ON THE COVER:
CARPENTARIA C-5H
Empire Energy Group Limited
ABN 29 002 148 361
Annual Report - 31 December 2024
Empire Energy Group Limited
Contents
31 December 2024
1
Corporate directory
2
Chair and Managing Director letter to shareholders
3
Operations review
5
Directors' report
13
Directors' report - remuneration report
23
Auditor's independence declaration
47
Consolidated statement of profit or loss and other comprehensive income
48
Consolidated statement of financial position
50
Consolidated statement of changes in equity
51
Consolidated statement of cash flows
52
Notes to the consolidated financial statements
53
Consolidated entity disclosure statement
98
Directors' declaration
99
Independent auditor's report to the members of Empire Energy Group Limited
100
Shareholder information
105
Empire Energy Group Limited
Corporate directory
31 December 2024
2
Directors
Peter Cleary (Chairman)
Alexander Underwood (Managing Director)
Louis Rozman
Prof John Warburton
Karen Green
Company Secretary
Gillian Nairn
Notice of Annual General
Meeting
The details of the annual general meeting of Empire Energy Group Limited
are:
29 May 2025 at 9.30 am
Level 2, 259 George Street, Sydney NSW 2000
Registered Office
Level 5
6-10 O'Connell Street
Sydney NSW 2000
Share Registry
Computershare Investors Services Pty Limited
Level 3
60 Carrington Street
Sydney NSW 2000
Auditor
EY
Level 34
200 George Street
Sydney NSW 2000
Australian Solicitors
Baker McKenzie
Level 46, Tower One
International Towers Sydney
100 Barangaroo Avenue
Barangaroo NSW 2000
US Solicitors
Hodgson Russ LLP
140 Pearl Street, Suite 100
Buffalo, NY 14202
Bankers
Macquarie Bank Limited
1 Elizabeth Street
Sydney NSW 2000
Australia & New Zealand Banking Group Limited
1 Chifley Plaza
Sydney NSW 200
PNC Bank
249 Fifth Avenue
One PNC Plaza
Pittsburgh PA 15222
Stock Exchange Listing
Empire Energy Group Limited shares are listed on:
Australian Securities Exchange (ASX code: EEG)
Website
www.empireenergygroup.net
Empire Energy Group Limited
Chair and Managing Director letter to shareholders
31 December 2024
3
Dear Shareholders,
Empire Energy has made significant progress towards our ambition of achieving production and gas sales
from our Carpentaria Pilot Project in the Northern Territory’s Beetaloo Basin.
The case for the development of the Beetaloo’s abundant shale gas resources grows stronger by the day,
as the need for energy security in Australia and among our Asian trading partners increases, and the
importance of the project to the Northern Territory economy becomes clearer.
The recent AEMO Gas Statement of Opportunities reminds us of the looming gas shortage on the east
coast of Australia. LNG demand is expected to grow driven by demand for natural gas in Asia with economic
growth and the replacement of coal fired power as the drivers. Beyond our pilot project, Empire’s
exploration leases and applications of over 26.7 million acres positions the company to be a significant
supplier of natural gas to these key markets.
We are committed to building an organisation that will not only deliver the pilot project but set us up for the
next significant phase of production. Empire works tirelessly to engage with key stakeholders from
governments, investors, Traditional Owners, suppliers as well as other operators in the NT.
Our relationship with the Traditional Owners on whose land we operate remains strong and productive.
This was keenly demonstrated when representatives offered to perform a traditional smoking ceremony at
the site of Carpentaria-5H. The Traditional Owners also used this occasion to name the site “Jijimhunja”
after a local species of beetle that burrows into the ground. We consider this an honour and demonstration
that the custodians of the land appreciate the opportunities that Empire can provide for local communities.
Our team’s focus in recent months has been the drilling of the Carpentaria-5H well, securing financing for
the Carpentaria Pilot Project (CPP) and securing regulatory approvals. Importantly, Carpentaria-5H was
drilled within time and budget, with the entire 3,310 metre horizontal section drilled, cased and cemented
within the target Middle Velkerri B shale zone. We are now preparing to stimulate the well, following which
we will carry out an extended production test.
During the year, we secured a binding commitment from Macquarie Bank Limited for a $65 million
funding package. Funds under the facilities will be applied to the CPP. We received NT environmental
approvals for the Carpentaria Pilot Project. In late April we raised $46.8 million through a well-supported
capital raise, and sale of a royalty over EP187, cornerstoned by Bryan Sheffield and Liberty Energy
(NYSE:LBRT), strongly supported by existing shareholders and we are very happy to have new US
institutional investors on the share register.
Consistent with Empire’s strategy focused on developing the Beetaloo Basin, in April we also announced
the sale of the remaining US based operating assets for up to US$9.1 million comprising upfront cash
payment of US$5.9 million and contingent and solar deferred payments of US$3.2 million, while retaining
a 3.75% carried working interest in all shale formations below the Medina Sandstone. The proceeds repaid
the US debt facility and released US$3.6 million in cash to support Empire’s Carpentaria development.
We are now a Beetaloo / McArthur Basin pure play.
We are working closely with the Northern Land Council to facilitate traditional owner consent for sale of
test gas. The NLC has advised us that the on-country meeting to seek that consent is scheduled for later
this month.
Once this approval is obtained we are confident we can proceed to achieve first production and gas sales
by the end of 2025.
Empire Energy Group Limited
Chair and Managing Director letter to shareholders
31 December 2024
4
There have been some important changes to the team as we prepare Empire for the exciting phase ahead.
Chris White joined us as COO in July 2024 and has made an immediate impact. Chris joins Empire following
18 years at Origin Energy in the roles of General Manager Upstream Growth, General Manager Exploration
and New Ventures, Group Manager Field Development Optimisation, Production Optimisation Manager
and Petroleum Engineering Team Leader. Chris and his experienced team have worked closely with our
operations and project team, inGauge Energy, to design and execute the Carpentaria-5H well as well as
ready Empire’s gas processing plant for construction at our NT site once the final approval for the use of
beneficial gas is obtained.
Our CFO Robin Polson and his team delivered a Gas Sales Agreement with the NT Government which
underpins the financial viability of the CPP.
On behalf of the Board and all shareholders, we would like to express our thanks to the extended Empire
team.
Our activities cannot progress without the continuing support of many stakeholders. We thank the previous
and current NT Government for their belief in our project and their unwavering support. The signing of the
GSA and the finalisation of all environmental permits are demonstrations of their belief in Empire.
We are grateful to the communities of the NT that encourage and supply our endeavours.
Importantly, we thank our shareholders who have remained loyal and supportive throughout.
Yours sincerely,
Peter Cleary
Alex Underwood
Chairman
Managing Director
Empire Energy Group Limited
Empire Energy Group Limited
Empire Energy Group Limited
Operations review
31 December 2024
5
A.
2024 OVERVIEW & HIGHLIGHTS
Empire Group’s functional currency is Australian Dollars. All references to dollars are Australian Dollars
unless otherwise stated.
GROUP FINANCIAL HIGHLIGHTS
•
Group Revenue $2.0 million (from discontinued operations) (Dec 2023: $6.1 million)
•
Net production 2,098 Mcfe per day (Dec 2023: 3,759 Mcfe per day)
•
Outstanding debt facility of $1.8 million and $4.4 million of bank guarantees (December 2023: US$4.75
million debt facility and $4.4 million bank guarantees)
•
Cash at bank $25.4 million (December 2023: $13.0 million)
AUSTRALIA – NORTHERN TERRITORY
•
Empire holds a 100% working interest and operatorship in approximately 28.9 million acres of petroleum
exploration tenements across the McArthur Basin and its Beetaloo Sub-basin in onshore Northern
Territory, Australia. During the year the appraisal work programs were progressed.
•
In April 2024, Empire completed a $46.8 million capital raise, including a sale of a royalty over EP187,
cornerstoned by Bryan Sheffield and Liberty Energy Inc (NYSE: LBRT). Commitments were received from
existing and new institutional and sophisticated investors for a strongly supported two-tranche placement
to raise $39 million. In addition, Daly Waters, a subsidiary of Formentera Partners (a US based private
equity firm founded by Bryan Sheffield) and Liberty Energy who each independently acquired a 2.25%
royalty interest in EP187 for US$2.5 million raising an additional US$5 million (~$7.7 million).
•
In July 2024, Empire signed a binding long-term Gas Sales Agreement to supply the Northern Territory
Government up to 25 TJ/d for 10 years (~75PJ total) from Empire’s Beetaloo Basin properties
commencing in 2025 and an additional 10TJ/d for up to 10 years at the option of the Northern Territory
Government to be made available by Empire if production levels from Carpentaria project exceed 100
TJ/d.
•
In November 2024, the Northern Territory Government approved Empire’s Environment Management
Plan for the progression of the Carpentaria Pilot Project (EP187), which includes the drilling, stimulation
and production testing of up to 9 additional horizontal wells along with the installation of the Carpentaria
Gas Facility and flowlines.
•
In November 2024, Empire executed binding term sheets with Macquarie Bank Limited for the
establishment of new credit facilities totalling $65 million. The financing package, along with existing
cash resources, will be applied to the drilling, completion and flow testing of C-5H and the installation of
the Carpentaria Gas Plant and associated in-field infrastructure.
•
In December 2024, the horizontal Carpentaria-5H (“C-5H”) well was successfully drilled and cased to a
Total Depth of 5,310 metres (17,421 feet). 100% of the 3,310 metre (10,860 foot) horizontal section was
placed within the target Velkerri-B shale, with strong gas shows throughout. The C-5H well was
completed with 5 ½” casing to Total Depth prior to suspension and rig release on 27 December 2024.
The well was executed in 41 days from spud to rig release. Hydraulic stimulation operations and
production testing of C-5H is scheduled to commence mid-2025 after the NT wet season.
•
In December 2024, environmental approvals were granted for the progression of the Western Permits
(EP167 and EP168), which includes the acquisition of a 2D seismic survey and the drilling, stimulation
and production testing of up to 6 horizontal wells.
•
During the year, the Empire team continued to advance Front-End Engineering and Design and
regulatory approvals for the proposed Carpentaria Pilot Project in EP187.
Empire Energy Group Limited
Operations review
31 December 2024
6
Managing Director Alex Underwood was invited by Traditional Owner to a smoking ceremony before drilling
commenced
The Hon Gerard Maley – Deputy Chief Minister NT, The Hon Lia Finocchiaro – Chief Minister NT and Managing
Director Alex Underwood, September 2024
Empire Energy Group Limited
Operations review
31 December 2024
7
Drone photos of C-5H
Ensign Rig Being Mobilised at C-5H
Carpentaria Gas Plant in operation immediately prior to acquisition
Empire Energy Group Limited
Operations review
31 December 2024
8
USA – APPALACHIA
•
In April 2024, Empire completed the sale of its US oil & gas assets located in the Appalachian region
for US$8.2 million, comprising: Upfront Cash Payment: US$5.9 million and Deferred Payments: US$2.3
million. Empire has also retained 3.75% carried working interest over shale formations with negligible
holding costs and US$0.9m in Deferred Solar Payments under its Mutual Use Agreement with
ConnectGen. On completion of the transaction, Empire repaid its US Macquarie Bank credit facility in full.
•
Net gas production of 380,833 Mcf to 31 March 2024 (June 2023: 596,168 Mcf).
•
Net oil production of 171 Bbls to 31 March 2024 (June 2023: 1,058 Bbls).
Carpentaria C-5H Ensign drill rig on location in EP187
Empire Energy Group Limited
Operations review
31 December 2024
9
B.
CREDIT FACILITIES
The outstanding balance of the USA Macquarie Bank Limited Credit Facility as at 31 December 2024 was
US$0 million (31 December 2023: US$4.75 million) having been fully repaid during the year.
The Company has a credit facility with Macquarie Bank Limited to support its activities in the Northern
Territory. The outstanding balance as at 31 December 2024 of Tranche A of the credit facility was
$1,827,000, which was subsequently repaid in January 2025.
During the period the Company has also executed binding term sheets with Macquarie Bank Limited
(“Macquarie”) for the establishment of new credit facilities totaling $65 million, of which Facility C is not yet
available due to conditions Precedent to First Utilisation. Key terms of this credit facility are set out below:
Principal Amount
$65 Million compromising:
•
Facility A (Revolving Credit Facility, $30.0 million)
•
Facility B (Performance Bond Facility, $5 million)
•
Facility C (Midstream Infrastructure Facility, $30 million)
Borrowers
Imperial Oil & Gas Pty Limited
Imperial Oil & Gas A Pty Limited
Guarantor
Empire Energy Group Limited,
Imperial Oil & Gas Pty Limited and
Imperial Oil & Gas A Pty Limited
Security
First ranking security over assets of each Borrower
First ranking security over the Guarantor’s shares in each Borrowings and
intercompany loans, plus featherweight security over the Guarantor’s other
assets
Fees
Utilisation Fee: 1.5% of utilisation
Commitment Fee: 40% of margin
Margin Facility A (5.5% p.a.), Facility B (10% p.a.)
Tolling Fee: Facility C ($0.70 / GJ x 25 TJ /day +CPI)
Interest Rate
Margin plus BBSW
Financial Covenants
Ratio of current assets to current liabilities of at least 1.00 to 1.00
Minimum cash balance in the Borrowers and Guarantor of at least $10
million (or its equivalent in any other currency or currencies)
Repayment Date
31 December 2026 (Facility A + B)
31 December 2034 (Facility C)
Repayment Arrangements
Facility A: on receipt of relevant R&D Tax Incentive payment
Facility B: on maturity date
Facility C: Empire may elect to prepay the Midstream Infrastructure Facility
at any time by making payment of an amount representing a 15% IRR for
the Midstream Infrastructure Facility cashflows up to the date of
prepayment including all tolls paid up to the date of prepayment
Conditions Precedent to
First Utilisation (Facility C)
• All regulatory and indigenous approvals in place to allow for sale of gas
from the Carpentaria Pilot Project under the Beneficial Use of Test Gas
provisions of the NT Petroleum Act
• C-5H to be drilled to a lateral length of at least 2,700 metres with at least
50 fracture stimulation stages placed
• Evidence of funding for the Carpentaria Gas Plant exceeding costs to
complete
• Issue of the Options to Macquarie
Empire Energy Group Limited
Operations review
31 December 2024
10
Options (Facility C)
• On financial close, Empire shall issue 50 million options to Macquarie
with an exercise price of $0.28 per share and an expiry date of 31
December 2029
• Options shall vest upon satisfaction of Conditions Precedent to First
Utilisation
C.
BUSINESS RISK
Exploration risk – Empire and its subsidiaries have interests in assets at various stages of
exploration, appraisal and development. Many leases have had very low levels of exploration
undertaken to date and may not yield commercial quantities of hydrocarbons. Oil and gas
exploration is inherently subject to numerous risks, including the risk that drilling will not result in
commercially viable oil and gas production.
Application risk – Several of Empire’s Northern Territory assets are in application stage requiring
native title and / or regulatory approvals to be granted as leases capable of being explored on. Such
approvals may or may not be granted which could adversely impact the value of the Company.
Regulatory risk – Empire has operations in the Northern Territory, Australia. Regulatory approvals
are required to explore, appraise, develop and produce from the assets. Where such regulatory
approvals are already in place, there is a risk that they could be revoked. Where such regulatory
approvals are not in place, there is a risk that they may not be granted.
Debt facility risk – Empire, through its subsidiaries, has a debt facility in place with Macquarie
Bank Limited. Whilst Empire has financial flexibility and expects to repay its debts in full, there is a
risk in the future that financial and other covenants under the debt facilities could be breached, which
could result in Macquarie exercising its security rights under the facilities. The debt facility matures
in December 2025 and will need to be repaid or refinanced prior to maturity.
Commodity price risk – Empire, through its Australian subsidiary, explores for oil and gas in
Australia and may be subject to domestic Australian gas price risk, LNG price risk and oil price risk.
The gas sales agreement between Empire and the Northern Territory Government is at a fixed price,
100% CPI, take-or-pay contract meaning that Empire is not exposed to commodity price risk for
these volumes.
Reliance on key personnel and contractors – Empire’s success depends in large measure on
certain key personnel and its project managers at InGauge Energy Pty Limited. The loss of the
services of such key personnel or contractors may have a material adverse effect on the business,
financial condition, operational results and prospects.
Economic risk – General economic conditions, movements in interest rates, inflation rates and
foreign exchange rates, investor sentiment, demand for, and supply of capital and other general
economic conditions may have a negative impact on Empire and its subsidiaries ability to carry out
its exploration, appraisal, development and production plans.
Environmental risk – The upstream oil and gas industry is exposed to environmental risks,
including the risk of oil and chemical spills, the risk of uncontrolled gas venting, and other material
environmental risks. If an environmental incident were to occur, it may result in Empire’s
subsidiaries’ licenses being revoked, its rights to carry on its activities suspended or cancelled, or
rectification costs, and significant legal consequences.
Title risk – Interests in onshore tenements in Australia are governed by the respective state
legislation and are evidenced by the granting of licenses or leases. Each license or lease is for a
specific term and carries with it annual expenditure and reporting commitments, as well as other
conditions requiring compliance. Consequently, the Company could lose title to or its interest in the
Tenements if license conditions are not met or if insufficient funds are available to meet expenditure
commitments. The Northern Territory Government has declared proposed Reserved Blocks over
parts of Empire’s tenements which are likely to impact the Company’s ability to carry out petroleum
exploration and development activities on those areas.
Empire Energy Group Limited
Operations review
31 December 2024
11
Native title and Aboriginal land - The Tenements extend over areas in which legitimate common
law native title rights of indigenous Australians exist. The ability of the Company to gain access to
its Tenements and to conduct exploration, development and production operations remains subject
to native title rights and aboriginal land rights and the terms of registration of such title agreements.
Reserves risk – Reserves assessment is a subjective process that provides an estimate of the
volume of recoverable hydrocarbons. Oil and gas estimates are not precise and are based on
knowledge, experience, interpretation and industry practices. There is a risk that the Company’s
reserves do not generate the actual revenues and cashflows that are currently being budgeted
which could adversely impact the Company.
Services risk – Empire engages the services of third party service providers to carry out
exploration, appraisal, development and operating activities. The cost of such services is subject to
very high price volatility, particularly in remote areas. There is a risk that such services may not be
able to be provided at a reasonable price, thereby preventing exploration, appraisal, development
and operations activities from occurring.
Insurance risk – The Company intends to insure its operations in accordance with industry
practice. However, in certain circumstances, the Company’s insurance may not be of a nature or
level to provide adequate insurance cover. The occurrence of an event that is not covered or fully
covered by insurance could have a material adverse effect on the business, financial condition and
results of the Company. Insurance against all risks associated with exploration and production is not
always available and where available the costs can be prohibitive.
Acquisitions – The Company may decide to pursue potential acquisitions in the future. This may
give rise to various operational and financial risks, including, but not limited to, poor integration
resulting in higher than expected integration costs, and financial underperformance of the acquired
assets.
Funding risk – The Company may need capital in the future to progress the development of its acreage.
There can be no guarantee that future capital, debt or equity, will be available or available on suitable
terms. It could adversely impact the value of the Company.
Climate change risk – Empire recognises the science supporting climate change and that the world
is transitioning to a lower carbon economy in which gas has a crucial role to play. Climate change
and management of future carbon emissions may lead to increasing regulation, activism, and costs.
Climate change may also have a direct physical impact on our operations e.g. through changing
climate patterns such as wet seasons and increased frequency of large storms.
Empire Energy Group Limited
Operations review
31 December 2024
12
D.
COMPETENT PERSONS STATEMENT
The information in this report which relates to the Company’s resources is based on, and fairly
represents, information and supporting documentation prepared by or under the supervision of the
following qualified petroleum reserves and resources evaluators, all of whom are licensed
professional petroleum engineers, geologists, or other geoscientists with over five years’ experience
and are qualified in accordance with the requirements of Listing Rule 5.42:
Name
Organisation
Qualifications
Professional
Organisation
Mr John G. Hattner
Netherland Sewell &
Associates Inc
MBA, Master of Science
in Geological
Oceanography, BSc
Licensed Professional
Geophysicist in the State
of Texas, USA
s Mr Joseph M. Wolfe
Netherland Sewell &
Associates Inc
Master of Petroleum
Engineering, BSc
Mathematics
Licensed Professional
Engineer in the State of
Texas, USA
None of the above evaluators or their employers have any interest in Empire Energy E&P, LLC or the
properties reported herein. The evaluators mentioned above consent to the inclusion in the report of the
matters based on their information in the form and context in which it appears.
Note Regarding Forward-Looking Statements
Certain statements made and information contained in this report are forward-looking statements and
forward- looking information (collectively referred to as “forward-looking statements”) within the meaning
of Australian securities laws. All statements other than statements of historical fact are forward-looking
statements
Empire Energy Group Limited
Directors' report
31 December 2024
13
The Directors present their report, together with the financial statements, on the consolidated entity (referred
to hereafter as the 'Group' or 'Empire Group') consisting of Empire Energy Group Limited (referred to hereafter
as the 'Company' or 'Parent entity' or 'Empire') and the entities it controlled at the end of, or during, the year
ended 31 December 2024.
Directors
The following persons were Directors of Company during the whole of the financial year and up to the date of
this report, unless otherwise stated:
Peter Cleary
Non-Executive Director and Chairman
Alexander Underwood
Managing Director
Louis Rozman
Non-Executive Director
Prof John Warburton
Non-Executive Director
Karen Green
Non-Executive Director
Principal activities
During the financial year the principal continuing activities of the Group consisted of:
●
The progression of appraisal work programs in Empire's wholly owned and operated exploration
tenements located in the highly prospective Northern Territory Beetaloo Sub-Basin.
●
The production and sale of oil and natural gas in the United States of America. The Empire Group sold its
oil and gas products primarily to owners of domestic pipelines, utilities and refiners located in Pennsylvania
and New York. These assets were divested during the year.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Business risks
Refer to Operations review for details of the Group's business risks.
Review of operations
The loss for the Group after providing for income tax amounted to $14,427,801 (31 December 2023:
$22,081,916).
For information on a review of the Empire Group’s operations refer to the Operations review prior to the
Directors' report. Refer to note 2 to the consolidated financial statements for an assessment of the going
concern of the Group.
Empire Energy Group Limited
Directors' report
31 December 2024
14
Tenements
Interest in Petroleum and Mineral Tenements
The Group is a participant in the following petroleum permits and mineral tenements and properties:
Percentage Interest held (%)
Lease
Holder
Status
31 December
2024
31 December
2024
%
%
EP180
Imperial Oil & Gas
Application
100%
100%
EP181
Imperial Oil & Gas
Application
100%
100%
EP182
Imperial Oil & Gas
Application
100%
100%
EP183
Imperial Oil & Gas
Application
100%
100%
EP184
Imperial Oi & Gas
Granted
100%
100%
EP187
Imperial Oil & Gas
Granted
100%
100%
EP188
Imperial Oil & Gas
Application
100%
100%
EP319
Imperial Oil & Gas
Application
100%
100%
EP320
Imperial Oil & Gas
Application
100%
100%
EP321
Imperial Oil & Gas
Application
100%
100%
EP322
Imperial Oil & Gas
Application
100%
100%
EP323
Imperial Oil & Gas
Application
100%
100%
EP324
Imperial Oil & Gas
Application
100%
100%
EP325
Imperial Oil & Gas
Application
100%
100%
EP326
Imperial Oil & Gas
Application
100%
100%
EP327
Imperial Oil & Gas
Application
100%
100%
EP328
Imperial Oil & Gas
Application
100%
100%
EP329
Imperial Oil & Gas
Application
100%
100%
EP330
Imperial Oil & Gas
Application
100%
100%
EP331
Imperial Oil & Gas
Application
100%
100%
EP332
Imperial Oil & Gas
Application
100%
100%
EP333
Imperial Oil & Gas
Application
100%
100%
EP334
Imperial Oil & Gas
Application
100%
100%
EP335
Imperial Oil & Gas
Application
100%
100%
EP336
Imperial Oil & Gas
Application
100%
100%
EP337
Imperial Oil & Gas
Application
100%
100%
EP338
Imperial Oil & Gas
Application
-
100%
EP339
Imperial Oil & Gas
Application
100%
100%
EP340
Imperial Oil & Gas
Application
100%
100%
EP341
Imperial Oil & Gas
Application
100%
100%
EP342
Imperial Oil & Gas
Application
100%
100%
EP167
Imperial Oil and Gas A
Granted
100%
100%
EP168
Imperial Oil and Gas A
Granted
100%
100%
EP169
Imperial Oil and Gas A
Granted
100%
100%
EP198
Imperial Oil and Gas A
Granted
100%
100%
Significant changes in the state of affairs
On 1 March 2024, Empire issued 276,275 ordinary fully paid shares for the conversion of Vested Performance
Rights belonging to former employees under the Empire Energy Group Limited Rights Plan for no
consideration.
