2022 Field Development Optimisation plan of
12 wells, bringing the total to 23 wells in the field. After
reviewing field performance, further development was
proposed by the Operator and approved by SKK Migas,
the Indonesian upstream regulator.
The approved Field Development Optimisation (OPL)
Phase 2 includes drilling 14 new development wells,
converting an existing production well to a water injection
well, and constructing three new drilling locations.
Additional production facilities and in-field pipelines
will also be constructed. Drilling has commenced and
is expected to continue for 12 to 18 months.
Two exploration wells are being planned in the Mahato
PSC, targeting independent prospects near the PB field.
In October 2023, Texcal, the Mahato PSC operator, and
Riau Petroleum, an Indonesian local government-owned
entity, signed an agreement to transfer a share of the
Mahato PSC’s Participating Interest to Riau Petroleum,
as required by the Production Sharing Contract (PSC)
and government regulations. The Government approvals
process for this transfer is ongoing but the joint venture
accounting for Cue’s participating interest reduced from
12.5% to 11.25% effective 1 November 2023.
Financial and operations
CUE INTERESTS
Cue
11.25%
Operator
Texcal Energy Mahato Inc
SAMPANG PSC
The Oyong and Wortel gas fields
generated $8.5 million in revenue
to Cue from long-term, fixed-price
contracts for gas sales to Indonesia
Power’s Grati Combined Cycle
Gas Power Plant.
Development planning for the Paus Biru gas discovery
continued throughout the year. The Sampang PSC term
expires in 2027 and the permit operator, Medco Energi, is
in discussions with the Indonesian Government regarding
an extension to the permit term and amendments to the
PSC. The PSC amendments and extensions are key steps
required for the joint venture to proceed with considering
a Final Investment Decision (FID) on the project.
The Paus Biru development is planned to include a single
well and wellhead platform at the Paus Biru gas field, with
a 27km subsea pipeline connecting the well to existing
infrastructure at the Oyong field.
CUE INTERESTS
Cue
15%
Operator
Medco Energi
8
Cue Energy Resources Limited
Annual Report 2024
New Zealand
PMP 38160 (Maari/Manaia)
Oil production from the
Maari/Manaia fields remained
consistently strong, with
gross production averaging
approximately 4,900 barrels
of oil per day over the year.
Cue received $10.1 million in revenue from the Maari field,
a 6% increase compared to the previous year.
High uptime was achieved from the Maari wells and
facilities during the year, as the joint venture continued
to focus on optimising existing production. The positive
effects of water injection were evident, with stable, and in
some cases increasing, production from wells.
Towards the end of the year, two production wells,
MR8 and MR10, experienced failures of their Electric
Submersible Pumps (ESP) after exceeding their
operational lifespans. Both these wells were repaired and
resumed production at their pre-workover production
rates subsequent to the year-end.
The MR6A production well was offline for the entire year.
A workover aimed at suspending the existing production
zone and perforating the Matapo and Kap100 reservoirs
to produce oil from these zones began during the year but
was delayed due to workover unit repairs. The workover
has been completed and it is expected to take some time
before results are known.
The Maari permit expires in December 2027, and the joint
venture has submitted and application for an extension
to allow production beyond the end of 2027.
CUE INTERESTS
Cue
5%
Operator
OMV
Financial and operations
9
Cue Energy Resources Limited
Annual Report 2024
30 June 2024
As at June 30, 2024 Cue has reported 4.6 million barrels of oil equivalent (mmboe) of proven (1P) reserves and
6.3 mmboe of Proven and Probable (2P) reserves. 68% of reported 2P reserves are gas and 32% are oil.
Cue’s 2P reserve replacement ratio for FY2024 is 112%, taking into account reserves additions and production during
the year.
Reserves and resources
2P reserve by Asset (mmboe)
Mahato
1.5
Sampang
PSC
0.9
Mereenie
1.9
Palm Valley
0.6
Maari
0.5
Dingo
1.0
6.3
mmboe
Gas/Oil reserves (mmboe)
Oil
2.0
Gas
4.3
6.3
mmboe
10
Cue Energy Resources Limited
Annual Report 2024
30 June 2024
Net to Cue as at 30 June 2024
1P
1P
1P
Developed
Undeveloped
Total
Reserves Proven (1P)
Gas
Oil
Equivalent
Gas
Oil
Equivalent
Gas
Oil
Equivalent
Country
Field/Permit
PJ
MMSTB
MMBOE
PJ
MMSTB
MMBOE
PJ
MMSTB
MMBOE
AUSTRALIA
Mereenie
7.2
0.1
1.2
1.1
0.0
0.2
8.2
0.1
1.4
Palm Valley
3.2
0.0
0.5
0.0
0.0
0.0
3.2
0.0
0.5
Dingo
2.5
0.0
0.4
3.0
0.0
0.5
5.6
0.0
0.9
NEW ZEALAND
Maari
0.0
0.2
0.2
0.0
0.2
0.2
0.0
0.4
0.4
INDONESIA(1)
Sampang PSC
2.0
0.0
0.3
0.4
0.0
0.1
2.4
0.0
0.4
Mahato
0.0
0.8
0.8
0.0
0.2
0.2
0.0
1.0
1.0
TOTAL RESERVES
14.9
1.1
3.5
4.5
0.3
1.1
19.4
1.5
4.6
2P
2P
2P
Developed
Undeveloped
Total
Reserves Proven & Probable (2P)
Gas
Oil
Equivalent
Gas
Oil
Equivalent
Gas
Oil
Equivalent
Country
Field/Permit
PJ
MMSTB
MMBOE
PJ
MMSTB
MMBOE
PJ
MMSTB
MMBOE
AUSTRALIA
Mereenie
10.0
0.1
1.7
1.2
0.0
0.2
11.2
0.1
1.9
Palm Valley
3.5
0.0
0.6
0.0
0.0
0.0
3.5
0.0
0.6
Dingo
3.1
0.0
0.5
3.2
0.0
0.5
6.3
0.0
1.0
NEW ZEALAND
Maari
0.0
0.3
0.3
0.0
0.2
0.2
0.0
0.5
0.5
INDONESIA(1)
Sampang PSC
2.5
0.0
0.4
2.7
0.0
0.4
5.2
0.0
0.9
Mahato
0.0
1.3
1.3
0.0
0.2
0.2
0.0
1.5
1.5
TOTAL RESERVES
19.1
1.6
4.8
7.1
0.4
1.6
26.2
2.0
6.3
2C Contingent Resource
Gas
Oil
Total
Country
Field/Permit
PJ
MMSTB
MMBOE
AUSTRALIA
Mereenie
13.7
0.0
2.3
Palm Valley
0.6
0.0
0.1
INDONESIA
Jeruk (Sampang PSC)(2)
0.0
1.2
1.2
Paus Biru (Sampang PSC)
7.0
0.0
1.2
TOTAL CONTINGENT RESOURCE
21.3
1.2
4.7
(1)
Indonesian Reserves are net of Indonesian Government share of Production. Production Sharing Contract (PSC) adjustments affect the
net equity across the various reserve categories
(2)
Cue interest in Jeruk is 8.18%
Reserves and resources continued
LEGEND:
PJ
Petajoules
MMSTB Million Stock Tank Barrels
MMBOE Million Barrels of Oil Equivalent
11
Cue Energy Resources Limited
Annual Report 2024
30 June 2024
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 Echelon Resources Limited to independently assess
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 statement
Oil and gas reserves, are reported as at 1 July 2024 and follow the SPE PRMS Guidelines (2018).
This resources statement is approved by, based on, and fairly represents information and supporting documentation
prepared by Echelon General Manager Assets & Engineering Daniel Leeman. Daniel is a Chartered Engineer with
Engineering New Zealand and holds Masters’ degrees in Petroleum and Mechanical Engineering as well as a Diploma in
Business Management and has over 15 years of experience. Daniel is also an active professional member of the Society
of Petroleum Engineers. Echelon 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 Operating and Technical
Committee Meetings.
Daniel is currently an employee of Echelon Resources 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. Echelon has been a shareholder in Cue since 17th Jan
2017 and as at 30 June 2024, Echelon had a 50.03% equity holding in Cue.
Cue currently holds an equity position of 5%, 11.25% and 15% in the Maari, Mahato and Sampang assets respectively,
though Production Sharing Contract adjustments at the Mahato and Sampang fields affect the net equity differently
across the various reserve categories.
In the Amadeus basin, Cue currently holds 7.5% equity in the Mereenie field and 15% equity in each of the Dingo and
Palm Valley fields.
For undeveloped reserves, the following project maturity sub-classes are assumed- at Mahato PSC, Undeveloped-
Approved for Development, at Sampang PSC- Justified for Development, at Maari- Justified for Development, at
Mereenie and Dingo- Justified for Development.
For Sampang PSC Contingent Resources, as the developments are not yet sanctioned, the economics and royalties are
not yet known, therefore an assumed net effective equity is used of 15% for Paus Biru and 8.18% for Jeruk.
Estimates are based on all available production data, the results of well intervention campaigns, seismic data, analytical
and numerical analysis methods, sets of deterministic reservoir simulation models provided by the field operators (OMV,
Texcal, Medco and Central Petroleum), and analytical and numerical analyses. Forecasts are based on deterministic
methods.
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.
Net reserves are net of equity portion, royalties, taxes and fuel and flare (as applicable).
All reserves and resources reported refer to hydrocarbon volumes post-processing and immediately prior to point of
sale. The volumes refer to standard conditions, defined as 14.7psia and 60°F.
The extraction methods are as follows; for Maari oil is produced to the FPSO Raroa and directly exported to international
oil markets, at Mahato, it is via EPF facilities which includes an oil and water separation system, with the oil then piped
6km to the CPI operated Petapahan Gathering Station, at Sampang, gas is gathering from the Wortel and Oyong fields
and piped to shore where it is sold into the Grati power station, at the Mereenie and Palm Valley gas fields gas is gathered
from the wells and ultimately collated into the Amadeus Gas Pipeline where sales vary to different customers within the
region and further afield and at Dingo, gas is sold into Alice Springs and the Owen Springs power plant.
Tables combining reserves have been done arithmetically and some differences may be present due to rounding.
For the 2P change of reserves year-on-year, quoted as the reserves replacement ratio herein, the calculation is
performed via; stated 2P total reserves as at 1 July 2024, divided by the sum of stated 2P total reserves as at 1 July 2023,
less production during FY24, all in millions of barrels of oil equivalent. In this case RRR = 6.32 / (6.29-0.64) = 112%.
Reserves and resources continued
12
Cue Energy Resources Limited
Annual Report 2024
30 June 2024
2P Reserves and resources reconciliation with 30 June 2023
2P Proven reserves (MMBOE)
Country
Field/Permit
30 June 2023
Reserves
Discoveries/
Extensions/
Revisions
Production
30 June 2024
Reserves
AUSTRALIA
Mereenie
2.0
0.0
0.1
1.9
Palm Valley
0.6
0.1
0.1
0.6
Dingo
1.0
0.0
0.0
1.0
NEW ZEALAND
Maari
0.5
0.1
0.1
0.5
INDONESIA
Sampang PSC
0.8
0.2
0.2
0.9
Mahato
1.4
0.3
0.2
1.5
TOTAL RESERVES
6.3
0.6
0.6
6.3
Reserves and resources continued
13
Cue Energy Resources Limited
Annual Report 2024
Our Commitment
At Cue, we are committed to upholding high standards
in health, safety, and environmental stewardship,
recognising these as vital to our business’ long-term
success. Our operations are guided by a Board-approved
Health, Safety and Environment (HSE) Policy, supported
by a robust HSE Management system. The Operational
Risk and Sustainability (ORS) Committee, comprising
members of our Board of Directors, regularly convenes
to review and evaluate the company’s HSE initiatives
and operational risks.
In FY2024, we are proud to report zero lost time injuries
and no significant spills within our operations. In our
non-operated joint ventures, Cue plays an active role
in promoting high health and safety standards. We
thoroughly review incident and health and safety reports,
providing critical feedback to ensure the safe and efficient
management of all operations.
Our commitment to employee well-being is further
demonstrated by the ongoing availability of our
Employee Assistance Program, ensuring support
is readily accessible whenever needed.
Working together with our Communities
Cue is dedicated to supporting the communities where
we operate. Through our joint venture partnerships, we
actively contribute to the well-being of local communities
around our projects. In our operations, we prioritise
local and regional economic growth by adhering to
our Capturing Local Economic Benefits Policy and
encouraging our partners to do the same.
In Indonesia, our operations maintain strong relationships
with local communities by offering employment
opportunities, developing community facilities, and
launching aid initiatives. Within the Mahato PSC, our
joint venture operator, Texcal Energy, supported various
corporate social responsibility initiatives in the past year.
These included educational efforts, such as a sustainable
scholarship program and the construction and renovation
of schools and dormitories. Health initiatives were also
a focus, with the construction of sanitation facilities and
the provision of food assistance to malnourished toddlers
and pregnant women in the Tapung district. Additionally,
humanitarian efforts provided emergency response and
aid to communities affected by natural disasters, such
as floods and landslides.
Medco Energi, on behalf of the Sampang PSC joint
venture, continued to support local fishermen near the
Sampang facilities by providing economic assistance,
including the distribution of fishing nets.
Additionally, the joint venture implemented several
community support initiatives, including rice field
irrigation programs for farmers, training programs to
address stunting issues, assistance programs for local
small businesses through training and equipment
support, and water irrigation assistance programs.
Sustainability report
Central Petroleum, the operator of Cue’s onshore
Australia Assets in the Northern Territory, maintains
a close partnership with the Traditional Owners in the
area and manages the ongoing relationship and cultural
heritage protection on Cue’s behalf. The Mereenie,
Palm Valley and Dingo fields are located on the land
of traditional owners and administered by the Central
Land Council (CLC), with land access agreements are
in place. Regular engagement with Traditional Owners
is undertaken by Central Petroleum and approval is
sought for site activities in our fields which require
ground disturbance.
Local businesses are supported where possible through
local procurement programs and the joint ventures and
Cue supports Central’s social investment, involving
stakeholders in our projects and providing training and
employment across local communities.
Cue’s Maari joint venture in New Zealand has committed
to a three-year support initiative for two community
projects within the South Taranaki District council area.
This includes funding the design and installation of a
jetty and surrounding area in the town of Patea, as well
as the development of a bicycle pump track at Aotea
Park Waverly, intended to be used by skateboards,
bikes and scooters.
Environment Stewardship
Cue works closely with our operators and joint venture
partners to minimise the environmental impact of our
operations. Our ongoing and recently completed projects
demonstrate this commitment.
We have installed solar panels on the Wortel wellhead
platform, which now provides power and reduces the
need for using gas or diesel for power generation.
Similarly, solar panels have been installed on the Oyong
wellhead platform to power the platform’s instrument air
compression, replacing the use of bottled nitrogen. This
initiative has reduced the marine transport requirements
associated with replacing offshore nitrogen supply
bottles.
In the second half of FY24, we completed a flare
gas recovery project at Mereenie, which has led to
an estimated 30% reduction in carbon emissions.
Additionally, we have optimised fuel burning for power
and are investigating the potential to utilise waste, low
pressure gas for power generation on the Raroa FPSO.
