ANNUAL REPORT FOR THE YEAR ENDED
30 JUNE 2022
ABN 65 084 918 481
Jupiter Energy Limited
Corporate directory
30 June 2022
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
Suite 2
Level 13 350 Collins Street
Melbourne VIC 3000
Principal place of business
Microdistrict 12, Building 79, BC Zhastar
Aktau, Kazakhstan, 130000
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 2022
Dear Shareholder,
I am pleased to present the 2022 Annual Report for Jupiter Energy Limited (“Jupiter Energy”, “the Company” or “the Group”).
The operating environment in Kazakhstan continued to be difficult in the 1st half of the 2021/2022 financial year, as the
country, like the rest of the world, continued to deal with the restrictions created by the COVID-19 pandemic. At the
beginning of 2022 the country also experienced a short period of civil unrest and in late February 2022 the geopolitical
environment was further complicated with rising tensions between Russia and Ukraine.
Despite these distractions, with the focus and dedication of our Aktau based team and the support of our Noteholders, the
Company was able to continue operations throughout the year without any major disruption. The Group produced
approximately 91,000 barrels of oil during the year and generated revenues of approximately $US3.0m, achieving almost
$US33 per barrel for domestic oil.
The strong international oil prices, which translated into a solid Kazakh domestic oil price, provided a buffer to the ~40%
year on year reduction in production levels caused by the various “Preparatory Period” restrictions and approval timelines
outlined below.
“Preparatory Period” restrictions were dictated by the gas emission levels on the Akkar East and Akkar North (East Block)
oilfields and the Company’s lack of access to 100% gas utilization infrastructure. In addition, production was shut in on the
West Zhetybai oilfield, as a result of the lengthy approval process required to transition that field from an Exploration Licence
to a Commercial Licence.
On a very positive note, during calendar year 2022, the Company has been able to announce major progress with regards
the planning and preparation for the building and commissioning of the requisite infrastructure to achieve 100% gas
utilisation across all three oilfields.
Achieving 100% gas utilization will be a significant milestone for the Company. Once the requisite infrastructure is installed,
all five production wells will be able to return to optimal production levels. Production should increase from the current ~30
tonnes (225 barrels) per day to ~100 tonnes (750 barrels) per day and the Company will also be positioned to apply for
permission to sell its oil into the export market. The Company expects to achieve 100% gas utilization and return to optimal
production during 1Q 2023.
The Company continues to work closely with its 4 Noteholders regarding an agreed Debt Restructure Plan. In March 2022,
the Company announced an agreed approach to the issue but unfortunately in September 2022 it was agreed with
Noteholders that the March 2022 plan could not proceed. The Company is now working closely with the 4 Noteholders on an
amended plan, the details of which will be announced as soon as the matter becomes binding on all parties. The restructure
of the Company’s debt will also be a major step forward for the Company.
I would like to thank our four Noteholders, all our shareholders and our dedicated employees for working together to get Jupiter
Energy to this point. I look forward to 1Q 2023 with anticipation.
Sincerely
Geoff Gander
Chairman/CEO
2
Jupiter Energy Limited
Directors' report
30 June 2022
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 2022.
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)
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 loss for the consolidated entity after providing for income tax amounted to $11,511,006 (30 June 2021: profit of $61,655).
Review of financial condition
At the end of the 2022 financial year, cash resources were $1,330,334 (2021: $690,949). 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.
Total assets at 30 June 2022 were $20,606,629 (2021: $20,154,013) and the consolidated entity has negative net assets of
$81,563,998 (2021: $70,298,670).
Funding and capital management
As at 30 June 2022, the Group had 153,377,693 listed shares trading under the ASX ticker "JPR".
During the year the Company funded operations primarily from oil sales with a small amount being drawn down from existing
credit facilities, to cover some corporate expenses.
As at 30 June 2022 the Company had approximately $US6.97m available to it under its committed 2017 Funding Agreement
with Waterford Finance & International Limited.
The Group is still reviewing its ongoing funding options to enable it to complete its committed work program for the 2022/2023
financial year.
The Akkar North (East Block) oilfield currently operates under its Commercial Production Licence and this Licence runs until
05 March 2046. The field is currently operating under the “Preparatory Period” of this Licence, meaning that oil production is
constrained due to the lack of infrastructure to achieve 100% gas utilization when its wells are operating at optimal levels.
The Akkar East oilfield operates under its Commercial Production Licence that runs until 02 March 2045. The field is also
currently operating under the ”Preparatory Period” of this Licence, meaning that oil production is also constrained due to the
lack of infrastructure to achieve 100% gas utilization when its wells operating at optimal levels.
“Preparatory Period” restrictions mean that oil production must be constrained to the level that ensures that all associated
gas produced during production can be used by the operator on the field – for power, heating and the like. No flaring of
associated gas is allowed – which is unlike when the wells were producing under the Company’s Exploration Licence (also
known as Trial Production).
3
Jupiter Energy Limited
Directors' report
30 June 2022
The West Zhetybai oilfield’s Exploration Licence expired at the beginning of September 2021 and the field was shut in on 31
August 2021. At that time, the Company commenced the approval process required to transition the oilfield from Trial
Production to Commercial Production. The West Zhetybai field is expected to return to production when its 100% gas
utilization infrastructure has been installed – scheduled for 1Q 2023.
On 15 March 2022, the Company provided shareholders with details of its plan to achieve Stage 1 100% Gas Utilisation. In
summary, and assuming the plan is approved by the relevant Kazakh regulatory authorities, Stage 1 will be based on a
decentralised configuration, with a gas to electricity generator being installed at each producing well head. The solution is
cost effective, reasonably straightforward to install and will enable the Company to return all five of its production wells to
optimal production in the shortest possible timeframe.
