ANNUAL REPORT FOR THE YEAR ENDED
30 JUNE 2021
ABN 65 084 918 481
Jupiter Energy Limited
Corporate directory
30 June 2021
Directors
Geoffrey Gander (Executive Chairman/Chief Executive Officer)
Baltabek Kuandykov (Non-Executive Director)
Alexey Kruzhkov (Non-Executive Director)
Alexander Kuzev (Non-Executive Director)
Mark Ewing (Non-Executive Director)
Company secretary
James Barrie
Registered office
Principal place of business
Suite 2
Level 13 350 Collins Street
Melbourne VIC 3000
Suite 2
Level 13 350 Collins Street
Melbourne VIC 3000
Share register
Computershare Investor Services Pty Ltd
Level 2, 45 St George’s Terrace
Perth WA 6000
Auditor
Solicitors
Bankers
Ernst & Young
11 Mounts Bay Road
Perth WA 6000
Steinepreis Paganin
Level 4,
16 Milligan Street
Perth WA 6000
National Australia Bank Ltd
UB13.03, 100 St Georges Terrace
Perth WA 6000
Stock exchange listing
Jupiter Energy Limited shares are listed on the Australian Securities Exchange (ASX
code: "JPR")
Website
www.jupiterenergy.com
Corporate Governance Statement
www.jupiterenergy.com
1
Jupiter Energy Limited
Chairman's letter
30 June 2021
Dear Shareholder,
I am pleased to present the 2021 Annual Report for Jupiter Energy Limited (“Jupiter Energy”, “the Company” or “the Group”).
The operating environment in Kazakhstan continued to be challenging during the 2020/2021 financial year, particularly as
the country, like the rest of the world, was gripped by the COVID-19 pandemic. Through the focus and dedication of our
Aktau based team, the Company was able to continue operations without any major disruption and Jupiter Energy continued
to sell its oil into the Kazakh domestic market via a local oil trader.
International oil prices over the reporting period were strong and this meant that the Company was able to achieve good
domestic oil prices and the Aktau operation was able to remain cashflow positive, albeit without any significant field
development taking place.
The Group produced approximately 155,000 barrels of oil during the year, generated revenues of $US3.386m (~$A4m),
achieving almost $US22 per barrel for its domestic oil, and recorded a breakeven result.
Production from most wells was constrained during the year either because of “Preparatory Period” restrictions on
production dictated by gas emission levels (Akkar East oilfield) or because production was shut in as an oilfield (Akkar North
East Block) went through the lengthy approval process required to transition from its Exploration Licence to its Commercial
Licence.
Thankfully, production from the West Zhetybai oilfield (J-58 well) was not impacted and this field was able to operate for the
full 12 months under its Trial Production Licence. As planned, J-58 was shut in at the end of August 2021 and is now going
through the same approval process to transition from its Exploration Licence to its Commercial Licence. The field is
expected to be back in production by 2Q calendar year 2022 and, like all the other wells, will operate under the constraints
set by “Preparatory Period” restrictions.
Looking forward, the building and commissioning of the requisite infrastructure to achieve 100% Gas Utilisation is the key
goal for the Company. Achieving 100% gas utilisation means that all excess gas that is produced, because of oil operations,
is used by the Company for its own needs and any additional gas is processed or converted into a form where it can be sold
and distributed to others. The ability to flare gas as a means of disposing of excess gas is prohibited when operating under a
Commercial Production Licence in Kazakhstan.
On 16 September 2021 the Company announced that it had signed a Framework Agreement which set out the timetable for
the development and lodgement of a detailed Project Development Plan focused on providing the Company with the
appropriate infrastructure to achieve 100% gas utilisation on the Akkar North (East Block), Akkar East and West Zhetybai
oilfields.
This is a critical initiative in terms of progressing the development of Jupiter Energy’s Kazakh asset and should be a game
changer for the Company. I would like to thank all shareholders, debtholders, and employees for the commitment they have
all shown to get Jupiter Energy to this point and I look forward to the 2021/2022 financial year with anticipation.
Sincerely
Geoff Gander
Chairman/CEO
2
Jupiter Energy Limited
Directors' report
30 June 2021
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the 'consolidated entity') consisting of Jupiter Energy Limited (referred to hereafter as the 'company' or 'parent entity') and
the entities it controlled at the end of, or during, the year ended 30 June 2021.
Directors
The following persons were directors of Jupiter Energy Limited during the whole of the financial year and up to the date of
this report, unless otherwise stated:
Geoffrey Gander (Executive Chairman/Chief Executive Officer)
Baltabek Kuandykov (Non-Executive Director)
Alexey Kruzhkov (Non-Executive Director)
Alexander Kuzev (Non-Executive Director)
Mark Ewing (Non-Executive Director - appointed 24 November 2020)
Phil Warren (Non-Executive Director - resigned 24 November 2020)
Principal activities
During the financial year the principal continuing activities of the consolidated entity consisted of:
●
●
Exploration for oil and gas in Kazakhstan; and
Appraisal, development and production of oil and gas properties in Kazakhstan.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
The profit for the consolidated entity after providing for income tax amounted to $61,655 (30 June 2020: loss of $42,352,148).
Review of Financial Conditions
At the end of the 2021 financial year, cash resources were $690,949 (2020: $138,980). These accounts have been prepared
on a going concern basis, predicated on the Group’s ability to raise additional cash. Refer to note 1 for additional information
surrounding going concern.
Assets decreased to $20,154,013 (2020: $21,831,285) and net liabilities increased to $70,298,670 (2020: $67,746,789).
Funding and Capital Management
As at 30 June 2021, the consolidated entity had 153,377,693 listed shares trading under the ASX ticker "JPR".
During the year the Company funded Aktau operations primarily from oil sales with small amounts being drawn down, on a
month by month basis, from existing credit facilities to cover Australian corporate expenses.
As at 30 June 2021 the consolidated entity had US$8,778,332 (AU$11,676,405) available to it under its committed 2017
Funding Agreement with Waterford International & Finance Limited.
The consolidated entity is still reviewing its ongoing funding options to enable it to complete its work program for the
2021/2022 financial year.
The Akkar East field operated for almost the entire 2020/2021 Financial Year under its Commercial Licence, operating under
“Preparatory Period” restrictions. “Preparatory Period” restrictions mean that oil production must be constrained to the level
that ensures that all gas produced during production can be used by the operator on the field – for power, heating and the
like. No flaring of excess gas is allowed, and this is where Trial Production (Exploration Period) and Commercial Production
are so different – during the period when wells operated under Trial Production conditions, the Company was allowed to flare
any excess gas produced from its wells.
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Jupiter Energy Limited
Directors' report
30 June 2021
The Trial Production Licence for the Akkar North (East Block) field expired at the end of December 2020 and the field was
shut in as it went through the approval process to transition from Trial Production to Commercial Production. This process
was completed in July 2021 and the field resumed constrained production, under Preparatory Period restrictions, at that time.
The Trial Production Licence for the West Zhetybai field was in place for the entire 2020/2021 Financial Year and expired at
the end of August 2021. The field has now been shut in as it goes through the same approval process required to transition
from Trial Production to Commercial Production. The field is expected to return to production early in Quarter 2 of 2022
calendar year and will resume constrained production, under Preparatory Period restrictions, at that time.
In order for any of the Company’s oilfields to operate under a full Commercial Licence, the requisite infrastructure that is
required to achieve 100% gas utilisation must be in place and approved for use.
On 16 September 2021, the Company announced that it had signed a Framework Agreement setting out the timetable for
the development and lodgement of a detailed Project Development Plan focused on providing the Company with the
appropriate infrastructure to achieve 100% gas utilisation on the Akkar North (East Block), Akkar East and West Zhetybai
oilfields.
The Framework Agreement has been signed with Sleipnir Technologies LLP (Sleipnir), a Kazakh registered company that
has a background in oil trading and the design and development of oilfield infrastructure.
Under Phase 1 of the Framework Agreement, Sleipnir will work with Jupiter Energy in a Project Management capacity,
assisting in the development of a detailed Project Development Plan to achieve 100% gas utilisation on all three of the
Company’s oilfields (the Plan). A project team made up of Jupiter and Sleipnir personnel has been formed, and a local
Kazakh Institute will soon be appointed to assist in the documentation of the detailed technical specifications associated with
the Plan.
Sleipnir will also play an active role in the proposed construction phase (Phase 2), if and when the Plan is approved by the
Kazakh Ministry of Energy (and other associated regulatory bodies) and will also assist Jupiter with any of the regulatory
approvals that may be required during Phase 2,
In summary, the Framework Agreement sets out the terms and conditions under which Jupiter and Sleipnir will work to
complete and lodge the Plan with the Kazakh Ministry of Energy by early Quarter 1 of 2022 calendar year.
The key elements of Phase 1 of the Framework Agreement are:
●
●
●
●
Development of a detailed Gas Utilisation Project Development Plan
Submission of the Project Development Plan to the Kazakh Ministry of Energy
Gaining approval from the Ministry of Energy (and other relevant regulatory bodies) for the Gas Utilisation Project
Development Plan
Confirming a detailed budget for the building of the approved Gas Utilisation infrastructure
Achieving 100% gas utilisation in a reasonable timeframe under a realistic budget will be a critical milestone for Jupiter
Energy and achieving 100% Gas Utilisation is a “must have” in terms of being able to move to full Commercial Production,
not the constrained Commercial Production conditions that the Company must now operate under.
OPERATING REVIEW
The first half of the financial year saw oil production from the Akkar North (East Block), Akkar East and West Zhetybai
oilfields.
From mid-September 2020 onwards, the Akkar East field operated under the Preparatory Period restrictions of its
Commercial Licence.
The Akkar North (East Block) oilfield produced under its Trial Production Licence for the initial 6 months of the financial year
and then production was shut in from 1 January 2021, as the field began the approval process to transition from Trial
Production to Commercial Production. The field returned to production in July 2021.
The West Zhetybai field operated under its Trial Production Licence for the entire financial year.
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Jupiter Energy Limited
Directors' report
30 June 2021
Production Report/Status of Well Licences
Production – Akkar East (J-51, J-52, J-53 and Well 19)
From mid-September 2020, oil was produced from the Akkar East J-51, J-52 and 19 wells under the Preparatory Period
restrictions of its Commercial Licence. These three wells are all located on the northern section of the permit area and are
part of the Akkar East oilfield.
When the wells recommenced production on 11 September 2020, production rates were constrained to a cumulative total of
~21 tonnes (~150 barrels) per day from the 3 wells. The optimum cumulative production level from these 3 wells is normally
~65 tonnes (~450 barrels) per day and this reduction in flow rates correlated to the reduction in excess gas that was allowed
to be produced, without 100% gas utilisation infrastructure being in place on the field.
The J-53 well, which is also located on the Akkar East oilfield, was shut in for the entire financial year, awaiting further
remedial work before potentially coming back onto production.
Production – Akkar North [East Block] (J-50 well)
The J-50 well produced under Trial Production for the first 6 months of the financial year. The well was shut in at the end of
December 2020 as the Company began the approval process to transition the field to Commercial Production.
As part of this process, the Final Reserves Report for the Akkar North (East Block) oilfield was approved by the Kazakh
Committee of Geology and on 14 July 2021 the oilfield was approved to recommence production under “Preparatory Period”
restrictions associated with its Commercial Licence.
The J-50 well currently produces at a constrained production rate of ~8.5 tonnes (~60 barrels) per day and will continue to
do so until the requisite 100% gas utilisation infrastructure has been built and commissioned for the oilfield. The optimum
production level from this well is ~15 tonnes (~110 barrels) per day, under natural flow.
Production- West Zhetybai (J-55, 58, 59 wells):
During the year oil was produced from the J-58 well under Trial Production.
In September 2021, as part of the approval process to transition to its Commercial Production Licence, the Kazakh Committee
of Geology approved the Final Reserve Report for the West Zhetybai field.
The J-55 well, which is also located on the West Zhetybai oilfield, was shut in for the entire financial year, awaiting further
remedial work before potentially coming back onto production. The J-59 well underwent limited testing during the financial
year and was not returned to full production.
A summary of the oil produced from all wells during the financial year, broken down by quarter, is as follows:
Well Number
J-50
J-51
J-52
Well 19
J-58
Production Production Production Production
Q1 Barrels Q2 Barrels Q3 Barrels Q4 Barrels
Total
Barrels
9,300
1,000
1,000
1,000
27,300
9,600
4,500
4,500
4,600
26,400
-
5,000
5,000
5,000
19,000
-
5,000
5,000
5,000
17,000
18,900
15,500
15,500
15,600
89,700
39,600
49,600
34,000
32,000
155,200
5
Jupiter Energy Limited
Directors' report
30 June 2021
Drilling Report
There was no new drilling during the financial year.
The drilling of any other new wells in the 2021/2022 financial year will require access to additional working capital and/or
agreement to deferred payment terms with a turnkey drilling operator.
Oil Production and Revenues
There were approximately 155,200 barrels of oil produced during the year, achieving revenues of $A4,025,701. This
compared with approximately 174,000 barrels produced in the previous reporting period, generating revenues of
$A5,634,059. All oil produced during the year was sold into the domestic market to a local trader - as per the terms of both
the Company’s Exploration Period Licence and “the Preparatory Period” restrictions of Jupiter Energy’s Commercial Licence.
