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EXPLORERS FROM NEW ZEALAND NEW ZEALAND OIL & GAS SINCE 1981 Contents
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OUR COMPASS
HIGHLIGHTS
REPORT FROM THE CHAIR AND CEO
PRODUCTION AND RESERVES
RESERVES COMPLIANCE STATEMENTS
OUR ACTIVITIES
SUSTAINABILITY AND COMMUNITY
Supporting Tree Planting
Supporting Diversity In The Community
Supporting World Class Life Science
Supporting Vunerable Families With Their Energy Needs
Supporting Science Education
Supporting Communities Where We Work
CORPORATE GOVERNANCE
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statement of Cash Flows
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Notes to the Financial Statements
INDEPENDENT AUDITOR’S REPORT
SHAREHOLDER INFORMATION
CORPORATE DIRECTORY
Signed on behalf of the board of New Zealand Oil & Gas Limited
on 27 September 2023.
Samuel Kellner
Chairman
Alastair McGregor
Director
New Zealand Oil & Gas Annual Report 2023 Our Values
TIKANGA: THE RIGHT THINGS THE RIGHT WAY
We operate safely, and do what we say we will do.
We display respect and understanding for other
people, opinions and cultures.
We respect values, rules and laws.
MAHI TAHI: WORK TOGETHER, COLLABORATE, COOPERATE, WITH TEAMWORK
We are open, honest and transparent.
We actively pitch in and help.
We have fun and work with passion.
We put big issues on the table so they
can be resolved.
PAˉKIKI: CONSUMED WITH CURIOSITY
We seek to better understand ourselves, and the
world, with the goal of constantly improving.
We explore new areas to add value to our work.
We work with initiative and imagination.
TAUHOKOHOKO: BARTER, BARGAIN, TRADE
We continually seek to add value through the
application of skills, brains and hard work.
We develop mutually beneficial relationships with
key stakeholders and partners.
We deliver excellent commercial outcomes.
3
New Zealand Oil & Gas Annual Report 2023
Our
Compass
We see natural gas assets
providing security of supply to an
energy-constrained world as it
undergoes a decades-long energy
transformation. We will pursue
quality investment opportunities.
4
WHO WE ARE
We are an oil and gas company with an
Australasian focus. We are ethical, values
based, and nimble.
We are an experienced, Wellington based
exploration and production company, and
we are growth ready.
Industry experts trusted by our
stakeholders, providing support and
advice.
WHERE WE ARE GOING
Growing: Efficiently deploy our resources
purchasing additional production that
has development upside and exploration
that fits our asset base.
Improving: Use our skillsets, optimising
our processes, and extracting additional
value from our physical assets and the
wider group.
Realising: Support our operating partners,
Cue subsidiary, and stakeholders, to
identify mutual value add.
HOW WE WILL GET THERE
We use our capital resources, technical
capability, relationships, values,
shareholder support and flexibility to
create opportunities, execute reliably
and in a way that makes us proud, so
that high quality people want to work
with us.
New Zealand Oil & Gas Annual Report 2023 Strength today and
growth tomorrow
Indonesia
production through
our Cue subsidiary
Australia production
and development
in the NT Amadeus
Basin and the Perth
Basin
New Zealand
production through
Kupe and Maari
Ambition to acquire
production with
development upside
with support from our
global-scale parent
We see natural gas assets providing security of supply to an
energy-constrained world as it undergoes a decades-long
energy transformation. We will pursue quality investment
opportunities.
5
New Zealand Oil & Gas Annual Report 2023 6
New Zealand Oil & Gas Annual Report 2023 Highlights
FINANCIAL RESULTS
Revenues up 18% to $98.8m (from $83.8m in FY22).
Net profit after tax is $19.1m (down from $25.7m in FY22).
Profit of 4.7 cents per share (down from 9.9cps in FY22).
PRODUCTION RESULTS
Production 1.33mmboe, up from 1.25mmboe in FY22 based
on 9 months of Amadeus ownership (net to NZOG inc.
Cue share).
RESERVES UPGRADE
4% at 2P total level.
ACTIVITY
A total of 8 wells have been drilled within FY23, this included
7 at Mahato and 1 at Palm Valley.
Future Activities Timeline - NZOG & Cue
This table summarises the timeline of expected activities including the farm-in.*
Asset
Kupe
Existing Permits
Mereenie
2023
2024
2025
Infill Well
2x Infill Wells
Further Infill Well(s)
Potential Stairway Appraisal
Palm Valley & Dingo
Dingo Compressor
Sampang & Oyong
Pending Paus
Biru FID
Mahato
L7
EP 437
Ongoing development drilling
BA-01 Exploration Well
Seismic Interpretation
2 Exploration Wells
1 Exploration Well
M&A
Development
Exploration
*Most activities subject to further approvals
7
New Zealand Oil & Gas Annual Report 2023 Report
from the
Chair and
CEO
Dear shareholder,
On behalf of the Board we are
very pleased to present this
annual report of our activities
and results.
It was a busy, active year, with development and
exploration in Australia and Indonesia.
Our results have been impressive. Production was up
14% for the year, and revenue increased 18%.
Revenues are growing quickly because our strategy
of growing through acquisition and developing our
producing assets has proved successful.
The performance of our producing assets has been
excellent, and it is pleasing that we were able to
announce a reserves upgrade. Details of the new reserve
figures are fully presented in this Annual Report.
Revenue from our Amadeus Basin assets in Australia’s
Northern Territory was up 47% compared to a year ago,
and revenue from Indonesia was up 14%.
Production has been strong, and we have been
exceptionally busy in our efforts to keep the momentum
going.
The Palm Valley drilling programme had success from a
8
second sidetrack into the Pacoota (P1) sandstone, which
is the current producing zone of the Palm Valley field. The
well has now been tied in and is producing.
In addition, development of our Cue subsidiary's portfolio
in Indonesia has been rewarding. Cue reported its highest
annual revenues since 2010, demonstrating the success
of its growth strategy. Our collaboration in the Amadeus
Basin has been beneficial for both companies.
At the Mahato PSC, development drilling continued. Nine
wells were completed as part of the field development
optimisation announced in June 2022. Sixteen total wells
were in production at fiscal year-end 2023 and the field is
currently producing approximately 419 barrels of oil per
day net to Cue.
Oil production from Cue's Maari field, offshore Taranaki,
New Zealand, continued to be strong.
The returns from our efforts are being put to work, and
the pace will pick up further in the year ahead.
In New Zealand, a new well will be drilled at Kupe and
infill wells at Maari will aim to increase production. In
Australia, infill wells are planned at Mereenie, while we
look forward to the excitement of exploration drilling in
our newly acquired acreage in the Perth Basin.
In Indonesia, Cue will participate in workovers of existing
wells at Mahato.
New Zealand Oil & Gas Annual Report 2023 We would like to thank our fellow directors for their
thoughtful and insightful contributions.
Our small and hard-working staff have performed beyond
expectations.
As we look ahead to an exciting year, we are confident
about the path we are on and we are delighted to have
the support of our shareholders as we strive to create
more value.
Samuel Kellner
Chairman
Andrew Jefferies
Chief Executive
While this is an intensive programme of development and
exploration activity, we are able to fund it from our cash
balance and ongoing cashflows.
At the end of the year we had almost fully paid off our
Amadeus acquisition. This frees up more cash to grow
the business further.
Production and reserves have been growing, and while
we push to grow even faster, we have a favourable wind
behind us.
We are witnessing unprecedented opportunities in
the gas market on the East Coast of Australia, where
increasing prices have improved the profitability of
existing assets and make additional exploration and
development activity more attractive. We are positioned
to harness this opportunity through our high-quality
acreage, allowing us to drive growth and create value.
As we wrote in our recently published Sustainability
Report, we are proud of what we do and proud of the way
we go about it. Our business exists to provide energy
security and affordability for consumers across our
region, in Australia, New Zealand and Indonesia.
The past year has been rewarding. We have helped our
communities by producing energy they need. We have
operated safely, and we have grown our business. We are
proud of our results.
9
New Zealand Oil & Gas Annual Report 2023 Production
and Reserves
to 2023
Actual and Forecast 2P Production
millions of barrels of oil equivalent
Mahato
Dingo
Palm Valley
Mereenie
Sampang
Maari
Kupe
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
10
Actual
Forecast
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
New Zealand Oil & Gas Annual Report 2023
Production
New Zealand Oil & Gas share (net)
Mahato
Dingo
Palm Valley
Mereenie
Sampang
Maari
Kupe
Amadeus
Some rounding. The New Zealand Oil & Gas interest in Mahato, Maari and Sampang is held through Cue Energy. New Zealand Oil & Gas has a 50.04% interest in Cue.
Graphic shows Cue’s full interest. Production from the Amadeus assets is from 1 October 2022 until 30 June 2023. The Mahato field is currently under development.
11
LPG3,5004,5004,0003,0002,5002,0001,5001,00050002020202220212023201920182017tonnesGAS7,0009,0008,0006,0005,0004,0003,0002,0001,00002020202220212023201920182017terajoulesOIL350,000450,000400,000300,000250,000200,000150,000100,00050,00002020202220212023201920182017barrelsNew Zealand Oil & Gas Annual Report 2023
Reserves
at 1 July 2023
Proved (1P) Reserves at 1 July 2023
Geographic area
New Zealand
Maari*
Kupe
Amadeus Basin,
Australia
Mereenie**
Palm Valley**
Dingo**
Indonesia
Sampang PSC*
Mahato*
Total
0.0
4.8
0.0
21.0
25.3
11.7
10.1
2.9
0.0
0.0
0.0
0.0
0.0
0.0
54.7
21.0
1.2 mmboe
0.3 mmboe
0.8 mmboe
0.5 mmboe
1.1 mmboe
Developed
Undeveloped
Total
Gas
(PJ)
LPG
(kt)
Oil &
Condensate
(mmb)
Total
(mmboe)
Gas
(PJ)
LPG
(kt)
Oil &
Condensate
(mmb)
Total
(mmboe)
Gas
(PJ)
LPG
(kt)
Oil &
Condensate
(mmb)
Total
(mmboe)
0.3
1.1
4.4
1.9
1.6
0.5
0.9
0.0
0.7
1.4
0.0
7.8
0.2
0.0
10.7
10.1
0.7 mmboe
0.1 mmboe
0.3 mmboe
0.3
0.1
0.3
0.0
0.0
0.0
0.9
1.6
e
4
.
4
o
b
m
m
0.0
3.3
0.0
0.0
0.0
0.0
0.0
3.3
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.2
0.2
0.0
1.3
0.0
0.0
1.7
0.0
5.4
0.0
24.3
26.7
11.7
18.5
3.1
0.0
0.0
0.0
0.0
0.0
0.0
65.5
24.3
0.3
0.1
0.3
0.0
0.0
0.0
1.0
1.6
0.3
1.2
4.6
1.9
3.0
0.5
1.0
12.5
1.4 mmboe
0.3 mmboe
1.1 mmboe
0.5 mmboe
e
o
b
1
.
m
5
m
1 . 4
m m b
o e
m
m
2.8
boe
m
1.4
mboe
1 . 7
mm b o e
Maari
Kupe
Mereenie
Palm Valley
Dingo
Sampang PSC
Mahato
As at evaluation date. Some rounding. Includes 100 per cent of Cue’s interests. New Zealand Oil & Gas has a 50.04% interest in Cue. See statement Page 14.
12
New Zealand Oil & Gas Annual Report 2023
Proved + Probable (2P) Reserves at 1 July 2023
Developed
Undeveloped
Total
Gas
(PJ)
LPG
(kt)
Oil &
Condensate
(mmb)
Total
(mmboe)
Gas
(PJ)
LPG
(kt)
Oil &
Condensate
(mmb)
Total
(mmboe)
Gas
(PJ)
LPG
(kt)
Oil &
Condensate
(mmb)
Total
(mmboe)
Geographic area
New Zealand
Maari*
Kupe
Amadeus Basin,
Australia
Mereenie**
Palm Valley**
Dingo**
Indonesia
Sampang PSC*
Mahato*
Total
0.0
5.7
0.0
25.1
35.4
12.9
11.6
3.4
0.0
0.0
0.0
0.0
0.0
0.0
69.0
25.1
1.4 mmboe
0.4 mmboe
1.0 mmboe
0.8 mmboe
1.2 mmboe
m
m
2.1
boe
0.4
0.1
0.4
0.0
0.0
0.0
1.3
2.2
e
o
1
b
6.
m
m
0.0
4.3
0.0
0.0
0.0
0.0
0.0
4.3
0.4
1.3
6.1
2.1
1.9
0.6
1.3
0.0
1.0
3.5
0.0
8.2
1.3
0.0
13.7
13.9
0.2 mmboe
0.2 mmboe
0.2
0.0
0.0
0.0
0.0
0.0
0.1
0.2
oe
b
m
.0
1
m
m
m
0.
b
5
o
e
1.9
mmb o e
0.2
0.2
0.6
0.0
1.3
0.2
0.1
2.5
0.0
6.7
0.0
29.4
38.9
12.9
20.2
4.7
0.0
0.0
0.0
0.0
0.0
0.0
83.3
29.4
1.7 mmboe
0.6 mmboe
1.4 mmboe
0.8 mmboe
m
m
3
.
2
b
o
e
2.1
mmboe
0.5
0.2
0.4
0.0
0.0
0.0
1.4
2.4
0.5
1.5
6.7
2.1
3.3
0.8
1.4
16.3
1
7.
e
o
b
m
m
Maari
Kupe
Mereenie
Palm Valley
Dingo
Sampang PSC
Mahato
As at evaluation date. Some rounding. Includes 100 per cent of Cue’s interests. New Zealand Oil & Gas has a 50.04% interest in Cue. See statement Page 14.
Remaining Proven & Probable (2P) Oil & Gas Reserves Change (mmboe)
Geographic area
New Zealand
Maari*
Kupe
Amadeus Basin, Australia
Mereenie**
Palm Valley**
Dingo**
Indonesia
Sampang PSC*
Mahato*
Total
*At 100% of Cue Equity in these Assets
**New Zealand Oil & Gas plus Cue Equity
EOFY22
Acquisition
FY23
Production
EOFY22
Adjusted
In Year
Revisions
EOFY23
0.6
1.7
7.1
2.1
3.2
0.8
1.4
17.0
0.1
0.2
0.4
0.3
0.1
0.2
0.1
1.3
0.5
1.5
6.7
1.8
3.1
0.7
1.3
15.6
0.0
0.0
0.0
0.3
0.2
0.1
0.0
0.7
0.0
0.5
1.5
6.7
2.1
3.3
0.8
1.4
16.3
13
New Zealand Oil & Gas Annual Report 2023
Reserves
Compliance
Statements
Oil and gas reserves, are reported as at 1 July
2023 and follow the SPE PRMS Guidelines
(2018).
This resources statement is approved by, based on, and
fairly represents information and supporting documentation
prepared by New Zealand Oil & Gas Assets & Engineering
Manager Daniel Leeman. Daniel is a Chartered Engineer
with Engineering New Zealand and holds Masters’ degrees
in Petroleum and Mechanical Engineering as well as a
Diploma in Business Management and has over 15 years of
experience. Daniel is also an active professional member of
the Society of Petroleum Engineers and the Royal Society
of New Zealand. New Zealand Oil & Gas reviews reserves
holdings twice a year by reviewing data supplied from the
field operator and comparing assessments with this and
other information supplied at scheduled Operating and
Technical Committee Meetings.
Daniel is currently an employee of New Zealand Oil & Gas
Limited whom, at the time of this report, are a related party
to Cue Energy. Daniel has been retained under a services
contract by Cue Energy Resources Ltd (Cue) to prepare an
independent report on the current status of the entity’s
reserves. As of the 17th of January 2017, NZOG held an
equity of 50.04% of Cue.
In the Amadeus basin, New Zealand Oil & Gas hold 12.5%
and 25% equity and Cue currently holds 7.5% equity in the
Mereenie field and 15% equity in each of the Dingo and Palm
Valley fields. The operator here is Central Petroleum.
Kupe reserves are determined by deterministic reservoir
simulation modelling conducted by the operator Beach
Energy, the operator at Kupe where New Zealand Oil & Gas
hold 4% equity.
Cue currently holds an equity position of 5%, 12.5% and
15% in the Maari, Mahato and Sampang assets respectively,
though Production Sharing Contract adjustments at the
Mahato and Sampang fields affect the net equity differently
across the various reserve categories.
