GLOBAL PETROLEUM LIMITED
AND CONTROLLED ENTITIES
ABN: 68 064 120 896
Financial Report For The Year Ended
30 June 2022
GLOBAL PETROLEUM LIMITED
AND CONTROLLED ENTITIES
ABN: 68 064 120 896
Financial Report For The Year Ended
30 June 2022
CONTENTS
Letter to Shareholders
Directors' Report
Auditor's Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors' Declaration
Independent Auditor's Report
Page
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40
GLOBAL PETROLEUM LIMITED AND CONTROLLED ENTITIES
LETTER TO SHAREHOLDER
Dear Shareholders,
We are pleased to present to you the Global Annual Financial Report for the year ended 30 June 2022.
The Company’s focus during the reporting period, and subsequently, has been on ongoing exploration work and its farm-out
process in respect of its Namibian licence PEL0094, and the continued strengthening of its finances in order to maintain its options
for this licence and/or the possible pursuit of other strategic investments.
In August 2021, Global notified the Ministry of Mines and Energy of its intention to enter into the remaining one year of the PEL0094
Initial Exploration Period, expiring in September 2022. The commitment for this period was to shoot a 2,000 square kilometre 3D
seismic data survey. During the period Global has continued with its technical work on the licence. After successfully mapping, with
the latest technology, the Barremian-Aptian Kudu Shale source rock from previous drilling in the Walvis Basin into its licence area
the Company carried out a study with well-regarded consultants which predicted that in all cases the source rock is mature in the
northern Walvis Basin and that sufficient volumes of hydrocarbons have migrated into the prospects in PEL0094. In addition, in
June 2022 the Company licensed a satellite radar study over the Walvis, in which a number of oil seeps were identified within
PEL0094. All of this work further supports the Company’s interpretation of a working petroleum system in the area.
In April 2022 the Company announced that the Namibian authorities had granted a one year extension to the Initial Exploration
Period, from September 2022 to September 2023.
In February 2022, the oil and gas exploration sector of Namibia was transformed by the announcement of two significant
discoveries of oil and gas in the Orange Basin, southern Namibia, heralding a new petroleum province offshore Namibia. The Shell
operated Graff-1 well made a discovery of light oil in both primary and secondary targets, proving a working petroleum system for
light oil. This was closely followed by the TotalEnergies operated Venus-1X well which discovered light oil with associated gas.
Evaluation of the discoveries has commenced with Shell’s La Rona-1 well completed earlier in 2022, and further exploration and
appraisal drilling by Shell and TotalEnergies is understood to be commencing in Q4 2022.
The Graff and Venus discoveries, and Global’s prospects and leads on PEL0094, are all interpreted by the Company to be sourced
by the Barremian-Aptian Kudu Shale. The apparent technical similarities in both source and reservoir between these discoveries
and the prospectivity in our own licence is highly encouraging. Accordingly the Company believes that the Walvis Basin, where
PEL0094 is situated, also has the potential to be extremely successful, and has the advantage of much shallower water depths
generally than the discoveries in the south.
In November 2021 the Company appointed PVE Consultants to assist in the farm-out of PEL0094, ahead of the exploration drilling
in the Orange Basin. Apart from the technical similarities with PEL0094 referred to above, the successful outcome of the Graff-1
and Venus-1X wells has sparked much interest in Namibian offshore exploration as a whole. The upcoming exploration and
appraisal wells are widely expected to accelerate this interest even further.
In Italy, regarding the outstanding appeal in relation to the Company’s four licence applications in the Adriatic Sea (“Applications”),
the judgement of the European Court was announced by the Company in January 2022. The Court found, in effect, that the
Company’s Applications offshore Italy do not contravene EU law.
As previously announced by the Company, the ‘Plan for Sustainable Energy Transition of Appropriate Areas’ (“Plan”) came into
effect in Italy in February 2022.
A key structural component of the Plan is the provision that in future only exploration for gas (as opposed to oil) will be permitted in
Italy, both onshore and offshore. With specific regard to the Applications, the Plan also provides that certain sections of the
application areas as previously constituted are deemed to be excluded, a process referred to by the relevant authorities as “re-
perimeterisation”.
Notwithstanding the Company’s reservations as to the practicality of gas-only exploration – a reservation which Global believes is
widely shared within the Energy Industry and beyond - the Company provided the Italian authorities technical evidence of the gas
prospectivity within the reduced application areas, also thereby accepting the re-perimeterisation of those areas.
The Italian Ministry of Ecological Transition has informed Global that the Company’s exploration objectives in the Applications are in
compliance with the provisions of the Plan, and that there is no impediment to the continuation of the process towards eventual
award of the exploration permits. The Company has decided to continue the process accordingly, and good progress is being
made.
However, the Company will continue to monitor both the evolving requirements of the application process and the wider legal and
political environment in Italy – we are informed that, following the recent General Election in Italy, the coalition partners in the new
Administration have all expressed support for future exploitation of oil & gas in the country. If the Applications are ultimately
successful and the Company decides to accept award of exploration permits, we would seek a partner at the appropriate time.
1
GLOBAL PETROLEUM LIMITED AND CONTROLLED ENTITIES
LETTER TO SHAREHOLDER
Corporate
The Company notes the continuing volatility of the oil price, which had fallen significantly due to the impact of the COVID-19
pandemic. Its subsequent recovery as demand for oil has increased has recently been over-shadowed by the invasion of the
Ukraine, which has caused the oil price to reach levels not seen for many years, with heightened supply concerns. As a pre-
revenue company in the early stages of exploration, Global does not directly benefit from current high oil prices. The Company has
no direct or indirect exposure to Russia and is not directly impacted by sanctions imposed on the country and/or people and entities
connected with it.
The strengthening of the Company’s financial position, which commenced in 2020, has now seen four successful equity share
placings which have raised combined total gross proceeds of £4.2 million (excluding any further proceeds from the future potential
exercise of associated warrants). The most recent of these was undertaken after the end of the reporting period, in late August
2022, and raised gross proceeds of £0.8 million.
We are pleased to have successfully undertaken this strengthening of Global’s finances, and are delighted to welcome new
shareholders to the Company.
Proceeds from these equity raises has enabled the Company to continue its exploration activities in Namibia, including entering the
remaining one year Initial Exploration Period on PEL0094 now extended until September 2023, together with ongoing efforts to farm-
out part of its equity in this licence.
Financial
During the year ended 30 June 2022, the Group recorded a loss after tax of US$1,647,094 (2021: US$3,927,794). Cash balances at 30
June 2022 amounted to US$1,139,775 (30 June 2021: US$1,834,434), the decrease reflecting ongoing expenditure partly offset by the
proceeds from the equity raise completed in August 2021. On 30 September 2022 Global had cash balances of US$1,498,293
following the equity raise completed after the end of the reporting period. The Group has no debt outside of suppliers who are settled
on normal commercial terms
Strategy and Outlook
The recent drilling successes in the Orange Basin are expected to bring a very strong boost to both industry and investor
confidence in relation to Namibian offshore exploration generally. We believe that Global is well positioned to benefit from this, and
we are continuing with our farm-out process to fund the next stage of exploration on our licence.
In Italy, we will endeavour to progress our Applications in the context of the prevailing political climate.
Finally, the Company will continue to explore all strategic alternatives in order to maximise shareholder value.
John van der Welle
Chairman
Peter Hill
Chief Executive Officer
2
GLOBAL PETROLEUM LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2022
1.
OPERATING AND FINANCIAL REVIEW
Namibian Project
The Namibian Project consists of an operated 78 per cent participating interest in Petroleum Exploration Licence (“PEL”) 0094 (acquired in
2018) which covers Block 2011A (see Figure 1). The Company also previously held an operated 85 per cent participating interest in PEL0029
covering Blocks 1910B and 2010A. PEL0029 expired on 3 December 2020, enabling the Company to focus its technical efforts on PEL0094.
In July 2020 the Company announced updated estimates of Prospective Resources for PEL0094 after interpretation of the existing 3D seismic
data, licensed from the Namibian State Oil Company, NAMCOR, in March 2020. The agreement with NAMCOR to licence the 3D seismic data
on Block 2011A in return for extra equity in the licence helped conserve the Company’s cash resources. The interpretation of the 3D seismic
data led to increased confidence in the two prospects, Marula and Welwitschia Deep. The Marula prospect is a distal pinchout of Upper
Cretaceous sandstones onto the Welwitschia high. The Welwitschia Deep prospect was also confirmed by interpretation of the 3D seismic data
as an Albian carbonate reservoir.
The four-year Initial Exploration Period of PEL0094 had initially been split into two sub-periods of two years each, with the first sub-period ending
in September 2020. By an amendment agreed with the Ministry of Mines and Energy (the “Ministry”), the Ministry gave Global a further year to
fulfill a modified work commitment, concentrated on the licensing of existing seismic data and the carrying out of studies specifically designed to
focus on the exciting Marula and Welwitschia Deep prospects.
In November 2020 the Company purchased historic 2D seismic data in order to map the source rock from the Wingat-1 and Murombe-1 wells in
the south of the Walvis Basin into Global’s acreage to the north. The Company also commissioned studies to examine the amplitude with offset
(“AVO”) response of the source rock in both the wells and on the seismic data, and also performed seismic inversion on some of the data. The
Company’s interpretation of this data, together with the commissioned studies, enabled the source rock to be mapped with even further
confidence into Global’s acreage. In December 2020 the Company purchased further historic 2D seismic data in order to improve interpretation
of both its Marula prospect and also the relatively under-explored eastern part of the block.
Consequently, in January 2021 the Company announced an updated estimate of Prospective Resources for PEL0094. The additional
Prospective Resources in the east of PEL0094 consist of 7 new leads with a total unrisked gross Prospective Resources (Best Estimate) of
2,048 million barrels of oil (“barrels”). As previously reported in July 2020, the pre-existing prospects - Marula and Welwitschia Deep - contain a
total of 881 million barrels, making a new total on the licence of 2,929 million barrels unrisked gross Prospective Resources (Best Estimate).
Regarding the Prospective Resources attributable to Global, the total unrisked net Prospective Resources (Best Estimate) now total 2,284
million barrels compared with the previous number of 687 million barrels net to Global – which related to Marula and Welwitschia Deep alone.
This means that the total unrisked net Prospective Resources (Best Estimate) – both gross and net – are over three times as large, due to the
new leads identified. When adjusted for exploration risk, Prospective Resources have approximately doubled.
The technical work undertaken in late 2020 more than fulfilled the firm work commitments for the extended sub-period to September 2021. As
well as identification of the significant new leads in the eastern part of PEL0094, the geological chance of success of Marula was increased from
18 per cent to 22 per cent and the further work significantly reinforced the Company’s confidence that the source rock is present and generating
oil in PEL0094 and vindicated the Company’s view that the acreage is highly prospective.
In August 2021, Global notified the Ministry of Mines and Energy of its intention to enter into the remaining one year of the PEL0094 Initial
Exploration Period, expiring in September 2022. The commitment for this period was to shoot a 2,000 square kilometre 3D seismic data survey.
During the period Global has continued with its technical work on the licence. After successfully mapping, with the latest technology, the
Barremian-Aptian Kudu Shale source rock from previous drilling in the Walvis Basin into its licence area, in late 2021 the company worked with
the well-regarded geochemical consultancy IGI to build a number of petroleum systems models for the Walvis Basin. This study was further
updated in summer 2022 and predicts that in all cases the source rock is mature in the northern Walvis Basin and that sufficient volumes of
hydrocarbons have migrated into the prospects in PEL0094. In addition, in June 2022 the Company licensed a satellite radar oil seep study over
the Walvis, in which a number of oil seeps have been identified within PEL0094. This further supports the Company’s interpretation of a working
petroleum system in the area. In April 2022 the Company announced that the Namibian authorities had granted a one-year extension to the
Initial Exploration Period, from September 2022 to September 2023.
In February 2022, the oil and gas exploration sector of Namibia was transformed by the announcement of two significant discoveries of oil and
gas in the Orange Basin, southern Namibia, heralding a new petroleum province offshore Namibia. The Shell operated Graff-1 well made a
discovery of light oil in both primary and secondary targets, proving a working petroleum system for light oil. This was closely followed by
TotalEnergies operated Venus-1X well which discovered light oil with associated gas. Further evaluation of the discoveries has commenced,
with Shell’s La Rona-1 well completed earlier in 2022, and further exploration and appraisal drilling by Shell and TotalEnergies is understood to
be commencing in Q4 2022.
The Graff and Venus discoveries, and Global’s prospects and leads on PEL0094, are all interpreted by the Company to be sourced by the
Barremian-Aptian Kudu Shale. The apparent technical similarities in both source and reservoir between these discoveries and the prospectivity
in our own licence is highly encouraging. Accordingly, the Company believes that the Walvis Basin, where PEL0094 is situated, also has the
potential to be extremely successful, and has the advantage of much shallower water depths generally than the discoveries in the south.
In November 2021 the Company appointed PVE Consultants to assist in the farm-out of PEL0094, ahead of the exploration drilling in the
Orange Basin. Apart from the technical similarities with PEL0094 referred to above, the successful outcome of the Graff-1 and Venus-1X
wells has sparked much interest in Namibian offshore exploration as a whole – a development which has become evident to Global in the
course of its farmout of PEL0094, and also to industry observers generally. The upcoming exploration and appraisal wells are widely expected
to accelerate this interest even further.