Oil was paid for on a prepayment basis and collected by a local oil trader from the well head.
On 16 September 2021, the Company announced that local Kazakh oil trader, Arion Trading, had signed an agreement for
the purchase of 100% of Jupiter’s domestic oil supply under terms consistent with those that other Jupiter oil trading partners
have signed in the past. This agreement will be based on 100% prepayment for all oil, with deliveries to Arion Trading
expected to commence in October 2021.
Status of Exploration and Commercial Licences
The Company currently operates the Akkar East and Akkar North (East Block) oilfields under the “Preparatory Period”
restrictions of its Commercial Production Licence. The Company operated the West Zhetybai under its Exploration Licence
until the end of August 2021, when that field was shut in and the approval process began to transition the West Zhetybai
field from Trial Production to Commercial Production.
The process of transitioning the Akkar East oilfield from its Exploration Licence to its 25 year Commercial Licence was
completed on 11 September 2020. The process of transitioning the Akkar North (East Block) field oilfield from its Exploration
Licence to its 25 year Commercial Licence was completed on 14 July 2021. The process of transitioning the West Zhetybai
oilfield from its Exploration Licence to its 25 year Commercial Licence is expected to be completed by early 2Q calendar year
2022.
As already stated in this report, the key issue facing the Company going forward is that in order to move any of the oilfields
into full Commercial Production, the oilfield must have access to infrastructure that enables it to achieve 100% gas utilisation
– ie all wells are able to produce oil without flaring the excess gas produced during oil production.
The announcement made on 16 September 2021 covering this issue is extremely important and in the event that the building
of this requisite infrastructure is not possible and there are no opportunities for Jupiter Energy to connect to neighbouring
gas utilisation infrastructure already in place nearby, the Company would need to review its underlying projected cashflow
and an impairment of the carrying value of the asset may be required.
Whilst the Company has a 25 year Commercial Production Licence, there are a number of key requirements that are needed
before full Commercial Production can commence, the most critical of which is providing infrastructure to allow all three
oilfields to produce oil whilst achieving 100% utilisation of the excess gas produced. As already discussed above, this
infrastructure is not currently in place but the Company is working with a local Kazakh group during the remainder of 2021
and into 2022 to address the gas utilisation issue.
Strategic Review
On 21 July 2020, the Jupiter Energy Board announced that the Company had decided to undergo a Strategic Review to
analyse all of its funding options regarding the future development of its acreage in the Mangistau.
As part of this process, the Jupiter Board resolved to engage JSC VTB Capital (VTB Capital) as financial advisor to the
Company to assist with this review. VTB Capital is part of the VTB Group, the Russian financial conglomerate, made up of
more than 20 credit and financial companies operating in all segments of financial markets including capital market
transactions, M&A advisory, financing and the like.
6
Jupiter Energy Limited
Directors' report
30 June 2021
As already detailed earlier in this Operating Review, the move into Commercial Production brings with it the need for greater
investment in field infrastructure to enable the Company to ultimately get access to the export oil market. The Board believes
it is critical that the Company now considers the identification of the most optimal source of funding for this investment,
together with exploring all alternatives to enable stakeholders to maximise future value from the Company’s assets.
The Company updated shareholders on progress with the Strategic Review in December 2020, in April 2021 and again in
July 2021. In summary VTB Capital’s work, as yet, has not been able to identify any suitable partner for Jupiter Energy.
Some organisations looked at a possible investment in the Company and several organisations were approached in terms
of the possibility of creating some form of gas utilisation infrastructure sharing partnership – however nothing progressed
with any of these initial discussions.
The key impediment for potential investors was the timing and cost of achieving 100% Gas Utilisation and to that end, the
Company has now announced its plan to work with Kazakh group, Sleipnir to develop a detailed Project Plan to achieve this
goal.
Jupiter Energy will continue to work with VTB Capital over the coming months to see whether further opportunities for new
sources of funding emerge now that there is a more definitive plan in place to address the issue of 100% gas utilisation.
Corporate Structure
The Company monitored its personnel numbers during the financial year and ended the year with 31 employees, an increase
of 5 over the year.
Corporate Additions and Changes
On 9 November 2020, the Company announced that Non-Executive Director Phil Warren was to retire as a Director of the
Company, effective from the conclusion of 24 November 2020 Annual General Meeting (AGM).
Phil joined the Jupiter Board on 20 April 2018 and made a significant contribution to the Company during his tenure. Mark
Ewing joined the Board as a Non-Executive Director on 24 November 2020.
On 16 November 2020, the Company announced that Grange Consulting would be stepping down from providing the roles
of Company Secretary and Chief Financial Officer, effective from the conclusion of 24 November 2020 AGM.
Grange Consulting had provided these services since April 2018 and also made a significant contribution to the Company
during their tenure. James Barrie and Greg Hammond of Fernville Group Pty Limited, based in Melbourne, took on the roles
of Company Secretary (James Barrie) and Chief Financial Officer (Greg Hammond) and began in these roles on 24
November 2020.
The Company also be changed its Registered Office and relocated from Perth to Melbourne during December 2020.
Annual General Meeting
The COVID-19 pandemic meant that the Annual General Meeting (AGM) was held virtually on 24 November 2020. The
Company expects the 2021 AGM to also be held during November under similar arrangements. A Notice of Meeting outlining
business to be covered at the 2021 AGM will be dispatched to shareholders during October 2021 and will include details on
how to attend online.
Summary
The 2020/21 Financial Year saw the Group suffer a small decline in the number of barrels of oil produced and revenues
achieved. These declines were because of a reduction in production levels necessitated by the need to transition and operate
the Akkar East and Akkar North (East Block) under a Commercial Production Licence, operating under Preparatory Period
restrictions. Only one oilfield, West Zhetybai, was able to achieve optimal production during the financial year, operating
under its Trial Production Licence for the entire period.
The COVID pandemic impacted Kazakhstan, as it did almost every country throughout the world, but the Aktau team did an
excellent job in minimising disruptions during the year and thankfully the amount of sickness experienced by staff was limited.
Vaccination levels amongst the Jupiter workforce were reasonably high and appropriate safety measures were enforced,
both in the Aktau office and in the field.
7
Jupiter Energy Limited
Directors' report
30 June 2021
COMPETENT PERSONS STATEMENT
General
Alexey Glebov, PhD, with over 34 years' oil & gas industry experience, is the qualified person who has reviewed and
approved the technical information contained in this report. Alexey PhD’s in technical science (1992) and geology science
(2006), an Honors Degree in Geology and Geophysics (1984) from Novosibirsk State University and a Gold Medal (1985)
from USSR Academy of Sciences. He is a member since 2001 of the European Association of Geoscientists & Engineers
(EAGE #M2001-097) and was made an Honorary Oilman in 2011 by the Ministry of Energy of the Russian Federation. Alexey
Glebov is qualified in accordance with ASX Listing Rule 5.41.
Kazakh State Approved Reserves
The information in this report which relates to the C1 and C2 Block 31 reserve estimations is based on information compiled
by Kazakh Institutes, Reservoir Evaluation Services LLP (“RES”) and Nauchno Proizvodstvennyi Tsentr (“NPC”). Both are
Kazakh based oil & gas consulting Groups that specialise in oil & gas reserve estimations. RES and NPC have used the
Kazakh Reserve classification system in determining their estimations. RES and NPC have sufficient experience which is
relevant to oil & gas reserve estimation and to the specific permit in Kazakhstan to qualify as competent to verify the
information pertaining to the C1 and C2 reserve estimations. RES and NPC have given and not withdrawn their written consent
to the inclusion of the C1 and C2 reserve estimations in the form and context in which they appear in this report. RES and
NPC have no financial interest in the Group.
Significant changes in the state of affairs
Other than those disclosed above, there were no significant changes in the state of affairs of the consolidated entity during
the financial year.
Matters subsequent to the end of the financial year
On 16 September 2021, a Framework Agreement was signed between Jupiter Energy and Sleipnir Technologies LLP
(Sleipnir), a Kazakh registered company that has a background in oil trading and the design and development of oilfield
infrastructure.
Under Phase 1 of the Framework Agreement, Sleipnir will work with Jupiter Energy in a Project Management capacity,
assisting in the development of a detailed Project Development Plan to achieve 100% gas utilisation on all three of the
Company’s oilfields (the Plan). A project team made up of Jupiter and Sleipnir personnel has been formed, and a local
Kazakh Institute will shortly be appointed to assist in the documentation of the detailed technical specifications associated
with the Plan.
Sleipnir will also play an active role in the proposed construction phase (Phase 2), if and when the Plan is approved by the
Kazakh Ministry of Energy (and other associated regulatory bodies) and will also assist Jupiter with any of the regulatory
approvals that may be required during Phase 2.
In summary, the Framework Agreement sets out the terms and conditions under which Jupiter and Sleipnir will work to
complete and lodge the Plan with the Kazakh Ministry of Energy by early 1Q 2022.
The key elements of Phase 1 of the Framework Agreement are:
●
●
●
●
Development of a detailed Gas Utilisation Project Development Plan
Submission of the Project Development Plan to the Kazakh Ministry of Energy
Gaining approval from the Ministry of Energy (and other relevant regulatory bodies) for the Gas Utilisation Project
Development Plan
Confirming a detailed budget for the building of the approved Gas Utilisation infrastructure
In addition to the development of Project Development Plan for Gas Utilisation, Sleipnir affiliate Arion Trading also signed an
agreement for the purchase of 100% of Jupiter’s domestic oil supply under terms consistent with those that other Jupiter oil
trading partners have signed in the past. This agreement will be based on 100% prepayment for all oil, with deliveries to
Arion Trading expected to commence in October 2021.
8
Jupiter Energy Limited
Directors' report
30 June 2021
During September 2021 Promissory Notes, that had a carrying value of US$66,438,142 (A$88,372,096) as at 30 June 2021,
had their repayment dates extended from 1 July 2022 to 1 July 2024.
No other matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect the
consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial
years.
Likely developments and expected results of operations
The Directors will continue to pursue oil and gas exploration and production opportunities in the Republic of Kazakhstan.
Environmental regulation
The consolidated entity is committed to achieving the highest standards of environmental performance. Standards set by the
Government of Kazakhstan are comprehensive and highly regulated. The consolidated entity strives to comply not only with
all Kazakh government regulations, but also maintain worldwide industry standards.
To maintain these high standards the Group is committed to a locally developed environmental monitoring program. This
monitoring program will continue to expand as and when new regulations are implemented and adopted in Kazakhstan.
There have been no known breaches of any environmental obligations.
ASX Reporting
As Jupiter Energy Limited is listed on the Australian Stock Exchange it is subject to the continuous disclosure requirements
of the ASX Listing Rules for Companies which require immediate disclosure to the market of information that is likely to have
a material effect on the price or value of Jupiter Energy Limited’s securities.
During the financial year, the Company responded to a number of queries from the Australian Securities and Investments
Commission (ASIC) in relation to share price fluctuations and potential irregular trading that occurred during April 2020. ASIC
confirmed on 23 July 2021 that it had concluded its work on 1 July 2021 and that it would not be taking any further action
following its investigation.
Health & Safety
The consolidated entity has developed a comprehensive Health and Safety policy for its operations in Kazakhstan and has
the appropriate personnel in place to monitor the performance of the Group with compliance under this policy. The Group
outsources many of its key drilling functions and as part of any contract entered into with third parties, a commitment to
Health & Safety and a demonstrated track record of success in this area is a key performance indicator in terms of deciding
on which companies will be contracted.
The COVID-19 pandemic has provided additional challenges to the Company during 2020 and 2021 and the Board believes
it has done all it can to ensure that employees follow local area restrictions, and that Aktau operation has exercised vigilance
with respect to employee and contractor safety.
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years): Nil
Nil
Interests in shares:
Geoffrey Gander
Executive Chairman/CEO
Mr Gander graduated from the University of Western Australia in 1984 where he
completed a Bachelor of Commerce Degree.
Mr Gander was involved in the identification and purchase of the Block 31 licence in
Kazakhstan and has driven the development of the business there since 2007. He is
currently responsible for the overall Operational Leadership of the Company as well as
Investor Relations and Group Corporate Development.
Powerhouse Ventures Limited (ASX : PVL)
9
Jupiter Energy Limited
Directors' report
30 June 2021
Name:
Title:
Experience and expertise:
Baltabek Kuandykov
Independent Non-Executive Director
Mr Kuandykov has considerable experience in the oil and gas industry in the region,
having served as President of Kazakhoil (predecessor of the Kazakh State oil company
KazMunaiGas). He was also seconded by the Kazakh Government to work with
Chevron Overseas Petroleum on CIS projects. Mr Kuandykov also has extensive
government experience in Kazakhstan, having served as Deputy Minister of Geology,
Head of the Oil and Gas Directorate at the Ministry of Geology, and was Deputy Minister
of Energy and Fuel Resources.