A further announcement was made on 26 July 2022 in which the Company confirmed that funding had been secured for the
procurement of five gas to electricity generators for Stage 1. The generators have since been ordered and are expected to
be delivered by the Chinese manufacturer to site during December 2022 and January 2023.
Based on this delivery schedule, the current forecast is to have all five wells (J-50, 51, 52, 58 and 19) return to optimal
production during 1Q 2023 and oil production is forecasted to increase from the current daily cumulative rate of ~30 tonnes
(~225 barrels) to ~100 tonnes (~750 barrels).
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
and not operate under the constrained Commercial Production conditions that currently prevail.
Operating review
The financial year saw oil production from the Akkar North (East Block) and Akkar East fields throughout the financial year,
with the West Zhetybai field being shut in for ten of the twelve months. West Zhetybai was shut in as the oilfield went through
the approval process to transition from Trial Production to Commercial Production.
Production Report/Status of Well Licences
Production – Akkar East (J-51, J-52, J-53 and Well 19)
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.
Production rates were constrained to a cumulative total of ~21 tonnes (~150 barrels) per days from the 3 wells. Optimal
production levels from these 3 wells is normally ~65 tonnes (~450 barrels) per day and this reduction in flow rates correlated
to the reduction in associated gas that was allowed to be produced, without 100% gas utilization 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 oilfield has been approved to produce under the Preparatory Period restrictions associated with its Commercial Licence.
The J-50 well produced at a constrained production rate of ~8.5 tonnes (~60 barrels) per day for the entire financial year.
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)
Oil from the J-58 well was limited to production for the months of July and August 2021. The J-58 well was shut in on 31
August 2021.
The J-55 and J-59 wells are also located on the West Zhetybai oilfield and were both shut in for the entire financial year,
awaiting further remedial work before potentially coming back onto production. No further exploration and evaluation activities
are currently planned on these wells and so the fair value was assessed to be nil and were consequently written-off during
the current year.
A summary of the oil produced from all production wells during the financial year, broken down by quarter, is as follows:
4
Jupiter Energy Limited
Directors' report
30 June 2022
Well Number
J-50
J-51
J-52
Well 19
J-58
Drilling report
Production
(1Q) (bbls)
Production
(2Q) (bbls)
Production
(3Q) (bbls)
Production
(4Q) (bbls)
TOTAL bbls
for the
2021/2022
Financial
Year
5,000
5,000
5,000
5,000
11,000
6,200
5,000
5,000
5,000
-
5,800
5,000
3,300
5,000
-
5,800
5,000
5,000
4,000
-
22,800
20,000
18,300
19,000
11,000
31,000
21,200
19,100
19,800
91,100
There was no new drilling during the financial year.
The drilling of any other new wells in the 2022/2023 financial year will require access to additional working capital and/or
agreement to deferred payment terms with a turnkey drilling operator. The current forward drilling plan is for no wells to be
drilled during 2023, but this will be reviewed after 100% gas utilization has been achieved and the Company has returned to
optimal production levels.
Oil Production and Revenues
There were approximately 91,000 barrels of oil produced during the year, achieving revenues of $4,126,946. This compared
with approximately 155,000 barrels produced in the previous reporting period, generating revenues of $4,025,701. 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 Licences.
Oil was paid for on a prepayment basis and the oil was collected by the local oil trader from the well head.
Status of Exploration and Commercial Licences
The Company has 25 year Commercial Production Licences. 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% utilization of the associated gas produced.
The Company currently operates the Akkar East and Akkar North (East Block) oilfields under the “Preparatory Period”
restrictions of their Commercial Production Licences. The West Zhetybai oilfield is shut in as the approval process to transition
the field from Trial Production to Commercial Production is progressed. It is expected that the West Zhetybai oilfield will
recommence production in 1Q 2023.
As already stated in this report, the key operational issue facing the Company going forward is that in order to move any of
the fields into full Commercial Production, the oilfield must have access to infrastructure that enables it to achieve 100% gas
utilization – ie to be able to produce oil without flaring the associated gas produced during oil production.
The announcements made on 15 March 2022 and 26 July 2022 covering gas utilisation outline the approval process currently
underway and its importance to the Company. If the Gas Utilization Plan were not to be approved, the Company would need
to review its underlying projected cashflow and an impairment of the carrying value of the asset may be required.
Strategic Review
During the year the Company continued to evaluate various opportunities for new sources of funding, as part of its ongoing
Strategic Review.
It appears that a key impediment for potential investors is the lack of 100% gas utilisation infrastructure and, to that end, the
Company now has a clear plan to achieve 100% gas utilization by the end of 1Q 2023.
5
Jupiter Energy Limited
Directors' report
30 June 2022
The Company will continue to work with its partners 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 utilization. It is also clear from the work
carried out as part of the Strategic Review that another key impediment to future investment is the quantum of debt on the
Balance Sheet. The Company is well progressed in discussions with the four Noteholders to agree on the terms of a Debt
Restructure Plan that the Board believes can be achieved in the short term.
Debt Restructure Plan
On 04 March 2022, the Company announced that it had reached agreement with its four Noteholders regarding a potential
restructure of the Company’s debt. This announcement was updated on 12 September 2022 when the Company advised
that the debt restructure plan as outlined on 04 March 2022 would not proceed and that a revised approach was being
discussed
The Company is in active dialogue with its 4 Noteholders regarding the terms of an amended Debt Restructure Plan.
Achieving 100% gas utilization as well as a significant restructure of the debt held on the Balance Sheet, should position the
Company for a very positive 2023 and beyond and all relevant parties are working towards this goal.
Annual General Meeting
The COVID-19 pandemic meant that the Annual General Meeting (AGM) was held virtually on 19 November 2021. The
Company expects the 2022 AGM to also be held during November under similar arrangements. A Notice of Meeting outlining
business to be covered at the 2022 AGM will be dispatched to shareholders during October 2022, and the Notice will include
details on how to attend and vote online.