3
GLOBAL PETROLEUM LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2022
Permit Applications Offshore Italy
FIGURE 1 - Map of Namibia showing Global Petroleum's Licence
In August 2013, the Company submitted applications, proposed work programmes and budgets to the Italian Ministry of Economic Development
for four exploration areas offshore Italy in the southern Adriatic (the “Applications”). The Company’s four Application Blocks are contiguous with
the Italian median lines abutting Croatia, Montenegro and Albania respectively (see Figure 2 below).
As previously reported, various local authorities and interest groups appealed to either the Rome Tribunal or the President of the Republic
against the Environmental Decrees in relation to the applications of the four areas. Publication of Environmental Decrees is the final
administrative stage before grant of the Permits. All first instance appeals made to the Rome Tribunal and to the President of the Republic were
subsequently adjudicated in Global’s favour.
However, Puglia, as the Italian region principally interested, made additional appeals to the Council of State (the highest level of appeal in Italy)
against the judgements of the Rome Tribunal. The subsequent appeals were heard by the Council of State in January 2020, and in February
2020 the Council of State issued a judgement. Essentially, the Council of State suspended the proceedings before it and referred the matter to
the European Court, requesting the Court to rule whether the four Applications contravene a relevant EU Directive relating to the maximum
permissible size of individual permits, in particular having regard to the fact that the four permit applications are contiguous.
The judgement of the European Court was announced by the Company in January 2022. The Court found, in effect, that the Company’s
Applications do not contravene EU law.
Separately from the appeals process above, in February 2019 the Italian Parliament passed a Bill suspending all hydrocarbon exploration
activities – including permit applications – for a period of 18 months. Under the proposed legislation, a Government-appointed Commission was
to review all onshore and offshore areas for the stated purpose of evaluating their suitability for hydrocarbon exploration and development in the
future. In doing so, the suitability of such activities in the context of social, industrial, urban, water source and environmental factors were to be
evaluated. In offshore areas, suitability would additionally be assessed having regard to the impact of such activity on the littoral environment,
marine ecosystems and shipping routes. Following the 18-month evaluation period, the intention was that a Hydrocarbon Plan would be
activated, setting out a strategy for future exploration and development. Following the expiry of its initial 18-month term, the moratorium was
extended twice.
4
GLOBAL PETROLEUM LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2022
In February 2022, the ‘Plan for Sustainable Energy Transition of Appropriate Areas’ (“Plan”) was published and came into legal effect.
A key structural component of the Plan is the provision that in future only exploration for gas (as opposed to oil) will be permitted in Italy, both
onshore and offshore. With specific regard to the Applications, the Plan also provides that certain sections of the application areas as previously
constituted are deemed to be excluded, a process referred to by the relevant authorities as “re-perimeterisation”.
Notwithstanding the Company’s reservations as to the practicality of gas-only exploration – a reservation which Global believes is widely shared
within the Energy Industry and beyond - the Company provided the Italian authorities technical evidence of the gas prospectivity within the
reduced application areas, also thereby accepting the re-perimeterisation of those areas.
The Italian Ministry of Ecological Transition has informed Global that the Company’s exploration objectives in the Applications are in compliance
with the provisions of the Plan, and that there is no impediment to the continuation of the process towards eventual award of the exploration
permits. The Company has decided to continue the process accordingly, and good progress is being made.
However, the Company will continue to monitor both the evolving requirements of the application process and the wider legal and political
environment in Italy – we are informed that, following the recent General Election in Italy, the coalition partners in the new Administration have
all expressed support for future exploitation of oil & gas in the country. If the Applications are ultimately successful and the Company decides to
accept award of exploration permits, we would seek a partner at the appropriate time.
FIGURE 2 - Map of Global Petroleum's 4 Permit Applications Offshore Italy in Southern Adriatic
Results of operations
Loss from continuing operations before tax
Corporation tax benefit (expense)
Net profit (loss)
2022
US$
2021
US$
(1,647,094)
-
(1,647,094)
(3,927,794)
-
(3,927,794)
The results of the Group include revenue from interest income of US$519 (2021: US$792).
Review of financial conditions
As at 30 June 2022, the Group had cash of US$1,139,775 (2021: US$1,834,434) and had no debt outside of suppliers who are settled on
normal commercial terms.
5
GLOBAL PETROLEUM LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2022
2.
STRATEGY
Global Petroleum's strategy is to maximize its gearing to exploration success in order to enhance shareholder value. This will be achieved
through the acquisition of early licence positions in frontier exploration areas in Africa and the Mediterranean either directly through licence
rounds, joint venture arrangements or acquisition.
Whilst the geographic focus is Africa and the Mediterranean, the Company will also consider other frontier areas that it considers to be highly
prospective.
3.
DIRECTORS
The names of Directors in office at any time during the financial year or since the end of the financial year are as follows:
Unless otherwise disclosed, Directors held their office from 1 July 2021 until the date of this report.
Mr John van der Welle
B.Sc., ACA
Non-Executive Chairman
Mr Peter Hill MA Law (Oxon)
Managing Director
Chief Executive Officer
Mr van der Welle is a Chartered Accountant with over 30 years' experience in the oil and gas
industry. Mr van der Welle has previously been a senior executive with, or Director of, a number of
UK listed upstream oil and gas companies - including Enterprise Oil, Hardy Oil and Gas, Premier
Oil, First Calgary Petroleums and Stratic Energy Corp, as well as a Non-Executive Director of
several AIM listed E&P companies.
Mr van der Welle was appointed as Non-Executive Chairman on 10 February 2014.
Mr Hill has extensive experience in the energy sector as a senior executive with a significant track
record worldwide in high-level M&A and business development roles, primarily in the oil industry.
Most recently, Mr Hill was the global head of Corporate M&A for Statoil ASA, where he was
responsible for several large transactions, being a key member of the team responsible for Statoil's
merger with Norsk Hydro Oil & Gas in December 2006 and leading the acquisition of EnCana's
Gulf of Mexico deepwater assets in 2005. Prior to agreeing to joining Global, Mr Hill was
responsible for supervising the execution of the IPO of Statoil's Energy & Retail division in the latter
part of 2010.
Previously, Mr Hill set up the international business of Waterous & Co as Managing Director in the
UK, and before that worked for Enterprise Oil for many years, latterly as Head of International New
Ventures. Mr Hill started in the energy industry with Total Oil Marine and is a UK qualified solicitor,
having commenced his career with Clifford Chance. He holds an MA in Law from Oxford
University.
Mr Hill was appointed as Managing Director and Chief Executive Officer of the Company on 1
September 2011. Mr Hill has not held any other directorships of publicly listed companies in the
last three years.
Mr Andrew Draffin CA
Independent Non-Executive Director
Mr Draffin is a Chartered Accountant with over 20 years' experience in financial reporting, treasury
management and corporate advisory services. He currently provides services as a Director,
Company Secretary and CFO to ASX listed, AIM listed and private companies.
Mr Draffin is a Director of EnviroMission.
Mr Draffin was appointed Company Secretary on 1 January 2018.
Mr Garrick Higgins
Independent Non-Executive Director
Mr Higgins is a Melbourne based lawyer and a principal of Grillo Higgins, a firm that practices in
energy and resources law and in corporate and securities law, including mergers and acquisitions,
takeovers, capital raisings, project finance, corporate governance and joint ventures.
Mr Peter Taylor B.Sc. C Eng
Non-Executive Director
(Resigned - 31 August 2021)
Mr Higgins was appointed a Director on 9 October 2017.
Mr Taylor has over 40 years' experience in the oil and gas industry. He co-founded T M Services,
an international oil and gas consulting company, in 1980 and became involved in the upstream
exploration and production sector in 1990. He has co-founded and been a Director of a number of
upstream companies.
Mr Taylor was a founding member with of Star Petroleum, Jupiter Petroleum and Neptune
Petroleum. Star Petroleum was incorporated into Global Petroleum in 2002. Jupiter Petroleum,
with assets in offshore Namibia, was acquired by Global Petroleum in 2011.
On 31 August 2021, the Company announced that Mr Taylor had resigned from the Board.
6
GLOBAL PETROLEUM LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2022
4.
COMPANY SECRETARY
Mr Draffin acts as Company Secretary to Global Petroleum and a number of publicly listed companies in the mining, oil and gas sectors,
investment and childcare sectors.
5.
DIRECTORS' MEETINGS
The number of Directors' meetings and the number of meetings attended by each of the Directors of the Company during the financial year are:
Mr J van der Welle
Mr P Hill
Mr A Draffin
Mr G Higgins
Mr P Taylor (resigned 31 August 2021)
6.
DIRECTORS' INTERESTS
Board Meetings
Number Eligible to
Attend
Board Meetings
Number Attended
6
6
6
6
1
6
6
6
6
1
The following table sets out each Director's relevant interest, including related parties, in shares, warrants and options of the Company as at the
date of this report:
Mr J van der Welle
Mr P Hill
Mr A Draffin
Mr G Higgins
Notes
Interest in Securities at the Date of this Report
Ordinary Shares (1)
Incentive Options (2)
Warrants (3)
1,291,151
4,744,472
666,667
-
3,000,000
12,000,000
1,500,000
1,500,000
1,000,000
2,000,000
666,667
-
(1) Ordinary Shares means fully paid ordinary shares in the capital of the Company.
(2) Incentive Options means an option over ordinary shares exercisable at various amounts and dates - see below.
(3) Warrants means an option over ordinary shares exercisable at various amounts and dates - see below.
Mr Taylor is not included in the above table as he is no longer a Director at the date of this report.
7.
PRINCIPAL ACTIVITIES, LIKELY DEVELOPMENTS AND DIVIDENDS
The principal activities of the Group during the year consisted of oil and gas exploration, and there has been no change in the nature of those
activities.
The Company expects to continue as an oil and gas explorer with a specific focus of enhancing of shareholder value by the identification and
commercialisation of oil and gas assets.
No dividends were paid or declared during the financial year ended 30 June 2022 (2021: Nil).
8.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There have been no significant changes in the state of affairs of the Company and Group during the financial year.
9.
EVENTS SUBSEQUENT TO REPORTING DATE
On 31 August 2022, the Company announced that it had successfully raised £800,000 in aggregate before costs, through the placing of
228,571,428 Ordinary Shares at a placing price of 0.35 pence per share.
As a further component of the placing, 114,285,714 Warrants were also issued at an exercise price of 0.70 pence per share for a period of 2
years (one Warrant for every two new Ordinary Shares). In the event the Warrants are exercised in due course in full, associated proceeds will
be £800,000 with the result that the Company will have raised gross proceeds of £1,600,000 at a weighted average price of 0.47 pence per
share.
10.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Constitution of the Company requires the Company, to the extent permitted by law, to indemnify any person who is or has been a Director
or officer of the Company or Group for any liability caused as such a Director or officer and any legal costs incurred by a Director or officer in
defending an action for any liability caused as such a Director or officer. During or since the end of the year, no amounts have been paid by the
Company or Group in relation to these indemnities. During the financial year, an indemnity insurance premium of US$135,998 (2021:
US$97,200) was paid by the Company.
7
GLOBAL PETROLEUM LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2022
11.
NON-AUDIT SERVICES
The Company's auditor, Hall Chadwick WA Audit Pty Ltd did not perform any non-audit related services.
Audit services:
Auditors of the Group, Hall Chadwick WA
-
audit and review of financial reports
12.
REMUNERATION REPORT - AUDITED
12.1
Principles of compensation - audited
2022
US$
2021
US$
23,288
23,288
23,358
23,358
The Group's remuneration policy for its key management personnel (KMP) has been developed by the Board taking into account the size of the
Group, the size of the management team for the Group, the nature and stage of development of the Group's current operations, and market
conditions and comparable remuneration levels for companies of a similar size and operating in similar sectors.
In addition to considering the above general factors, the Board has also placed emphasis on the following specific issues in determining the
remuneration policy for KMP:
(i)
(ii)
(iii)
the Group is currently focused on undertaking exploration, appraisal and development activities;
risks associated with developing oil and gas companies while exploring and developing projects; and
measures other than profit which may be generated from asset sales, the Group may undertake new project acquisitions, exploration
and development activities. Therefore, the Company does not expect to undertake profitable operations until sometime after the
commencement of commercial production on any of its projects.
These principles were reflected in the discretionary grant of options in 2021, following approval by shareholders on 7 January 2021.
12.2
Directors' and executive officers' remuneration - audited
Executive Director remuneration
The Group's remuneration policy is to provide a fixed remuneration component and a performance-based component (short term incentive and
long-term incentive) - see details below. The Board believes that this remuneration policy is appropriate given the considerations discussed in
the section above and aims to align executives' objectives with shareholder and business objectives.
Currently, given the size and nature of the Group's operations, there is only one executive, Mr Peter Hill, who is also a Director.
Mr P Hill, Managing Director and Chief Executive Officer, has a Contract of Employment with Global Petroleum Limited dated 1 August 2011
(amended, with effect, 1 August 2014). The contract specifies the duties and obligations to be fulfilled by the Managing Director and Chief
Executive Officer. The contract has a rolling annual term and provides for termination by either party on twelve months' notice. Upon notice, Mr
Hill will be entitled to his remuneration and related benefits up to the end of the notice period. The Contract of Employment does not provide for
any additional termination payout. His base remuneration under the terms of the contract is set at GBP250,000 (US$331,971) plus health
insurance, GBP13,659 (US$18,994).