Estimates are based on all available production data,
the results of well intervention campaigns, seismic
data, analytical and numerical analysis methods, sets of
14
deterministic reservoir simulation models provided by the
field operators (Beach Energy, OMV, Texcal, Medco and
Central Petroleum), and analytical and numerical analyses.
Forecasts are based on deterministic methods.
Proven (1P) reserves are estimated quantities of oil and gas
which geological and engineering data demonstrate with
reasonable certainty (90% chance) to be recoverable in
future years from known reservoirs, under existing economic
and operating conditions. Probable (2P) reserves have a
50% chance or better of being technically and economically
producible.
Known accumulations are reserves or contingent resources
that have been discovered by drilling a well and testing,
sampling, or logging a significant quantity of recoverable
hydrocarbons.
Net reserves are net of equity portion, royalties, taxes and
fuel and flare (as applicable).
Developed reserves are expected to be recoverable from
existing wells and facilities. Undeveloped reserves will
be recovered through future investments (e.g. through
installation of compression, new wells into different but
known reservoirs, or infill wells that will increase recovery).
Total reserves are the sum of developed and undeveloped
reserves at a given level of certainty.
For undeveloped reserves, the following project maturity
sub-classes are assumed- at Mahato PSC, Undeveloped-
Approved for Development, at Sampang PSC- Justified
for Development, at Maari- Justified for Development, at
Mereenie and Dingo- Justified for Development, at Kupe-
Approved for Development.
At all fields, economic modelling has been conducted to
determine the economically recoverable quantities. For the
conversion to equivalent units, standard industry factors
have been used of 6Bcf to 1mmboe, 1Bcf to 1.05PJ, 1 tonne
of LPG to 8.15 boe and 1TJ of gas to 163.4 boe. All reserves
and resources reported refer to hydrocarbon volumes
post-processing and immediately prior to point of sale. The
volumes refer to standard conditions, defined as 14.7psia
and 60°F.
The extraction methods are as follows; at Kupe gas is
New Zealand Oil & Gas Annual Report 2023 produced to the processing plant and onwards sale to
domestic market, LPG is trucked from site to local markets,
condensate is trucked from site and sold internationally. For
Maari, oil is produced to the FPSO Raroa and directly
exported to international oil markets. At Mahato, it is via EPF
facilities which includes an oil and water separation system,
with the oil then piped 6km to the CPI operated Petapahan
Gathering Station. Sampang, gas is gathering from the
Wortel and Oyong fields and piped to shore where it is sold
into the Grati power station. At the Mereenie and Palm Valley
gas fields, gas is gathered from the wells and ultimately
collated into the Amadeus Gas Pipeline where sales vary to
different customers within the region. Further afield and at
Dingo, gas is sold into Alice Springs and the Owen Springs
power plant.
Tables combining reserves have been done arithmetically
and some differences may be present due to rounding.
15
New Zealand Oil & Gas Annual Report 2023 Our Activities
Australia
Amadeus Basin
Mereenie (OL4 & OL5)
17.5% New Zealand Oil & Gas
7.5% Cue Energy Resources*
50% Macquarie Mereenie
25% Central Petroleum (Operator)
Palm Valley (OL3)
35% New Zealand Oil & Gas
15% Cue Energy Resources*
50% Central Petroleum (Operator)
Dingo (L7)
35% New Zealand Oil & Gas
15% Cue Energy Resources*
50% Central Petroleum (Operator)
What we’ve done
During FY23, the Amadeus basin has provided a hub of activity with successful drilling and production from the Palm Valley PV-12 well,
as well as a campaign of re-completions at the Mereenie field. The delivery of the PV-12 well, and the continued strong performance of
the Dingo well led to the reserves upgrade as announced on 27 July 2023.
What we’re planing
Going forward in the Amadeus basin, the Joint Venture continues to review the potential for, and execution of, several activities. These
include; the installation of the Flare Gas Recovery Compressor at Mereenie; further compression facilities at Dingo; in-field data
acquisition at both Mereenie and Palm Valley; as well as reviewing the potential for infill drilling across the basin.
*New Zealand Oil & Gas has a 50.04% interest in Cue. Cue’s full interest is shown.
16
New Zealand Oil & Gas Annual Report 2023 Perth Basin
L7
25% New Zealand Oil & Gas
25% Talon Energy
50% Triangle Energy Global (Operator)
EP437
25% New Zealand Oil & Gas
25% Talon Energy
50% Triangle Energy Global (Operator)
_
GERALDTON
EP437
L7 (Mt Horner)
GERALDTON
Towns
Pipeline
Gas Field
Oil Field
NZOG blocks
Petroleum titles
Mt Horner
Yardarino
Dongara
Waitsia
Lockyer Deep
0
6.5
13
19.5
26
Kilometers
West Erregulla
Esri, HERE, Garmin, FAO, USGS, NGA
In the Perth Basin permits new seismic data was received and is currently being worked
to refine the key drill ready prospects. Drilling three exploration wells (two in L7 and one
in EP437), rig availability and timing are being discussed with other operators and long
lead items will require ordering. Stakeholder engagement for the potential drill locations
is underway.
0
500 1,000 1,500 2,000
km
Esri, HERE, FAO, NOAA
Towns
Pipeline
NZOG blocks
Petroleum titles
_
0
10
20
40
60
80
Kilometers
Esri, HERE, Garmin, FAO, USGS
PERTH
*New Zealand Oil & Gas has a 50.04% interest in Cue. Cue’s full interest is shown.
17
New Zealand Oil & Gas Annual Report 2023 Indonesia
East Java
New Zealand
Taranaki
New Plymouth
Kupe
Maari
Kupe – New Zealand Oil & Gas 4%
Maari – Cue Energy Resources 5%*
Madura Island
Wortel
Oyong
Jeruk
Sampang PSC
East Java
Sampang PSC – Cue Energy 15%*
Sumatra
Mahato PSC
Mahato – Cue Energy 12.5%*
*New Zealand Oil & Gas has a 50.04% interest in Cue. Cue's full interest is shown.
18
New Zealand Oil & Gas Annual Report 2023 19
New Zealand Oil & Gas Annual Report 2023 20
New Zealand Oil & Gas Annual Report 2023SUSTAINABILTY Sustainability
and Community
The Company publishes
a separate sustainability
report. It also maintains a
sustainability section on its
website at: https://www.
nzog.com/sustainability/
TCFD RISK DISCLOSURE
Taskforce on Climate-Related Financial Disclosure risks,
and the framework for managing climate risks, are
comprehensively reported in the Sustainability Report.
TCFD reporting is also maintained on our Company
website.
21
New Zealand Oil & Gas Annual Report 2023 1
Supporting tree
planting
555 trees planted in 2023
545 in 2022
New Zealand Oil & Gas supported the tree planting by Te
Nukuroa o Matamata, which is a project led by Te Runaka o
Otakou to restore habitats and rejuvenate mahika kai (food
gathering places) in the lower Taieri catchment.
The lower Taieri catchment area is recognised as a precious
refuge for threatened and endangered species of plants,
fish and birds.
Te Nukuroa o Matamata project will:
seek to reverse the negative effects of drainage,
development, and adverse land use practices, the
incursion of introduced species that have contributed
to the degradation of water quality and the loss of
wetlands and riparian vegetation and biodiversity in this
catchment.
create training and jobs over 3 years, focused on
biodiversity enhancement through a range of wetland,
river and riparian habitat restoration and protection
works.
connect people with traditional waterways and
resources, and be a pathway of learning and skills
development.
improve water quality through the restoration of native
vegetation condition and healthy habitat;
reduce introduced pest plant and invasive weeds, and
animal pest populations.
•
•
•
•
•
22
Tree's that count
Atarau Sanctuary
Our support helped Atarau Sanctuary to plant 270 trees
in a sanctuary for kiwi chicks.
Atarau Sanctuary provides predator-free sanctuary for
Paparoa Wildlife Trust’s roroa (great spotted kiwi) chicks,
which are hatched at Willowbank Wildlife Reserve and then
put in the sanctuary until they are old enough to fend for
themselves.
Atarau Sanctuary is the first land-based pest-proof crèche
specifically for kiwi in the South Island and the only facility
for roroa to take sanctuary until they are big enough to head
out into the world. Since opening in 2010, Atarau has given
sanctuary to 49 roroa chicks.
By planting this area in native plants it will replicate
an environment that will be comparable to the wild
environment in which the kiwi will be released.
Paparoa Wildlife Trust is a community conservation initiative
dedicated to running effective conservation projects in the
Paparoa Ranges near Greymouth.
“ Support from organisations such as Trees that Count is really
important for helping us create a safe transition for our young kiwis,
and ultimately give them the best chance of survival.”
Read more about Atarau Sanctuary
grow.treesthatcount.co.nz/planters/atarausanctuary/
New Zealand Oil & Gas Annual Report 2023SUSTAINABILTY Tomahawk/Smaills Beachcare Trust
Our support helped to plant 239 trees
Tomahawk Smaills Beachcare Trust's aim is to restore
the habitat and biodiversity of the sand dune ecosystem
in the Ocean Grove Reserve, and to provide long term
protection to the Ocean Grove community against the
threat of erosion.
Ocean Grove Reserve is a 28 hectare site of active sand
dunes located approximately 6 kilometres from Dunedin
city centre.
The Trust contributes to restoration through hands-on
participation in nursery activities and native planting.
The Trust sustains local relationships across a diverse
group of people by offering a positive opportunity to
contribute to a common environmental cause.
Otago Fish & Game Council
Our support helped to plant 400 trees in a wetland area
Otago Fish and Game is a not for profit organisation charged
with maintaining and enhancing sportsfish and gamebirds
and their habitat.
Takitakitoa is an ongoing wetland restoration of
significance. The planting programme, which is designed to
convert a previously grazed area of the wetland back into
native shrubland, has been running for 4 years.
Rain, hail or shine, nothing will stop the
crew from completing their planting
down at the Takitakitoa Wetland! With
all this good quality habitat around, the
place is teeming with life.
Read more about Otago Fish & Game Council
grow.treesthatcount.co.nz/planters/fishgamenewzealand/#funding
Supporting diversity
in the community
We support life-changing scientific
research, science education, tree
planting, and initiatives that help
vulnerable families with their energy
needs
Proudly Rainbow Inclusive
New Zealand Oil & Gas is proud to earn a Rainbow Tick and
be a leader in our industry in accepting and valuing people in
the workplace, embracing the diversity of sexual and gender
identities.
The Tick certification process tests whether a workplace
understands and welcomes sexual and gender diversity. The
process involves an on-going quality improvement process.
Rainbow refers to people who identify as lesbian, gay,
bisexual, transgender, takatāpui and intersex (LGBTTQIA+).
23
2New Zealand Oil & Gas Annual Report 2023SUSTAINABILTY Supporting world
class life science
Supporting
vulnerable families
with their energy
needs
The Salk Institute for Biological Studies
New Zealand Oil & Gas financially supports the Salk Institute,
home to scientists who delve into research areas, from
aging, cancer and immunology to diabetes, brain science
and plant biology.
The Salk Institute's renowned and award-winning
scientists explore the very foundations of life, seeking new
understandings in neuroscience, genetics, immunology,
plant biology and more.
Be it cancer or Alzheimer's, aging or diabetes, Salk is where
cures begin.
Our support goes specifically to the Harnessing Plants
Initiative to mitigate climate change by developing crop and
wetland plants that will store more carbon, longer, to reduce
atmospheric CO2.
24
Dunedin Curtain Bank
Dunedin is notorious for cold homes that make children sick.
The cost of energy bills and insulation can create hardship
for vulnerable families.
New Zealand Oil & Gas proudly partners with Dunedin
Curtain Bank to up-cycle unwanted and unused curtains,
line them, and distribute them to needy families.
Curtains make a big difference to the warmth of a home. A
third of all heat loss in an uninsulated home occurs through
windows. Even double-glazed windows let out more heat
than uninsulated walls.
We purchased curtains for 140 needy households in
Dunedin. Our curtain purchases:
•
•
•
Saved around 8.4 tCO2 from being emitted.
Each household saved an average $170 a year.
Saved around $23,000 for the houses we help through
the Dunedin Curtain Bank.
34New Zealand Oil & Gas Annual Report 2023SUSTAINABILTY Supporting
science
education
Supporting
communities
where we work
EPro8 Challenge
New Zealand Oil & Gas supports EPro8 Challenge, an Inter-
School Science and Engineering Competition. Every year
over 22,000 students from throughout New Zealand take
part.
Students participate in a series of events: firstly within their
school and then inter-school. These events are designed to
promote science and engineering.
We want to make a contribution to the community where
our head office is located, so our support went to help
students from Wellington Central and Porirua.
Amadeus Basin
The joint venture in the Amadeus Basin assets works closely
with the community. It aims to provide employment and
business opportunities to local communities.
Over $4 million was spent with Northern Territory local
contractors and businesses in the reporting period.
In the Northern Territory, over half of the operator’s staff live
locally and a quarter are indigenous.
New Zealand Oil & Gas supports the operator’s open
engagement with the Traditional Owners of our Northern
Territory joint operations located on or near Indigenous
lands, providing employment and training opportunities.
The joint venture operator works closely with the Central
Land Council and Aboriginal Areas Protection Authority to
ensure operations do not disturb areas of cultural heritage
significance.
Otago Science Fair
Other Joint Ventures
Each year New Zealand Oil & Gas sponsors a number
of awards at the Otago Science Fair to help students
understand more about earth, science, energy efficiency,
Mātuaranga Māori, marine science and much more.
Through our joint ventures we also support community
engagement projects in respect of Kupe and Maari in New
Zealand and via Cue Energy Resources in Indonesia.
25
56New Zealand Oil & Gas Annual Report 2023SUSTAINABILTY New Zealand Oil & Gas Limited (the Company) is a New
Zealand incorporated and domiciled limited liability company
registered under the New Zealand Companies Act 1993.
The Company is listed and its shares quoted on the official
list of the Australian Securities Exchange (ASX) and on the
Main Board equity security market operated by NZX Limited
(NZX) as a foreign exempt entity. On both exchanges the
Company’s code is “NZO”. From a regulatory perspective this
means that, while the ASX Listing Rules apply to the Company,
certain provisions of the Australian Corporations Act 2001
(Cth) do not. The Company is not subject to chapters 6, 6A,
6B, and 6C of the Australian Corporations Act 2001 (Cth)
dealing with the acquisition of shares (including substantial
holdings and takeovers). The Companies Act 1993 (NZ) applies
to the Company, as do certain provisions of the Financial
Markets Conduct Act 2013 (NZ) (including in relation to
financial reporting, but not including provisions relating to
substantial shareholdings). Key limitations on the acquisition
of shares in the Company are imposed by the following New
Zealand legislation: Commerce Act 1986, Overseas Investment
Act 2005, and Takeovers Act 1993, together with various
regulations and codes promulgated under such legislation.
This statement sets out the main corporate governance
practices adopted by the Company.
Corporate Governance Best Practice Codes
The Company reviews and assesses governance processes,
policies, and its compliance with corporate governance best
practice at least annually.
This includes assessing compliance with the ASX Listing
Rules, the ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendations (4th Edition)
2019 (ASX Principles and Recommendations), and the NZX
Listing Rules and Corporate Governance Code 10 December
2020 (NZX code).
Under Listing Rule 4.10.3, ASX listed entities are required to
benchmark corporate governance practices against the ASX
Principles and Recommendations and, where they do not
conform, to disclose that fact and the reasons why.
This section of the report is structured to report performance
against the ASX Principles and Recommendations.
This Corporate Governance Statement is current to, and was
approved by the board on, 20 September 2023.
Corporate
Governance
26
New Zealand Oil & Gas Annual Report 2023 Board Composition
Samuel Kellner
Chairman
Dr Rosalind Archer
Independent Director
Dr Rosalind Archer joined the board of New Zealand
Oil & Gas in November 2014. Dr Archer is Head of
the School of Engineering and Built Environment
at Griffith University in Queensland. Dr Archer is a
former President of Engineering New Zealand. She
runs a consulting practice as a reservoir engineer
with clients locally and internationally. She regularly
speaks on reservoir engineering topics at international
conferences.
Dr Archer graduated with a BE from University of
Auckland. She holds a PhD in Petroleum Engineering,
and PhD minor in Geological and Environmental Studies
from Stanford University.