Summary
The 2021/22 Financial Year saw revenues flat year on year, despite a ~40% decline in the number of barrels of oil produced.
The decline in production was as a result of a reduction in production levels necessitated by the need to operate the Akkar
East and Akkar North (East Block) under Preparatory Period restrictions as well as having to shut in the West Zhetybai field
for 10 months during the financial year, as the field transitions from its Exploration Licence to its Commercial Licence.
No oilfield was able to operate at its optimal production level during the financial year.
Our team in Aktau did a wonderful job in minimizing disruptions during the year and thankfully the amount of COVID sickness
experienced by staff was limited. Vaccination levels amongst the Jupiter workforce are high and appropriate safety measures
were enforced, both in the Aktau office and in the field.
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
Any 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.
6
Jupiter Energy Limited
Directors' report
30 June 2022
Matters subsequent to the end of the financial year
On 26 July 2022 the Company provided an update on progress with its Gas Utilisation Plan.
The Company advised that with funding secured, five gas to electricity generators would be ordered from a Chinese
manufacturer and the generators were expected to be delivered to the field(s) by early 1Q 2023. All infrastructure would be
installed as soon as feasible after delivery of the generators, and it was expected that optimal production from the three
oilfields should commence during 1Q 2023.
The Company also advised that the purchase of the gas to electricity generators would be funded from operations and
involved a $US1.3m prepayment from a local Kazakh oil trader. The $US1.3m prepayment will be offset against additional
oil sales that are expected to result from the increased production achieved when the 100% gas utilisation infrastructure
becomes operational.
The five gas to electricity generators have now been ordered and the delivery schedule remains as outlined in the 26 July
2022 announcement.
On 12 September 2022 the Company announced that the Debt Restructure Plan announced on 04 March 2022 would not
proceed. The Company continues to be in active dialogue with its 4 Noteholders regarding the terms of an amended Debt
Restructure Plan.
No other matter or circumstance has arisen since 30 June 2022 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.
Significant changes in the state of affairs
Except as otherwise set out in this report, the Directors are unaware of any significant changes in the state of affairs or
principal activities of the consolidated entity that occurred during the financial year.
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.
Health and safety
The Group 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 2021 and 2022 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.
7
Jupiter Energy Limited
Directors' report
30 June 2022
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
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.
Nil
Other current directorships:
Former directorships (last 3 years): Powerhouse Ventures Limited (ASX : PVL) – resigned 25 November 2021
Interests in shares:
Nil
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:
8
Jupiter Energy Limited
Directors' report
30 June 2022
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)
'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
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 2022, and
the number of meetings attended by each director were:
G Gander
B Kuandykov
A Kruzhkov
A Kuzev
M Ewing
Full Board
Attended
Held
4
4
3
4
4
4
4
4
4
4
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. KMP comprise the company's directors which are listed above,
For the purposes of this report, the term 'executive' encompasses the Executive Chairman/Chief Executive Officer.
9
Jupiter Energy Limited
Directors' report
30 June 2022
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.
●
●
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. It should
be noted that Directors Fees for all Directors, except Mark Ewing, are currently being deferred and a table summarising the
outstanding fees due to Directors can be found on page 12 of this Report.
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.
Fixed Remuneration
The fixed remuneration of executives is comprised of a base salary and superannuation. The fixed remuneration of
executives is reviewed annually.
10
Jupiter Energy Limited
Directors' report
30 June 2022
Variable remuneration – Short Term Incentives (STI)
The CEO may be awarded a one off annual bonus payment by mutual agreement and at the discretion of the Board. In the
years ended 30 June 2022 and 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 $US350,000 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 2022, the consolidated entity did not use remuneration consultants.
Voting and comments made at the company's 19 November 2021 Annual General Meeting ('AGM')
At the 19 November 2021 AGM, 99.70% of the votes received supported the adoption of the remuneration report for the year
ended 30 June 2021. 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.
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Directors Consulting
fees
$
fees ***
$
Non-
monetary
$
Super-
annuation
$
Long
service
leave
$
Equity-
settled
$
Total
$
55,109
55,109
41,331
41,667
-
116,419
87,192
-
-
193,216
342,094
545,705
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
55,109
171,528
128,523
41,667
342,094
738,921
2022
Non-Executive Directors:
A Kruzhov *
B Kuandykov *
A Kuzev *
M Ewing
Executive Directors:
Geoff Gander **
*
**
Directors fees from February 2015 have been deferred until such time that at least US$10,000,000 in new equity is
raised or alternatively the consolidated entity sells the Block 31 licence and receives the funds associated with that sale.
Consulting fees of AU$40,000 per annum are presently being deferred. Geoff Gander fees are being paid to him as a
consultant.
*** Consulting fees relate to specific fees paid in relation to the oil and gas industry consultations.
11
Jupiter Energy Limited
Directors' report
30 June 2022
2021
Non-Executive Directors:
A Kruzhov *
B Kuandykov *
A Kuzev *
M Ewing ***
Executive Directors:
Geoff Gander ****
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Directors Consulting
fees
$
fees **
$
Non-
monetary
$
Super-
annuation
$
Long
service
leave
$
Equity-
settled
$
Total
$
53,565
53,474
40,173
30,208
-
95,888
80,331
-
-
177,420
342,032
518,251
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
53,565
149,362
120,504
30,208
342,032
695,671
*
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.
Consulting fees relate to specific fees paid in relation to the oil and gas industry.