Other current directorships:
Nil
Former directorships (last 3 years): Nil
Nil
Interests in shares:
Name:
Title:
Experience and expertise:
Alexander Kuzev
Independent Non-Executive Director
Mr Kuzev is an oil industry professional with over 27 years of experience. Most of
Alexander’s career has been spent working in the Former Soviet Union (FSU) with
much of that time responsible for the overall management of field operations with a
focus on production sustainability, technology and field maintenance. He has worked
with a range of oil and gas companies including Schlumberger and Gazprom
Drilling. Alexander brings an important technical skill set to the Jupiter Energy Board
as well as in country experience, having been involved with various Kazakhstan based
oil and gas operations since the late 1990’s.
Other current directorships:
Nil
Former directorships (last 3 years): Nil
Nil
Interests in shares:
Name:
Title:
Alexey Kruzhkov
Non-Executive Director
Experience and expertise:
Mr Kruzhkov holds an Engineering Degree and an MBA and has over 10 years’
experience working in the investment industry, focusing primarily on organisations
involved in Oil & Gas, Mining and Real Estate. He has served as a Director on the
Boards of companies listed in Canada and Norway. He is a board member and part of
the executive team of Waterford Investment and Finance Limited and resides in
Cyprus. He holds British and Russian citizenships.
Other current directorships:
Nil
Former directorships (last 3 years): Nil
Nil
Interests in shares:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Former directorships (last 3 years): Nil
Nil
Interests in shares:
Mark Ewing
Independent Non-Executive Director (appointed 24 November 2020)
Mark has had more than 40 years’ experience as a Chartered Accountant.
Mark Ewing is an experienced company director and member of the Institute of
Company Directors. Mark has had more than 40 years’ working with private and public
companies in Australia, Asia, UK and the US. He specialises in the provision of
corporate advice to SME’s and small ASX listed companies, due diligence, capital
raisings and business sales.
TTA Holdings Limited (ASX: TTA)
10
Jupiter Energy Limited
Directors' report
30 June 2021
Name:
Title:
Qualifications:
Experience and expertise:
Phil Warren
Independent Non-Executive Director (resigned 24 November 2020)
Mr Warren is a Chartered Accountant
Mr Warren is a Chartered Accountant and has over 20 years experience in finance and
corporate roles in Australia and Europe. He is Managing Director of a corporate
advisory services firm and has extensive experience in mergers and acquisitions, debt
financing, equity raisings and corporate governance.
N/A
Other current directorships:
Former directorships (last 3 years): N/A
N/A
Interests in shares:
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
Company secretary
Emma Wates acted as company secretary until November 2020 at which time she was replaced by James Barrie.
James Barrie (GAICD, Dipl InvRel (AIRA), B. Business) is a professional director and company secretary. He provides the
Jupiter Board independent advice and expertise, and is skilled in the areas of corporate governance, company secretary,
share registry, employee plans, treasury, capital management, accounting, commercial analysis, strategy, stakeholder
relations, sales, business development, IPOs and mergers and acquisitions.
Meetings of directors
The number of meetings of the company's Board of Directors ('the Board') held during the year ended 30 June 2021, and
the number of meetings attended by each director were:
G Gander
B Kuandykov
A Kruzhkov
P Warren
A Kuzev
M Ewing
Full Board
Attended
Held
5
5
4
3
4
2
5
5
5
3
5
2
Held: represents the number of meetings held during the time the director held office.
Due to the small number and geographical spread of the Directors, it was determined that the Board would undertake all of
the duties of properly constituted Audit & Compliance and Remuneration Committees.
Remuneration report (audited)
This remuneration report outlines the Director and executive remuneration arrangements of the consolidated entity in
accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of this report, key
management personnel (KMP) of the consolidated entity are defined as those persons having authority and responsibility for
planning, directing and controlling the major activities of the consolidated entity, directly or indirectly, including any Director
(whether executive or otherwise) of the Company.
For the purposes of this report, the term 'executive' encompasses the chief executive, senior executives and general
managers of the consolidated entity.
11
Jupiter Energy Limited
Directors' report
30 June 2021
Principles used to determine the nature and amount of remuneration
The remuneration policy of the consolidated entity has been designed to align Directors and executives interests with the
shareholder and business objectives by providing a fixed remuneration component and offering long term incentives based
on a key performance area – with a focus to the material improvement in share price performance. The Board of the
consolidated entity believes the remuneration policy to be appropriate to attract and retain the best executives and Directors
to run and manage the consolidated entity, as well as create goal congruence between Directors, executives and
shareholders.
The Board's policy for determining the nature and amount of remuneration for Board members and senior executives of the
consolidated entity is as follows:
●
The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was
developed by the Board after a review of similar listed and unlisted companies with activities in overseas jurisdictions
and taking into account the experience and skill set required to successfully develop operations in these jurisdictions
from early-stage development. The consolidated entity does not have a remuneration committee. The Board is of the
opinion that due to the size of the consolidated entity, the functions performed by a Remuneration Committee can be
adequately handled by the full Board.
All executives receive a base salary (which is based on factors such as length of service and experience),
superannuation, fringe benefits and performance incentives.
The Board reviews executive packages annually by reference to the consolidated entity's performance, executive
performance and comparable information from industry sectors and other listed companies in similar industries.
●
●
The executive Directors receive a superannuation guarantee contribution as required by the government which is currently
9.5%, and do not receive any other retirement benefits. This contribution forms part of their total remuneration package.
Remuneration Structure
Non-Executive Director Remuneration
Objective
The Board seeks to set aggregate remuneration at a level which provides the consolidated entity with the ability to attract
and retain directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
Structure
The Board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment
and responsibilities. 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. The maximum
aggregate amount of fees that can be paid to non-executive Directors is subject to approval by shareholders at the Annual
General Meeting. Total remuneration for all non-executive Directors, is not to exceed $350,000 per annum as approved by
shareholders at the Annual General Meeting held on 15 November 2010. Fees for non-executive Directors are not linked to
performance of the consolidated entity. Non-executive Directors are also encouraged to hold shares in the company.
Directors who are called upon to perform extra services beyond the director’s ordinary duties may be paid additional fees for
those services.
Executive Remuneration
Objective
The consolidated entity aims to reward executives with a level and mix of remuneration commensurate with their position
and responsibilities within the consolidated entity so as to:
●
●
●
●
reward executives for consolidated entity, business unit and individual performance;
align the interests of executives with those of shareholders;
link reward with the strategic goals and performance of the consolidated entity; and
ensure total remuneration is competitive by market standards
Structure
In determining the level and make-up of executive remuneration, the Board reviews remuneration packages provided by
similar listed and unlisted companies with activities in overseas jurisdictions and taking into account the experience and skill
set required to successfully develop operations in these jurisdictions from early stage development as well as the salary
levels of local workers in that jurisdiction. It is the Board’s policy that employment contracts are entered into with the Chief
Executive Officer and all key management personnel.
12
Jupiter Energy Limited
Directors' report
30 June 2021
Fixed Remuneration
The fixed remuneration of executives is comprised of a base salary and superannuation. The fixed remuneration of
executives is reviewed annually.
Variable remuneration – Short Term Incentives (STI)
The consolidated entity operates a STI program for its Kazakh based employees, which is based on a cash bonus subject
to the attainment of clearly defined Branch and individual measures.
Actual STI payments awarded to each employee depends on the extent to which specific targets are met, as determined by
the Board. The targets consist of a number of key performance indicators (KPIs) covering financial and non-financial Branch
and individual measures of performance.
Directors are not eligible for participation in the STI program.
The CEO may be awarded a one off annual bonus payment by mutual agreement and at the discretion of the Board. In the
year ended 30 June 2021, no cash bonuses were paid.
Variable Remuneration – Long Term Incentives (LTI)
The objectives of long term incentives are to:
●
●
●
●
align executives remuneration with the creation of shareholder wealth;
recognise the ability and efforts of the Directors, employees and consultants of the consolidated entity who have
contributed to the success of the consolidated entity and to provide them with rewards where deemed appropriate;
provide an incentive to the Directors, employees and consultants to achieve the long term objectives of the consolidated
entity and improve the performance of the consolidated entity; and
attract persons of experience and ability to employment with the consolidated entity and foster and promote loyalty
between the consolidated entity and its Directors, employees and consultants.
Structure
Long term incentives granted to Directors and senior executives are delivered either in the form of a defined bonus or via the
issue of Performance Rights, issued under the Performance Rights Plan. There were no performance rights issued during
the current financial year or prior financial year. There is a bonus that forms part of the CEO package which is linked to the
sale of the permit area. Under the terms of the package, the CEO is entitled to $US 350,000 or 0.5% (whichever is greater)
of the value of the consideration received if Jupiter or Contract 2275 (pertaining to the main project) is assigned, transferred
or sold to a third party during the term of the agreement.
Use of remuneration consultants
During the financial year ended 30 June 2021, the consolidated entity did not use remuneration consultants.
Voting and comments made at the company's 24 November 2020 Annual General Meeting ('AGM')
At the 24 November 2020 AGM, 99.89% of the votes received supported the adoption of the remuneration report for the year
ended 30 June 2020. The company did not receive any specific feedback at the AGM regarding its remuneration practices.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables.
13
Jupiter Energy Limited
Directors' report
30 June 2021
2021
Non-Executive Directors:
A Kruzhov *
B Kuandykov *
A Kuzev *
P Warren **
M Ewing ***
Executive Directors:
Geoff Gander
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Directors
fees
$
Consulting
fees
$
Non-
Super-
monetary annuation
Long
service
leave
$
Equity-
settled
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
53,565
149,362
120,504
-
30,208
342,032
695,671
$
$
-
-
-
-
-
-
-
-
-
-
-
-
40,000
40,000
53,565
53,474
40,173
-
30,208
-
95,888
80,331
-
-
-
177,420
302,032
478,251
*
**
Directors fees from February 2015 have been deferred until such time that at least US$5,000,000 in new equity is raised
or alternatively the consolidated entity sells the Block 31 licence and receives the funds associated with that sale.
In accordance with the agreement between Grange Consulting Group Pty Ltd (“Grange”) and the consolidated entity,
the consolidated entity incurred $63,026 in corporate consulting fees and office rent charged by Grange on normal
commercial terms. This amount is not included in the remuneration of Mr Warren and is not payable to Mr Warren. Mr
Warren resigned on 24 November 2020.
*** Mr Ewing was appointed on 24 November 2020.
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Directors
fees
$
Consulting
fees
$
Non-
Super-
monetary annuation
$
$
Long
service
leave
$
Equity-
settled
$
Total
$
59,619
59,880
44,714
-
-
369,890
89,204
-
-
164,213
289,134
748,228
-
-
-
-
-
-
-
-
-
-
40,000
40,000
-
-
-
-
-
-
-
-
-
-
-
-
59,619
429,770
133,918
-
329,134
952,441
2020
Non-Executive Directors:
A Kruzhov *
B Kuandykov * and ***
A Kuzev *
P Warren **
Executive Directors:
Geoff Gander
*
**
Directors fees from February 2015 have been deferred until such time that at least US$5,000,000 in new equity is raised
or alternatively the consolidated entity sells the Block 31 licence and receives the funds associated with that sale.
In accordance with the agreement between Grange Consulting Group Pty Ltd (“Grange”) and the consolidated entity,
the consolidated entity incurred A$144,011 in corporate consulting fees and office rent charged by Grange on normal
commercial terms. Of this amount, A$51,500 was incurred by the consolidated entity for services provided by Mr.
Warren who is a Director of Grange Consulting. This amount is not included in the remuneration of Mr Warren and is
not payable to Mr Warren.
*** Amount includes Non Executive Director fee of US$40,000 (A$59,880), Consulting Fees of US$100,000 (A$147,727)
and consulting fees of A$222,163 (2019: A$284,985) which are accrued and paid under normal terms and conditions
to Meridian Petroleum LLP, of which Mr. Kuandykov is a director, for the provision of geological services at normal
commercial rates.
14
Jupiter Energy Limited
Directors' report
30 June 2021
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
A Kruzhov
B Kuandykov
A Kuzev
M Ewing
Executive Directors:
Geoff Gander
Fixed remuneration
2020
2021
At risk - STI
At risk - LTI
2021
2020
2021
2020
100%
100%
100%
100%
100%
100%
100%
-
100%
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The total deferred fees owing to each related party are included within Trade and Other Payables in the Statement of
Financial Position and have been detailed below:
Geoff Gander
Baltabek Kuandykov
Alexey Kruzhkov
Alexander Kuzev
Consolidated
2021
$
2020
$
14,754
331,050
255,727
155,535
72,100
304,362
221,850
126,667
757,066
724,979
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details
of these agreements are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Geoffrey Gander
Executive Chairman/Chief Executive Officer
8 September 2017
Base Salary of GBP200,000 (A$340,000) including Director Fees and the current
Superannuation Levy of 9.5%. Mr Gander will be paid a Bonus of $US350,000 or 0.5%
(whichever is greater) of the value of the consideration received by the consolidated
entity if the Company or Contract 2275 is assigned, transferred or sold to a third party
during the term of the Agreement. Director fees of A$3,333 per month (included in Base
Salary figure above), deferred until such time that at least US$5,000,000 in new equity
is raised or alternatively the consolidated entity sells the Block 31 licence and receives
the funds associated with that sale.