(i) Fixed remuneration
Fixed remuneration consists of a base remuneration, as well as an employer contribution to a superannuation fund and other non-
cash benefits. Non-cash benefits may include provision of motor vehicles and healthcare benefits.
The fixed remuneration is reviewed annually by the Board in the absence of a Remuneration and Nomination Committee. The
process consists of a review of Company and individual performance, relevant comparative remuneration externally where
appropriate and external advice on policies and practices.
(ii) Performance based remuneration - short term incentive
The executive is entitled to an annual cash bonus upon achieving various key performance indicators ("KPI's"), as set by the Board.
Having regard to the current size, nature and opportunities of the Company, the Board has determined that these KPI's will include
measures such as successful completion of exploration activities (e.g. completion of exploration programmes within budgeted
timeframes and costs), development activities (e.g. completion of feasibility studies), corporate activities (e.g. recruitment of key
personnel) and business development activities (e.g. project acquisitions and capital raisings).
During the 2022 financial year, no cash bonuses were paid or payable (2021: Nil).
(iii) Performance based remuneration - long term incentive
The Board may issue incentive options to the executive as a key component of the incentive portion of their remuneration, in order to
attract and retain the services of the executive and to provide an incentive linked to the performance of the Group. The Board has a
policy of granting incentive options to the executive with exercise prices at or above market share price (at the time of agreement). As
such, incentive options granted to the executive will generally only be of benefit if the executive performs to the level whereby the
value of the Group increases sufficiently to warrant exercising the incentive options granted. No options were granted to Directors as
remuneration during the 2022 financial year. 13,000,000 options were granted to Directors as remuneration during the 2021 financial
year.
8
GLOBAL PETROLEUM LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2022
There are no vesting or performance criteria on the incentive options granted to executives, as given the speculative nature of the
Group's activities and the small management team responsible for its running, it is considered the performance of the executive and
the performance and value of the Group are closely related.
Non-Executive Director Remuneration
The Board's policy is for fees to Non-Executive Directors to be no greater than market rates for comparable companies for time, commitment
and responsibilities. Given the current size, nature and risks of the Group, incentive options have been used to attract and retain certain Non-
Executive Directors. The Board determines payments to the Non-Executive Directors and reviews their remuneration annually, based on market
practice, duties and accountability. Independent external advice is sought when required, however, no external advice has been sought in
relation to remuneration paid during the reporting period. The maximum aggregate amount of fees that can be paid to Non-Executive Directors
is subject to approval by shareholders at a General Meeting. Fees for Non-Executive Directors are not linked to the performance of the Group.
However, to align Directors' interests with shareholder interests, the Directors are encouraged to hold shares in the Company and Non-
Executive Directors may in limited circumstances receive unlisted incentive options in order to secure their initial or ongoing services.
Mr van der Welle's fees were GBP65,000 (US$86,313) (2021: GBP29,398 (US$40,066)). Messrs Draffin and Higgins fees were AU$36,000
(US$25,969 and US$25,445 respectively) - (2021: AU$36,000 (US$26,990) and AU$36,000 (US$26,994) respectively). These fees relate to
responsibilities as a Director only. Non-Executive Directors can rescind their position at any time by submitting their resignation in writing. A Non-
Executive Director's appointment can be terminated by a shareholder vote. The Non-Executive Directors are not entitled to any pay-outs on
termination.
The Board has no retirement scheme in place. Directors who retire from the Board of Directors are not entitled to any retirement payment. The
Group will make contributions to superannuation funds where required - in 2022 contributions to Messrs Draffin and Higgins were US$2,597
(AU$3,600) and US$2,544 (AU$3,600) respectively (2021: US$2,638 (AU$3,420) and US$2,508 (AU$3,420) respectively).
Relationship between remuneration of KMP, shareholder wealth and earnings
During the Group's project identification, acquisition, exploration and development phases of its business, the Board anticipates that the Group
will retain earnings (if any) and other cash resources for the exploration and development of its resource projects. Accordingly, the Group does
not currently have a policy with respect to the payment of dividends and returns of capital. Therefore, there was no relationship between the
Board's policy for determining the nature and amount of remuneration of KMP and dividends paid and returns of capital by the Group during the
current and previous five financial years.
The Board did not determine the nature and amount of remuneration of the KMP by reference to changes in the price at which shares in the
Company traded between the beginning and end of the current and the previous four financial years. However, as noted above, a number of
KMP have received or are entitled to receive incentive options which generally will only be of value to the individual should the value of the
Company's shares increase sufficiently to warrant exercising the incentive options.
Relationship between remuneration of KMP and earnings
As discussed above, the Group is currently undertaking exploration and development activities, and does not expect to be undertaking profitable
operations (other than by way of material asset sales), until sometime after the successful commercialisation, production and sales of
commodities from one or more of its projects. Accordingly, the Board does not consider earnings during the current and previous four financial
years when determining the nature and amount of remuneration of KMP.
Currently, the Company only employs one executive KMP, Mr P Hill. Details of his contract are shown above.
Details of the nature and amount of each element of the remuneration of the Directors and key management personnel of the Group for the
financial year are as follows:
Short-Term
Remuneration
Short-Term
Directors’
Fees
US$
US$
331,971
331,971
-
-
-
-
-
-
-
86,313
25,969
25,445
8,313
146,040
Post-
Employment
Superannuation
and other
benefits
US$
18,994
18,994
-
2,597
2,544
-
5,141
331,971
146,040
24,135
Year ended 30 June 2022
Director
Executive Directors’
Mr P Hill
Sub-total Executive Director’s
remuneration
Non-Executive Directors
Mr J van der Welle(2)
Mr A Draffin(1)
Mr G Higgins
Mr P Taylor (resigned 31 August
2021)
Sub-total Non-Executive
Directors’ remuneration
Total Directors’ remuneration
Share-Based
Payments
Shares/Options
Total
Proportion of
Remuneration
Share Based
Related
US$
US$
-
-
-
-
-
-
-
-
350,965
350,965
86,313
28,566
27,989
9,313
151,181
502,146
%
0%
0%
0%
0%
0%
0%
0%
0%
9
GLOBAL PETROLEUM LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2022
Short-Term
Remuneration
Short-Term
Directors’
Fees
Year ended 30 June 2021
Director
Executive Directors
Mr P Hill(3)
Sub-total Executive Directors'
remuneration
Non-Executive Directors
Mr J van der Welle(2) (3)
Mr A Draffin(1)
Mr G Higgins
Mr P Taylor (resigned 31 August 2021) (3)
Mr P Blakey (deceased 28 January 2021) (3)
Sub-total Non-Executive Directors'
remuneration
Total Directors' remuneration
Post-
Employment
Superannuation
and other
benefits
US$
Share-Based
Payments
Shares/Options
Total
Proportion of
Remuneration
Share Based
Related
US$
US$
%
13,924
74,776
332,095
23%
13,924
74,776
332,095 23%
US$
US$
243,395
243,395
-
-
-
-
-
-
-
-
40,066
26,990
26,994
33,901
21,862
149,813
-
2,638
2,508
-
-
5,146
24,924
12,463
12,463
18,694
18,694
64,990
42,091
41,965
52,595
40,556
87,238
242,197
38%
30%
30%
36%
46%
36%
243,395
149,813
19,070
162,014
574,292
28%
Notes in relation to the table of Directors' remuneration:
(1)
(2)
(3)
Mr A Draffin was remunerated US$25,969 (2021: US$26,990) as Company Secretary, separate to this role as Director and thus not
included in this table.
Mr J van der Welle was remunerated US$22,384 in 2021 financial year as a consultant, separate to his role as a Director and thus
not included in this table.
Short-Term Remuneration and Short-Term Directors Fees paid for the Year Ended 30 June 2021 has been restated after US$51,427
in National Insurance (a tax levied on payroll in the UK) payments was incorrectly recorded in the gross payments to Mr Hill, Mr Van
der Welle, Mr Taylor and Mr Blakey.
12.3
Equity Instruments - audited
Shares or Options granted to Directors and Key Management Personnel
No options were granted or issued during the 2022 financial year. During the 2021 financial year, a total of 13,000,000 options were issued to
some of the Directors. The options were granted for no consideration and are not subject to any vesting conditions. The fair value at grant date
was GBP0.0064 (US$0.0088) per option. The fair value of the options was determined using the Black Scholes method. They are exercisable
on or before 21 January 2026 with an exercise price of GBP0.01037/option.
12.4
Directors and Key Management Personnel transactions
Loan to Directors
There have been no loans to any Director or key management personnel or their related parties during the period.
Movement in Shareholdings
2022
Directors
Mr J van der Welle
Mr P Hill
Mr A Draffin
Mr G Higgins
Mr P Taylor1 (resigned 31 August 2021)
Held at 1 July 2021(1)
Shares purchased
1,291,151
4,744,472
666,667
-
45,629,071
-
-
-
-
-
Held at 30 June
2022(1)
1,291,151
4,744,472
666,667
-
45,629,071
Movement in Options
2022
Directors
Mr J van der Welle
Mr P Hill
Mr A Draffin
Mr G Higgins
Mr P Taylor1 (resigned 31
August 2021)
Held at 1 July 2021
Granted as
compensation
Exercised
Other changes
3,000,000
12,000,000
1,500,000
1,500,000
1,500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Held at 30 June
2022
3,000,000
12,000,000
1,500,000
1,500,000
1,500,000
1 Mr P Taylor resigned on 31 August 2021. Amounts shown are for the period 1 July 2021 until resignation as a Director.
10
GLOBAL PETROLEUM LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2022
Movement in Warrants
2022
Directors
Mr J van der Welle
Mr P Hill
Mr A Draffin
Mr G Higgins
Mr P Taylor1 (resigned 31
August 2021)
Held at 1 July 2021
1,000,000
2,000,000
666,667
-
4,000,000
Granted as
compensation
-
-
-
-
-
Exercised
Other changes
Held at 30 June
2022
-
-
-
-
-
-
-
-
-
-
1,000,000
2,000,000
666,667
-
4,000,000
1 Mr P Taylor resigned on 31 August 2021. Amounts shown are for the period 1 July 2021 until resignation as a Director.
Other transactions
A number of Directors, or their related parties, hold positions in other entities that result in them having control or significant influence over the
financial or operating policies of those entities. A number of these entities transacted with the Company or its controlled entities in the reporting
period.
During the year, the Company paid DW Accounting and Advisory Pty Ltd, a company controlled by Mr A Draffin US$25,969 (2021: US$26,990)
for company secretarial services. Northlands Advisory Services Limited, a company controlled by Mr J van der Welle was paid US$22,384 in the
2021 financial year for consulting services.
End of Remuneration Report
13. CORPORATE GOVERNANCE STATEMENT
The London Stock Exchange (LSE) has a requirement in AIM Rule 26 for AIM companies to comply with a recognised corporate governance
code. Following delisting from ASX in July 2020, the Company adopted the UK's QCA Corporate Governance Code for Small and Mid-Size
Quoted Companies (the "QCA Code"), in replacement of the ASX's Corporate Governance Council's Corporate Governance Principles and
Recommendations 4th Edition, as the basis for its corporate governance. The Company's Corporate Governance Statement can be found on
Global's website www.globalpetroleum.com.au.
14. AUDITOR'S INDEPENDENCE DECLARATION
The auditor's independence declaration is on Page 12, and forms part of the Directors' Report for the financial year ended 30 June 2022.
15. DIRECTORS' RESOLUTION
This report is made in accordance with a resolution of the Directors made pursuant to Section 298(2) of the Corporations Act 2001.
ANDREW DRAFFIN
DIRECTOR AND COMPANY SECRETARY
Dated: 25 October 2022
11
To The Board of Directors
Auditor’s Independence Declaration under Section 307C of the Corporations Act
2001
As lead audit Director for the audit of the financial statements of Global Petroleum Limited for the financial year
ended 30 June 2022, I declare that to the best of my knowledge and belief, there have been no contraventions of:
•
•
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
Yours faithfully
HALL CHADWICK WA AUDIT PTY LTD
MARK DELAURENTIS CA
Director
Dated in Perth, Western Australia this 25th day of October 2022
GLOBAL PETROLEUM LIMITED
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2022
Continuing operations
Employee benefits expense
Administrative expense
Exploration and business development expenses
Depreciation and amortisation expense
Other expenses
Exploration written off
Share based payments
Foreign exchange gain (loss)
Results from operating activities
Finance income
Net finance income
(Loss) from continuing operations before tax
Tax expense
(Loss) from continuing operations after tax
(Loss) for the year
Earnings per share
From continuing and discontinued operations
Basic earnings per share (cents)
Diluted earnings per share (cents)
Note
2022
US$
2021
US$
(450,400)
(830,592)
(21,767)
(3,439)
(162,970)
-
-
(178,445)
(271,224)
(873,302)
(16,070)
(3,439)
(196,303)
(2,410,272)
(236,790)
78,814
(1,647,613)
(3,928,586)
519
519
792
792
(1,647,094)
(3,927,794)
-
-
(1,647,094)
(3,927,794)
(1,647,094)
(3,927,794)
(0.21)
(0.21)
(1.03)
(1.03)
11
11
19
3
6
6
The accompanying notes form part of these financial statements.