**
*** Mr Ewing was appointed on 24 November 2020.
**** Consulting fees of AU$40,000 per annum are presently being deferred.
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
2021
2022
At risk - STI
At risk - LTI
2022
2021
2022
2021
100%
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
2022
$
2021
$
104,941
430,107
338,713
208,855
14,754
331,050
255,727
155,535
1,082,616
757,066
12
Jupiter Energy Limited
Directors' report
30 June 2022
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:
Name:
Title:
Agreement commenced:
Term of agreement:
Name:
Title:
Agreement commenced:
Term of agreement:
Name:
Title:
Agreement commenced:
Term of agreement:
Geoffrey Gander
Executive Chairman/Chief Executive Officer
8 September 2017
Consulting fees of GBP200,000 (A$366,638), of which A$3,333 per month is deferred
until such time that at least US$10,000,000 in new equity is raised or alternatively the
consolidated entity sells the Block 31 licence and receives the funds associated with
that sale. Mr Gander will be paid a Bonus of $US350,000 or 0.5% (whichever is greater)
of the value of the consideration received by the consolidated entity if the Company or
Contract 2275 is assigned, transferred or sold to a third party during the term of the
Agreement.
Baltabek Kuandykov
Non-Executive Director
5 October 2010
Mr Kuandykov is entitled to a base fee of US$ 40,000 per annum. Mr Kuandykov’s fees
are deferred until such time that at least US$10,000,000 in new equity is raised or
alternatively the consolidated entity sells the Block 31 licence and receives the funds
associated with that sale. Mr Kuandykov 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 Kuandykov as a non-executive Director is otherwise on terms that are customary
for an appointment of this nature. In addition, he is entitled to consulting fee of
$US84,000 per annum.
Alexey Kruzhkov
Non-Executive Director
18 June 2016
Mr Kruzhkov is entitled to a base fee of US$ 40,000 per annum. Mr Kruzhkov’s fees
are deferred until such time that at least US$10,000,000 in new equity is raised or
alternatively the consolidated entity sells the Block 31 licence and receives the funds
associated with that sale. Mr Kruzhkov will be reimbursed reasonable expenses
incurred in performing his duties, including the cost of attending Board Meetings, travel,
accommodation and entertainment where agreed to by the Board. The appointment of
Mr Kruzhkov as a non-executive Director is otherwise on terms that are customary for
an appointment of this nature.
Alexander Kuzev
Non-Executive Director
12 September 2017
Mr Kuzev is entitled to a base fee of US$ 30,000 per annum. Mr Kuzev’s fees are
deferred until such time that at least US$10,000,000 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. In addition, he is entitled to consulting fee of $US60,000
per annum.
Name:
Title:
Agreement commenced:
Term of agreement:
Mark Ewing
Non-Executive Director
24 November 2020
Mr Ewing is entitled to a base fee of $A50,000 per annum plus GST. On 1 February
2022, Mr Ewing agreed to reduce this base fee to $A30,000 per annum plus GST.
The termination provisions of Geoff Gander's contract are as follows:
13
Jupiter Energy Limited
Directors' report
30 June 2022
Reason for termination
-
initiated
termination with reason or
Contractor
incapacitation
Company - initiated termination without reason
Company – initiated termination for serious misconduct
Contractor – initiated termination with reason
Notice Period
Payment in lien of
notice
for Contractor
1 month
12 months
12 months
None
30 days
12 months
None
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 2022.
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 2022.
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 2022.
Additional information
The earnings of the consolidated entity for the five years to 30 June 2022 are summarised below:
2022
$
2021
$
2020
$
2019
$
2018
$
Sales revenue
Profit /loss after income tax
Market capitalisation
4,126,946
(11,511,006)
3,060,000
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)
6,300,000
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
2022
2021
2020
2019
2018
Share price at financial year end (cents)
Basic earnings/(loss) per share (cents per
share)
2.00
(7.51)
3.20
0.04
1.50
1.10
4.10
(27.61)
(5.82)
(6.54)
Additional disclosures relating to key management personnel
Shareholding
No director or other member of key management personnel of the consolidated entity held any shares in the company during
the financial year.
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
2022 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.
14
Jupiter Energy Limited
Directors' report
30 June 2022
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 19 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.
The directors are of the opinion that the services as disclosed in note 19 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 2022
15
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 2022, I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b. No contraventions of any applicable code of professional conduct in relation to the audit; and
c. No non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of Jupiter Energy Limited and the entities it controlled during the
financial year.
Ernst & Young
Mark Cunningham
Partner
30 September 2022
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Jupiter Energy Limited
Contents
30 June 2022
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
18
19
20
21
22
46
47
52
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 are:
Registered office
Suite 2
Level 13 350 Collins Street
Melbourne VIC 3000
Principal place of business
Microdistrict 12, Building 79, BC Zhastar
Aktau, Kazakhstan, 130000
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 2022. The
directors have the power to amend and reissue the financial statements.