Our commitment to environmental responsibility is
further demonstrated by our compliance with the Task
Force for Climate-Related Financial Disclosures (TCFD)
guidelines, as outlined in this Shareholder Report. All
emissions from our New Zealand operations are offset
though the purchase of New Zealand Units (NZUs),
while our corporate emissions are mitigated through
tree planting initiatives.
14
Cue Energy Resources Limited
Annual Report 2024
15
Cue Energy Resources Limited
Annual Report 2024
This section details Cue Energy Resources’ approach to climate disclosure and climate risk management. It is structured
in accordance with the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations:
–
Climate Change Statement
–
Governance
–
Strategy
–
Risk management
–
Metrics and targets
1.
Statement on climate change from the Chief Executive
Energy supply and security remain critical themes globally. Rising energy demand and market volatility highlight the
need for reliable and affordable energy. Our commitment to sustainable development continues to be a core element of
our long-term strategy. The energy transition will be complex, unfolding over decades. Despite this shift, natural gas and
oil are expected to remain vital components of the energy mix under various transition scenarios. An orderly transition is
essential to manage climate-related risks without causing energy shortages, price spikes, or economic disruptions.
Cue recognises the scientific consensus of climate change and its impact on our community and environment. We
remain committed to supporting our joint venture partners to reduce emissions at our non-operated projects and
reducing emissions at our corporate offices in Melbourne and Jakarta and actively offset our corporate emissions by
planting trees through Greenfleet. We believe a collaborative transition is necessary, ensuring we empower and support
our joint venture partners and operators to lead in emissions reduction, fostering collaboration and shared responsibility
by leveraging existing infrastructure, technical expertise, and relationships.
Over the past year, we have continued to identify, manage, report, and mitigate material climate risks to our business.
This report details our assessment of the business risks linked to climate change and how we manage them. As we look to
the year ahead, we remain committed to evaluating our progress and setting new benchmarks to support the transition
to a sustainable future while managing our footprint responsibly in the interest of our shareholders and the wider
community.
Matthew Boyall
Chief Executive Officer
Taskforce on Climate–Related Financial
Disclosures (TCFD) Statement
16
Cue Energy Resources Limited
Annual Report 2024
Taskforce on Climate–Related Financial
Disclosures (TCFD) Statement continued
2. Governance
TCFD Category
Recommendation
Summarised in
this document at
Governance
Disclose the organisation’s governance around climate-related risks and
opportunities.
2.1, 2.2
Describe the board’s oversight of climate related risks and opportunities.
2.2
Describe management’s role in assessing and managing climate-related
risks and opportunities.
2.2
2.1 Climate-Related Risk Governance process
BOARD OF DIRECTORS
•
Board Charter
•
Cue Risk Management System
•
ASX Listing Rules and Corporate Governance Code
(E.g. Principal 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 risk and opportunities to Board
CUE MANAGEMENT
•
Regularly reviews and updates risk register
•
Allocates risk to risk owners
•
Reports risk register to ORSC
STAFF HEALTH, SAFETY AND
ENVIRONMENT PROCESS
•
Identifies and reviews site HS
incidents and incorporates these into
the risk register
17
Cue Energy Resources Limited
Annual Report 2024
2.2. Board oversight
Recognition and management of risks is detailed under the company Charter, available in the Corporate Governance
section of our website. The responsibilities are set out in the table:
Board
–
Reviewing all risks, including climate-related risks and opportunities, and ensuring
these are appropriately managed to support our business strategy
–
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
Operational Risk and
Sustainability Committee
(ORSC)
–
Sets, reviews, and agrees on relevant risk policies, practices, frameworks, targets,
and performance
–
Charter assigns it the responsibility for approving environmental policy and
monitoring progress, including climate change responses
CEO
–
Accountable to the Board for ensuring the implementation of climate policies
–
At an operational level, the responsibility for day-to-day oversight of climate risk
and opportunity (including managing climate objectives and targets)
Management
–
Management is responsible for identifying, assessing, and managing risk described
on the Cue risk register
3. Strategy
TCFD category
Recommendation
Summarised in
this document at
Strategy
Disclose the actual potential impacts of climate-related risks and
opportunities on the organisation’s businesses, strategy and financial
planning where such information is material.
3.1
Describe the climate related risks and opportunities the organisation has
identified over the short, medium and long term.
3.2, 4.3
Describe the impact of these risks on businesses, strategy and financial
planning.
3.3
Describe the resilience of the organisation’s strategy, taking into
consideration different climate related scenarios including a 2 degree
celsius or lower scenario.
3.4
3.1. Actual and potential impacts of climate-related risks and opportunities
The Company is involved in natural gas production for Indonesian and East Coast Australian markets that are energy
constrained and hungry for gas to generate electricity that would otherwise likely come from coal generation.
The Company’s forecasts indicate constrained markets will be sustained, with continued economic value for its
production and value for its reserves.
Taskforce on Climate–Related Financial
Disclosures (TCFD) Statement continued
18
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Annual Report 2024
3.2. Product demand
Time Horizon
Demand
Short Term
AEMO GSOO 2024 highlights the risks of gas supply shortfalls in Southern Australia from 2025
with supply not meeting demand from 2028 as Southern Australia production declines.
IEA global oil demand is forecast to rise by 3.2 million barrels per day between 2023 and 2030.
Indonesia has announced 2030 targets for increased domestic oil and gas production.
Medium/Long Term
The Australian Energy Market Operator (AEMO) predicts Northern Territory gas demand to
increase to the mid 2030s.
The Australian Government “Future Gas Strategy 2024” recognizes that under all credible net
zero scenarios, natural gas is needed through to 2050 and beyond.
Indonesia recognizes the crucial role of natural gas in sustainable development as a key
facilitator of the Energy transition, alongside renewables.
3.3 Regulations
Cue navigates varying regulatory landscapes across these countries, assessing risks related to climate change, carbon
pricing, and physical impacts. Adaptation and strategic planning are essential to ensure operational resilience and
compliance.
Country
Approach
New Zealand
New Zealand Emission Trading Scheme (ETS) market pricing and forecasts used for carbon
emissions. NZUs purchases annually to fulfill obligations.
Modelled NZU prices are used in Maari performance forecasts and sensitivity testing.
Australia
Cue is currently not under any regulated carbon pricing mechanism in Australia.
Onshore Australia emissions are reported under the National Greenhouse and Energy
Reporting (NGER) scheme by the field operator and are below the current safeguard
mechanism threshold. The recent Mereenie flare gas recovery project has further reduced
Mereenie emissions.
The Internal price used for investment economics is based on market pricing with sensitivity
testing included for potential changes in regulations.
Indonesia
Indonesia has introduced sector based carbon pricing regulations which currently do not apply
to Cue’s operations.
We monitor the potential economic effects of climate-related policy and climate conditions
on asset value and operation, which at this stage are uncertain in their implementation.
3.4. Alternative Energy Scenarios
The Company monitors the various Energy outlooks and industry forecasters. Short-term demand for gas is expected,
however, decarbonization progress could impact the long-term outlook. Gas fields cannot quickly increase supply in
response to higher demand, potentially leading to upward price pressure in a slower transition. Lower prices may result in
slower investment in deliverability.
In Australia and Indonesia, there’s regulatory interest in capturing carbon emissions. If carbon capture and storage (CCS)
becomes more cost-effective, Cue may explore emission reduction through CCS although no abatement plan currently
exists.
Additionally, falling oil prices driven by electrification of transport, could affect Cue’s interests in the Mahato and Maari
oil fields. This risk is reflected in sensitivity analysis based on forward price curves. Financial resilience is reviewed as part
of risk management, with material risks disclosed in financial reports.
Taskforce on Climate–Related Financial
Disclosures (TCFD) Statement continued
19
Cue Energy Resources Limited
Annual Report 2024
4. Risk management
“Directors should have a sound understanding of the material risks faced by the issuer and how
to manage them. The Board should regularly verify that the issuer has appropriate processes
that identify and manage potential and material risks.”
TCFD category
Recommendation
Summarised in
this document at
Risk management
Disclose how the organisation identifies, assesses and manages climate-
related risks.
4.1
Describe the process for identifying and assessing climate risks.
4.1, 4.2
Describe processes for managing climate risks.
4.1, 4.3
Describe how processes for identifying, assessing and managing are
integrated into overall risk management.
4.1, 4.3
4.1. Identify, assess and manage climate-related risks
The Company follows a robust Risk Management System Framework. Climate risks are considered alongside other
business risk and recorded in the central risk register, which evaluates controls, assigns ownership, and tracks treatment
plans. These risks are regularly reviewed, considering operational factors, industry insights, peer information, shareholder
feedback, regulatory changes, and internal analysis by staff and contractors.
Oversight of climate risk management occurs through internal reviews by the board’s Operational Risk and Sustainability
committee. The Chief Executive bears responsibility for climate risks, including those affecting individual assets and
financial investments related to climate change.
Cue assesses potential climate-related risks under various headings:
–
Policy and Legal
–
Physical (acute and chronic)
–
Financial and Market
–
Social/Political/Regulatory
–
Technological
These risks carry financial and operational implications, potentially impacting profitability. However, financial and market
risks, along with social/political risks, also offer opportunities, including a higher adoption of natural gas as partner to
renewable energy and as a lower-carbon alternative to coal.
For further details on risk types and controls, refer to section 4.3.
4.2. Calculating Climate risk
In New Zealand, the Emissions Trading Scheme sets a market based price for carbon emissions. New Zealand Units
(NZUs), representing one metric tonne of Carbon dioxide, or the equivalent of any other greenhouse gas are purchased
by Cue and surrendered for the Maari production asset. For future sensitivity testing we model an NZU price and
emissions forecasts.
In Australia, no current mandated carbon pricing mechanism exists for Cue emissions. Project and investment
economics are tested based on a range of potential carbon pricing outcomes. Similarly, in Indonesia, the current carbon
cost mechanism does not apply to Cue’s operations. We monitor a range of potential climate-related policies and
conditions for their effect on asset value and operation.
For physical risks to all our asset interests, the Company has comprehensive insurance and regularly participates in
technical review meetings that assess engineering risks to plant.
Due to uncertainty about future carbon pricing mechanisms and the rapidly changing policy positions in some countries
where the Company operates and investigates new projects, carbon price testing is undertaken using the most available
information and estimates at the time.
Taskforce on Climate–Related Financial
Disclosures (TCFD) Statement continued
20
Cue Energy Resources Limited
Annual Report 2024
4.3. Risk types and controls
The table of risks below uses the following time horizon categories:
Short - 0-5 years,
Medium - 5-10 years,
Long - 10+ years.
Risk type
Recommendation
Description
Time
Control
Non physical
risks
Policy and legal 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.
Risk of regulatory backlash
against ESG initiatives.
Changing regulations
including banks and
restrictive regulations, taxes
and emissions limits across
all jurisdictions risk viability
of projects.
s, m, l
Board and management
understand their fiduciary duties
around climate change risk.
Internal processes include due
diligence and joint venture
processes to identify and manage
climate risk.
Monitoring the jurisdictions where
we undertake activities.
Strategy of diversifying jurisdictions
to mitigate changes on any
individual regulatory environment.
Reporting on climate related
governance, strategy, risks and
targets.
Reputational and
social license risks
Stakeholder disengagement
and oppositional activism. Loss
of social license, leading to
project delays or stoppages.
Recruitment and retention risk.
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.
Insurance premiums increase.
Potential for classes of assets
and locations to become
uninsurable.
Capital cost increase 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.
s, m, l
s, m, l
m, l
s, m, l
s, m, l
Shadow price on carbon to
sensitivity testing in investment
decisions.
Due diligence screening of
commercial opportunities and joint
venture processes.
Assurance relating to insurance
forecasts.
Access to a range of funding
options.
Reporting on climate related
governance, strategy, risks and
targets.
Jurisdictional diversification to
avoid impact on sudden, unilateral
changes, confiscation or value
destruction by regulation.
Taskforce on Climate–Related Financial
Disclosures (TCFD) Statement continued
21
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Annual Report 2024
Risk type
Recommendation
Description
Time
Control
Physical risks Acute & Chronic
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
m,l
Engineering anticipates
environmental conditions.
Carbon policy provides for review
of climate issues in strategic and
operational decisions.
Opportunities Commercial
Global reduction in high
carbon sources such as coal is
increasing demand for natural
gas as a lower carbon partner
to renewables.
s,m,l
Strategic preference for natural
gas. Support for our joint venture
partners pursuing low carbon
innovations on sites.
5.
Metrics and Targets
TCFD category
Recommendation
Summarised in
this document at
Metrics and Targets
Disclose measures used to assess climate-related risks
and measure them
5.1
Disclose emissions by Scope 1, 2 and 3
5.1
Disclose targets used to manage climate-related risk
5.2
5.1. Emissions
Oil and Gas operations encompass Cue’s proportion of Scope 1 and Scope 2 emissions, drawn from the production
activities in our fields. Detailed monthly emissions reports are submitted by field operators at Maari and Sampang PSC,
while Central Petroleum, managing Cue’s Onshore Australia Assets, reports emissions through the NGER. Mahato
emissions are currently estimated due to no operator reporting.
Scope 1 and 2 emissions relate to Cue’s share of emissions from production facilities in New Zealand and Indonesia and
corporate office activities. Cue’s onshore Australia emissions data is not included due to timing of NGER reporting and
will be published by Cue when available later this year. For corporate offices, an annual estimation of carbon emissions
from operational activities is compiled utilizing factors like electricity consumption.
The Company does not report Scope 3 emissions due to the difficulties in obtaining and verifying information from end
users.
Scope 1
Emissions (tCO2e)**
boe produced**
Intensity Factor (tCO2e per boe)
FY21*
8,720
352,338
0.025
FY22
8, 311
452,251
0.018
FY23
8,442
388,648
0.022
FY24
7,984
406,858
0.020
*
Mahato Emissions for 2021 are not included as the data was not available for the first part year
**
Amadeus Basin emissions data is not included due to timing of the Operators NGER reporting and will be published by Cue when
available later this year
Taskforce on Climate–Related Financial
Disclosures (TCFD) Statement continued
22
Cue Energy Resources Limited
Annual Report 2024
Scope 2
Entity
CUE Emissions (tCO2e) FY24
Previous Year
Total Office emissions (Melbourne & Jakarta)
7.0
7.7
Samarinda Warehouse
5.6
5.6
Sampang
250.8
279.8
Total Scope 2 emissions
263.4
293.1
Cue offsets estimated office and air travel emissions by collaborating with Greenfleet Australia for tree planting.
Greenfleet specializes in planting native trees within legally safeguarded biodiverse forests, aiding in the absorption
of carbon emissions.
0.000
0.005
0.010
0.015
0.020
0.025
0.030
FY21
FY22
FY23
FY24
CO2e(t)/boe
produced
Cue Emissions Intensity
5.2. Targets
Focus Area
Target
Status
Reporting
Continue to report Scope 1 and 2 emissions
Complete, Ongoing refinement of data
collection and reporting
Reporting
Continue to enhance Mahato emissions data
collection
Ongoing. Standardised reporting is expected
to be implemented in Mahato PSC soon.
Policy and Legal
Review climate change policy and update if
necessary
Publication in annual report. Available on
website
Commercial
Apply internal price on carbon to investment
decisions
Actioned as required
Emission reduction
Participate with JV partners to identify and
implement emissions reduction projects or
offsets at producing sites
Material emissions reduction projects
underway at Maari and completed at
Mereenie during FY24.