On 12 April 2024, Empire completed the sale of Empire Energy E&P LLC (“Empire E&P”) to PPP Future
Development, Inc for US$8.2 million, comprising upfront cash payment of US$5.9 million and Deferred
Payments of US$2.3 million. Empire E&P was the operating entity for all of Empire’s USA Appalachia oil & gas
assets.
On 17 April 2024, Daly Waters, a subsidiary of Formentera Partners (a US based private equity firm founded
by Bryan Sheffield) and Liberty Energy each acquired a 2.25% royalty interest in the gross value of petroleum
produced from EP187 for a consideration of US$2.5m per party.
Empire Energy Group Limited
Directors' report
31 December 2024
15
On 5 June 2024, Empire completed a $39 million capital raise (before share issuance costs) from existing and
new institutional and sophisticated investors for a strongly supported two-tranche placement.
On 26 July 2024, Empire signed a 10-year binding Gas Sales Agreement (“GSA”) with the Northern Territory
Government to supply:
●
up to 25 Terajoules (TJ) of gas per day for 10-years (~75 Petajoules total, 100% Empire) from Empire’s
Beetaloo Basin properties commencing in 1 July 2028 (“Initial Supply”) and
●
an additional 10 TJ+ per day for up to 10 years at the option of the Buyer to be made available by Empire
if production levels from the Carpentaria project exceed 100 TJ per day (“Option Supply”).
On 27 November 2024, Empire executed binding commitment letters for $65 million Beetaloo Financing
Package. The Package is made up of:
●
$30 million R&D Facility will fund exploration, appraisal and development activities including Carpentaria-
5H and construction of infield infrastructure;
●
$5 million Performance Bond Facility to meet Empire’s Northern Territory environmental bonding
obligations; and
●
$30 million Midstream Infrastructure Facility to finance refurbishment and construction of the Carpentaria
Gas Plant and associated infrastructure.
Under the agreement, gas will be delivered to the Power and Water Corporation (“PWC”) operated McArthur
River Gas pipeline (“MRP”) on an ex-field take-or-pay basis at market-competitive gas prices, escalating at
100% of the Consumer Price Index. The Option Supply would be at a slightly lower price than the Initial Supply,
providing the potential for long-term affordable energy supply for the people of the Northern Territory if larger
scale development occurs. A T-piece connection has already been installed into the MRP by PWC at the
proposed location of the Carpentaria Gas Plant (“CGP”) to allow for delivery of gas from the CGP into the
MRP.
The binding GSA is conditional on customary conditions for an agreement of this nature including Empire
reaching a final investment decision for the Carpentaria Pilot Project, NT regulatory approvals for the
installation of the CGP and sale of gas under the Beneficial Use of Test Gas provisions of the NT Petroleum
Act. These regulatory approval processes are well advanced.
There were no other significant changes in the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
On 10 and 13 January 2025, Empire paid $1.0 million and $0.827 million respectively, to fully repay the loan
drawings under Facility A (Revolving Credit Facility) with Macquarie Bank Limited.
On 18 February 2025, Empire made a $12.8 million (including associated 1.5% utilisation fee) draw-down
under the R&D Facility with Macquarie Bank Limited. Proceeds from the borrowing will be applied to Northern
Territory, appraisal activities including C-5H and construction of infield infrastructure.
No other matter or circumstance has arisen since 31 December 2024 that has significantly affected, or may
significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in
future financial years.
Likely developments and expected results of operations
Except for information disclosed on certain developments and the expected results of those developments
included in this report under review of operations, further information on likely developments in the operations
of the Group and the expected results of operations have not been included in this report because the Directors
believe it would be likely to result in unreasonable prejudice to the Group.
Environmental regulation
There are environmental regulations surrounding oil and gas activities which have been conducted by the
Empire Group. There has been no material breach of these regulations during the financial period or since the
end of the financial period and up to the date of this report.
Empire Energy Group Limited
Directors' report
31 December 2024
16
Information on Directors
Name:
Peter Cleary
Title:
Non-Executive Director and Chair
Age:
67
Qualifications:
BCom, LLB
Experience and expertise:
Mr Cleary is a leader in the oil and gas sector. He holds relationships with
commercial and government entities gained over a distinguished 29-year
career representing Santos, the North West Shelf Venturers and BP in Asia.
His executive career was in LNG, pipeline gas and chemicals operations.
Mr Cleary is a senior adviser to Mitsubishi’s international LNG and Australian
Carbon businesses. He is currently on the Executive of the Australia Korea
Business Council. He is a Graduate of the Australian Institute of Company
Directors and a Fellow of the Australian Institute of Energy – SA Branch.
He previously held positions as a Board member of the Australian Petroleum
Production & Exploration Association (APPEA), the Australia China Council
and the Australia Japan Foundation. In 2023 he retired after 15 years as a
member of the Executive Committee of the Australia Japan Business Co-
operation Committee.
Other current directorships:
Australia - Korea Business Council
Former directorships (last 3
years):
Australia Japan Business Co-operation Council
Special responsibilities:
None
Interests in shares:
1,669,546 ordinary shares
Interests in options:
NA
Interests in rights:
1,327,160 restricted rights
Name:
Alexander Underwood
Title:
Managing Director
Age:
42
Qualifications:
LLB, BCom (Hons)
Experience and expertise:
Mr Underwood has nearly 20 years of specialist upstream oil and gas
investing, financing and management experience. Previously he spent two
years with the Commonwealth Bank of Australia, Singapore as Director of
Natural Resources and nine years with Macquarie Bank in Sydney and
Singapore as Associated Director of Energy Markets Division. He
commenced his career at BHP Billiton Petroleum.
Other current directorships:
None
Former directorships (last 3
years):
None
Special responsibilities:
Chief Executive Officer of Imperial Oil & Gas Pty Limited
Executive Director of Imperial Oil & Gas Pty Limited
Executive Director of Imperial Oil & Gas A Pty Limited
President and Managing Member of the Company’s 100% wholly owned US
subsidiaries
Interests in shares:
2,750,000 ordinary shares
Interests in options:
None
Interests in rights:
8,297,935 unvested performance rights
1,649,436 vested performance rights
1,000,000 service rights
1,586,579 restricted rights
Empire Energy Group Limited
Directors' report
31 December 2024
17
Name:
Louis Rozman
Title:
Non-Executive Director
Age:
67
Qualifications:
BEng, MGeoSc
Experience and expertise:
Mr Rozman is a mining engineer and executive with over 40 years’
experience in operating, constructing and financing resource projects
internationally. He has held senior executive positions in the mining and
energy industries and has been a non-executive director of several ASX and
TSX listed resource companies. Mr. Rozman’s executive experience as a
successful pioneer of coal seam gas development and production in
Queensland is of direct relevance to Empire’s plans.
Mr Rozman is a Fellow of the Australian Institute of Company Directors and
a Fellow and Chartered Professional (Management) of the Australasian
Institute of Mining and Metallurgy. He has a Bachelor of Engineering degree
from the University of Sydney and a Masters in Geoscience from Macquarie
University.
Other current directorships:
None
Former directorships (last 3
years):
None
Special responsibilities:
Chair of the Remuneration Committee
Member of the Technical Committee
Interests in shares:
839,796 ordinary shares
Interests in options:
NA
Interests in rights:
478,722 restricted rights
Name:
Prof John Warburton
Title:
Non-Executive Director
Age:
67
Qualifications:
PhD, FGS, FPESA, MAICD
Experience and expertise:
Prof Warburton has over 40 years of professional oil and gas experience in
operated and non-operated conventional and unconventional petroleum
discovery, development and in new business delivery. Prof Warburton has
worked in Western Europe, West Africa, Central Asia, Middle East, Pakistan,
Papua New Guinea, throughout the Asia Pacific Region, including Australia
and New Zealand, and most recently in Mongolia. He has resided as an
expatriate in a number of these regions.
Prof Warburton’s career includes 14 years of senior technical and leadership
roles at BP. He was Executive General Manager for Exploration & New
Business at Eni in Pakistan, and until March 2018 John was Chief of
Geoscience & Exploration Excellence at Oil Search Ltd. He has been a
Director of Empire’s wholly owned Northern Territory subsidiary, Imperial Oil
& Gas Pty Limited ('Imperial'), since 2011 and was its Chief Executive Officer
from 2011 to 2014. He continues to serve as a Non-Executive Director of
Imperial. In addition, Prof Warburton is Visiting Professor in the School of
Earth & Environment at Leeds University UK.
Other current directorships:
Independent Non-Executive Chairman TMK Energy Limited
Former directorships (last 3
years):
Independent Non-Executive Director Senex Energy Limited
Special responsibilities:
Non-Executive Director of Imperial Oil & Gas Pty Limited
Chair of the Technical Committee
Member of the Audit and Risk Committee
Interests in shares:
1,397,815 ordinary shares
Interests in options:
NA
Interests in rights:
1,200,000 service rights
Empire Energy Group Limited
Directors' report
31 December 2024
18
Name:
Karen Green
Title:
Non-Executive Director
Age:
57
Qualifications:
BCom, FCA, FCPA, GAICD
Experience and expertise:
Ms. Green has 37 years’ experience in business advisory services in Western
Australia and Northern Territory (NT). She has lived in the NT since 1991
where she was an equity partner in the Deloitte Australian partnership for
over 20 years.
Ms Green led the private advisory services team in the Northern Territory,
South Australia and Tasmania. Ms Green was also the Office Managing
Partner at Deloitte in the NT for several years and the 5th female ever to
become a Partner in the Deloitte Australia partnership. Ms Green has retired
from public practice and now focusses on non-executive director roles.
Ms Green is recognised for her strategic direction and leadership through a
variety of board roles including currently as a Non-Executive Director on the
Airport Development Group. Ms Green is also Chair of the NT Screen
Industry Advisory Committee and President of the NT Council of the
Australian Institute of Company Directors. Ms Green has previously been on
the NT National Security Advisory Group, Darwin Port Corporation board
when government owned, Member of Investment Advisory Group for
Department of Chief Minister and Cabinet, inaugural treasurer and board
member of Energy Club Northern Territory, Director of Darwin Festival and
Member of Ministerial Advisory Council for Department of Business.
Other current directorships:
None
Former directorships (last 3
years):
Nil
Special responsibilities:
Chair of the Audit and Risk Committee
Member of the Remuneration Committee
Interests in shares:
625,000 ordinary shares
Interests in options:
None
Interests in rights:
274,927 restricted rights
'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
Gillian Nairn
On 17 January 2025, Empire appointed Gillian Nairn as Company Secretary of Empire and its wholly owned
Australian subsidiaries, Imperial Oil & Gas Pty Limited and Imperial Oil & Gas A Pty Limited.
Ben Johnston (resigned on 17 January 2025)
Mr Johnston joined Empire as Vice President Business Development in November 2019. Ben is an energy
sector specialist having worked across M&A, ECM and debt / project finance transactions while at leading
banks including RBC Capital Markets and Commonwealth Bank. Ben is a chartered accountant having trained
with KPMG and holds an MBA from the Australian Graduate School of Management.
Empire Energy Group Limited
Directors' report
31 December 2024
19
Meetings of Directors
The number of meetings of the Company's Board of Directors ('the Board') held during the year ended 31
December 2024, and the number of meetings attended by each Director were:
Full Board
Remuneration
Committee
Audit and Risk
Committee
Technical Committee
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Peter Cleary
11
11
-
-
-
-
-
-
Alexander
Underwood*
11
11
-
-
-
-
-
-
Louis Rozman
10
11
1
1
-
-
2
2
Prof John
Warburton
10
11
-
-
6
6
2
2
Karen Green
10
11
1
1
6
6
-
-
Held: represents the number of meetings held during the time the Director held office or was a member of the
relevant committee.
*
Mr Underwood excused himself from Remuneration Committee Meetings when matters relating to his
remuneration were discussed.
Shares under option
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share
issue of the Company or of any other body corporate.
Shares issued on the exercise of options
There were no ordinary shares of Empire Energy Group Limited issued on the exercise of options during the
year ended 31 December 2024 and up to the date of this report.
Shares under Performance Rights
Unissued ordinary shares of Empire Energy Group Limited under Performance Rights at the date of this report
are as follows:
Number
Grant date
Expiry date
under rights
Unvested
13 September 2013
NA
250,000
17 June 2022
31 December 2037
1,451,409
22 December 2022
31 December 2037
1,297,209
21 July 2023
31 December 2038
1,878,144
21 December 2023 *
31 December 2038
791,863
28 May 2024
31 December 2038
4,968,382
1 July 2024
31 December 2038
1,806,684
20 December 2024
31 December 2039
1,570,737
Vested
3 August 2021
30 June 2034
1,300,500
30 March 2022
30 December 2034
563,859
27 January 2023
31 December 2035
548,234
23 February 2024
31 December 2036
281,058
16,708,079
*
Performance Rights granted on 21 December 2023 were issued on 15 March 2024.
No person entitled to exercise the Performance Rights had or has any right by virtue of the performance right
to participate in any share issue of the Company or of any other body corporate.
Empire Energy Group Limited
Directors' report
31 December 2024
20
Shares issued on the exercise of Performance Rights
On 1 March 2024, Empire issued 276,275 ordinary fully paid shares for the conversion of Vested Performance
Rights belonging to former employees under the Empire Energy Group Limited Rights Plan for no
consideration.
On 18 September, Empire issued 17,911 ordinary fully paid shares for the conversion of Vested Performance
Rights belonging to former employees under the Empire Energy Group Limited Rights Plan for no
consideration.
Shares under Restricted Rights
Unissued ordinary shares of Empire Energy Group Limited under Restricted Rights at the date of this report
are as follows:
Exercise
Number
Grant date
Expiry date
price
under rights
7 August 2020
31 December 2035
$0.000
1,019,753
1 June 2021
1 June 2036
$0.000
617,979
23 December 2020
23 December 2035
$0.000
455,820
2 July 2021
2 July 2036
$0.000
94,908
21 December 2021
21 December 2036
$0.000
531,465
17 June 2022
17 June 2037
$0.000
509,198
17 June 2022
17 June 2037
$0.000
275,360
9 September 2022
9 September 2037
$0.000
131,493
22 December 2022
22 December 2037
$0.000
574,792
21 July 2023
21 July 2038
$0.000
604,141
21 December 2023 *
21 December 2038
$0.000
477,417
28 May 2024
12 December 2039
$0.000
1,328,102
12 July 2024
12 December 2039
$0.000
304,592
20 December 2024
12 December 2039
$0.000
696,230
7,621,250
*
Restricted Rights granted on 21 December 2023 were issued on 15 March 2024.
No person entitled to exercise the Restricted Rights had or has any right by virtue of the restricted right to
participate in any share issue of the Company or of any other body corporate.
Shares issued on the exercise of Restricted Rights
On 18 September, Empire issued 137,885 ordinary fully paid shares for the conversion of Restricted Rights
belonging to former employees under the Empire Energy Group Limited Rights Plan for no consideration.
Shares under Service Rights
Unissued ordinary shares of Empire Energy Group Limited under Service Rights at the date of this report are
as follows:
Empire Energy Group Limited
Directors' report
31 December 2024
21
Grant date
Expiry date
Exercise
price
Number
under rights
Unvested
21 December 2023 *
21 December 2038
$0.00
789,958
1 July 2024
31 December 2038
$0.00
602,228
20 December 2024
31 December 2039
$0.00
766,703
Vested
14 June 2019
30 June 2034
$0.00
1,000,000
4 August 2020
31 December 2035
$0.00
838,558
1 June 2021
31 December 2036
$0.00
600,000
20 December 2024
31 December 2029
$0.00
395,889
4,993,336
*
Service Rights granted on 21 December 2023 were issued on 15 March 2024.
No person entitled to exercise the Service Rights had or has any right by virtue of the service right to participate
in any share issue of the Company or of any other body corporate.
Shares issued on the exercise of Service Rights
There were no other ordinary shares of Empire Energy Group Limited issued on the exercise of Service Rights
during the year ended 31 December 2024 and up to the date of this report.
Indemnity and insurance of officers
The Company has indemnified the Directors and executives of the Company for costs incurred, in their capacity
as a Director or executive, for which they may be held personally liable, except where there is a lack of good
faith.
During the financial year, the Company paid a premium in respect of a contract to insure the Directors and
executives of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract
of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the
auditor of the Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor
of the Company or any related entity.
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 27 to the financial statements.
The Directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or
by another person or firm on the auditor's behalf), is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001.
Empire Energy Group Limited
Directors' report
31 December 2024
22
The Directors are of the opinion that the services as disclosed in note 27 to the financial statements do not
compromise the external auditor's independence requirements of the Corporations Act 2001 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 (including Independence Standards) 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 EY
There are no officers of the Company who are former partners of EY.
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.
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 Directors
___________________________
Alexander Underwood
Managing Director
31 March 2025
Sydney
Empire Energy Group Limited
Directors’ Report
31 December 2024
23
Letter from the Chair of the Remuneration Committee
Dear Shareholders,
As the Chair of the Remuneration Committee and on behalf of the Board, I am pleased to present the Empire
Energy (EEG) Remuneration Report for the year ended 31 December 2024 (FY24).
FY24 has seen significant progress by EEG and especially in the Beetaloo Sub-basin operations with:
1. All activities carried out without any safety incidents and in an environmentally responsible manner.
2. The Company’s assets in the USA were sold profitably and the Company is now solely focussed on
the Beetaloo Basin.
3. The securing of a Gas Sale Agreement (GSA) with the NT Government to deliver up to 25TJ/day for
10 years plus an option to supply an additional 10TJ/day if total project production exceeds 100TJ/day.
4. A successful capital raising brought knowledgeable and experienced US shale gas investors onto the
Company’s register, whilst providing funding for the drilling and fracture stimulation of Carpentaria 5H.
5. Ordering long lead items necessary to achieve the drilling and fracture stimulation programs of 2024
and 2025.
6. The gas compression plant acquired from AGL in December 2023 underwent detailed engineering
assessment, tendering and planning in preparation for its refurbishment. In addition, the design and
planning for the gas gathering system and field operations were materially advanced.
7. Significant and ongoing positive engagement through on-country meetings with Traditional Owners
and pastoral stakeholders continued.
8. Strong support continued from the NT Labor government and this support continues from the new
Country Liberal Party government, which is very keen to see the Beetaloo Sub-Basin provide a
solution to the Territory’s energy demands.
9. Carpentaria-5H was drilled on time and within budget. The horizontal section well was by far the
longest well drilled in the history of the Beetaloo.
10. Securing all environment approvals for the Carpentaria Pilot Project.
Activities in 2024 were completed within budget, demonstrating EEG’s cost and operational efficiencies within
the basin. The Board believe that this year’s achievements are in large part a result of the effective alignment
of the current remuneration framework with the expectations of the company’s various stakeholders.
The Remuneration Committee continually reviews the total remuneration packages of the senior executives
including the Managing Director and is of the view that Empire Energy’s remuneration level is fairly
benchmarked against its peers.
The Remuneration Report for the year ended 31 December 2024 (2024 Financial Year or FY24) forms part of
the Directors’ Report. It has been prepared in accordance with the Corporations Act 2001 (Cth) (the Act),
Corporations Regulation 2M.3.03, in compliance with AASB124 Related Party Disclosures, and audited as
required by section 308(3C) of the Act. It also includes additional information and disclosures that are intended
to support a deeper understanding of remuneration governance and practices, for shareholders, where
statutory requirements are not sufficient.
Louis Rozman
Chair, Remuneration Committee
Empire Energy Group Limited
Directors’ Report
31 December 2024
24
1.
The Role of the Remuneration Committee
The objective of the Remuneration Committee is to ensure that the Company’s remuneration system attracts
and retains staff, executives and directors who will create sustained value for shareholders.
The Remuneration Committee is responsible for:
•
oversight of remuneration policies and processes;
•
evaluating the performance of the Managing Director;
determining and recommending remuneration of the Managing Director; and
•
monitoring the performance of the executive management team and reviewing the remuneration of
the executive management team proposed by the Managing Director.
The Board, upon the recommendation of the Remuneration Committee, approves the remuneration of the
Managing Director and the executive management team.
2.
Remuneration Policy
EEG’s Remuneration Policy (REM Policy) was last updated in March 2024 under the Remuneration Committee
Charter. The Remuneration Committee retains overall responsibility for the review and recommendations in
relation to the remuneration of Executive Directors (including the Managing Director) and executives reporting
to the Managing Director as well as Non-executive Director Board Fees. In discharging these responsibilities,
the Committee adheres to the following:
•
to ensure the Company’s remuneration structures are equitable and aligned with the long-term
interests of the Company and its shareholders; having regard to relevant Company policies without
rewarding conduct that is contrary to the Company’s values or risk appetite;
•
to attract and retain skilled personnel;
•
to structure short and long-term incentives that are challenging and linked to the creation of sustainable
shareholder returns; and
•
to ensure any termination benefits are justified and appropriate.
The primary objective of the REM Policy is to facilitate the achievement of the Company’s goals by aligning
executive rewards with value creation for shareholders, by ensuring that the quantum and elements of
remuneration attract and retain key talent which is aligned with the Company’s strategy and business
objectives. The objective is to ensure the cost of remuneration is reasonable and appropriate to the Company’s
circumstances.
The Board has discretion to review and adjust the remuneration policy from time to time. For Total
Remuneration Package (TRP), which includes all elements of remuneration, at a Target level) while the
Company has been in its early development phases, the Board made a strategic decision to apply a P75 (75th
Percentile) TRP compared to other comparable market capitalisation companies. However, to mitigate
concerns regarding potential high positioning of remuneration due to this policy, remuneration packages have
generally been designed to have a greater performance/alignment focus than is typical in benchmarks:
1. Fixed Pay (FP) has in practice been set at or below P50 (lower FP/cash);
2. Short Term Variable Remuneration (STVR) has in the past had a lower weighting than typical P75 at
Target oriented packages (low short-term rewards), however in EEG’s current phase where the
Company’s primary project is being physically built, the STVR has been increased to drive delivery on
these project outcomes; the 2025 weighting of FP+STVR would deliver P62.5,
3. Long Term Variable Remuneration (LTVR) has in practice been set as the gap between the lower
elements and a P75 at Target package, resulting in higher-than-typical LTVR grants, but also greater
long term, equity and performance alignment than would be typical.
The Board’s view is that this approach has placed an appropriate focus on performance and risk, as the
business has been de-risking the investment for shareholders through project development milestone
achievement. With this higher-than-typical risk in the package design, it is appropriate to offer a premium, to
ensure that the incentive is motivating.