12
GLOBAL PETROLEUM LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
Note
2022
US$
2021
US$
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total current assets
Non-current assets
Property, plant and equipment
Exploration and evaluation assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
7
8
12
10
11
13
14
15
23
1,139,775
37,020
185,159
1,834,434
80,622
39,384
1,361,954
1,954,440
13,158
1,291,599
1,304,757
2,666,711
16,597
972,467
989,064
2,943,504
112,048
220,730
332,778
83,999
163,458
247,457
332,778
247,457
2,333,933
2,696,047
43,474,971
1,249,042
(42,390,080)
42,189,991
1,249,042
(40,742,986)
2,333,933
2,696,047
The accompanying notes form part of these financial statements.
13
GLOBAL PETROLEUM LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
Consolidated Group
Balance at 1 July 2020
Comprehensive income
Loss for the year
Total comprehensive income for the year
Transactions with owners, in their capacity as owners, and other
transfers
Issue of shares
Transaction costs
Expiry of options
Issue of options
Ordinary
Option
Reserve
US$
US$
Foreign
Currency
Translation
Reserve
US$
Accumulated
Losses
Total
US$
US$
39,221,112
964,895
570,410
(37,338,245)
3,418,172
-
-
3,191,040
(222,161)
-
-
-
-
-
-
(523,053)
236,790
-
-
-
-
-
-
-
(3,927,794)
(3,927,794)
(3,927,794)
(3,927,794)
-
-
3,191,040
(222,161)
523,053
-
-
236,790
523,053
3,205,669
Total transactions with owners and other transfers
2,968,879
(286,263)
Balance at 30 June 2021
Balance at 1 July 2021
Comprehensive income
Loss for the year
Total comprehensive income for the year
Transactions with owners, in their capacity as owners, and other
transfers
Issue of shares
Transaction costs
Total transactions with owners and other transfers
42,189,991
678,632
570,410
(40,742,986)
2,696,047
42,189,991
678,632
570,410
(40,742,986)
2,696,047
-
-
1,367,000
(82,020)
1,284,980
-
-
-
-
-
-
-
-
-
-
(1,647,094)
(1,647,094)
(1,647,094)
(1,647,094)
-
-
-
1,367,000
(82,020)
1,284,980
Balance at 30 June 2022
43,474,971
678,632
570,410
(42,390,080)
2,333,933
The accompanying notes form part of these financial statements.
14
GLOBAL PETROLEUM LIMITED
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 30 JUNE 2022
Cash flows from operating activities
Interest received
Payments to suppliers and employees
GST/VAT refunds received
Net cash (used in) operating activities
Cash flows from investment activities
Payments for exploration and business development expenditure
Reclassification of bank guarantee
Net cash (used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payments for capital raising costs
Net cash provided by financing activities
Note
2022
US$
2021
US$
519
(1,551,823)
43,602
(1,507,702)
792
(1,368,821)
26,833
(1,341,196)
18a
(340,900)
(130,050)
(470,950)
(725,054)
-
(725,054)
1,367,000
(82,020)
1,284,980
3,191,040
(222,161)
2,968,879
Net (decrease)/increase in cash held
Cash and cash equivalents at beginning of financial year
Effect of exchange rates on cash holdings in foreign currencies
Cash and cash equivalents at end of financial year
(693,672)
1,834,434
(987)
1,139,775
902,629
932,818
(1,013)
1,834,434
7
The accompanying notes form part of these financial statements.
15
GLOBAL PETROLEUM LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Global Petroleum Limited ("Global", the "Company") is a company domiciled in Australia. Global is a company limited by shares incorporated in
Australia whose shares are publicly traded on the AIM market of the London Stock Exchange ("AIM"). The consolidated annual financial statements
of the Company as at, and for the 12 months ended, 30 June 2022 comprise the Company and its controlled entities (together referred to as the
"Group"). The Group is a for-profit entity and is primarily involved in oil and gas exploration and development.
The consolidated annual financial statements of the Group as at, and for the year ended, 30 June 2022 are available upon request from the Company's
registered office at C/- DW Accounting & Advisory, Level 4, 91 William Street, Melbourne, Victoria, 3000, Australia or at www.globalpetroleum.com.au.
The separate financial statements of the parent entity, Global Petroleum Limited ("Parent"), have not been presented within this annual financial
report as permitted by the Corporations Act 2001.
The financial statements were authorised for issue on 25 October 2022 by the Board of Directors of the Company.
Note 1
Summary of Significant Accounting Policies
Basis of Preparation
These general purpose consolidated financial statements have been prepared in accordance with the Corporations Act 2001, Australian
Accounting Standards and Interpretations of the Australian Accounting Standards Board and in compliance with International Financial
Reporting Standards as issued by the International Accounting Standards Board. The Group is a for-profit entity for financial reporting
purposes under Australian Accounting Standards. Material accounting policies adopted in the preparation of these financial statements are
presented below and have been consistently applied unless stated otherwise.
Except for cash flow information, the financial statements have been prepared on an accrual basis and are based on historical costs,
modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.
(a) Going Concern
The financial statements have been prepared on the going concern basis of accounting, which contemplates the continuity of normal
business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business.
The Group has no source of operating revenue and settles its expenditure obligations from existing cash resources. It generated a loss
of US$1,647,094 (2021: loss of US$3,927,794) and had net cash outflows from the operating activities of US$1,507,702 (2021: net
cash outflows of US$1,341,196) for the year ended 30 June 2022. As of that date, the Group had net assets of US$2,333,933 (2021:
US$2,696,047) and cash assets of US$1,139,775 (2021: US$1,834,434). The Group has no debt.
The Directors have prepared a cash flow forecast for the next 12 months based on best estimates of future inflows and outflows of
cash, to support the Group's ability to continue as a going concern. The ability of the Company to continue as a going concern is
principally dependent upon a combination of one or more of the following factors – management of existing funds; securing further
funds via raising capital from equity markets (See note 15 - Issued Share Capital); concluding a farm-out arrangement whereby a farm-
in party would assume the costs of meeting certain future exploration and other commitments on the Company’s Namibian licence; and
the deferral of licence commitments. (See note 11 - Exploration Assets and note 16 – Future Commitments).
The raising of additional equity capital is subject to market conditions and investor demand; securing a farm-out requires agreement
with a suitable third party which the Group has not achieved to date; and any deferral of licence commitments would require the consent
of the Namibian Ministry of Mines and Energy. As each of these are not within the Company’s control, these conditions constitute a
material uncertainty that may cast significant doubt on the use of the going concern basis of accounting. However the Directors have a
reasonable expectation that one or more of these actions will be achieved, and following a successful equity placing in the reporting
period which raised gross proceeds of GBP1.0 million) (previous period - GBP2.4 million), in August 2022, Global announced a further
successful placing of ordinary shares in the Company, raising gross proceeds of GBP0.8 million (See note 20 - Events After the
Reporting Period). On this basis the Group’s projections indicate that it will have sufficient liquidity to meet its expenditure related
liabilities as they fall due in the next twelve months from the date of finalising these financial statements.
Accordingly, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence
for the foreseeable future, and therefore the Directors continue to adopt the going concern basis of accounting in preparing the financial
statements. The financial statements do not include any adjustments relating to the classification of assets including Exploration and
Evaluation assets, or the recoverability of asset carrying values, or to the amount and classification of liabilities, that might result should
the Group be unable to continue as a going concern.
(b) Principles of Consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of Global Petroleum Limited and all of its
subsidiaries being entities that the Parent controls. The Parent controls an entity when it is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those returns through its power over the entity. A list of the subsidiaries
is provided in Note 9.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group from the date on
which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the date that control ceases. Inter-
company transactions, balances and unrealised gains or losses on transactions between Group entities are fully eliminated on
consolidation. Accounting policies of subsidiaries may be changed and adjustments made where necessary to ensure uniformity of the
accounting policies adopted by the Group.
16
Note 1: Summary of Significant Accounting Policies (continued)
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as "non-controlling Interests". The
Group initially recognises non-controlling interests that are present ownership interests in subsidiaries and are entitled to a
proportionate share of the subsidiary’s net assets on liquidation at either fair value or the non-controlling interests’ proportionate share
of the subsidiary’s net assets. Subsequent to initial recognition, non-controlling interests are attributed their share of profit or loss and
each component of other comprehensive income. Non-controlling interests are shown separately within the equity section of the
statement of financial position and statement of comprehensive income. No non-controlling interests were recognised for the reporting
period.
Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses
under common control. The business combination will be accounted for from the date that control is obtained, whereby the fair value of
the identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to certain limited
exemptions).
When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent
consideration arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is not
remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability is
remeasured each reporting period to fair value, recognising any change to fair value in profit or loss, unless the change in value can be
identified as existing at acquisition date.
All transaction costs incurred in relation to business combinations, other than those associated with the issue of a financial instrument,
are recognised as expenses in profit or loss when incurred.
The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.
Goodwill
Goodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the excess of the sum of:
(i) the consideration transferred at fair value;
(ii) any non-controlling interest (determined under either fair value or proportionate interest method); and
(iii) the acquisition date fair value of any previously held equity interest,
over the acquisition date fair value of any identifiable assets acquired and liabilities assumed.
The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date fair value of any
previously held equity interest shall form the cost of the investment in the separate financial statements.
Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are
accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to
reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling
interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of
the Group.
When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated as the difference between
(i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying
amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. All amounts previously
recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the
related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as
specified/permitted by applicable AASB Accounting Standards). The fair value of any investment retained in the former subsidiary at the
date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under AASB 139: Financial
Instruments: Recognition and Measurement, when applicable, the cost on initial recognition of an investment in an associate or a joint
venture.
The amount of goodwill recognised on acquisition of each subsidiary in which the Group holds less than 100% interest will depend on
the method adopted in measuring the non-controlling interest. The Group can elect in most circumstances to measure the non-
controlling interest in the acquiree either at fair value (full goodwill method) or at the non-controlling interest's proportionate share of the
subsidiary's identifiable net assets (proportionate interest method). In such circumstances, the Group determines which method to
adopt for each acquisition and this is stated in the respective note to the financial statements disclosing the business combination.
Under the full goodwill method, the fair value of the non-controlling interest is determined using valuation techniques which make the
maximum use of market information where available.
Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments
in associates.
Goodwill is tested for impairment annually and is allocated to the Group's cash-generating units or groups of cash-generating units,
representing the lowest level at which goodwill is monitored and not larger than an operating segment. Gains and losses on the disposal
of an entity include the carrying amount of goodwill related to the entity disposed of.
17
Note 1: Summary of Significant Accounting Policies (continued)
(c) Corporation Tax
The corporation tax expense (income) for the year comprises current corporation tax expense (income) and deferred tax expense (income).
Current corporation tax expense charged to profit or loss is the tax payable on taxable income for the current period. Current tax liabilities
(assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority using tax rates (and tax
laws) that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax
losses.
Current and deferred corporation tax expense (income) is charged or credited outside profit or loss when the tax relates to items that are
recognised outside profit or loss or arising from a business combination.
A deferred tax liability shall be recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises
from: (a) the initial recognition of goodwill; or (b) the initial recognition of an asset or liability in a transaction which: (i) is not a business
combination; and (ii) at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).
Except for business combinations, no deferred corporation tax is recognised from the initial recognition of an asset or liability, where
there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or
the liability is settled and their measurement also reflects the manner in which management expects to recover or settle the carrying
amount of the related asset or liability. With respect to non-depreciable items of property, plant and equipment measured at fair value
and items of investment property measured at fair value, the related deferred tax liability or deferred tax asset is measured on the basis
that the carrying amount of the asset will be recovered entirely through sale. When an investment property that is depreciable is held by
the entity in a business model whose objective is to consume substantially all of the economic benefits embodied in the property
through use over time (rather than through sale), the related deferred tax liability or deferred tax asset is measured on the basis that the
carrying amount of such property will be recovered entirely through use.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that
future taxable profit will be available against which the benefits of the deferred tax asset can be utilised, unless the deferred tax asset
relating to temporary differences arises from the initial recognition of an asset or liability in a transaction that:
-
-
is not a business combination; and
at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets
and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that
the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or
simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset
where: (i) a legally enforceable right of set-off exists; and (ii) the deferred tax assets and liabilities relate to corporation taxes levied by
the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or
simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of
deferred tax assets or liabilities are expected to be recovered or settled.
(d) Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending on the
requirements of the applicable accounting standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly (i.e. unforced)
transaction between independent, knowledgeable and willing market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used to determine fair value.
Adjustments to market values may be made having regard to the characteristics of the specific asset or liability. The fair values of
assets and liabilities that are not traded in an active market are determined using one or more valuation techniques. These valuation
techniques maximise, to the extent possible, the use of observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or liability (i.e. the market with the
greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the most advantageous market
available to the entity at the end of the reporting period (i.e. the market that maximises the receipts from the sale of the asset or
minimises the payments made to transfer the liability, after taking into account transaction costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant’s ability to use the asset in its highest
and best use or to sell it to another market participant that would use the asset in its highest and best use.
The fair value of liabilities and the entity’s own equity instruments (excluding those related to share-based payment arrangements) may
be valued, where there is no observable market price in relation to the transfer of such financial instruments, by reference to observable
market information where such instruments are held as assets. Where this information is not available, other valuation techniques are
adopted and, where significant, are detailed in the respective note to the financial statements.