As a result of the COVID-19 pandemic, related travel restrictions and the inability to
enter Kazakhstan, Geoff Gander’s contracted fee structure was suspended, effective 1
March 2020 to 31 August 2020, and fees payable reduced by 25%. The contract
returned to normal terms from 1 September 2020 when Geoff Gander returned to
Kazakhstan.
15
Jupiter Energy Limited
Directors' report
30 June 2021
Name:
Title:
Agreement commenced:
Term of agreement:
Name:
Title:
Agreement commenced:
Term of agreement:
Name:
Title:
Agreement commenced:
Term of agreement:
Name:
Title:
Agreement commenced:
Term of agreement:
Name:
Title:
Agreement commenced:
Term of agreement:
Baltabek Kuandykov
Non-Executive Director
5 October 2010
Mr Kruzhkov is entitled to a base fee of US$ 40,000 per annum. Mr Kruzhkov’s fees
are deferred until such time that at least US$5,000,000 in new equity is raised or
alternatively the consolidated entity sells the Block 31 licence and receives the funds
associated with that sale. Mr Kruzhkov will be reimbursed reasonable expenses
incurred in performing his duties, including the cost of attending Board Meetings, travel,
accommodation and entertainment where agreed to by the Board. The appointment of
Mr Kruzhkov as a non-executive Director is otherwise on terms that are customary for
an appointment of this nature.
Alexey Kruzhkov,
Non-Executive Director
18 June 2016
Mr Kruzhkov is entitled to a base fee of US$ 40,000 per annum. Mr Kruzhkov’s fees
are deferred until such time that at least US$5,000,000 in new equity is raised or
alternatively the consolidated entity sells the Block 31 licence and receives the funds
associated with that sale. Mr Kruzhkov will be reimbursed reasonable expenses
incurred in performing his duties, including the cost of attending Board Meetings, travel,
accommodation and entertainment where agreed to by the Board. The appointment of
Mr Kruzhkov as a non-executive Director is otherwise on terms that are customary for
an appointment of this nature.
Alexander Kuzev
Non-Executive Director
12 September 2017
Mr Kuzev is entitled to a base fee of US$ 30,000 per annum. Mr Kuzev’s fees are
deferred until such time that at least US$5,000,000 in new equity is raised or
alternatively the consolidated entity sells the Block 31 licence and receives the funds
associated with that sale. Mr Kuzev will be reimbursed reasonable expenses incurred
in performing his duties, including the cost of attending Board Meetings, travel,
accommodation and entertainment where agreed to by the Board. The appointment of
Mr Kuzev as a non-executive Director is otherwise on terms that are customary for an
appointment of this nature.
Mark Ewing
Non-Executive Director
24 November 2020
Mr Ewing is entitled to a base fee of $A50,000 per annum plus GST.
Phil Warren
Non-Executive Director
20 April 2018
Mr Warren is paid a base fee of $nil and will be reimbursed reasonable expenses
incurred in performing his duties, including the cost of attending Board Meetings, travel,
accommodation and entertainment where agreed to by the Board. Mr Warren is the
Managing Director of Grange Consulting Group Pty Ltd, with which the consolidated
entity has entered in to a corporate consulting agreement for corporate compliance and
financial management services. The appointment of Mr Warren as a non-executive
Director is otherwise on terms that are customary for an appointment of this nature.
16
Jupiter Energy Limited
Directors' report
30 June 2021
The termination provisions of Geoff Gander's contract are as follows:
Reason for termination
Notice Period
Payment in lien of notice
-
-
initiated
Contractor
initiated
termination with reason or for
Contractor incapacitation
Company
termination without reason
Company
termination
misconduct
Contractor
termination without reason
Contractor
termination with reason
initiated
serious
initiated
initiated
–
for
–
–
1 month
12 months
12 months
12 months
None
None
12 months
30 days
12 months
12 months
Share-based compensation
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during the year
ended 30 June 2021.
Options
There were no options over ordinary shares issued to directors and other key management personnel as part of
compensation that were outstanding as at 30 June 2021.
There were no options over ordinary shares granted to or vested by directors and other key management personnel as part
of compensation during the year ended 30 June 2021.
Additional information
The earnings of the consolidated entity for the five years to 30 June 2021 are summarised below:
2021
$
2020
$
2019
$
2018
$
2017
$
Sales revenue
Profit /loss after income tax
Market capitalisation
4,025,701
61,655
6,120,000
5,634,059
(42,352,138)
2,300,000
8,963,533
(8,927,775)
942,000
2,922,167
(10,023,857)
-
(8,076,857)
6,300,000 38,300,000
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
2021
2020
2019
2018
2017
Share price at financial year end (cents)
Basic earnings/(loss) per share (cents per
share)
3.20
1.50
1.10
4.10
25.00
0.04
(27.61)
(5.82)
(6.54)
(5.27)
17
Jupiter Energy Limited
Directors' report
30 June 2021
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the company held during the financial year by each director and other members of key management
personnel of the consolidated entity, including their personally related parties, is set out below:
Balance at Received
as part of
the start of
the year
remuneration Additions
Disposals/
other
Balance at
the end of
the year
Ordinary shares
G Gander
B Kuandykov
A Kruzhkov
A Kuzev
P Warren
M Ewing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
This concludes the remuneration report, which has been audited.
Shares under option
There were no unissued ordinary shares of Jupiter Energy Limited under option outstanding at the date of this report.
Shares issued on the exercise of options
There were no ordinary shares of Jupiter Energy Limited issued on the exercise of options during the year ended 30 June
2021 and up to the date of this report.
Indemnity and insurance of officers
The company indemnifies the directors and executives of the company for costs incurred, in their capacity as a director or
executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the company paid a premium in respect of a contract to insure the directors and executives of the
company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
To the extent permitted by law, the Group has agreed to indemnify its auditors, Ernst & Young Australia, as part of the terms
of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No
payment has been made to indemnify Ernst & Young during or since the financial year.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking responsibility
on behalf of the company for all or part of those proceedings.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the prior financial year by the
auditor are outlined in note 22 to the financial statements. There were no non-audit services provided during the current
financial year.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
18
Jupiter Energy Limited
Directors' report
30 June 2021
The directors are of the opinion that the services as disclosed in note 22 to the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity
of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including
reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the company,
acting as advocate for the company or jointly sharing economic risks and rewards.
Officers of the company who are former partners of Ernst & Young
There are no officers of the company who are former partners of Ernst & Young.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this directors' report.
Auditor
Ernst & Young continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Geoffrey Gander
Director
30 September 2021
19
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s independence declaration to the directors of Jupiter Energy
Limited
As lead auditor for the audit of the financial report of Jupiter Energy Limited for the financial year
ended 30 June 2021, I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Jupiter Energy Limited and the entities it controlled during the
financial year.
Ernst & Young
Mark Cunningham
Partner
30 September 2021
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
MC:DA:JUPITER:007
Jupiter Energy Limited
Contents
30 June 2021
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 consolidated financial statements
Directors' declaration
Independent auditor's review report to the members of Jupiter Energy Limited
Shareholder information
General information
22
23
24
25
26
54
55
59
The financial statements cover Jupiter Energy Limited as a consolidated entity consisting of Jupiter Energy Limited and the
entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is
Jupiter Energy Limited's functional and presentation currency.
Jupiter Energy Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered
office and principal place of business is:
Suite 2
Level 13 350 Collins Street
Melbourne VIC 3000
A description of the nature of the consolidated entity's operations and its principal activities are included in the directors'
report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 30 September 2021. The
directors have the power to amend and reissue the financial statements.
21
Jupiter Energy Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2021
Revenue
Revenue from contracts with customers
Cost of sales
Gross profit
Other income
Foreign exchange gains (losses)
Finance income
Expenses
General and administration expenses
Impairment of assets
Other expenses
Finance costs
Profit/(loss) before income tax expense
Income tax expense
Note
Consolidated
2021
$
2020
$
4,025,701
(2,125,323)
1,900,378
5,634,059
(3,194,429)
2,439,630
428,159
7,636,191
31,627
8,095,977
107,318
(1,406,647)
23,712
(1,275,617)
(2,060,683)
-
(106,990)
(7,767,027)
(2,519,824)
(32,571,270)
(4,432)
(8,420,635)
61,655
(42,352,148)
-
-
5
5
5
6
Profit/(loss) after income tax expense for the year attributable to the owners of
Jupiter Energy Limited
61,655
(42,352,148)
Other comprehensive loss
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive loss for the year, net of tax
(2,613,536)
(680,854)
(2,613,536)
(680,854)
Total comprehensive loss for the year attributable to the owners of Jupiter
Energy Limited
(2,551,881)
(43,033,002)
Basic earnings / (loss) per share
Diluted earnings / (loss) per share
Cents
Cents
31
31
0.04
0.04
(27.61)
(27.61)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
22
Jupiter Energy Limited
Consolidated statement of financial position
As at 30 June 2021
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Other financial assets
Property, plant and equipment
Right-of-use assets
Exploration and evaluation assets
Oil and gas properties
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Lease liabilities
Other financial liabilities
Total current liabilities
Non-current liabilities
Provisions
Other financial liabilities
Total non-current liabilities
Total liabilities
Net liabilities
Equity
Issued capital
Reserves
Accumulated losses
Total deficiency in equity
Note
Consolidated
2021
$
2020
$
7
8
690,949
80,968
37,126
82,013
891,056
138,980
65,579
25,080
101,365
331,004
9
10
11
12
405,503
541,261
-
1,558,934
489,460
903,552
72,452
485,567
16,757,259 19,549,250
19,262,957 21,500,281
20,154,013 21,831,285
13
14
16
1,723,257
1,568,525
538,223
205,187
83,071
-
- 22,030,391
1,773,712 24,374,942
15
16
306,875
358,816
88,372,096 64,844,316
88,678,971 65,203,132
90,452,683 89,578,074
(70,298,670)
(67,746,789)
17
18
85,633,935 85,633,935
(22,617,167)
(130,701,902) (130,763,557)
(25,230,703)
(70,298,670)
(67,746,789)
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
23
Jupiter Energy Limited
Consolidated statement of changes in equity
For the year ended 30 June 2021
Consolidated
Balance at 1 July 2019
Issued
capital
$
Accumulated
Reserves
$
losses
$
Total
deficiency in
equity
$
85,633,935
(21,936,313)
(88,411,409)
(24,713,787)
Loss after income tax expense for the year
Other comprehensive loss for the year, net of tax
Total comprehensive loss for the year
-
-
-
-
(680,854)
(42,352,148)
-
(42,352,148)
(680,854)
(680,854)
(42,352,148)
(43,033,002)
Balance at 30 June 2020
85,633,935
(22,617,167) (130,763,557)
(67,746,789)
Consolidated
Balance at 1 July 2020
Issued
capital
$
Accumulated
Reserves
$
losses
$
Total
deficiency in
equity
$
85,633,935
(22,617,167) (130,763,557)
(67,746,789)
Profit after income tax expense for the year
Other comprehensive loss for the year, net of tax
Total comprehensive income /(loss) for the year
-
-
-
-
(2,613,536)
61,655
-
61,655
(2,613,536)
(2,613,536)
61,655
(2,551,881)
Balance at 30 June 2021
85,633,935
(25,230,703) (130,701,902)
(70,298,670)
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
24
Jupiter Energy Limited
Consolidated statement of cash flows
For the year ended 30 June 2021
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Other revenue
Interest and other finance costs paid
Note
Consolidated
2021
$
2020
$
3,677,276
(3,491,241)
31,626
428,160
(16,796)
6,147,984
(6,745,436)
23,712
-
(56,932)
Net cash from/(used in) operating activities
29
629,025
(630,672)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for exploration and evaluation assets
Payments for oil and gas properties
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of lease liabilities
Net cash from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
(85,329)
(1,201,995)
(84,778)
(112,852)
(1,808,330)
-
(1,372,102)
(1,921,182)
1,380,841
(83,071)
2,298,204
(146,320)
1,297,770
2,151,884
554,693
138,980
(2,724)
(399,970)
534,690
4,260
Cash and cash equivalents at the end of the financial year
7
690,949
138,980
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
25
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 1. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Going concern
The consolidated financial statements have been prepared on a going concern basis with the Directors of the opinion that
the consolidated entity can meet its obligations as and when they fall due.
As at 30 June 2021, the consolidated entity had a net current liability position of $882,656. At 30 June 2021 the consolidated
entity has total undrawn facilities of US$8,778,332 (AU$11,676,405), refer to note 16 for details. The consolidated entity is
able to settle its short term obligations from available funding as, included in the net current liability position balance, are
accrued director fees of $757,066 for which settlement has been deferred until the consolidated entity has raised at least
US$5,000,000 in a share capital raising or the consolidated entity sells Block 31. Other current liabilities are contract liabilities
of $205,187 that will be settled through the physical delivery of oil.
For the consolidated entity to be able to continue to carry out intended drilling and evaluation of Block 31 and to have sufficient
working capital the consolidated entity is required to:
●
●
●
●
secure additional funding;
extend the repayment terms of the remaining promissory notes and convertible notes to 1 July 2024;
obtain the necessary approvals to transition the West Zhetybai oilfield from exploration to commercial production; and
obtain approval to build the requisite infrastructure to achieve 100% gas utilisation on all three oilfields (Akkar North
(East Block), Akkar East and West Zhetybai).