17
Jupiter Energy Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2022
Revenue
Revenue from contracts with customers
Cost of sales
Gross profit
Other income
Foreign exchange gains (losses)
Finance income
Gain on remeasurement of promissory notes
Expenses
General and administration expenses
Impairment of exploration and evaluation assets
Other expenses
Finance costs
Profit/(loss) before income tax expense
Income tax expense
Note
Consolidated
2022
$
2021
$
4,126,946
(2,627,886)
1,499,060
4,025,701
(2,125,323)
1,900,378
5
13
352,882
(8,346,417)
68,578
4,988,472
(2,936,485)
428,159
7,636,191
31,627
-
8,095,977
(1,992,148)
(367,892)
(21,684)
(7,691,857)
(2,060,683)
-
(106,990)
(7,767,027)
(11,511,006)
61,655
-
-
5
5
6
Profit/(loss) after income tax expense for the year attributable to the owners of
Jupiter Energy Limited
(11,511,006)
61,655
Other comprehensive income /(loss)
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income /(loss) for the year, net of tax
Total comprehensive loss for the year attributable to the owners of Jupiter
Energy Limited
245,678
(2,613,536)
245,678
(2,613,536)
(11,265,328)
(2,551,881)
Cents
Cents
Basic earnings / (loss) per share
Diluted earnings / (loss) per share
28
28
(7.51)
(7.51)
0.04
0.04
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
18
Jupiter Energy Limited
Consolidated statement of financial position
As at 30 June 2022
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
Exploration and evaluation assets
Oil and gas properties
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract 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
2022
$
2021
$
1,330,334
68,501
29,920
70,826
1,499,581
690,949
80,968
37,126
82,013
891,056
7
8
9
10
253,124
337,336
1,389,210
405,503
541,261
1,558,934
17,127,378 16,757,259
19,107,048 19,262,957
20,606,629 20,154,013
11
1,775,830
3,847
1,779,677
1,568,525
205,187
1,773,712
12
13
363,663
306,875
100,027,287 88,372,096
100,390,950 88,678,971
102,170,627 90,452,683
(81,563,998)
(70,298,670)
14
15
85,633,935 85,633,935
(25,230,703)
(142,212,908) (130,701,902)
(24,985,025)
(81,563,998)
(70,298,670)
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
19
Jupiter Energy Limited
Consolidated statement of changes in equity
For the year ended 30 June 2022
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)
Consolidated
Balance at 1 July 2021
Issued
capital
$
Accumulated
Reserves
$
losses
$
Total
deficiency in
equity
$
85,633,935
(25,230,703) (130,701,902)
(70,298,670)
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income /(loss) for the year
-
-
-
-
245,678
(11,511,006)
-
(11,511,006)
245,678
245,678
(11,511,006)
(11,265,328)
Balance at 30 June 2022
85,633,935
(24,985,025) (142,212,908)
(81,563,998)
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
20
Jupiter Energy Limited
Consolidated statement of cash flows
For the year ended 30 June 2022
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
2022
$
2021
$
3,938,073
(4,130,330)
68,578
352,882
-
3,677,276
(3,491,241)
31,626
428,160
(16,796)
Net cash from operating activities
26
229,203
629,025
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 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
(7,685)
(165,358)
(112,349)
(85,329)
(1,201,995)
(84,778)
(285,392)
(1,372,102)
694,902
-
1,380,841
(83,071)
694,902
1,297,770
638,713
690,949
672
554,693
138,980
(2,724)
Cash and cash equivalents at the end of the financial year
1,330,334
690,949
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
21
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
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.
The consolidated financial statements have been prepared on the going concern basis, which contemplates continuity of
normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business. The
consolidated entity had net cash inflows from operating activities of $247,412 during the year ended 30 June 2022 and as at
30 June 2022 had a net current liability and net liability position of $280,096 and $81,563,998 respectively. Included in the
net current liability position balance, are accrued director fees of $1,082,616 for which settlement has been deferred.
During the year the consolidated entity extended the repayment terms of its existing promissory note facilities to 1 July
2024. At 30 June 2022, the consolidated entity has total undrawn amounts under its promissory note facilities of
US$6,965,276 (AU$10,110,721) albeit given the current geopolitical environment there may be some uncertainty as to
whether this undrawn amount is readily available.
For the consolidated entity to continue to carry out its intended activities and to have sufficient working capital to continue as
a going concern the consolidated entity will be required to achieve the following:
●
●
undertake a capital raising via a share placement in the first half of the 2023 calendar year;
finalise a proposed amended debt restructure plan which would see the 4 promissory noteholders convert a portion of
their outstanding principal to equity, write off all accrued interest and agree to repayment of the remaining principal via
tranche payments to be made during 2023 and 2024;
obtain full approval for the 100% gas utilisation plan currently being reviewed by the relevant Kazakh regulatory
authorities;
obtain the necessary gas emission approvals to transition the Akkar North (East Block), Akkar East and West Zhetybai
oilfields into full commercial Production from Preparatory Period restrictions; and
return all 5 production wells to an optimal cumulative daily production level of approximately 100 tonnes.
●
●
●
As at the date of this report, the directors are satisfied there is a reasonable basis to believe that the above matters can be
achieved.
Should the consolidated entity not achieve 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 asset 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.
22
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
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 23.
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 2022 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 ($).
23
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
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.
Taxation receivables are considered statutory in nature and are measured at the tax rate when the transaction subject to tax
occurred.
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.
24
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
Note 1. Significant accounting policies (continued)
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
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. 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.
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.
25
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
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.
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.
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. Field costs that do not specifically relate to a well,
are transferred to oil and gas properties once the well enters commercial production.
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.
26
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
Note 1. Significant accounting policies (continued)
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.
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.
27
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
Note 1. Significant accounting policies (continued)
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:
●
●
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.
28
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
Note 1. Significant accounting policies (continued)
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 2022. 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.
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.
29
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
Note 2. Critical accounting judgements, estimates and assumptions (continued)
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.
Management have reviewed the carrying value of exploration and evaluation assets at 30 June 2022. No further exploration
and evaluation expenditure has currently been budgeted for the J55 and J 59 wells, which represents an indicator of
impairment. The carrying value of both assets has been reviewed and written-off in full as the value in use was assessed to
be nil with no future cash flows are currently expected to be recovered from further exploration and development.
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;
30
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
Note 2. Critical accounting judgements, estimates and assumptions (continued)
●
●
●
●
●
Forecast commodity prices and exchange rates;
Production volumes, reserves and timing of export sales;
Recoverable reserves;
Cost assumptions; and
Discount rate
Management have reviewed the carrying value of oil and gas properties at 30 June 2022 and are satisfied that there are no
indicators of impairment.
Note 3. Geopolitcal and economic risks
The operating environment in Kazakhstan continued to be difficult in the first half of the 2021/2022 financial year, as the
country, like the rest of the world, continued to deal with the restrictions created by the COVID-19 pandemic. At the beginning
of 2022 the country also experienced a short period of civil unrest and in late February 2022 the geopolitical environment
was further complicated with rising tensions between Russia and Ukraine.