18
Note 1: Summary of Significant Accounting Policies (continued)
(e) Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated
depreciation and impairment losses.
Plant and equipment
Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated depreciation and any accumulated
impairment. In the event the carrying amount of plant and equipment is greater than the estimated recoverable amount, the carrying
amount is written down immediately to the estimated recoverable amount and impairment losses are recognised in profit or loss. A
formal assessment of recoverable amount is made when impairment indicators are present (refer to Note 1(h) for details of
impairment).
The carrying amount of plant and equipment is reviewed annually by the Directors to ensure it is not in excess of the recoverable amount
from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset's
employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining
recoverable amounts.
The cost of fixed assets constructed within the consolidated group includes the cost of materials, direct labour, borrowing costs and an
appropriate proportion of fixed and variable overheads.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.
All other repairs and maintenance are recognised as expenses in profit or loss during the financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets including buildings and capitalised leased assets, but excluding freehold land, is depreciated
on a straight-line basis over the asset's useful life to the Group commencing from the time the asset is held ready for use. Leasehold
improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the
improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Plant and equipment
Depreciation Rate
20%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its
estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are
recognised in profit or loss in the period in which they arise. Gains shall not be classified as revenue. When revalued assets are sold,
amounts included in the revaluation surplus relating to that asset are transferred to retained earnings.
(f) Exploration and Evaluation Expenditure
Expenditure on exploration and evaluation is accounted for in accordance with the 'area of interest' method and with AASB 6
Exploration for and Evaluation of Mineral Resources, which is the Australian equivalent of IFRS 6 - Exploration for and Evaluation of
Mineral Resources.
Exploration and evaluation costs are capitalised as intangible assets and assessed for impairment where facts and circumstances
suggest that the carrying amount of an exploration and evaluation asset may exceed the recoverable amount. Exploration and
evaluation costs are capitalised if the rights to tenure of the area of interest are current and either:
(i)
(ii)
the expenditure relates to an exploration discovery where, at balance sheet date, activities have not yet reached a stage which
permits an assessment of the existence or otherwise of economically recoverable reserves and active and significant
operations in, or in relation to, the area of interest are continuing; or
it is expected that the expenditure will be recouped through successful exploitation of the area of interest, or alternatively, by
its sale.
Costs incurred before the Group has obtained the legal rights to explore an area are expensed.
Each potential or recognised area of interest is reviewed every six months to determine whether economic quantities of reserves have
been found or whether further exploration and evaluation work is underway or planned to support the continued carry forward of
capitalised costs.
Where a determination is made that there is no further value to be extracted from the data licenses then any unamortised balance is
written off.
Once management has determined the existence of economically recoverable reserves for an area of interest, deferred costs are tested
for impairment and then classified from exploration and evaluation assets to oil and gas assets on the Consolidated Statement of
Financial Position.
The recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful development and
commercial exploitation, or alternatively, sale of the respective areas of interest.
19
Note 1: Summary of Significant Accounting Policies (continued)
(g) Financial Instruments
Recognition and Initial Measurement
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions to the instrument.
For financial assets, this is the date that the Group commits itself to either the purchase or sale of the asset (i.e. trade date accounting
is adopted).
Financial instruments (except for trade receivables) are initially measured at fair value plus transactions costs except where the
instrument is classified ‘at fair value through profit or loss’ in which case transaction costs are expensed to profit or loss immediately.
Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are
adopted.
Trade receivables are initially measured at the transaction price if the trade receivables do not contain a significant financing
component or if the practical expedient was applied as specified in AASB 15.63.
Classification and Subsequent Measurement
Financial liabilities
Financial instruments are subsequently measured at:
— amortised cost; or
— fair value through profit or loss.
A financial liability is measured at fair value through profit and loss if the financial liability is:
— held for trading; or
— initially designated as at fair value through profit or loss.
All other financial liabilities are subsequently measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest expense in
profit or loss over the relevant period. The effective interest rate is the internal rate of return of the financial asset or liability. That is, it is
the rate that exactly discounts the estimated future cash flows through the expected life of the instrument to the net carrying amount at
initial recognition.
A financial liability is held for trading if:
— it is incurred for the purpose of repurchasing or repaying in the near term; or
— it is part of a portfolio where there is an actual pattern of short-term profit taking.
Any gains or losses arising on changes in fair value are recognised in profit or loss to the extent that they are not part of a designated
hedging relationship are recognised in profit or loss.
The change in fair value of the financial liability attributable to changes in the issuer's credit risk is taken to other comprehensive income
and are not subsequently reclassified to profit or loss. Instead, they are transferred to retained earnings upon derecognition of the
financial liability. If taking the change in credit risk in other comprehensive income enlarges or creates an accounting mismatch, then
these gains or losses should be taken to profit or loss rather than other comprehensive income.
A financial liability cannot be reclassified.
Financial assets
Financial assets are subsequently measured at:
— amortised cost;
— fair value through other comprehensive income; or
— fair value through profit or loss.
Measurement is on the basis of two primary criteria:
— the contractual cash flow characteristics of the financial asset; and
— the business model for managing the financial assets.
A financial asset that meets the following conditions is subsequently measured at amortised cost:
— the financial asset is managed solely to collect contractual cash flows; and
— the contractual terms within the financial asset give rise to cash flows that are solely payments of principal and interest on the
principal amount outstanding on specified dates.
A financial asset that meets the following conditions is subsequently measured at fair value through other comprehensive income:
— the contractual terms within the financial asset give rise to cash flows that are solely payments of principal and interest on the
principal amount outstanding on specified dates;
— the business model for managing the financial assets comprises both contractual cash flows collection and the selling of the
financial asset.
By default, all other financial assets that do not meet the measurement conditions of amortised cost and fair value through other
comprehensive income are subsequently measured at fair value through profit or loss.
20
Note 1: Summary of Significant Accounting Policies (continued)
The Company initially designates a financial instrument as measured at fair value through profit or loss if:
— it eliminates or significantly reduces a measurement or recognition inconsistency (often referred to as “accounting mismatch”) that
would otherwise arise from measuring assets or liabilities or recognising the gains and losses on them on different bases;
— it is in accordance with the documented risk management or investment strategy, and information about the groupings was
documented appropriately, so that the performance of the financial liability that was part of a group of financial liabilities or financial
assets can be managed and evaluated consistently on a fair value basis.
The initial designation of the financial instruments to measure at fair value through profit or loss is a one-time option on initial
classification and is irrevocable until the financial asset is derecognised.
Derecognition
Derecognition refers to the removal of a previously recognised financial asset or financial liability from the statement of financial
position.
Derecognition of financial liabilities
A liability is derecognised when it is extinguished (i.e. when the obligation in the contract is discharged, cancelled or expires). An
exchange of an existing financial liability for a new one with substantially modified terms, or a substantial modification to the terms of a
financial liability is treated as an extinguishment of the existing liability and recognition of a new financial liability.
The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable, including any
non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
Derecognition of financial assets
A financial asset is derecognised when the holder's contractual rights to its cash flows expires, or the asset is transferred in such a way
that all the risks and rewards of ownership are substantially transferred.
All of the following criteria need to be satisfied for derecognition of financial asset:
— the right to receive cash flows from the asset has expired or been transferred;
— all risk and rewards of ownership of the asset have been substantially transferred; and
— the Company no longer controls the asset (i.e. the Company has no practical ability to make a unilateral decision to sell the asset
to a third party).
On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of
the consideration received and receivable is recognised in profit or loss.
On derecognition of a debt instrument classified as at fair value through other comprehensive income, the cumulative gain or loss
previously accumulated in the investment revaluation reserve is reclassified to profit or loss.
On derecognition of an investment in equity which was elected to be classified under fair value through other comprehensive income,
the cumulative gain or loss previously accumulated in the investment revaluation reserve is not reclassified to profit or loss, but is
transferred to retained earnings.
Impairment
The Group recognises a loss allowance for expected credit losses on:
— financial assets that are measured at amortised cost or fair value through other comprehensive income.
Loss allowance is not recognised for:
— financial assets measured at fair value through profit or loss.
Expected credit losses are the probability-weighted estimate of credit losses over the expected life of a financial instrument. A credit
loss is the difference between all contractual cash flows that are due and all cash flows expected to be received, all discounted at the
original effective interest rate of the financial instrument.
The Group uses the following approaches to impairment, as applicable under AASB 9: Financial Instruments:
— the general approach
General approach
Under the general approach, at each reporting period, the Group assesses whether the financial instruments are credit-impaired, and if:
— the credit risk of the financial instrument has increased significantly since initial recognition, the Group measures the loss
allowance of the financial instruments at an amount equal to the lifetime expected credit losses; or
— there is no significant increase in credit risk since initial recognition, the Group measures the loss allowance for that financial
instrument at an amount equal to 12-month expected credit losses.
21
Note 1: Summary of Significant Accounting Policies (continued)
(h) Impairment of Assets
At the end of each reporting period, the Company assesses whether there is any indication that an asset may be impaired. The
assessment will include the consideration of external and internal sources of information, including dividends received from subsidiaries,
associates or joint ventures deemed to be out of pre-acquisition profits. If such an indication exists, an impairment test is carried out on the
asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs of disposal and value in use,
to the asset’s carrying amount. Any excess of the asset’s carrying amount over its recoverable amount is recognised immediately in profit
or loss, unless the asset is carried at a revalued amount in accordance with another Standard (e.g. in accordance with the revaluation
model in AASB 116: Property, Plant and Equipment ). Any impairment loss of a revalued asset is treated as a revaluation decrease in
accordance with that other Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the entity estimates the recoverable amount of the
cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill, intangible assets with indefinite lives and intangible assets not yet available for use.
When an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised
estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss
is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the
impairment loss is treated as a revaluation increase.
(i) Interests in Joint Arrangements
Joint arrangements represent the contractual sharing of control between parties in a business venture where unanimous decisions about
relevant activities are required.
Separate joint venture entities providing joint venturers with an interest to net assets are classified as a joint venture and accounted for
using the equity method.
Joint operations represent arrangements whereby joint operators maintain direct interests in each asset and exposure to each liability of
the arrangement. The company’s interests in the assets, liabilities, revenue and expenses of joint operations are included in the respective
line items of the financial statements.
Gains and losses resulting from sales to a joint operation are recognised to the extent of the other parties’ interests. When the Company
makes purchases from a joint operation, it does not recognise its share of the gains and losses from the joint arrangement until it resells
those goods/assets to a third party.
(j) Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of the Company is the currency of the primary economic environment in which that entity operates. The financial
statements are presented in United States dollars, which is the Company’s functional currency.
Transaction and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transaction.
Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue
to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange
rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in profit or loss, except exchange differences that arise
from net investment hedges.
Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive income to the
extent that the underlying gain or loss is recognised in other comprehensive income, otherwise the exchange difference is recognised in
the profit or loss.
The Company
The financial results and position of foreign operations whose functional currency is different from the entity’s presentation currency are
translated as follows:
— assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
— income and expenses are translated at exchange rates on the date of transaction; and
— all resulting exchange differences are recognised in other comprehensive income.
Exchange differences arising on translation of foreign operations with functional currencies other than United States dollars are
recognised in other comprehensive income and included in the foreign currency translation reserve in the statement of financial position
and allocated to non-controlling interest where relevant. The cumulative amount of these differences is reclassified into profit or loss in the
period in which the operation is disposed of.
22
Note 1: Summary of Significant Accounting Policies (continued)
(k) Employee Benefits
Short-term employee benefits
Provision is made for the Company’s obligation for short-term employee benefits. Short-term employee benefits are benefits (other
than termination benefits) that are expected to be settled wholly before twelve months after the end of the annual reporting period in
which the employees render the related service, including wages, salaries and sick leave. Short-term employee benefits are measured
at the (undiscounted) amounts expected to be paid when the obligation is settled.
The Company’s obligations for short-term employee benefits such as wages, salaries and sick leave are recognised as part of current
trade and other payables in the statement of financial position. The Company’s obligations for employees’ annual leave and long
service leave entitlements are recognised as provisions in the statement of financial position.
Other long-term employee benefits
Provision is made for employees’ long service leave and annual leave entitlements not expected to be settled wholly within 12 months
after the end of the annual reporting period in which the employees render the related service. Other long-term employee benefits are
measured at the present value of the expected future payments to be made to employees.
Expected future payments incorporate anticipated future wage and salary levels, durations of service and employee departures and are
discounted at rates determined by reference to market yields at the end of the reporting period on government bonds that have maturity
dates that approximate the terms of the obligations. Any remeasurements for changes in assumptions of obligations for other long-
term employee benefits are recognised in profit or loss in the periods in which the changes occur.
The Company’s obligations for long-term employee benefits are presented as non-current provisions in its statement of financial
position, except where the Company does not have an unconditional right to defer settlement for at least 12 months after the end of the
reporting period, in which case the obligations are presented as current provisions.
(l) Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that
an outflow of economic benefits will result and that outflow can be reliably measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period.
(m) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and deposits available on demand with banks, other short-term highly liquid
investments with original maturities of 3 months or less.
(n) Revenue and Other Income
Revenue Recognition
Interest income is recognised using the effective interest method.