Samuel Kellner has held a variety of senior executive
positions with the Ofer Global Group since joining the
Group in 1980. He has been deeply involved in various Ofer
Global Group’s business lines, with a particular emphasis
on offshore oil and gas, shipping and real estate, and has
advised the Ofer Global Group companies on investments in
a variety of investment managers, hedge funds and private
equity funds. Most recently, Mr Kellner served as president
of Global Holdings Management Group (US) Inc, where he
led North American real estate acquisition, development
and financing activities. Mr Kellner serves as a director of
O.G. Energy, O.G. Oil & Gas and Cue Energy Resources. He is
also an executive director of the main holding companies
for the Zodiac shipping group and Omni Offshore Terminals,
a leading provider of floating production, storage and
offloading (FSO and FPSO) solutions to the offshore oil
and gas industry. As a member of the O.G. Energy Senior
Management Committee, he helps drive the strategy for the
Ofer Global Group’s energy activities.
Mr Kellner graduated with a BA degree from Hebrew
University in Jerusalem. He has an MBA from the University
of Toronto, and taught at the University of Toronto while
working toward a PhD in Applied Economics. Mr Kellner was
appointed in December 2017. He is the Chairman of the
Board of Directors and a member of the Nomination and
Remuneration Committee.
27
New Zealand Oil & Gas Annual Report 2023 Marco Argentieri
Director
Alastair McGregor
Director
Marco Argentieri is Senior Vice President and General
Counsel for O.G. Energy, and a member of the Board of
Directors of both O.G. Energy and O.G. Oil & Gas.
As a member of the O.G. Energy Senior Management
Committee, he helps drive the strategy for the Ofer Global
Group’s energy activities. Mr Argentieri serves as the chief
legal counsel for the O.G. Energy Group, where he advises
on financing activities, acquisitions, and other commercial
and corporate matters. Mr Argentieri has worked for the
Ofer Global Group since 2006, where he previously served as
chief legal counsel responsible for Ofer Global Group finance
activities, with a particular focus on the Group’s offshore
oil services and shipping businesses. Prior to joining Ofer
Global, Mr Argentieri was an attorney at the New York offices
of Latham & Watkins LLP and Skadden, Arps, Slate, Meagher
& Flom LLP.
He holds a B.A. from the University of Rochester, a J.D. from
New York University, and an MBA from Columbia University.
Mr Argentieri joined the board in July 2018.
Alastair McGregor has been actively involved in the oil and
gas sector since 2003. He is currently chief executive of O.G.
Energy, which holds the Ofer Global Group’s broader energy
interests, and O.G. Oil & Gas Limited, a company that holds
directly or indirectly oil & gas exploration and production
interests onshore and offshore. He leads the O.G. Energy
Senior Management Committee, driving the strategy for the
Ofer Global Group’s energy activities.
Mr McGregor is also the chair of Cue Energy Resources. In
addition, he is chief executive of Omni Offshore Terminals
Limited, a leading integrated provider of floating production
and storage and offloading (FPSO & FSO) solutions to the
offshore oil & gas industry. Omni’s operations span the
globe from New Zealand, Australia, South East Asia, Middle
East and South America. Prior to entering the oil and gas
industry, Mr McGregor spent twelve years as a banker with
Citigroup and Salomon Smith Barney.
Mr McGregor holds a BEng (hons) in Aeronautical
Engineering and an MSc in Transport Management,
Economics and Finance. Mr McGregor joined the board in
October 2017.
Andrew Jefferies
Managing Director
Rod Ritchie
Independent Director
Mr Jefferies joined New Zealand Oil & Gas in 2013. He
started his career with Shell in Australia and has worked
in oil and gas in Australia, Germany, the United Kingdom,
Thailand and Holland Mr Jefferies is also a graduate of
the Australian Institute of Company Directors (GAICD),
and a Certified Petroleum Engineer with the Society of
Petroleum Engineers.
After graduating with a BE Hons (Mechanical) from the
University of Sydney, Mr Jefferies earned an MBA in
technology management from Deakin University in Australia,
and an MSc in petroleum engineering from Heriot-Watt
University in Scotland.
Rod Ritchie joined the board in 2013. He began his career as
a petroleum engineer with Schlumberger for 28 Years and
then joined OMV, where he worked for a further twelve years.
Mr Ritchie has more than 40 years of global experience
in leadership roles and as a Health, Safety, Environmental
and Security (HSSE) executive in the oil and gas industry,
including serving as corporate Senior Vice President of
HSSE and Sustainability at OMV in Vienna, Austria.
Mr Ritchie has worked closely with the International
Association of Oil and Gas Producers (IOGP) to create
industry best practice standards for the oil and gas sector.
He is an active leadership and cultural change consultant,
and an author on the subject of safety leadership and
several Society of Petroleum Engineers papers on the
subject of HSSE and safety leadership.
28
New Zealand Oil & Gas Annual Report 2023 Composition of the Board
The number of directors is specified in the constitution as a
minimum of three and up to a maximum of seven.
With our primary ASX listing, two directors must be
ordinarily resident in Australia. Dr Archer and Mr Ritchie are
ordinarily resident in Australia.
The NZ Companies Act requires one director to live in
New Zealand (or in an enforcement country and be a
director a company there e.g., Australia). Mr Jefferies lives in
New Zealand.
The Company’s constitution requires directors to retire
at the third Annual Meeting since their last appointment,
or every three years (whichever is longer). If eligible, each
retiring director may offer themselves for re-election.
Directors holding office during
1 July 2022 to 30 June 2023
Directors
Date elected
Year first
appointed
Dr Rosalind Archer
3 November 2021
2014
Marco Argentieri
3 November 2021
2018
Andrew Jefferies
3 November 2021
2017
Samuel Kellner
3 November 2021
2017
Alastair McGregor
5 November 2020
2017
Rod Ritchie
2 November 2022
2013
4
3
2
1
2
0
1
3
2
0
1
3
2
2
0
0
Y
Y
1
4
1
4
e
a
r
o
e
a
r
o
f
F
ir
s
t A
f
F
ir
s
t A
Board Gender Composition
1
5
1
5
6
5
4
3
2
1
p
p
oin
t
2
0
1
7
p
p
oin
t
2
0
1
7
m
e
nt
m
e
nt
2018
2018
2021
2022
Male
Female
29
New Zealand Oil & Gas Annual Report 2023
Directors Interests Policy
Directors’ Interests Register
Directors are required to recognise that the possibility
of conflict of interest exists, and are expected to declare
potential conflict of interest situations to the board and
manage conflicts of interest in accordance with the
Directors Interests Policy, the Code of Business Conduct and
Ethics, and the Company’s Constitution.
The Company maintains an interests register in compliance
with the Companies Act 1993, which records particulars of
certain transactions and matters involving directors.
The Directors’ Interests Policy is available in the corporate
governance section of the Company's website at:
www.nzog.com/dmsdocument/489
Directors' Securities Interests
The interests of Directors in securities of the Company at
30 June 2023 were:
Direct
Interest
Indirect Interest
Mr A Jefferies
50,000
1,801,258 share options
30
Directors' interests recorded in the Interests Register of the
Company as at 30 June 2023 are detailed below.
Notices given or adjusted during the financial year ended 30
June 2023 are marked with an asterisk (*).
Each such Director will be regarded as interested in all
transactions between the Company and the disclosed entity.
Mr S Kellner
O.G. Oil & Gas Ltd
Director
O.G. Energy Holdings Ltd
Director
Omni Holdings Ltd
Director
Cue Energy Resources Ltd
Director
Mr M Argentieri
O.G. Energy Holdings Ltd
Director
O.G. Oil & Gas Ltd
OGOG (Kohatukai) Ltd
OGOG (Otway)
Holdings Pty Ltd
OGOG (Otway) Pty Ltd
OGOG (1) Limited
OGOG (2) Limited
OGOG (K2) Inc.
OGOG (GOM1) Inc.
OGOG (GOM
Management) Inc.
OGOG (Management)
Limited
Director
Director
Director
Director
Director
Director
Vice-President/
Treasurer/
Secretary/
Director
Vice-President/
Treasurer/
Secretary/
Director
Vice-President/
Treasurer/
Secretary/
Director
Director
OGOG (Warrior) Inc*
Director
Cue Energy Resources Ltd
Director
Dr R Archer
Engineering New Zealand
Immediate Past
President*
Capricorn Solutions Ltd
Director
Contact Energy
Infratil
NZ Windfarms
Griffith University
Shareholder*
Shareholder*
Shareholder*
Head of School
of Engineering
and Built
Environment*
New Zealand Oil & Gas Annual Report 2023 Mr A Jefferies
88 Energy Ltd
Shareholder
Mr A McGregor
Cue Energy Resources Ltd
Director
Carnarvon Petroleum Limited
Shareholder
Central Petroleum
CGX Energy
Shareholder
Shareholder*
Cue (Ashmore Cartier) Pty Ltd
Director
Cue Energy Resources Ltd
Director &
Shareholder
Cue Exploration Pty Ltd
Director
Cue Mahakam Hilir Pty Ltd
Director
Cue Mahato Pty Ltd
Cue Sampang Pty Ltd
Cue Taranaki Pty Ltd
Director
Director
Director
Energy Resources Aotearoa
Director
Global Energy Ventures
Shareholder*
Hartshead Resources
Shareholder*
Melbana Energy
Pancontinental Oil
Shareholder*
Shareholder
Tuatara Energy Limited
Director
Warrego
Shareholder
Mr R Ritchie
Cue Energy Resources Ltd
Director
SPARC NZ consulting
Director
Sparc (Aust) Pty Ltd
SacGasCo
Shareholder
Shareholder
Cue Kalimantan Pte Ltd
Omni Holdings Limited
Omni Offshore
Terminals Pte Ltd
Omni Offshore Terminals
(Operations) Pte Ltd
Omni Offshore Terminals
(Manora) Pte Ltd
Omni Offshore Terminals
(Nong Yao) Pte Ltd
Gading Megah Sdn Bhd
Omni Offshore
Terminals (Operations)
(Thailand) Co Ltd
Omni Offshore Terminals
(Brazil) B.V.
Omni Offshore Terminals
(Lay-Up) B.V.
Aurora FSO Ltd
Manora FSO Ltd
O.G. Oil & Gas
(Singapore) Pte Ltd
O.G. Oil & Gas Ltd
O.G. Energy Holdings Ltd
OGOG (Kohatukai) Ltd
OGOG (Otway) Pty Ltd
OGOG (Otway)
Holdings Pty Ltd
OGOG (1) Limited
OGOG (2) Limited
O.G. Oil & Gas
(Oceania) Pte. Ltd
OGOG (K2) Inc.
OGOG (GOM1) Inc
OGOG (GOM
Management) Inc.
Director
Director
Director
Director
Director
Director
Director
Director
Director*
Director*
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
President/
Director
President/
Director
President/
Director
OGOG (GOM NZ) Limited
Director
OGOG (GOM Management)
Limited
OGOG (Warrior) Inc.
President/
Director
Director
** Name change from previous declaration
31
New Zealand Oil & Gas Annual Report 2023 Management
Andrew Jefferies
Chief Executive
See biographical note above.
Alan Clare
General Manager
Exploration and Appraisal
Alan joined New Zealand Oil & Gas in March 2023. He started
his career with Esso Australia in 1989 after graduating from
Macquarie University with a BSc Hons (Earth Science) and
later an MSc from University of NSW. Alan has worked in the
energy sector for over 33 years in Australia, UK, USA, China,
Egypt and New Zealand.
He has held both technical and managerial roles with
ConocoPhillips, Apache and OMV.
32
Daniel Leeman
General Manager Assets
and Engineering
Daniel was appointed General Manager Assets and
Engineering in 2021 after joining New Zealand Oil & Gas
in 2014. He has over 15 years of experience within the
petroleum industry. Daniel began his career at Talisman
Energy (UK) working within the Rotational Graduate
Engineering Programme where he specialised as a Drilling
Engineer. He later worked at Senergy (UK) as a Reservoir
Engineer, then Conoco Phillips (UK), where he was a Senior
Reservoir Engineer. Daniel is a Chartered Professional
Engineer with Engineering New Zealand and holds Master’s
degrees in Petroleum Engineering from Heriot-Watt
University, and Mechanical Engineering with a Diploma in
Business Management from the University of Aberdeen.
Daniel is also an active professional member of the Society
of Petroleum Engineers and the Royal Society of New
Zealand.
Catherine McKelvey
Chief Financial Officer
Catherine has worked in finance for over 30 years, including
nine years in the energy sector. She has been CFO at
New Zealand Oil & Gas since 2017. Deeply experienced
in corporate finance, and a Chartered Management
Accountant, she holds a BA in Economics.
New Zealand Oil & Gas Annual Report 2023
Paris Bree
General Counsel
Michael Wright
General Manager Commercial
Paris started as a lawyer with New Zealand Oil & Gas in 2010
after having been a solicitor in the Bell Gully Wellington and
Herbert Smith Freehills London litigation departments. Paris
has a law degree and an arts degree from Victoria University
of Wellington and is admitted to the High Court of New
Zealand as a Barrister and Solicitor. She is also a delegate of
the University of Dundee Centre for Energy after completing
the Petroleum and Mineral Law and Policy course on
Petroleum Agreements and a delegate of CWC’s Production
Sharing Contracts-Advanced Master Class.
Paris was awarded the Anthony Harper Young In-House
Lawyer of the Year at the 2019 New Zealand Law Awards.
She was named as an In-house Leader by NZ Lawyer
magazine in 2020 and 2022 and NZ Lawyer Elite Women
2021.
Paris was appointed General Counsel in 2017.
Michael Wright joined New Zealand Oil & Gas in 2012 having
worked in the energy sector for over 30 years. Michael
started his career working on gas distribution networks
before spending 11 years planning and developing power
stations. In 2003 Michael joined OMV and subsequently
joined Vector to manage the implementation of pipeline
open access. Michael has also worked as a consultant
advising companies in various parts of the energy sector.
Michael has a Master’s degree in Mechanical Engineering
from Cranfield University, UK.
The interests of the current Company Officers (excluding the Chief Executive) in securities of the Company at 30 June 2023 were:
Direct interest in New Zealand Oil & Gas securities
Indirect interest in New Zealand Oil & Gas securities
Officers
Paris Bree
Alan Clare
Daniel Leeman
688,756 options to acquire ordinary - shares
in accordance with Scheme Rules
712,158 options to acquire ordinary - shares
in accordance with Scheme Rules
Catherine McKelvey
10,214 directly held ordinary shares -
Michael Wright
715,723 options to acquire ordinary shares
in accordance with Scheme Rules
920,612 options to acquire ordinary - shares
in accordance with Scheme Rules
-
-
-
-
-
33
New Zealand Oil & Gas Annual Report 2023 PRINCIPLE 1
Lay solid foundations for
management and oversight
Clearly delineate the respective roles and responsibilities of its board
and management and regularly review their performance.
- (ASX Principles and Recommendations)
Role of the Board
Responsibilities of the Board
The board is responsible for the overall corporate
governance of the Company including strategic direction,
determining policy, and approving significant contracts,
capital and operating costs, financial arrangements
and investments.
In addition to statutory and constitutional requirements,
the board has a formal charter that sets out its functions
and structure.
The Board Charter is available in the corporate governance
section of the Company's website at
www.nzog.com/dmsdocument/371
34
The board operates under a written charter which sets
out the roles and responsibilities of the board. The Board
Charter clearly distinguishes and discloses the respective
roles and responsibilities of the board and management.
The procedure for nomination and appointment of directors
to the board is set out in the Charter.
The board is accountable for the performance of the
Company. The specific responsibilities of the board include:
• Approving corporate strategy and performance objectives;
• Establishing policies appropriate for the Company;
• Oversight of the Company, including its control and
accountability systems;
• Approving major investments and monitoring the return
of those investments;
• The overall risk management and control framework for
the Company and ensuring appropriate risk management
systems are established and applied;
• Appointing, removing and evaluating the performance of
the chief executive;
• Reviewing the performance of senior management;
• Appointing and removing the company secretary;
• Setting broad remuneration policy;
• Reviewing implementation of strategy and ensuring
appropriate resources are available;
• Nominating and appointing new directors to the board;
• Evaluating the performance of the board, committees of
the board, and individual directors;
• Reviewing and ratifying systems of risk management,
internal compliance and control, codes of conduct, and
legal compliance;
• Approving and monitoring the progress of any major
New Zealand Oil & Gas Annual Report 2023 capital expenditure, capital management and acquisitions
and divestitures;
• Reviewing and ratifying HSSE Sustainability and
Operational Risk policies, the HSSE Sustainability and
Operational Risk Management System and monitoring its
implementation and performance;
• Approving and monitoring financial and other reporting;
• Ensuring that the Company provides continuous
disclosure of information such that shareholders and
the investment community have available all information
to enable them to make informed assessments of the
Company’s prospects;
Board Proceedings
The board meets on a formal scheduled basis four times
per year, and holds other meetings as required, including by
video conference.