Emission reduction
Offset 100% of emissions from head office
and corporate travel.
FY24 office emissions offset through
tree planting
Emissions reductions
Support office sustainability improvement
opportunities.
Ongoing
Taskforce on Climate–Related Financial
Disclosures (TCFD) Statement continued
23
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Directors’ report
30 June 2024
10
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 2024.
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
Richard Malcolm
Rod Ritchie
Samuel Kellner
Marco Argentieri
Chief Executive Officer
Matthew Boyall
Chief Financial Officer
Melanie Leydin resigned on 30 June 2024, the Chief Financial Officer duties have been assumed by the Chief Executive
Officer and Financial Controller.
Company Secretary
On 26 October 2023, Ms Melanie Leydin resigned and Ms Anita Addorisio was appointed as Company Secretary.
Ms Addorisio is an experienced finance professional with over 20 years’ senior finance experience and 10 years’ experience
as a Company Secretary for ASX listed companies within several industry sectors, including resources. She is a Fellow of
both CPA and Governance Institute of Australia and holds a Masters in Accounting.
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: https://www.cuenrg.com.au/site/About-Us/corporate-directory.
Dividends
Current period
On 28 February 2024, the Company’s Board of Directors approved the declaration of an interim special dividend of $0.02 (2
cents) per fully paid ordinary share, totalling $13.97 million. This interim special dividend was declared as a Conduit Foreign
Income (CFI), unfranked special dividend and was paid on 5 April 2024.
On 23 August 2024, the Company’s Board of Directors approved the declaration of a final dividend of $0.01 (1 cent) per fully
paid ordinary share, totalling approximately $7 million. This final dividend has been declared as a Conduit Foreign Income
(CFI), unfranked final dividend and will be paid on 26 September 2024.
Previous period
There were no dividends paid, recommended or declared during the previous financial period.
Financial performance
The Consolidated Entity reported a net profit after tax of $14.19 million for the year ended 30 June 2024 (FY 2024), compared
to a net profit after tax of $15.21 million for the year ended 30 June 2023 (FY 2023). This was mainly attributable to consistent
strong profitability from Mahato and Maari, offset by a higher income tax expense due to utilization of carried forward tax
losses in Cue Taranaki which were recognised for the first time in FY 2023.
Directors’ report
24
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Directors' report
30 June 2024
11
Financial performance
Production
revenue
FY 2024
Production
revenue
FY 2023
Gross
margin FY
2024
Gross
margin FY
2023
$'000
$'000
%
%
Maari
10,123
9,510
55%
37%
Mahato
19,721
18,714
74%
69%
Sampang
8,531
11,492
48%
59%
Amadeus
11,284
11,889
47%
45%
49,659
51,605
EBITDAX
FY 2024
FY 2023
$'000
$'000
Profit before tax
25,322
19,881
Depreciation and amortisation
6,400
6,099
Finance costs
684
1,703
EBITDA*
32,406
27,683
Business development expenses
66
13
Share based payments
112
96
Exploration and evaluation expenses
228
3,073
EBITDAX**
32,812
30,865
* EBITDA is a financial measure which is not prescribed by Australian Accounting Standards (‘AAS’) and represents the profit
under AAS adjusted for depreciation, amortisation, finance costs and tax.
**EBITDAX is EBITDA adjusted to exclude business development costs, exploration and evaluation expenses, share based
payments and one-off expenses. EBITDAX is used as a measure of financial performance as it is a commonly used indicator
of performance of the Consolidated Entity's peers and therefore facilitates relative comparison of performance.
Financial position
The net assets of the Consolidated Entity increased in FY 2024 by $0.72 million to $64.91 million (FY 2023: $64.19 million).
Working capital, being current assets less current liabilities, was $20.51 million (FY 2023: $19.12 million).
The consolidated cash and cash equivalents increased in FY 2024 by $1.02 million to $16.26 million (FY 2023: $15.24 million).
FY 2024
FY 2023
$'000
$'000
Net cashflows from operating activities
26,943
12,653
Net cashflows used in investing activities
(7,735)
(17,630)
Net cashflows used in financing activities
(18,051)
(3,081)
Net cashflows for the year ended 30 June
1,157
(8,058)
Higher operating cash inflow was due to higher receipts from customers. Lower investing cash outflow was due to lower
exploration expenditure. Higher financing cash outflows largely driven by repayment of loans and dividends paid for the first
time during the year.
Business Risks
The Consolidated Entity is subject to risks that are specific to the Consolidated Entity and its business activities, as well as
general risks.
25
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Directors' report
30 June 2024
12
Exposure to oil and gas prices
The Consolidated Entity is exposed to global commodity price variability for oil products produced in Indonesia, New Zealand
and Australia which are sold on a US dollar Brent crude benchmark price basis.
The majority of the Consolidated Entity ’s gas production is sold on fixed price contracts and is exposed to changes in the gas
price on renewal or signing of new contracts. Gas sold in Australia on the short term market is exposed to daily variations in
price. In addition to normal market operations, gas prices for Australian sales are subject to risk of government intervention,
including under the Competition and Consumer Amendment (Gas Market) Bill 2022.
Oil and Gas prices can be volatile. A decline in the price of oil and gas may have a material adverse effect on Consolidated
Entity’s financial performance.
The valuation of oil and gas assets is affected by expectations of future oil and gas prices. An extended or substantial decline
in oil and/or gas prices or demand, or an expectation of such a decline, may reduce the expected cash flows and/or quantity
of reserves and resources classified in relation to the associated oil and gas assets, which may lead to a reduction in the
valuation of these assets.
Foreign exchange risk
The Consolidated Entity is exposed to foreign currency risk on cash and cash equivalents, oil sales, the recoverable value of
oil and gas assets and capital commitments that are denominated in foreign currencies.
The Consolidated Entity ’s financial report is presented in Australian Dollars and the functional currency for its operations in
New Zealand and Indonesia is the United States Dollar (USD). The majority of the Consolidated Entity ’s costs are incurred
in currencies other than Australian Dollars and revenue mainly received in USD. Accordingly, it is subject to fluctuations in the
rates of currency exchange between these currencies, the primary impact of which is reflected in other comprehensive income.
The Consolidated Entity currently does not utilise hedging or other derivative instruments. The Consolidated Entity’s foreign
exchange risk exposures are mitigated through natural hedging of cost and revenue currencies, where appropriate.
Ability to access funding
Exploration, development, and production can involve significant capital expenditure. If cashflows decrease or the
Consolidated Entity is not able to access necessary funding, this may result in postponement or reduction of capital
expenditures, relinquishment of rights in assets or otherwise may have an adverse effect on the Consolidated Entity’s
operations and financial performance.
The Consolidated Entity’s ability to raise additional funds if required would be subject to, among other things, factors beyond
the control of the Consolidated Entity and its Directors, including cyclical factors affecting the economy, investment climate for
the energy sector and share markets generally. If for any reason the Consolidated Entity was unable to raise future funds if
required, its ability to realise its strategy could be significantly affected.
Joint Operations
The Consolidated Entity participates in its business activities through minority interest in joint operations operated by other
companies, governed by operating agreements. Under these agreements, the Consolidated Entity does not control the
approval of work programmes and budgets and other project partners may participate in activities without the Consolidated
Entity's approval. The Consolidated Entity may also be required to participate in activities which it did not approve, have its
interests diluted or not gain the benefit of an activity.
Project agreements can be subject to differences in interpretation and implementation with Operator responsibility for day to
day operations. As a result, the Consolidated Entity may be exposed to operational and financial obligations outside of its
control.
Reserves and resources
Estimating oil and gas reserves and resources is subject to significant uncertainties associated with technical data and the
interpretation of that data, future commodity prices and development and operating costs. There can be no guarantee that the
Consolidated Entity will successfully produce the volume of hydrocarbons that it estimates as reserves or that hydrocarbon
resources will be successfully converted to reserves.
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The Consolidated Entity’s reserves and resources estimates are prepared by qualified, experienced engineers in accordance
with the 2018 update to the Petroleum Resources Management System sponsored by the Society of Petroleum Engineers,
World Petroleum Council, American Association of Petroleum Geologists and Society of Petroleum Evaluation Engineers
(SPE-PRMS).
Exploration and Development
The Consolidated Entity’s projects are at various stages of exploration, development and production. Oil and gas exploration
and development activities can be high-risk undertakings and there can be no assurance that the exploration or development
of any projects will result in the discovery of, and ability to realise any economic resources. Even if an apparently viable oil
and gas resource is identified, there is no guarantee that it can be economically produced.
Exploration and development activities may be affected by a range of factors including geological conditions, limitations on
activities due to seasonal weather patterns or adverse weather conditions, unanticipated operational and technical difficulties,
difficulties in commissioning and operating plant and equipment, mechanical failure or plant breakdown, unanticipated
reservoir problems which may affect production volumes and/or costs, industrial disputes, unexpected shortages and
increases in the costs of plant and equipment, native title processes, changing government regulations and many other factors
beyond the Consolidated Entity’s control.
Production
The Consolidated Entity’s oil and gas production is exposed to interruptions which may result from mechanical or technical
failure, pipeline and other infrastructure access, project delays or other unforeseeable events. Restrictions on the movement
and supply of personnel and products due to external influences such as geopolitical unrest or conflict and a pandemic may
also cause interruption to production.
A significant interruption to production could result in loss of revenue and additional costs to repair or replace equipment.
Regulatory risk
The Consolidated Entity currently operates in Australia, Indonesia and New Zealand and is subject to changes in government
policy or statutory changes that may affect our business operations and financial position. A change in government regime
may significantly result in changes to fiscal, monetary, property rights and other issues which may result in a material adverse
impact on Consolidated Entity’s business and its operations.
Profitability may be affected by changes in government taxation and royalty policies or the interpretation and application of
policies in our operating jurisdictions.
The Consolidated Entity monitors changes in relevant regulations and engages with regulators and governments to ensure
policy and law changes are appropriately understood. Any failure to comply with or changes to applicable laws, regulations or
permits, even if non-compliance is inadvertent, could result in material fines, penalties, changes in the cost of operations,
additional investment or other liabilities. In extreme cases, non-compliance with or amendments applicable laws, regulations
or permits could result in suspension of activities or forfeiture of one or more of the Consolidated Entity’s projects.
Access to infrastructure
Our oil and gas sales can be dependent on access to third party owned infrastructure. Infrastructure failure, such as pipelines
and processing facilities, increased tariffs or restrictions on access to third party infrastructure may have a material effect on
financial performance.
The Consolidated Entity works with its project partners, customers and infrastructure suppliers to understand and mitigate the
risk of delays or failure.
Permit Risk
All petroleum licences held by the Consolidated Entity are subject to the granting and approval of relevant government bodies
and ongoing compliance with licence terms and conditions, including periodic requirements for renewal or extension.
The Consolidated Entity monitors project operators’ tenure management processes and standard operating procedures to
minimise the risk of losing tenure.
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Litigation
The Consolidated Entity is not currently involved in any litigation. However, in the ordinary course of business we may become
involved in litigation and disputes, for example with our partners, contractors or employees over a broad range of matters. Any
such litigation or dispute could involve significant economic costs and damage to relationships with partners or other
stakeholders. Outcomes of any litigation may have an adverse impact on the Consolidated Entity’s business, market reputation
and financial condition and financial performance.
Health Safety and Environmental risk
Exploration, development, production and transportation of oil and gas involves a variety of risks which may impact the health
and safety of personnel, the community and the environment.
Natural disasters, operational error and equipment failure, amongst other things, could result in oil and gas leaks or spills or
loss of well control which may lead injury or loss of life, damage to equipment and facilities, legal liability and reputational
damage. Losses or liabilities from such events could reduce revenue or increase costs and materially impact Consolidated
Entity’s financial position.
The Consolidated Entity works with project operators to ensure processes and procedures are in place to minimise these risks
and seeks to maintain appropriate insurance policies to mitigate against the financial effects of any incident.
Climate change and the development of alternative energy sources
The Consolidated Entity's operating environment is and will continue to be impacted by the continually developing impact of
climate change and the response needed to ensure the well-being of the global community. The adverse impact of climate
change continues to impact the search for and development of alternative energy sources to those historically based on the
use of hydrocarbons in the generation of energy for industrial and private use.
The Consolidated Entity is conscious of its responsibilities in respect of minimising the impact of its operations on the
environment, however, fundamental shifts in the commercial availability of alternative energy sources developed as a result
of the adverse impact of climate change may impact the Consolidated Entity's future operational and financial performance.
Digital and Cyber Security
Any information technology system is potentially vulnerable to interruption and/or damage from a number of sources, including
but not limited to computer viruses, cyber security attacks and other security breaches, power, systems, internet and data
network failures, and natural disasters.
The Consolidated Entity is committed to preventing and reducing cyber security risks through outsourcing the IT environment
which it utilizes to a reputable service provider.
Reliance on key personnel
The Consolidated Entity’s success depends to a significant extent upon its key management personnel, as well as other staff
and technical personnel including those employed on a contractual basis. The loss of the services of such personnel or the
reduced ability to recruit additional personnel could have an adverse effect on the Consolidated Entity's performance.
The Consolidated Entity maintains a mix of permanent staff and expert consultants to advance its projects and ensure access
to multiple skill sets. The remuneration policy is reviewed regularly to ensure it appropriately reflects current and expected
employment conditions and best practices.
Geopolitical Risk
The Russian-Ukrainian and Israeli-Gaza conflicts have had significant global macro-economic impacts, including increasing
instability in global energy prices. Related impacts include, but are not limited to volatility in commodity prices, currency
movements, supply-chain and travel disruptions, disruption in banking systems and capital markets, increased costs and
expenditures and cyberattacks. The conflicts' development and conclusion is inherently uncertain and the consequences for
the global economy and the Consolidated Entity’s operations unpredictable.
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.
Refer to the Financial and Operations review preceding this Director's Report.
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Significant changes in the state of affairs
On 1 July 2023, 3,473,653 options over the Company’s fully paid ordinary shares expired, with an exercise price of $0.089
(8.9cents) per fully paid ordinary share.
On 8 September 2023, the Company issued 4,640,759 options over fully paid ordinary shares to employees with an exercise
price of $0.072 (7.2 cents) per fully paid ordinary share and which expire on 1 July 2028.
On 3 October 2023, the Consolidated Entity announced the repayment of the remaining $4 million in outstanding unsecured
loans to New Zealand Oil & Gas Ltd (NZOG), which renamed to Echelon Resources Ltd (Echelon) on 31 July 2024.
On 26 October 2023, Ms Melanie Leydin resigned as the Consolidated Entity's Company Secretary and Ms Anita Addorisio
was appointed as Company Secretary with immediate effect. Ms Melanie Leydin retained her position as the Consolidated
Entity's Chief Financial Officer until 30 June 2024.
On 28 February 2024, the Company’s Board of Directors approved the declaration of an interim special dividend of $0.02 (2
cents) per fully paid ordinary share, totalling $13.97 million. This interim special dividend was declared as a Conduit Foreign
Income (CFI), unfranked special dividend and was paid on 5 April 2024.