(o)Trade and Other Payables
Trade and other payables represent the liabilities for goods and services received by the Group that remain unpaid at the end of the
reporting period. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the
liability. Trade and other payables are initially measured at fair value and subsequently measured at amortised cost using the effective
interest method.
(p) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST/VAT, except where the amount of GST/VAT incurred is not
recoverable from the relevant taxation authority.
Receivables and payables are stated inclusive of the amount of GST/VAT receivable or payable. The net amount of GST/VAT
recoverable from, or payable to, the relevant taxation authority is included with other receivables or payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST/VAT components of cash flows arising from investing or financing activities which
are recoverable from, or payable to, the relevant taxation authority are presented as operating cash flows included in receipts from
customers or payments to suppliers.
(q) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current
financial year.
Where the Group retrospectively applies an accounting policy, makes a retrospective restatement or reclassifies items in its financial
statements, an additional (third) statement of financial position as at the beginning of the preceding period in addition to the minimum
comparative financial statements is presented.
23
Note 1: Summary of Significant Accounting Policies (continued)
(r) Critical Accounting Estimates and Judgements
The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgements, estimates
and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods affected.
Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in
the financial statements is included in the following Notes:
-
-
Note 11 - Exploration and Evaluation Assets
Note 3 - Tax Expense
Note 2
Parent Information
The following information has been extracted from the books and records of the financial
information of the parent entity has been prepared in accordance with Australian Accounting
Standards.
Statement of Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Accumulated losses
Option reserve
Total equity
Statement of Profit or Loss and Other Comprehensive Income
Loss for the year
Total comprehensive income/(loss)
As at 30 June 2022, the parent entity has no capital commitments (2021: Nil).
2022
US$
2021
US$
1,361,954
776,640
1,949,993
333,879
2,138,594
2,283,872
322,900
-
322,900
243,965
-
243,965
1,815,694
2,039,907
43,474,971
42,189,991
(42,337,909) (40,828,716)
678,632
1,815,694
678,632
2,039,907
(1,509,193)
(4,062,776)
(1,509,193)
(4,062,776)
24
GLOBAL PETROLEUM LIMITED
Note 3
Tax Expense
(a) The prima facie tax on profit from ordinary activities before corporation tax is reconciled to corporation tax as follows:
Prima facie tax payable on profit from ordinary activities before corporation tax
at 19% (2021: 19%)
- Consolidated Group
Increase (decrease) in corporation tax expense due to:
Expenditure not allowable for corporation tax purposes
Deferred tax assets not recognised
Corporation tax attributable to entity
(b) Current tax payable
The Group has no current tax payable (2021: Nil).
Consolidated Group
2022
US$
2021
US$
(312,948)
(746,281)
2,826
310,122
-
500,763
245,518
-
On 1 April 2014, Global Petroleum Limited changed its tax domicile from Australia to the United Kingdom. However, it must be noted that
under Australian tax law, Global Petroleum Limited remains an Australian tax resident. As a result, Global Petroleum Limited is a tax
resident of both Australia and the United Kingdom. Under the terms of the Australia-United Kingdom Double Tax Treaty, Global Petroleum
Limited will be a dual resident company deemed to be a resident in the UK for the purposes of allocating taxing rights.
Multilateral Instruments (MLI) came into force in January 2019 which impact the tie breaker rule previously used for dual resident entities.
The MLI changes currently cover six of Australia's double tax treaties which includes the UK. The dual residents entitlement to any treaty
benefits will be denied where the two competent authorities, the Australia Taxation Office and HM Revenue and Customs do not reach an
agreement on a single jurisdiction of tax residency. On 13 October 2020, the Company received a decision from the Australian Taxation
Office determining the Company is deemed to be a resident only in the UK.
(c) Deferred corporation tax
Deferred tax assets
Tax losses available to offset future taxable profits
Tax benefit not brought to account
2022
US$
2021
US$
4,020,369
3,662,676
(4,020,369)
(3,662,676)
-
-
The amount of UK tax losses carried forward is US$14.72 million as at 30 June 2022 (2021: US$13.34 million). A corresponding deferred
tax asset, calculated using the rate of 19% (which has been enacted in the Finance Act 2021 effective from 1 April 2023), of US$3.68
million (2021: US$3.33 million) has not been recognised due to insufficient certainty regarding the availability of future profits against
which the losses can be utilised.
In addition the Group has a pool of pre-trading revenue expenditure of US$0.2 million (2021: US$0.2 million) and a pool of pre-trading capital
expenditure of c. US$8.6 million (2021: US$7.8 million) arising in the overseas subsidiaries for which no deferred tax asset has been
recognised due to insufficient certainty regarding the availability of future profits against which the costs can be utilised.
25
GLOBAL PETROLEUM LIMITED
Note 4
Key Management Personnel Compensation
Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration paid or payable to each member of the Group’s
key management personnel (KMP) for the year ended 30 June 2022.
The totals of remuneration paid to KMP of the Company and the Group during the year are as follows:
Short-term employee benefits
Post-employment benefits
Share-based payments
Total KMP compensation
Short-term employee benefits
2022
US$
2021
US$
478,011
24,135
-
502,146
393,208
19,070
162,014
574,292
–
these amounts include fees and benefits paid to the Non-Executive Chairman and Non-Executive Directors as well as all salary,
paid leave benefits, fringe benefits and cash bonuses awarded to Executive Directors and other KMP.
Post-employment benefits
–
these amounts are the current year’s estimated costs of providing for the Group's defined benefits scheme post-retirement,
superannuation contributions made during the year and post-employment life insurance benefits.
Share-based payments
–
these amounts represent the expense related to the participation of KMP in equity-settled benefit schemes as measured by the fair
value of the options, rights and shares granted on grant date.
Further information in relation to KMP remuneration can be found in the Remuneration Report.
Other key management personnel transactions
A number of Directors, or their related parties, hold positions in other entities that result in them having control or significant influence over the
financial or operating policies of those entities. A number of these entities transacted with the Company or its controlled entities in the reporting
period.
During the year, the Company paid DW Accounting and Advisory Pty Ltd, a company controlled by Mr A Draffin US$52,901 (2021: US$46,671)
for company secretarial services and accountancy fees and Northlands Advisory Services Limited, a company controlled by Mr J van der Welle,
US$22,384 in 2021 financial year for consulting services.
Note 5
Auditor’s Remuneration
Remuneration of the auditor for:
- auditing or reviewing of the Group’s financial statements
Note 6
Earnings per Share
(a) Reconciliation of earnings to profit or loss
Loss used in calculating basic and diluted earnings per share
Weighted average number of ordinary shares used in calculating basic earnings per share
Effect of dilutive securities
Adjusted weighted average number of ordinary shares and potential ordinary shares used in calculating
basic and diluted earnings per share
Basic and diluted (loss) per share
2022
US$
2021
US$
23,288
23,288
23,358
23,358
2022
US$
2021
US$
(1,647,094)
(3,927,794)
787,915,442
380,503,965
-
-
787,915,442
380,503,965
(0.21)
(0.21)
The above data reflects the income and share data used in the calculations of basic and diluted earnings per share.
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding any costs of servicing
equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the year, adjusted for bonus
elements in ordinary shares issued during the year.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after tax effect of
interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to
have been issued for no consideration in relation to dilutive potential ordinary shares.
26
GLOBAL PETROLEUM LIMITED
Note 7
Cash and Cash Equivalents
Cash at bank and on hand
Short-term bank deposits
Reconciliation of cash
Cash and cash equivalents at the end of the financial year as shown in the
statement of cash flows is reconciled to items in the statement of financial
position as follows:
Cash and cash equivalents
Bank overdrafts
Note 8
Trade and Other Receivables
Other receivables
- deposits
- GST & VAT receivable
Total current trade and other receivables
Credit risk
2022
US$
2021
US$
1,139,775
1,834,434
-
-
1,139,775
1,834,434
1,139,775
1,834,434
-
-
1,139,775
1,834,434
2022
US$
2021
US$
-
37,020
37,020
-
80,622
80,622
The Group has no significant concentration of credit risk with respect to any single counter party or group of counter parties other than those
receivables specifically provided for and mentioned within Note 8. The class of assets described as Trade and Other Receivables is considered
to be the main source of credit risk related to the Group.
On a geographic basis, the Group has significant credit risk exposures in United Kingdom and Australia given the substantial operations in
those regions. The Group’s exposure to credit risk for receivables at the end of the reporting period in those regions is as follows:
Australia
United Kingdom
2022
US$
5,271
31,749
37,020
2021
US$
11,030
69,592
80,622
The Group always measures the loss allowance for trade receivables at an amount equal to lifetime expected credit loss. The expected credit
losses on trade receivables are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the
debtor's current financial position, adjusted for factors that are specific to the debtors, general economic conditions of the industry in which the
debtors operate and an assessment of both the current as well as the forecast direction of conditions at the reporting date.
There has been no change in the estimation techniques or significant assumptions made during the current reporting period.
The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no
realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings, or when the
trade receivables are over two years past due, whichever occurs earlier. None of the trade receivables that have been written off is subject to
enforcement activities.
Financial Assets Measured at Amortised Cost
Trade and other receivables
- Total current
- Total non-current
Total financials assets measured at amortised cost
2022
US$
$
2021
US$
$
37,020
80,622
-
-
37,020
80,622
27
GLOBAL PETROLEUM LIMITED
Note 9
Interest in Subsidiaries
(a)
Information about Principal Subsidiaries
The subsidiaries listed below have share capital consisting solely of ordinary shares or ordinary units which are held directly by the Group.
The proportion of ownership interests held equals the voting rights held by Group. Each subsidiary’s principal place of business is also its
country of incorporation.
Name of subsidiary
Principal place of business
Global Petroleum Exploration Limited
United Kingdom
Global Petroleum Namibia Limited
British Virgin Islands
Global Petroleum UK Limited 1
1 Global Petroleum UK Limited was dissolved effective September 2021.
United Kingdom
Ownership interest held
2022
(%)
100%
100%
-
2021
(%)
100%
100%
100%
Subsidiary financial statements used in the preparation of these consolidated financial statements have also been prepared as at the same
reporting date as the Group’s financial statements.
(b) Significant Restrictions
There are no significant restrictions over the Group's ability to access or use assets, and settle liabilities, of the Group.
Note 10
Property, Plant and Equipment
Plant and Equipment
Furniture and fittings
At cost
Accumulated depreciation
Total plant and equipment
(a) Movements in Carrying Amounts
2022
US$
2021
US$
33,535
(20,377)
13,158
13,158
33,535
(16,938)
16,597
16,597
Movements in carrying amounts for each class of property, plant and equipment between the beginning and the end of the current
financial year:
Consolidated Group:
Balance at 1 July 2020
Depreciation expense
Balance at 30 June 2021
Depreciation expense
Balance at 30 June 2022
Furniture and
Fitting
US$
Total
US$
20,036
(3,439)
16,597
(3,439)
13,158
20,036
(3,439)
16,597
(3,439)
13,158
28
GLOBAL PETROLEUM LIMITED
Note 11
Exploration and Evaluation Assets
Balance at beginning of year
Expenditure capitalised during the year
Expenditure written off during the year
Balance at end of year
2022
US$
972,467
319,132
2021
US$
2,673,754
708,985
-
(2,410,272)
1,291,599
972,467
At 30 June 2022, the balance of the Group's exploration and evaluation assets relates solely to its Namibian licence PEL0094.
During the year, the Group did not incur any exploration and evaluation expenditure that did not meet the criteria for recognition as exploration
assets under the Group's accounting policy (2021: Nil).
In addition, an amount of US$21,767 (2021: US$16,070) was spent on business development, which relates to the Group's activities in assessing
opportunities in the oil and gas sector.
Namibia
In September 2018, Global Petroleum Namibia was awarded licence PEL0094 and a Petroleum Agreement was signed on 11 September 2018.
The Initial Exploration Period runs for four years, and is divided into two sub periods of two years each; IEP1, and IEP2. IEP1 runs from
September 2018 to September 2020. During IEP1, Global has undertaken to purchase and reprocess the existing available 3D seismic data and
other 2D data, as well as some additional G & G studies. In July 2020, agreement was reached with the Ministry of Mines and Energy ("MME")
for the extension of the sub-period ending in September 2020 for one year to September 2021, with a modified work commitment. The Company
has met all IEP1 commitments at the date of this report. In August 2021, the Company announced that the Namibian authorities had
acknowledged the exercise by the Company of its option to enter into the next sub-period of PEL0094 from September 2021 to September 2022.
In April 2022 the Company announced that the Namibian authorities had granted a one year extension to the Initial Exploration Period, from
September 2022 to September 2023.
Exploration commitments on the Company's exploration tenements are detailed in Note 16.
Note 12
Other Assets
Current
Prepayment
Bank guarantee
Note 13
Trade and Other Payable
Current Unsecured liabilities
Trade payables
Sundry payables and accrued expenses
Financial liabilities at amortised cost classified as trade and other payables
Trade and other payables
- Total current
- Total non-current
Financial liabilities as trade and other payables
29
2022
US$
2120
US$
55,109
130,050
185,159
39,384
-
39,384
2022
US$
2021
US$
16,935
95,113
112,048
112,048
-
112,048
35,161
48,838
83,999
83,999
-
83,999
GLOBAL PETROLEUM LIMITED
Note 14
Provisions
Current Employee benefits
Opening balance at 1 July
Movement in provisions
Balance at 30 June
Provision for Employee Benefits
2022
US$
2021
US$
163,458
57,272
220,730
166,309
(2,851)
163,458
Provision for employee benefits represents amounts accrued for annual leave and long service leave.