Empire Energy Group Limited
Directors’ Report
31 December 2024
25
However, as the business matures, milestones are achieved, the Carpentaria Project is operational and the
investment is de-risked, the Board anticipates transitioning to a more typical remuneration policy of:
1. Fixed Pay, benchmarked against relevant market benchmarks.
2. Total Remuneration Packages at Target to be set around P62.5.
3.
Remuneration Benchmarking Policy
The Board has discretion to regularly review the approach to benchmarking remuneration of Key Management
Personnel (KMP) and seeks the advice of independent expert advisors from time to time. In recent years, the
remuneration of KMP is established against a comparator group, based on the following features and updated
at each instance in consultation with advisors:
1. 20 comparable resources companies, mostly energy.
2. About 10 companies larger and 10 smaller than EEG, to ensure that measures of central tendency
such as P50/median are highly relevant and balanced.
3. Companies fall within a range of half to double EEG’s sustainable market capitalisation at the time of
group determination, to ensure that benchmarks are stable over time and relevant to a business of
EEG’s scale and complexity, and that indicators such as P75 are drawn from a relevant range.
The most recent executive remuneration benchmarking comparator group was composed of the following
companies;
Table 1
Comparator Group Companies
31 December 2024
ASX
Company Name
Market
Capitalisation
(AUD Million)
Invictus energy Ltd
105
Elevate Uranium Ltd
112
Kinetiko Energy Ltd
113
Gold Hydrogen Ltd
133
Aspire Mining Ltd
142
TerraCom Ltd
160
Silver Mines Ltd
166
Alligator Energy Ltd
178
Comet Ridge Ltd
178
Conrad Asia Energy Ltd
192
Vysarn Ltd
228
Empire Energy Group
229
Black Cat Syndicate Ltd
259
Carnarvon Energy Ltd
270
Grange Resources Ltd
289
29 Metals Ltd
295
Peninsula Energy Ltd
296
Horizon Oil Ltd
309
Metro Mining Ltd
316
Cooper Energy
462
Tamboran Resources Ltd
528
Remuneration of non-KMP staff is established against a comparator group of over 270 Australian based
Resources, Construction and Engineering companies. This work is undertaken by the KMP and with the input
and overview of the Remuneration Committee.
Empire Energy Group Limited
Directors’ Report
31 December 2024
26
4.
Remuneration Overview
Executive KMP total remuneration is currently made up of Fixed Pay and Variable Remuneration.
Fixed Pay is made up of base salary and any other fixed elements such as superannuation, and other benefits
where applicable. Fixed Pay is intended to be positioned against the median of market benchmarks from a
group of comparable resource and energy companies (Comparator Group of Companies, see Table 1) of
similar size to ensure remuneration is competitive and fair, subject to approximately ±20% pay range to account
for individual factors such as incumbent experience, qualifications, and performance.
Variable Remuneration is composed of short-term incentive (STI) and long-term incentive (LTI) components.
STIs are 12 month milestone objectives. LTIs are a combination of Total Shareholder Returns (TSR) and multi-
year milestones. The “incentive” component is the upside for performing above expectations and represent
the true “bonus”. Metrics selected are intended to be linked to the primary drivers of value creation for
stakeholders, and successful implementation of the long-term strategy over both the short and long term.
The Total Remuneration Package (TRP) is intended to be composed of an appropriate mix of remuneration
elements including Fixed Pay, short term variable remuneration (STVR) and long-term variable remuneration
(LTVR). The Target TRP (TRP for expected performance) is generally intended to fall between the median
and upper quartile of market benchmarks.
Variable Remuneration fills the gap between Fixed Pay and the Total Remuneration Package and is intended
to be a mix of “at-risk” and “incentive” remuneration. The “at-risk” component of variable remuneration that is
below “Target policy” is designed to be what an executive would stand to lose for not meeting expectations.
The Board has selected a competitive TRP market position between median and upper quartile benchmarks
to adjust for the impact of nil and negative reported variable remuneration. This has been established by
research conducted by the Board’s appointed independent External Remuneration Consultant (ERC).
The Committee regularly engages with ERCs to ensure the current policy and frameworks are aligned with
current market practices and remain competitive and fair.
5.
External Remuneration Consultants
The Remuneration Committee may engage the assistance and advice of External Remuneration Consultants
to provide information on remuneration related matters as they arise. During FY24 the Board retained Godfrey
Remuneration Group Pty Ltd (GRG) as an ERC. During FY24, GRG provided the following services:
•
Analysis and recommendations regarding executive remuneration in relation to the Managing Director
and Direct Reports – $13,000 + GST
•
EEG REM Report support – $2,500 + GST
An agreed set of protocols has been put in place to ensure that the remuneration recommendations are free
from undue influence from key management personnel. These protocols include requiring that the consultant
not communicate with affected key management personnel without a member of the Remuneration Committee
being present or without the authorisation of the Chairman of the Remuneration Committee, and that the
consultant not provide any information relating to the outcome of the engagement with the affected key
management personnel. The Board is also required to make inquiries of the consultants’ processes at the
conclusion of the engagement to ensure that they are satisfied that any recommendations made have been
free from undue influence. The Board is satisfied that these protocols were followed and that there was no
undue influence.
The Remuneration Committee also considers other reports outlining remuneration practices and quantum in
determining remuneration within the Company.
Empire Energy Group Limited
Directors’ Report
31 December 2024
27
6.
Key Remuneration Governance Considerations and Changes
The following summarises the key remuneration governance matters that were the focus of considerations in
FY24, and those that are expected to be addressed in FY25, including planned changes:
a) Benchmarking Managing Director, Chief Financial Officer and Chief Operations Officer compensation
against ASX and other comparable listed market data to inform quantum and mix of compensation
decisions, intended to meet EEG’s strategy and market positioning requirements. (Completed 2024)
b) Benchmarking and review of non KMP staff compensation against comparable market data to inform
quantum and mix of compensation decisions, intended to meet EEG’s strategy and market positioning
requirements. (Completed 2024)
c) Assessment of vesting conditions for LTVR (Completed 2024)
d) REM Policy Review (Completed March 2024)
7.
People Covered by This Report
This report covers Key Management Personnel (KMP) which are defined as those who have the authority and
responsibility for planning, directing and controlling the activities of Empire Energy.
Table 2
Committee Membership
Name
Role
Appointed
Audit & Risk
Remuneration
Technical
Non-Executive KMP
Mr Peter Cleary
Non-Executive Chairman
Non-Executive Director
30/05/2023
25/5/2020
Prof John Warburton
Non-Executive Director
6/02/2019
✓
C
Mr Louis Rozman
Non-Executive Director
11/03/2021
C
✓
Ms Karen Green
Non-Executive Director
17/11/2023
C
✓
Executive KMP
Mr Alex Underwood
Managing Director
23/07/2018
Mr Robin Polson
Chief Financial Officer
18/07/2022
Mr Chris White
Chief Operating Officer
02/07/2024
✓ = Member, C = Chair
The following changes to KMP occurred during FY24 or between the end of FY24 and the date of publication of
this report:
•
Mr Chris White was appointed as Chief Operating Officer of the Company on 02/07/2024.
•
Mr Robin Polson has retired as Chief Financial Officer and will depart before mid-2025.
Empire Energy Group Limited
Directors’ Report
31 December 2024
28
8.
Executive KMP Remuneration – Framework Overview
The following table outlines Empire Energy’s approach to executive KMP remuneration:
Table 3
Fixed Pay
Short Term Variable
Remuneration
Long Term Variable
Remuneration
Purpose
Fixed Pay (FP) is set with
reference to the median of
benchmarks and aimed at
paying fairly for meeting
the requirements of a role.
Links achievement of EEG’s
short-term performance
objectives with the
remuneration received by the
executive.
Incentivizes
executives
for
performance against annual
safety,
operational
and
financial
performance
objectives set by the Board at
the beginning of the financial
year.
The
short-term
objectives selected are linked
to the Company’s long-term
strategy which is designed to
provide
sustainable
value
creation for shareholders.
Links achievement of EEG’s
shareholder wealth creation
with the remuneration received
by the executive.
The purpose of LTVR is to
create a strong incentive for the
performance
of
senior
executives over the long term
and to align their interests with
those of stakeholders through
share
ownership
and
performance testing.
Delivery
Base Salary,
superannuation and other
benefits.
The Board has discretion to
settle STVR awards in the
form of cash or Restricted
Rights.
If Target STI milestone is
achieved, bonus payment of
Target% of Fixed Pay is paid.
If Stretch STI milestone is
achieved, bonus payment of
Stretch% of Fixed Pay is paid.
If a milestone is achieved
between Target and Stretch,
STVR bonus payment is made
pro-rata.
Performance Rights to receive
EEG shares are issued, subject
to LTVR performance over a 3-
year Measurement Period.
If Target LTI milestones are
achieved, bonus payment of
Target% of Fixed Pay is paid.
If Stretch LTI milestones are
achieved, bonus payment of
Stretch% of Fixed Pay is paid.
If milestones are achieved
between Target and Stretch,
LTVR bonus payment is made
pro-rata.
STVR
Award &
Settlement
Awards will be calculated following the auditing of accounts.
STVR awards may be paid as cash or equity. The overarching policy is to pay STVR awards in
the form of Restricted Rights to preserve cash reserves, however a decision to offer cash can be
made based on the Board’s view that this is more appropriate in the current market. There is
currently no STVR deferral mechanism.
Restricted Rights are granted for nil consideration under the EEG Limited Rights Plan (EEGLRP),
and vest immediately upon grant. Restricted Rights are subject to a 90-day exercise restriction
and can be exercised anytime following vesting and before the end of the Term (15 years).
TVR
Disposal
Restrictions
Shares acquired on the exercise of vested Restricted Rights ("Restricted Shares") will be
subject to disposal restrictions until all of the following cease to restrict disposals:
• the Company’s share trading policy,
• the Corporations Act insider trading provisions, and
• temporary Specified Disposal Restriction of one (1) year from their date of issue.
Empire Energy Group Limited
Directors’ Report
31 December 2024
29
STVR
Board
Discretion
The Board has discretion to vary awards upwards or downwards, including to nil, in the
circumstance that the award would otherwise be likely to be viewed as inappropriate given the
circumstances that prevailed over the Measurement Period (such as in the case of harm to the
Company’s stakeholders for which participants are accountable).
LTVR
Settlement
The Rights are “Indeterminate Rights” which may be settled in the form of a Company Share,
or cash equivalent, upon valid exercise.
LTVR Term
and Lapse
The Term of the Performance Rights are 15 years from the Grant Date. If not exercised within
the term, the Performance Rights will lapse.
LTVR
Service
condition &
Cessation of
Employment
Under the Rules, in addition to the performance conditions, continued service during the
Measurement Period is a requirement for all Rights to become eligible to vest. On termination,
a portion of Performance Rights granted in the financial year in which the termination occurs will
be forfeited. The proportion that will be forfeited will be equal to the remainder of the financial
year following the termination as a proportion of the full financial year. This provision recognises
that grants of Performance Rights are part of the remuneration for the year of grant and that if
part of the year is not served then some of the Performance Rights will not have been earned.
LTVR
Measureme
nt Period
Modifier
The EEGLRP Rules allow for the Measurement Period to be extended by 12 months, if an
executive is still employed, and nil vesting occurred at the first test. The start of the Measurement
Period would not be affected by this, and modification of the Measurement Period can only apply
to vesting scales that are expressed on an annualised basis, which ensures the adjustment does
not make vesting easier (i.e. will not apply to milestone conditions, only TSR). The Measurement
Period would be extended from three years to four years. The purpose of this feature is to
address short term anomalies that arise at the relevant calculation points. Examples of such
anomalies being: delay of an essential permit not caused by the Company, unseasonal weather
impacts outside the control of the Company. The purpose of an extension is to motivate
management to strive for improvement if the LTI fails to vest at the end of the Measurement
Period for reasons outside of Company control. The Measurement Period Modifier is not
unreasonable given the stage and location of the project, delays to permits and approvals and
working in a region with a Tropical Wet Season are a reality, whilst everything that can be done
is done to minimize these risks
LTVR
Cessation of
Employment
Unvested Performance Rights held at the date of termination and granted in the financial year of
the termination will be forfeited in the proportion that the remainder of the financial year following
the termination bears to the full financial year, unless otherwise determined by the Board.
All other unvested Performance Rights will be retained for possible vesting based on
performance during the Measurement Period, to be assessed following the completion of the
Measurement Period. If at the time of vesting subsequent to termination of employment the share
price is lower than at the date of cessation of employment the value of the Rights will be paid in
cash only, not Shares, unless otherwise determined by the Board.
LTVR
Corporation
Actions
Change of Control
In the event of a Change of Control:
• Unvested Performance Rights granted in the financial year of the Change of Control will lapse
in proportion that the remainder of the financial year bears to the full financial year; and
• For all remaining unvested Performance Rights, the number of Performance Rights to vest
will be determined by the number of unvested Performance Rights multiplied by the change in
share price at the commencement of the Measurement Period and the share price at Change
of Control.
Major Return of Capital to Shareholders
In the event of a major return of capital to shareholders, the Board has discretion to determine
how unvested Performance Rights will be dealt with.
LTVR
Board
Discretion
The Board retains discretion to increase or decrease, including to nil, the vesting percentage in
relation to each Tranche of Performance Rights if it forms the view that it is appropriate to do so
given the circumstances that prevailed during the Measurement Period.
STVR/LTVR
Gates
A 'Gate' of no major health, safety or environmental incidents occurring during the measurement
period applies. A Gate is a performance hurdle which must be satisfied before any STVR/LTVR
Performance Rights can vest.
Empire Energy Group Limited
Directors’ Report
31 December 2024
30
9.
Executive KMP Remuneration – Worked Example for Managing Director
Table 4
FY24
Approach
for MD
Fixed Pay
Short Term Variable
Remuneration for FY24
Long Term Variable
Remuneration for FY24
Fixed Pay is set with
reference to the
median of tailored
benchmarks designed
around companies of
comparator market
capitalisation and
market sector.
MD Fixed Pay:
$550,000 inclusive of
SGC
Opportunity as % of FR for
Managing Director:
Target
Stretch
50%
100%
STVR KPIs:
Target will include:
-
Finance Work Program
-
Secure GSA
-
Secure approvals to
construct CGP
-
Commence ’24 NT
exploration program
-
Closure of US Asset Sale
-
Individual Growth and
Effectiveness
Stretch will include:
-
Order project long lead
items for 2024
-
Completion of drilling and
stimulation of C5
Gate:
No STVR is paid unless there are
no major health, safety or
environmental incidents occurring
during the measurement period.
Intended opportunity as % of FR
for Managing Director:
Target
Stretch
40%
80%
LTVR Performance Measures:
-
50% Absolute TSR
-
50% Milestones
Target will include:
-
+25% TSR
Milestones for LTI in 2024:
-
Debt in place for project
development
-
All necessary approvals in
place to flow gas
-
Financial Investment
Decision (FID) made to
deliver gas
-
CGP engineering and team
in-hand for construction of
gas facilities
Stretch will include:
-
Gas flow tests C5H
-
Construct CGP
Gate:
No LTVR is paid unless there are
no major health, safety or
environmental incidents occurring
during the measurement period.
Empire Energy has in place an executive incentive plan named the Empire Energy Group Limited Rights Plan
or EEG Limited Rights Plan which was approved by shareholders at the 2019 Annual General Meeting and
renewed by shareholders at the 2022 Annual General Meeting.
Empire Energy Group Limited
Directors’ Report
31 December 2024
31
The following diagram outlines the executive KMP remuneration structure and timing under the remuneration
framework as applicable to FY24 where STVR is Short Term Variable Remuneration, and LTVR is Long Term
Variable Remuneration.
Chart A
FY24
FY25
FY26
FY27
Fixed Pay
STVR Performance
Period
Audit* & STVR
Assessment
Award Paid**
LTVR Performance Period (75%) - Performance Rights with an Absolute
TSR Vesting Condition
Vesting
Assessments and
Vesting
LTVR Performance Period (25%) - Performance Rights with a Milestone
Vesting Condition
*STVR awards are generally awarded soon after the release of the audited Annual Report
**STVR awards can be paid in either cash or equity (Restricted Rights).
10.
Annual Company Performance At-A-Glance
The following outlines the Company’s performance in FY24 and previous 4 years, which is intended to assist
in demonstrating the link between performance, value creation for shareholders, and executive reward:
Table 5 – Statutory Performance Disclosure
FY End Date
Share Price
(beginning of
period)
Share Price
(end of
period)
Change in
Share Price
$
Dividends
(paid during
period)
Change in Shareholder
Wealth
(SP Change +
Dividends)
Total Value
%
31/12/2024
$0.195
$0.225
$0.030
$0.000
$0.030
15%
31/12/2023
$0.200
$0.195
-$0.005
$0.000
-$0.005
-3%
31/12/2022
$0.340
$0.200
-$0.140
$0.000
-$0.140
-41%
31/12/2021
$0.355
$0.340
-$0.015
$0.000
-$0.015
-4%
31/12/2020
$0.445
$0.355
-$0.090
$0.000
-$0.090
-20%
During the period TSR was positive and there will be a TSR component of the LTVR allocated for
performance in FY24.
Empire Energy Group Limited
Directors’ Report
31 December 2024
32
Table 6 – Northern Territory Resources Growth
FY End Date
NT P(50) Prospective
Resource (TCFe)
NT 2C Contingent
Resource (BCFe)
Total Company 2P
Reserves (MBOE)
31/12/2024
-
-
-
31/12/2023
46.3
1,669
4,439
31/12/2022
47.7
575
5,723
31/12/2021
46.9
221
6,440
31/12/2020
14.7
41
6,000
There were no changes to Contingent Resources as Carpentaria-5H drilling activity was undertaken from the
same well pad as the Carpentaria-2/2H and 3H wells. The well pad and step out locations had a pre-existing
Contingent Resources assignation. Furthermore, no Prospective Resources were matured to Contingent
Resources, nor was there on-ground activity in permits outside of EP187 to refine the shale fairway mapping.
Consequently, an independent estimation of Contingent Resources and Prospective Resources was not
undertaken during the reporting year.
The US gas assets were sold during the reporting year.
11.
FY24 Executive Remuneration Opportunities and Outcomes At-A-Glance
The following charts outline the remuneration opportunities under executive remuneration structures, in this
case specific to the MD, with the outcomes dependent on performance over FY24 for STVR and LTVR, and
the “Realised” remuneration payable in respect of the completed FY24 year and performance delivered:
Chart B.
Note:
-
“Realised” refers to Total Fixed Pay received during FY24, Cash STVR awarded in respect of FY24
outcomes, and LTVR that vested in FY24 and granted in FY22.
35%
52%
64%
36%
26%
31%
29%
21%
5%
$0
$200,000
$400,000
$600,000
$800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000
MD/CEO - Stretch
MD/CEO - Target
MD/CEO - Realised
Fixed Pay
Cash STVR
Equity-Settled STVR
LTVR
Empire Energy Group Limited
Directors’ Report
31 December 2024
33
12.
The Empire Energy Variable Remuneration Framework
12.1 FY24 Short Term Variable Remuneration (STVR) for MD
The instrument used for STVR is cash or Restricted Rights.
EEG applied the following KPIs and weightings to the MD in relation to FY24 to provide a sharp focus on
development and operational expectations:
Targets were:
-
Financing the Work Program and manage costs to within 10% of budget. – 50%
-
Secure GSA with an offtaker - 20%
-
Secure all necessary approvals granted to develop CGP- 15%
-
Completed of ’2024 NT exploration field work program -5%
-
Closure of US Asset Sale – 5%
-
Individual Growth and Effectiveness – 5%
Stretch were:
-
Completion of drilling and stimulation of Carpentaria-5H
-
Order of project long lead items for 2025
12.2 FY24 Short Term Variable Remuneration (STVR) for CFO
The instrument used for STVR is cash or Restricted Rights.
EEG applied the following KPIs and weightings to the CFO in relation to FY24 to provide a sharp focus on
development and operational expectations:
Target were:
-
Timely and accurate financial reporting 40%
-
Provide insightful and accurate commercial analysis 20%
-
Ensure compliance with environmental, landholder, and land titles regulatory reporting and tariff
requirements 20%
-
Advocate company interests and views to government, regulators and other stakeholders 20%
Stretch were:
-
Support MD to ensure effective closure of US Asset Sale
-
Secure GSA prior to NT election
-
Support MD to negotiate and close financing
12.3 FY24 Short Term Variable Remuneration (STVR) for COO
The instrument used for STVR is cash or Restricted Rights.
EEG applied the following KPIs and weightings to the COO in relation to FY24 to provide a sharp focus on
development and operational expectations:
Target were:
-
Majority of approvals for Carpentaria Gas Project secured in year 35%
-
Drilling of Carpentaria-5 completed in year 35%
-
Cost to first gas managed to budget 20%
-
HSE and Regulator management to only minor incidents and / or notices 10%
Stretch were:
-
All approvals for Carpentaria Gas Project secured in year
-
Drilling and stimulation of Carpentaria-5 completed in year
-
Cost to first gas managed to below budget
Empire Energy Group Limited
Directors’ Report
31 December 2024
34
12.4 FY24 Long Term Variable Remuneration (LTVR) for MD
A description of the LTVR plan, which is operated under the EEGLRP, is set out below:
Table 7
13.
The Link Between Performance and Reward in FY24
13.1 FY24 STVR Outcomes
The STVR plan is designed to reward executives for the achievement against annual performance objectives
set by the Board at the beginning of the performance period. The payment of an STVR is dependent on the
delivery of performance against a range of outcome metrics. The performance metrics and outcomes of
assessment against those metrics are summarised below:
Table 8 - FY24 CEO STVR Performance Scorecard Outcomes
Metric/Measure
Weighting
Outcome
(% of Target)
Weighted Outcome
(% of Target)
Equity finance the 24/25 Work Program
50%
100%
50%
Secure GSA and project long lead items
20%
150%
30%
CGP development approvals granted
15%
50%
7.5%
Completed ‘24 NT field work program
5%
0%
0%
Closure of US Asset sale
5%
100%
5%
Individual Growth and Effectiveness
5%
100%
5%
TOTAL
100%
97.5%
Instrument
Performance Rights under the EEGLRP.
Measurement
Period
1 January 2025 – 31 December 2027 (3-year Measurement Period)
Performance
Metrics and
Weightings
Tranche 1 (50% weight at Target) is to be subject to an Absolute Total Shareholder Return
(ATSR) vesting condition. The vesting of such Performance Rights will be determined by
comparing the Company’s TSR over the Measurement Period according to the following
vesting scale:
Performance
Level
Empire Energy's
Absolute TSR
(per annum)
% of Tranche
Vesting
Stretch
≥ 40%
100%
Between Target and Stretch
> 25% & < 40%
Pro-rata
Target
= 25%
50%
Between Threshold and Target
> 10% & < 25%
Pro-rata
Threshold
= 10%
25%
Below Threshold
< 10%
0%
TSR is the sum of Share Price appreciation and dividends (assumed to be reinvested in
Shares) during the Measurement Period. It is annualised for the purpose of the above vesting
scale. The TSR of the Company over the Measurement Period will be calculated and
converted to a compound annual growth rate (CAGR) value for the purpose of assessment
against this scale. During periods of nil dividends being declared, TSR is equal to the change
in Share Price.
Tranche 2 (50% weight at Target) is to be subject to meeting specific milestones in 2024 to
set the company up for success in 2025 and beyond.