On 19 March 2024, the Consolidated Entity issued 252,562 fully paid ordinary shares upon the exercise of 2,152,655 unlisted
options over fully paid ordinary shares with an exercise price of $0.09 (9 cents) per fully paid ordinary share and an expiry
date of 1 July 2024. Settlement was made on a cashless net basis; settlement being determined on difference between the
30 day VWAP (volume-weighted average price) for the period immediately preceding the exercise date less the exercise price
of $0.09 (9 cents) per fully paid ordinary share.
During April 2024, the Consolidated Entity had its interest in the Mahato PSC reduced by 10% (from 12.5% to 11.25%),
effective 1 November 2023, for no consideration in accordance with the Mahato PSC and subsequent Indonesian Government
regulations.
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
On 23 July 2024, the Palm Valley production license was renewed for 21 years commencing on 7 November 2024.
On 23 August 2024, the Company’s Board of Directors approved the declaration of a final dividend distribution of $0.01 (1
cent) per fully paid ordinary share, totalling $7 million. This final dividend distribution was declared as a Conduit Foreign
Income (CFI), unfranked final dividend and was paid on 26 September 2024.
No other matter or circumstance has arisen since 30 June 2024 that has significantly affected, or may significantly affect the
Consolidated Entity's operations, the results of those operations, or the Consolidated Entity's state of affairs in future financial
years.
Likely developments and expected results of operations
The following activities may affect the expected results of operations:
●
Progress on Paus Biru and the Final Investment Decision;
●
Further exploration and development drilling in existing company fields;
●
Changes in New Zealand legislation and the impact it may have on the scope and funding of the Maari field
decommissioning obligations;
●
Continuing volatility in global energy markets; and
●
Actively seeking to acquire new production opportunities.
Environmental regulation
Within the last year there have been no incidents, lost time injuries or significant spills within Cue Energy Resources Limited.
Among the joint operations there have been 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.
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Information on directors
Name:
Alastair McGregor
Title:
Non-Executive Chairman
Qualifications:
BEng, MSc
Experience and expertise:
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 Echelon Resources Ltd. 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(Hons) and an MSc in Aeronautical Engineering.
Other current directorships:
Echelon Resources Ltd (ASX: ECH)
Former directorships (last 3 years):
None
Special responsibilities:
Member, Remuneration and Nomination Committee
Interests in shares:
None
Interests in options:
None
Name:
Andrew Jefferies
Title:
Non-Executive Director
Qualifications:
BE Hons (Mechanical), MBA, MSc in petroleum engineering, GAICD, Certified
Petroleum Engineer
Experience and expertise:
Mr Jefferies is managing director of Echelon. 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, Holland and is currently
based in New Zealand.
Other current directorships:
Echelon Resources Limited (ASX: ECH)
Former directorships (last 3 years):
None
Special responsibilities:
Member, Audit and Risk Committee
Member, Remuneration and Nomination Committee
Member, Operational Risk and Sustainability Committee
Member, Commercial Committee
Interests in shares:
8,000 fully paid ordinary shares
Interests in options:
None
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Name:
Peter Hood AO
Title:
Non-Executive Director
Experience and expertise:
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, 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.
Other current directorships:
De Grey Mining Ltd (ASX: DEG)
GR Engineering Ltd (ASX: GNG)
Matrix Composites and Engineering Ltd (ASX: MCE)
Former directorships (last 3 years):
None
Special responsibilities:
Chair, Independent Board Committee
Member, Audit and Risk Committee
Member, Commercial Committee
Interests in shares:
80,000 fully paid ordinary shares
Interests in options:
None
Name:
Richard Malcolm
Title:
Non-Executive Director
Experience and expertise:
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.
Other current directorships:
None
Former directorships (last 3 years):
None
Special responsibilities:
Chairman, Remuneration and Nomination Committee
Member, Independent Board Committee
Member, Operational Risk and Sustainability Committee
Interests in shares:
300,000 Fully Paid Ordinary Shares
Interests in options:
None
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Name:
Rod Ritchie
Title:
Non-Executive Director
Qualifications:
B.Sc
Experience and expertise:
Mr Ritchie is a Non-Executive director of Echelon. Mr Ritchie joined Echelon's board in
2013. He began his career as a petroleum engineer with Schlumberger and after 28
years and then joined OMV where he worked for a further 12 years. Mr Ritchie has over
45 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. More recently he has qualified as an executive and
leadership coach with the Australian Institute of Professional coaches (AIPC) and also
works with the CEO institute in Perth WA as a syndicate chair.
Other current directorships:
Echelon Resources Limited (ASX: ECH)
Former directorships (last 3 years):
None
Special responsibilities:
Member, Remuneration and Nomination Committee
Chair, Operational Risk and Sustainability Committee
Interests in shares:
None
Interests in options:
None
Name:
Samuel Kellner
Title:
Non-Executive Director
Qualifications:
BA, MBA
Experience and expertise:
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 Echelon, 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.
Other current directorships:
Echelon Resources Limited (ASX: ECH)
Former directorships (last 3 years):
None
Special responsibilities:
None
Interests in shares:
None
Interests in options:
None
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Name:
Mr Marco Argentieri
Title:
Non-Executive Director
Experience and expertise:
Mr Argentieri is a Director of Echelon, Executive Vice President of 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.
Other current directorships:
Echelon Resources Limited (ASX: ECH)
Former directorships (last 3 years):
None
Special responsibilities:
Chair, Audit and Risk Committee
Member, Commercial Committee
Interests in shares:
None
Interests in options:
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.
Company secretary
On 26 October 2023, Ms Melanie Leydin resigned and Ms Anita Addorisio was appointed as Company Secretary.
Ms Addorisio is an experienced finance professional with over 20 years’ senior finance experience and 10 years’ experience
as a Company Secretary for ASX listed companies within several industry sectors, including resources. She is a Fellow of
both CPA Governance Institute of Australia and holds a Masters in Accounting.
Meetings of directors
Full Board
Full Board
Remuneration
and
Nomination
Committee
Remuneration
and
Nomination
Committee
Audit and Risk
Committee
Audit and Risk
Committee
Operational
Risk and
Sustainability
Committee
Operational
Risk and
Sustainability
Committee
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Alastair McGregor
5
5
3
3
-
-
-
-
Andrew Jefferies
5
5
3
3
3
3
2
2
Peter Hood*
5
5
-
-
3
3
-
-
Richard Malcolm*
4
5
3
3
-
-
2
2
Rod Ritchie
5
5
3
3
-
-
2
2
Samuel Kellner
5
5
-
-
-
-
-
-
Marco Argentieri
5
5
-
-
3
3
-
-
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
*
During the year, the Independent Board Committee which consists of Peter Hood and Richard Malcolm held one meeting
which was attended by both of them.
Remuneration report
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 2024, in accordance with the Corporations Act 2001 and its regulations.
Key management personnel (KMP) 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
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(B) Remuneration policy
(C) Details of remuneration
(D) Equity based remuneration
(E) Relationship between remuneration policy and company performance
(A) Director and executive details
The following persons acted as Directors of the company during or since the end of the financial year:
●
Alastair McGregor (Non-Executive Chairman)
●
Andrew Jefferies (Non-Executive Director)
●
Peter Hood (Non-Executive Director)
●
Richard Malcolm (Non-Executive Director)
●
Rod Ritchie (Non-Executive Director)
●
Samuel Kellner (Non-Executive Director)
●
Marco Argentieri (Non-Executive Director)
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 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.
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:
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●
Fixed base cash salary and fees;
●
Short term incentive (STI) programme benefits, including cash bonuses;
●
Long term benefits in the form of long service leave;
●
Superannuation entitlements post employment; and
●
Equity settled benefits, including but not limited to long term incentives in the form of options and/or performance rights.
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. The Board last reviewed the salaries paid to peer company executives in determining the salary of
the Company’s KMP at the end of the 2022 financial year. 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 his annual STI, based on actual
performance against key performance indicators (KPIs).
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 4 September 2023.
Term: Permanent employment contract, no fixed terms.
Details: Base salary of $424,848 per annum plus superannuation, up to the super guarantee maximum employer
contribution, to be reviewed annually by the Board. Mr Boyall is also entitled to short-term incentive up to 30% (2023: 30%) of
his base salary at the discretion of the Board at the end of each calendar year dependent on the success of meeting key
deliverables. Mr Boyall’s entitlements to long-term incentives is determined at the Board sole discretion.
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:
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KMP Compensation - 30 June 2024
Short-term
benefits
Short-term benefits
Long-term
benefits
Post
employment
Share
based
payments
Cash salary
and fees
Deemed
short term
benefits*
Cash
bonuses
Consulting
Fees
Long
service
leave
Superannuation
Equity
settled
Total
30 June 2024
$
$
$
$
$
$
$
$
Directors
Alastair McGregor*
100,000
-
-
-
-
-
-
100,000
Andrew Jefferies*
62,981
-
-
-
-
-
-
62,981
Peter Hood
75,862
-
-
-
-
3,989
-
79,851
Richard Malcolm
66,872
-
-
-
-
7,356
-
74,228
Rod Ritchie
74,228
-
-
-
-
-
-
74,228
Samuel Kellner*
62,981
-
-
-
-
-
-
62,981
Marco Argentieri*
74,228
-
-
-
-
-
-
74,228
Other Key
Management
Personnel:
Matthew Boyall**
424,747
-
87,051
-
(951)
27,500
54,243
592,590
941,899
-
87,051
-
(951)
38,845
54,243 1,121,087
*
Commencing 1 July 2023, the Directors' fees are invoiced by Echelon and paid on a quarterly basis. The Directors’ fees
are retained by Echelon and not personally received by the Directors.
**
Matthew Boyall's cash bonus consists of $87,051 for achieving a 68.3% performance rating against 2023 key
performance indicators (KPIs). The KPIs were measured against the actual results for the calendar year ending 31
December 2023. Mr Boyall is entitled to up to 30% of base salary in short term incentives.
KMP Compensation - 30 June 2023
Short-term
benefits
Short-term benefits
Long-term
benefits
Post
employment
Share
based
payments
Cash salary
and fees
Deemed
short term
benefits*
Cash
bonuses
Consulting
Fees
Long
service
leave
Superannuation
Equity
settled
Total
30 June 2023
$
$
$
$
$
$
$
$
Directors
Alastair McGregor*
-
94,340
-
-
-
-
-
94,340
Andrew Jefferies*
-
59,416
-
-
-
-
-
59,416
Peter Hood
68,096
-
-
-
-
7,235
-
75,331
Richard Malcolm
63,301
-
-
-
-
6,725
-
70,026
Rod Ritchie
70,026
-
-
12,000
-
-
-
82,026
Samuel Kellner*
-
59,416
-
-
-
-
-
59,416
Marco Argentieri*
-
70,026
-
-
-
-
-
70,026
Other Key
Management
Personnel:
Matthew Boyall**
398,592
-
90,180
-
27,021
27,500
50,688
593,981
600,015
283,198
90,180
12,000
27,021
41,460
50,688 1,104,562
36
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Directors' report
30 June 2024
23
*
Total remuneration $1,104,562 for FY 2023 includes the presentation of deemed compensation. The entire value of the
$283,198 (i) solely arose from the technical application of disclosure requirements of the accounting standards, and (ii)
the $283,198 is deemed only and neither the Company nor any member of the Consolidated Entity paid or in any way
settled or has obligations to settle the aforementioned deemed remuneration of $283,198. The Consolidated Entity's
actual obligations for the settlement of Directors' remuneration for FY 2023 was $821,364.
**
Matthew Boyall's cash bonus consisted of $90,180 for achieving a 75% performance rating against 2022 key performance
indicators (KPIs). The KPIs were measured against the actual results for the calendar year ending 31 December 2022.
Mr Boyall is entitled to up to 30% of base salary in short term incentives.
The proportion of remuneration linked to the Consolidated Entity's performance and the fixed proportion are as follows:
Fixed
remuneration
Fixed
remuneration
At risk - STI
At risk - LTI
Name
30 June 2024
30 June 2023
30 June 2024
30 June 2023
30 June 2024
30 June 2023
Directors:
Alastair McGregor*
100%
100%
-
-
-
-
Andrew Jefferies*
100%
100%
-
-
-
-
Peter Hood
100%
100%
-
-
-
-
Marco Argentieri*
100%
100%
-
-
-
-
Richard Malcolm
100%
100%
-
-
-
-
Rod Ritchie
100%
100%
-
-
-
-
Samuel Kellner*
100%
100%
-
-
-
-
Other Key Management
Personnel:
Matthew Boyall
76%
85%
15%
15%
9%
-
* Alastair McGregor, Andrew Jefferies, Samuel Kellner and Marco Argentieri were not directly remunerated by the Company
during the year ended 30 June 2024.
(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:
37
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Directors' report
30 June 2024
24
●
the ESOP sets out the framework for the offer of Options by the Company, and is typical for an ESOP;
●
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”. Unless the Board determines otherwise
at its sole discretion, Options held by good leavers will expire upon cessation of employment;
●
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; and
●
the Board is granted a certain level of discretion under the Employee Incentive Programme (EIP), including the power to
amend the rules under which the EIP is governed and to waive vesting conditions, forfeiture conditions or disposal
restrictions, including but not limited to the execution of the EIP's terms upon termination of employment.
The options will vest on the date determined by the Board and as specified in the Invitation Letter.
4,640,759 options were granted under the ESOP during FY 2024 (FY 2023: 3,649,298). In March 2024, the Consolidated
Entity issued 252,562 fully paid ordinary shares upon the exercise of 2,152,655 unlisted options over fully paid ordinary shares
with an exercise price of $0.09 (9 cents) per fully paid ordinary share and an expiry date of 1 July 2024. Settlement was made
on a cashless net basis, determined on difference between the 30 day VWAP for the period immediately preceding the
exercise date less the exercise price of $0.09 (9 cents) per fully paid ordinary share.
Share-based compensation
Issue of shares
During FY 2024, 164,208 fully paid ordinary shares were issued to Matthew Boyall, the Chief Executive Officer upon the
exercise on a cashless basis of 1,399,595 options granted as part of their compensation.
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of KMP in this financial year or
future reporting years are as follows:
Number of
Fair value
options
Vesting date and
per option
Name
granted
Grant Date
exercisable date
Expiry date
Exercise price
(Cents)
at grant date
(Cents)
Matthew Boyall
1,102,607 16 July 2020
1 July 2023
1 July 2025
11.700
5.100
Matthew Boyall
1,428,843 23 July 2021
23 July 2024
23 July 2026
7.800
3.900
Matthew Boyall
1,714,612 30 August 2022
1 July 2025
1 July 2027
8.900
3.200
Matthew Boyall
2,129,386 8 September 2023 1 July 2026
1 July 2028
7.200
3.150
Options granted carry no dividend or voting rights.