Under the Kazakhstan Sub Surface Code, once an oil field is in commercial production it must utilise 100% of the gas it emits
via means other than flaring. In order to do this, the oil field requires onsite infrastructure to be in place to either utilise gas
from oil production or convert it to some form from which it can then be on sold. Once the requisite infrastructure is in place
and approved, the Company will be able to extract and sell oil under the commercial production license that forms part of the
Block 31, 2275 contract. Due to the significant infrastructure required, which is not currently in place, should the consolidated
entity not receive approvals to produce from the oilfields without the infrastructure or find a suitable alternative:
●
●
the value of Block 31 may not be fully realised as intended and it could have implications on asset values currently
recognised in the financial statements;
the promissory and convertible note facility holders may have right to demand repayment prior to their revised maturity
date.
Subsequent to 30 June 2021 the consolidated entity has extended the repayment terms of existing promissory notes and
convertible notes to 1 July 2024. The Directors are confident of being able to secure further additional funding required to
continue to develop Block 31, obtain approvals to both transition the West Zhetybai oilfield from exploration to commercial
production and to build the requisite infrastructure to achieve 100% gas utilisation on all three oilfields; however there remains
uncertainty as to whether all of these matters will be achieved.
Should the consolidated entity not achieve all the matters set out above, there is significant uncertainty as to whether the
consolidated entity would continue as a going concern and therefore whether it would realise its assets and extinguish its
liabilities in the normal course of business and at the amounts stated in the financial report. The financial report does not
include adjustments relating to the recoverability or classification of the recorded assets amounts nor to the amounts or
classification of liabilities that might be necessary should the consolidated entity not be able to continue as a going concern.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate
for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention.
26
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
financial statements, are disclosed in note 2.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only.
Supplementary information about the parent entity is disclosed in note 26.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Jupiter Energy Limited
('company' or 'parent entity') as at 30 June 2021 and the results of all subsidiaries for the year then ended. Jupiter Energy
Limited and its subsidiaries together are referred to in these financial statements as the 'consolidated entity'.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity
when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable
to the parent.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and
non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The
consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained
together with any gain or loss in profit or loss.
Operating segments
An operating segment is a component of an entity that engages in business activities from which it may earn revenue and
incur expenses (including revenues and expenses relating to transactions with other components of the same entity), whose
operating results are regularly reviewed by the Board of Directors (the chief operating decision makers) to make decisions
about resources to be allocated to the segment and assess its performance and for which discrete financial information is
available. Management will also consider other factors in determining operating segments such as the existence of a line
manager and the level of segment information presented to the executive management team.
Operating segments are identified based on the information provided to the chief operating decision makers. Currently the
consolidated entity has only one operating segment, being the consolidate entity.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Jupiter Energy Limited's functional and presentation
currency.
Functional and presentation currency
Both the functional and presentation currency of Jupiter Energy Limited and each of its Australian subsidiaries are Australian
dollars ($). The results and financial position of foreign subsidiaries whose functional currencies are not Australian dollars
are translated to the presentation currency of the consolidated entity, being Australian dollars ($).
27
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
Transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at
the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of
exchange ruling at the reporting date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange
rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated
using the exchange rates at the date when the fair value was determined.
Translation of consolidated entity Companies’ functional currency to presentation currency
The results of the foreign subsidiaries are translated into Australian Dollars (presentation currency of the consolidated entity)
using weighted average rates. Assets and liabilities are translated at exchange rates prevailing at reporting date. Exchange
variations resulting from the translation are recognised in the foreign currency translation reserve in equity.
On consolidation, exchange differences arising from the translation of the net assets in the foreign subsidiaries are taken to
the foreign currency translation reserve. If a foreign subsidiary was disposed, the related cumulative amount of exchange
differences would be reclassified to profit or loss.
Revenue recognition
The consolidated entity recognises revenue as follows:
Sale of oil
Revenue from the sale of oil is recognised at a point in time when the control of the product is transferred to the customer,
which occurs at the well head. Revenue is recognised at the amount to which the consolidated entity expects to be entitled.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
Other revenue and income
Other revenue is recognised when it is received or when the right to receive payment is established.
Income tax
The consolidated entity adopts the liability method of tax-effect accounting whereby the income tax expense is based on the
profit adjusted for any non-assessable or disallowed items.
Deferred tax is accounted for using the liability method in respect of temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from
the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or
taxable profit or loss. No deferred income tax will be recognised in respect of taxable temporary differences associated with
investments in subsidiaries, when the timing of the reversal of the temporary differences can be controlled by the company
and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is
settled. Deferred tax is credited in the statement of profit or loss and other comprehensive income except where it relates to
items that is credited directly to equity, in which case the deferred tax is adjusted directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against
which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse
change will occur in income taxation legislation and the anticipation that the consolidated entity will derive sufficient future
assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
28
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within
12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used
to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating cycle;
it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash at bank and in hand. A deposit is defined as short-term, if
it has a maturity of three months or less from the date of acquisition.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined
above, net of outstanding bank overdrafts.
Trade and other receivables
Trade receivables, which generally have 30-90 day terms, are recognised and carried at amortised cost amount less an
allowance for expected credit losses. A receivable represents the consolidated entity's right to an amount of consideration
that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).
Inventories
Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the
ordinary course of business less the estimated costs of completion and any estimated selling costs.
Financial assets and liabilities
Financial assets are classified as measured at amortised cost, fair value through profit or loss, or fair value through other
comprehensive income. The classification is based on two criteria: the consolidated entity’s business model for managing
the assets; and whether the instruments’ contractual cash flows represent ‘solely payments of principal and interest’ on the
principal amount outstanding. The assessment of whether contractual cash flows on debt instruments are solely comprised
of principal and interest are made based on the facts and circumstances at initial recognition of the assets.
Taxation receivables are considered statutory in nature and are measured at the tax rate when the transaction subject to tax
occurred.
Financial assets at amortised cost
A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held within a business
model whose objective is to hold assets in order to collect contractual cash flows; and (ii) the contractual terms of the financial
asset represent contractual cash flows that are solely payments of principal and interest.
Impairment
Under AASB 9, impairments of financial assets classified as measured at amortised cost are recognised on an expected loss
basis which incorporates forward-looking information when assessing credit risk. Movements in the expected loss reserve
are recognised in profit or loss.
For trade receivables, a simplified approach is used and for all other receivables, a general approach is used whereby the
consolidated entity recognises lifetime expected credit losses when there has been a significant increase in credit risk since
initial recognition. If the credit risk on the financial instrument has not increased significantly since initial recognition, the
consolidated entity measures the loss allowance for the financial instrument at an amount equal to expected credit losses
within the next 12 months. Expected credit losses are a probability-weighted estimated of credit losses over the expected life
of the financial instrument. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between
the cash flows due to the entity in accordance with the contract and the cash flows that the consolidated entity expects to
receive). Expected credit losses are discounted at the effective interest rate of the financial asset.
29
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss (‘FVTPL’), loans
and borrowings, or as derivatives, as appropriate. A financial liability is classified as at FVTPL if it is classified as held-for-
trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair
value and net gains and losses, including any interest expense, are recognised in profit or loss.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings, net of directly attributable
transaction costs. The consolidated entity’s financial liabilities include trade and other payables and loans and borrowings.
The consolidated entity did not recognise any financial liabilities as at FVTPL.
Borrowings are classified as current liabilities unless the consolidated entity has an unconditional right to defer settlement of
the liability for at least 12 months after the reporting period.
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses. Such
cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the part is incurred.
Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment
as a replacement only if it is eligible for capitalisation. All other repairs and maintenance are recognised in profit or loss as
incurred.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment
(excluding land) over their expected useful lives as follows:
Plant and equipment
3-10 years
The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial
year end.
An item of plant and equipment is derecognised upon disposal or when no further future economic benefits are expected to
be derived from its use or disposal on a prospective basis. Any gain or loss arising on derecognition of the asset (calculated
as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the profit or loss in
the year the asset is derecognised.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the
cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain ownership of the leased asset at
the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or
adjusted for any remeasurement of lease liabilities.
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term
leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to
profit or loss as incurred.
Exploration and evaluation assets
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs
are only carried forward to the extent that they are expected to be recouped through the successful development of the area
or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of
economically recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness
of continuing to carry forward costs in relation to that area of interest.
30
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
Unsuccessful exploration in the area of interest is expensed as incurred even if activities in this area of interest are continuing.
Accumulated costs in relation to an abandoned area are written off in full to profit or loss in the year in which the decision to
abandon the area is made.
When a discovered oil or gas field enters the development phase or an individual well is assessed as being in production
(once a trial production licence is granted) the accumulated exploration and evaluation expenditure is transferred to oil and
gas properties or property plant and equipment, depending on its nature.
Oil and gas properties
Oil and gas properties usually comprise single oil or gas fields being developed for future production or which are in the
production phase. Where several individual oil fields are to be produced through common facilities, the individual oil field and
the associated production facilities are managed and reported as a single oil and gas asset.
Assets in development
When the technical and commercial feasibility of an undeveloped oil or gas field has been demonstrated, the field enters its
development phase. The costs of oil and gas assets in the development phase are accounted for as tangible assets and
include past exploration and evaluation costs, development drilling and plant and equipment and any associated land and
buildings.
Producing assets
The costs of oil and gas assets in production are accounted for as tangible assets and include past exploration and evaluation
costs, pre-production development costs and the ongoing costs of continuing to develop reserves for production and to
expand or replace plant and equipment and any associated land and buildings. Producing assets are depreciated over total
proved and probable reserves on a unit of production basis.
Impairment of assets
At each reporting date, the consolidated entity reviews the carrying values of its tangible and intangible assets (excluding
goodwill) to determine whether there is any indication that those assets have been impaired. If such an indication exists, the
recoverable amount of the asset, being the higher of the asset’s fair value less costs of disposal and value in use, is compared
to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the profit
or loss.
Trade and other payables
Trade payables and other payables are carried at amortised costs and due to their short-term nature are not discounted.
They represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year that
are unpaid and arise when the consolidated entity becomes obliged to make future payments in respect of the purchase of
these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition.
Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the consolidated entity has received
consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the
consolidated entity transfers goods or services to the customer, a contract liability is recognised when the payment is made
or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the consolidated entity
performs under the contract. The consolidated entity applies a practical expedient available under AASB 15 by which the
consolidated entity does not adjust the promised amount of consideration for the effects of a significant financing component
because the consolidated entity expects, at contract inception, that the period between when the consolidated entity transfers
the goods or services to a customer and when the customer pays for those goods or services will be one year or less.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or,
if that rate cannot be readily determined, the consolidated entity's incremental borrowing rate. Lease payments comprise of
fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is
reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on
an index or a rate are expensed in the period in which they are incurred.
31
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured
if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an
adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset
is fully written down.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
Provisions
Provisions are recognised when the consolidated entity has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.
Where the consolidated entity expects some or all of a provision to be reimbursed, for example under an insurance contract,
the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense
relating to any provision is presented in the profit and loss net of any reimbursement.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows
at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks
specific to the liability.
Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Restoration
Costs of site restoration are provided over the life of the field or facility from when exploration commences and are included
in the costs of that stage. Site restoration costs include the dismantling and removal of plant, equipment and building
structures, waste removal, and rehabilitation of the site in accordance with clauses of the permits. Such costs have been
determined based on current legal requirements and technology. In calculating the provision the future estimated costs are
discounted to present value.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site restoration,
there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation.
Accordingly the costs have been determined on the basis that the restoration will be completed within one year of abandoning
the site.
Employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to
be settled wholly within 12 months of the reporting date are recognised in provisions in respect of employees' services up to
the reporting date. They are measured at the nominal amounts based on current wage and salary rates, and include related
on-costs. Liabilities for non-accumulating sick leave are recognised when the leave is taken.
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
Earnings/loss per share
Basic/loss earnings per share
Basic loss per share is calculated as net profit attributable to members of the parent, adjusted to exclude any preference
share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element.
Diluted/loss earnings per share
Diluted loss per share is calculated as net profit attributable to members of the parent, adjusted for:
32
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
●
●
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised
as expenses; and
other non-discretionary changes in income or expenses during the period that would result from the dilution of potential
ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus
element.
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST or VAT except:
●
●
where the GST or VAT incurred on a purchase of goods and services is not recoverable from the taxation authority, in
which case the GST or VAT is recognised as part of the cost of acquisition of the asset or as part of the expense item
as applicable; and
receivables and payables are stated with the amount of GST or VAT included.
The net amount of GST or VAT recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the balance sheet.
Cash flows are included in the Cash Flow Statement on a gross basis and the GST or VAT component of cash flows arising
from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified as
operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST or VAT recoverable from, or payable to, the taxation
authority.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2021. The consolidated
entity has reviewed the changes and believes that they will not have a material impact.
Note 2. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors, including expectations of future events, management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal
the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
Production start date
The consolidated entity assesses each well to determine when the well moves into the production stage. This is when the
well is substantially completed and ready for intended use. The consolidated entity considers various criteria in determining
the production start date, including but not limited to, results of well testing, the ability of the well to sustain ongoing
production, installation of the relevant well infrastructure and receiving the relevant regulatory approvals.