Empire Energy Group Limited
Directors’ Report
31 December 2024
35
Overall STVR outcomes for FY24 are determined through the Board’s assessment of the business and
Individual Outcomes. The actual outcomes are outlined below:
Table 9 – FY24 STVR Outcomes
Executive
KMP
Opportunity as %
of Fixed Pay
STVR
Outcome
as % of
Target
Total
STVR
Awarded
($)
Cash ($)
Restricted
Rights ($)
% Maximum STVR
Maximum
STVR
Target
STVR
Awarded
%
Forfeited
%
Alex
Underwood
100%
50%
97.5%
$268,125
$268,125
N/A
48.75%
51.25%
Robin
Polson
37.5%
25%
100%
$86,625
$0
$86,625
66.7%
33.3%
Chris
White
52.5%
35%
100%
$65,205
$0
$65,205
66.7%
33.3%
In FY24 the Board determined that given market circumstances it was appropriate to offer the option of cash
or Restricted Rights and in this case the Managing Director chose to take cash.
13.2
Recent LTVR Outcomes
Table 10 – FY24 CEO LTVR Performance Scorecard Outcomes
Metric/Measure
Weighting
Outcome
(% of Target)
Weighted Outcome
(% of Target)
Tranche 1: TSR 25% p.a.*
50%
60%
30%
Tranche 2: Milestones:
50%
75%
37.5%
-Debt in place for ’25 project development
12.5%
100%
12.5%
-Necessary approvals in place to flow gas
12.5%
100%
12.5%
-FID made to deliver gas in 2025**
12.5%
0%
0%
-CGP ready for construction in 2025
12.5%
100%
12.5%
TOTAL Tranche 1 and Tranche 2
67.5%
* TSR exceeded Threshold but was less than Target. On a pro-rata basis 60% of Target was achieved.
** All milestones within EEG control were achieved in full. Approval from the NT Government for the
Beneficial Use of Gas is yet to be finalised.
Empire Energy Group Limited
Directors’ Report
31 December 2024
36
Table 11 - FY23 CEO LTVR Performance Rights, Granted in FY24
Table 12 – Eligible to Vest FY24 as Granted in FY22
Role
Tranche
Weighting
No. Eligible
To Vest In
Reporting
Period for
FY24
Target
Performance
Actual
Outcome
% of
Tranche
Vested
Number
Vested
Grant Date
Valuation
$ Value of
LTVR that
Vested (as
per Grant
Date
Valuation)
Realisable
Value
(Number x
Vesting Date
SP net of
Exercise
Price)
Managing
Director
Absolute TSR
75%
1,244,065
25% TSR p.a
0%
0%
0
N/A
$0
$0
Milestones
25%
207,344
Board
Measured
100%
100%
207,344
30-May-22
$21,253
$46,652
Chief Financial
Officer
Absolute TSR
75%
219,403
25% TSR p.a
0%
60%
0
N/A
$0
$0
Milestones
25%
47,015
Board
Measured
100%
100%
47,015
22-Dec-22
$4,466
$10,578
Chief Operating
Officer
No eligible rights vested in the reporting period for FY24
TOTAL
1,717,827
254,359
$25,719
$57,230
Measurement Period
1 January 2024 to 31 December 2026 (3 years).
Grant Calculation
The number of Rights in a Tranche of LTVR to be granted are calculated via the application of the following formula:
Target LTVR $ x Tranche Weight at Target ÷ Right Value ÷ % Vesting at Target
where Right Value is the 2023 VWAP of $0.16605
Opportunity & Grant Value
Opportunity as % of Fixed Pay
Target
Stretch
Managing Director
40%
80%
Based on the Right Value of $0.16605, the maximum/stretch level of grants to be made to the Managing Director, Alex Underwood
for FY24 LTVR will be 4,968,382 Performance Rights. The same formula was applied to other KMPs, the number of Performance
Rights will differ for each person due to their different FP.
Instrument
The LTVR is in the form of Performance Rights with a nil Exercise Price, which are subject to performance and service vesting
conditions.
Empire Energy Group Limited
Directors’ Report
31 December 2024
37
14.
Achieved Total Remuneration Package for FY24
The following outlines “Achieved” (what became payable, or vested in respect of FY24 performance completed) total remuneration, including the portions of maximum
variable remuneration that was vested at the completion of 31 December 2024.
Table 13
Name
Role(s)
Year
Fixed
Package
(incl Super)
Total STVR
Awarded
Following
Completion of
the Financial
Year (cash)*
Total STVR
Awarded
Following
Completion of
the Financial
Year (equity-
settled)
Value of LTVR that
Vested Following
Completion of the
Measurement
Period**
Total
Remuneration
Package (TRP)
Gains/Losses on
Vested LTVR from
Change in Value
During Vesting
Period***
Alex Underwood
Managing Director
2024
$550,000
$268,125
$0
$21,253
$839,378
$25,400
Managing Director
2023
$475,000
$126,600
$0
$18,346
$622,946
$7,254
Robin Polson
Chief Financial
Officer
2024
$375,166
$0
$86,625
$4,466
$466,257
$6,112
Chief Financial
Officer
2023
$341,345
$0
$78,750
$0
$420,095
N/A
Chris White^
Chief Operating
Officer
2024
$200,000
$0
$65,205
$0
$265,205
N/A
Chief Operating
Officer
2023
N/A
N/A
N/A
N/A
N/A
N/A
* This is the value of the total STVR award calculated following the end of the Financial Year.
** This is the grant value of the LTVR that vested in the reporting period i.e. number that vested multiplied by the Monte-Carlo value at grant.
*** This is the difference between the Black-Scholes value at grant, and the realisable value based on the market value of a share at the time of vesting.
^ Chris White joined Empire on 2 July 2024
15.
Use of Board Discretion
During the financial year and to the date of this report, the Board did not exercise any discretions available to it to modify STVR or LTVR outcomes, vesting or awards.
Empire Energy Group Limited
Directors’ Report
31 December 2024
38
16.
Statutory Tables and Supporting Disclosures
16.1
Executive KMP Statutory Remuneration for FY24
The following table outlines the statutory remuneration of executive KMP:
Table 14
Fixed Pay
Short Term
Remuneration
Share-Based
Payments Benefits
Name
Roles
Year
Salary
Super
Other
Benefits
***
Total
Fixed
Pay
Cash
STVR*
Change
in
Accrued
Leave
Equity-
Settled
STVR*
LTVR**
Total
Remuneration
Package
(TRP)
Variable
Remunerati
on as %
TRP
Terminati
on
Benefits
Current Executive KMP
Alex
Underwood
Managing
Director
2024
$521,334
$28,666
$15,572
$565,572
$268,125
$(10,425)
$0
$330,398
$1,153,670
51%
$0
Managing
Director
2023
$449,708
$26,345
$18,454
$494,507
$118,750
$(10,452)
$0
$36,342
$634,147
23%
$0
Robin
Polson
Chief
Financial
Officer
2024
$346,500
$28,666
$0
$375,166
$0
$(11,280)
$86,625
$0
$450,511
17%
$42,556
Chief
Financial
Officer
2023
$315,000
$26,345
$0
$341,346
$0
$13,558
$78,750
$0
$433,654
19%
$0
Chris
White^
Chief
Operating
Officer
2024
$185,034
$14,966
$0
$200,000
$0
$14,331
$62,205
$0
$276,536
28%
$0
Chief
Operating
Officer
2023
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
*Note that the STVR value reported in this table is the STVR that was paid during the reporting period, being the award earned during the previous period. Incentive outcomes
for the reporting and previous period are outlined elsewhere in this report.
** Note that the LTVR value reported in this table is the amortised accounting charge of all grants that have not lapsed or vested as at the start of the reporting period. Where
a market-based measure of performance is used such as TSR, no adjustments can be made to reflect actual LTVR vesting.
*** Other benefits include car parking, car allowances, General Employee Share Schemes, FBT, insurance, some elements of which are non-cash items.
^ Chris White joined Empire on 2 July 2024
Empire Energy Group Limited
Directors’ Report
31 December 2024
39
17.
FY24 Non-Executive Director (NED) Remuneration
17.1
Fee Policy
The following outlines the principles that EEG applies to governing NED remuneration:
Table 15
Fee Policy
Remuneration of Non-executive Directors is determined by the Board based on
recommendations from the Remuneration Committee and the maximum amount approved by
shareholders from time to time. Non-executive Directors can participate in the Share Rights
Plan.
The Board undertakes an annual review of its performance and the performance of the Board
Committees against performance goals set. Details of the nature and amount of each element
of the remuneration of each Director and each specified executive of the Empire Group
receiving the highest remuneration are set out in the following tables.
The following table outlines the current Fee Policy, which is unchanged from 2023:
Role/Function
Main Board
All Committees
Chair
$90,000
$10,000
Member
$60,000
$5,000
Fees are exclusive of superannuation.
Note: Non-executive Directors are also reimbursed for reasonable out-of-pocket expenses
that are directly related to EEG’s business. Equity grants, if any, are deducted from the
foregoing fees.
Aggregate
Board Fees
The total amount of fees paid to Non-executive Directors in the year ended 31 December
2024 is within the aggregate fee limit of $400,000 which was last approved by shareholders
on 30 May 2019. Grants of equity approved by shareholders are excluded from counting
towards the aggregate Board Fees, in accordance with the ASX Listing Rules.
Empire Energy Group Limited
Directors’ Report
31 December 2024
40
17.2
FY24 NED Equity Grants
A description of the terms Non-executive Director (NED) equity grants for FY24 is described below:
Table 16
Purpose
The purpose of NED equity grants in FY24 is to allow Non-executive Directors to exchange
cash Board Fees for grants of equity in respect of FY24 remuneration.
Opportunity
NEDs may elect to receive equity up to 100% of their Board Fees including superannuation
in lieu of cash payment.
Instrument
The FY24 NED Equity Plan grant is to be in the form of Restricted Rights.
Price and
Exercise Price
The Price is nil, because it forms part of the remuneration of the Participant, however grants
are generally based on an agreement to forego cash Board Fees.
The Exercise Price is nil.
Allocation
method
The Rights are valued using the following method:
Right Value = Share Price – (Dividends expected to be lost before first exercise date)
The Number of Rights to be granted = Sacrificed$ ÷ Right Value
Share Price = 3-month Volume Weighted Average Price during each quarter
Vesting
Conditions,
Exercise
Restrictions
In order to ensure NED independence is not compromised, and to recognise that the
instruments are an alternative to cash remuneration, the Rights are not subject to any vesting
conditions.
Rights may not be exercised within 90 days of the Grant Date.
Disposal
Restriction
The Director Fee Restricted Rights may not be disposed of at any time, but can be exercised
following vesting, up to the end of their Term. Shares acquired on exercise of vested Director
Fee Restricted Rights ("Restricted Shares") will be subject to disposal restrictions until all of
the following cease to restrict disposals:
a) the Company’s share trading policy,
b) the Corporations Act insider trading provisions, and
c) Specified Disposal Restriction of one (1) year from their date of issue.
Term and
Lapse
Director Fee Restricted Rights will have a term of 15 years and if not exercised within the
term the Rights will lapse. On exercise, each Director Fee Restricted Right will convert into
one ordinary share.
Fraud, Gross
Misconduct
etc.
In the event that the Board forms the opinion that a Director has committed an act of fraud,
defalcation or gross misconduct in relation to the Company, the Director will forfeit all
unvested Director Fee Restricted Rights.
Empire Energy Group Limited
Directors’ Report
31 December 2024
41
17.3
Non-executive Director (NED) KMP Statutory Remuneration for FY24
The following table outlines the statutory and audited remuneration of NEDs ($, except where otherwise indicated):
Table 17
Name
Role(s)
Year
Board
Fees
Committee
Fees
Superannuation
Other
Benefits
Equity
Grant *
Terminatio
n Benefits
Total
Paul Espie AO (a)
Non-Executive Chairman
2024
$0
$0
$0
$0
$0
$0
$0
Non-Executive Chairman
2023
$82,500
$0
$8,663
$0
$0
$0
$91,163
John Warburton
Non-Executive Director
2024
$60,000
$15,000
$8,438
$0
$0
$0
$83,438
Non-Executive Director
2023
$60,000
$16,904
$8,272
$0
$0
$0
$85,176
Peter Cleary (b)
Non-Executive Chairman
2024
$0
$0
$0
$0
$99,900
$0
$99,900
Non-Executive Director
2023
$0
$0
$0
$0
$63,565
$0
$63,565
Louis Rozman (c)
Non-Executive Director
2024
$0
$0
$0
$0
$83,252
$0
$83,252
Non-Executive Director
2023
$30,000
$5,000
$3,675
$0
$0
$0
$38,675
Paul Fudge (d)
Non-Executive Director
2024
$0
$0
$0
$0
$0
$0
$0
Non-Executive Director
2023
$52,726
$0
$5,650
$0
$0
$0
$58,376
Jacqui Clarke (d)
Alternate Director
2024
$0
$0
$0
$0
$0
$0
$0
Alternate Director
2023
$58,376
$6,967
$0
$0
$0
$0
$65,343
Karen Green (e)
Non-Executive Director
2024
$30,000
$7,500
$4,312
$0
$51,890
$0
$93,702
Non-Executive Director
2023
$0
$0
$0
$0
$0
$0
$0
* Share based payments reflect the cash equivalent in lieu of Director fees.
(a) Paul Espie retired as Non-Executive Director & Chairman on 30 May 2023.
(b) Peter Cleary has elected to take his Director Fees in Restricted Rights in lieu of a cash payment. The $99,900 were approved at the 2024 AGM and relate to
director fees from July 2023 to June 2024.
(c) Louis Rozman has elected to take his Director Fees in Restricted Rights in lieu of a cash payment from 1 July 2023. The $83,252 were approved at the 2024 AGM
and relate to director fees from July 2023 to June 2024
(d) Paul Fudge and his alternate Jacqui Clarke retired as Non-Executive Directors on 17 November 2023.
(e) Karen Green was appointed Non-Executive Director on 17 November 2023. Karen elected to take her Director Fees in Restricted Rights in lieu of a cash payment
from date of appointment to 30 June 2024. The $51,890 were approved at the 2024 AGM and relate to director fees from October 2023 to June 2024. From 1 July
2024, Karen elected to take her fees in cash.
Empire Energy Group Limited
Directors’ Report
31 December 2024
42
18.
KMP Equity Interests and Changes During FY24
Movements in equity interests held by executive KMP during the reporting period, including their related parties, are set out below:
Table 18
Name
Instrument
Number Held
at Open FY24
Granted FY24
Expired
during
FY24
Vested
during
FY24
FY24
Exercised
(or Shares
received
from
Exercising)
FY24
Purchased
/
Other
FY24
Sold
Number
Held at
Close
2024
Number
Date Granted
Number
Number
Number
Number
Number
Number
Number
Alex
Underwood
Shares
2,750,000
-
-
-
-
-
-
-
2,750,000
Vested Rights
4,090,926
-
-
-
145,089
-
-
-
4,236,0151
Unvested Rights
5,568,420
28/05/2024
4,968,382
(2,238,867)
-
-
-
-
8,297,935
Options
-
-
-
-
-
-
-
-
-
Robin
Polson
Shares
-
-
-
-
-
-
-
-
-
Vested Rights*
-
20/12/2024
1,086,181
-
249,664
-
-
-
1,335,845
Unvested
Rights**
266,418
20/12/2024
2,296,675
(671,714)^
-
-
-
-
1,891,379
Chris White
Shares
-
-
-
-
-
-
-
-
-
Vested Rights
-
-
299,004
-
-
-
-
-
299,004
Unvested Rights
-
01/07/2024
2,981,109
-
-
-
-
-
2,981,109
TOTALS
12,675,764
-
11,631,351
(2,910,581)
394,753
-
-
-
21,791,287
* For the FY24 Vested Rights granted, 211,538 were granted in FY23 and 477,417 were granted in FY22
** For the FY24 Unvested Rights granted, 961,548 were granted in FY23
^These Rights were forfeited
Empire Energy Group Limited
Directors’ Report
31 December 2024
43
Movements in equity interests held by non-executive KMP during the reporting period, including their related parties, are set out below:
Table 19
Name
Instrument
Number Held at
Open FY24
Granted FY24
Forfeited
during FY24
Vested
during
FY24
FY24
Exercised
(or Shares
received
from
Exercising)
FY24
Purchased
/Other
FY24
Sold
Number Held at
Close 2024
Number
Date
Granted
Number
Number
Number
Number
Number
Number
Number
John
Warburton
Shares
772,815
-
-
-
-
-
625,000
-
1,397,815
Vested Rights
1,200,000
-
-
-
-
-
-
-
1,200,000
Unvested Rights
-
-
-
-
-
-
-
-
-
Options
159,091
-
-
-
-
-
-
-
159,091
Peter
Cleary
Shares
1,044,546
-
-
-
-
625,000
-
1,669,546
Vested Rights
752,707
28/05/2024
574,453
-
-
-
-
-
1,327,160
Unvested Rights
-
-
-
-
-
-
-
-
-
Options
227,273
-
-
(227,273)
-
-
-
-
-
Louis
Rozman
Shares
683,546
-
-
-
-
-
156,250
-
839,796
Vested Rights
-
28/05/2024
478,722
-
-
-
-
-
478,722
Unvested Rights
-
-
-
-
-
-
-
-
-
Options
227,273
-
-
(227,273)
-
-
-
-
-
Karen
Green
Shares
-
-
-
-
-
-
625,000
-
625,000
Vested Rights
-
28/05/2024
274,927
-
-
-
-
-
274,927
Unvested Rights
-
-
-
-
-
-
-
-
-
Options
-
-
-
-
-
-
-
-
-
TOTALS
5,067,251
-
1,328,102
(454,546)
-
-
2,031,250
-
7,927,057
Empire Energy Group Limited
Directors’ Report
31 December 2024
44
The following outlines the accounting values and potential future costs of equity remuneration granted during FY24 for executive KMP:
Table 20
2024 Equity
Grants
Tranche
Grant
Type
Vesting
Conditions
Grant Date
Value of
Grant per
Right
Total value
of Grant
Value
Expensed in
FY 24
Max Value to
be Expensed in
Future Years
Name
Alex
Underwood
FY24 STVR Restricted Rights
STVR
n/a*
n/a
n/a
n/a
n/a
n/a
FY24 LTVR Performance Rights - T1
LTVR
Absolute TSR
28/05/2024
$0.038
$94,339
$21,631
$72,708
FY24 LTVR Performance Rights - T2
LTVR
Milestones
28/05/2024
$0.190
$235,998
$54,078
$181,920
Robin Polson
FY24 STVR Restricted Rights
STVR
n/a*
20/12/2024
$0.210
$83,417
$83,417
$0
FY24 LTVR Performance Rights
LTVR
Absolute TSR
20/12/2024
$0.053
$57,725
$857
$56,868
FY24 LTVR Service Rights
LTVR
Milestones
20/12/2024
$0.210
$42,056
$624
$41,432
FY24 LTVR Service Rights (vested)
LTVR
Milestones
20/12/2024
$0.210
$42,556
$42,556
$0
Chris White
FY24 STVR Restricted Rights
STVR
n/a*
20/12/2024
$0.210
$62,791
$62,791
$0
FY24 LTVR Performance Rights (sign -on)
LTVR
Absolute TSR
1/07/2024
$0.483
$87,263
$17,453
$69,810
FY24 LTVR Performance Rights
LTVR
Absolute TSR
20/12/2024
$0.053
$24,739
$367
$24,372
FY24 LTVR Service Rights
LTVR
Milestones
1/07/2024
20/12/2024
$0.210
$122,360
$21,180
$101,180
Totals
$853,244
$304,954
$548,290
Note: the minimum value to be expensed in future years for each of the above grants made in FY24 is nil. A reversal of previous expense resulting in a negative
expense in the future may occur in the event of an executive KMP departure or failure to meet non-market-based conditions including failure for Gate to open.
*Pursuant to Section 300A (1)(d) of the Corporations Act, The FY20 STVR Restricted Rights are not subject to the satisfaction of a performance condition as the
Restricted Rights have been used to settle short term awards already subject to performance conditions.
Empire Energy Group Limited
Directors’ Report
31 December 2024
45
The following outlines the accounting values and potential future costs of equity remuneration granted during FY24 for Non-executive KMP:
Table 21
2024 Equity
Grants
Tranche
Grant Type
Vesting
Conditions
Grant Date
Value of
Grant per
Right
Total Value at
Grant
Value
Expensed in
FY 24
Max Value to
be Expensed
in Future
Years
Name
Peter Cleary
Restricted Rights
Fee Sacrifice
n/a*
28/05/2024
$0.190
$109,146
$109,146
-
Louis Rozman
Restricted Rights
Fee Sacrifice
n/a*
28/05/2024
$0.190
$90,957
$90,957
-
Karen Green
Restricted Rights
Fee Sacrifice
n/a*
28/05/2024
$0.190
$52,236
$52,236
-
Note: the minimum value to be expensed in future years for each of the above grants made in FY24 is nil. A reversal of previous expense resulting in a negative
expense in the future may occur in the event of a NED departure or failure to meet non-market-based conditions.
*Pursuant to Section 300A (1)(d) of the Corporations Act, The Restricted Rights to Mr Peter Cleary, Mr Louis Rozman and Ms Karen Green are not subject to the
satisfaction of a performance condition as the Restricted Rights have been granted in lieu of cash payments for the fulfilment of their roles as Non-Executive Directors.
19.
KMP Service Agreements
19.1
Executive KMP Service Agreements
The following outlines current executive KMP service agreements:
Table 22
Name
Position Held at Close
of FY24
Employing Company
Duration of
Contract
Period of Notice
Termination Payments*
From Company
From KMP
Alex Underwood
Managing Director
Empire Energy Group
Limited
Permanent
12 months
12 months
12 months of salary in lieu
of notice
Robin Polson
Chief Financial Officer
Empire Energy Group
Limited
Permanent
3 months
3 months
3 months of salary in lieu
of notice
Chris White
Chief Operating Officer
Empire Energy Group
Limited
Permanent
3 months
3 months
3 months of salary in lieu
of notice
*Note: Under the Corporations Act the Termination Benefit Limit is 12 months average Salary (over prior 3 years) unless shareholder approval is obtained.
Empire Energy Group Limited
Directors’ Report
31 December 2024
46
19.2
Non-Executive Directors (NEDs) Service Agreements
The appointment of Non-executive Directors is subject to a letter of engagement. Under this approach NEDs
are not eligible for any termination benefits following termination of their office, nor any payments other than
those required under law such as in respect of superannuation. There are no notice periods applicable to
either party under this approach
20.
Other Statutory Disclosures
20.1
Loans to KMP and their related parties
During the financial year and to the date of this report, the Company made no loans to directors and other
KMP and none were outstanding as at 31 December 2024 (2023: Nil).
20.2
Other transactions with KMP
The following transactions occurred with entities controlled by Related Parties:
Table 23
Related Party
Related Entity
Transactions
Contracting Payment
Melissa
Underwood
Spouse of
Managing Director
Temporary contract as
Accounting Assistant
$189,195
End of Audited Remuneration Report
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Auditor’s independence declaration to the directors of Empire Energy Group
Limited
As lead auditor for the audit of the financial report of Empire Energy Group Limited for the financial
year ended 31 December 2024, I declare to the best of my knowledge and belief, there have been:
a.
No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b.
No contraventions of any applicable code of professional conduct in relation to the audit; and
c.
No non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of Empire Energy Group Limited and the entities it controlled during the
financial year.