(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 2024
38
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Directors' report
30 June 2024
25
2024
2023
2022
2021
2020
$'000
$'000
$'000
$'000
$'000
Production revenue from continuing operations
49,659
51,605
44,439
22,449
23,916
Profit/(loss) before income tax expense from
continuing operations
25,322
19,881
21,756
(7,442)
5,099
Profit/(loss) after income tax expense
14,189
15,211
16,068
(12,743)
1,313
Total KMP remuneration settled by the
Consolidated Entity
1,121
821
741
659
690
2024
2023
2022
2021
2020
Share price at start of year (cents)
5.60
6.50
6.00
9.50
8.30
Share price at end of year (cents)
10.50
5.60
6.50
6.00
9.50
Basic earnings/(loss) per share (cents)
2.03
2.18
2.30
(1.83)
0.19
Diluted earnings/(loss) per share (cents)
2.03
2.18
2.30
(1.83)
0.19
Dividend ($'000)
13,967
-
-
-
-
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:
Balance at
Balance at
the start of
Disposals/
the end of
the year
Additions
other
the year
Ordinary shares*
Non-Executive Directors
-
-
-
-
Andrew Jefferies
8,000
-
-
8,000
Peter Hood
80,000
-
-
80,000
Richard Malcolm
300,000
-
-
300,000
Other Key Management Personnel
-
-
-
-
Matthew Boyall**
200,000
164,208
-
364,208
588,000
164,208
-
752,208
*
Alastair McGregor, 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 the Company.
**
In March 2024, 1,399,595 options with an expiry date of 1 July 2024 and an exercise price of $0.09 (9 cents) per fully
paid ordinary share were exercised on a cashless basis during the period, as a result of which 164,208 fully paid ordinary
shares were issued.
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:
Balance at
Expired/
Balance at
the start of
forfeited/
the end of
the year
Granted
Exercised
other
the year
Options over ordinary shares
Matthew Boyall
6,933,995
2,129,386
(1,399,595)
(1,288,338)
6,375,448
6,933,995
2,129,386
(1,399,595)
(1,288,338)
6,375,448
This concludes the remuneration report, which has been audited.
39
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Directors' report
30 June 2024
26
Shares under option
Unissued ordinary shares of Cue Energy Resources Limited under option at the date of this report are as follows:
Grant date
Vesting date
Expiry date
Exercise price
(cents)
Number under
option
16/07/2020
01/07/2023
01/07/2025
11.70
3,204,237
23/07/2021
01/07/2024
23/07/2026
7.80
4,005,799
30/08/2022
01/07/2025
01/07/2027
8.90
3,598,698
08/09/2023
01/07/2026
01/07/2028
7.20
4,640,759
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
During FY 2024 and up to the date of this report, 252,562 fully paid ordinary shares of Cue Energy Resources Limited were
issued on a cashless basis upon the exercise of 2,152,654 options over fully paid ordinary shares in the Company with an
exercise price of $0.09 (9 cents) per fully paid ordinary share.
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 officer or 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 16 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 pre-approves all non-audit services 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:
●
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.
40
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Directors' report
30 June 2024
27
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
23 August 2024
41
Cue Energy Resources Limited
Annual Report 2024
28
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 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.
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
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
Limited for the financial year ended 30 June 2024 there have been:
i.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
ii.
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
KPM_INI_01
PAR_SIG_01
PAR_NAM_01
PAR_POS_01
PAR_DAT_01
PAR_CIT_01
Vicky Carlson
Partner
Melbourne
23 August 2024
Auditor’s Independence Declaration
42
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2024
Consolidated
Note 30 June 2024 30 June 2023
$'000
$'000
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
29
Revenue from continuing operations
Revenue from operations
5
49,659
51,605
Production costs
6
(19,629)
(22,721)
Gross profit from production
30,030
28,884
Other income
836
487
Net foreign currency exchange (loss)/gain
(119)
10
Expenses
Exploration activities
(228)
(3,073)
Corporate and administration expenses
7
(3,148)
(2,485)
Sales expenses
(1,365)
(2,239)
Finance cost
(684)
(1,703)
Profit before income tax expense
25,322
19,881
Income tax expense
8
(11,133)
(4,670)
Profit after income tax expense for the year attributable to the owners of Cue
Energy Resources Limited
14,189
15,211
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
388
947
Other comprehensive income for the year, net of tax
388
947
Total comprehensive income for the year attributable to the owners of Cue
Energy Resources Limited
14,577
16,158
Cents
Cents
Basic earnings per share
23
2.03
2.18
Diluted earnings per share
23
2.03
2.18
Statement of profit or loss and other comprehensive income
43
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Statement of financial position
As at 30 June 2024
Consolidated
Note 30 June 2024 30 June 2023
$'000
$'000
The above statement of financial position should be read in conjunction with the accompanying notes
30
Assets
Current assets
Cash and cash equivalents
16,259
15,238
Trade and other receivables
9
8,134
10,822
Contract assets
-
5,118
Inventories
2,420
1,181
Total current assets
26,813
32,359
Non-current assets
Advances paid for restoration works
11
6,069
5,994
Property, plant and equipment
20
26
Right-of-use assets
206
110
Exploration and evaluation assets
-
114
Production properties
10
63,017
62,289
Development assets
10
4,553
4,458
Deferred tax assets
8
12,201
12,250
Deposits
404
404
Total non-current assets
86,470
85,645
Total assets
113,283
118,004
Liabilities
Current liabilities
Trade and other payables
2,984
3,929
Contract liabilities
-
822
Borrowings
-
3,945
Lease liabilities
43
91
Tax liabilities
8
3,040
3,998
Provisions
239
231
Deferred consideration
-
225
Total current liabilities
6,306
13,241
Non-current liabilities
Contract liabilities
4,000
4,332
Lease liabilities
174
45
Deferred tax liabilities
8
9,280
7,631
Provisions
11
28,609
28,563
Total non-current liabilities
42,063
40,571
Total liabilities
48,369
53,812
Net assets
64,914
64,192
Equity
Contributed equity
12
152,543
152,416
Reserves
13
54,100
6,393
Accumulated losses
(141,729)
(94,617)
Total equity
64,914
64,192
Statement of financial position
44
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Statement of changes in equity
For the year ended 30 June 2024
The above statement of changes in equity should be read in conjunction with the accompanying notes
31
Contributed
General
Accumulated
equity
Reserves
reserve
losses
Total equity
Consolidated
$'000
$'000
$'000
$'000
$'000
Balance at 1 July 2022
152,416
1,132
-
(105,610)
47,938
Profit after income tax expense for the year
-
-
4,218
10,993
15,211
Other comprehensive income for the year, net
of tax
-
947
-
-
947
Total comprehensive income for the year
-
947
4,218
10,993
16,158
Transactions with owners in their capacity as
owners:
Share-based payment (note 24)
-
96
-
-
96
Balance at 30 June 2023
152,416
2,175
4,218
(94,617)
64,192
Total equity
Contributed
equity
Reserves
General
reserve
Accumulated
losses
Consolidated
$'000
$'000
$'000
$'000
$'000
Balance at 1 July 2023
152,416
2,175
4,218
(94,617)
64,192
Profit after income tax expense for the year
-
-
-
14,189
14,189
Other comprehensive income for the year, net
of tax
-
388
-
-
388
Total comprehensive income for the year
-
388
-
14,189
14,577
Transfer to/from Accumulated losses
-
-
61,440
(61,440)
-
Dividend paid
-
-
(13,967)
-
(13,967)
Transactions with owners in their capacity as
owners:
Share-based payments (note 24)
-
(27)
-
139
112
Exercise of options
127
(127)
-
-
-
Balance at 30 June 2024
152,543
2,409
51,691
(141,729)
64,914
Statement of changes in equity
45
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Statement of cash flows
For the year ended 30 June 2024
Consolidated
Note 30 June 2024 30 June 2023
$'000
$'000
The above statement of cash flows should be read in conjunction with the accompanying notes
32
Cash flows from operating activities
Receipts from customers
56,362
43,458
Interest received
833
432
Payments to suppliers and employees
(19,180)
(18,845)
Payments for exploration and evaluation expenditure
(217)
(2,618)
Income tax paid
(9,139)
(6,738)
Royalties paid
(1,598)
(2,353)
Cash generated from operating activities
27,061
13,336
Interest and other finance costs paid
(118)
(683)
Net cash from operating activities
22
26,943
12,653
Cash flows used in investing activities
Payments for exploration, development and production properties
(7,506)
(11,261)
Payments for plant and equipment
(4)
(5)
Payment for businesses acquired
(225)
(6,082)
Payments for security bonds
-
(282)
Net cash used in investing activities
(7,735)
(17,630)
Cash flows used in financing activities
Payments of principal element of lease liabilities
(84)
(81)
Payment of dividends
(13,967)
-
Repayment of borrowings
(4,000)
(3,000)
Net cash used in financing activities
(18,051)
(3,081)
Net increase/(decrease) in cash and cash equivalents
1,157
(8,058)
Cash and cash equivalents at the beginning of the financial year
15,238
23,223
Effects of exchange rate changes on cash and cash equivalents and restricted cash
(136)
73
Cash and cash equivalents at the end of the financial year
16,259
15,238
Statement of cash flows
46
Cue Energy Resources Limited
Annual Report 2024
33
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
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, hereinafter collectively referred to as the Consolidated
Entity. 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.
Cue Energy Resources Limited’s parent entity is Echelon Resources Limited (Echelon) (formerly known as New Zealand Oil
& Gas Limited), a company incorporated in New Zealand and its ultimate parent entity is O.G. Oil & Gas (Singapore) Pte. Ltd.
(OGOG), a company incorporated in Singapore.
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 23 August 2024.
Note 2. Material accounting policy information
The accounting policies that are material to the Consolidated Entity are set out either in the respective notes or below. The
accounting policies adopted are consistent with those of the previous financial year, unless otherwise stated.
(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 Consolidated Entity 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 have 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 18.
Notes to the financial statements
47
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
34
(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 2024 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 Consolidated Entity 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 Consolidated Entity controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Consolidated Entity. They are de-
consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by
the Consolidated Entity.
Investments in subsidiaries are accounted for at cost in the standalone financial statements of the parent entity, Cue Energy
Resources Limited.
(e) Production revenue
Revenue from the sale of crude oil and gas is recognised at the point in time when control of the product is transferred to the
customer, which is generally when the product is physically transferred into a vessel, pipe or other delivery mechanism and
the customer accepts the product. Consequently, the Consolidated Entity’s performance obligations are considered to relate
only to the sale of crude oil / gas, with each barrel of crude oil or cubic meter of gas is considered to be a separate performance
obligation under the contractual arrangements in place.
Under the terms of the relevant production sharing arrangements, the Consolidated Entity is entitled to its participating share
in the crude oil based on the Consolidated Entity’s working interest. Revenue from contracts with customers is recognised
based on the actual volumes sold to customers.
The Consolidated Entity’s sales of crude oil are priced based on market prices and sales of gas are priced based on different
contractual arrangements which include fixed and market prices.
(f) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value. 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.
(g) Trade and other payables
Trade and other payables 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.
(h) 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.
(i) Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the
period in which they are incurred.
48
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
35
(j) 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.
(k) 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, the Consolidated Entity’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.
Foreign operations
The results and financial position of Consolidated Entity’s foreign operations are translated into its presentation currency using
the following procedures:
(a)
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;
(b)
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
(c)
all resulting exchange differences shall be recognised in other comprehensive income.
(l) Advances paid for rehabilitation works
Advances paid for rehabilitation works represent amounts paid to special purpose funds established with the primary objective
of meeting future rehabilitation obligations and are recognised and measured in accordance with AASB Interpretation 5 Rights
to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds (AASBI 5). AASBI 5 requires
restoration provisions and contributions to funds to be separately disclosed in the Consolidated Entity’s statement of financial
position.
(m) Contract assets and liabilities
Contract assets and liabilities are recognized and measured in accordance with AASB 15 Revenue from Contracts with
Customers.
Contract assets
Contract assets represent rights to consideration for performance obligations satisfied to date, which will be recognised as
trade receivables when the right to invoice becomes unconditional.
49
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
36
Contract liabilities
Contract liabilities represent the Consolidated Entity's obligation to transfer gas to customers and are recognised when a
customer pays consideration or when a receivable is recognised reflecting its unconditional right to consideration before the
Consolidated Entity has satisfied its performance obligations in respect of the transfer of the goods or services to the customer.
The Consolidated Entity has performance obligations for the delivery of gas for which payment was received in advance and
for gas not taken by its sole customer in the Dingo field, in respect of a take or pay arrangement in accordance with which the
Consolidated Entity has the obligation to upon request provide gas in the contractually defined volumes which were not able
to be consumed. The customer must take the future delivery of gas no later than 2035. If and when concluded that the
customer's entitlements to take future gas deliveries within the contractually defined time, the relevant portion of the contract
liability is derecognised.
(n) Loans and borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are
subsequently measured at amortised cost using the effective interest method.
(o) 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.
(p) 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 in the application of accounting standards, make certain assumptions that affect the application of policies and
consider and conclude on sources of and apply estimation uncertainties which affect the reported amounts of assets, liabilities,
income and expenses.
The judgements made, assumptions applied and the consideration of sources of estimation uncertainty, are based on the
application of historical experience and various other factors that are believed to be reasonable under the circumstances, the
results of which form the basis of concluding on the carrying values of assets and liabilities that may not be 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 judgements made, assumptions applied and consideration of sources of
estimation uncertainty 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.
50
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
Note 3. Critical accounting estimates and judgements (continued)
37
(i) Recovery of deferred tax assets
Management recognise deferred tax assets on unutilised carry forward tax losses if management considers it is probable that
future tax profits will be available to utilise the unused tax losses (refer to note 8).
Management are required to make assumptions on and consider inherent uncertainties in respect of the various inputs used
in the estimation of future taxable income against which unutilised losses may be applied. These assumptions include but are
not limited to the nature, timing and extent of project development and reserves, production and sales performance, energy
prices where not contractually fixed and which are subject to global macroeconomic factors and inflation and its impact on
future tax deductions. The inherent estimation uncertainty when forecasting future operational and financial performance also
directly the actual generation of future taxable income, which may differ to the estimated taxable income and associated
deferred tax asset.
(ii) Impairment of production properties
Production properties impairment testing requires an estimation of recoverable amount, which management have determined
using either fair value less costs to sell or a value-in-use model for the respective cash generating units (CGUs).
Management is required to apply its judgement in concluding on the definition of CGUs to which an asset or group of assets
relates. Furthermore, in defining the discount rate appropriate to calculate the present value of future outflows when
determining the fair value less costs to sell or value-in-use, management is requirement to apply judgement in determining
the relevant risks and basis of calculating the risks associated with compiling an appropriate discount rate.
The calculation of a CGU's recoverable amount through either the fair value less costs to sell or its value-in-use requires the
entity to make certain assumptions on reserves, future production volumes, pricing of its energy products and cost estimates,
exchange rates and how they impact on future cashflows, where appropriate the costs to sell and in respect of the inputs
utilised in defining an appropriate discount rate.
These assumptions are inherently uncertain inputs and assumptions and accordingly management review their accuracy and
appropriateness periodically.
Management have considered and made assumptions in respect of the impact of climate change and the development of
commercially viable alternative energy sources on future cashflows and the respective CGUs' value in use and fair value less
costs to sell. The assumptions are based on current information, historical trends and future expectations which may differ to
the assumptions made by management when concluding on the impact of climate change and the development of
commercially viable alternative energy sources.
(iii) Useful life of production properties and their amortisation
Estimates of reserve quantities and future production volumes are based on certain assumptions and subject to inherent
estimation uncertainties. These factors are critical elements of the calculation of the amortisation of production property assets.