The situation in the region remains fluid and continues to be monitored by the board and management.
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 oil trader in Kazakhstan.
Geographical information
Sales to external customers
Geographical non-current
assets
2022
$
2021
$
2022
$
2021
$
Kazakhstan
4,126,946
4,025,701 19,107,048 19,262,957
All significant property, plant and equipment, oil and gas properties and exploration and evaluation assets are domiciled in
Kazakhstan.
31
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
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
Exploration and evaluation assets
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)
Foreign exchange gains and (losses)
Unrealised gains and losses on promissory notes
Other foreign exchange differences
Foreign exchange gains and (losses)
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 25% (2021: 26%)
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
Gain on remeasurement of promissory notes
Income tax expense
32
Consolidated
2022
$
2021
$
476,899
9,137
635,822
14,944
486,036
650,766
367,892
-
7,684,021
-
7,836
7,750,231
6,419
10,377
7,691,857
7,767,027
687,127
49,917
-
235,988
269,864
497,727
(8,346,417)
7,636,191
(8,264,740)
(81,677)
7,633,683
2,508
(8,346,417)
7,636,191
Consolidated
2022
$
2021
$
(11,511,006)
61,655
(2,877,752)
16,030
41,368
1,921,004
2,162,498
(1,247,118)
223,818
2,015,060
(2,254,908)
-
-
-
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
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
Provisions
Consolidated
2022
$
2021
$
1,776,282
8,967,822
5,677,155
72,733
(311,899)
9,026,343
6,025,521
61,375
Total deferred tax assets not recognised
16,493,992 14,801,340
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. Other financial assets
Non-current assets
Liquidation fund
Consolidated
2022
$
2021
$
253,124
405,503
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.
Note 8. Property, plant and equipment
Non-current assets
Plant and equipment - at cost
Less: Accumulated depreciation
Consolidated
2022
$
2021
$
2,038,160
(1,700,824)
2,064,016
(1,522,755)
337,336
541,261
33
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
Note 8. Property, plant and equipment (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 2020
Additions
Exchange differences
Depreciation expense
Balance at 30 June 2021
Additions
Exchange differences
Depreciation expense
Balance at 30 June 2022
Note 9. Exploration and evaluation assets
Non-current assets
Exploration and evaluation - at cost
Plant &
equipment
$
903,552
85,329
(200,563)
(247,057)
541,261
7,685
5,412
(217,022)
337,336
Consolidated
2022
$
2021
$
1,389,210
1,558,934
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 2020
Additions
Exchange differences
Balance at 30 June 2021
Additions
Exchange differences
Impairment of assets
Balance at 30 June 2022
Exploration &
evaluation
$
485,567
1,170,492
(97,125)
1,558,934
165,358
32,810
(367,892)
1,389,210
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 2022
Management have reviewed the carrying value of exploration and evaluation assets at 30 June 2022. No further expenditure
has presently been budgeted for the J55 and J 59 wells, which represents an indicator of impairment. The carrying value of
both assets has been reviewed and written-off in full as the value in use was assessed to be nil with no future cash flows are
currently expected to be recovered from further exploration and development.
34
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
Note 10. Oil and gas properties
Non-current assets
Oil and gas properties - at cost
Less: Accumulated amortisation
Consolidated
2022
$
2021
$
19,240,591 18,689,003
(1,931,744)
(2,113,213)
17,127,378 16,757,259
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 2020
Additions
Change in estimate of restoration liability
Exchange differences
Amortisation expense
Balance at 30 June 2021
Additions
Change in estimate of restoration liability
Exchange differences
Amortisation expense
Balance at 30 June 2022
Note 11. Trade and other payables
Current liabilities
Trade payables
Accrued expenses and other payables
Refer to note 17 for further information on financial instruments.
Note 12. Provisions
Non-current liabilities
Rehabilitation
35
Oil and gas
properties
$
19,549,250
84,778
29,768
(2,566,394)
(340,143)
16,757,259
113,080
(731)
406,037
(148,267)
17,127,378
Consolidated
2022
$
2021
$
1,060,937
714,893
709,514
859,011
1,775,830
1,568,525
Consolidated
2022
$
2021
$
363,663
306,875
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
Note 12. Provisions (continued)
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 (2021: 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 2022 a discount rate of 5.05%
(2021: 6.46%)
Movements in provisions
Movements in each class of provision during the current financial year, other than employee benefits, are set out below:
Consolidated - 2022
Carrying amount at the start of the year
Change in estimates*
Exchange differences
Accretion expense
Carrying amount at the end of the year
Rehabilitation
$
306,875
46,166
2,786
7,836
363,663
*
Change in estimate was due to decrease in discount rate and slight increase in estimated rehabilitation cost per well.
Note 13. Other financial liabilities
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
Gain on remeasurement
Closing balance
Consolidated
2022
$
2021
$
100,027,287 88,372,096
88,372,096 86,874,707
(7,633,683)
1,380,841
7,750,231
-
8,264,740
694,902
7,684,021
(4,988,472)
100,027,287 88,372,096
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 Notes
36
Consolidated
2022
$
2021
$
10,254,973
8,878,297
8,407,174
7,849,382
26,067,458 23,238,663
54,826,559 48,876,877
100,027,287 88,372,096
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
Note 13. Other financial liabilities (continued)
At 30 June 2022 the consolidated entity has total undrawn facilities of $US6,965,276 ($10,110,721).
The key terms of the 2017 Funding Agreement are:
●
●
●
●
●
●
●
Unsecured
Effective 31 July 2017
Repayable on 1 July 2024
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) are:
●
●
●
●
●
●
●
Unsecured
Effective 24 May 2016
Drawdowns will roll into a promissory note
Promissory note is repayable on 1 July 2024
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 2024
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 from 1 July 2022 to until 1 July 2024. On the date of extension
of the repayment terms, the promissory notes were remeasured using the original effective interest rate which resulted to a
gain on remeasurement amounting to $4,988,472.