Ernst & Young
Siobhan Hughes
Partner
Sydney
31 March 2025
Empire Energy Group Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 31 December 2024
Consolidated
Note
2024
2023
(restated*)
$
$
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes
48
Revenue from continuing operations
Other income
5
1,022,028
50,803
Finance income
5
1,525,030
250,113
Expenses
Exploration expenses
(12,186,111)
(9,093,233)
General and administration expenses
6
(9,178,163)
(6,634,540)
Depreciation, depletion and amortisation
6
(280,610)
(289,058)
Unrealised loss on forward commodity contracts
-
(296,020)
Finance costs
6
(1,279,345)
(1,042,321)
Loss before income tax expense from continuing operations
(20,377,171)
(17,054,256)
Income tax expense
7
(177,010)
(251,113)
Loss after income tax expense from continuing operations
(20,554,181)
(17,305,369)
Profit/(loss) after income tax expense from discontinued operations
8
6,126,380
(4,776,547)
Loss after income tax expense for the year attributable to the
owners of Empire Energy Group Limited
(14,427,801)
(22,081,916)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Transfer of foreign currency reserve on disposal of US subsidiary
(63,050)
-
Translation of foreign operations
351,622
311,481
Other comprehensive income for the year, net of tax
288,572
311,481
Total comprehensive loss for the year attributable to the owners
of Empire Energy Group Limited
(14,139,229)
(21,770,435)
Total comprehensive loss for the year is attributable to:
Continuing operations
(19,954,454)
(16,993,888)
Discontinued operations
5,815,225
(4,776,547)
(14,139,229)
(21,770,435)
*
Note that the comparatives have been restated to reflect the profit/(loss) from discontinued operations due to sale of US subsidiary in April 2024. Refer to note 8.
Empire Energy Group Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 31 December 2024
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes
49
Cents
Cents
Earnings per share for loss from continuing operations
attributable to the owners of Empire Energy Group Limited
Basic earnings per share
10
(2.20)
(2.24)
Diluted earnings per share
10
(2.20)
(2.24)
Earnings per share for profit/(loss) from discontinued operations
attributable to the owners of Empire Energy Group Limited
Basic earnings per share
10
0.66
(0.62)
Diluted earnings per share
10
0.66
(0.62)
Earnings per share for loss attributable to the owners of Empire
Energy Group Limited
Basic earnings per share
10
(1.54)
(2.86)
Diluted earnings per share
10
(1.54)
(2.86)
Empire Energy Group Limited
Consolidated statement of financial position
As at 31 December 2024
Consolidated
Note
2024
2023
$
$
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes
50
Assets
Current assets
Cash and cash equivalents
9
25,437,604
12,971,514
Trade and other receivables
11
2,728,214
1,912,220
Other assets
12
9,593,865
5,219,862
Inventories
-
38,937
Total current assets
37,759,683
20,142,533
Non-current assets
Oil and gas properties
14
-
38,206,087
Property, plant and equipment
15
2,823,379
556,565
Exploration and evaluation assets
16
123,711,342
111,514,901
Right-of-use assets
17
423,897
982,961
Intangibles
-
99,732
Financial assets
13
2,283,767
-
Total non-current assets
129,242,385
151,360,246
Total assets
167,002,068
171,502,779
Liabilities
Current liabilities
Trade and other payables
18
23,854,858
8,466,291
Borrowings
19
1,827,000
8,771,474
Lease liabilities
20
255,944
604,085
Provisions
21
256,085
271,723
Total current liabilities
26,193,887
18,113,573
Non-current liabilities
Lease liabilities
20
196,078
370,509
Provisions
21
4,168,914
40,715,280
Total non-current liabilities
4,364,992
41,085,789
Total liabilities
30,558,879
59,199,362
Net assets
136,443,189
112,303,417
Equity
Contributed equity
22
293,400,772
255,945,973
Reserves
23
12,271,302
11,177,030
Accumulated losses
(169,228,885) (154,819,586)
Total equity
136,443,189
112,303,417
Empire Energy Group Limited
Consolidated statement of changes in equity
For the year ended 31 December 2024
The above consolidated statement of changes in equity should be read in conjunction with the
accompanying notes
51
Issued
Accumulated
Capital
Reserves
losses
Total equity
Consolidated
$
$
$
$
Balance at 1 January 2023
255,945,973
10,399,487
(132,737,670)
133,607,790
Loss after income tax expense for the year
-
-
(22,081,916)
(22,081,916)
Other comprehensive income for the year, net
of tax
-
311,481
-
311,481
Total comprehensive income/(loss) for the year
-
311,481
(22,081,916)
(21,770,435)
Transactions with owners in their capacity as
owners:
Share-based payments
-
466,062
-
466,062
Balance at 31 December 2023
255,945,973
11,177,030
(154,819,586)
112,303,417
Issued
Accumulated
Capital
Reserves
losses
Total equity
Consolidated
$
$
$
$
Balance at 1 January 2024
255,945,973
11,177,030
(154,819,586)
112,303,417
Loss after income tax expense for the year
-
-
(14,427,801)
(14,427,801)
Other comprehensive income for the year, net
of tax
-
288,572
-
288,572
Total comprehensive income/(loss) for the year
-
288,572
(14,427,801)
(14,139,229)
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction costs
(note 22)
37,454,799
-
-
37,454,799
Share-based payments
-
824,202
-
824,202
Transfer to/from accumulated losses (note 23)
-
(18,502)
18,502
-
Balance at 31 December 2024
293,400,772
12,271,302
(169,228,885)
136,443,189
Empire Energy Group Limited
Consolidated statement of cash flows
For the year ended 31 December 2024
Consolidated
Note
2024
2023
$
$
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
52
Cash flows from operating activities
Receipts from customers (inclusive of GST)
(57,171)
11,953,249
Payments to suppliers and employees (inclusive of GST)
(15,024,878)
(35,577,593)
Government grants (Beetaloo Cooperative Drilling Program)
-
7,697,880
R&D tax incentive
3,968,447
15,336,577
Interest received
1,527,927
308,554
Interest and other finance costs paid
(1,494,324)
(1,939,642)
Income taxes paid
(177,010)
(251,113)
Net cash used in operating activities
35
(11,257,009)
(2,472,088)
Cash flows from investing activities
Payments for property, plant and equipment
15
(942,389)
(137,043)
Payments for exploration and evaluation assets
(26,073,117)
(7,024,670)
Payments for security deposits
-
(625,239)
Proceeds from disposal of property, plant and equipment
-
403,970
Proceeds from release of security deposits
4,398,257
-
Sale of royalties for exploration and evaluation assets
7,757,367
-
Proceeds from the sale of discontinued operation
8,100,603
-
Net cash used in investing activities
(6,759,279)
(7,382,982)
Cash flows from financing activities
Proceeds from issue of shares
22
39,000,000
-
Proceeds from interest-bearing liabilities
-
1,827,000
Repayments of interest-bearing liabilities
(7,061,421)
(804,094)
Share issue transaction costs
(1,545,201)
-
Repayment of lease liabilities
(584,630)
(349,174)
Net cash from financing activities
29,808,748
673,732
Net increase/(decrease) in cash and cash equivalents
11,792,460
(9,181,338)
Cash and cash equivalents at the beginning of the financial year
12,971,514
21,880,311
Effects of exchange rate changes on cash and cash equivalents
673,630
272,541
Cash and cash equivalents at the end of the financial year
9
25,437,604
12,971,514
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
53
Note 1. General information
The financial statements cover Empire Energy Group Limited as a Group consisting of Empire Energy Group
Limited and the entities it controlled at the end of, or during, the year. The financial statements are presented
in Australian dollars, which is Empire Energy Group Limited's functional and presentation currency.
Empire Energy Group Limited is a listed public company limited by shares, incorporated and domiciled in
Australia. Its registered office and principal place of business is:
Level 5
6 - 10 O’Connell Street
Sydney NSW 2000
A description of the nature of the Group'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 31 March
2025. The Directors have the power to amend and reissue the financial statements.
Note 2. Material accounting policies information
New or amended Accounting Standards and Interpretations adopted
The Group 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. The
adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial
performance or position of the Group.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
Going concern
The Group has prepared the financial report on the going concern basis, which assumes continuity of normal
business activities and the realisation of assets and settlement of liabilities in the ordinary course of business.
As at 31 December 2024 the Group reported an operating loss after income tax of $14,427,801 and incurred
net operating cash outflows of $11,257,009.
The Group continues to incur increased expenditure in respect of the Carpentaria Pilot Project. The Group is
also planning significant expenditures, not yet committed, for the Carpentaria Pilot Project within the next 12
months. The existing Group’s cash on hand, when taking account of the existing facility debt covenant to retain
a minimum cash balance of $10 million (refer Note 19), is not sufficient to meet all these obligations (committed
or otherwise) as they come due over the next twelve months.
These factors raise material uncertainty regarding the Group’s ability to continue as a going concern. The
continuation of the Group as a going concern is dependent upon the ability of the Group to obtain necessary
additional capital to fund ongoing activities within the next 12 months.
Management has several plans in various stages of progress to source additional funding including drawing
down on its $30 million R&D Facility ($12.8 million was drawn on this facility in February this year). The R&D
Facility provides Empire with additional liquidity and will allow Empire to better manage its working capital
requirements. Funds can be applied to Northern Territory appraisal activities including C-5H and construction
of infield infrastructure.
The Directors are confident that funding will be available to provide operating capital based on:
●
A history of successful equity raises, noting the Company raised $39 million in 2024 with the previous
equity raise in 2022 where the Company raised $30.5 million.
●
In 2024 Empire received an R&D Tax Offset for FY2023 of $4.0 million (2023: $15.6 million for FY2022).
The Company will continue to apply for R&D Tax Offsets in respect of its eligible R&D activities undertaken as
part of its Carpentaria Pilot Project.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 2. Material accounting policies information (continued)
54
However, if the Group is not successful in securing sufficient additional funds or through other arrangements
when required, then to meet its expenditure targets there may be uncertainty about whether the Group is able
to realise assets and/or extinguish liabilities in the normal course of business at the amounts stated in the
Financial Report.
The consolidated financial statements do not include any adjustments related to the recoverability and
classification of recorded assets and liabilities that might be necessary should the Group be unable to continue
as a going concern.
Basis of preparation
These general purpose financial statements have 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. These financial statements also comply
with International Financial Reporting Standards as issued by the International Accounting Standards Board
('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where
applicable, the revaluation of financial assets and liabilities at fair value through profit or loss and derivative
financial instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the Group's accounting policies.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates
are significant to the financial statements, are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group.
Supplementary information about the parent entity is disclosed in note 32.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Empire Energy
Group Limited ('Company' or 'parent entity') as at 31 December 2024 and the results of all subsidiaries for the
year then ended. Empire Energy Group Limited and its subsidiaries together are referred to in these financial
statements as the 'Group' or 'Empire Group'.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the
Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability
to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated
from the date on which control is transferred to the Group. They are de-consolidated from the date that control
ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment
of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in
ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference
between the consideration transferred and the book value of the share of the non-controlling interest acquired
is recognised directly in equity attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and
non-controlling interest in the subsidiary together with any cumulative translation differences recognised in
equity. The Group recognises the fair value of the consideration received and the fair value of any investment
retained together with any gain or loss in profit or loss.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 2. Material accounting policies information (continued)
55
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on
the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM
is responsible for the allocation of resources to operating segments and assessing their performance.
Foreign currency translation
Foreign currency transactions
Foreign currency transactions are translated into the Company's functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of
such transactions and from the translation at financial year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into the Company's functional currency using the
exchange rates at the reporting date. The revenues and expenses of foreign operations are translated into the
Company's functional currency using the average exchange rates, which approximate the rates at the dates
of the transactions, for the period. All resulting foreign exchange differences are recognised in other
comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is
disposed of.
Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be
entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the
Group: identifies the contract with a customer; identifies the performance obligations in the contract;
determines the transaction price which takes into account estimates of variable consideration and the time
value of money; allocates the transaction price to the separate performance obligations on the basis of the
relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when
or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the
goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such
as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other
contingent events. Such estimates are determined using either the 'expected value' or 'most likely amount'
method. The measurement of variable consideration is subject to a constraining principle whereby revenue
will only be recognised to the extent that it is highly probable that a significant reversal in the amount of
cumulative revenue recognised will not occur. The measurement constraint continues until the uncertainty
associated with the variable consideration is subsequently resolved. Amounts received that are subject to the
constraining principle are recognised as a refund liability.
Finance income
Finance income comprises interest income on funds invested as well as fair value gains on oil and gas
derivatives the Group is party to. Interest income is recognised as it accrues, using the effective interest
method.
Government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to
match them with the costs that they are intended to compensate.
Government grants related to assets, including non-monetary grants at fair value, are presented in the
statement of financial position by deducting the grant in arriving at the carrying amount of the asset.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 2. Material accounting policies information (continued)
56
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on
the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and
liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior
periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be
applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or
substantively enacted, except for:
●
when the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction, affects
neither the accounting nor taxable profits; or
●
when the taxable temporary difference is associated with interests in subsidiaries, associates or joint
ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference
will not reverse in the foreseeable future.
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.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date.
Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits
will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are
recognised to the extent that it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax
assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to
the same taxable authority on either the same taxable entity or different taxable entities which intend to settle
simultaneously.
Discontinued operations
A discontinued operation is a component of the Group that has been disposed of or is classified as held for
sale and that represents a separate major line of business or geographical area of operations, is part of a
single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired
exclusively with a view to resale. The results of discontinued operations are presented separately on the face
of the statement of profit or loss and other comprehensive income.
Tax consolidation
Empire Energy Group Limited and its wholly-owned Australian resident entities form a tax-consolidated Empire
Group. As a consequence, all members of the tax-consolidated Empire Group have been taxed as a single
entity since 1 July 2003. The head entity within the tax-consolidated Empire Group is Empire Energy Group
Limited.
Current tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences
of the members of the tax-consolidated Empire Group are recognised in the separate financial statements of
the members of the tax-consolidated Empire Group using the ‘separate taxpayer within Empire Group’
approach by reference to the carrying amounts of assets and liabilities in the separate financial statements of
each entity and the tax values applying under tax consolidation.
Any current tax liabilities (or assets) and deferred tax assets arising from unused tax losses of the subsidiaries
are assumed by the head entity in the tax-consolidated Empire Group and are recognised by the Empire Group
as amounts payable/(receivable) to/from other entities in the tax-consolidated Empire Group in conjunction
with any tax funding arrangement amounts (refer below). Any difference between these amounts is recognised
by the Empire Group as an equity contribution or distribution.
The Empire Group recognises deferred tax assets arising from unused tax losses of the tax consolidated
Empire Group to the extent that it is probable that future taxable profits of the tax consolidated Empire Group
will be available against which the asset can be utilised.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 2. Material accounting policies information (continued)
57
Any subsequent period adjustments to deferred tax assets arising from unused tax losses as a result of revised
assessments of the probability of recoverability is recognised by the head entity only.
Nature of tax funding arrangements and tax sharing arrangements
The head entity, in conjunction with other members of the tax-consolidated Empire Group, has entered into a
tax funding arrangement which sets out the funding obligations of members of the tax-consolidated Empire
Group in respect of tax amounts.
The tax funding arrangements require payments to/from the head entity equal to the current tax liability/(asset)
assumed by the head entity and any tax-loss deferred tax asset assumed by the head entity, resulting in the
head entity recognising an inter-entity receivable/(payable) equal in amount to the tax liability/(asset) assumed.
The inter-entity receivables/(payables) are at call. Contributions to fund the current tax liabilities are payable
as per the tax funding arrangement and reflect the timing of the head entity’s obligation to make payments for
tax liabilities to the relevant tax authorities.
The head entity in conjunction with other members of the tax-consolidated Empire Group, has also entered
into a tax sharing agreement. The tax sharing agreement provides for the determination of the allocation of
income tax liabilities between the entities should the head entity default on its tax payment obligations. No
amounts have been recognised in the financial statements in respect of this agreement as payment of any
amounts under the tax sharing agreement is considered remote.
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.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method, less any allowance for expected credit losses. Trade receivables are generally due
for settlement within 30 to 90 days.
An estimate of expected credit is loss is made based on historic data on collectability and consideration of the
credit worthiness of customers. Bad debts are written-off when identified.
Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation and impairment.
Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and
equipment (excluding land) over their expected useful lives as outlined below, except for land which is not
depreciated:
Buildings
40 years
Equipment
5 years
Motor vehicles
5 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each
reporting date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic
benefit to the Group. Gains and losses between the carrying amount and the disposal proceeds are taken to
profit or loss.
Exploration assets
Mineral exploration and evaluation expenditure is written off as incurred or accumulated in respect of each
identifiable area of interest and capitalised. These costs are carried forward only if they relate to an area of
interest for which rights of tenure are current and in respect of which:
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 2. Material accounting policies information (continued)
58
●
such costs are expected to be recouped through the successful development and exploitation of the area
of interest, or alternatively by its sale; or
●
exploration and/or evaluation activities in the area have not reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves and active or significant
operations in, or in relation to, the area of interest are continuing.
These costs are only capitalised to the extent that they are expected to be recovered through the successful
development of the area. In all other cases, these costs are expensed as incurred.
In the event that an area of interest is abandoned or if the Directors consider the expenditure to be of reduced
value, accumulated costs carried forward are written off during the period in which that assessment is made.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest.
Immediate restoration, rehabilitation and environmental costs necessitated by exploration and evaluation
activities are expensed as incurred and treated as exploration and evaluation expenditure. Exploration
activities resulting in future obligations in respect of restoration costs result in a provision to be made by
capitalising the estimated costs, on a discounted cash basis, of restoration and depreciating over the useful
life of the asset.
Impairment of exploration assets
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that
the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. Where a
potential impairment is indicated, assessment is performed for each area of interest in conjunction with the
group of operating assets (representing a Cash Generating Unit) to which the exploration and evaluation is
attributable. To the extent that capitalised exploration and evaluation is not expected to be recovered, it is
charged to profit or loss.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured
at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments
made at or before the commencement date net of any lease incentives received, any initial direct costs
incurred, and, except where included in the cost of inventories, an estimate of costs expected to be incurred
for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of
the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use
assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term
leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are
expensed to profit or loss as incurred.
Trade and other payables
Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of
the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost
and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
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.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 2. Material accounting policies information (continued)
59
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised
at the present value of the lease payments to be made over the term of the lease, discounted using the interest
rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate.
Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments
that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise
price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated
termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in
the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a
rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a
lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss
if the carrying amount of the right-of-use asset is fully written down.
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.
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past
event, it is probable the Group will be required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration
required to settle the present obligation at the reporting date, taking into account the risks and uncertainties
surrounding the obligation. If the time value of money is material, provisions are discounted using a current
pre-tax rate specific to the liability. The increase in the provision resulting from the passage of time is
recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave
expected to be settled wholly within 12 months of the reporting date are measured at the amounts expected
to be paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting
date are measured at the present value of expected future payments to be made in respect of services provided
by employees up to the reporting date. Consideration is given to expected future wage and salary levels,
experience of employee departures and periods of service. Expected future payments are discounted using
market yields at the reporting date on high quality corporate bonds with terms to maturity and currency that
match, as closely as possible, the estimated future cash outflows.
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or rights 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 the Black-Scholes or Monte-Carlo option pricing model that takes into account the exercise
price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility
of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option,
together with non-vesting conditions that do not determine whether the Group receives the services that entitle
the employees to receive payment. No account is taken of any other vesting conditions.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 2. Material accounting policies information (continued)
60
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.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to
market conditions are considered to vest irrespective of whether or not that market condition has been met,
provided all other conditions are satisfied.
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 Group or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the Group 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.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure
purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date; and assumes that the
transaction will take place either: in the principal market; or in the absence of a principal market, in the most
advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or
liability, assuming they act in their economic best interests. For non-financial assets, the fair value
measurement is based on its highest and best use. Valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair value, are used, maximising the use
of relevant observable inputs and minimising the use of unobservable inputs.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction,
net of tax, from the proceeds.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Empire Energy Group
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 additional ordinary shares that would have been
outstanding assuming conversion of all dilutive potential ordinary shares.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 2. Material accounting policies information (continued)
61
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not
yet mandatory, have not been early adopted by the Group for the annual reporting period ended 31 December
2024. The Group has not yet assessed the impact of these new or amended Accounting Standards and
Interpretations.
The accounting policies adopted are consistent with those of the previous financial year, unless otherwise
stated.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts in the financial statements. Management continually evaluates
its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses.
Management bases its judgements, estimates and assumptions on historical experience and on other various
factors, including expectations of future events, management believes to be reasonable under the
circumstances. The resulting accounting judgements and estimates will seldom equal the related actual
results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next
financial year are discussed below.
Provision for rehabilitation
A provision has been made for the present value of anticipated costs for future site restoration. The Group's
extraction and exploration activities are subject to various laws and regulations governing the protection of the
environment and Traditional Owners.
The Group recognises management's best estimate for site rehabilitations in the period in which they are
incurred. Actual costs incurred in the future periods could differ materially from the estimates. Additionally,
future changes to environmental laws and regulations, life of well estimates and discount rates could affect the
carrying amount of this provision.
Recoverability of exploration and evaluation assets
Assessment of the indicators of impairment of capitalised exploration and evaluation expenditure requires
certain estimates and assumptions to be made as to future events and circumstances, particularly in relation
to whether economic quantities of reserves have been discovered. Such estimates and assumptions may
change as new information becomes available. If, after expenditure is capitalised, information becomes
available indicating that the recovery of expenditure is unlikely, the amount capitalised is written off in the
consolidated statement of comprehensive income in the period when the new information becomes available.
The recoverability of the carrying amount of exploration and evaluation assets is dependent on the successful
development and commercial exploitation or sale of the respective areas of interest.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of
the equity instruments at the date at which they are granted. The fair value is determined by using either the
Monte-Carlo or Black-Scholes model taking into account the terms and conditions upon which the instruments
were granted. The accounting estimates and assumptions relating to equity-settled share-based payments
would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period
but may impact profit or loss and equity.
Note 4. Operating segments
Identification of reportable operating segments
The Group is organised into two operating segments:
(1) Northern Territory - includes all exploration and drilling activity of the Group in the Northern Territory,
conducted through Imperial Oil & Gas Pty Limited and Imperial Oil & Gas A Pty Limited; and
(2) Corporate - includes all centralised administration costs, minor other income and investments/loans in
Imperial Oil & Gas Pty Limited and Imperial Oil & Gas A Pty Limited (eliminated on consolidation).
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 4. Operating segments (continued)
62
These operating segments are based on the internal reports that are reviewed and used by the Board of
Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and
in determining the allocation of resources. There is no aggregation of operating segments.
Intersegment revenue relates to Corporate overhead charges only. Included in Other income are gains
disclosed separately of the face of the Statement of Profit or Loss and Other Comprehensive Income.
Information reported to the CODM allows resources to be allocated and subsequent performance to be
analysed. This is reviewed on a monthly basis.
Other operating expenses represents the profit/(loss) earned by each segment without allocation of central
administration costs and share-based payments, finance income and finance expense, gains or losses on
disposal of associates and discontinued operations. This is the measure reported to the CODM for the
purposes of resource allocation and assessment of segment performance.
The number of segments changed from three segments in the prior year to two segments due to the sales of
its US oil and gas assets.