(iv) Estimates of reserve quantities
The estimated quantities of Consolidated Entity's reported Proven and Probable hydrocarbon reserves 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 certain interpretations of geological and geophysical models
and assessments of the technical feasibility and commercial viability of producing the reserves. These assessments require
assumptions to be made regarding future development and production costs, commodity prices, exchange rates and fiscal
regimes. The estimates of reserves may change from period to period as the economic assumptions used to estimate the
reserves 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 Consolidated Entity’s policies and procedures for
reserves estimation, which conform to guidelines prepared by the Society of Petroleum Engineers.
(v) Restoration (rehabilitation or rehab) 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 in accordance with the terms of the respective permits and relevant
legislation in the various jurisdictions in which the Consolidated Entity operates. There is inherent uncertainty in the definition
of the works undertaken, technology used to complete the works, the estimation of the relevant costs associated with the
defined works and the timing of settlement of restoration obligations. Details of restoration provisions are disclosed in note 11.
51
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
Note 3. Critical accounting estimates and judgements (continued)
38
(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)Development assets
Development 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 mineral resources. Key
judgements are applied in considering costs to be capitalised that are expected to be recovered either through successful
development or sale of the relevant mining interest. The primary assumption made in respect of development assets is that
these assets will be able to be realised through the successful development of the relevant mining tenement or through its
sale.
Assumptions are also made, that could impact the future commercial production at the mine, when concluding on the level of
reserves and resources, the impact on future technology changes on mining techniques which could impact the cost of mining,
future legal changes, the impact of climate change 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.
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 EBITDAX, an adjusted measure of earnings
before interest expense, tax, depreciation and amortisation, which allows peer comparison when assessing performance. The
accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the Group's financial
statements.
Management have concluded that the Group operates in four principal segments: Australia, being the Amadeus Basin assets,
Maari in New Zealand and Sampang and Mahato in Indonesia. The Group has a distinct corporate function which has been
presented separately in order to reconcile to the statutory results.
Australian onshore operations
The Company resides in Melbourne, Australia. The Consolidated Entity, through separate legal entities, Cue Mereenie Pty
Ltd, Cue Palm Valley Pty Ltd and Cue Dingo Pty Ltd, holds 3 permits for onshore activities in Australia in the Amadeus Basin
in the Northern Territory. For details of subsidiaries refer to note 19 and interests in joint operations refer to note 20.
New Zealand
The Group, through its wholly owned subsidiary, Cue Taranaki Pty Ltd, holds a 5% interest in petroleum production property,
PMP38160 (Maari) in New Zealand.
Indonesia
The Group, through its wholly owned subsidiary, Cue Sampang Pty Ltd, holds a 15% interest in the Sampang PSC gas
production property and through Cue Mahato Pty Ltd, a 11.25% interest in the Mahato PSC oil production property.
Information regarding the Group’s reportable segments is presented below:
52
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
Note 4. Financial reporting by segments (continued)
39
Australia
New Zealand
Indonesia
Indonesia
Corporate
Total
Amadeus
Maari
Mahato
Sampang
Consolidated - 30 June 2024
$'000
$'000
$'000
$'000
$'000
$'000
Revenue
Revenue from operations
11,284
10,123
19,721
8,531
-
49,659
Total revenue
11,284
10,123
19,721
8,531
-
49,659
EBITDAX
6,652
7,435
16,262
4,647
(2,184)
32,812
Depreciation and amortisation
(1,915)
(2,256)
(1,621)
(544)
(64)
(6,400)
Share-based payments expense
-
-
-
(27)
(85)
(112)
Business development
expenses
-
-
-
-
(66)
(66)
Finance costs
(205)
(280)
(8)
(34)
(157)
(684)
Exploration and evaluation
expenses
(112)
-
(46)
-
(70)
(228)
Profit/(loss) before income tax
expense
4,420
4,899
14,587
4,042
(2,626)
25,322
Income tax expense
(11,133)
Profit after income tax
expense
14,189
Australia
New Zealand
Indonesia
Indonesia
Corporate
Total
Amadeus
Maari
Mahato
Sampang
Consolidated - 30 June 2023
$'000
$'000
$'000
$'000
$'000
$'000
Revenue
Revenue from operations
11,889
9,510
18,714
11,492
-
51,605
Total revenue
11,889
9,510
18,714
11,492
-
51,605
EBITDAX
6,630
4,512
14,069
7,473
(1,819)
30,865
Depreciation and amortisation
(2,127)
(2,081)
(1,118)
(707)
(66)
(6,099)
Share-based payments expense
-
-
-
(22)
(74)
(96)
Business development
expenses
21
-
-
-
(34)
(13)
Finance costs
(202)
(144)
(3)
(601)
(753)
(1,703)
Exploration and evaluation
expenses
(2,217)
-
(816)
-
(40)
(3,073)
Profit/(loss) before income tax
expense
2,105
2,287
12,132
6,143
(2,786)
19,881
Income tax expense
(4,670)
Profit after income tax
expense
15,211
Consolidated
30 June 2024 30 June 2023
Non-current assets by geographic segment
$'000
$'000
Australia
32,712
33,654
Indonesia
27,682
24,058
New Zealand
13,876
15,590
74,270
73,302
53
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
Note 4. Financial reporting by segments (continued)
40
Major customers
The Group has a number of customers to whom it provides oil products, of which 64% (FY 2023: 63%) of revenue is supplied
to one customer and 33% (FY 2023: 32%) another. The Group supplies gas to a number of external customers, one of which
generates 45% (FY 2023: 51%) of revenue and 19% (FY 2023: 13%) another.
Note 5. Revenue from operations
Consolidated
30 June 2024 30 June 2023
$'000
$'000
Crude oil and condensate revenue
30,927
29,580
Natural gas revenue
18,732
22,025
49,659
51,605
Note 6. Production costs
Consolidated
30 June 2024 30 June 2023
$'000
$'000
Production costs
13,320
16,716
Amortisation of production properties
6,309
6,005
19,629
22,721
Note 7. Corporate and administration expenses
Consolidated
30 June 2024 30 June 2023
$'000
$'000
Employee expenses
1,586
1,200
Accounting and audit fees
775
597
Share based payments
112
96
Depreciation expense
91
94
Superannuation contribution expense
66
57
Business development expenses
66
13
Legal expenses
40
3
Other expenses
192
231
Communication expense
220
194
Total administration expenses
3,148
2,485
54
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
41
Note 8. Income tax expense
Consolidated
30 June 2024
30 June 2023
$'000
$'000
Income tax expense
Current tax
9,332
9,154
Adjustment recognised for current tax in prior periods
103
-
Initial Recognition of previously unrecognised net deferred tax assets
(3,197)
(1,027)
Deferred tax - origination and reversal of temporary differences
4,895
(3,457)
Aggregate income tax expense
11,133
4,670
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense
25,322
19,881
Tax at the statutory tax rate of 30%
7,597
5,964
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Recognition of deferred tax assets
(2,082)
(3,814)
Difference in overseas tax rates
2,544
1,653
Differences arising from the application of royalty regimes
1,088
827
Other balances and permanent differences
1,883
(615)
Prior year tax losses not recognised
-
655
11,030
4,670
Adjustment recognised for current tax in prior periods
103
-
Income tax expense
11,133
4,670
The Consolidated Entity's effective tax rate for the year ended 30 June 2024 was 44% (30 June 2023: 23%).
Consolidated
30 June 2024 30 June 2023
$'000
$'000
Deferred tax included in income tax expense comprises:
Decrease/(Increase) in deferred tax assets
49
(5,362)
Increase in deferred tax liabilities
1,649
880
Deferred tax – origination and reversal of temporary differences
1,698
(4,482)
Consolidated
30 June 2024 30 June 2023
$'000
$'000
Current tax liabilities
3,040
3,998
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. 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.
55
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
Note 8. Income tax expense (continued)
42
Consolidated
30 June 2024 30 June 2023
$'000
$'000
Deferred tax assets recognised comprises of:
Restoration provisions
13,106
12,760
Carried forward tax losses
10,289
9,508
Other
164
224
Gross deferred tax assets
23,559
22,492
Less set off against deferred tax liabilities
(11,358)
(10,242)
Net deferred tax assets
12,201
12,250
During the year ended 30 June 2024, the Consolidated Entity utilised $2.44 million in previously recognised deferred tax
assets on carry forward losses in offsetting against taxable profits generated. The Consolidated Entity recognised a deferred
tax asset of $10.3 million (30 June 2023: $9.51 million) in respect of carried forward tax losses recognised.
Consolidated
30 June 2024 30 June 2023
$'000
$'000
Deferred tax liabilities recognised comprises of:
Production, development and exploration and evaluation assets
20,638
17,873
Less set off against deferred tax assets
(11,358)
(10,242)
Net deferred tax liabilities
9,280
7,631
Consolidated
30 June 2024 30 June 2023
$'000
$'000
Reconciliation of movement in deferred tax balances
Opening balance of net deferred tax assets/(liabilities)
4,619
137
Restoration provisions
346
(2,185)
Carried forward losses
781
7,736
Production, development and exploration and evaluation assets
(2,765)
(863)
Other
(60)
(206)
Closing balance of net deferred tax assets
2,921
4,619
Consolidated
30 June 2024 30 June 2023
$'000
$'000
Deferred tax not recognised
Deferred tax not recognised comprises temporary differences attributable to:
Tax losses
19,421
23,033
Net deferred tax not recognised
19,421
23,033
At 30 June 2024, the Consolidated Entity had $64.74 million in unutilised carry forward losses, the tax effect of which is $19.42
million. The potential tax benefit has not been recognised in the statement of financial position as the recovery of this benefit
is uncertain.
56
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
Note 8. Income tax expense (continued)
43
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.
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.
Cue Taranaki Pty Ltd is subject to the provisions of its Petroleum Mining Permit (the Permit) which, in conjunction with the
Minerals Programme for Petroleum (1995) Act and Crown Minerals (Royalties for Petroleum) Regulations 2013 (collectively
the Legislation), defines the basis of provisional royalty payments made each reporting period. The provisions of the Permit
define a hybrid royalty system whereby the minimum royalty payment, is the higher of 5% of revenues or 20% of the provisional
accounting profit (APR), as defined in the legislation.
The Consolidated Entity recognises the minimum royalty payment as a royalty expense, included in the statement of profit or
loss and other comprehensive income as production costs, with any excess of the APR over the minimum royalty payment
presented as an income tax expense, in accordance with AASB 112. At 30 June 2024 a deferred tax asset of $5.02 million
and a deferred tax liability of $2.45 million have been recognised in respect of the application of the terms of the Legislation
to timing differences arising between the recognition and measurement criteria in the Legislation and the application of
Australian Accounting Standards. These deferred tax balances are in addition to balances recognised on temporary timing
differences generated through the application of the respective corporate income tax legislation in the jurisdictions in which
the Consolidated Entity operates.
Note 9. Current assets - trade and other receivables
Consolidated
30 June 2024 30 June 2023
$'000
$'000
Trade receivables
5,808
8,510
Other receivables
2,126
2,121
7,934
10,631
Prepayments
200
191
8,134
10,822
57
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
Note 9. Current assets - trade and other receivables (continued)
44
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 2024 (30 June 2023: Nil).
The ageing of trade and other receivables at the reporting date was as follows:
Consolidated
30 June 2024 30 June 2023
$'000
$'000
Not overdue
6,192
5,432
Less than one month
1,742
5,148
More than 1 month overdue, not impaired
-
51
7,934
10,631
Trade and other receivables are not considered impaired and relate to a number of independent customers for whom there is
no recent history of default.
Note 10. Non-current assets - production properties
Consolidated
30 June 2024 30 June 2023
$'000
$'000
Net accumulated cost incurred on areas of interest
Joint operation production assets
Sampang
2,239
2,794
Maari
13,876
15,590
Mahato
15,024
10,910
Palm Valley
5,952
6,523
Mereenie
18,070
18,564
Dingo
7,856
7,908
Balance as at 30 June
63,017
62,289
Reconciliations
A reconciliation of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
30 June 2024 30 June 2023
Production properties
$'000
$'000
Balance at 1 July
62,289
54,117
Additions during the year
7,305
7,662
Changes in restoration provision – production (note 11)
(550)
2,919
Amortisation expense
(6,212)
(6,032)
Contract liabilities reversed
161
(348)
Transfers
-
3,055
Changes in foreign currency translation
24
916
Closing balance 30 June
63,017
62,289
58
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
Note 10. Non-current assets - production properties (continued)
45
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 performed on the basis which best reflects the consumption of future economic benefits. In the
Amadeus Basin properties, physical assets are amortised on the straight-line basis whilst all other production properties are
amortised 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. As at 30 June 2024, the Consolidated Entity determined that were no impairment indicators
present. 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 and reversals are 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.
Accounting policy for calculation of recoverable amount
For oil and gas assets the estimated future cash flows are based on either the fair value less costs to sell or the value-in-use
calculations, which use 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 cash generating units 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
based on assumptions that reflect 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.
Development assets
Consolidated
Net accumulated cost incurred on areas of interest
30 June 2024 30 June 2023
Development assets
$'000
$'000
Sampang - Paus Biru
4,339
4,348
Mereenie
214
110
4,553
4,458
59
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
46
Note 11. Non-current liabilities - provisions
Consolidated
30 June 2024 30 June 2023
$'000
$'000
Employee benefits
2
-
Restoration provisions
28,607
28,563
28,609
28,563
Movements in restoration provision during the financial year are set out below:
Restoration
provisions
Consolidated - 30 June 2024
$'000
Carrying amount at the start of the year
28,563
Change in provisions recognised
(527)
Unwinding of provision
620
Impact of foreign currency translation
(49)
Carrying amount at the end of the year
28,607
Consolidated
30 June 2024 30 June 2023
$'000
$'000
Restoration provisions
28,607
28,563
Advances paid for restoration works
(6,069)
(5,994)
Net unfunded restoration provisions
22,538
22,569
In accordance with legislative obligations in the respective jurisdictions in which the Consolidated Entity operates, contributions
are made to special purpose funds established solely for the purpose of financing future restoration works, any amounts which
have been funded are not available for general use and restricted solely for the purpose of funding future restoration works.
As at 30 June 2024, $6.07 million (30 June 2023: $5.99 million) has been contributed to such funds in respect of the Sampang
asset in Indonesia.
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.
Restoration provision
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.
When the liability is initially recognised, the present value of the estimated costs is capitalised by increasing the carrying
amount of the related oil and gas assets to the extent that it was incurred by the development/construction of the field, any
subsequent changes to the provision, excluding the unwinding of interest in producing assets, commensurately changes the
carrying amount of the related oil and gas asset.
60
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
47
Note 12. Equity - contributed equity
Consolidated
30 June 2024 30 June 2023 30 June 2024 30 June 2023
Shares
Shares
$'000
$'000
Ordinary shares - fully paid
698,372,282
698,119,720
152,543
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.
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion
to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company
does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share
shall have one vote.
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. Management may recommend declaring a dividend to be paid to shareholders, returning capital to shareholders or
issuing new shares
There has been no change during the year to the strategy adopted by management to control the capital of the entity.
On 28 February 2024, the Company’s Board of Directors approved the declaration of an interim special dividend distribution
of $0.02 (2 cents) per fully paid ordinary share, totalling $13.97 million. This interim special dividend distribution was declared
as a Conduit Foreign Income (CFI), unfranked special dividend and was paid on 5 April 2024.