The Commercial Committee and the Company Secretary
establish the agenda for each board meeting.
The Chief Executive keeps the board informed of material or
potentially material matters between meetings and provides
a weekly update to the board on all relevant matters.
A report is prepared for each meeting, which includes:
• Updates on assets
• Overall corporate governance of the consolidated entity;
• Updates on exploration and production activities and
• Determining the key messages that the Company wishes
financial management;
to convey to the market from time to time; and
• Summaries of new business opportunities;
• Monitoring information commitments and continuous
• An update on human resources and facilities;
disclosure obligations.
Performance reviews of the Board
The board charter states: The board shall undertake regular
reviews of the operations and performance of the board,
its committees and individual directors. Where appropriate,
the board may engage external consultants to conduct this
review. In addition to compliance with each committee’s
individual charter, the review shall consider:
• The skills required by the board, including processes
to satisfy any skill-gaps;
• How the required skills are best represented on
the board; and
• The process for identifying suitable candidates,
for appointment to the board.
Reviews are undertaken by way of a questionnaire submitted
to directors. Responses are collated and reviewed by the
chair of the Nominations and Remuneration Committee.
The chair of the Nominations and Remuneration Committee
then undertakes an overall review on the outcomes and
produces a written report which is reviewed by the full
board. Individual director performance is addressed by
one-on-one review with the chair of the Nominations and
Remuneration Committee.
For the financial year, the Nominations and Remuneration
Committee agreed that the above process that was followed.
The Directors’ Interests Policy is available in the corporate
governance section of the Company's website at
www.nzog.com/dmsdocument/489
• An investor relations report;
• Updates on stakeholder engagement, media and
sustainability; and
• Other reports as relevant.
Key strategic issues and opportunities are also presented to
the board by management as part of each meeting.
To ensure that independent judgement is achieved and
maintained, the board has adopted a number of processes
in respect of its decision making. These include:
• Any director may obtain independent advice at the
Company’s expense where the director considers it
necessary to carry out their duties and responsibilities as
a director, with the prior consent of the chair of the Audit
Committee (or in the case of the Audit Committee chair’s
absence, the prior consent of the chair of the board).
Such consent may not be withheld unreasonably; and
• Directors must comply with the Directors’ Interests Policy.
It addresses disclosable interests, conflicts of interest,
director information obligations, board review and
determination obligations, and the rules for participation
in board deliberations in the event of a conflict of interest.
On appointment, each director has also acknowledged their
individual disclosure obligations.
35
New Zealand Oil & Gas Annual Report 2023 Delegation to Management
Delegated Authorities Manual
While the board has overall and final responsibility for the
business of the Company, it has delegated substantial
responsibility for the conduct and administration of the
Company’s business and policy implementation to the chief
executive and his management team.
Board approved policies and procedures are in place to set
parameters for the delegated responsibilities, including:
• Health and Safety Policy;
• Environment Policy;
• Climate Change Policy;
• Community Engagement Policy;
• Capturing Local Economic Benefit Policy;
• Code of Business Conduct and Ethics;
• Communications, Market Disclosure and Social Media
Policy;
• Securities Trading Policies for Directors, Employees and
Dedicated Contractors;
• Directors’ Interests Policy;
• Protected Disclosure (Whistleblower) Policy;
• Diversity Policy;
• Delegated Authorities Manual;
The board has established formal limits of authority to
provide clarity to the chief executive and management so
that they are in a position to carry out the business of the
Company efficiently and effectively within the parameters of
proper corporate governance.
The Delegated Authorities Manual sets limits to financial
commitments and other decision-making, and is monitored
by the board through the audit function.
ORS
Committee
• Remuneration and Performance Appraisal Policy;
C
o
A
m
u
C
h
i
e
f
E
x
e
c
u
t
i
v
e
M
a
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a
g
e
m
e
n
t
a
n
d
S
t
a
ff
m
d
i
• Treasury Policy;
• Email and Internet Use Policy;
• Anti-Harassment Policy;
• Drugs and Alcohol Policy;
• Paid Parental Leave Policy; and
• Workplace Flexibility Policy.
• Modern Slavery Policy.
S
h
a
r
e
h
o
d
e
r
s
l
i
t
t
t
e
e
B
o
a
r
d
N
o
C
o
m
R
e
m
min
u
mittee
n
eration
ation &
These policies are reviewed regularly. The board may
establish other policies and practices to ensure it fulfils
its functions.
C
ommit
omme
tee
rcial
C
All of these policies are available in the corporate governance
section of the Company's website at
www.nzog.com/investor-information
36
New Zealand Oil & Gas Annual Report 2023
PRINCIPLE 2
Structure the board to be effective
and add value
The board should be of an appropriate size and collectively have the skills,
commitment, and knowledge of the entity and the industry in which it operates
to enable it to discharge its duties effectively and to add value.
- (ASX Principles and Recommendations)
Composition of the Board
The board as a whole, supported by the Nomination and
Remuneration Committee, undertakes the process for
identifying suitable candidates for appointment to the
board and recommending directors for appointment, having
reviewed its operations, the performance of individual
directors, the qualifications of candidates for the board, the
skills required by the board, and how the required skills are
best represented.
The board provides clear recommendations and relevant
information in the Notice of Meeting at which candidate
directors are put forward. Biographical information is
presented in the Notice of Meeting, and further information
about directors is presented on the company’s website.
Where possible, the process of vetting prospective directors
includes background checks into character, education,
criminal record, and bankruptcy. The Nomination and
Remuneration Committee also undertakes other vetting
procedures that it deems appropriate in the circumstances
As the board has not recommended any new candidate
since 2018, these checks have not been performed in the
past year. Background checks have not been undertaken
where directors are nominated by the major shareholder
of the Company, reflecting the reality of the ownership
structure of the Company.
Upon appointment to the Company’s board, directors are
advised of salient requirements and policies. Obligations
such as disclosure of interests, managing conflicts, and
share trading are managed through policies. Directors
have received training in health and safety governance.
Further training about how to best perform their duties as
directors was not required during the reporting period as
the Company has robust policies around director duties and
the board’s skills are appropriate.
When the Company converted its listing to being primary
listed on the ASX, each director entered into individual
written agreements with the Company consistent with ASX
listing rule 3.19B.
The Company enters into an employment agreement with
the managing director and the senior executives, the
material terms of which are disclosed below.
The Company Secretary is Paris Bree, who is also the
company’s General Counsel. She is appointed by the board
and accountable directly to the board.
The company was not in the S&P/ASX 300 Index at
the commencement of the reporting period, and
is not a “relevant employer” under the Workplace
Gender Equality Act.
37
New Zealand Oil & Gas Annual Report 2023 Board Skills
Board skills are set out in the accompanying chart.
The board considers its composition brings together skill-
sets that are highly valued in the industry. The board has a
balance of independence, skills, knowledge, experience, and
perspectives.
In considering the appropriate board composition, account
is given to whether or not a shareholder owns a majority
of the shares in the Company. The board composition is a
Number of Directors with Specific Skillset
Oil & Gas
Finance & Economics
6
5
4
3
2
1
consequence of the Company’s ownership structure.
Two out of six directors are independent. The chair is not
independent, reflecting the ownership structure of the
Company. The chair and CEO are not the same person.
The board has determined that as at 30 June 2023, Dr
Archer and Mr Ritchie are independent directors as they
do not fall into any of the categories specified in the ASX
Principles and Recommendations as being examples of
interests, positions and relationships that might raise
issues about the independence of a director.
Mr Kellner, Mr Argentieri, and Mr McGregor are not
independent because of their association with O.G. Oil & Gas
Limited, which is a substantial shareholder in New Zealand
Oil & Gas Ltd.
Mr Jefferies is not independent because he is the managing
director of New Zealand Oil & Gas.
Upon appointment to the Company’s board, directors are
advised of salient requirements and responsibilities for
directors of the Company.
Committees of the Board
The Board has established the following committees
to assist it by focusing on specific responsibilities,
reporting back to the Board and making any necessary
recommendations:
Committee
ORS
• Audit Committee,
C
o
A
m
u
• Nominations and Remuneration Committee,
m
i
d
i
t
M
a
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g
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m
e
n
t
a
n
d
S
t
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ff
• Operational Risk and Sustainability Committee,
e
e
t
t
C
h
i
e
f
N
o
• Commercial Committee.
E
x
e
c
Each committee has a Charter, approved by the Board and
u
t
i
v
reviewed regularly. The Board has sole responsibility for the
e
appointment of directors to committees. Any director is
entitled to attend a meeting of a committee if that director
so wishes, except that members who are not members of
the Audit Committee may only attend its meetings at the
C
ommit
invitation of the Audit Committee.
omme
tee
rcial
More detail about the role and activities of these
committees is reported under relevant headings below.
R
e
m
min
u
n
eration
ation &
C
HSSE
Executive Management
All Committee Charters are available on the
Company’s website at
www.nzog.com/investor-information
Engineering
& Operations
Exploration
M&A
Legal
38
New Zealand Oil & Gas Annual Report 2023
PRINCIPLE 3
Instill a culture of acting lawfully, ethically
and responsibly
Instill and continually reinforce a culture across the organisation
of acting lawfully, ethically and responsibly.
- (ASX Principles and Recommendations)
New Zealand Oil & Gas practices the highest standards
of corporate governance and aspires to continuous
improvement in its governance performance.
• Act with high standards of honesty, integrity, fairness,
and equity in all aspects of their involvement with the
Company;
The board has adopted the following overarching
governance objectives:
• Lay solid foundations for management and oversight.
• Achieve high standards of transparency and ethical and
responsible decision-making.
• Structure itself to add value.
• Make timely and balanced disclosure.
• Respect the rights of its shareholders.
• Safeguard integrity in its financial reporting.
• Recognise and manage risks.
• Encourage enhanced performance.
• Promote a corporate culture that upholds agreed
Company values.
The Company’s values are displayed in the graphic on the
inside front cover of this report.
Code of Business Conduct and Ethics
The Company’s Code of Business Conduct and Ethics sets
out values and ethics expected of the Company’s directors,
management, employees and contractors.
The Company strives to create a strong culture of honesty,
integrity, loyalty, fairness, forthrightness and ethical
behaviour.
• Company representatives are required to:
• Comply fully with the content and spirit of all laws and
regulations governing the Company’s operations, business
environment, and employment practices;
• Not knowingly participate in illegal or unethical activity;
• Actively promote compliance with laws, rules, regulations,
and the Company’s Code of Business Conduct and Ethics;
and
• Not do anything that would be likely to negatively affect
the Company’s reputation.
The Code addresses in detail issues such as:
• Conflicts of interest and corporate opportunities;
• Protection and proper use of Company assets;
• Confidential and proprietary information;
• Intellectual property;
• Competition and fair dealing;
• Business entertainment and gifts;
• Anti-bribery and corruption;
• Cash koha;
• Insider trading or tipping: and
• Reporting Code violations.
The Code requires the board to be informed of any material
breaches.
The Code of Business Conduct and Ethics is available in the
corporate governance section of the Company's website at
www.nzog.com/dmsdocument/487
39
New Zealand Oil & Gas Annual Report 2023 Protected Disclosures
Anti-bribery and Corruption
The Company’s anti-bribery and corruption policies are
included as specific items within the Code of Business
Conduct and Ethics.
The Company has a Protected Disclosures (Whistleblower)
Policy that provides a procedure for employees and
contractors to raise concerns or make disclosures about
what they observe happening at work.
The purpose is to facilitate disclosure and investigation
of serious wrongdoing. It provides a mechanism for
concerns being raised and dealt with at an early stage and
in an appropriate manner. The person making the report
is protected from any adverse consequences where the
concern is raised in good faith. The board is to be informed
of any material incidents reported under this policy.
The protected Disclosures (Whistleblower) Policy is available in the
corporate governance section of the Company's website at
The Code of Business Conduct and Ethics is available in the
corporate governance section of the Company's website at
www.nzog.com/dmsdocument/495
www.nzog.com/dmsdocument/487
40
New Zealand Oil & Gas Annual Report 2023 PRINCIPLE 4
Safeguard the integrity
of corporate reports
Have appropriate processes to verify the integrity of corporate reports.
- (ASX Principles and Recommendations)
The Chief Executive and CFO provide the Board with a letter
affirming that, in their opinion, the financial records have
been properly maintained, that the financial statements
comply with the appropriate accounting standards and give
a true and fair view of the Company’s financial position and
performance, and that they form their opinion on the basis
of appropriate and effective controls.
Senior management review quarterly activity reports,
cash flow reports and other formal reports to verify and
confirm content.
The Managing Director, CFO and General Counsel approve
reports prior to being circulated to the full Board for
approval ahead of public release.
Audit Committee
The Audit Committee, together with the Chief Executive, is
responsible to the Board for overseeing the financial and
internal controls, financial reporting and audit practices of
the Company.
The chair of the Audit Committee also oversees and
authorises any trading in securities by directors, employees
or contractors. Restrictions on trading are outlined in the
Securities Trading Policy and Guidelines for Directors, and in
the Securities Trading Policy and Guidelines for Employees
and Dedicated Contractors.
In practice the Committee considers:
• Corporate reporting and internal controls,
• Whether financial statements reflect their understanding
of the financial position and performance of the Company
and otherwise provide a true and fair view,
The Audit Committee Charter is available here
www.nzog.com/dmsdocument/372
• The appropriateness of the accounting judgements
and choices exercised by management in preparing the
financial statements,
• The appointment of the external auditor and rotation of
the audit engagement partner;
• The fees payable to the auditor for audit and
non-audit work,
• The scope and adequacy of the external audit, and
• The independence and performance of the
external auditor.
Audit Committee Composition
Alastair McGregor, Dr Rosalind Archer and Rod Ritchie
comprise the Audit Committee. As Dr Archer and Mr
Ritchie are independent, a majority of members of the
audit committee are independent and none are executive
directors.
The chair of the audit committee, Mr McGregor, is not the
chair of the Board. Mr McGregor is not an independent
director, which reflects the composition of the Board.
Mr McGregor has a financial background. Dr Archer and
Mr Ritchie have gathered considerable experience about
the company’s financial affairs through their service on the
Board and on the Audit Committee. Further information
about the skills and qualifications of the committee
members are set out in the biography page (see pages
27 & 28).
The Committee met twice during the year by video
conference, and all members attended both meetings.
The chair of the Board, directors, the chief executive and
other staff may be invited by the Audit Committee to attend
meetings of the Committee.
41
New Zealand Oil & Gas Annual Report 2023 The Audit Committee can meet with the external auditors
and senior management in separate sessions. An annual
process considers engagement of auditors, having regard
to the auditors’ independence and policies for rotation
of partners.
The Company does not have an internal audit function, as
the scale and complexity of the business and the nature of
its financial management does not currently require it.
The Audit Committee Charter is available here
www.nzog.com/dmsdocument/372
The Securities Trading Policy and Guidelines for Employees and
Contractors is available on the Company’s website here
www.nzog.com/dmsdocument/download/497
The Securities Trading Policy and Guidelines for Directors is
available here
www.nzog.com/dmsdocument/download/496
42
New Zealand Oil & Gas Annual Report 2023 PRINCIPLE 5
Make timely and balanced disclosure
Make timely and balanced disclosure of all matters that a reasonable person would
expect to have a material effect on the price or value of the Company's securities.
- (ASX Principles and Recommendations)
New Zealand Oil & Gas complies with Listing Rule 3.1,
which requires a listed entity, subject to certain exceptions,
to disclose to ASX immediately any information that a
reasonable person would expect to have a material effect on
the price or value of its securities.
The Board receives advance copies of all
material announcements.
New presentations are released to both market platforms,
ASX and NZX, ahead of the presentation, and promptly
posted to the Company website.
Continuous Disclosure
The company releases to markets, promptly and without
delay, information that a reasonable person would expect to
have a material effect on the price of its securities. The only
exceptions to this disclosure principle are those permitted
under the Listing Rules.
The board is responsible for monitoring commitments and
continuous disclosure obligations and initiating action as
warranted to ensure reporting is fair and reasonable.
The Company has a Communications, Market Disclosure and
Social Media Policy. Its purpose is to:
• Reinforce the Company’s commitment to the continuous
disclosure obligations imposed by law and stock
exchange rules,
• Describe the processes to ensure compliance,
• Outline the Company’s general communications approach
aimed at ensuring timely and accurate information is
provided to shareholders, market participants and market
observers, and
• Provide ground rules for the use of social media.
Non-Financial Reporting
The Company publishes a Sustainability Report.