Liabilities for wages, salaries and remuneration, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled
within 12 months of the reporting date are recognised in provisions in respect of employees' services up to the reporting date and are measured at
the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken
and measured at the rates paid or payable. Employee benefits payable later than one year are measured at the present value of the estimated
future cash flows to be made for those benefits.
Note 15
Issued Capital
811,541,816 (2021: 611,541,816) fully paid ordinary shares
2022
US$
2021
US$
43,474,971
42,189,991
43,474,971
42,189,991
At 30 June 2022, the Group has authorised share capital amounting to 811,541,816 fully paid ordinary shares. The shares have no par value.
(a) Ordinary Shares
2022
2021
No.
US$
No.
US$
At the beginning of the reporting period
611,541,816
42,189,991
202,652,927
39,221,112
Shares issued during the year
Less: Transaction costs
200,000,000
1,367,000
408,888,889
3,191,040
-
(82,020)
-
(222,161)
At the end of the reporting period
811,541,816
43,474,971
611,541,816
42,189,991
(b) Options
2022
2021
At the beginning of the reporting period
Options issued during the year
At the end of the reporting period
(c) Warrants
At the beginning of the reporting period
Warrants issued during the year
At the end of the reporting period
(d) Capital Management
Number of
options
Weighted
average
exercise
price US$
Number of
options
27,100,000
0.0380
8,100,000
-
-
19,000,000
27,100,000
0.0214
27,100,000
2022
2021
Number of
warrants
297,777,778
100,000,000
397,777,778
Weighted
average
exercise
price GBP
Number of
warrants
0.012
0.010
-
297,777,778
0.011
297,777,778
Weighted
average
exercise
price US$
0.0380
0.0143
0.0214
Weighted
average
exercise
price GBP
-
0.012
0.012
The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future
development of the business. Given the stage of development of the Group, the Board's objective is to minimise debt and to raise
funds as required through the issue of new shares. The Company conducted one equity fund-raisings during the reporting period and
one after the year-end. (See Note 1(a) - Going Concern and Note 20 - Events After the Reporting Period)
There were no changes in the Group's approach to capital management during the year.
The Group is not subject to any externally imposed capital requirements.
30
GLOBAL PETROLEUM LIMITED
Note 15: Issued Capital (continued)
(e) Dividends
No dividends have been paid or declared during the reporting year (2021: Nil).
(f) Capital Raise
In August 2022, the Company completed a capital raise where an additional 228,571,428 ordinary shares were issued bringing the total
ordinary shares on issue to 1,040,113,244 as at the date of this report.
Note 16
Commitments
(a) Exploration expenditure commitments
In order to maintain current rights of tenure to exploration tenements, the Group is required to perform minimum exploration work to meet
the minimum expenditure requirements specified by various foreign governments where exploration tenements are held. These obligations
are subject to renegotiation when application for a tenement is made and at other times. These obligations are not provided for in the
financial statements. Financial commitments for subsequent periods can only be determined at future dates, as the success or otherwise
of exploration programmes determines courses of action allowed under options available in tenements. The Group's only exploration
expenditure commitments relate to its interest in joint ventures.
(b) Namibia Licence PEL0094
Global was awarded licence PEL0094 in Namibia in September 2018, and a Petroleum Agreement was signed on 11 September 2018. The
Initial Exploration Period ("IEP") runs for four years, and is divided into two sub periods of two years each; IEP1, and IEP2. IEP 1 runs from
December 2018 to December 2020. In July 2020, agreement was reached with the MME for an extension of the sub period ending
September 2020 for one year to September 2021, with a modified work commitment.
During IEP1, Global has undertaken to licence existing seismic data and the carry out of studies specifically designed to focus on the
Marula and Welwitschia Deep prospects. The technical work undertaken in late 2020 has more than fulfilled the firm work commitments in
respect of IEP1. In August 2021, the Company elected to enter the next licence sub-period IEP2 until September 2022. The commitment is
to shoot and process a new 2,000 square kilometre 3D seismic data survey. In April 2022 the Company announced that the Namibian
authorities had granted a one-year extension to the Initial Exploration Period, from September 2022 to September 2023.
Global Petroleum Namibia Limited has an 78 per cent interest in the PEL0094, however it is responsible for 100 per cent of the
expenditure requirements with its joint venture partners holding a total of 22 per cent free carried interest.
With respect to PEL0029 (Blocks 1910B and 2010A), the licence was issued on 3 December 2010 and expired under its terms on 3
December 2020, further extensions not being permitted under Namibian petroleum exploration law. The Company completed its
outstanding licence work programme commitments for PEL0029 under budget in the latter part of 2020.
Note 17
Operating Segments
General Information
Identification of reportable segments
The Group operates in the oil and gas exploration, development and production segments as described below: The
Group currently holds a prospective oil and gas exploration interest offshore Namibia.
Basis of accounting for purposes of reporting by operating segments
(a) Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors, being the chief operating decision makers with respect to
operating segments, are determined in accordance with accounting policies that are consistent with those adopted in the annual financial
statements of the Group.
(b) Intersegment transactions
An internally determined transfer price is set for all intersegment sales. This price is reset quarterly and is based on what would be
realised in the event the sale was made to an external party at arm’s length. All such transactions are eliminated on consolidation of the
Group's financial statements.
Corporate charges are allocated to reporting segments based on the segment's overall proportion of revenue generation within the Group.
The Board of Directors believes this is representative of likely consumption of head office expenditure that should be used in assessing
segment performance and cost recoveries.
Intersegment loans payable and receivable are initially recognised at the consideration received/to be received net of transaction costs. If
intersegment loans receivable and payable are not on commercial terms, these are not adjusted to fair value based on market interest rates.
This policy represents a departure from that applied to the statutory financial statements.
(c) Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of the economic value
from the asset. In most instances, segment assets are clearly identifiable on the basis of their nature and physical location.
31
GLOBAL PETROLEUM LIMITED
Note 17: Operating Segments (continued)
(d) Segment liabilities
Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of the segment.
Borrowings and tax liabilities are generally considered to relate to the Group as a whole and are not allocated. Segment liabilities include
trade and other payables and certain direct borrowings.
(e) Unallocated items
The following items of revenue, expense, assets and liabilities are not allocated to operating segments as they are not considered part of
the core operations of any segment:
• Derivatives
• Net gains on disposal of available-for-sale investments
• Impairment of assets and other non-recurring items of revenue or expense
• Corporation tax expense
• Deferred tax assets and liabilities
• Current tax liabilities
• Other financial liabilities
• Intangible assets
• Discontinued operations
• Retirement benefit obligations
(ii)
Segment assets and liabilities
Africa
Consolidated
(2,410,272)
(1,647,094)
(3,927,794)
2021
US$
2022
US$
2021
US$
(f) Segment information
(i)
Segment performance
Interest income
Net foreign exchange gain/(loss)
Corporate and administration costs
Exploration written off
Loss before corporation tax
Corporation tax (expense)/benefit for continuing operations
Loss for the year
Segment assets
Assets
Total segment assets
Unallocated assets
Consolidated assets
Segment liabilities
Liabilities
Total segment liabilities
Unallocated liabilities
Consolidated liabilities
Africa
Consolidated
2022
US$
2021
US$
-
-
-
-
-
-
-
2022
US$
1,291,599
1,291,599
-
-
-
-
(2,410,272)
(2,410,272)
-
972,467
972,467
-
1,291,599
972,467
9,877
9,877
-
9,877
3,500
3,500
-
3,500
2022
US$
519
(178,445)
(1,469,168)
-
(1,647,094)
-
2021
US$
792
78,814
(1,597,128)
(2,410,272)
(3,927,794)
-
1,291,599
1,291,599
1,375,112
2,666,711
9,877
9,877
322,901
332,778
319,132
972,467
972,467
1,971,037
2,943,504
3,500
3,500
243,957
247,457
708,985
Acquisition of non-current assets, including capitalised
exploration assets
319,132
708,985
32
GLOBAL PETROLEUM LIMITED
Note 18 Cash Flow Information
(a) Reconciliation of cash flows from operating activities with profit after
Loss after corporation tax
Adjustments for non-cash items:
Depreciation
Unrealised net foreign exchange (gain)/loss
Share based payments
Exploration written off
Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries:
Decrease in receivables and prepayments
(Increase) in payables
(Increase) in provisions
2022
US$
2021
US$
(1,647,094)
(3,927,794)
3,439
193,397
-
-
27,877
(28,049)
(57,272)
3,439
(35,844)
236,790
2,410,272
15,066
(40,274)
(2,851)
Net cash (used in) operating activities
(1,507,702)
(1,341,196)
Note 19 Share-based Payments
The aggregate share-based payments for the year ended 30 June 2022 are set out below:
30 June 2022
30 June 2021
Number
Weighted average
exercise price US$
Number
Weighted average
exercise price US$
Options outstanding as at 1 July
Granted
27,100,000
-
0.0214
-
8,100,000
19,000,000
Options outstanding as at 30 June
27,100,000
0.0214
27,100,000
0.0380
0.0143
0.0214
The following share-based payment arrangements were in existence during the current reporting period:
Number
Grant Date
Expiry Date
Exercise Price
(i) Option granted
8,100,000
14 November 2017
13 November 2022 US$0.0190
(ii) Options granted
19,000,000
7 January 2021
21 January 2026
US$0.0143
Fair value at grant
date
Vesting Period
441,842
236,790
N/A
N/A
Options were valued using the Black-Scholes model. Where relevant, the expected life used in the model has been adjusted based on
management's best estimate of the effects of non-transferability of exercise restrictions. Expected volatility is based on the historical share
price volatility of the Company's ordinary shares over the reporting period.
Number
Share price at grant
date US$
Exercise Price
US$
Expected
volatility
Option life
Risk-free
interest rate
8,100,000
19,000,000
0.024
0.013
0.0190
0.0143
85%
160%
5 years
5 years
2.24%
1.49%
33
GLOBAL PETROLEUM LIMITED
Note 20
Other than the following, the directors are not aware of any significant events since the end of the reporting period.
Events After the Reporting Period
On 31 August 2022, the Company announced that it had successfully raised £800,000 in aggregate before costs, through the placing of
228,571,438 Ordinary Shares at a placing price of 0.35 pence per share.
As a further component of the placing, 114,285,714 Warrants were also issued at an exercise price of 0.70 pence per share for a period of 2
years (one Warrant for every two new Ordinary Shares). In the event the Warrants are exercised in due course in full, associated proceeds will
be £800,000 with the result that the Company will have raised gross proceeds of £1,600,000 at a weighted average price of 0.47 pence per
share.
Note 21
Related Parties
Related Parties
(a) Ultimate parent
Global Petroleum Limited is the ultimate Parent Entity of the Group.
(b) Key Management Personnel:
The key management personnel of the Group during or since the end of the financial year were as follows:
Directors
Mr John van der Welle
Mr Peter Hill
Mr Andrew Draffin
Mr Garrick Higgins
Mr Peter Taylor (resigned 31 August 2021)
Note 22
Financial Risk Management
Non-Executive Chairman
Managing Director and Chief Executive Officer
Non-Executive Director and Company Secretary
Non-Executive Director
Non-Executive Director
The Group's principal financial instruments comprise trade and other receivables, trade and other payables, cash and term deposits. The main
risks arising from the Group's financial instruments are interest rate risk, foreign currency risk, credit risk and liquidity risk.
This note presents information about the Group's exposure to each of the above risks, its objectives, policies and processes for measuring and
managing risk, and the management of capital. Other than as disclosed, there have been no significant changes since the previous financial
year to the exposure or management of these risks.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Given the nature and
size of the business, no formal risk management committees have been established, however responsibility for control and risk management is
delegated to the appropriate level of management with the Chairman, CEO and Company Secretary (or their equivalent) having ultimate
responsibility to the Board for the risk management and control framework.
Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and
to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions
and the Group's activities.
Arrangements put in place by the Board to monitor risk management include regular reporting to the Board in respect of the operations and financial
position of the Group. The Board also reviews risks that relate to operations and financial instruments as required, at least every six months.
Given the uncertainty as to the timing and amount of cash inflows and outflows, the Group has not implemented any additional strategies to mitigate
the financial risks and no hedging has been put in place. As the Group's operations change, the Directors will review this policy periodically going
forward.
The totals for each category of financial instruments, measured in accordance with AASB 139: Financial Instruments: Recognition and
Measurement as detailed in the accounting policies to these financial statements, are as follows:
Financial Assets
Financial assets at amortised cost
- cash and cash equivalents
-
trade and other receivables
- bank guarantee
Total financial assets
Financial Liabilities
Financial liabilities at amortised cost
-
trade and other payables
Total financial liabilities
Note
2022
US$
2021
US$
7
8
12
13
1,139,775
1,834,434
37,020
130,050
80,622
-
1,306,845
1,915,056
112,048
112,048
83,999
83,999
34
GLOBAL PETROLEUM LIMITED
Note 22: Financial Risk Management (continued)
Specific Financial Risk Exposures and Management
The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of interest rate
risk, foreign currency risk and other price risk (commodity and equity price risk). There have been no substantive changes in the types of risks
the Group is exposed to, how these risks arise, or the Board’s objectives, policies and processes for managing or measuring the risks from the
previous period.
a. Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations.