When the well moves into the production stage the capitalisation of certain development costs ceases and costs incurred
are expensed as a production cost. It is also at this point when that the well commences depreciation. Any proceeds received
from oil sales prior to the production start date as part of any well testing, are deducted from the asset.
33
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 2. Critical accounting judgements, estimates and assumptions (continued)
Impairment of non current assets
At each reporting date, the consolidated entity reviews the carrying values of its assets to determine whether there is any
indication those assets have been impaired. Last year the consolidated entity determined that impairment indicators existed
for the prior year, and assessed the recoverable value of Block 31. In making this judgement, management have considered
internal and external sources of information including an assessment of operational performance as well as key modelling
assumptions such as current and forecast oil price, discount rates, market valuations for similar assets and the market
capitalisation of the consolidated entity.
Specific consideration was given to the external sources of information, in particular current and forecast oil prices, as a
result of COVID-19 impacting the current economic climate. Despite COVID-19, global oil prices remained strong during the
year, meaning Kazakh domestic oil prices were also steady.
The consolidated entity has a 25 year Commercial Production Licence which could allow continued operations, but there are
a number of key requirements that are needed before commercial production can commence, the most critical of which is
providing infrastructure to allow all three oilfields to produce oil with 100% gas utilisation. This infrastructure is not currently
in place.
Management have reviewed the carrying value of exploration and evaluation assets at 30 June 2021 and are satisfied that
there are no indicators of impairment.
Recovery of deferred tax assets
Judgement is required in determining whether deferred tax assets are recognised in the statement of financial position.
Deferred tax assets, including those arising from unutilised tax losses, require the consolidated entity to assess the likelihood
that the consolidated entity will generate sufficient taxable earnings in future periods, in order to utilise recognised deferred
tax assets. Judgment is also required in respect of the application of existing tax laws in each jurisdiction.
Assumptions about the generation of future taxable profits depend on management’s estimates of future cash flows. These
estimates of future taxable income are based on forecast cash flows from operations (which are impacted by production and
sales volumes oil prices, reserves, operating costs, closure and rehabilitation costs, capital expenditure, and other capital
management transactions). To the extent that future cash flows and taxable income differ significantly from estimates, the
ability of the consolidated entity to realise the deferred tax assets recorded at the reporting date could be impacted.
In addition, future changes in tax laws in the jurisdictions in which the consolidated entity operates could limit the ability of
the consolidated entity to obtain tax deductions in future periods.
Exploration and evaluation assets
The consolidated entity's accounting policy for exploration and evaluation assets is set out in note 1. The application of this
policy necessarily requires management to make certain judgements, estimates and assumptions as to future events and
circumstances, in particular the assessment of whether economic quantities of reserves may be found. Any such, estimates
and assumptions may change as new information becomes available. If, after having capitalised expenditure under the
consolidated entity’s policy, management concludes that the consolidated entity is unlikely to recover the expenditure by
future exploitation or sale, then the relevant capitalised amount will be written off to the profit and loss.
The trial production licence for Akkar North (East Block) expired at the end of December 2020 and the consolidated entity
applied to transfer the Akkar North (East Block) oilfield from an exploration phase to Commercial Production under the Block
31 contract. This process was completed in July 2021. The trial production licence for the West Zhetybai oilfield expired at
the beginning of September 2021 and the approval process to transfer the West Zhetybai oilfield from an exploration phase
to Commercial Production under the Block 31 contract started shortly thereafter.
As part of transitioning to Commercial Production a final reserves report for each oilfield needs to be submitted and approved
by the Kazakh Ministry of Energy. This report defines the approved reserves for production during the Commercial Production
period. Any acreage within the oilfield that has no defined reserves will be relinquished as part of this process. Final Reserve
Reports have now been approved for the Akkar East, Akkar North (East Block) and West Zhetybai oilfields with no
prospective acreage relinquished.
34
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 2. Critical accounting judgements, estimates and assumptions (continued)
Provision for restoration
Costs of site restoration are provided over the life of the field and related facilities from when exploration commences and
are included in the costs of that stage. Site restoration costs include the dismantling and removal of plant, equipment and
building structures, waste removal, and rehabilitation of the site in accordance with clauses of the permits.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site restoration,
there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation.
Accordingly the costs have been determined on the basis that the restoration will be completed within one year of abandoning
the site.
Units of production depreciation of oil and gas properties
Oil and gas properties are depreciated using the units of production (UOP) method over total proved and probable
hydrocarbon reserves. This results in a depreciation/amortisation charge proportional to the depletion of the anticipated
remaining production from the field/well.
Each item’s life, which is assessed annually, has regard to both its physical life limitations and to present assessments of
economically recoverable reserves of the field at which the asset is located. These calculations require the use of estimates
and assumptions, including the amount of recoverable reserves. The calculation of the UOP rate of depreciation could be
impacted to the extent that actual production in the future is different from current forecast production based on total proved
and probable reserves. Changes to proved and probable reserves could arise due to changes in the factors or assumptions
used in estimating reserves, including:
●
●
The effect on proved and probable reserves of differences between actual commodity prices and commodity price
assumptions; or
Unforeseen operational issues.
Changes are accounted for prospectively.
Recoverability of oil and gas properties
The consolidated entity assesses each asset or cash generating unit (CGU) (excluding goodwill, which is assessed annually
regardless of indicators) every reporting period to determine whether any indication of impairment exists. Where an indicator
of impairment exists, a formal estimate of the recoverable amount is made, which is considered to be the higher of the fair
value less costs of disposal and value in use. These assessments require the use of estimates and assumptions such as
long-term oil prices (considering current and historical prices, price trends and related factors), discount rates, operating
costs, future capital requirements, decommissioning costs, exploration potential, reserves operating performance (which
includes production and sales volumes).
These estimates and assumptions are subject to risk and uncertainty. Therefore, there is a possibility that changes in
circumstances will impact these projections, which may impact the recoverable amount of assets and/or CGUs. Management
has assessed Block 31 as being an individual CGU, which is the lowest level for which cash inflows are largely independent.
In measuring the recoverable amount, future cashflows are sensitive to changes in the following key assumptions;
●
●
●
●
●
Forecast commodity prices and exchange rates;
Production volumes, reserves and timing of export sales;
Recoverable reserves;
Cost assumptions; and
Discount rate
In accordance with the consolidated entity’s accounting policy, the consolidated entity’s CGU was tested for indicators of
impairment as at 30 June 2020 and the recoverable amount was determined through a value in use model. This assessment
supported the recoverability of the Block 31 CGU consisting of the Akkar East, Akkar North (East Block) and West Zhetybai
oil fields.
Management have reviewed the carrying value of oil and gas properties at 30 June 2021 and are satisfied that there are no
indicators of impairment.
35
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 3. Impact of COVID 19 pandemic
During the year ended 30 June 2020, the COVID-19 was declared a pandemic by the World Health Organisation (WHO).
The pandemic has adversely affected the global economy, including an increase in unemployment, decrease in consumer
demand, interruptions in supply chains, and tight liquidity and credit conditions. Since its outbreak, governments worldwide
have set up measures to contain the pandemic. Many countries have required entities to limit or suspend business
operations, and have also implemented travel restrictions and quarantine measures. Monetary and fiscal stimulus packages
have also been introduced in some countries. As the COVID-19 outbreak continues to evolve, the estimated financial impact
cannot be reasonably determined at this juncture. The impact which COVID 19 has had on the consolidated entity is set out
below.
Kazakhstan operations
Despite COVID-19 infection rates being high in Kazakhstan, the Company’s operations remained largely unimpacted during
the financial year ending 30 June 2021. Major precautions were taken to ensure staff were safe and as soon as the SPUTNIK
V vaccine was made available in country, all staff were offered the opportunity to be vaccinated. Many took up this
opportunity.
Australian operations
The impact of COVID-19 on the consolidated entity's Australian operations has not been material due to their scale and
nature of operations as a holding company.
Note 4. Operating segments
Identification of reportable operating segments
Operating segments are identified based on the information provided to the chief operating decision makers.
The consolidated entity has identified that it has one operating segment being related to the activities in Kazakhstan, on the
basis that the operations in Australia relate to running the Corporate Head Office only.
All oil sales are with one customer in Kazakhstan.
Geographical information
Sales to external customers
Geographical non-current
assets
2021
$
2020
$
2021
$
2020
$
Kazakhstan
4,025,701
5,634,059 19,262,957 21,500,282
All significant property, plant and equipment, oil and gas properties and exploration and evaluation assets are domiciled in
Kazakhstan.
36
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 5. Expenses
Profit/(loss) before income tax includes the following specific expenses:
Depreciation and amortisation
Depreciation and amortisation (charged to cost of sales)
Depreciation and amortisation (charged to general and administration expense)
Total depreciation and amortisation
Impairment
VAT Receivable
Exploration and evaluation assets
Total impairment
Finance costs
Interest and finance charges paid/payable on promissory note
Interest and finance charges paid/payable on lease liabilities
Unwinding of the discount on provisions
Finance costs expensed
Employee benefits included in are summarised below
Expensed in cost of sales
Expensed in general and administration
Capitalised in exploration and evaluation assets
Foreign exchange gains and (losses)
Unrealised gains and losses on promissory notes
Other foreign exchange differences
Note 6. Income tax expense
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit/(loss) before income tax expense
Tax at the statutory tax rate of 26% (2020: 27.5%)
Consolidated
2021
$
2020
$
635,822
14,944
913,557
13,141
650,766
926,698
-
1,951,944
- 30,619,326
- 32,571,270
7,750,231
6,419
10,377
8,363,703
44,249
12,683
7,767,027
8,420,635
235,988
269,864
497,727
192,353
202,264
301,742
7,633,683
2,508
7,636,191
(1,410,906)
4,259
(1,406,647)
Consolidated
2021
$
2020
$
61,655
(42,352,148)
16,030
(11,646,841)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Effect of tax rates in foreign jurisdictions
Interest expense
Temporary differences and tax losses not brought to account as a deferred tax asset
223,818
2,015,060
(2,254,908)
128,197
2,315,675
9,202,969
Income tax expense
-
-
37
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 6. Income tax expense (continued)
Deferred tax assets not recognised
Deferred tax assets not recognised comprises temporary differences attributable to:
Unrealised FX (gain) / loss
Tax losses – Australia
Tax losses – Foreign Subsidiaries
Consolidated
2021
$
2020
$
(311,899)
9,026,343
6,086,896
1,772,266
9,202,424
7,042,904
Total deferred tax assets not recognised
14,801,340 18,017,594
The above potential tax benefit, which excludes tax losses, for deductible temporary differences has not been recognised in
the statement of financial position as the recovery of this benefit is uncertain.
Note 7. Cash and cash equivalents
Current assets
Cash at bank
Note 8. Other current assets
Current assets
Prepayments
Other current assets
Note 9. Other financial assets
Non-current assets
Liquidation fund
Consolidated
2021
$
2020
$
690,949
138,980
Consolidated
2021
$
2020
$
62,368
19,645
62,799
38,566
82,013
101,365
Consolidated
2021
$
2020
$
405,503
489,460
The consolidated entity has a deposit for the purpose of a liquidation fund. The deposit is to be used for land restoration
when required. Under the laws of Kazakhstan, the deposit must be replenished in the amount of 1% of the annual
investments. The carrying value approximates the fair value.
38
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 10. Property, plant and equipment
Non-current assets
Plant and equipment - at cost
Less: Accumulated depreciation
Consolidated
2021
$
2020
$
2,064,016
(1,522,755)
2,392,097
(1,488,545)
541,261
903,552
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2019
Additions
Exchange differences
Depreciation expense
Balance at 30 June 2020
Additions
Exchange differences
Depreciation expense
Balance at 30 June 2021
Note 11. Exploration and evaluation assets
Non-current assets
Exploration and evaluation - at cost
Plant &
equipment
$
1,169,768
97,262
(43,401)
(320,077)
903,552
85,329
(200,563)
(247,057)
541,261
Consolidated
2021
$
2020
$
1,558,934
485,567
39
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 11. Exploration and evaluation assets (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2019
Additions
Exchange differences
Impairment of assets
Transfers in/(out)
Balance at 30 June 2020
Additions
Exchange differences
Balance at 30 June 2021
Exploration &
evaluation
$
29,336,875
1,808,330
50,480
(30,619,326)
(90,792)
485,567
1,170,492
(97,125)
1,558,934
The consolidated entity assesses each asset or cash generating unit (CGU) every reporting period to determine whether any
indication of impairment exists. Where an indicator of impairment exists, a formal estimate of the recoverable amount is
made, which is considered to be the higher of the fair value less costs of disposal and value in use. Management has
assessed Block 31 as being an individual CGU, which is the lowest level for which cash inflows are largely independent.
30 June 2020
As outlined in note 2 during the prior year, the consolidated entity applied to transfer Akkar East oilfield from an exploration
phase to Commercial Production under the Block 31 contract, which was approved by the Kazakh authorities in September
2020. The process to transition Akkar North (East Block) to Commercial Production commenced in January 2021 and was
completed in July 2021. During the approval process, and specifically as a result of submitting the final reserve reports for
the commercial production areas and relinquishing any parts of the oilfields with no defined reserves, the consolidated entity
identified indicators of impairment during the year ended 30 June 2020.