Sustainability reporting includes material exposure to
environmental, economic and social sustainability risks
and other key risks. It explains how the Company manages
those risks and how operational or non-financial targets
are measured.
Components of sustainability reported include:
• A summary of the Company’s values;
• Taskforce on Climate-Related Finance Disclosures (TCFD),
including Governance of climate risk, Company policies
and the Company’s climate change statement;
• Sustainability and climate risk strategy and risk
management and corporate responsibility strategy;
• Diversity Statement, performance metrics and targets;
• A summary of the Company’s approach to
stakeholder engagement,
• Summary of the Company’s contribution to
local communities;
• A materiality matrix; and
• Relationship between business strategy and the UN’s
Sustainable Development Goals.
A copy of the 2023 Sustainability Report is available on the
Company’s website, here
www.nzog.com/dmsdocument/download/670
43
New Zealand Oil & Gas Annual Report 2023 Non-Financial Reporting Continued.
The Company publishes a Sustainability Report.
Sustainability reporting includes material exposure to
environmental, economic and social sustainability risks
and other key risks. It explains how the Company manages
those risks and how operational or non-financial targets
are measured.
Components of sustainability reported include:
• A summary of the Company’s values;
• Taskforce on Climate-Related Finance Disclosures (TCFD),
including Governance of climate risk, Company policies
and the Company’s climate change statement;
• Sustainability and climate risk strategy and risk
management and corporate responsibility strategy;
• Diversity Statement, performance metrics and targets;
• A summary of the Company’s approach to
stakeholder engagement,
• Summary of the Company’s contribution to
local communities;
• A materiality matrix; and
• Relationship between business strategy and the UN’s
Sustainable Development Goals.
A copy of the 2023 Sustainability Report is available on the
Company’s website, here
www.nzog.com/dmsdocument/download/670
44
New Zealand Oil & Gas Annual Report 2023 Waivers
The Company has one ASX waiver which allows it to provide announcement simultaneously to both the ASX and the NZX.
Details below.
Rule Number
15.7
Date
19/06/2022
ASX Code
NZO
Listed
Company
Waiver
Number
Decision
Basis For
Decision
NEW ZEALAND OIL & GAS LIMITED
WLC220102-001
Based solely on the information provided, ASX Limited ('ASX') grants New Zealand Oil & Gas
Limited (the 'Company') a waiver from Listing Rule 15.7 to the extent necessary to permit the
Company to provide announcements simultaneously to both ASX and the NZX.
Underlying Policy
An entity must not release information that is for release to the market to any person until it has given
the information to ASX and received an acknowledgement that ASX has released the information
to the market. This ensures that all investors have equal access to the information.
The Company has not made any formal submissions in relation to its request for waivers from Listing Rules 15.7 other than to
note that these waivers have been commonly granted to NZ Foreign Exempt Entities when they transition to a full ASX Listing.
Present Application
The Company is a New Zealand incorporated entity and is listed on NZX. A difference in time zones means that trading on
NZX commences approximately two hours prior to market open on ASX. There is also a period of overlap during which the
Company may be required, under both the NZX and ASX Listing Rules, to lodge information immediately with each of the
exchanges. Both of these scenarios could result in the Company releasing information to NZX before it has received an
acknowledgement of release from ASX. The waiver permits the Company to give information simultaneously to NZX and ASX.
It is not considered that the simultaneous lodgement of information with an overseas stock exchange by a dual listed entity
would infringe the policy principle of equal access to information. Lodging announcements simultaneously with ASX and NZX
does not infringe the policy rationale behind the rule. The problem encountered by the Company until such time that it delists
on NZX, which prevents it from complying with listing rule 15.7.1, is that during trading hours on NZX, the Company will not
be permitted to wait for confirmation from ASX that the announcement has been released on ASX before giving it to NZX.
The Communications, Market and Social Media Disclosure Policy
is available in the corporate governance section of the Company's
website at
www.nzog.com/dmsdocument/488
45
New Zealand Oil & Gas Annual Report 2023 PRINCIPLE 6
Respect the rights of security holders
Provide security holders with appropriate information and facilities to
allow them to exercise their rights as security holders effectively
- (ASX Principles and Recommendations)
Shareholder Participation
The Company communicates openly with investors with
the aim of growing understanding about the business, its
activities and plans, governance, financial performance
and prospects.
The Company encourages shareholder participation at
the annual meeting by inviting questions in advance and
discussion from the floor. Meeting agendas and supporting
documents such as presentations are posted on the
Company’s website.
It makes directors and management available at annual
meetings and provides and opportunity for conversation
about the Company. Investor queries to the Company
by phone and email are answered promptly by senior
managers. For major Company events, management and
directors reach out to larger minority holders to discuss
issues and concerns.
The Company encourages participation in annual meetings.
It holds meetings online as well as in person and provides
extensive opportunities before and during meetings for
questions, discussion and engagement. Questions may
be submitted in advance by shareholders not present and
answers are made available on the webcast recording on the
website. Shareholders continue to avail these opportunities.
The Notice of Annual Meeting of Shareholders is posted
when it is available and at least 20 working days prior to
the meeting.
Shareholders can directly message the Company at any
time through the website and management aims to
respond promptly. The Company makes available key staff
and directors to answer questions about major initiatives.
The chief executive actively contacts shareholders who seek
to engage.
Shareholders have the right to vote on major decisions that
change the nature of the company’s activities. All shares
participate equally with other shares on the basis of one
share, one vote. There are no special voting rights attached
46
to any stock. Voting is conducted by poll, not by show of
hands, as recommended by shareholders’ associations.
The Company accepts the principle of one share-one vote
in the listing rules and agrees that a show of hands is
inconsistent with this principle. The Company holds ballots
with scrutineers present on all votes at all meetings.
The Company’s offices and shareholder meetings are
wheelchair accessible.
Website
The Company maintains a website, nzog.com, where
comprehensive information is presented about its activities,
governance and financial performance.
Shareholders and interested parties can subscribe via
the website to receive notice of the Company’s market
announcements by email.
The dedicated investor relations section of the website
makes available share price information, detail about
shareholdings, statutory reports, corporate governance
information, and market updates about the Company’s
activities.
The corporate governance landing page presents all relevant
corporate governance documents, including policies,
charters, and the constitution.
The Investors section provides links to:
• News, market announcements, and investor briefings;
• Policies, charters and other corporate governance
documentation;
• Periodic reports, including annual and quarterly reports
and sustainability reporting;
• Information about annual and special meetings, including
notices of meeting, voting cards, CEO and Chair’s
addresses, results and webcasts, including historical
records of past meetings;
New Zealand Oil & Gas Annual Report 2023 • Shareholder information including the distribution of
listed holdings, information about past dividends and a
share price graph.
Recent reports are typically linked from the most prominent
panel of the front page of the website.
The website provides detailed descriptions of
current activities;
Registry
The Company shifted registry management to
Computershare Australia (from New Zealand) following its
Annual Meeting of Shareholders in November 2022.
Any shareholder may receive all communications from New
Zealand Oil & Gas and from the registry in electronic form.
Contact Computershare to make arrangements:
• Production and financial data
Australia
• The names, photographs and brief biographical
information for each directors and senior executive;
• A statement of values;
• Sustainability and corporate responsibility information;
• Investor relations materials.
The corporate governance landing page is at
www.nzog.com/corporate-governance/
Computershare Investor Services Pty Ltd
GPO Box 3329 Melbourne, VIC 8060 Australia
Freephone: 1 800 501 366 (within Australia)
Telephone: +61 3 9415 4083
Facsimile:+61 3 9473 2500
Email: Web.Queries@computershare.com.au
Website: www.computershare.com.au
New Zealand
Computershare Investor Services Ltd
Level 2, 159 Hurstmere Road Takapuna, Private Bag 92119
Auckland, New Zealand
Telephone: +64 9 488 8777
Freephone: 0800 467 335
Facsimile: +64 9 488 8787
Email: enquiry@computershare.co.nz
www.investorcentre.com
Investor information is available at
Update your details here
www.nzog.com/investor-information/
www.computershare.com.au/easyupdate/NZO
47
New Zealand Oil & Gas Annual Report 2023 PRINCIPLE 7
Recognise and manage risk
Establish a sound risk management framework and periodically
review the effectiveness of that framework.
- (ASX Principles and Recommendations)
The board allocates oversight of risk management in
relation to health, safety and environment and company
operations to the Operational Risk and Sustainability
Committee and oversight in relation to accounting
standards and principles, financial statement compliance
and reliability and the audit process to the Audit Committee.
Operational Risk and Sustainability Committee
The Operational Risk and Sustainability Committee is
chaired by Rod Ritchie, who is independent. The other
members are Dr Rosalind Archer, Andrew Jefferies, and
Alastair McGregor.
The Committee met two times during the year by
video conference, and all members were present for
each meeting.
The Operational Risk and Sustainability Committee’s
role is to advise and support the board in meeting its
responsibilities in relation to health, safety, security,
environment, sustainability, operational risk and community
engagement matters arising out of the activities and
operations of the Group.
The committee’s responsibilities include:
• Risk Management Framework: Monitor the performance
and effectiveness of, and compliance with, the Company’s
Risk Management Framework and review the adequacy of
risk controls.
• Approve policy and monitor progress: Set, review and
agree ORS policies, practices, frameworks and targets,
including performance against these, as recommended by
management, including but not limited to:
- Sustainability performance framework, targets and
reporting;
- Community and Iwi engagement;
- Environmental policies and programmes
including Climate
- Change responses.
48
• Seek assurance of the Company’s compliance with all
ORS legislative requirements, licence conditions and
stakeholder commitments.
• Support the Board and management in defining the
Company’s ORS objectives, taking into account legal
obligations and industry best practice.
• Work with management to agree how ORS objectives will
be achieved, monitored and reviewed.
• Support a culture of continuous improvement by
reviewing significant incidents and system failures and
monitoring actions and measures to minimise recurrence.
• Ensure the necessary skills are obtained and maintained
within the Group to achieve ORS objectives.
• Provide leadership to the Board and support the Company
in aspiring to proactively manage ORS issues.
• Ensure that significant issues are brought to the attention
of the full Board
Company policies, frameworks and strategies relevant to
this Committee:
• Health and Safety Policy
• Environment Policy
• Capturing Local Economic Benefits Policy
• Community Engagement Policy
• HSSE Management Framework and Management System
- Risk Register
• Risk Management Procedure
• Sustainability Framework
• Climate Change Policy
Read the Operational Risk and Sustainability Committee's
charter here
www.nzog.com/dmsdocument/370
New Zealand Oil & Gas Annual Report 2023 Health and Safety
Environment
The Company values the wellbeing of employees,
contractors and communities in which we operate. It is
fully committed to the provision of a safe and healthy
environment for all employees, contractors and visitors to
New Zealand Oil & Gas sites, and to achieving a health and
safety aspiration of 'no one gets hurt’ and ‘no incidents’.
All employees, contractors and joint venture parties
engaged in activities under the Company’s operational
control are responsible for the application of the Health and
Safety Policy.
All employees are responsible for taking all practical steps
to avoid harm to themselves or to others in the workplace.
They must report any potentially hazardous situations,
maintain good housekeeping in all areas and comply with
safe work practices and procedures.
The Company’s managers are responsible for promoting the
Health and Safety Policy in non-operated joint ventures.
The Company values our natural environment and is
committed to responsible management practices that
minimise environmental impacts arising from our activities,
using soundly-based science as the basis for all of our
environmental decisions.
All employees, contractors and joint venturers engaged
in activities under the Company’s operational control
are responsible for applying the Environment Policy. The
Company’s managers are responsible for promoting the
policy in non-operated joint ventures.
Management reviews the risk management framework
twice per year and reports to the Operational Risk and
Sustainability Committee.
The full Board reviews the risk register annually.
The full Health and Safety Policy is available in the corporate
governance section of the Company's website at
The full Environment Policy is available in the corporate governance
section of the Company's website at
www.nzog.com/dmsdocument/492
www.nzog.com/dmsdocument/491
49
New Zealand Oil & Gas Annual Report 2023 Recognising and Managing Risk
The Company has a risk management system
framework, which outlines the Company’s approach to
risk management. It provides a framework for applying
consistent and comprehensive risk management practices
across all functional areas of the business.
A central Company risk register, which considers the risks,
reviews the controls, assigns ownership of a risk and
tracks treatment plans, is maintained. Risk assurance is
provided through a prioritised programme of audits and
internal review.
The board’s accountabilities include:
• Overseeing the effectiveness of the risk management
system framework,
• Monitoring compliance, and
• Approving polices and systems for the ongoing
identification and management of risks.
The board’s responsibilities include:
• Approving the Company’s risk capacity and appetite,
• Reviewing material risks, and
• Reviewing the risk register.
Responsibility for identifying, documenting and managing
risks and opportunities is delegated to the appropriate
level of management. The Chief Executive is responsible
for such things as integrating risk management into core
business processes, managing the Company’s corporate
strategic risks and opportunities, and regularly reviewing
the Company’s risk profile. The Chief Executive has ultimate
responsibility to the board for design, development and
improvement of the risk management framework system
and maintains the Company’s risk register.
The Company does not have an internal risk function.
The process employed for evaluating and improving the
effectiveness of risk management and internal control
processes is:
• Risks are formally reviewed by risk owners;
• Management regularly reviews the risk register to ensure
adherence and continuous improvement;
• The ORS Committee regularly reviews the risk register,
with a particular emphasis on reducing key risks to as low
as reasonably practicable;
50
• For specific operational activities (including seismic
acquisition campaigns), the board reviews the intended
operational activity against activities related to elements
of the Company’s HSSE management framework to
ensure a compliant work programme, achieving desired
objectives safely; and
• After-action reviews of an operational phase of a project
are undertaken by the HSSE Advisor and project team,
to identify improvement in control processes. The after-
action review is then reviewed by the ORS Committee.
The ORS Committee reviews specific risks at each meeting
of the committee and, at least annually, reviews the risk
register and framework document to satisfy itself that the
system continues to be sound.
The process employed for evaluating and improving the
effectiveness of risk management and internal control
processes is:
• Risks are formally reviewed by risk owners;
• Management regularly reviews the risk register to ensure
adherence and continuous improvement;
• The ORS Committee regularly reviews the risk register,
with a particular emphasis on reducing key risks to as low
as reasonably practicable;
• For specific operational activities (including seismic
acquisition campaigns), the board reviews the intended
operational activity against activities related to elements
of the Company’s HSSE management framework to
ensure a compliant work programme, achieving desired
objectives safely; and
• After-action reviews of an operational phase of a project
are undertaken by the HSSE Advisor and project team,
to identify improvement in control processes. The after-
action review is then reviewed by the ORS Committee.
The ORS Committee reviews specific risks at each meeting
of the committee and, at least annually, reviews the risk
register and framework document to satisfy itself that the
system continues to be sound.
The Risk Management System Framework is available in the
corporate governance section of the Company’s website at
www.nzog.com/dmsdocument/1
New Zealand Oil & Gas Annual Report 2023 TCFD Risk Disclosure
Taskforce on Climate-Related Financial Disclosure risks,
and the framework for managing climate risks, are
comprehensively reported in the Sustainability Report.
TCFD reporting is also maintained on our Company website.
A copy of the 2023 Sustainability Report is available on the
Company’s website, here:
www.nzog.com/dmsdocument/download/670
51
New Zealand Oil & Gas Annual Report 2023 Climate risk
management
How we identify, assess and manage climate-related risks
The Company’s Risk Management System Framework
applies consistent and comprehensive risk management
practices.
Climate risks are recorded in the central risk register, which
considers the risks, reviews the controls, assigns ownership
of risk and tracks treatment plans.
Climate risks are identified on an ongoing basis and
consideration is given to industry and peer information and
expertise, shareholder and community feedback, regulatory
changes, and analysis by our own staff and contractors.
Risk assurance and oversight of climate risk management is
provided through internal review by the board Operation Risk
and Sustainability committee.
How we model Climate Risk
Kupe, New Zealand
For our New Zealand Kupe asset, New Zealand Oil & Gas uses
the New Zealand ETS market pricing for carbon emissions.
The Company has sufficient forward emissions credits for
future demand. As these were purchased at much lower
carbon prices, the emissions trading system carbon costs
represent a positive opportunity for competitive advantage.
For physical risks to the Kupe offshore platform, onshore
coastal processing plant and connecting pipeline, the
Company carries insurance and equipment is engineered to
standards well in excess of expected weather activity.
Amadeus Basin, Australia
For physical risks to our Amadeus Basin interests, the
Company has comprehensive insurance to cover physical
risk. The risks associated with climate are assessed in
engineering planning. For forward price risk associated with
production, the Company uses impairment testing based on
forward market prices and contracts.