On 23 August 2024, the Company’s Board of Directors approved the declaration of a final dividend distribution of $0.01 (1
cent) per fully paid ordinary share, totalling $7 million. This final dividend distribution was declared as a Conduit Foreign
Income (CFI), unfranked final dividend and was paid on 26 September 2024.
The gearing ratio is nil at 30 June 2024 and 6.15% at 30 June 2023.
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.
61
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
48
Note 13. Equity - reserves
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Foreign
currency
reserve
Options
reserve
General
reserve
Total
Consolidated
$'000
$'000
$'000
$'000
Balance at 1 July 2022
581
551
-
1,132
Foreign currency translation
947
-
-
947
Share-based payments
-
96
-
96
Transfer from accumulated losses
-
-
4,218
4,218
Balance at 30 June 2023
1,528
647
4,218
6,393
Foreign currency translation
388
-
-
388
Share-based payments
-
(27)
-
(27)
Transfer from accumulated losses
-
-
61,440
61,440
Transfer upon exercise of options
-
(127)
-
(127)
Dividends declared
-
-
(13,967)
(13,967)
Balance at 30 June 2024
1,916
493
51,691
54,100
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.
General reserve
The reserve is used to quarantine the Company's standalone accumulated profits generated in a reporting period.
Note 14. Financial instruments
The Consolidated Entity’s principal financial instruments comprise receivables, payables, cash and cash equivalents (inclusive
of restricted balances) and borrowings.
The Consolidated Entity 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
Consolidated Entity’s financial targets whilst protecting future financial security.
The main risks arising from the Consolidated Entity’s financial instruments are interest rate risk, foreign currency risk,
commodity price risk, credit risk and liquidity risk. The Consolidated Entity 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 Consolidated Entity’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.
62
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
Note 14. Financial instruments (continued)
49
Risk Exposures and Responses
(a) Fair value risk
The financial assets and liabilities of the Consolidated Entity 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 Consolidated Entity
has trade receivables, other financial assets, trade payables and borrowings, which are a reasonable approximation of their
fair values due to their short-term nature. Given the nature of the financial assets and liabilities noted and the relatively short-
term nature and the use of the appropriate interest rates in determining the loan's fair value, there is no material fair value
risk.
(b) Interest rate risk
The Consolidated Entity’s exposure to market interest rates is related primarily to its cash deposits and borrowings.
The Consolidated Entity 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 Consolidated Entity.
(c) Foreign exchange risk
The Consolidated Entity is subject to foreign exchange risk on its international exploration and appraisal activities where costs
are incurred in foreign currencies. The Consolidated Entity generates revenue denominated in foreign currencies, and does
hold significant foreign currency cash balances. The Consolidated Entity’s foreign exchange risk exposures are mitigated
through natural hedging, where appropriate.
The Consolidated Entity’s exposure to foreign exchange risk at the reporting date was as follows (holdings are shown in AUD
equivalent):
Consolidated
30 June 2024
USD
NZD
IDR
$'000
$'000
$'000
Financial assets
Cash and cash equivalents
6,851
317
80
Trade and other receivables
7,070
101
3
Financial liabilities
Trade and other payables
(747)
(1,026)
(4)
AUD strengthened
AUD weakened
Consolidated - 30 June 2024
% change
effect on
profit before
tax
Effect on
equity
% change
effect on
profit before
tax
Effect on
equity
Cash and cash equivalents
10%
(659)
-
10%
805
-
Trade and other receivables
10%
(652)
-
10%
798
-
Trade and other payables
10%
161
-
10%
(197)
-
(1,150)
-
1,406
-
63
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
Note 14. Financial instruments (continued)
50
Consolidated
30 June 2023
USD
NZD
IDR
$'000
$'000
$'000
Financial assets
Cash and cash equivalents
4,455
159
60
Trade and other receivables
84
-
5
Financial liabilities
Trade and other payables
3
1,380
-
AUD strengthened
AUD weakened
Consolidated - 30 June 2023
% change
effect on
profit before
tax
Effect on
equity
% change
effect on
profit before
tax
Effect on
equity
Cash and cash equivalents
10%
(425)
-
10%
519
-
Trade and other receivables
10%
(10)
-
10%
10
-
Trade and other payables
10%
130
-
10%
(144)
-
(305)
-
385
-
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 generates revenue from the sale of hydrocarbons. Exposure
to commodity price risk is therefore limited to this revenue and from future revenue potentially generated from successful
exploration and appraisal activities, the quantum of which at this stage cannot be measured. The Group’s exposure to
commodity price fluctuations is therefore in respect of the sale of petroleum products denominated in US dollars.
Gas contracts are primarily fixed price, with an immaterial value of contracts subject to spot prices, limiting the Group's
exposure to fluctuations in gas price.
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 Consolidated Entity 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.
Consequently, there are reasonable grounds to conclude that the Group is able to meet its payment obligations in full as and
when 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, including taking out loans and where available and appropriate,
maintaining credit facilities.
64
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
Note 14. Financial instruments (continued)
51
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.
30 June 2024
12 months or
less
1 to 2 years
2 to 5 years
More than 5
years
Non-derivative financial liabilities
$'000
$'000
$'000
$'000
Trade and other payables
2,986
-
-
-
Lease liabilities
43
174
-
-
Borrowings
-
-
-
-
30 June 2023
12 months or
less
1 to 2 years
2 to 5 years
More than 5
years
Non-derivative financial liabilities
$'000
$'000
$'000
$'000
Trade and other payables
3,929
-
-
-
Borrowings
4,398
-
-
-
Lease liabilities
91
45
-
-
On 23 June 2022, the Consolidated Entity entered into a two-year, unsecured loan agreement with Echelon for $7.0 million.
The loan is unsecured, with an interest rate of 10% p.a. fixed for the term of the loan and an establishment fee of 1.5% of the
loan amount. The term of the loan is two years from inception date in June 2022 and early repayments are allowed with no
penalty. During the year ended 30 June 2023, $3 million in loan repayments were made, the balance being settled in full
during the year ended 30 June 2024.
(f) Credit risk
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 which
could include an assessment of their independent credit rating, financial position, past experience and industry reputation.
The risks are regularly monitored.
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Consolidated Entity. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying
amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to
the financial statements. The Consolidated Entity does not hold any collateral.
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.
65
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
52
Note 15. 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)*
* Commencing 1 July 2023, the Directors' fees are invoiced by Echelon and paid on a quarterly basis. The Directors’ fees are
retained by Echelon and not personally received by the Directors.
Director Fee Details
$
Total directors' fees for the year ended 30 Jun 2024
528,496
Invoiced - Paid in relation to FY 2023
53,698
Invoiced - Paid in relation to FY 2024
528,496
Amount invoiced but not paid
-
During the financial year, Echelon provided technical and legal services to the Group under consulting agreements. The
arrangements are on normal commercial terms. As at 30 June 2024, $0.07 million was accrued for services rendered from
the immediate parent company and directors (30 June 2023: $0.16 million). During the year ended 30 June 2024, the
consolidated entity repaid the remaining $4.00 million in outstanding unsecured loan to Echelon (the carrying amount of which
is $3.95 million at 30 June 2023) and in respect of which $0.16 million in finance costs have been incurred (30 June 2023:
$0.70 million).
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)
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
30 June 2024 30 June 2023
Short term employment benefits (including non-monetary benefits)
941,899
612,015
Cash bonuses
87,051
90,180
Deemed short term benefits
-
283,198
Long term benefits
(951)
27,021
Post-employment benefits
38,845
41,460
Share-based payments
54,243
50,688
Total employee benefits
1,121,087
1,104,562
Other related party transactions
Repayment of amounts owing to the Company as at 30 June 2024 and all future debts due to the Company, by the controlled
entities are subordinated in favour of all other creditors. The Company 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.
66
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
Note 15. Key management personnel disclosures and related party disclosures (continued)
53
The Company provides management, administration and accounting services to the subsidiaries. No management fees were
charged to subsidiaries in the FY 2024 or FY 2023.
The Consolidated Entity enters into operating arrangements where the Group has joint control over the respective venture’s
oil and gas net assets, described in note 22. In each of the joint operations, the participants appoint an operator to act on their
behalf in managing operations (the Operator).
All financial relationships with the Operator are on an arm’s length basis.
Note 16. Auditor remuneration
During the financial year the following fees were paid or payable for services provided by the auditor of the company:
Consolidated Consolidated
2024
2023
$
$
Audit services - KPMG
Audit or review of the financial statements
412,770
273,810
Other assurance services
23,973
8,000
436,743
281,810
Other services - KPMG
Advisory services
40,992
65,270
Tax compliance
32,887
21,377
73,879
86,647
510,622
368,457
No other services were provided by the auditor during the year, other than those set out above.
Note 17. Contingencies and commitments
Contingent assets and liabilities
The Directors are not aware of any contingent assets or contingent liabilities as at 30 June 2024 (30 June 2023: Nil).
Expenditure commitments
Consolidated
30 June 2024 30 June 2023
$'000
$'000
Exploration and development expenditure commitments*
The Consolidated Entity participates in a number of licences, permits and production sharing
contracts for which it has made commitments, including but not limited to with
relevant governments, to complete minimum work programmes.
Within one year*
8,339
5,169
One to five years
9,759
-
18,098
5,169
* The majority of the commitments are in relation to drilling and infrastructure works at the Mahato PSC.
Commitments reflect the Consolidated Entity's interest in future financial obligations, based on existing facts and
circumstances, where the Consolidated Entity is contractually or substantively committed to making future expenditure. These
commitments may be either direct obligations or, as is the case with most commitments, obligations which the respective
projects' operators enter into on the Consolidated Entity's behalf with suppliers and service providers.
67
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
54
Note 18. 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
30 June 2024 30 June 2023
$'000
$'000
Profit after income tax
65,384
3
Total comprehensive income
65,384
3
Parent
30 June
2024
30 June 2023
$'000
$'000
Total current assets
10,818
11,754
Total assets
68,849
21,438
Total current liabilities
646
4,748
Total liabilities
648
4,765
Equity
Contributed equity
152,543
152,416
General reserve
51,416
-
Option reserve
493
647
Accumulated losses
(136,251)
(136,390)
Total equity
68,201
16,673
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 2024 (30 June 2023: nil)
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2024 (30 June 2023: nil)
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for the acquisition of capital assets as at 30 June 2024 (30 June 2023: nil).
68
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
55
Note 19. Shares in subsidiaries
Principal place of business
Ownership
interest
Ownership
interest
Name
Country of incorporation
30 June 2024 30 June 2023
%
%
Cue Mahato Pty Ltd
Indonesia/Australia
100.00%
100.00%
Cue Mahakam Hilir Pty Ltd
Indonesia/Australia
100.00%
100.00%
Cue Kalimantan Pte Ltd*
Singapore
100.00%
100.00%
Cue (Ashmore Cartier) Pty Ltd Australia
100.00%
100.00%
Cue Sampang Pty Ltd
Indonesia/Australia
100.00%
100.00%
Cue Taranaki Pty Ltd
New Zealand/Australia
100.00%
100.00%
Cue Exploration Pty Ltd
Australia
100.00%
100.00%
Cue Palm Valley Pty Ltd
Australia
100.00%
100.00%
Cue Mereenie Pty Ltd
Australia
100.00%
100.00%
Cue Dingo Pty Ltd
Australia
100.00%
100.00%
All companies in the Group have a 30 June reporting date.
* Shares held by Cue Mahakam Hilir Pty Ltd
Note 20. Interests in joint operations
Cue Interest
Cue Interest
Permit expiry
Property
Operator
2024 (%)
2023 (%)
date
Indonesia
Mahakam Hilir PSC
Cue Kalimantan Pte Ltd
100*
100*
15/04/2021
Sampang PSC
Medco Energi Sampang
Pty Ltd
15 (8.18
Jeruk Field)
15 (8.18
Jeruk Field)
04/12/2027
Mahato PSC
Texcal Energy Mahato Inc.
11.25**
12.5
20/07/2042
New Zealand
PMP38160
OMV New Zealand Limited
5
5
02/12/2027
Amadeus Basin
Mereenie (OL4 and OL5
Production Licences)
Central Petroleum
7.5***
7.5
17/11/2044
Palm Valley (OL3 Production
Licence)****
Central Petroleum
15
15
07/11/2045
Dingo
(L7
Production
Licence)
Central Petroleum
15
15
06/07/2039
* Mahakam Hilir PSC exploration permit has expired and regulatory processes for surrender are ongoing as at 30 June 2024.
** During April 2024, the Group had its interest in the Mahato PSC reduced by 10% (from 12.5% to 11.25%) for no
consideration in accordance with the Mahato PSC and subsequent Indonesian Government regulations. The Group has
accounted for the reduced interest effective from 1 November 2023.
*** The Mereenie production license was renewed until 17 November 2044.
**** The Palm Valley production license was renewed until 7 November 2045.
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.
69
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
56
Note 21. Events after the reporting period
On 23 July 2024, the Palm Valley production license was renewed for 21 years commencing on 7 November 2024.
On 29 July 2024, a long-term Gas Sales Agreement with the Northern Territory Government was signed for Mereenie and
Palm Valley fields.
On 15 August 2024, the Mereenie Joint Venture approved the drilling of two new development wells.
On 23 August 2024, the Company’s Board of Directors approved the declaration of a final dividend distribution of $0.01 (1
cent) per fully paid ordinary share, totalling $7 million. This final dividend distribution was declared as a Conduit Foreign
Income (CFI), unfranked final dividend and was paid on 26 September 2024.
No other matter or circumstance has arisen since 30 June 2024 that has significantly affected, or may significantly affect the
Consolidated Entity's operations, the results of those operations, or the Consolidated Entity's state of affairs in future financial
years.
Note 22. Reconciliation of profit after income tax to net cash from operating activities
Consolidated
30 June 2024 30 June 2023
$'000
$'000
Profit after income tax expense for the year
14,189
15,211
Adjustments for:
Share-based payments
112
96
Finance costs associated with abandonment provision
684
1,703
Exploration expenses
-
913
Depreciation
91
94
Amortisation
6,309
6,005
Net gain on foreign currency conversion
501
879
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
2,688
(3,918)
Decrease/(increase) in contract assets
5,118
(3,282)
Decrease/(increase) in inventories
(1,239)
56
Decrease/(increase) in deferred tax assets
49
(5,362)
Decrease in trade and other payables
(945)
(721)
Decrease in contract liabilities
(1,315)
(1,271)
(Decrease)/Increase in tax liabilities
(958)
1,332
Increase/(decrease) in deferred tax liabilities
1,649
880
Increase/(decrease) in provisions
10
38
Net cash from operating activities
26,943
12,653
Note 23. Earnings per share
Consolidated
30 June 2024 30 June 2023
$'000
$'000
Profit after income tax attributable to the owners of Cue Energy Resources Limited
14,189
15,211
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
698,194,450
698,119,720
Weighted average number of ordinary shares used in calculating diluted earnings per share
698,194,450
698,119,720
70
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
Note 23. Earnings per share (continued)
57
Cents
Cents
Basic earnings per share
2.03
2.18
Diluted earnings per share
2.03
2.18
Accounting policy for earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to the owners of Cue Energy Resources Limited,
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.
Note 24. Share-based payments
During the year ended FY 2024, $0.11 million in share-based payments expenses was recognised (FY 2023: $0.10 million).