This arises principally from cash and cash equivalents and trade and other receivables.
There are no significant concentrations of credit risk within the Group with exception of cash on deposit as described below.
Trade and other receivables comprise accrued interest, GST, VAT and other tax refunds due. Where possible, the Group trades only with
recognised, creditworthy third parties. It is the Group's policy that all customers who wish to trade on credit terms are subject to credit
verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Group's exposure to
bad debts is not significant. At 30 June 2022, none (2021: none) of the Group's receivables are past due. No impairment losses have been
recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.
With respect to credit risk from cash and cash equivalents, the Group's exposure to credit risk arises from default of the counterparty, with
a maximum exposure equal to the carrying amount of these instruments.
b. Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Board's approach to managing
liquidity is to ensure, as far as possible, that the Group will have sufficient liquidity to meet its liabilities when due. As at 30 June 2022, the
Group has sufficient liquid assets to meet its financial obligations.
The table below reflects an undiscounted contractual maturity analysis for financial assets and financial liabilities. Financial guarantee liabilities
are treated as payable on demand since the Group has no control over the timing of any potential settlement of the liabilities.
Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual timing may therefore
differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflect the earliest contractual
settlement dates and do not reflect management’s expectations that banking facilities will be rolled forward.
Financial Liability and Financial Asset Maturity Analysis
Consolidated Group
Within 1 Year
1 to 5 years
Over 5 years
Total
2022
US$
2021
US$
2022
US$
2021
US$
2022
US$
2021
US$
2022
US$
2021
US$
Financial liabilities due for payment
Trade and other
112,048
payables
Total expected
112,048
83,999
83,999
-
-
Consolidated Group
Within 1 Year
1 to 5 years
2022
US$
2021
US$
2022
US$
2021
US$
1,139,775
Financial assets - cash flows realisable
Cash and cash
equivalents
Trade, term and loan
receivables
Bank guarantee
Total anticipated
inflows
130,050
1,306,845
37,020
1,834,434
80,622
-
1,915,056
1,194,797
1,831,057
Net (outflow) / inflow
on financial
instruments
c. Market Risk
-
-
-
-
-
-
Over 5 years
2022
US$
2021
US$
-
-
-
-
-
-
112,048
83,999
112,048
83,999
Total
2022
US$
2021
US$
1,139,775
1,834,434
37,020
80,622
-
-
-
-
-
-
130,050
-
-
-
-
-
-
-
-
-
1,306,845
1,915,056
1,194,797
1,831,057
i.
Interest rate risk
The Group's exposure to the risk of changes in market interest rates relates primarily to the cash at bank and term deposits with a floating
interest rate.
These financial assets with variable rates expose the Group to cash flow interest rate risk. All other financial assets and liabilities, in
the form of receivables and payables, are non-interest bearing.
Interest rate sensitivity
A sensitivity of 50 basis points ("bp") increase or decrease to the existing floating rate has been selected as this is considered reasonable
given the current level of both short term and long term interest rates.
A change of 50 basis points in interest rate at the deporting date would have increased (decreased) profit or loss and equity by the amount
shown below. The analysis assumes that all other variables, in particular foreign currency rates, remain constant.
35
GLOBAL PETROLEUM LIMITED
Note 22: Financial Risk Management (continued)
The Group currently does not engage in any hedging or derivative transactions to manage interest rate risk.
2022
Cash and cash equivalents
2021
Cash and cash equivalents
ii. Foreign currency risk
Profit or Loss
50bp
Increase
50bp
Decrease
US$
US$
6,349
6,349
9,172
9,172
The Company and its subsidiaries in the Group have a functional currency of the US Dollar. The Group is exposed to foreign currency
risk from transactional currency exposure. Such exposure arises from transactions denominated in currencies other than the
functional currency of the entities in the Group.
With instruments being held by overseas operations, fluctuations in the US Dollar and UK Pound Sterling may impact on the Group’s
financial results unless those exposures are appropriately hedged.
The Group currently does not engage in any hedging or derivative transactions to manage foreign currency risk.
Sensitivity analysis for currency risk
A sensitivity of 10% has been selected as this is considered reasonable given historic and potential future changes in foreign
currency rates. This sensitivity analysis is prepared as at the balance sheet date.
Year ended 30 June 2022
+/- 10% in AU$/US$ and GBP/US$
Year ended 30 June 2021
+/- 10% in AU$/US$ and GBP/US$
Profit
US$
102,021
Profit
US$
159,520
Equity
US$
102,021
Equity
US$
159,520
There have been no changes in any of the methods or assumptions used to prepare the above sensitivity analysis from the prior year.
Fair Values
Fair value estimation
The fair values of financial assets and financial liabilities are presented in the following table and can be compared to their carrying amounts as
presented in the statement of financial position.
Differences between fair values and carrying amounts of financial instruments with fixed interest rates are due to the change in discount rates
being applied by the market since their initial recognition by the Group.
Consolidated Group
Financial assets
Financial assets at amortised cost:
Cash and cash equivalents
Trade and other receivables
Bank Guarantee
Total financial assets
Financial liabilities at amortised cost
Trade and other payables
Total financial liabilities
Note
2022
2021
Carrying
Amount
US$
Fair Value
US$
Carrying
Amount
US$
Fair Value
US$
7
8
12
13
1,139,775
1,139,775
1,834,434
1,834,434
37,020
130,050
37,020
130,050
80,622
-
80,622
-
1,306,845
1,306,845
1,915,056
1,915,056
112,048
112,048
112,048
112,048
83,999
83,999
83,999
83,999
(i) Cash and cash equivalents, trade and other receivables, and trade and other payables are short-term instruments in nature whose carrying
amounts are equivalent to their fair values.
(ii) Term receivables reprice to market interest rates every three months, ensuring carrying amounts approximate fair value.
36
GLOBAL PETROLEUM LIMITED
Note 23
Reserves
a.
Foreign currency translation reserve
The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the financial statements
of foreign operations where their functional currency is different to the presentation currency of the Parent Entity. As a result of the change
in functional currency of the Company and several of its subsidiaries on 1 July 2014, no further foreign currency translation differences
were recognised as all entities in the Group have a US Dollar functional currency.
b.
Option reserve
The option reserve comprises the cumulative grant date fair value of options issued to Directors, other personnel and consultants over the
vesting period.
i. Analysis of items of other comprehensive income by each class of reserve
Foreign currency translation reserve
Opening balance as at 1 July
Movement in foreign currency translation reserve
Closing balance as at 30 June
Option reserve
Opening balance as at 1 July
Movement in option reserve
Closing balance as at 30 June
Total reserves
Note 24
Interests in Joint Operations
2022
US$
2021
US$
570,410
-
570,410
678,632
-
678,632
1,249,042
570,410
-
570,410
964,895
(286,263)
678,632
1,249,042
The Group holds interest in various joint ventures, whose principal activities are in petroleum exploration and production. Refer to Note 11 -
Exploration and Evaluation Assets.
Costs incurred attributable to joint operations have been capitalised based on accounting policies in Note 1(f) - Exploration and Evaluation
Expenditure.
Included in the assets and liabilities of the Group are the following assets and liabilities relating to interests in joint ventures:
Current assets
Trade and other receivables
Total current assets
Non-current assets
Exploration an evaluation assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Net assets
2022
US$
2021
US$
-
-
1,291,599
1,291,599
1,291,599
9,877
9,877
9,877
4,447
4,447
972,467
972,467
976,914
3,500
3,500
3,500
1,281,722
973,414
The Parent Entity does not guarantee to pay the deficiency of its controlled entities in the event of a winding up of any controlled entity.
In accordance with normal industry practice, the Group has entered into joint ventures with other parties for the purpose of exploring and
developing petroleum interests. If a party to a joint venture defaults and does not contribute its share of joint venture obligations, then the other
joint venture participants may be liable to meet those obligations. In this event, the interest in the permit held by the defaulting party may be
redistributed to the remaining joint venture participants.
37
GLOBAL PETROLEUM LIMITED
Note 25
Company Details
The registered office of the company is:
C/- DW Accounting & Advisory Pty Ltd
Level 4, 91 William Street
Melbourne Vic 3000 Australia
UK Office:
134 Buckingham Palace Road London
SW1W 0SR
United Kingdom
38
GLOBAL PETROLEUM LIMITED
DIRECTORS' DECLARATION
In accordance with a resolution of the Directors of Global Petroleum Limited, the Directors of the Company declare that:
1.
the financial statements and notes are in accordance with the Corporations Act 2001 and:
(a)
comply with Australian Accounting Standards applicable to the entity, which, as stated in accounting
policy Note 1 to the financial statements, constitutes compliance with International Financial Reporting
Standards; and
(b) give a true and fair view of the financial position as at 30 June 2022 and of the performance for the year
ended on that date of the consolidated group;
2.
3.
in the Directors' opinion there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable; and
the Directors have been given the declarations required by section 295A of the Corporations Act 2001 from the
Chief Executive Officer and Company Secretary.
Signed in accordance with a resolution of the Directors of Global Petroleum Limited.
Director
Andrew Draffin
Dated this
25 October 2022
39
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GLOBAL PETROLEUM LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Global Petroleum Limited (“the Company”) and its subsidiaries
(“the Consolidated Entity”), which comprises the consolidated statement of financial position as at
30 June 2022, the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the year
then ended, and notes to the financial statements, including a summary of significant accounting
policies, and the directors’ declaration.
In our opinion:
a.
the accompanying financial report of the Consolidated Entity is in accordance with the
Corporations Act 2001, including:
(i)
giving a true and fair view of the Consolidated Entity’s financial position as at 30 June 2022
and of its financial performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
b.
the financial report also complies with International Financial Reporting Standards as disclosed
in Note 1.
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 Consolidated Entity 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 (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 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 1 (a) in the financial report which indicates that the Consolidated Entity
incurred a net loss of USD $1,647,094 during the year ended 30 June 2022. As stated in Note 1 (a),
these events or conditions, along with other matters as set forth in Note 1 (a), indicate that a material
uncertainty exists that may cast significant doubt on the Consolidated Entity’s ability to continue as a
going concern. Our opinion is not modified in this respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Key Audit Matter
How our audit addressed the Key Audit Matter
Recoverability of Exploration Assets
Our procedures included, amongst others:
As disclosed
statements, as at 30 June 2022,
in Note 11 to the financial
the
• Assessing management’s determination
of its areas of interest for consistency with
Consolidated Entities capitalised exploration
costs were carried at $1,291,599.
The recoverability of the capitalised exploration
costs was considered a key audit matter due to:
represents
• The carrying value of capitalised
a
costs
exploration
significant asset of the Group, we
considered
to assess
it necessary
whether
facts and circumstances
existed to suggest the carrying amount
of
the
this asset may exceed
recoverable amount; and
• Determining
whether
impairment
involves significant
indicators exist
judgement by management.
the definition in AASB 6. This involved
analysing the tenements in which the
consolidated entities holds an interest and
for
the exploration programs planned
those tenements.
• For each area of interest, we assessed the
Consolidated Entities rights to tenure by
corroborating to government registries;
• We tested the additions to capitalised
expenditure for the year by evaluating a
sample of
for
consistency to underlying records, the
recorded expenditure
capitalisation
the
Consolidated Entities accounting policy
requirements
of
and the requirements of AASB 6;
• We considered the activities in each area
of interest to date and assessed the
planned future activities for each area of
interest by evaluating budgets for each
area of interest.
Key Audit Matter
How our audit addressed the Key Audit Matter
• We assessed each area of interest for one
or more of the following circumstances that
may indicate impairment of the capitalised
expenditure:
o
the licenses for the right to explore
expiring in the near future or are
not expected to be renewed;
o substantive expenditure for further
exploration in the specific area is
neither budgeted or planned;
o decision
or
intent
by
the
Consolidated Entity to discontinue
activities in the specific area of
of
interest
lack
due
to
commercially viable quantities of
resources; and
o data indicating that, although a
development in the specific area is
likely to proceed, the carrying
amount of the exploration asset is
unlikely to be recovered in full
from successful development or
sale.
• We assessed the appropriateness of the
related disclosures in Note 11 to the
financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Consolidated Entity’s annual report for the year ended 30 June 2022, 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.
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 that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and
for such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error. In Note 1, the directors also state in accordance with Australian Accounting Standard AASB 101
Presentation of Financial Statements, that the financial report complies with International Financial
Reporting Standards.
In preparing the financial report, the directors are responsible for assessing the Consolidated Entity’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the
Consolidated Entity or to cease operations, or has 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
judgement 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 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 Consolidated Entity’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 Consolidated Entity’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 Consolidated Entity 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.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Consolidated Entity to express an opinion on the financial report.
We are responsible for the direction, supervision and performance of the Consolidated Entity
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, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period 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 Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2022. The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with s 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.
Auditor’s Opinion
In our opinion, the Remuneration Report of Global Petroleum Limited, for the year ended 30 June 2022,
complies with section 300A of the Corporations Act 2001.
HALL CHADWICK WA AUDIT PTY LTD
MARK DELAURENTIS CA
Director
Dated in Perth, Western Australia this 25th day of October 2022