The Company uses an internal price to test economics of
investments based on market prices in other comparable
international regimes. Expectations of forward prices reflect
the market consensus on the likelihood and level of future
carbon charges and market demand. Potential increased
52
carbon pricing or reduced prices are part of the Company’s
sensitivity testing.
Carbon prices have generally conformed to forward curves
in the reporting period, while oil and gas commodity prices
have been much higher due to concerns about energy
security and actual shortages of gas. As a result, the
financial risks associated with climate change are assessed
to be considerably positive (upside) as of the date of this
report.
Perth Basin, Australia
In the acquisition of exploration opportunities in Western
Australia, the Company used a shadow carbon price to test
the economics of a discovery during due diligence.
Expectations of forward prices were based on market
consensus. Potential increased carbon pricing or reduced
prices were also considered as part of the Company’s
sensitivity testing. Engineering risks will be assessed in the
FEED (Front End Engineering Design) process following any
new discovery.
Assets held by Cue
For assets held by its subsidiary, Cue Energy Resources, in
New Zealand and Indonesia, risks are modelled by Cue, and
the Cue board manages the risk for those assets. The risk
model is broadly similar to the one used by New Zealand Oil
& Gas to manage assets held directly.
Climate risk, drilling and discovering new resources
The risks associated with drilling and operating new oil and
gas wells are managed by the field operator. New Zealand Oil
& Gas does not operate any exploration or production site.
The Company exercises active oversight of operator health,
safety and environment risks and manage these through its
risk management framework.
Oil and gas are fossil fuels that produce climate changing
emissions. Our Statement on Climate Change can be read
in our Sustainability Report. We target gas production
in Australia, New Zealand and Indonesia, and evidence is
clear that our production provides energy security and
substitutes for much higher emitting alternatives. New
discoveries do not materially alter demand for oil and gas
products and so any production needs to be measured
against the alternative energy source.
The Climate Change Policy is available here
www.nzog.com/dmsdocument/download/493
New Zealand Oil & Gas Annual Report 2023 Risk Assessment
The table uses the following time horizon categories: Short (S): 0–5 years, Medium (M) 5–10 years, Long (L) 10+ years.
Risk type
Description
Time
Control
Non physical risks
Policy and legal risks
Litigation against companies and/or
directors on climate grounds (claiming
causation or seeking greater action to
mitigate effects) could have reputational,
development and operating cost impacts.
Changing regulations including bans
and restrictive regulations, taxes and
emissions limits across all jurisdictions
risk viability of projects.
S M L
Board and management understand their
fiduciary duties around climate change risk.
Internal processes, including due diligence and joint
venture processes, identify and manage climate risk.
Monitor jurisdictions where we undertake activities.
Look to diversify jurisdictions to mitigate changes
to any individual regulatory environment.
Participate in New Zealand’s environmental regulation
framework through reputable industry advocacy
bodies, including Energy Resources Aotearoa, Business
New Zealand and the Business Energy Council.
Develop evidence for the role of natural
gas in a net carbon-zero future.
Reputational and
social license risks
Stakeholder disengagement and oppositional
activism. Loss of social license, leading
to project delays or stoppages.
Recruitment and retention risk.
Risk of partner misalignment from divergent
approaches to carbon management.
S M L
Manage environmental performance
through sustainability framework.
Promote corporate values, including
our pride in our work.
Due diligence screening of commercial
opportunities and joint ventures.
Financial risks
Divestment movement increases, affecting
availability and cost of capital.
Insurance premiums increase.
Potential for classes of assets and
locations to become uninsurable.
Capital cost increases if new environmental
standards require more expensive
supplies relative to alternatives.
Carbon pricing adopted across jurisdictions,
or inconsistently between them.
Changes to price and cost forecasts
result in stranded assets or reserves.
Physical assets, especially our coastally-
located gas production plant, may be subject to
increased frequency and intensity of extreme
weather events such as storms, flooding, coastal
inundation, lack of water availability, or slips.
Offshore drilling and production delayed
or shut in by increased weather events.
Physical risks
Acute & Chronic
S M L
S M L
Incorporation of a shadow price on carbon in
sensitivity testing for investment decisions.
Due diligence screening of commercial opportunities
and JV processes. Assurance of insurance forecasts.
M L
Access to a range of funding options.
Reporting on environmental, social, and governance
(ESG) matters, including TCFD compliant reporting.
S M L
S M L
Jurisdictional diversification to mitigate
the impact of sudden, unilateral changes,
confiscation, or value destruction by regulation.
M L
Engineering anticipates environmental conditions.
Carbon policy provides for review of climate
issues in strategic and operational decisions.
Opportunities
Commercial
Global reduction in high carbon sources such
as coal is increasing demand for natural gas
as a lower carbon partner to renewables.
S M L
Strategic preference for natural gas.
Support for our joint venture partners
pursuing low carbon innovations on sites.
Ongoing investigation of investment
opportunities in lower emission technologies,
including carbon capture and storage.
Reputational
Partnering with local communities to
support low carbon initiatives.
S M L
Local relationships and discussions about contributing
to socially desirable low carbon outcomes.
53
New Zealand Oil & Gas Annual Report 2023
PRINCIPLE 8
Remunerate fairly and responsibly
Pay director remuneration sufficient to attract and retain high quality directors
and design executive remuneration to attract, retain and motivate high
quality senior executives and to align their interests with the creation of value
for security holders and with the Company’s values and risk appetite.
- (ASX Principles and Recommendations)
Nomination and Remuneration Committee
The Company has a Nomination and Remuneration
Committee comprising Dr Rosalind Archer (Chair), Marco
Argentieri, Samuel Kellner, Alastair McGregor and Rod
Ritchie.
The Committee charter requires that it comprises at least
three non-executive directors of the board. The chair, Dr
Archer, is independent.
Principle 2.1 of the ASX Principles and Recommendations
recommends that a majority of the nomination committee
should be independent directors. A majority of the board is
not independent and the composition of the committee also
reflects this.
Nomination and Remuneration
Committee Member
Meetings attended
during the year
Dr Rosalind Archer (Chair)
Marco Argentieri
Samuel Kellner
Alastair McGregor
Rod Ritchie
3
3
3
2
3
The Nomination and Remuneration Committee is
responsible to the board for:
Providing recommendations to the board in relation
to the director selection and appointment practices of
the Company;
Evaluation and remuneration of directors and
board succession;
Chief Executive remuneration, appointment,
performance criteria and review;
•
•
54
•
Reviewing and providing recommendations to the board
in relation to:
- Senior executive and key staff succession plans;
- The Company’s remuneration, recruitment, retention
and termination policies and procedures for all
employees;
- Implementing the Company’s Diversity Policy and
achieving any associated measurable objectives; and
- Other relevant matters identified from time to time by
the board.
Remuneration and Performance Appraisal
The Company aims to attract, retain and motivate
professional staff capable of achieving the goals of the
Company.
To achieve this, the Company wants to encourage and
reward its staff fairly and appropriately within the market to
reflect performance and contribution.
The Remuneration Policy sets out a process to assess the
competitiveness of remuneration.
The Nomination and Remuneration Committee makes
recommendations on remuneration policies for the chief
executive and senior managers based on assessment of
relevant market conditions and linking remuneration to
the Company’s financial and operational performance and
individual performance.
Executive remuneration may comprise salary, short-term
incentive payments and share options.
Read the Committee's Charter here
www.nzog.com/dmsdocument/373
New Zealand Oil & Gas Annual Report 2023 Short Term Incentive
Director’s Remuneration
Officers of the Company may receive payments under a
short term incentive scheme.
40% of the STI is based on company performance, 30%
is Board discretion, and 30% on personal performance.
45% of the personal performance component is assessed
on behaviours aligned with Company values, 10% on HSE
performance, and 45% on the personal performance criteria
agreed at the start of the financial year between the Chief
Executive and the respective officers.
In 2021-22 the company factors affecting short term
incentive payments were:
Acquisitions
Board approval to make binding offer
on two opportunities, execution of
one sales and purchase agreement,
completion of two deals.
Group Strategy
Execute board-agreed group strategy.
Funding gap
Overheads
Develop and execute funding
strategy to close cash flow gap.
Not exceeding budgeted overheads.
Emphasis on achievement of
meaningful cost reduction initiatives.
Reserves replacement
2P reserves replacement.
HSSE
Corporate discretion
Sustainability targets met,
influence of process safety with
operating JV partners, HSSE
review of CTP operations.
Awarded on overall company
performance, share price
performance and oil and
gas market conditions
In the reporting period the Company has determined that
the overall business performance outcome was 81%.
At the 2008 Company Annual Meeting, shareholders
approved a resolution that director’s fees be set at a
maximum of $600,000 per annum, being the combined total
for all non-executive directors. There has been no increase
in the fee level since 2008 and in March 2016 the board and
directors volunteered a reduction in their fees.
OGOG representative directors have not yet drawn any fees
for their services.
Directors do not receive any performance-based
remuneration. Mr Jefferies does not receive fees because he
is the Chief Executive.
The total remuneration and other benefits to directors for
services in all capacities during the year ended 30 June
2022 was:
Dr R Archer
Mr M Argentieri
Mr A Jefferies
Mr S Kellner
Mr A McGregor
Mr R Ritchie
$77,599
$1,020,736*
$ 77,599
* Includes remuneration received as Chief Executive
CEO Salary
Salary Paid
Benefits
Cash STI1
LTI share options2
Total
$684,772
$51,485
$220,301
$64,178
$1,020,736
(1) STI for current period, paid August 2023
(2) LTI share options issued during the
year 502,730. Total held 1,801,258
Options to acquire ordinary shares are issued in accordance with
Scheme Rules, which are available here
www.nzog.com/dmsdocument/480-nzog-share-option-scheme-
rules-pdf
55
New Zealand Oil & Gas Annual Report 2023 Staff Salary Bands
$100,000 - $110,000
$110,000 - $120,000
$150,000 - $160,000
$160,000 - $170,000
$170,000 - $180,000
$190,000 - $200,000
$200,000 - $210,000
$220,000 - $230,000
$230,000 - $240,000
$320,000 - $330,000
$390,000 - $400,000
$460,000 - $470,000
$470,000 - $480,000
$620,000 - $630,000
$1,020,000 - $1,030,000
1
3
1
2
1
1
1
1
1
1
2
1
1
1
1
19
Securities Trading Policies
The Company’s Securities Trading Policies set out
procedures about when and how an employee, dedicated
contractor or director can deal in Company securities.
These policies are consistent with New Zealand’s Financial
Markets Conduct Act 2013 and its insider trading
procedures, and they comply with ASX and NZX listing rules.
The board ensures that these policies are
up-to-date and compliant at all times with
changes to the law and to listing rules.
The Securities Trading Policies are available on the Company’s
website at
For directors: www.nzog.com/dmsdocument/496
For employees and contractors www.nzog.com/dmsdocument/497
56
New Zealand Oil & Gas Annual Report 2023 Proudly Rainbow Inclusive
Diversity Statement
New Zealand Oil & Gas is proud to earn a Rainbow Tick and
be a leader in our industry in accepting and valuing people in
the workplace, embracing the diversity of sexual and gender
identities.
The Tick certification process tests whether a workplace
understands and welcomes sexual and gender diversity. The
process involves an on-going quality improvement process.
Rainbow refers to people who identify as lesbian, gay,
bisexual, transgender, takatāpui and intersex (LGBTTQIA+).
The Company is committed to an inclusive workplace that
embraces diversity.
The Company values, respects and leverages the unique
contributions of people with diverse backgrounds,
experiences and perspectives.
The Company recognises diversity is about commitment
to equality and treating all individuals with respect, and
includes, but is not limited to, gender, age, disability,
ethnicity, marital or family status, religion, sexual
orientation, gender identity or expression, and cultural
background.
The Company commits to recruiting from a diverse pool of
candidates, who will be considered with no conscious or
unconscious bias that might discriminate against certain
candidates.
The Company’s employment practices and policies take into
account the domestic responsibilities of employees and
adopts flexible work practices.Examples of these are set out
below, under Diversity Performance Metrics.
The Company supports the determination of self-identity
by all employees including using the titles, names and
pronouns of their choice. We seek advice from external
organisations to appropriately support staff.
The board establishes measurable objectives for achieving
gender diversity. The board may establish measurable
objectives for other aspects of diversity, and assesses
regularly both the set objectives and the progress in
achieving them.
The Nomination and Remuneration Committee makes
an annual assessment of success in achieving and
implementing the policy and the set objectives, then reports
to the board with recommendations.
Our Diversity Policy is at
www.nzog.com/dmsdocument/download/490
57
New Zealand Oil & Gas Annual Report 2023 Diversity Performance Metrics
Diversity Performance 2022-23
The following charts show gender diversity across the company (excluding contractors) as at 30 June 2023, and compares that to numbers as at 30 June 2022.
2 023
2 022
2 023
2 022
1
1
Board
5
5
2
2
Senior
Executives
4
3
2 023
2 022
5
8
7
6
Other
Employees
Female
Male
Gender Diverse
Compliance with the Diversity Policy
With respect to the provision of the diversity policy, the board has determined that the Company has complied with the policy.
Status
Achieved
Objective
Promote ongoing
engagement with diversity
initiatives, policies and
guidelines to ensure
they are continuing to
evolve as needed
Progress
We have set up the Te Ata initiative to support and nurture the well-being of our
team, which includes coaching, training, upskilling, resilience training, "conversations
that matter" training, and a monthly book club. The Company was recognised with a
wellbeing award by Vitae in appreciation of the Te Ata initiative.
The CEO has committed to having lunch with every staff member to ensure that they
are receiving appropriate opportunities for development and to understand how they
feel about the organisation's performance. We have reviewed our policies to ensure
that they do not impede our ability to maintain a diverse workplace. We have also
created a flexible working guideline that complements our family-friendly and diversity
policies (which can be found on our website). Candidates have given positive feedback
about these initiatives when we have recruited new team members.
Providing talent
management support
for diverse and
emerging leaders.
Completed and
ongoing
The Diversity Committee maintains a cultural calendar that celebrates events of cultural
significance to our people, and we have integrated them into all staff gatherings and
events.
The Company participates in Diversity Works, offering staff opportunities to attend
workshops, webinars, and networking events.
Job descriptions for leadership roles in the Company have been reviewed, and a job
sizing activity is underway to determine appropriate benchmarks for resource allocation
and equitable remuneration.
Retain Rainbow Tick
Achieved
Review for re-accreditation is required and the Company was re-accredited.
58
New Zealand Oil & Gas Annual Report 2023 Diversity
Performance
Targets for 2023-24
•
•
•
Promote ongoing engagement with diversity initiatives,
policies and guidelines to ensure they are evolving
appropriately.
Provide talent management support for diverse and
emerging leaders.
During any relevant board selection process, ensure
at least one credible and suitably experienced female
candidate is provided for consideration.
•
Retain Rainbow Tick.
59
New Zealand Oil & Gas Annual Report 2023 Consolidated
Financial
Statements
For the year ended 30 June 2023
Authorised on behalf of the New Zealand Oil & Gas Limited
Board of Directors on 30 August 2023:
Samuel Kellner
Director
Rosalind Archer
Director
60
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statement
of Cash Flows
For the year ended 30 June 2023
NZ$000
Notes
2023
2022
Cash flows from operating activities
Customer receipts
Production and marketing payments
Supplier and employee payments (inclusive of GST)
Interest received
Income tax paid
Royalties paid
Other
Net cash inflow from operating activities
Cash flows from investing activities
Exploration and evaluation expenditure
Oil and gas asset expenditure
Prospects acquired (net of cash)
Deferred consideration
Security deposits and bonds
Property, plant and equipment expenditure
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from issues of equity securities
Lease liabilities principal element payments
Net cash (outflow)/inflow from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Exchange rate effects on cash and cash equivalents
Cash and cash equivalents at the end of the year
The notes to the financial statements are an integral part of these financial statements
87,011
(31,391)
(10,534)
872
(7,370)
(7,018)
882
32,452
(12,070)
(24,678)
-
(22,160)
(1,239)
(117)
(60,264)
-
(249)
(249)
(28,061)
64,590
(149)
36,380
9
79,507
(22,941)
(10,784)
134
(7,471)
(4,267)
(2,704)
31,474
(9,071)
(10,008)
(33,328)
(10,596)
(446)
(126)
(63,575)
24,982
(231)
24,751
(7,350)
70,759
1,181
64,590
61
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statement
of Cash Flows continued
Reconciliation of profit for the year to net cash inflow from operating activities
NZ$000
Profit for the year
Depreciation and amortisation
Deferred tax benefit
Contract liabilities non-cash
Exploration expenditure
Emissions costs settled by units
Net foreign exchange differences
Unwind of discount
Share based payments
Lease payments in financing
Other
Change in operating assets and liabilities
Movement in receivables
Movement in contract assets
Movement in inventories
Movement in payables
Movement in provisions
Movement in tax payable
Net cash inflow from operating activities
2023
19,079
15,396
(5,284)
(4,897)
9,128
202
837
2,759
418
260
260
(4,075)
(3,586)
51
407
42
1,455
32,452
2022
25,724
13,708
(11,480)
(4,007)
6,015
902
233
72
670
250
32
(7,248)
2,032
(405)
4,216
51
709
31,474
The notes to the financial statements are an integral part of these financial statements.