Note 14. Issued capital
Consolidated
2022
Shares
2021
Shares
2022
$
2021
$
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.
37
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
Note 14. Issued capital (continued)
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.
The consolidated entity is not subject to externally imposed capital requirements. The capital risk management policy
remains unchanged from the 30 June 2021 Annual Report
Note 15. Reserves
Foreign currency reserve
Share-based payments reserve
Consolidated
2022
$
2021
$
(30,749,039)
5,764,014
(30,994,717)
5,764,014
(24,985,025)
(25,230,703)
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 2020
Foreign currency translation
Balance at 30 June 2021
Foreign currency translation
Balance at 30 June 2022
Foreign
currency
$
Share-based
payments
$
Total
$
(28,381,181)
(2,613,536)
5,764,014
-
(22,617,167)
(2,613,536)
(30,994,717)
245,678
5,764,014
-
(25,230,703)
245,678
(30,749,039)
5,764,014
(24,985,025)
38
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
Note 16. Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 17. 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.
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
Kazakhstani Tenge
Assets
Liabilities
2022
$
2021
$
2022
$
2021
$
542,688
1,032,766
467 100,027,287 88,372,096
-
-
-
1,575,454
467 100,027,287 88,372,096
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 - 2022
% change
profit before
tax
Effect on
equity
% change
profit before
tax
Effect on
equity
AUD strengthened
Effect on
AUD weakened
Effect on
US Dollars
Kazakhstani Tenge
10%
10%
(9,948,459)
103,277
(9,948,459)
103,277
10%
10%
9,948,459
(103,277)
9,948,459
(103,277)
(9,845,182)
(9,845,182)
9,845,182
9,845,182
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
39
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
Note 17. Financial instruments (continued)
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.
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 - 2022
Non-derivatives
Non-interest bearing
Trade payables
Interest-bearing - fixed rate
Promissory notes
Total non-derivatives
Consolidated - 2021
Non-derivatives
Non-interest bearing
Trade payables
Interest-bearing - fixed rate
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
$
-
1,775,830
-
15.00%
- 123,027,248
1,775,830 123,027,248
-
-
-
-
1,775,830
- 123,027,248
- 124,803,078
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
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
40
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
Note 17. Financial instruments (continued)
At 30 June 2022 the consolidated entity has total undrawn facilities of $US 6,965,276 ($10,110,721).
Note 18. 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
Note 19. Remuneration of auditors
Consolidated
2022
$
2021
$
738,921
695,671
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
Note 20. Contingent liabilities
Consolidated
2022
$
2021
$
103,190
98,280
42,830
48,893
The consolidated entity had no contingent liabilities as at 30 June 2022 and 30 June 2021.
Note 21. 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
Consolidated
2022
$
2021
$
317,689
315,502
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.
41
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
Note 22. Related party transactions
Parent entity
Jupiter Energy Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 24.
Key management personnel
Disclosures relating to key management personnel are set out in note 18 and the remuneration report included in the
directors' report.
Transactions with related parties
The following transactions occurred with related parties:
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.
-
63,026
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Consolidated
2022
$
2021
$
Current payables:
Total directors fees payable*
Consolidated
2022
$
2021
$
1,148,897
777,965
*
Of these fees a total $1,082,616 has been deferred until such time that at least US$10,000,000 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.
Note 23. 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
42
Parent
2022
$
2021
$
(12,281,551)
(2,551,890)
(12,281,551)
(2,551,890)
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
Note 23. Parent entity information (continued)
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
2022
$
2021
$
93,338
62,786
18,740,152 19,094,873
1,293,096
1,021,457
101,320,383 89,393,553
85,633,935 85,633,935
5,764,014
(173,978,180) (161,696,629)
5,764,014
(82,580,231)
(70,298,680)
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 2022 and 30 June 2021.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2022 and 30 June 2021.
Commitments
The parent entity had no commitments as at 30 June 2022 and 30 June 2021.
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.
Note 24. 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 25. Events after the reporting period
Principal place of business /
Country of incorporation
Australia
Australia
Australia
Singapore
Singapore
Ownership interest
2021
2022
%
%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
On 26 July 2022 the Company provided an update on progress with its Gas Utilisation Plan.
43
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
Note 25. Events after the reporting period (continued)
The Company advised that with funding secured, five gas to electricity generators would be ordered from a Chinese
manufacturer and the generators were expected to be delivered to the field(s) by early 1Q 2023. All infrastructure would be
installed as soon as feasible after delivery of the generators, and it was expected that optimal production from the three
oilfields should commence during 1Q 2023.
The Company also advised that the purchase of the gas to electricity generators would be funded from operations and
involved a $US1.3m prepayment from a local Kazakh oil trader. The $US1.3m prepayment will be offset against additional
oil sales that are expected to result from the increased production achieved when the 100% gas utilisation infrastructure
becomes operational.
The five gas to electricity generators have now been ordered and the delivery schedule remains as outlined in the 26 July
2022 announcement.
On 12 September 2022 the Company announced that the Debt Restructure Plan announced on 04 March 2022 would not
proceed. The Company continues to be in active dialogue with its 4 Noteholders regarding the terms of an amended Debt
Restructure Plan.
No other matter or circumstance has arisen since 30 June 2022 that has significantly affected, or may significantly affect the
consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial
years.