As a result, the recoverable amount of the consolidated entity’s CGU was calculated using the value-in-use method (VIU),
which reflected the present value of the future cash flows expected to be derived from the CGU. This calculated recoverable
amount was then compared with the carrying value of the assets of the CGU. Arising from the VIU calculations, an impairment
expense of $30,619,326 was recognised in the prior year.
In measuring the recoverable amount, the following key assumptions were used:
●
●
●
Discount rate: 16%
Production volume over the life: ~2,181,000 tonnes
Long term oil price – ~US $60/bbls
The impairment charge relating to Block 31 reflected the global oil prices which had fallen significantly during the prior year,
partly due to the softening of the market as a result of the COVID-19 pandemic. The recoverability of Block 31 CGU is highly
sensitive to changes in the long term oil prices.
30 June 2021
Management have reviewed the carrying value of oil and gas properties at 30 June 2021 and are satisfied that there are no
indicators of further impairment. It has been assessed that there are no indicators to suggest that previous impairments
should be reversed.
40
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 12. Oil and gas properties
Non-current assets
Oil and gas properties - at cost
Less: Accumulated amortisation
Consolidated
2021
$
2020
$
18,689,003 22,152,915
(2,603,665)
(1,931,744)
16,757,259 19,549,250
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Oil and gas
properties
$
20,427,153
(531,662)
11,615
90,792
(448,648)
19,549,250
84,778
29,768
(2,566,394)
(340,143)
16,757,259
Consolidated
2021
$
2020
$
709,514
859,011
1,069,640
653,617
1,568,525
1,723,257
Consolidated
Balance at 1 July 2019
Exchange differences
Change in estimate of restoration liability
Transfers in/(out)
Amortisation expense
Balance at 30 June 2020
Additions
Change in estimate of restoration liability
Exchange differences
Amortisation expense
Balance at 30 June 2021
Note 13. Trade and other payables
Current liabilities
Trade payables
Accrued expenses and other payables
Refer to note 20 for further information on financial instruments.
41
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 14. Contract liabilities
Current liabilities
Contract liabilities
Consolidated
2021
$
2020
$
205,187
538,223
Unsatisfied performance obligations
The contract liability refers to amounts received in advance for oil sales. As at 30 June 2021, there is approximately 687
tonnes of oil to be delivered under the contract (2020: 3,388 tonnes). This obligation is expected to be fulfilled within the
quarter ending 30 September 2021 (2020 :30 September 2020).
Note 15. Provisions
Non-current liabilities
Rehabilitation
Consolidated
2021
$
2020
$
306,875
358,816
Rehabilitation
The consolidated entity accrues provisions for the forthcoming costs of rehabilitation of the territory. The timing of
rehabilitation is likely to depend on when the field ceases to produce at economically viable rates which is currently estimated
to be 2044 (2020: 2044). This will depend upon future oil and gas prices, which are inherently uncertain. The underlying
rehabilitation costs are denominated in Tenge and in calculating the provision at 30 June 2021 a discount rate of 6.46%
(2020: 7.47%)
Movements in provisions
Movements in each class of provision during the current financial year, other than employee benefits, are set out below:
Consolidated - 2021
Carrying amount at the start of the year
Change in estimates *
Exchange differences
Unwinding of discount
Carrying amount at the end of the year
*
Due to a change in the discount rate used in the calculation
Rehabilitation
$
358,816
(12,112)
(50,206)
10,377
306,875
42
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 16. Other financial liabilities
Current liabilities
Promissory notes
Non-current liabilities
Promissory notes
Reconciliation
Reconciliation of the overall balance of promissory notes at the beginning and end of the
current and previous financial year are set out below:
Opening balance
Impact of foreign exchange differences
Drawdowns
Interest accrued
Closing balance
Consolidated
2021
$
2020
$
- 22,030,391
88,372,096 64,844,316
88,372,096 86,874,707
86,874,707 74,801,893
1,410,906
2,298,205
8,363,703
(7,633,683)
1,380,841
7,750,231
88,372,096 86,874,707
Other financial liabilities comprises the following unsecured promissory notes with principal and accrued interest totalling:
2017 Funding Agreement
2016 Funding Agreement
Refinanced Series B Promissory Note
Promissory Note – Discharge of Convertible Notes1
Consolidated
2021
$
2020
$
8,407,174
7,849,382
6,762,017
7,836,828
23,238,663 23,290,326
48,876,877 48,985,536
88,372,096 86,874,707
At 30 June 2021 the consolidated entity has total undrawn facilities of US$8,778,332 (AU$11,676,405).
The key terms of the 2017 Funding Agreement are:
●
●
●
●
●
●
●
Unsecured
Effective 31 July 2017
Repayable on 1 July 2022
Interest rate of 15% pa
Interest will accrue and be repayable with principal
Lenders can elect to be repaid if there is a change of control in Jupiter Energy Limited or Jupiter Energy Pte Ltd or there
is a change in control in contract 2275 covering the Block 31 Licence
Bonus will be payable to the Lenders equivalent to 5% of the sale price of contract 2275 in the event that the contract
is assigned, transferred or sold to a 3rd party during the period of the facility. No Liability has been recognised, as no
sale agreement has been entered into. Interest rate of 15% pa
The key terms of the 2016 Funding Agreement (including the Refinanced Series B Promissory Note) and Promissory Note
Discharge of Convertible Notes are:
43
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 16. Other financial liabilities (continued)
●
●
●
●
●
●
●
Unsecured
Effective 24 May 2016
Drawdowns will roll into a promissory note
Promissory note is repayable on 1 July 2022
Interest rate of 15% per annum
Interest will accrue and be repayable with principal
Lender can elect to be repaid if there is a change of control in Jupiter Energy Limited or Jupiter Energy Pte Ltd or there
is a change in control in contract 2275 covering the Block 31 Licence.
The key terms of the Promissory Note – Discharge of Convertible Notes:
●
●
●
●
●
●
●
Unsecured
Effective 24 May 2016
Drawdowns will roll into a promissory note
Promissory note is repayable on 1 July 2022
Interest rate of 15% per annum
Interest will accrue and be repayable with principal
Lender can elect to be repaid if there is a change of control in Jupiter Energy Limited or Jupiter Energy Pte Ltd or there
is a change in control in contract 2275 covering the Block 31 Licence.
During September 2021, all promissory notes were extended until 1 July 2024, refer to note 28
Note 17. Issued capital
Consolidated
2021
Shares
2020
Shares
2021
$
2020
$
Ordinary shares - fully paid
153,377,693 153,377,693 85,633,935 85,633,935
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion
to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company
does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that
it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to
reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as
value adding relative to the current company's share price at the time of the investment. The consolidated entity is not actively
pursuing additional investments in the short term as it continues to integrate and grow its existing businesses in order to
maximise synergies.
44
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 17. Issued capital (continued)
The consolidated entity is not subject to externally imposed capital requirements. The capital risk management policy
remains unchanged from the 30 June 2020 Annual Report.
Note 18. Reserves
Foreign currency reserve
Share-based payments reserve
Consolidated
2021
$
2020
$
(30,994,717)
5,764,014
(28,381,181)
5,764,014
(25,230,703)
(22,617,167)
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their
remuneration, and other parties as part of their compensation for services.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2019
Foreign currency translation
Balance at 30 June 2020
Foreign currency translation
Balance at 30 June 2021
Note 19. Dividends
Foreign
currency
$
Share-based
payments
$
Total
$
(27,700,327)
(680,854)
5,764,014
-
(21,936,313)
(680,854)
(28,381,181)
(2,613,536)
5,764,014
-
(22,617,167)
(2,613,536)
(30,994,717)
5,764,014
(25,230,703)
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 20. Financial instruments
Financial risk management objectives
The main purpose of these financial instruments is to provide finance for the consolidated entity’s operations. The
consolidated entity has various other financial assets and liabilities such as trade receivables and trade payables, which
arise directly from its operations. The main risks arising from the consolidated entity’s financial instruments are cash flow
interest rate risk, liquidity risk, foreign currency risk and credit risk.
Primary responsibility for identification and control of financial risks rests with the Board. The Board reviews the risks identified
below, including the setting of limits for trading in derivatives, hedging cover of foreign currency and interest rate risk, credit
allowances, and future cash flow forecast projections.
45
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 20. Financial instruments (continued)
Market risk
Foreign currency risk
The consolidated entity has transactional currency exposures. Such exposure arises from sales or purchases by an operating
entity in currencies other than the functional currency.
At balance date, the consolidated entity had the following exposure to United States Dollars (USD) and Great Britain Pound
(GBP) foreign currency that is not designated in cash flow hedges:
The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial liabilities at the
reporting date were as follows:
Consolidated
US dollars
British pounds
Assets
2021
$
2020
$
Liabilities
2021
$
2020
$
467
61
132,098 88,372,096 86,874,707
-
365
-
528
132,463 88,372,096 86,874,707
The following tables summarise the sensitivity of financial instruments held at balance date to movement in the exchange
rate of the Australian dollar to the United States Dollar and Great Britain Pound (GBP), with all other variables held constant.
Consolidated - 2021
% change
profit before
tax
Effect on
equity
% change
profit before
tax
Effect on
equity
AUD strengthened
Effect on
AUD weakened
Effect on
US Dollars
British Pounds
10%
10%
(8,837,162)
6
(8,837,162)
6
10%
10%
8,837,162
6
8,837,162
6
(8,837,156)
(8,837,156)
8,837,168
8,837,168
Consolidated - 2020
% change
profit before
tax
Effect on
equity
% change
profit before
tax
Effect on
equity
AUD strengthened
Effect on
AUD weakened
Effect on
US Dollars
British Pounds
5%
5%
(4,337,130)
18
(4,337,130)
18
5%
5%
4,337,130
(18)
4,337,130
(18)
(4,337,112)
(4,337,112)
4,337,112
4,337,112
Price risk
The consolidated entity is not exposed to any significant price risk.
Interest rate risk
The consolidated entity’s exposure to market risk for changes in interest rates is only on cash and cash equivalents, which
given the current level of cash and cash equivalents does not present a material risk. Other financial liabilities in the form of
Promissory notes carry fixed interest and are therefore not subject to interest rate risk.
Credit risk
Credit risk represents the loss that would be recognised if counterparties fail to perform as contracted.
46
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 20. Financial instruments (continued)
With respect to credit risk arising from the financial assets of the consolidated entity, which comprise cash and cash
equivalents, a liquidation fund and trade receivables, the consolidated entity’s exposure to credit risk arises from default of
the counter party, with a maximum exposure equal to the carrying amount of these instruments.
The consolidated entity continuously monitors the credit quality of counterparties. Where available, external credit ratings
and/or reports on the counterparty are obtained and used. The consolidated entity’s policy is to deal only with credit worthy
counterparties. Credit terms are subject to an internal approval process which considers the credit rating of the customer.
The ongoing credit risk is managed through regular review of ageing analysis.
Liquidity risk
Management and the Board monitor the consolidated entity’s liquidity on the basis of expected cash flow. The information
that is prepared by senior management and reviewed by the Board includes monthly and annual cash flow budgets.
Remaining contractual maturities
The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
Consolidated - 2021
Non-derivatives
Non-interest bearing
Trade payables
Interest-bearing - fixed rate
Promissory notes
Total non-derivatives
Consolidated - 2020
Non-derivatives
Non-interest bearing
Trade payables and other
payables
Interest-bearing - variable
Lease liability
Interest-bearing - fixed rate
Lease liability
Promissory notes
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
1,568,525
-
15.00%
- 96,166,377
1,568,525 96,166,377
-
-
-
-
1,568,525
- 96,166,377
- 97,734,902
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
-
1,723,257
90
-
-
7.00%
-
90,708
15.00% 24,079,425 71,107,667
25,893,480 71,107,667
-
-
-
-
-
-
1,723,257
-
90
-
90,708
- 95,187,092
- 97,001,147
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
At 30 June 2021 the consolidated entity has total undrawn facilities of US$8,778,332 (AU$11,676,405).
Fair value of financial instruments
All of the consolidated entity’s financial assets and liabilities are carried at amortised cost, with the carrying value
approximating the fair value.
47
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 21. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the consolidated entity
is set out below:
Short-term employee benefits
Post-employment benefits
Note 22. Remuneration of auditors
Consolidated
2021
$
2020
$
655,671
40,000
912,441
40,000
695,671
952,441
During the financial year the following fees were paid or payable for services provided by Ernst & Young, the auditor of the
company, and its network firms:
Audit services - Ernst & Young Australia
Audit or review of the financial statements
Audit services - overseas member firms
Audit or review of the financial statements
Other services - overseas member firms
Non-audit fees (tax advisory services in Kazakhstan)
Consolidated
2021
$
2020
$
98,280
102,011
48,893
54,491
-
20,331
48,893
74,822
Note 23. Contingent liabilities
The consolidated entity had no contingent liabilities at 30 June 2021 and 30 June 2020.