62
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statement
of Comprehensive Income
For the year ended 30 June 2023
NZ$000
Revenue
Operating costs
Exploration and evaluation expenditure
Other income
Other expenses
Profit from operating activities excluding amortisation, impairment and net finance costs
Amortisation of production assets
Net finance (costs)/income
Profit before income tax and royalties
Income tax (expense)/benefit
Royalties expense
Profit for the year
Profit for the year attributable to:
Profit attributable to shareholders
Profit attributable to non-controlling interest (NCI)
Profit for the year
Other comprehensive income:
Items that may be classified to profit or loss
Foreign currency translation reserve (FCTR) differences
Asset revaluation reserve
Total other comprehensive income for the year
Total comprehensive income for the year is attributable to:
Equity holders of the Group
Non-controlling interest
Total comprehensive income for the year
Earnings per share
Basic earnings per share attributable to shareholders (cents)
Diluted earnings per share attributable to shareholders (cents)
The notes to the financial statements are an integral part of these financial statements.
Notes
4
5
4
6
14
7
8
8
20
20
22
22
2023
98,784
(35,117)
(9,128)
1,008
(12,447)
43,100
2022
83,806
(24,213)
(6,015)
489
(14,310)
39,757
(15,178)
(13,634)
(686)
27,236
(4,101)
(4,056)
19,079
10,757
8,322
19,079
(901)
(1,408)
16,770
7,936
8,834
16,770
4.7
4.7
452
26,575
3,211
(4,062)
25,724
17,159
8,565
25,724
5,672
1,045
32,441
23,265
9,176
32,441
9.9
9.9
63
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statement
of Financial Position
For the year ended 30 June 2023
NZ$000
ASSETS
Current assets
Cash and cash equivalents
Receivables and prepayments
Contract assets
Inventories
Right of use assets
Total current assets
Non-current assets
Exploration and evaluation assets
Oil and gas assets
Property, plant and equipment
Right of use assets
Other intangible assets
Net deferred tax assets
Other financial assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Payables
Lease provisions
Contract liabilities
Deferred consideration
Current tax liabilities
Total current liabilities
Non-current liabilities
Rehabilitation provisions
Contract liabilities
Deferred consideration
Lease provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Share capital
Reserves
Retained losses
Attributable to shareholders of the Group
Non-controlling interest in subsidiaries
Total equity
Net asset backing per share (cents)
Net tangible asset backing per share (cents)
64
Notes
2023
2022
9
10
13
14
8
15
16
17
8
18
17
19
20
21
21
36,380
17,017
5,567
2,668
130
61,762
2,625
183,015
148
343
1,423
13,663
8,307
209,524
271,286
12,171
268
2,837
817
4,349
20,442
55,115
15,708
-
261
71,084
91,526
179,760
236,883
9,215
(88,930)
157,168
22,592
179,760
79.1
71.3
64,590
12,544
2,032
2,762
131
82,059
7,193
173,926
214
300
2,896
8,420
7,347
200,296
282,355
16,493
267
5,625
23,225
2,873
48,483
51,856
19,231
149
234
71,470
119,953
162,402
236,883
11,639
(99,877)
148,645
13,757
162,402
71.4
63.3
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statement
of Changes in Equity
For the year ended 30 June 2023
NZ$000
Share
capital
Reserves
Retained
earnings
Total
Non-
controlling
interest
Total
equity
Balance as at 30 June 2021
211,901
4,961
(117,543)
99,319
4,580
103,899
Profit for the year
Foreign currency translation differences
Shares issued
Share based compensation expense
Forfeited and expired ESOP awards
Asset revaluation reserve
-
-
24,982
-
-
-
5,060
-
673
(100)
1,045
17,159
-
-
-
100
407
17,159
5,060
24,982
673
-
1,453
8,565
612
-
-
-
-
25,724
5,672
24,982
673
-
1,453
Balance as at 30 June 2022
236,883
11,639
(99,877)
148,645
13,757
162,402
Profit for the year
Foreign currency translation differences
Share based compensation expense
Forfeited and expired ESOP awards
Asset revaluation reserve
-
-
-
-
-
-
10,757
(1,414)
418
(20)
(1,408)
-
-
20
170
10,757
(1,414)
418
-
(1,238)
8,322
513
-
-
-
19,079
(901)
418
-
(1,238)
Balance as at 30 June 2023
236,883
9,215
(88,930)
157,168
22,592
179,760
The notes to the financial statements are an integral part of these financial statements
65
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS Notes to the Financial
Statements for Year
Ended 30 June 2023
Basis of consolidation
Subsidiaries are fully consolidated from the date of
acquisition, being the date on which the Group obtains
control, and continue to be consolidated until the date that
control ceases. Consistent accounting policies are employed
in the preparation and presentation of the Group financial
statements. Intra-group balances, transactions, unrealised
income or expenses arising from intra-group transactions
and dividends are eliminated in preparing the Group
financial statements. A list of subsidiaries and associates is
shown in note 11.
Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and
losses resulting from the settlement of such transactions
and from the translation at year end exchange rates of
monetary assets and liabilities denominated in foreign
currencies, are recognised in the income statement,
except when deferred in the statement of comprehensive
income and held in equity reserves as qualifying cash flow
hedges and qualifying net investment hedges. Translation
differences on non-monetary items, such as equities
classified as fair value through other comprehensive
income, are included in the statement of comprehensive
income and held in the fair value reserves in equity.
1 Basis of accounting
Reporting entity
New Zealand Oil & Gas Limited (NZO) is a company domiciled
in New Zealand, registered under the Companies Act 1993
and listed on the Australian Stock Exchange (ASX) and the
New Zealand Stock Exchange (NZX) as a foreign exempt
listing. The Group is a Financial Markets Conduct (FMC)
reporting entity for the purposes of the FMC Act 2013.
The financial statements presented are for NZO, its
subsidiaries and the interests in associates and jointly
controlled operations (together referred to as the “Group”).
The ultimate parent company is O.G.Oil & Gas (Singapore)
Pte. Limited ("OGOG"), a company incorporated in
Singapore, which is a subsidiary and part of the O.G. Energy
Holdings Ltd. (“OGE”) Group.
Comparative figures have been adjusted to conform to
changes in presentation for the current reporting period.
Basis of preparation
The financial statements have been prepared in accordance
with New Zealand Generally Accepted Accounting Practices
("NZ GAAP") and the Financial Reporting Act 2013. They
comply with the NZ equivalents to International Financial
Reporting Standards ("NZ IFRS") as appropriate for profit-
oriented entities, and with International Financial Reporting
Standards ("IFRS").
The presentation and reporting currency used in the
preparation of the financial statements is New Zealand
dollars (NZD or $) rounded to the nearest thousand unless
otherwise stated. The financial statements are prepared on
a goods and services tax (GST) exclusive basis except billed
receivables and payables which include GST.
These financial statements are prepared on the basis of
historical cost except where otherwise stated in specific
accounting policies contained in the accompanying notes.
66
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS 2 Critical accounting estimates and judgements
3 Segment information
The preparation of the financial statements requires
management to make judgements, estimates and
assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities,
income, and expenses. Actual results may differ from
these estimates.
The estimates and assumptions that have the most
significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year relate to:
¬ Recoverability of deferred tax assets, assessment of the
ability of entities in the Group to generate future taxable
income (refer to note 8).
¬ Recoverability of exploration and evaluation assets
and oil and gas assets. Assessment includes future
commodity prices, future cash flows, estimated discount
rates and estimates of reserves. Management performs
an assessment of the carrying value of investments at
each reporting date and considers objective evidence
for impairment on each investment, taking into account
observable data on the investment, the fair value, the
status or context of capital markets, its own view of
investment value and its long-term intentions (refer to
notes 13 and 14).
¬ Provision for rehabilitation obligations includes
estimates of future costs, timing of required rehabilitation
and an estimated discount rate (refer to note 18).
The ongoing geo-political tensions in Eastern Europe
have caused ongoing volatility and uncertainty around
the breadth and duration of business disruption in both
domestic and international markets. Consequently,
demand for products and commodity prices have
fluctuated and costs associated with exploration and
development projects are increasing.
Operating segments’ operating results are reviewed
regularly by the Group’s chief executive officer (CEO),
the entity’s chief decision maker, and have discrete
financial information available. Segment results
that are reported to the CEO include items directly
attributable to a segment as well as those that can be
allocated on a reasonable basis.
The following summaries describe the activities within
each of the reportable operating segments:
¬ Perth Basin (from 20 March 2023): Exploration interests
in Western Australian comprising the L7 Production
licence (L7) and EP437 Exploration Permit (EP437). Refer
to note 13.
¬ Kupe oil & gas field (Kupe): Development, production,
and sale of natural gas, liquified petroleum gas (LPG) and
condensate (light oil), located in the offshore Taranaki
Basin, New Zealand.
¬ Amadeus Basin oil & gas fields (from 1 October 2021):
Comprising NZO's share of the Mereenie oil and gas field,
Palm Valley gas field and Dingo gas field, all located in
the Amadeus Basin in Australia. Cue Energy Resources
Limited ("Cue"), a partially owned subsidiary of NZO, holds
a participating interest in the Amadeus Basin assets,
these are included in the Cue segment below.
¬ Other and unallocated: Unallocated items comprise
corporate assets, corporate overheads, merger and
acquisition expenditure, and income tax assets and
liabilities.
¬ Cue Energy Resources Limited: The Group acquired a
controlling interest in Cue during the 2015 financial year
and from 1 October 2021 this segment includes Cue's
participating interest in the Amadeus Basin assets.
67
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS 3 Segment information (continued)
2023
$000
Sales to external customers - NZ
Sales to external customers - Australia
Sales to external customers - other countries
Total sales revenue
Other income/(expense)
Total sales revenue and other income
Segment result
Other net finance expense
Profit before income tax and royalties
Income tax and royalties expense
Profit for the year
Segment assets
Segment liabilities
Included in segment results:
Depreciation and amortisation expenses
2022
$000
Sales to external customers - NZ
Sales to external customers - Australia
Sales to external customers - other countries
Total sales revenue
Other income/(expense)
Total sales revenue and other income
Segment result
Other net finance expense
Profit before income tax and royalties
Income tax and royalties expense
Profit for the year
Segment assets
Segment liabilities
Included in segment results:
Perth
Basin
Kupe oil &
gas field
Amadeus
Basin oil &
gas fields
Other &
unallocated
Cue Energy
Resources
Ltd
-
-
-
-
-
-
9,548
-
-
30,272
2,612
-
12,160
30,272
-
3
12,160
30,275
-
-
-
-
1,622
1,622
-
12,933
43,419
56,352
(617)
55,735
(243)
6,332
6,430
(7,641)
23,044
Total
9,548
43,205
46,031
98,784
1,008
99,792
27,922
(686)
27,236
(8,157)
19,079
2,214
-
-
28,279
12,726
85,864
30,834
34,867
2,020
120,062
271,286
45,946
91,526
3,259
5,401
258
6,649
15,567
Kupe oil &
gas field
12,665
Amadeus
Basin oil &
gas fields
-
-
20,561
3,020
15,685
-
-
20,561
(11)
15,685
20,550
Other &
unallocated
Cue Energy
Resources
Ltd
-
-
-
-
-
8,812
38,748
47,560
Total
12,665
29,373
41,768
83,806
500
500
-
489
47,560
84,295
9,307
3,994
(10,304)
23,126
26,123
452
26,575
(851)
25,724
30,303
13,380
87,690
53,855
53,670
110,692
282,355
2,567
50,151
119,953
Depreciation and amortisation expenses
3,869
4,000
216
5,873
13,958
68
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS
5
Operating Costs
$000
Production and sales
marketing costs
Workover expenditure
Carbon emissions expenditure
Insurance expenditure
Movement in inventory
Royalties (i)
Total operating costs
2023
2022
28,828
22,005
2,025
376
921
988
1,979
35,117
-
902
912
(341)
735
24,213
(i) Royalties include private royalties with respect to the Amadeus Basin
assets and Government royalties at the Maari oil field which are based on a
gross revenue method of calculation.
4 Revenue
Sales comprise revenue earned from the sale of petroleum
products, when control of ownership of the petroleum
products have been transferred to the buyer, which will vary
depending on the contract (e.g. at the plant or at the port).
Revenue is recognised at the fair value of the consideration
received net of the amount of GST.
(a) Revenue from contracts with customers
$000
Crude oil and condensate
Natural gas and LPG
Total revenue from contracts
with customers
Other income
Total revenue and other income
2023
2022
37,983
60,801
33,954
49,852
98,784
83,806
1,008
99,792
489
84,295
(b) Tariffs included in revenue
Natural gas revenue includes an allowance for the additional
transportation costs incurred when the gas delivery point
is not at the plant. The cost of the transportation was $1.4
million (2022: $0.3 million).
(c) Major Customers
Customers with revenue exceeding 10% of the Group’s total
hydrocarbon sales revenue are shown below.
$000
First largest
Second largest
Third largest
Fourth largest
2023
20,434
12,551
10,384
-
% of sales
revenue
20.7%
12.7%
10.5%
-
Total revenue from major customers
43,369
43.9%
$000
First largest
Second largest
Third largest
Fourth largest
Total revenue from major customers
2022
15,965
13,003
9,815
8,367
47,150
% of sales
revenue
19.0%
15.5%
11.7%
10.0%
56.2%
69
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS 6 Other expenses
8
Taxation
$000
2023
2022
CLASSIFICATION OF OTHER
EXPENSES BY NATURE
Audit fees paid to the
Group auditor - KPMG
Directors’ fees
Legal fees
Consultants’ fees
Employee expenses
Depreciation
Share based payment expense
IT and software expenses
Registry and stock exchange fees
Stamp duty on Amadeus
Basin acquisition
Other
Total other expenses
603
390
169
874
492
381
931
920
6,869
5,760
389
418
1,189
331
-
1,215
12,447
324
673
867
401
2,310
1,251
14,310
$000
2023
2022
FEES PAID TO THE GROUP AUDITOR
Audit and review of
financial statements
Tax compliance services
Tax advisory services
Other assurance services
603
125
324
-
Total fees paid to Group auditor
1,052
7 Finance income and costs
$000
Bank fees
Unwind of discount
Total finance costs
Interest income
Exchange gains on foreign
currency balances
Total finance income
Net finance (costs)/income
2023
(46)
(1,971)
(2,017)
1,119
212
1,331
(686)
492
108
98
42
740
2022
(22)
(82)
(104)
146
410
556
452
70
Current and deferred tax is calculated on the basis of the
laws enacted or substantively enacted at balance date.
Current tax is the expected tax payable on the taxable
income for the year and any adjustment to tax payable in
respect of previous years.
Current and deferred tax are recognised in profit or loss
except when the tax relates to items recognised in other
comprehensive income, in which case the tax is also
recognised in other comprehensive income.
$000
2023
2022
INCOME TAX (EXPENSE)/BENEFIT
Current tax
Deferred tax
(a) Total income tax
(expense)/benefit
INCOME TAX (EXPENSE)/
BENEFIT CALCULATION
(Profit)/loss before income
tax and royalties
Less: royalties expense
(9,385)
5,284
(8,269)
11,480
(4,101)
3,211
(27,236)
(26,575)
4,056
4,062
(Profit)/loss before income tax
(23,180)
(22,513)
Tax at the New Zealand
tax rate of 28%
Tax effect of amounts which
are (not deductible)/taxable:
(6,490)
(6,433)
Difference in overseas tax rate
(2,153)
(3,449)
Non-deductible expenses
Foreign exchange adjustments
Unrealised timing differences
Unrecognised tax losses
Recognition of deferred
(liabilities)/tax assets
Prior year tax losses (not
recognised)/recognised
Other
(43)
212
2,478
82
5
662
-
(1,255)
2,101
3,011
(719)
589
7,982
2,928
Total tax effect of amounts which
are (not deductible)/taxable:
(4,025)
3,533
Adjustment recognised for
current tax in prior years
(76)
Total income tax (expense)/benefit
(4,101)
(322)
3,211
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS Government royalty expenses incurred by the Group
relate to petroleum royalty payments to the New Zealand
and Australian Governments in respect of the Kupe and
Amadeus oil and gas fields, and are recognised on an
accrual basis.