Note 26. Reconciliation of profit/(loss) after income tax to net cash from operating activities
Profit/(loss) after income tax expense for the year
(11,511,006)
61,655
Consolidated
2022
$
2021
$
Adjustments for:
Depreciation and amortisation
Impairment of exploration and evaluation assets
Foreign exchange differences
Non cash finance costs
Gain on remeasurement of promissory notes
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
Decrease/(increase) in inventories
Decrease in other operating assets
Increase in trade and other payables
Decrease in contract liabilities
Increase in other provisions
Net cash from operating activities
365,289
367,892
8,264,740
7,691,857
(4,988,472)
650,766
-
(7,633,683)
7,750,231
-
12,467
7,206
163,566
10,838
(201,340)
46,166
(15,389)
(12,046)
103,309
57,218
(333,036)
-
229,203
629,025
44
Jupiter Energy Limited
Notes to the consolidated financial statements
30 June 2022
Note 27. Changes in liabilities arising from financing activities
Consolidated
Balance at 1 July 2020
Net cash from/(used in) financing activities
Exchange differences
Accrued interest
Balance at 30 June 2021
Net cash from financing activities
Gain on remeasurement
Exchange differences
Accrued interest
Balance at 30 June 2022
Note 28. Earnings per share
Leases
$
Promissory
notes
$
Total
$
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
694,902
-
(4,988,472)
-
8,264,740
-
7,684,021
-
694,902
(4,988,472)
8,264,740
7,684,021
- 100,027,287 100,027,287
Consolidated
2022
$
2021
$
Profit/(loss) after income tax attributable to the owners of Jupiter Energy Limited
(11,511,006)
61,655
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
(7.51)
(7.51)
0.04
0.04
45
Jupiter Energy Limited
Directors' declaration
30 June 2022
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 2022 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 2022
46
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 2022, 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 2022
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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
Carrying value of oil and gas properties
Why significant
How our audit addressed the key audit matter
At 30 June 2022, the Group had oil and gas properties
of $17,127,378 which forms 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 2022, the Group has not identified any
indication that the Block 31 CGU is impaired.
Disclosures regarding this matter are in Note 2 to the
financial report.
Given the size of the balance and the judgmental
nature in identifying indicators 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 including forecasted oil price
assumptions, discount rate and current and
historical operational performance, in conjunction
with our valuation specialists.
► Assessed the Group’s right to tenure over Block 31,
which included obtaining supporting documentation
such as license agreements.
► Considered the relationship between the asset’s
carrying value and the Group’s market
capitalisation.
► Assessed the adequacy of disclosures in Note 2 of
the financial report.
Why significant
How our audit addressed the key audit matter
At 30 June 2022, the Group had a financial liability of
$100,027,287 relating to promissory note facilities as
disclosed in Note 13.
The promissory notes are denominated in US dollars
and converted to the Group’s functional currency of
Australian dollars at period end. Any changes in the
Australian dollar balance, due to movements in foreign
We evaluated the appropriateness of the measurement
and classification of amounts outstanding on the
Group’s promissory note facilities. In performing our
procedures, we:
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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
available promissory note facilities to fund operations
and the repayment dates of the promissory notes were
extended resulting in the recognition of a gain on
remeasurement.
Due to the significance of the promissory note balance,
the determination of current and non-current
classification and the measurement of promissory
notes this was considered to be a key audit matter.
► Considered changes to the terms and conditions of
each promissory note during the year and the
impact of the changes on the measurement of
promissory notes having regard to the
requirements of Australian Accounting Standards.
► Tested the measurement of foreign currency gains
or losses on promissory note balances using the
applicable year- end exchange rates.
► Confirmed the completeness and accuracy of
outstanding balances with the borrower of the
promissory note facilities.
► Assessed whether the Group had the unconditional
right to defer repayment of the promissory notes
by more than 12 months as at 30 June 2022.
► Assessed the adequacy of disclosure in Note 13 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 2022 annual report, but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report 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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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.
► 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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the Directors’ report for the year ended 30
June 2022.
In our opinion, the Remuneration Report of Jupiter Energy Limited for the year ended 30 June 2022,
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 2022
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Jupiter Energy Limited
Shareholder information
30 June 2022
The shareholder information set out below was applicable as at 5 September 2022.
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
419
443
205
366
68
0.10
0.77
1.01
8.58
89.54
1,501
100.00
1,188
2.95
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
19,837,751
11,068,130
6,392,434
4,039,905
2,287,804
2,110,226
1,700,000
946,021
815,162
586,536
523,000
513,246
506,450
500,000
500,000
500,000
482,034
464,554
26.56
21.68
12.93
7.22
4.17
2.63
1.49
1.38
1.11
0.62
0.53
0.38
0.34
0.33
0.33
0.33
0.33
0.33
0.31
0.30
127,753,941
83.30
FISKE NOMINEES LIMITED (FISKPOOL A/C)
FISKE NOMINEES LIMITED
FISKE NOMINEES LIMITED
FISKE NOMINEES LIMITED
CITICORP NOMINEES PTY LIMITED
COLLEGE SEARCH PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR GLENN WILLIAM TWOMEY + MRS KAREN LYNNE TWOMEY
MR JOHN NORMAN ACKLAND
MR SOON JEUNG YUEN
MR RICHARD DONALD MILLAR
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
MR STEVY TRENT MAYALL + MS RACHELLE LEA WALTON
MRS TRA THU LE
ALDENHAM HOLDINGS LIMITED
MR BARRY PAUL AHERNE
MR CHRISTOPHER BRIGHT
TINA'S STYLE CENTRE PTY LTD (JA & TJ JENKINS S/F A/C)
BNP PARIBAS NOMS PTY LTD (DRP)
MR PETER ANTHONY WRIGHT
Unquoted equity securities
There are no unquoted equity securities.
52
Jupiter Energy Limited
Shareholder information
30 June 2022
Substantial holders
Substantial holders in the company are set out below:
WATERFORD FINANCE AND INVESTMENT LIMITED
MISTYVALE LIMITED
CENTRAL ASIAN HOLDINGS LIMITED
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
% of total
shares
issued
Number held
35,836,107
32,366,613
30,277,470
23.36
21.10
19.74
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.
53