Operating segment information
Northern
Territory
Corporate
Total
Consolidated - 2024
$
$
$
Revenue
Intersegment charges
(6,620,494)
6,620,494
-
Intersegment interest
7,030,962
(7,030,962)
-
Total revenue
410,468
(410,468)
-
Other income
-
1,022,028
1,022,028
Interest income (external)
6,511
1,518,519
1,525,030
Depreciation and amortisation
(19,877)
(260,733)
(280,610)
Share-based payments expense
-
(824,202)
(824,202)
Finance costs (net)
(1,262,584)
(16,761)
(1,279,345)
Other operating expenses
(13,161,011)
(7,379,061)
(20,540,072)
Loss before income tax expense
(14,436,961)
(5,940,210)
(20,377,171)
Income tax expense
(177,010)
Loss after income tax expense
(20,554,181)
Assets
Segment assets
138,044,670
28,957,398
167,002,068
Total assets
167,002,068
Liabilities
Segment liabilities
25,724,025
4,834,854
30,558,879
Total liabilities
30,558,879
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 4. Operating segments (continued)
63
USA
Northern
Territory
Corporate
Eliminations
Total
Consolidated - 2023
$
$
$
$
$
Revenue
Intersegment interest
-
-
9,757,939
(9,757,939)
-
Intersegment charges
-
-
4,827,588
(4,827,588)
-
Total revenue
-
-
14,585,527
(14,585,527)
-
Segment profit/(loss)
29,897
(14,077,405)
8,312,013
(9,643,891) (15,379,386)
Other income
(2,914)
53,717
-
-
50,803
Interest income (external)
372
6,896
242,845
-
250,113
Depreciation and amortisation
-
(20,003)
(269,055)
-
(289,058)
Share-based payments expense
-
-
(348,387)
-
(348,387)
Finance costs (net)
-
(1,019,260)
(23,061)
-
(1,042,321)
Unrealised loss on forward
commodity contracts
(296,020)
-
-
-
(296,020)
Intersegment interest
(2,509,023)
(7,385,981)
-
9,895,004
-
(Loss)/profit before income tax
expense
(2,777,688) (22,442,036)
7,914,355
251,113
(17,054,256)
Income tax expense
(251,113)
Loss after income tax expense
(17,305,369)
Assets
Segment assets
45,826,070 116,534,967 253,594,035 (244,452,293) 171,502,779
Total assets
171,502,779
Liabilities
Segment liabilities
79,912,793 178,800,101
1,894,078 (201,407,610)
59,199,362
Total liabilities
59,199,362
Historically, all of the Group's producing oil and gas assets were located in the USA. Since the Company sold
its producing US subsidiary during the reporting period (refer to note 8), the Group didn't have producing assets
as at 31 December 2024.
All the Group's exploration oil and gas tenements are in the Northern Territory, Australia.
The loss generated by disposed US operations up to the disposal date was $830,907 (excluding the gain on
disposal of $6.9 million).
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
64
Note 5. Finance and Other Income
Finance income
Consolidated
2024
2023
Interest from bank
1,144,099
250,113
Fair value movement on deferred consideration
107,341
-
Unwind of discount of solar financial asset
273,590
-
1,525,030
250,113
Other income
Consolidated
2024
2023
$
$
Net gain on disposal of property, plant and equipment
-
53,717
Deferred US solar payments (note 13)
1,022,028
(2,914)
1,022,028
50,803
On 28 November 2022, Empire executed a Mutual Use Agreement (“MUA”) with Connect Gen, a developer
and operator of renewable energy projects across the United States, for the use of surface rights over 2,056
acres of land which Empire holds oil & gas leases in Chautauqua County, New York State (the South Ripley
Solar Project). Consideration payable by Connect Gen included deferred payments of which $1.0m has been
recognised as income.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
65
Note 6. Expenses
Consolidated
2024
2023
$
$
Loss before income tax from continuing operations includes the following
specific expenses:
Depreciation and depletion
Depreciation - property, plant and equipment (note 15)
43,599
51,972
Depreciation - right-of-use assets (note 17)
237,011
237,086
Total depreciation and depletion
280,610
289,058
General and administration expenses
Salaries and wages - Australia
2,875,275
2,819,840
Other advisory fees
1,979,992
582,309
Other overhead
3,295,273
2,671,139
Insurance including NT work programs
203,421
212,865
Share-based payments expense*
824,202
348,387
9,178,163
6,634,540
Finance costs
Interest expense on financial liabilities
312,212
379,911
Interest expense on lease liabilities
16,761
23,061
Commitment fees (Facility - AU)
522,482
274,849
Establishment fees (Facility - AU)
427,890
364,500
Finance costs expensed
1,279,345
1,042,321
Employee costs
Defined contribution superannuation expense
185,743
182,720
Salaries and wages
2,689,532
5,818,753
Total employee costs
2,875,275
6,001,473
*
There were no changes to the Empire Energy Group Limited Rights Plan as compared to the prior period.
During the period 9,436,634 Performance Rights, 2,867,875 Restricted Rights and 3,604,207 Service
Rights were granted to employees and independent directors. Refer to note 34.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
66
Note 7. Income tax
Consolidated
2024
2023
$
$
Income tax expense
Current tax
177,010
251,113
Aggregate income tax expense
177,010
251,113
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense from continuing operations
(20,377,171)
(17,054,256)
Profit/(loss) before income tax expense from discontinued operations
6,126,380
(4,776,547)
(14,250,791)
(21,830,803)
Tax at the statutory tax rate of 30% (2023: 25%)
(4,275,237)
(5,457,701)
Difference in overseas tax rates
(77,116)
67,652
Changes in Australian tax rate
493,332
-
Withholding tax paid
177,010
251,113
Deferred tax asset in relation to tax losses and temporary differences not
recognised
3,859,021
5,390,049
Income tax expense
177,010
251,113
Consolidated
2024
2023
$
$
Deferred tax assets not recognised
Deferred tax assets not recognised comprises temporary differences
attributable to:
Tax losses
45,044,801
24,000,839
Capital losses
-
201,841
Other
7,293,224
8,995,776
Total deferred tax assets not recognised
52,338,025
33,198,456
The above potential tax benefit, which excludes tax losses, for deductible temporary differences has not been
recognised in the statement of financial position as the recovery of this benefit is uncertain.
The potential benefit of the deferred tax asset attributable to tax losses will only be obtained if:
(i)
the Group derives future assessable income of a nature and of an amount sufficient to enable the benefit
from the deduction for the loss to be realised; or
(ii)
the Group continues to comply with the conditions for deductibility imposed by the law; and
(iii) no changes in tax legislation adversely affect the Group in realising the asset.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 7. Income tax (continued)
67
Consolidated
2024
2023
$
$
Deferred tax asset
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Accrued asset retirement obligation
21,201,841
3,618,421
Oil and gas properties and property, plant and equipment
-
4,738,466
Other
5,108,778
638,889
Deferred tax asset in relation to temporary differences not recognised
(7,293,224)
-
Set-off of deferred tax assets pursuant to set-off provisions
(19,017,395)
(8,995,776)
Deferred tax asset
-
-
Consolidated
2024
2023
$
$
Deferred tax liability
Deferred tax liability comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Oil and gas properties and property, plant and equipment
16,463,947
4,144,737
Other
2,553,448
114,035
Set-off of deferred tax liabilities pursuant to set-off provisions
(19,017,395)
(4,258,772)
Deferred tax liability
-
-
Note 8. Discontinued operations
Description
On 12 April 2024, the Group sold its oil & gas assets in the USA for US$8.2m (AU$12.5m), comprising of
upfront cash payment of US$5.9m (AU$9.0m) and deferred payments up to US$2.3m (AU$3.5m). With a fair
value of US$0.9m (AU$1.5m).
The deferred consideration is payable under the following terms:
●
The deferred consideration is paid in monthly instalments due on the first day of each month commencing
1 June 2024, until such amount is paid in full (i.e. the "Deferred Payment")
●
The monthly Deferred Payment amount shall be based on the Henry Hub settlement price from the second
preceding month. It shall constitute a single payment determined by the maximum amount, based on the
following tiered payment amounts that depend on the gas price, as shown below:
Gas price (US dollar per Million Btu)
Amount Payable (US dollar)
3.50 - 3.99
25,000
4.00 - 4.49
50,000
4.50 - 4.99
750,000
5.00 - 5.49
100,000
5.50 - 5.99
125,000
6.00 and above
150,000
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 8. Discontinued operations (continued)
68
Financial performance information
Consolidated
2024
2023
$
$
Discontinued revenue
2,044,791
6,085,528
Discontinued cost of sales
(1,375,526)
(5,892,491)
Discontinued gross profit
669,265
193,037
Discontinued other income
(27,092)
524,875
Discontinued interest income
2,897
58,441
Total other income
(24,195)
583,316
Discontinued expense
(1,409,262)
(5,552,900)
Loss before income tax expense
(764,192)
(4,776,547)
Income tax expense
-
-
Loss after income tax expense
(764,192)
(4,776,547)
Gain on disposal before income tax
6,890,572
-
Income tax expense
-
-
Gain on disposal after income tax expense
6,890,572
-
Profit/(loss) after income tax expense from discontinued operations
6,126,380
(4,776,547)
Translation reserve transferred to income statement
(63,050)
-
Total comprehensive income/(loss)
5,815,225
(4,776,547)
Cash flow information
Consolidated
2024
2023
$
$
Net cash used in operating activities
(625,304)
(193,037)
Net cash from investing activities
-
-
Net cash from financing activities
214,979
897,321
Net (decrease)/increase in cash and cash equivalents from discontinued
operations
(410,325)
704,284
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 8. Discontinued operations (continued)
69
Carrying amounts of assets and liabilities disposed
Consolidated
As at 12 April
2024
$
Cash and cash equivalents
54,723
Trade and other receivables
1,566,819
Inventories
54,433
Prepayments
330,596
Oil & gas properties
38,715,069
Property, plant and equipment
547,054
Right-of-use asset
296,728
Total assets
41,565,422
Trade and other payables
114,637
Provisions
37,742,956
Other liabilities
299,214
Total liabilities
38,156,807
Net assets
3,408,615
Of the upfront cash payment of US$5.9 million (A$9.0 million), US$4.6 million (A$7.1 million) has been used
to repay the external loan facility in the Group’s US business, immediately before sale (refer note 19). As such,
the balances above exclude this debt (as it had been repaid before divestment).
Details of the disposal
Consolidated
2024
$
Total sale consideration
10,484,370
Carrying amount of net assets disposed
(3,408,615)
Disposal costs
(185,183)
Gain on disposal before income tax
6,890,572
Reclassified to income statement
-
Gain on disposal after income tax
6,890,572
The total sale consideration is comprised of US$5.9 million in cash (A$9.0 million) and US$2.3 million in
deferred consideration (A$3.5 million). The deferred consideration has been fair valued at the date of sale as
US$0.9 million (A$1.5 million).
In determining the fair value of the deferred consideration on initial recognition, an expected cash flow profile
has been determined based on the terms of the agreement which stipulate how much is receivable by the
Group each month based on the Henry Hub gas price at that time. A Henry Hub forward curve at the date of
sale has therefore been used to estimate the timing of cash flows which have then been discounted based on
a 14.12% discount rate. This rate incorporates both the risk-free rate and counterparty credit risk.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
70
Note 9. Cash and cash equivalents
Consolidated
2024
2023
$
$
Current assets
Cash at bank
25,437,604 12,971,514
Note 10. Earnings per share
Consolidated
2024
2023
$
$
Earnings per share for loss from continuing operations
Loss after income tax attributable to the owners of Empire Energy Group
Limited
(20,554,181)
(17,305,369)
Number
Number
Weighted average number of ordinary shares used in calculating basic
earnings per share
935,213,554
773,121,148
Weighted average number of ordinary shares used in calculating diluted
earnings per share
935,213,554
773,121,148
Cents
Cents
Basic earnings per share
(2.20)
(2.24)
Diluted earnings per share
(2.20)
(2.24)
Consolidated
2024
2023
$
$
Earnings per share for profit/(loss) from discontinued operations
Profit/(loss) after income tax attributable to the owners of Empire Energy
Group Limited
6,126,380
(4,776,547)
Number
Number
Weighted average number of ordinary shares used in calculating basic
earnings per share
935,213,554
773,121,148
Weighted average number of ordinary shares used in calculating diluted
earnings per share
935,213,554
773,121,148
Cents
Cents
Basic earnings per share
0.66
(0.62)
Diluted earnings per share
0.66
(0.62)
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 10. Earnings per share (continued)
71
Consolidated
2024
2023
$
$
Earnings per share for loss
Loss after income tax attributable to the owners of Empire Energy Group
Limited
(14,427,801)
(22,081,916)
Number
Number
Weighted average number of ordinary shares used in calculating basic
earnings per share
935,213,554
773,121,148
Weighted average number of ordinary shares used in calculating diluted
earnings per share
935,213,554
773,121,148
Cents
Cents
Basic earnings per share
(1.54)
(2.86)
Diluted earnings per share
(1.54)
(2.86)
Nil Options (2023: 78,924,528), 14,350,433 Performance Rights (2023: 12,766,951), 4,993,336 Service Rights
(2023: 2,438,558) and 7,621,250 Restricted Rights (2023: 4,891,260) have been excluded from the above
calculation as their inclusion would be anti-dilutive.
Note 11. Trade and other receivables
Consolidated
2024
2023
$
$
Current assets
Other receivables
3,475
3
GST receivable
2,724,739
1,912,217
2,728,214
1,912,220
Note 12. Other assets
Consolidated
2024
2023
$
$
Current assets
Carpentaria-5H consumables*
8,128,238
-
Prepayments
1,255,033
510,028
Security deposits**
180,594
4,679,834
Term deposits
30,000
30,000
9,593,865
5,219,862
*
Consumables made up of sand and chemicals bought but not yet used for Hydraulic Stimulation expected
mid-2025.
**
Security deposits comprise of cash payments to secure leasing. In 2023 $4,397,896 related to Northern
Territory Environmental bonds held with the Northern Territory Government which is now funded via
Macquarie bank guarantees in favour of the Northern Territory Government on a non-cash-backed basis.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
72
Note 13. Financial assets
Consolidated
2024
2023
$
$
Non-current assets
Solar deferred payments(note 5)
656,870
-
Deferred consideration (note 8)
1,626,897
-
2,283,767
-
Solar deferred payments refer to all remaining payments of US$500k due to Empire E&P pursuant to the 2022
Mutual Use Agreement with ConnectGen Chautauqua Country LLC for the Ripley Solar Project to be received
by the Company. The Deferred consideration has been revalued at year end using the same methodology
described in note 8.
Note 14. Oil and gas properties
Consolidated
2024
2023
$
$
Non-current assets
Oil and gas - Producing
-
95,504,259
Less: Accumulated depletion
-
(60,481,115)
-
35,023,144
Oil and gas - Non Producing
-
3,182,943
-
38,206,087
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year
are set out below:
Oil and gas -
Producing
Oil and gas -
Non
Producing
Total
Consolidated
$
$
$
Balance at 1 January 2023
33,398,132
3,213,480
36,611,612
Change in estimate
2,882,216
-
2,882,216
Depletion
(985,900)
-
(985,900)
Exchange differences
(271,304)
(30,537)
(301,841)
Balance at 31 December 2023
35,023,144
3,182,943
38,206,087
Change in estimate
-
-
-
Disposals
(34,923,411)
(3,182,943)
(38,106,354)
Depletion
(257,459)
-
(257,459)
Exchange differences
157,726
-
157,726
Balance at 31 December 2024
-
-
-
Estimates of recoverable amounts for producing assets are based on an asset’s value in use or fair value less
costs to sell, using a discounted cash flow method.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
73
Note 15. Property, plant and equipment
Consolidated
2024
2023
$
$
Non-current assets
Land - at cost
-
7,310
Buildings - at cost
-
329,876
Less: Accumulated depreciation
-
(130,547)
-
199,329
Equipment - at cost
323,837
2,104,781
Less: Accumulated depreciation
(312,844)
(1,961,165)
10,993
143,616
Motor vehicles - at cost
140,460
1,024,460
Less: Accumulated depreciation
(138,637)
(818,150)
1,823
206,310
Plant and equipment- at cost
2,810,563
-
Less: Accumulated depreciation
-
-
2,810,563
-
2,823,379
556,565
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year
are set out below:
Land
Buildings
Equipment
Motor
vehicles
Plant and
equipment
Total
Consolidated
$
$
$
$
$
$
Balance at 1 January 2023
7,380
211,666
231,579
158,149
-
608,774
Additions
-
-
23,884
113,159
-
137,043
Exchange differences
(70)
(1,706)
(17,759)
173
-
(19,362)
Depreciation expense
-
(10,631)
(94,088)
(65,171)
-
(169,890)
Balance at 31 December
2023
7,310
199,329
143,616
206,310
-
556,565
Transfer from exploration and
evaluation assets (note 16)
-
-
-
-
3,227,243
3,227,243
Additions
-
-
9,797
-
932,592
942,389
R&D rebate
-
-
-
-
(1,349,272) (1,349,272)
Disposals
(6,530)
(199,329)
(117,220)
(140,527)
-
(463,606)
Exchange differences
(780)
-
(11,506)
(33,385)
-
(45,671)
Depreciation expense
-
-
(13,694)
(30,575)
-
(44,269)
Balance at 31 December
2024
-
-
10,993
1,823
2,810,563
2,823,379
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
74
Note 16. Exploration and evaluation assets
Consolidated
2024
2023
$
$
Non-current assets
Capitalised exploration and evaluation assets
123,711,342
111,514,901
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year
are set out below:
Capitalised
exploration
and
evaluation
assets
Consolidated
$
Balance at 1 January 2023
127,039,687
Additions
7,859,924
Disposals
(350,253)
Government grants and R&D tax incentive
(23,034,457)
Balance at 31 December 2023
111,514,901
Additions
26,073,117
Change in Provision on rehabilitation
(272,891)
Transfer to plant and equipment (note 15)
(3,227,243)
Government grants and R&D tax incentive
(2,619,175)
Private royalties*
(7,757,367)
Balance at 31 December 2024
123,711,342
*
On 17 April 2024, Daly Waters Royalty, LP (“Daly Waters”) and Liberty Energy Australia Pty. Limited
(“Liberty Energy”) each acquired a 2.25% royalty interest in the gross value of petroleum produced from
the 52 blocks that make up Exploration permit 187 (“EP187”) for a consideration of US$2.5m per party.
Under the terms of the royalty interest, a 2.25% royalty interest in the gross value of petroleum produced
from the ORRI Lands shall be paid to each party within 60 days of the end of each quarter. The ORRI
shall be calculated in largely the same manner as the 10% royalty payable to the Northern Territory
government (“NT Government)” as set forth in the Petroleum Royalty Act (“the Act”). The sale of royalty
has been treated as an effective sale of a portion of rights in EP187 to Liberty Energy and Daly Waters as
both Royalty holders will bear the economic risks and benefits related to the success of the project.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
75
Note 17. Right-of-use assets
Consolidated
2024
2023
$
$
Non-current assets
Plant and equipment
946,532
948,345
Less: Accumulated depreciation
(522,635)
(285,624)
423,897
662,721
Motor vehicles
748,117
1,058,386
Less: Accumulated depreciation
(748,117)
(738,146)
-
320,240
423,897
982,961
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year
are set out below:
Right-of-use
assets
Consolidated
$
Balance at 1 January 2023
999,606
Additions
320,423
Foreign exchange
(4,827)
Depreciation expense
(332,241)
Balance at 31 December 2023
982,961
Disposals
(322,053)
Depreciation expense
(237,011)
Balance at 31 December 2024
423,897
The Company currently leases its Australian corporate headquarters in Sydney under a 4-year operating lease
recognised as a right-of-use asset and lease liability, with monthly payments approximately $22,888. The rental
agreement has a 3.75% fixed rent review on the anniversary of the commencement date of the lease being 3
November 2022.
The Group leases a photocopier under a 4-year operating agreement which commenced in October 2024.
Monthly lease payments are $395.
For AASB 16 Lease disclosures refer to:
●
note 6 for depreciation and interest expenses;
●
note 20 for lease liabilities; and
●
consolidated statement of cash flows for repayment of lease liabilities.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
76
Note 18. Trade and other payables
Consolidated
2024
2023
$
$
Current liabilities
Trade payables
18,524,798
4,459,808
Accruals
3,482,622
2,281,919
Other payables
1,847,438
1,724,564
23,854,858
8,466,291
Refer to note 25 for further information on financial instruments.
Note 19. Borrowings
Consolidated
2024
2023
$
$
Current liabilities
Bank loan - secured
1,827,000
8,771,474
Classification of borrowings
All borrowings have been classified as current liabilities on the basis that the Group does not have the right to
defer payment for at least 12 months after the reporting date.
Australian Operations
The Group established a new credit facilities totaling A$65 million with Macquarie Bank Limited to support its
activities in the Northern Territory , of which Facility C is not yet available due to conditions Precedent to First
Utilisation. The outstanding balance as at 31 December 2024 of Tranche A of the old credit facility was
$1,827,000, having been fully repaid in January 2025. Key terms of this credit facility are set out below:
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 19. Borrowings (continued)
77
Principal amount
$65 million comprising:
- Facility A (Revolving Credit Facility, $30.0 million)
- Facility B (Performance Bond Facility, $5 million)
- Facility C (Midstream Infrastructure Facility, $30 million)
Borrowers
Imperial Oil & Gas Pty Limited
Imperial Oil & Gas A Pty Limited
Guarantor
Empire Energy Group Limited, Imperial Oil & Gas Pty Limited and Imperial
Oil & Gas A Pty Limited
Security
First ranking security over assets of each Borrower
First ranking security over the Guarantor’s shares in each Borrowings and
intercompany loans, plus featherweight security over the Guarantor’s other
assets
Fees
Utilisation Fee: 1.5% of utilisation
Commitment Fee: 40% of margin
Margin: Facility A (5.5% p.a.), Facility B (10% p.a.)
Tolling Fee: facility C ($0.70 / GJ * 25 TJ / day + CPI)
Interest rate
Margin plus BBSW
Financial covenants
- Ratio of current assets to current liabilities of at least 1.00 to 1.00
- Minimum cash balance in the Borrowers and Guarantor of at least $10
million (or its equivalent in any other currency or currencies)
Maturity date
31 December 2026 (Facility A + B)
31 December 2034 (Facility C)
Repayment arrangements
Facility A: on receipt of relevant R&D Tax Incentive payment
Facility B: on maturity date
Facility C: Empire may elect to prepay the Midstream Infrastructure Facility
at any time by making payment of an amount representing a 15% IRR for
the Midstream Infrastructure Facility cashflows up to the date of prepayment
including all tolls paid up to the date of prepayment
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 19. Borrowings (continued)
78
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Consolidated
2024
2023
2024
2023
US$
US$
$
$
Total facilities
Bank loan - US Operations*
-
4,750,020
-
6,944,474
Bank loan - Australia Operations - Facility A**
-
-
30,000,000
2,250,000
Bank loan - Australia Operations - Facility C***
-
-
30,000,000
-
-
4,750,020
60,000,000
9,194,474
Used at the reporting date
Bank loan - US Operations
-
4,750,020
-
6,944,474
Bank loan - Australia Operations - Facility A
-
-
1,827,000
1,827,000
Bank loan - Australia Operations - Facility C
-
-
-
-
-
4,750,020
1,827,000
8,771,474
Unused at the reporting date
Bank loan - US Operations*
-
-
-
-
Bank loan - Australia Operations - Facility A
-
-
28,173,000
423,000
Bank loan - Australia Operations - Facility C
-
-
30,000,000
-
-
-
58,173,000
423,000
*
The Bank Loan for US Operations was an amortising term loan for the US Business, Empire E&P. On 12
April 2024, the loan facility was repaid in full using proceeds from the sale of the Empire E&P business.
Refer to note 8 for details on the sale.
**
The Group has a $30 million R&D Facility (Facility A) with Macquarie Bank which provides Empire with
additional liquidity and will allow Empire to better manage its working capital requirements. Funds can be
applied to Northern Territory exploration, appraisal and development activities including C-5H and
construction of infield infrastructure. Facility sized at 80% of the FY2024 and FY2025 estimated tax
rebates under the Australian Government’s Research and Development (“R&D”) Tax Incentive Scheme.