Note 24. Commitments
On 2 March 2020, Addendum No. 10 (state registration to Contract No. 2275) was concluded, according to which the
exploration period was extended for the Akkar North (East Block) and West Zhetybai fields in addition to the approval of
terms of a new standard contract for exploration and production. At the same time, the Akkar East field transitioned into the
Preparatory Period and, based on the decision of the Expert Commission of the Ministry of Energy of the Republic of
Kazakhstan, was allocated a separate - Contract No. 4803E dated 2 March 2020. Addendum No. 11 to Contract No. 2275
was also issued, allowing the Akkar North (East Block) to transition to the Preparatory Period and operate until 2 March
2023.
Exploration work commitments
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
48
Consolidated
2021
$
2020
$
315,502
3,965,380
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 24. Commitments (continued)
The amount includes a penalty that may be accrued within the work program commitments, relating to the unfulfilled
commitment to drill two wells on the West Zhetybai field, prior to the expiration of the exploration period and approval of the
Final Reserve Report for the West Zhetybai field. The exploration period expired and Final Reserve Report was approved
without these two wells having been drilled.
Note 25. Related party transactions
Parent entity
Jupiter Energy Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 27.
Key management personnel
Disclosures relating to key management personnel are set out in note 21 and the remuneration report included in the
directors' report.
Transactions with related parties
The following transactions occurred with related parties:
Consolidated
2021
$
2020
$
Payment for goods and services:
Consulting fees accrued and paid under normal terms and conditions to Grange Consulting
of which Mr Warren is a director.
consulting fees were accrued and paid under normal terms and conditions to Meridian
Petroleum LLP, of which Mr. Kuandykov is a director, for the provision of geological services
at normal commercial rates
63,026
144,011
-
222,164
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Current payables:
Total deferred directors fees *
Consulting fees payable to Grange Consulting of which Mr Warren is a director
Consolidated
2021
$
2020
$
777,965
-
724,979
11,640
*
These are deferred until such time that at least US$5,000,000 in new equity is raised or alternatively the consolidated
entity sells the Block 31 licence and receives the funds associated with that sale. The deferred director fees will be paid
in cash.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
49
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 26. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive loss
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total deficiency in equity
Parent
2021
$
2020
$
(2,551,890)
(43,037,992)
(2,551,890)
(43,037,992)
Parent
2021
$
2020
$
62,786 19,965,035
19,094,873 19,965,139
1,021,457
837,221
89,393,553 87,711,928
85,633,935 85,633,935
5,764,014
(161,696,629) (159,144,738)
5,764,014
(70,298,680)
(67,746,789)
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2021 and 30 June 2020.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2021 and 30 June 2020.
Commitments
The parent entity had no commitments at 30 June 2021 and 30 June 2020.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1, except
for the following:
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
50
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 27. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described in note 1:
Name
Jupiter Energy (Victoria) Pty Ltd
Jupiter Biofuels Pty Ltd
Jupiter Energy (Kazakhstan) Pty Ltd
Jupiter Energy Pte Ltd
Jupiter Energy (Services) Pte Ltd
Note 28. Events after the reporting period
Principal place of business /
Country of incorporation
Australia
Australia
Australia
Singapore
Singapore
Ownership interest
2020
2021
%
%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
On 16 September 2021, a Framework Agreement was signed between Jupiter Energy and Sleipnir Technologies LLP
(Sleipnir), a Kazakh registered company that has a background in oil trading and the design and development of oilfield
infrastructure.
Under Phase 1 of the Framework Agreement, Sleipnir will work with Jupiter Energy in a Project Management capacity,
assisting in the development of a detailed Project Development Plan to achieve 100% gas utilisation on all three of the
Company’s oilfields (the Plan). A project team made up of Jupiter and Sleipnir personnel has been formed, and a local
Kazakh Institute will shortly be appointed to assist in the documentation of the detailed technical specifications associated
with the Plan.
Sleipnir will also play an active role in the proposed construction phase (Phase 2), if and when the Plan is approved by the
Kazakh Ministry of Energy (and other associated regulatory bodies) and will also assist Jupiter with any of the regulatory
approvals that may be required during Phase 2.
In summary, the Framework Agreement sets out the terms and conditions under which Jupiter and Sleipnir will work to
complete and lodge the Plan with the Kazakh Ministry of Energy by early 1Q 2022.
The key elements of Phase 1 of the Framework Agreement are:
●
●
●
●
Development of a detailed Gas Utilisation Project Development Plan
Submission of the Project Development Plan to the Kazakh Ministry of Energy
Gaining approval from the Ministry of Energy (and other relevant regulatory bodies) for the Gas Utilisation Project
Development Plan
Confirming a detailed budget for the building of the approved Gas Utilisation infrastructure
In addition to the development of Project Development Plan for Gas Utilisation, Sleipnir affiliate Arion Trading also signed an
agreement for the purchase of 100% of Jupiter’s domestic oil supply under terms consistent with those that other Jupiter oil
trading partners have signed in the past. This agreement will be based on 100% prepayment for all oil, with deliveries to
Arion Trading expected to commence in October 2021.
During September 2021 Promissory Notes, that had a carrying value of US$66,438,142 (A$88,372,096) as at 30 June 2021,
had their repayment dates extended from 1 July 2022 to 1 July 2024.
No other matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect the
consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial
years.
51
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 29. Reconciliation of profit/(loss) after income tax to net cash from/(used in) operating activities
Consolidated
2021
$
2020
$
61,655
(42,352,148)
650,766
(7,633,683)
7,750,231
926,698
1,406,647
8,363,703
- 32,571,270
(15,389)
(12,046)
103,309
57,218
(333,036)
339,486
2,394
55,484
(1,786,327)
(157,879)
629,025
(630,672)
Leases
$
Promissory
notes
$
Total
$
(146,320)
-
-
229,391
- 74,801,894 74,801,894
2,151,884
1,410,906
8,363,703
229,391
2,298,204
1,410,906
8,363,703
-
83,071 86,874,707 86,957,778
1,297,770
(83,071)
(7,633,683)
-
7,750,231
-
1,380,841
(7,633,683)
7,750,231
- 88,372,096 88,372,096
Profit/(loss) after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Foreign exchange differences
Non cash finance costs
Impairment expense
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
Decrease/(increase) in inventories
Decrease in other operating assets
Increase/(decrease) in trade and other payables
Decrease in contract liabilities
Net cash from/(used in) operating activities
Note 30. Changes in liabilities arising from financing activities
Consolidated
Balance at 1 July 2019
Net cash from/(used in) financing activities
Exchange differences
Accrued interest
Other changes
Balance at 30 June 2020
Net cash from/(used in) financing activities
Exchange differences
Accrued interest
Balance at 30 June 2021
52
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2021
Note 31. Earnings per share
Consolidated
2021
$
2020
$
Profit/(loss) after income tax attributable to the owners of Jupiter Energy Limited
61,655
(42,352,148)
Weighted average number of ordinary shares used in calculating basic earnings per share
153,377,693 153,377,693
Weighted average number of ordinary shares used in calculating diluted earnings per share 153,377,693 153,377,693
Number
Number
Basic earnings / (loss) per share
Diluted earnings / (loss) per share
Cents
Cents
0.04
0.04
(27.61)
(27.61)
53
Jupiter Energy Limited
Directors' declaration
30 June 2021
In the directors' opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Australian Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 1 to the financial statements;
the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at
30 June 2021 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable, subject to matters disclosed in note 1 Going Concern.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Geoffrey Gander
Director
30 September 2021
54
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor’s report to the members of Jupiter Energy Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Jupiter Energy Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at
30 June 2021, the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the year
then ended, notes to the consolidated financial statements, including a summary of significant
accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2021
and of its consolidated financial performance for the year ended on that date; and
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We 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 of the financial report, which describes the principal conditions that raise
doubt about the Group’s ability to continue as a going concern. These events or conditions indicate
that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as
a going concern. Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
MC:DA:JUPITER:005
Carrying value of non-current assets
Why significant
How our audit addressed the key audit matter
At 30 June 2021, the Group had non-current assets,
comprising its oil and gas properties of $16,757,259,
property, plant and equipment of $541,261 and capitalised
exploration and evaluation expenditure of $1,558,934. These
non-current assets form part of the Block 31 cash-generating
unit (“CGU”) for impairment testing purposes.
The Group is required to assess throughout the reporting
period, whether there is any indication that an asset or CGU
may be impaired. If any such indication exists, the Group is
required to estimate the recoverable amount of the asset or
CGU. At 30 June 2021, the Group has not identified any
indication that the non-current assets are impaired nor that
previously recognised impairment should be reversed.
Disclosures regarding this matter are in Notes 2 and 11 to the
financial report.
Given the size of the balance, the judgmental nature in
identifying indicators of impairment or reversal of impairment
we considered this a key audit matter.
Promissory note facilities
In performing our procedures, we:
► Considered the Group’s assessment of triggers for
impairment or reversal of impairment including forecasted
oil price assumptions, discount rate and current and
historical operational performance, in conjunction with
our valuation specialists’.
► Considered the Group’s right to tenure over the Block 31
CGU, which included obtaining and assessing supporting
documentation such as license agreements.
► Considered the qualitative impairment indicators of
exploration and evaluation assets related to the Group’s
ability or intention to progress evaluation activities.
► Considered the relationship between the assets carrying
value and the Group’s market capitalisation.
► Considered the adequacy of disclosure in Notes 2 and 11
of the financial report.
Why significant
How our audit addressed the key audit matter
At 30 June 2021, as disclosed in Note 16, the Group had a
financial liability of $88,372,096 comprised of promissory
note facilities.
We evaluated the appropriateness of the measurement and
classification of amounts outstanding on the Group’s
promissory note facilities. In performing our procedures, we:
The promissory notes are denominated in US dollars and are
converted to the Company’s functional currency of Australian
dollars at period end. Any changes in the Australian dollar
balance, due to movements in the foreign exchange rates, is
recognised in the profit and loss as a foreign currency gain or
loss.
During the year, the Group continued to draw down on the
available promissory note facilities to fund operations and
repayment dates were extended for two facilities.
Accordingly, due to the significance of the balance, the
current and non-current classification and measurement of
promissory notes was considered to be a key audit matter.
► Considered the changes to the terms and conditions of
each promissory note during the year and the impact of
the reported balances at year end and the compliance
with the requirements of Australian Accounting
Standards.
► Tested the measurement of foreign currency gains or
losses on promissory note balances.
► Confirmed the completeness and accuracy of outstanding
balances with the Issuer of the promissory note facilities.
► Considered whether the Group had the unconditional right
to defer repayment of the promissory note facilities by
more than 12 months as at 30 June 2021.
► Considered the adequacy of disclosure in Note 16 to the
financial report.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2021 annual report, but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
MC:DA:JUPITER:005
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 preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
MC:DA:JUPITER:005
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included of the directors’ report for the year ended
30 June 2021.
In our opinion, the Remuneration Report of Jupiter Energy Limited for the year ended 30 June 2021,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Mark Cunningham
Partner
Perth
30 September 2021
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
MC:DA:JUPITER:005
Jupiter Energy Limited
Shareholder information
30 June 2021
The shareholder information set out below was applicable as at 27 September 2021.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Equity security holders
Ordinary shares
% of total
Number
of holders
shares
issued
417
462
227
387
65
0.10
0.81
1.12
9.07
88.90
1,558
100.00
1,146
2.32
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
% of total
shares
issued
Number held
40,734,581
33,246,107
19,940,835
11,068,130
6,225,975
2,329,470
2,143,221
1,787,058
1,276,000
1,250,000
1,000,000
700,000
700,000
670,000
643,860
519,870
506,450
500,000
500,000
500,000
26.56
21.68
13.00
7.22
4.06
1.52
1.40
1.17
0.83
0.81
0.65
0.46
0.46
0.44
0.42
0.34
0.33
0.33
0.33
0.33
126,241,557
82.34
FISKE NOMINEES LIMITED (FISKPOOL A/C)
FISKE NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD (DRP)
FISKE NOMINEES LIMITED
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR GLENN WILLIAM TWOMEY + MRS KAREN LYNNE TWOMEY
COLLEGE SEARCH PTY LTD
MRS COLETTE DALY
MRS TRA THU LE
MRS CINDY MAREE ANDUEZA
MR JOHN NORMAN ACKLAND
IERACE PTY LTD (THE IERACE FAMILY A/C)
GM80 PTY LTD
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD (DRP A/C)
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
IRELAND RESOURCES
SILK-ROADS WORLDWIDE LOGISTICS AUSTRALIA PTY LTD
TINA'S STYLE CENTRE PTY LTD (JA & TJ JENKINS S/F A/C)
MR PAUL TREVOR WAPSHOTT
Unquoted equity securities
There are no unquoted equity securities.
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Jupiter Energy Limited
Shareholder information
30 June 2021
Substantial holders
Substantial holders in the company are set out below:
FISKE NOMINEES LIMITED (FISKPOOL A/C)
FISKE NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD (DRP)
FISKE NOMINEES LIMITED
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
% of total
shares
issued
Number held
40,734,581
33,246,107
19,940,835
11,068,130
26.56
21.68
13.00
7.22
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
There are no other classes of equity securities.
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