On 8 September 2023, the Company issued 4,640,759 unlisted options to eligible employee under the share option scheme.
The options are exercisable at $0.072 (7.2 cents) per option and will vest on 1 July 2026 and expire on 1 July 2028.
The options were valued using Black-Scholes option pricing model. $0.042 million of share-based payment expense was
recognised in relation to the options for the year ended 30 June 2024.
In March 2024, 2,152,654 options with an expiry date of 1 July 2024 and an exercise price of $0.09 (9 cents) per fully paid
ordinary share were exercised on a cashless basis, as a result of which 252,562 fully paid ordinary shares in the Company
were issued.
Set out below are summaries of options granted under the plan:
30 June 2024
Grant date
Expiry date
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/other
Balance at
the end of
the year
29/07/2017
01/07/2023
$0.070
3,473,653
-
-
(3,473,653)
-
04/10/2019
01/07/2024
$0.090
3,523,015
-
(2,152,654)
-
1,370,361
16/07/2020
01/07/2025
$0.117
3,204,237
-
-
-
3,204,237
23/07/2021
22/07/2026
$0.078
4,005,799
-
-
-
4,005,799
30/08/2022
01/07/2027
$0.089
3,598,698
-
-
-
3,598,698
08/09/2023
01/07/2028
$0.072
-
4,640,759
-
-
4,640,759
17,805,402
4,640,759
(2,152,654)
(3,473,653)
16,819,854
Weighted average exercise price
$0.088
$0.072
$0.090
$0.070
$0.087
The weighted average remaining contractual life of outstanding options at 30 June 2024 is 2.43 years (30 June 2023: 2.56
years).
71
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Notes to the financial statements
30 June 2024
Note 24. Share-based payments (continued)
58
30 June 2023
Grant date
Expiry date
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/other
Balance at
the end of
the year
29/07/2017
01/07/2023
$0.070
3,513,430
-
-
(39,777)
3,473,653
04/10/2019
01/07/2024
$0.090
3,569,765
-
-
(46,750)
3,523,015
16/07/2020
01/07/2025
$0.117
3,241,067
-
-
(36,830)
3,204,237
23/07/2021
22/07/2026
$0.078
4,047,966
-
-
(42,167)
4,005,799
30/08/2022
01/07/2027
$0.089
-
3,649,298
-
(50,600)
3,598,698
14,372,228
3,649,298
-
(216,124)
17,805,402
Weighted average exercise price
$0.088
$0.089
$0.000
$0.088
$0.088
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
08/09/2023
01/07/2028
$0.065
$0.072
56.24%
-
3.82%
$0.031
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 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.
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.
72
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Annual Report 2024
Cue Energy Resources Limited
Consolidated entity disclosure statement
30 June 2024
59
Consolidated entity disclosure statement
Tax residency
Entity name
Entity type
Place formed or
incorporated
% of share
capital held
directly or
indirectly
Australian or
foreign
Foreign
Jurisdiction
Cue Energy Resources Limited Body corporate
Australia
-
Australia
N/A
Cue Mahato Pty Ltd
Body corporate
Australia
100.00% Australia**
N/A
Cue Mahakam Hilir Pty Ltd
Body corporate
Australia
100.00% Australia**
N/A
Cue Kalimantan Pte Ltd*
Body corporate
Singapore
100.00% Foreign
Singapore
Cue (Ashmore Cartier) Pty Ltd Body corporate
Australia
100.00% Australia**
N/A
Cue Sampang Pty Ltd
Body corporate
Australia
100.00% Australia**
N/A
Cue Taranaki Pty Ltd
Body corporate
Australia
100.00% Australia**
N/A
Cue Exploration Pty Ltd
Body corporate
Australia
100.00% Australia**
N/A
Cue Palm Valley Pty Ltd
Body corporate
Australia
100.00% Australia**
N/A
Cue Mereenie Pty Ltd
Body corporate
Australia
100.00% Australia**
N/A
Cue Dingo Pty Ltd
Body corporate
Australia
100.00% Australia**
N/A
* Shares held by Cue Mahakam Hilir Pty Ltd.
** This entity is part of a tax-consolidated group under Australian taxation law, for which Cue Energy Resources Limited is the
head entity.
Key assumptions and judgements
Determination of Tax Residence
Section 295 (3A) of the Corporation Acts 2001 requires that the tax residency of each entity which is included in the
Consolidated entity disclosure statement (CEDS) be disclosed. In the context of an entity which was an Australian resident,
“Australian resident" has the meaning provided in the Income Tax Assessment Act 1997.
In determining tax residency, the consolidated entity has applied the following interpretations:
Australian tax residency
The consolidated entity has applied current legislation and judicial precedent, including having regard to the Commissioner of
Taxation's public guidance in Tax Ruling TR 2018/5.
Foreign tax residency
The consolidated entity has applied current legislation and where available judicial precedent in the determination of foreign
tax residency.
73
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Annual Report 2024
Cue Energy Resources Limited
Directors' declaration
30 June 2024
60
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 2024 and of its performance for the financial year ended on that date;
●
the consolidated entity disclosure statement as at 30 June 2024 is true and correct; 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; and
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
23 August 2024
74
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61
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
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.
Independent Auditor’s Report
To the shareholders of Cue Energy Resources Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
Cue Energy Resources (the Company).
In our opinion, the accompanying Financial
Report of the Company gives a true and
fair view, including of the Group’s
financial position as at 30 June 2024 and
of its financial performance for the year
then ended, in accordance with the
Corporations Act 2001, in compliance with
Australian Accounting Standards and the
Corporations Regulations 2001.
The Financial Report comprises:
Consolidated Statement of financial position as at 30
June 2024;
Consolidated Statement of profit or loss and other
comprehensive income, Consolidated Statement of
changes in equity, and Consolidated Statement of
cash flows for the year then ended;
Consolidated entity disclosure statement and
accompanying basis of preparation as at 30 June
2024;
Notes, including material accounting policy
information; and
Directors’ Declaration.
The Group consists of the Company and the entities it
controlled at the year end or from time to time during
the financial year.
Basis for opinion
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.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
the audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our
audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in
accordance with these requirements.
75
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62
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgement, were of most significance in
our audit of the Financial Report of the current period.
This matter was addressed in the context of our audit of the Financial Report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on this matter.
Restoration provision relating to the Maari field included within provisions ($16.7 million)
Refer to Note 11 to the Financial Report
The key audit matter
How the matter was addressed in our audit
We identified the restoration provision for
the Maari field as a key audit matter due to:
•
the estimation uncertainty relating to the
forecast restoration cash flows, which
require auditor judgement to evaluate
their appropriateness; and
•
the significant size of the restoration
provision relative to the Group’s financial
position.
The Group incurs obligations to close,
restore and rehabilitate its sites and
associated facilities. We focused on
changes and updates to the following key
assumptions made by the Group in
determining its restoration provision for the
Maari field:
•
useful lives of the field and related
assets, giving consideration to the
economic reserves and resources and
production profiles;
•
the interpretation of legislative
regulatory requirements governing the
Group’s obligations;
•
the cost and timing of future
rehabilitation costs; and
•
discount, forecast inflation and fx rates
applied by the Group to determine the
net present value of restoration forecast
cash flows.
Our procedures included:
•
assessed the design of the Group’s process to
determine whether any updates were required to
the underlying restoration costs;
•
assessed the consistency of timing between
planned restoration activities and the Group’s
reserves and resources estimates and expected
production profile;
•
evaluated the scope and competency of the
Group’s competent person responsible for the
estimation of economic reserves and resources in
accordance with industry standards;
•
used our knowledge of the Group and our
industry experience, having assessed the Group’s
performance in the Maari field, and evaluated any
changes to the legislative regulatory
requirements, to challenge the reasonability of the
future restoration costs and their timing;
•
evaluated discount, forecast inflation and fx rates
applied by the Group to determine the net present
value of the restoration provision against publicly
available data, including risk free rates;
•
assessed the integrity of the provision calculation,
including the accuracy of the underlying
calculation formulas;
•
assessed the appropriateness of the Group’s
disclosures in the financial report, using our
understanding obtained from our testing and
against accounting standard requirements.
76
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63
Other Information
Other Information is financial and non-financial information in Cue Energy Resources Limited’s annual
report 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 Financial and
Operations Review, Directors’ Report and the Shareholder Information. The Chairman’s Overview,
Reserves and Resources and Sustainability report 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 in accordance with the Corporations Act 2001, including giving
a true and fair view of the financial position and performance of the Group, and in compliance
with Australian Accounting Standards and the Corporations Regulations 2001
implementing necessary internal control to enable the preparation of a Financial Report in
accordance with the Corporations Act 2001, including giving a true and fair view of the
financial position and performance of the Group, and that is free from material misstatement,
whether due to fraud or error
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
77
Cue Energy Resources Limited
Annual Report 2024
64
the basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the
Auditing and Assurance Standards Board website 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
In our opinion, the Remuneration Report
of Cue Energy Resources Limited for the
year ended 30 June 2024, complies with
Section 300A of the Corporations Act
2001.
Directors’ responsibilities
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration
Report in accordance with Section 300A of the
Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in
pages 19 to 25 of the Directors’ report for the year
ended 30 June 2024.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
KPMG
Vicky Carlson
Partner
Melbourne
23 August 2024
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Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Shareholder information
30 June 2024
1
Shareholder Information
1. Distribution of equitable securities
The shareholder information set out below was applicable as at 12 September 2024
Ordinary shares
Options over ordinary
shares
% of total
% of total
Number
shares
Number
shares
of holders
issued
of holders
issued
1 to 1,000
82
-
-
-
1,001 to 5,000
169
0.08
-
-
5,001 to 10,000
504
0.63
-
-
10,001 to 100,000
1,432
7.26
-
-
100,001 and over
314
92.03
6
100.00
2,501
100.00
6
100.00
Holding less than a marketable parcel - Minimum $ 500.00
parcel at $ 0.0950 per unit.
259
0.09
2. Registered Top 20 Shareholders
The registered names and holdings of the 20 largest holdings of quoted ordinary shares in the Company as at
12 September 2024:
Ordinary shares
% of total
shares
Shareholder
Number held
issued
1.ECHELON OFFSHORE LIMITED
349,368,803
50.00
2.BNP PARIBAS NOMS PTY LTD UOBKH A/C R'MIERS
115,456,460
16.53
3.PORTFOLIO SECURITIES PTY LTD
10,000,000
1.43
4.CITICORP NOMINEES PTY LIMITED
6,974,946
1.00
5.REVIRESCO NOMINEES PTY LTD
5,750,000
0.82
6.HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
5,519,527
0.79
7.MAITRI PTY LTD
5,138,434
0.74
8.MR TREVOR DAVID INSKIP + MRS NARELLE CELIA INSKIP
4,422,813
0.63
9.MR SEAN DENNEHY
4,200,000
0.60
10.MR ABID GORAYA + MRS MAHMUDAH BENNETT
4,051,929
0.58
11.RIUOHAURAKI LIMITED
4,000,000
0.57
12.MR RYAN KEITH HANSON
3,960,000
0.57
13.MR STEPHEN ALAN MCCABE + MRS JANET BACKHOUSE
3,485,000
0.50
14.BEIRA PTY LIMITED
3,300,000
0.47
15.LAKEMBA PTY LTD
2,984,051
0.43
16.BNP PARIBAS NOMINEES PTY LTD
2,946,972
0.42
17.MR STEPHEN ALAN MCCABE
2,616,618
0.37
18.SHARESIES AUSTRALIA NOMINEE PTY LIMITED
2,121,979
0.30
19.MR DAMIANO GIORGIO PILLA
1,996,427
0.29
20.MR JOHN PHILIP DANIELS
1,778,000
0.25
540,071,959
77.30
79
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Shareholder information
30 June 2024
2
3. Unquoted equity securities
The following persons hold 20% or more of unquoted equity securities:
Name
Class
Number held
Matthew Boyall
Unquoted options
6,375,448
4. Substantial Shareholders
Substantial holders in the company are set out below:
Ordinary
shares
Number held
% of total
shares
issued
Echelon Offshore Limited
349,368,803
50.00
BNP Paribas Noms Pty Ltd (DRP)
115,456,460
16.53
5. Vendor Securities
There are no restricted securities on issue as at 12 September 2024.
6. Voting rights
At meeting of members or classes of members:
(a) each member entitled to vote may vote in person or by proxy, attorney or respective;
(b) on a show of hands, every person present who is a member or a proxy, attorney or representative of a member has one
vote; and
(c) on a poll, every person present who is a member or a proxy, attorney or representative of a member has:
(i) for each fully paid share held by person, or in respect of which he/she is appointed a proxy, attorney or representative,
one vote for the share;
(ii) for each partly paid share, only the fraction of one vote which the amount paid (not credited) on the share bears to the
total amounts paid and payable on the share (excluding amounts credited).
Subject to any rights or restrictions attached to any shares or class of shares.
7. Annual General Meeting and Director Nominations Closing date
Cue Energy Resources Limited advises that its Annual General Meeting will be held on or about Wednesday 23 October
2024. The time and other details relating to the meeting will be advised in the Notice of Meeting to be sent to all
Shareholders and released to ASX immediately upon despatch.
The Closing date for receipt of nomination for the position of Director is 17 September 2024. Any nominations must be
received in writing no later than 5.00pm (Melbourne time) on 17 September 2024 at the Company’s Registered Office.
The Company notes that the deadline for nominations for the position of Director is separate to voting on Director elections.
Details of the Director’s to be elected will be provided in the Company’s Notice of Annual General Meeting in due course.
8. Share registry
Enquiries
Cue's share register is managed by Computershare. Please contact Computershare for all shareholding and dividend related
enquiries.
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Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Shareholder information
30 June 2024
3
Change of shareholder details
Shareholders should notify Computershare of any changes in shareholder details via the Computershare website
(www.computershare.com.au) or writing (fax, email, mail). Examples of such changes include:
• Registered name
• Registered address
• Direct credit payment details
Computershare Investor Services Pty Ltd
GPO Box 2975
Melbourne, Victoria 3001 Australia
Telephone: 1300 850 505 (within Australia)
or +61 3 9415 4000 (outside Australia)
Facsimile: +61 3 9473 2500
Email: web.queries@computershare.com.au
Website: www.computershare.com.au
9. Sharecodes
ASX Share Code: CUE
81
Cue Energy Resources Limited
Annual Report 2024
Corporate Directory
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
Company Secretary
Anita Addorisio
Registered Office
Level 3, 10-16 Queen Street
Melbourne, VIC 3000
Australia
Telephone: +61 3 8610 4000
Fax: +61 3 9614 2142
Principal Place of Business
Level 3, 10-16 Queen Street
Melbourne, VIC 3000
Australia
Telephone: +61 3 8610 4000
Fax: +61 3 9614 2142
Share register
Computershare Investor Services Pty Limited
Yarra Falls, 452 Johnston Street
Abbotsford, VIC 3067
Australia
Telephone: +61 3 9415 5000
Fax: +61 3 9473 2500
Auditor
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 address
cuenrg.com.au
82
Cue Energy Resources Limited
Annual Report 2024
Cue Energy Resources Limited
Level 3, 10 Queen Street
Melbourne Victoria 3000
Tel: +61 3 8610 4000
www.cuenrg.com.au