*** The Group has a $30 million Midstream Infrastructure Facility (Facility C) with Macquarie Bank where
proceeds can be applied to the refurbishment and construction of the Carpentaria Pilot Gas Plant.
Repayment of the Midstream Infrastructure Facility will be via a tolling fee. Facility C is not yet available
due to conditions Precedent to First Utilisation.
The Group has a $5 million Performance Bond Facility (Facility B) with Macquarie Bank to meet Empire's
Northern Territory environmental bonding obligations. Bank guarantees issued under Tranche B provide
financial security to the Northern Territory Government.
Note 20. Lease liabilities
Consolidated
2024
2023
$
$
Current liabilities
Lease liability
255,944
604,085
Non-current liabilities
Lease liability
196,078
370,509
452,022
974,594
Refer to note 25 for maturity analysis of lease liabilities.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
79
Note 21. Provisions
Consolidated
2024
2023
$
$
Current liabilities
Employee benefits
256,085
271,723
Non-current liabilities
Lease make good
43,940
43,940
Provision for rehabilitation (Northern Territory)
4,124,974
4,397,865
Asset retirement obligations (USA)
-
36,273,475
4,168,914
40,715,280
4,424,999
40,987,003
Movements in provisions
Movements in provision for rehabilitation and asset retirement obligations during the current financial year, are
set out below:
Lease make
good
Provision for
rehabilitation
Asset
retirement
obligations
Total
Consolidated
$
$
$
$
Carrying amount at the start of the year
43,940
4,397,865
36,273,475
40,715,280
Change in estimate
-
(272,891)
-
(272,891)
Disposal
-
-
(36,273,475)
(36,273,475)
Carrying amount at the end of the year
43,940
4,124,974
-
4,168,914
Lease make good
The provision represents the present value of the estimated costs to make good the premises leased by the
Group at the end of the respective lease terms.
Provision for rehabilitation (NT)
A provision has been made for the present value of anticipated costs for future NT site restoration.
Rehabilitation obligations arise for future removal and environmental restoration costs of exploration, appraisal
and development activities. The cost to abandon wells, remove facilities and rehabilitate affected areas is
based on the extent of work required under current legal requirements. Provisions for the cost of each
rehabilitation are recognised at the time that the environmental disturbance occurs and capitalised as part of
the associated asset cost.
Note 22. Contributed equity
Consolidated
2024
2023
2024
2023
Shares
Shares
$
$
Ordinary shares - fully paid
1,017,303,219
773,121,148
293,400,772
255,945,973
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 22. Contributed equity (continued)
80
Movements in ordinary share capital
Details
Date
Shares
Issue
price
$
Balance
1 January 2023
773,121,148
255,945,973
Movements
-
-
Balance
31 December 2023
773,121,148
255,945,973
Issue of shares on exercise of
performance rights
1 March 2024
276,275
$0.000
-
Issue of shares on raising capital
24 April 2024
193,321,700
$0.160
30,931,472
Issue of shares on raising capital
5 June 2024
50,428,300
$0.160
8,068,528
Issue of shares on the exercise of
restricted rights
18 September 2024
137,885
$0.000
-
Issue of shares on the exercise of vested
performance rights
18 September 2024
17,911
$0.000
-
Share issue transaction costs, net of tax
-
$0.000
(1,545,201)
Balance
31 December 2024
1,017,303,219
293,400,772
Ordinary shares
Ordinary shares entitle the holder to participate in any dividends declared and any proceeds attributable to
shareholders should the Company be wound up, in proportions that consider both the number of shares held
and the extent to which those shares are paid up. 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.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so
that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum
capital structure to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt
is calculated as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Group is subject to certain financing arrangements covenants and meeting these is given priority in all
capital risk management decisions. There have been no events of default on the financing arrangements
during the financial year.
The capital risk management policy remains unchanged from the 2023 Annual Report.
The Company considers its capital to comprise its ordinary share capital and reserves.
In managing its capital, the Company’s primary objective is to maintain a sufficient funding base to enable the
Company to meet its working capital and strategic operation needs.
In making decisions to adjust its capital structure to achieve these aims, either through altering its dividend
policy, new share issues, or consideration of debt the Company considers not only its short-term position but
also its long-term operational and strategic objectives.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
81
Note 23. Reserves
Consolidated
2024
2023
$
$
Foreign currency translation reserve
(35,224)
(323,796)
Options reserve
12,306,526
11,320,327
Fair value reserve
-
180,499
12,271,302
11,177,030
Foreign currency translation reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements
of foreign operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net
investments in foreign operations.
Options reserve
The reserve is used to recognise the value of equity benefits provided to employees and Directors as part of
their remuneration, and other parties as part of their compensation for services.
Fair value reserve
The fair value reserve comprises the cumulative net change in the fair value of equity investments until the
investment is derecognised.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Foreign
currency
translation
Options
Fair value
Total
Consolidated
$
$
$
$
Balance at 1 January 2023
(635,277)
10,854,265
180,499
10,399,487
Foreign currency translation
311,481
-
-
311,481
Share-based payments
-
466,062
-
466,062
Balance at 31 December 2023
(323,796)
11,320,327
180,499
11,177,030
Transferred to profit or loss
(63,050)
-
-
(63,050)
Foreign currency translation
351,622
-
-
351,622
Share-based payments
-
824,202
-
824,202
Transfer from/(to) accumulated losses
-
161,997
(180,499)
(18,502)
Balance at 31 December 2024
(35,224)
12,306,526
-
12,271,302
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
82
Note 24. Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Franking credits
There are no franking account credits available as at 31 December 2024 and 31 December 2023.
Note 25. Financial instruments
Financial risk management objectives
The Empire Group’s principal financial instruments, other than derivatives, comprise bank loans, financial
assets, and cash and cash equivalents. The main purpose of these financial instruments is to raise finance for
the Empire Group’s operations. The Empire Group has various other financial assets and liabilities such as
trade receivables and payables, which arise from its operations. The Empire Group also enters derivative
transactions, principally commodity hedges.
The Board has overall responsibility for the determination of the Empire Group’s risk management objectives
and policies and has the responsibility for designing and operating processes that ensure the effective
implementation of the objectives and policies to the Empire Group’s finance function.
The Board receives monthly reports through which it reviews the effectiveness of the processes put in place
and appropriateness of the objectives and policies it sets.
The overall objective of the board is to set policies that seek to reduce risk as far as possible without unduly
affecting the Empire Group’s competitiveness and flexibility.
The Empire Group is exposed to risks that arise from its use of financial instruments. The main risks arising
from the Empire Group’s financial instruments are interest rate risk, commodity price risk, liquidity risk, equity
risk and credit risk. This note describes the Empire Group’s objectives, policies and processes for managing
those risks and methods used to measure them. Further quantitative information in respect of these risks is
presented throughout these financial statements.
There have been no substantive changes in the Empire Group’s exposure to financial instrument risks, its
objectives, policies and processes for managing those risks or the methods used to measure them from
previous periods unless otherwise stated in this note.
Further details regarding these policies are set out below:
Market risk
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency
risk through foreign exchange rate fluctuations.
The Empire Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s
operating activities (when expenditure is denominated in a foreign currency).
The risk is measured using sensitivity analysis and cash flow forecasting.
The foreign currency risk exposure is not material as at the statement of financial position date.
Interest rate risk
The Group's main interest rate risk arises from long-term borrowings.
The Empire Group is constantly monitoring its exposure to trends and fluctuations in interest rates in order to
manage interest rate risk. The Empire Group’s exposure to interest rate risk at 31 December 2024 is set out
in 'liquidity and interest rate risk management' below.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 25. Financial instruments (continued)
83
The Empire Group’s policy is to continually review the portion of its borrowings that are either at floating or
fixed rates of interest. To manage this mix in a cost-efficient manner, the Empire Group previously entered into
interest rate swaps, in which Empire agrees to exchange, at specified intervals, the difference between fixed
and variable interest rate amounts calculated by reference to an agreed upon notional principal amount. These
swaps were designated to hedge underlying debt obligations. There are no interest rate swaps at 31 December
2024.
The Empire Group monitors forecasts and actual cash flows and the maturity profiles of financial assets and
liabilities to manage its liquidity risk.
Credit risk
Credit risk is the risk that the other party to the financial instrument will fail to discharge their financial obligation
in respect of that instrument resulting in the Empire Group incurring a financial loss. The Empire Group’s
exposure to credit risk arises from potential default of the counter party with the maximum exposure equal to
the carrying amount of these instruments. There are no significant concentrations of credit risk within the
Empire Group.
The maximum exposure to credit risk at balance date is as follows:
Consolidated
2024
2023
$
$
Other receivables
2,728,214
1,912,220
Security deposits
180,594
4,679,834
2,908,808
6,592,054
Liquidity risk
Liquidity risk is the inability to access funds, both anticipated and unforeseen, which may lead to the Empire
Group being unable to meet its obligations in an orderly manner as they arise. Empire seeks to maintain
sufficient available liquidity (cash and available debt facilitates) at all times.
The Empire Group’s liquidity position is managed to ensure sufficient funds are available to meet financial
commitments in a timely and cost-effective manner. The Empire Group is primarily funded through on-going
cash flow, debt funding and equity capital raisings, as and when required.
Funding is in place with reputable financial institutions in the US and Australia. Bank compliance reporting is
undertaken quarterly and adherence to covenants checked regularly. Management also regularly monitors
actual and forecast cash flows to manage liquidity risk.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 25. Financial instruments (continued)
84
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest
date on which the financial liabilities are required to be paid. The tables include both interest and principal cash
flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying
amount in the statement of financial position.
Weighted
average
interest rate
1 year or
less
Between 1
and 2 years
Between 2
and 5 years
Over 5
years
Remaining
contractual
maturities
Consolidated - 2024
%
$
$
$
$
$
Non-derivatives
Non-interest bearing
Trade and other payables
-
23,854,858
-
-
-
23,854,858
Interest-bearing - variable
Bank loan - NT
8.54%
1,827,000
-
-
-
1,827,000
Interest-bearing - fixed rate
Lease liability
3.87%
255,944
196,078
-
-
452,022
Total non-derivatives
25,937,802
196,078
-
-
26,133,880
Weighted
average
interest rate
1 year or
less
Between 1
and 2 years
Between 2
and 5 years
Over 5
years
Remaining
contractual
maturities
Consolidated - 2023
%
$
$
$
$
$
Non-derivatives
Non-interest bearing
Trade and other payables
-
8,466,291
-
-
-
8,466,291
Interest-bearing - variable
Bank loan - US
11.90%
6,944,474
-
-
-
6,944,474
Bank loan - NT
9.84%
1,827,000
-
-
-
1,827,000
Interest-bearing - fixed rate
Lease liability
3.87%
604,085
-
370,509
-
974,594
Total non-derivatives
17,841,850
-
370,509
-
18,212,359
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually
disclosed above.
Equity risk
The Empire Group relies on equity markets to raise capital for its exploration and development activities and
is thus exposed to equity market volatility.
Equity price arises from investments in equity securities and Empire Group Limited’s issued capital.
The Group’s equity risk is considered minimal and as such no sensitivity analysis has been completed.
The fair value of financial instruments classified as level 3 is determined by the use of valuation models. These
include discounted cash flow analysis or the use of observable inputs that require significant adjustments
based on unobservable inputs (future Henry Hub price - refer to note 8). The fair value of financial asset
classified as level 3 as at 31 December 2024 is $1,626,898 (2023: nil).
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
85
Note 26. Key management personnel disclosures
Directors
The following persons were Directors of the Company at any time during the financial year were:
Peter Cleary
Alexander Underwood
Louis Rozman
Prof John Warburton
Karen Green
The following persons were Key Management Personnel of the Company at any time during the financial
year:
Robin Polson - Chief Financial Officer
Chris White - Chief Operating Officer
Compensation
The aggregate compensation made to Directors and other members of key management personnel of the
Group is set out below:
Consolidated
2024
2023
$
$
Short-term employee benefits
1,450,332
1,214,384
Post-employment benefits
85,047
78,951
Share-based payments
1,063,588
178,536
2,598,967
1,471,871
Other transactions with key management personnel and their related parties
Consolidated
2024
2023
$
$
Payment for contracting services from Melissa Underwood (Spouse of
Managing Director, Alex Underwood)
189,195
101,827
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
86
Note 27. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by EY, the auditor of
the Company, its network firms and unrelated firms:
Consolidated
2024
2023
$
$
Audit services - EY (2023: Nexia Sydney Audit Pty Ltd)
Audit and review of the financial statements
161,720
185,388
Other services - Nexia Sydney Audit Pty Ltd
Taxation and other advisory services
79,650
74,962
241,370
260,350
Audit services - Schneider Downs & Company Inc (US operations)
Audit or review of the financial statements
31,349
126,454
Other services - Schneider Downs & Company Inc (US operations)
Taxation services
-
22,982
31,349
149,436
Other services - Deloitte Pty Ltd
Advisory services
457,830
303,465
Note 28. Contingent assets
There are no contingent assets as at the date of this annual report (31 December 2023: nil).
Note 29. Contingent liabilities
The Empire Group is subject to various federal, state, territory and local laws and regulations relating to the
protection of the environment. The Empire Group has established procedures for the ongoing evaluation of its
operations, to identify potential environmental exposures and to comply with regulatory policies and
procedures.
Empire Energy Group Limited together with its subsidiaries Imperial Oil & Gas Pty Limited and Imperial Oil &
Gas A Pty Limited have granted Macquarie Bank Limited security over their assets as guarantors of the
Australian credit facility to Macquarie the lender.
Environmental expenditures that relate to current operations are expensed or capitalised as appropriate.
Expenditures that relate to an existing condition caused by past operations, and do not contribute to current or
future revenue generation, are expensed. Liabilities are recorded when environmental assessment and or
clean-up is probable, and the costs can be reasonably estimated. The Empire Group maintains insurance that
may cover in whole or in part certain environmental expenditures. At 31 December 2024, the Empire Group
had bank guarantees from Macquarie Bank for the total amount of $4,397,865 (31 December 2023: $0) under
facility B (refer to Note 19).
There have been no other changes in contingent liabilities since the last annual reporting date.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
87
Note 30. Commitments
Exploration and petroleum tenement leases
In order to maintain current rights of tenure to exploration and mining tenements, the Company and the
companies in the Group are required to outlay lease rentals and to meet the minimum expenditure
requirements of the various Government Authorities. These obligations are subject to re-negotiation upon
expiry of the relevant leases or when application for a mining licence is made. No expenditure commitment
exists at 31 December 2024 (2023: nil).
Note 31. Related party transactions
Empire Energy Group Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 33.
Key management personnel
Disclosures relating to key management personnel are set out in note 26 and the remuneration report included
in the Directors' report.
Transactions with related parties
There were no transactions with related parties during the current and previous financial year, other than those
identified with key management personnel in note 26.
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting
date.
Loans to/from related parties
During the year the Company advanced and received loans and provided accounting and administrative
services to other companies in the Empire Group. These balances, along with associated charges, are
eliminated on consolidation.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 32. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Parent
2024
2023
$
$
Profit after income tax
6,096,542
6,696,990
Total comprehensive income
6,096,542
6,696,990
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 32. Parent entity information (continued)
88
Statement of financial position
Parent
2024
2023
$
$
Total current assets
26,239,849
8,251,893
Total assets
140,979,863
110,279,465
Total current liabilities
4,594,836
1,432,937
Total liabilities
4,834,854
1,894,078
Equity
Contributed equity
293,400,772
255,945,973
Other reserves
12,271,301
11,177,030
Accumulated losses
(169,527,064) (158,737,616)
Total equity
136,145,009
108,385,387
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
Refer to note 29 for details on the guarantee the parent entity has in place in relation to the debts of its
subsidiaries as at 31 December 2024 and 31 December 2023.
Contingent liabilities
Refer to note 29 for details on contingent liabilities as at 31 December 2024 and 31 December 2023.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 31 December 2024 and
31 December 2023.
Material accounting policy information
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2,
except for the following:
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
●
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt
may be an indicator of an impairment of the investment.
Note 33. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries
in accordance with the accounting policy described in note 2:
Ownership interest
Principal place of business /
2024
2023
Name
Country of incorporation
%
%
Imperial Oil & Gas Pty Limited
Australia
100%
100%
Imperial Oil & Gas A Pty Limited
Australia
100%
100%
Empire Energy Holdings, LLC(1)
USA
100%
100%
Empire Energy USA, LLC(2)
USA
100%
100%
Empire Energy (MidCon), LLC(3)
USA
100%
100%
Empire Energy E&P, LLC(4)
USA
-
100%
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 33. Interests in subsidiaries (continued)
89
(1)
Holds a bank account only, not dormant as held for US tax purposes as carries all the tax losses.
(2)
Holds bank account and intercompany loan.
(3)
Dormant entity
(4)
Discontinued on 12 April 2024.
Note 34. Share-based payments
Share-based payments are issued to:
●
enable the Company to provide variable remuneration including both an at-risk component and an
incentive component, that is performance focused and linked to long-term value creation for shareholders;
●
enable the Company to compete effectively for the calibre of talent required for it to be successful;
●
ensure that Participants have commonly shared goals; and
●
assist Participants to become Shareholders.
Options
Set out below are summaries of options granted under the plan:
2024
Balance at
Expired/
Balance at
Exercise
the start of
forfeited/
the end of
Grant date
Expiry date
price
the year
Granted
Exercised
other
the year
13/08/2021 31/08/2024
$0.700
8,000,000
-
-
(8,000,000)
-
13/08/2021 31/08/2024
$0.700
1,696,970
-
-
(1,696,970)
-
09/09/2022 09/09/2024
$0.350 69,227,558
-
-
(69,227,558)
-
78,924,528
-
-
(78,924,528)
-
Weighted average exercise price
$0.390
$0.350
$0.000
$0.000
$0.000
2023
Balance at
Expired/
Balance at
Exercise
the start of
forfeited/
the end of
Grant date
Expiry date
price
the year
Granted
Exercised
other
the year
13/08/2021 31/08/2024
$0.700
8,000,000
-
-
-
8,000,000
13/08/2021 31/08/2024
$0.700
1,696,970
-
-
-
1,696,970
09/09/2022 09/09/2024
$0.350 69,227,558
-
-
-
69,227,558
78,924,528
-
-
-
78,924,528
Weighted average exercise price
$0.390
$0.000
$0.000
$0.000
$0.390
All Options are exercisable at the end of the financial year noting trading terms for options held by Company
employees and directors are subject to the Company’s Share Trading Policy.
The weighted average remaining contractual life of options granted during the financial year and outstanding
at the end of the financial year was 0 years (2023: 0.8 years).
The weighted average share price during the financial year was $0.220 (2023: $0.164).
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 34. Share-based payments (continued)
90
Performance Rights
During the 2013 financial year the Company issued 2,500,000 Performance Rights (pre-consolidation) over
fully paid ordinary shares in the Company as part consideration for the buyback of the minority interest equity
holder in Empire Energy USA LLC. The minority interest holder also received 400,000 (on a post-consolidation
bias) fully paid ordinary shares in the issued capital of Empire Energy Group Limited. The Performance Rights
are exercisable at no cost under the following events:
●
Lifting of the current moratorium on oil and/or natural gas fracking in New York State;
●
If the Company sells, transfers or assigns all or substantially all of its property interests in Chautauqua
and Cattaraugus Counties in the State of New York to an unaffiliated third party then the Performance
Rights will vest in accordance with the following schedule:
Fair market value of consideration received by the
Company
Performance Rights exercisable
Less than $25.0 million
0.0%
At least $25.0 million but less than $45.0 million
Percentage calculated by dividing fair market value
of consideration received by the Company by $45.0
million
$45.0 million or more
100.0%
●
If the holder of the Performance Rights in any way disposes of more than 75% of the 4 million ordinary
shares assigned as part of the minority interest buy back transaction prior to either the moratorium being
terminated or a third party sale being consummated then the Performance Rights will be cancelled.
●
The holder of the Performance Rights is an associated entity of a former senior executive of the
Company’s US subsidiaries, Mr Allen Boyer.
●
At the Company’s Annual General Meeting conducted on 30 May 2019, Shareholders approved the
consolidation of the Company’s equity on a 1 for 10 basis. The effect of the Share Consolidation during
the period reduced the 2,500,000 Performance Rights to 250,000 Performance Rights.
2020 issue
During the 2020 financial year, the Company issued 3,913,960 Performance Rights to the Managing Director
and senior executives under the terms of the Company’s Rights Plan and was approved by Shareholders on
14 July 2020.
2021 issue
During the 2021 financial year, the Company issued 1,015,625 Performance Rights to the Managing Director
and senior executives under the terms of the Company’s Rights Plan and was approved by Shareholders on
3 August 2021.
2022 issue
During the 2022 financial year, the Company issued 2,445,183 Performance Rights to the Managing Director
and employees under the terms of the Company's Rights Plan and was approved by Shareholders on 30 May
2022.
2023 issue
During the 2023 financial year, the Company issued 3,175,353 Performance Rights to the Managing Director
and employees under the terms of the Company's Rights Plan and was approved by Shareholders on 30 May
2023.
Also during the 2023 financial year, 3,913,960 Performance Rights issued to senior executives in 2020 passed
their three year measurement period for vesting calculation. 548,234 of these Performance Rights vested,
173,804 lapsed, while the remaining 3,191,922 remain unvested.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 34. Share-based payments (continued)
91
2024 issue
During the 2024 financial year, the Company issued 7,566,929 Performance Rights to the Managing Director
and employees under the terms of the Company's Rights Plan and was approved by Shareholders on 28 May
2024.
Set out below are summaries of Performance Rights (unvested) granted under the plan:
2024
Balance at
Expired/
Balance at
Exercise
the start of
forfeited/
the end of
Grant date
Expiry date
price
the year
Granted
Exercised
other
the year
09/09/2013
$0.000
250,000
-
-
-
250,000
07/08/2020
31/12/2035
$0.000
3,191,922
-
-
(3,191,922)
-
03/08/2021
31/12/2036
$0.000
1,015,625
-
-
(1,015,625)
-
21/12/2021
31/12/2036
$0.000
993,774
-
-
(993,774)
-
17/06/2022
31/12/2037
$0.000
1,451,409
-
-
(1,451,409)
-
22/12/2022
31/12/2037
$0.000
1,297,209
-
-
(1,297,209)
-
21/07/2023
31/12/2038
$0.000
1,878,144
-
-
-
1,878,144
20/12/2023
31/12/2038
$0.000
-
791,863
-
-
791,863
28/05/2024
31/12/2038
$0.000
-
4,968,382
-
-
4,968,382
01/07/2024
31/12/2038
$0.000
-
1,806,684
-
-
1,806,684
20/12/2024
31/12/2039
$0.000
-
1,570,737
-
-
1,570,737
10,078,083
9,137,666
-
(7,949,939) 11,265,810
Performance Rights granted on 20 December 2023 were issued on 15 March 2024.
2023
Balance at
Expired/
Balance at
Exercise
the start of
forfeited/
the end of
Grant date
Expiry date
price
the year
Granted
Exercised
other
the year
09/09/2013
$0.000
250,000
-
-
-
250,000
07/08/2020
31/12/2035
$0.000
3,913,960
-
-
(722,038)
3,191,922
03/08/2021
31/12/2036
$0.000
1,015,625
-
-
-
1,015,625
21/12/2021
31/12/2036
$0.000
993,774
-
-
-
993,774
17/06/2022
31/12/2037
$0.000
1,451,409
-
-
-
1,451,409
22/12/2022
31/12/2037
$0.000
-
1,297,209
-
-
1,297,209
21/07/2023
31/12/2038
$0.000
-
1,878,144
-
-
1,878,144
7,624,768
3,175,353
-
(722,038) 10,078,083
Performance Rights granted on 22 December 2022 was issued on 3 February 2023.
*
There are 2,748,618 performance Rights that are due to vest at the end of the financial year as they are
subject to a 3-year term and vesting hurdles. The milestones required for the performance rights for
Tranche 1 (2,312,355) were not met and Tranche 2 (390,972) have vested. Refer to Performance Rights
(vested) table.
The weighted average remaining time to Vesting Date of Performance Rights (unless extended in accordance
with the rights Plan Rules) granted during the financial year and outstanding at the end of the financial year
was 2 years (2023: 2 years).
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 34. Share-based payments (continued)
92
Set out below are summaries of Performance Rights (vested) granted under the plan:
2024
Exercise
Balance at
the start
Expired/
forfeited/
Balance at
the end
Grant date
Expiry date
price
of the year
Granted
Exercised
other
of the year
03/08/2021
30/06/2034
$0.00
1,300,500
-
-
-
1,300,500
30/03/2022
30/12/2034
$0.00
840,134
-
(276,275)
-
563,859
27/01/2023
31/12/2035
$0.00
548,234
-
-
-
548,234
15/03/2024
31/12/2036
$0.00
-
298,968
(17,910)
-
281,058
31/12/2024
31/12/2036
$0.00
-
390,972
-
-
390,972
2,688,868
689,940
(294,185)
-
3,084,623
During the 2024 financial year, the Company issued 298,968 of Performance Right that vested to the
Company's employees under the terms of the Company's Rights Plan Terms set out in Empire's 2021 Notice
of Annual General Meeting.
2023
Exercise
Balance at
the start
Expired/
forfeited/
Balance at
the end
Grant date
Expiry date
price
of the year
Granted
Exercised
other
of the year
03/08/2021
30/06/2034
$0.00
1,300,500
-
-
-
1,300,500
30/03/2022
30/12/2034
$0.00
840,134
-
-
-
840,134
27/01/2023
31/12/2035
$0.00
-
548,234
-
-
548,234
2,140,634
548,234
-
-
2,688,868
During the 2023 financial year, the Company issued 548,234 of Performance Right that vested to the
Company's employees under the terms of the Company's Rights Plan Terms set out in Empire's 2021 Notice
of Annual General Meeting.
There are no unvested Performance Rights exercisable at the end of the financial year as they are subject to
a 3-year term and vesting hurdles.
The weighted average remaining time to Vesting Date of Performance Rights (unless extended in accordance
with the rights Plan Rules) granted during the financial year and outstanding at the end of the financial year
was 2 years (2023: 2).
Set out below are the Performance Rights exercisable at the end of the financial year:
2024
2023
Grant date
Expiry date
Number
Number
03/08/2021
30/06/2034
1,300,500
1,300,500
30/03/2022
30/12/2034
563,859
840,134
27/01/2023
31/12/2035
548,234
548,234
15/03/2024
31/12/2036
281,058
-
2,693,651
2,688,868
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 34. Share-based payments (continued)
93
For the Performance Rights 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
20/12/2023
31/12/2038
$0.185
$0.000
70.62%
-
4.45%
$0.018
01/07/2024
31/12/2038
$0.150
$0.000
69.41%
-
4.37%
$0.048
28/05/2024
31/12/2038
$0.190
$0.000
67.54%
-
4.25%
$0.038
28/05/2024
31/12/2038
$0.190
$0.000
-
-
-
$0.190
20/12/2024
31/12/2039
$0.210
$0.000
67.72%
-
4.27%
$0.052
*
As there are no market-based performance/vesting conditions attached to the Tranche 2 FY24 LTI
Performance Rights issued on 28 May 2024, the fair value of each Right on the date of grant would be
equal to the Share Price on the date of grant (i.e. $A0.19), since the Rights have a zero exercise price.
Restricted Rights
Set out below are summaries of Restricted Rights granted under the plan:
2024
Balance at
Expired/
Balance at
Exercise
the start of
forfeited/
the end of
Grant date
Expiry date
price
the year
Granted
Exercised
other
the year
07/08/2020
31/12/2035
$0.000
1,019,753
-
-
-
1,019,753
23/12/2020
23/12/2035
$0.000
455,820
-
-
-
455,820
01/06/2021
01/06/2036
$0.000
617,979
-
-
-
617,979
02/07/2021
02/07/2036
$0.000
94,908
-
-
-
94,908
21/12/2021
21/12/2036
$0.000
568,778
-
(37,313)
-
531,465
17/06/2022
17/06/2037
$0.000
509,198
-
-
-
509,198
17/06/2022
17/06/2037
$0.000
275,360
-
-
-
275,360
09/09/2022
09/09/2037
$0.000
131,493
-
-
-
131,493
22/12/2022
22/12/2037
$0.000
613,830
-
(39,038)
-
574,792
21/07/2023
21/07/2038
$0.000
604,141
-
-
-
604,141
21/12/2023
21/12/2038
$0.000
-
538,951
(61,534)
-
477,417
28/05/2024
12/12/2039
$0.000
-
1,328,102
-
-
1,328,102
12/07/2024
12/12/2039
$0.000
-
304,592
-
-
304,592
20/12/2024
12/12/2039
$0.000
-
696,230
-
-
696,230
4,891,260
2,867,875
(137,885)
-
7,621,250
Restricted Rights granted on 20 December 2023 were issued on 15 March 2024.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 34. Share-based payments (continued)
94
2023
Balance at
Expired/
Balance at
Exercise
the start of
forfeited/
the end of
Grant date
Expiry date
price
the year
Granted
Exercised
other
the year
07/08/2020
31/12/2035
$0.000
1,019,753
-
-
-
1,019,753
01/06/2021
01/06/2036
$0.000
617,979
-
-
-
617,979
23/12/2020
23/12/2035
$0.000
485,485
-
-
(29,665)
455,820
02/07/2021
02/07/2036
$0.000
94,908
-
-
-
94,908
21/12/2021
21/12/2036
$0.000
568,778
-
-
-
568,778
17/06/2022
17/06/2037
$0.000
509,198
-
-
-
509,198
17/06/2022
17/06/2037
$0.000
275,360
-
-
-
275,360
09/09/2022
09/09/2037
$0.000
131,493
-
-
-
131,493
22/12/2022
22/12/2037
$0.000
-
613,830
-
-
613,830
21/07/2023
21/07/2038
$0.000
-
604,141
-
-
604,141
3,702,954
1,217,971
-
(29,665)
4,891,260
Restricted Rights granted on 22 December 2022 were issued on 3 February 2023.
Restricted Rights are all exercisable at the end of the financial year noting trading terms for Rights held by
Company employees and directors are subject to the Company’s Share Trading Policy.
The weighted average remaining time to Vesting Date of Restricted Rights (unless extended in accordance
with the rights Plan Rules) granted during the financial year and outstanding at the end of the financial year
was 0.3 years (2023: 0.3 years).
For the Restricted Rights 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
21/12/2023
21/12/2038
$0.190
$0.000
-
-
-
$0.185
28/05/2024
12/12/2039
$0.190
$0.000
-
-
-
$0.190
12/07/2024
12/12/2039
$0.260
$0.000
-
-
-
$0.260
20/12/2024
12/12/2039
$0.210
$0.000
-
-
-
$0.210
*
As there are no market-based performance/vesting conditions attached to the FY24/FY23 Restricted
Rights, the fair value of each Right on the date of grant would be equal to the Share Price on the date of
grant, since the Rights have a zero exercise price.
Service Rights
Set out below are summaries of Service Rights (vested) granted under the plan:
2024
Balance at
Expired/
Balance at
Exercise
the start of
forfeited/
the end of
Grant date
Expiry date
price
the year
Granted
Exercised
other
the year
14/06/2019
30/06/2034
$0.00
1,000,000
-
-
-
1,000,000
04/08/2020
31/12/2035
$0.00
838,558
-
-
-
838,558
01/06/2021
31/12/2036
$0.00
600,000
-
-
-
600,000
20/12/2024
31/12/2039
$0.00
-
395,889
-
-
395,889
2,438,558
395,889
-
-
2,834,447
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
Note 34. Share-based payments (continued)
95
2023
Balance at
Exercised
Balance at
Exercise
the start of
forfeited/
the end of
Grant date
Expiry date
price
the year
Granted
Exercised
other
the year
14/06/2019
30/06/2034
$0.00
1,000,000
-
-
-
1,000,000
04/08/2020
31/12/2035
$0.00
838,558
-
-
-
838,558
01/06/2021
31/12/2036
$0.00
600,000
-
-
-
600,000
2,438,558
-
-
-
2,438,558
During the 2024 financial year, the Company issued 395,889 of Service Rights that vested to the Company's
employees under the terms of the Company's Rights Plan Terms.
The weighted average remaining time to Vesting Date of Service Rights (unless extended in accordance with
the rights Plan Rules) granted during the financial year and outstanding at the end of the financial year was 0
years (2023: 0 years).
Set out below are summaries of Service Rights (unvested) granted under the plan:
2024
Balance at
Expired/
Balance at
Exercise
the start of
forfeited/
the end of
Grant date
Expiry date
price
the year
Granted
Exercised
other
the year
22/12/2023
31/12/2038
$0.00
-
1,248,161
-
(458,203)
789,958
01/07/2024
31/12/2038
$0.00
-
602,228
-
-
602,228
20/12/2024
31/12/2039
$0.00
-
1,357,929
-
(591,226)
766,703
-
3,208,318
-
(1,049,429)
2,158,889
*Performance Rights Granted on 21/12/2023 were issued on 15/03/2024.
During the 2024 financial year, the Company issued 3,208,318 Service Rights to employees under the terms
of the Company's Rights Plan.
Unvested Service Rights are subject to 3-year term vesting hurdles.
The weighted average remaining time to Vesting Date of Performance Rights granted during the year and
outstanding at the end of the financial year was 2 years (2023: nil).
For the Service Rights granted during the current financial year, the valuation model inputs used to determine
the fair value at the grants date, are as follows:
Share price
Exercise
Expected
Dividend
Risk-free
Fair value
Grant date
Expiry date
at grant
date
price
volatility
yield*
interest rate
at grant
date
21/12/2023
31/12/2038
$0.150
$0.00
-
-
-
$0.185
01/07/2024
31/12/2038
$0.210
$0.00
-
-
-
$0.210
20/12/2024
31/12/2039
$0.210
$0.00
-
-
-
$0.210
*
As there are no market-based performance/vesting conditions attached to the FY24/FY23 Restricted
Rights, the fair value of each Right on the date of grant would be equal to the Share Price on the date of
grant, since the Rights have a zero exercise price.
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
96
Note 35. Cash flow information
Reconciliation of loss after income tax to net cash from/(used in) operating activities
Consolidated
2024
2023
$
$
Loss after income tax expense for the year
(14,427,801)
(22,081,916)
Adjustments for:
Depreciation, depletion and amortisation
606,696
1,488,031
Net gain on disposal of exploration and evaluation assets
-
(53,717)
Net gain on disposal of assets of discontinued operations
(6,890,572)
-
Share-based payments
824,202
466,062
R&D Tax Rebate /Government grant offset against oil and gas properties
3,968,447
23,034,457
Accretion of asset retirement obligation
-
1,696,857
Other non-cash expenses
(128,913)
-
Finance costs - non cash
797,023
-
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
(2,382,813)
7,770,799
Decrease/(increase) in inventories
(15,496)
27,424
Increase in prepayments
-
(4,000,601)
Increase in other assets
(9,102,856)
-
Increase/(decrease) in trade and other payables
15,510,712
(10,838,783)
Increase/(decrease) in employee benefits
(15,638)
19,299
Net cash used in operating activities
(11,257,009)
(2,472,088)
Non-cash investing and financing activities
Consolidated
2024
2023
$
$
Additions to the right-of-use assets
-
320,423
Changes in liabilities arising from financing activities
Bank
Lease
loan
liabilities
Total
Consolidated
$
$
$
Balance at 1 January 2023
7,822,908
1,008,172
8,831,080
Net cash used in financing activities
-
(349,174)
(349,174)
Proceeds from borrowings
1,827,000
-
1,827,000
Repayment of borrowings
(804,094)
-
(804,094)
Acquisition of leases - US leases
-
320,423
320,423
Exchange differences
(74,340)
(4,827)
(79,167)
Balance at 31 December 2023
8,771,474
974,594
9,746,068
Net cash used in financing activities
-
(584,630)
(584,630)
Repayment of borrowings
(7,061,421)
-
(7,061,421)
Disposal of leases
-
(299,214)
(299,214)
Exchange differences
116,947
361,272
478,219
Balance at 31 December 2024
1,827,000
452,022
2,279,022
Empire Energy Group Limited
Notes to the consolidated financial statements
31 December 2024
97
Note 36. Events after the reporting period
On 10 and 13 January 2025, Empire paid $1.0 million and $0.827 million respectively, to fully repay the loan
drawings under Facility A (Revolving Credit Facility) with Macquarie Bank Limited.
On 18 February 2025, Empire made a $12.8 million (including associated 1.5% utilisation fee) draw-down
under the R&D Facility with Macquarie Bank Limited. Proceeds from the borrowing will be applied to Northern
Territory, appraisal activities including C-5H and construction of infield infrastructure.
No other matter or circumstance has arisen since 31 December 2024 that has significantly affected, or may
significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in
future financial years.
Empire Energy Group Limited
Consolidated entity disclosure statement
As at 31 December 2024
98
Entity name
Entity type
Place formed /
Country of
incorporation
Ownership
interest
%
Tax residency
Empire Energy Group Limited
Body Corporate
Australia
100%
Australia
Imperial Oil & Gas Pty Limited
Body Corporate
Australia
100%
Australia
Imperial Oil & Gas A Pty Limited
Body Corporate
Australia
100%
Australia
Empire Energy Holdings, LLC
Body Corporate
USA
100%
USA
Empire Energy USA, LLC
Body Corporate
USA
100%
USA
Empire Energy (MidCon), LLC
Body Corporate
USA
100%
USA
Empire Energy Group Limited
Directors' declaration
31 December 2024
99
In the Directors' opinion:
●
the attached financial statements and notes comply with the Corporations Act 2001, the 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 Group's financial position as
at 31 December 2024 and of its performance for the financial year ended on that date;
●
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 information disclosed in the attached consolidated entity disclosure statement is true and correct.
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
___________________________
Alexander Underwood
Managing Director
31 March 2025
Sydney
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Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Independent auditor’s report to the members of Empire Energy Group
Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Empire Energy Group Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 31
December 2024, the consolidated statement of comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, notes to the
financial statements, including material accounting policy information, the consolidated entity
disclosure statement and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a.
Giving a true and fair view of the consolidated financial position of the Group as at 31 December
2024 and of its consolidated financial performance for the year ended on that date; and
b.
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial report
section of our report. We are independent of the Group in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional
and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including
Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia.
We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of Empire Energy Group Limited, would be in the same terms if given to the
directors as at the time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 2 of the financial report which describes the principal conditions that raise
doubt about the Group’s ability to continue as a going concern. These conditions indicate the
existence of a material uncertainty that may cast significant doubt about the Group’s ability to
continue as a going concern. Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial report of the current year. These matters were addressed in the context of our
audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a
separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
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matters to be communicated in our report. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of material
misstatement of the financial report. The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis for our audit opinion on the accompanying
financial report.
Carrying value of Exploration and Evaluation Assets
Why significant
How our audit addressed the key audit matter
The Group’s exploration and evaluation assets of
$123.7 million as at 31 December 2024 represented
74% of the total assets of the Group.
Exploration and evaluation assets are measured at
cost and expenditure incurred during the year was
capitalised in accordance with the requirements of
the Australian Accounting Standards and the Group’s
accounting policy as disclosed in Note 2.
The Directors assess the Group’s exploration and
evaluation assets for indicators of impairment in
accordance with Australian Accounting Standards
including whether: the rights to tenure for the areas
of interest are current; the Group’s ability and
intention to continue to evaluate and develop the area
of interest; and, whether the results of the Group’s
exploration and evaluation work to date are
sufficiently progressed for a decision to be made as to
the commercial viability or otherwise of the area of
interest.
We considered this to be a Key Audit Matter due to
the carrying amount of the exploration and evaluation
assets relative to the total assets, the importance of
the balance to users of the financial statements, and
the judgement involved in the assessment of
indicators of impairment.
Our audit procedures included the following:
•
Understanding the Group’s current exploration
program.
•
Assessing the Group’s right to explore in the
relevant exploration area, which included
obtaining and assessing supporting
documentation such as license agreements.
•
Considering the Group’s intention to carry out
significant exploration and evaluation activity in
the relevant areas of interest, which included an
assessment of the Group’s budgets, cash-flow
forecast models and inquiries of management as
to the intentions and strategy of the Group.
•
Agreeing a sample of costs capitalised during the
year to supporting documentation and assessing
whether these costs met the capitalisation
requirements of Australian Accounting Standards
and the Group’s accounting policy.
•
Evaluating whether the methodology used and
outcomes reached by the Group in identifying
indicators of impairment met the requirements of
Australian Accounting Standards.
•
Assessing whether exploration and evaluation
data exists to indicate that the carrying amount
of capitalised exploration and evaluation is
unlikely to be recovered through development or
sale.
•
Considering whether any other information was
present which would suggest the carrying
amount may not be recoverable, including
considering market capitalisation.
•
Assessing the adequacy of the disclosures
included in the Notes to the financial report
including those made with respect to judgments
and estimates.
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Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2024 annual report but does not include the financial report and
our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express 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
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of:
►
The financial report (other than the consolidated entity disclosure statement) that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; and
►
The consolidated entity disclosure statement that is true and correct in accordance with the
Corporations Act 2001; and
for such internal control as the directors determine is necessary to enable the preparation of:
►
The financial report (other than the consolidated entity disclosure statement) that gives a true and
fair view and is free from material misstatement, whether due to fraud or error; and
►
The consolidated entity disclosure statement that is true and correct and is free of misstatement,
whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
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that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
►
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
►
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
►
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group to cease to continue
as a going concern.
►
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in
a manner that achieves fair presentation.
►
Plan and perform the Group audit to obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business units within the Group as a basis for forming an
opinion on the Group financial report. We are responsible for the direction, supervision and review
of the audit work performed for the purposes of the Group audit. We remain solely responsible for
our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate
threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 25 to 47 of the directors’ report for the
year ended 31 December 2024.
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In our opinion, the Remuneration Report of Empire Energy Group Limited for the year ended 31
December 2024, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Siobhan Hughes
Partner
Sydney
31 March 2025
Empire Energy Group Limited
Shareholder information
31 December 2024
105
The shareholder information set out below was applicable as at 21 March 2025 (grouped).
Number of securityholders
At the specified date, there were 3,264 holders of ordinary shares (quoted). There were five classes of
unquoted rights on issue as detailed below. There were no other classes of equity securities on issue.
Shareholding Distribution
There were 1,017,303,219 quoted fully paid ordinary shares on issue held as follows:
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
Ordinary shares
% of total
Number
shares
of holders
issued
1 to 1,000
205
-
1,001 to 5,000
748
0.23
5,001 to 10,000
434
0.34
10,001 to 100,000
1,255
5.00
100,001 and over
622
94.43
3,264
100.00
Holding less than a marketable parcel
-
-
Empire Energy Group Limited
Shareholder information
31 December 2024
106
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
% of total
shares
Number held
issued
Sheffield Holdings LP
79,895,105
7.85
Elphinstone Holdings Pty Ltd
78,625,000
7.73
Citicorp Nominees Pty Limited
54,126,043
5.32
Liberty Oilfield Services LLC
48,076,923
4.73
Hsbc Custody Nominees (Australia) Limited - AC2
45,538,550
4.48
Buttonwood Nominees Pty Ltd
40,596,000
3.99
Pangaea (NT) Pty Ltd ,(Pangaea (NT) Unit A/C >
40,000,000
3.93
HSBC Custody Nominees (Austrlia) Limited
33,059,063
3.25
Global Energy And Resources Development Limited
32,294,969
3.17
Emg Northern Territory Holding Pty Ltd
26,515,152
2.61
Macquarie Bank Limited Metals Mining and AG A/C >
26,451,367
2.60
Robmar Investments Pty Limited
25,648,749
2.52
All-States Finance Pty Limited
20,000,000
1.97
Liangrove Media Pty Limited
17,807,500
1.75
Grosvenor Equities Pty Ltd NO 2 A/C >
16,629,964
1.63
BNP Paribas Nominees Pty Ltd (IB AU Noms RetailClient)
13,160,519
1.29
Cha Qian
9,245,000
0.91
Molbek Pty Limite Bruck Family Super Fund A/C >
8,250,000
0.81
Geneagle Securities Nominees Pty Limited
8,000,000
0.79
Ms Swati Shukla
7,400,000
0.73
631,319,904
62.06
Substantial holders
Substantial holders as disclosed in substantial holding notices given to the Company were as follow:
Ordinary shares
% of total
shares
Number held
issued
Pangaea (NT) Pty Limited
140,572,611
13.82
Macquarie Group Limited & its controlled bodies corporate
76,995,360
7.57
Sheffield Group
82,159,919
8.08
Elphinstone Group
53,333,969
5.24
Empire Energy Group Limited
Shareholder information
31 December 2024
107
Unquoted Unvested Performance Rights
There were 14,014,428 unquoted Unvested Performance Rights on issue held as follows:
Number of
holders
%
1-1,000
-
-
1,001 – 5,000
-
-
5,001 – 10,000
-
-
10,001 – 100,000
1
0.18
100,001 and over
9
99.82
Total
10
100.00
Unquoted Vested Performance Rights
There were 3,084,623 unquoted Vested Performance Rights on issue held as follows:
Number of
holders
%
1-1,000
-
-
1,001 – 5,000
1
0.15
5,001 – 10,000
-
-
10,001 – 100,000
1
1.52
100,001 and over
5
98.33
Total
7
100.00
Unquoted Unvested Service Rights
There were 2,158,889 unquoted Unvested Service Rights on issue held as follows:
Number of
holders
%
1-1,000
-
-
1,001 – 5,000
-
-
5,001 – 10,000
-
-
10,001 – 100,000
1
2.41
100,001 and over
4
97.59
Total
5
100.00
Unquoted Vested Service Rights
There were 2,834,447 unquoted Vested Service Rights on issue held as follows:
Number of
holders
%
1-1,000
-
-
1,001 – 5,000
-
-
5,001 – 10,000
-
-
10,001 – 100,000
-
-
100,001 and over
5
100.00
Total
5
100.00
Empire Energy Group Limited
Shareholder information
31 December 2024
108
Unquoted Restricted Rights
There were 7,621,250 unquoted Restricted Rights held as follows:
Number of
holders
%
1-1,000
-
-
1,001 – 5,000
-
-
5,001 – 10,000
-
-
10,001 – 100,000
1
0.20
100,001 and over
12
99.80
Total
13
100.00
Unquoted equity securities as at 21 March 2025
Class of unquoted securities
Number
Number
on issue
of holders
Unlisted Performance Rights
14,014,428
9
Unlisted Performance Rights (Vested)
3,084,623
5
Unlisted Service Rights
2,834,447
7
Unlisted Service Rights (Unvested)
2,158,889
5
Unlisted Restricted Rights
7,621,250
12
Voting rights
Ordinary shares (including partly paid shares) carry voting rights on a one for one basis and unlisted options
and rights do not carry voting rights.
Ordinary shares
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.
There are no other classes of equity securities.
Unmarketable parcels
There are 503 holders of an unmarketable parcel of shares based on a share price of $0.19.
Securities subject to voluntary escrow
There were no securities subject to a restriction period or voluntary escrow period.