At 30 June 2023, no imputation credits were held for
subsequent years (2022: nil).
(b) Current tax liabilities
$000
Current tax liabilities
2023
4,349
2022
2,873
The Group has an ongoing Indonesian Tax matter relating to
a notice of amended assessment which is being disputed
by Cue. Cue is indemnified for any losses arising from
this disputed notice of assessment and has recognised
a liability and receivable on the balance sheet.
(c) Deferred tax
Deferred taxation is recognised in respect of temporary
differences between the tax bases of assets and liabilities and
their carrying amounts in the financial statements. Deferred tax
assets and future tax benefits are recognised where realisation
of the asset is probable. Deferred tax assets are reviewed at
each reporting date and are reduced to the extent that it is no
longer probable that the related tax benefit will be realised.
Deferred tax is not recognised for the following temporary
differences: the initial recognition of assets or liabilities in
a transaction that is not a business combination and that
affects neither accounting nor taxable profit, and differences
relating to investments in subsidiaries to the extent that they
probably will not reverse in the foreseeable future. Deferred
tax is measured at the tax rates that are expected to be
applied to the temporary differences when they reverse.
The utilisation of the deferred tax asset is dependent on
future taxable profits in excess of the profits arising from the
reversal of existing temporary differences. As at 30 June 2023
the Group have accumulated losses in New Zealand of $162
million (30 June 2022: $141 million), together with unclaimed
tax deductions for production and development expenditure
incurred previously. The Group has not recognised a New Zealand
deferred tax asset as under current oil price assumptions it
is not expected that sufficient future taxable profits will be
generated. The future availability of accumulated tax losses
remains subject to the Group satisfying the relevant business
and shareholder continuity requirements for each jurisdiction.
The Group has not recognised a deferred tax asset of $83.5
million at 30 June 2023 (30 June 2022: $39.7 million)
relating to carried forward Australian tax losses, as the
probability of being able to utilise these is uncertain.
Deferred tax assets and liabilities are disclosed on a
net basis in respect of their tax jurisdictions.
$000
2023
2022
THE BALANCE COMPRISES
TEMPORARY DIFFERENCES
ATTRIBUTABLE TO:
Deferred Tax Assets
Non-deductible provisions
Carried forward tax losses
Other
Total deferred tax assets
Deferred Tax Liabilities
Oil & gas assets
9,905
22,899
558
33,362
12,565
11,734
1,074
25,373
(19,676)
(16,853)
Other items (including lease assets)
(23)
(100)
Total deferred tax (liabilities)
(19,699)
(16,953)
Net deferred tax assets /(liabilities)
13,663
8,420
MOVEMENTS:
Opening balance at the
beginning of the year
Recognised in profit and loss
Recognised in other
comprehensive income
8,420
5,284
(3,391)
11,480
(41)
331
Closing balance at end of year
13,663
8,420
71
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS 9 Cash and cash equivalents
10 Receivables and prepayments
Cash and cash equivalents comprise cash on hand, cash
at bank, short-term deposits and deposits on call with an
original maturity of three months or less.
$000
2023
2022
Cash at bank and in hand
28,969
63,852
Deposits at call
Short term deposits
Share of oil and gas interests’ cash
Total cash and cash
equivalents at end of year
2,364
4,448
599
10
98
630
36,380
64,590
2023
by currency:
New Zealand dollar
United States dollar
Australian dollar
Indonesian rupiah
Total cash and cash
equivalents at end of year
2022
by currency:
New Zealand dollar
United States dollar
Australian dollar
Indonesian rupiah
Total receivables and
prepayments at end of year
Base
Currency
NZD
Equivalent
5,745
6,286
18,637
596,896
5,745
10,297
20,273
65
36,380
Base
Currency
NZD
Equivalent
23,448
4,527
30,603
97,677
23,448
7,268
33,864
11
64,590
$000
Trade receivables
Share of oil and gas
interests’ receivables
Prepayments
Total receivables and
prepayments at end of year
2023
by currency:
New Zealand dollar
United States dollar
Australian dollar
Indonesian rupiah
Total receivables and
prepayments at end of year
2022
by currency:
New Zealand dollar
United States dollar
Australian dollar
Indonesian rupiah
Total receivables and
prepayments at end of year
2023
7,196
9,262
559
2022
6,394
5,617
533
17,017
12,544
Base
Currency
NZD
Equivalent
1,687
7,166
3,294
72,651
1,687
11,738
3,584
8
17,017
Base
Currency
NZD
Equivalent
1,590
4,219
3,769
71,451
1,590
6,776
4,170
8
12,544
72
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS 11 Investments in subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it has power over the entity, has exposure or
rights to variable returns from this involvement and when it has the ability to use its power to affect the amount of the returns
At 30 June 2023 the Group held a 50.04 per cent interest in Cue (30 June 2022: 50.04 per cent). Cue entities below reflect the
Group’s 50.04 per cent interest in Cue subsidiaries.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the Consolidated Statement of
Comprehensive Income and Consolidated Statement of Financial Position respectively.
The financial statements of each of the Group’s entities are measured using the currency of the primary economic environment
in which the entity operates ("the functional currency"). The functional currency of the subsidiaries within the Group
are shown below.
The consolidated financial statements incorporate the assets, liabilities and results of the following entities:
Name of entity
New Zealand Oil & Gas
Australia and New Zealand Petroleum Limited
NZOG Onshore Limited
NZOG Canterbury Limited
NZOG 2013 O Limited
NZOG Bohorok Pty Limited
NZOG Devon Limited
NZOG GNA Trustee Limited
NZOG 2013 T Limited
NZOG Energy Limited
NZOG Offshore Limited
NZOG Pacific Holdings Pty Limited
NZOG Pacific Limited
NZOG Services Limited
NZOG Taranaki Limited
Petroleum Resources Limited
NZOG MNK Bohorok Pty Limited
NZOG (Ironbark) Pty Limited
NZOG Mereenie Pty Limited
NZOG Palm Valley Pty Limited
NZOG Dingo Pty Limited
NZOG Acacia Pty Limited*
NZOG Compass Pty Limited**
* Incorporated on the 13 March 2023.
** Incorporated on the 14 March 2023.
Country of
incorporation
New Zealand
New Zealand
New Zealand
New Zealand
Australia
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
Australia
New Zealand
New Zealand
New Zealand
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Equity
Holding
2023
Equity
Holding
2022
Functional
Currency
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
NZD
NZD
NZD
NZD
USD
NZD
NZD
NZD
NZD
NZD
AUD
NZD
NZD
NZD
NZD
USD
AUD
AUD
AUD
AUD
AUD
AUD
73
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS 11 Investments in subsidiaries (continued)
Name of entity
Cue Energy Resources
Cue Energy Resources Limited
Cue Mahakam Hilir Pty Ltd
Cue (Ashmore Cartier) Pty Ltd
Cue Sampang Pty Ltd
Cue Taranaki Pty Ltd
Cue Kalimantan Pte Ltd
Cue Mahato Pty Ltd
Cue Exploration Pty Ltd
Cue Palm Valley Pty Ltd
Cue Mereenie Pty Ltd
Cue Dingo Pty Ltd
12 Oil and gas interests
Country of
incorporation
Australia
Australia
Australia
Australia
Australia
Singapore
Australia
Australia
Australia
Australia
Australia
Equity
Holding
2023
50.04%
50.04%
50.04%
50.04%
50.04%
50.04%
50.04%
50.04%
50.04%
50.04%
50.04%
Equity
Holding
2022
50.04%
50.04%
50.04%
50.04%
50.04%
50.04%
50.04%
50.04%
50.04%
50.04%
50.04%
Functional
Currency
AUD
AUD
AUD
USD
USD
USD
USD
AUD
AUD
AUD
AUD
The Group has interests in a number of joint arrangements which are classified as joint operations. The Group financial
statements include a proportionate share of the oil and gas interests’ assets, liabilities, revenue, and expenses with items of a
similar nature on a line by line basis, from the date that joint control commences until the date that joint control ceases.
The Group held the following oil and gas production, exploration and evaluation, and appraisal interests at the end of the year:
Name
Entity
Country of
permit
Interest
2023
Interest
2022
NEW ZEALAND OIL & GAS
PML 38146 – Kupe
OL4 and OL5 - Mereenie
OL3 - Palm Valley
L 7 - Dingo
L7 Production licence*
NZOG Taranaki Ltd
NZOG Mereenie Pty Ltd
NZOG Palm Valley Pty Ltd
NZOG Dingo Pty Ltd
NZOG Acacia Pty Ltd
EP437 Exploration Permit*
NZOG Compass Pty Ltd
CUE ENERGY RESOURCES **
Mahato PSC
PMP 38160 – Maari
Sampang PSC
OL4 and OL5 - Mereenie
OL3 - Palm Valley
L7 - Dingo
Cue Mahato Pty Ltd
Cue Taranaki Pty Ltd
Cue Sampang Pty Ltd
Cue Mereenie Pty Ltd
Cue Palm Valley Pty Ltd
Cue Dingo Pty Ltd
New Zealand
Australia
Australia
Australia
Australia
Australia
Indonesia
New Zealand
Indonesia
Australia
Australia
Australia
4.0%
17.5%
35.0%
35.0%
25.0%
25.0%
12.5%
5.0%
15.0%
7.5%
15.0%
15.0%
4.0%
17.5%
35.0%
35.0%
-
-
12.5%
5.0%
15.0%
7.5%
15.0%
15.0%
* Subject to regulatory approval.
**Represents the percentage interest held by Cue. The Group interest is 50.04% (June 2022: 50.04%) of the Cue interest.
74
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS 13 Exploration and evaluation assets
The Group uses the successful efforts method of accounting
for oil and gas exploration costs. All general exploration and
evaluation costs are expensed as incurred except the direct
costs of acquiring the rights to explore, drilling exploratory
wells, and evaluating the results of drilling. These direct
costs are capitalised as exploration and evaluation assets
pending the determination of the success of the well. If a
well does not result in a successful discovery, the previously
capitalised costs are immediately expensed.
Key judgement: recoverability of exploration and
evaluation assets
Assessment of the recoverability of capitalised exploration
and evaluation expenditure requires certain estimates
and assumptions to be made for future events and
circumstances, particularly in relation to whether economic
quantities of reserves that have been discovered. Therefore,
such estimates and assumptions may change as new
information becomes available. If it is concluded that the
carrying value of an exploration and evaluation asset is
unlikely to be recovered by future development or sale, the
relevant amount is then expensed in the profit and loss.
Capitalised exploration and evaluation assets, including
expenditure to acquire mineral interests in oil and gas
properties, related to wells that find proven reserves are
classified as development assets within oil and gas assets
at the time of sanctioning the development project.
$000
Opening balance
Exploration expenditure
incurred during the year
Expenditure transferred to oil and
gas assets relating to PV-12
Revaluation of foreign currency
exploration and evaluation assets
Total exploration and evaluation
assets at end of year
2023
7,193
2022
-
7,336
6,957
(11,318)
-
(586)
236
2,625
7,193
On 17 April 2022, the Palm Valley 12 (PV-12) well was
spudded. On 10 July 2022, after challenging drilling
conditions, the Joint Venture decided to stop drilling
towards the deep Arumbera exploration target. Instead, it
was agreed to side-track a lateral well-bore, from PV- 12, to
evaluate the lower Pacoota (P2) / Pacoota (P3) sandstone.
On 22 August 2022, the Group announced the decision to
curtail further drilling in the lower P2 and P3 side-track due
to the combination of the presence of formation water and
no significant gas shows.
On 5 September 2022, the Joint Venture commenced
drilling of a second side-track (ST2) lateral well bore to
evaluate the Pacoota 1 sandstone, the current producing
zone of the wells in Palm Valley. On 17 October 2022, the
Group announced that the PV-12 ST2 would be completed
as a gas producing well, to be tied-in and flowing into the
existing gas field network. On 28 November 2022 the PV- 12
well was tied-in and commenced flow testing.
Total PV-12 exploration costs of $14.5 million have been
expensed in respect of the unsuccessful sections of the
well. In accordance with the Group’s accounting policy $7.8
million was expensed in the current year and $6.7 million
was expensed in the year ended 30 June 2022.
The costs of drilling the successful ST2 production well of
$11.3 million have been transferred to Oil and gas assets in
the balance sheet. Refer to note 14.
Following year end, on 27 July 2023 the Group announced
an upgrade in reserves at the Palm Valley as a result of the
PV-12 exploration activity. Refer to note 27.
On 17 January 2023, the Group announced that it had
executed a binding term sheet with ASX listed energy
company, Triangle Energy (Global) Ltd (Triangle) (ASX:
TEG). The Farm-Out Agreement (FOA) provides the Group
with a 25% participating interest in the onshore Western
Australian L7 production licence and EP437 exploration
permit. The Group will contribute upfront costs of
$2.1 million and participate in the drilling of 3 onshore
exploration wells, providing a carry to Triangle capped at
$3.9 million.
The transaction is treated as an asset acquisition in line
with NZ IFRS 6, with an acquisition date of 20 March 2023,
which is when the Group entered into the FOA with Triangle
and assumed control of the assets. Upfront costs of $2.1
million, relating to seismic work already carried out, have
been recognised as an exploration asset.
The agreed carry of Triangle's drilling costs of $3.9 million
is disclosed in the Commitment note. Refer to note 26.
Acquisition related costs of $0.2 million are capitalised in
line with IFRS 6.
75
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS 14 Oil and gas assets
Development
Development assets include construction, installation and
completion of infrastructure facilities such as pipelines
and development wells. No amortisation is provided in
respect of development assets until they are reclassified
as production assets.
has been a change in the estimates used to determine the
recoverable amount. An impairment loss is reversed only to
the extent that the asset’s carrying amount does not exceed
the carrying amount that would have been determined, net
of depreciation or amortisation, if no impairment loss had
been recognised previously.
Production assets
Production assets capitalised represent the accumulation
of all development expenditure incurred by the Group in
relation to areas of interest in which petroleum production
has commenced. Expenditure on production areas of
interest and any future estimated expenditure necessary to
develop proven and probable reserves are amortised using
the units of production method on a basis consistent with
the recognition of revenue. Where it is possible to separately
identify tangible assets, they are depreciated on a straight
line basis in line with their economic life.
Subsequent costs
Subsequent costs are included in the assets carrying
amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits
associated with the asset will flow to the Group and the cost
of the item can be measured reliably. All other repairs and
maintenance are expensed in the income statement during
the financial year in which they are incurred.
Impairment
The carrying value is assessed for impairment each
reporting date. An impairment loss is recognised if the
carrying amount of an asset or its cash generating unit
exceeds its recoverable amount. A cash generating unit is
the smallest identifiable asset group that generates cash
flows that are largely independent from other assets and
groups. Impairment losses are recognised in the profit or
loss, and in respect of cash generating units, are allocated
first to reduce the carrying amount of any goodwill allocated
to the units and then to reduce the carrying amount of the
other assets in the unit (group of units) on a pro rata basis.
The recoverable amount of an asset or cash generating unit
is the greater of its value in use and its fair value less costs
to sell. In assessing recoverable amount, the estimated
future cash flows are discounted to their present value
using a post-tax discount rate, that reflects current market
assessments of the time value of money, and the risks
specific to the asset.
Impairment losses recognised in prior years are reassessed
at each reporting date and the loss is reversed if there
76
$000
Opening balance
Additions through acquisition
of Amadeus Basin assets
Make up gas forfeited
Expenditure capitalised
Expenditure transferred from
Exploration and evaluation
(refer to note 13)
2023
2022
173,926
53,477
-
118,576
(1,263)
13,664
-
8,017
11,318
-
Amortisation for the year
(15,178)
(13,634)
Rehabilitation provision
movement (refer to note 18)
Revaluation of foreign
currency oil and gas assets
1,838
(455)
(1,290)
7,945
Total oil and gas assets at end of year
183,015
173,926
At 30 June 2023, the Group assessed each asset to
determine whether an indicator of impairment existed.
Indicators of impairment include changes in future selling
prices, future costs, and reserves.
Hydrocarbon reserves are estimates of the amount of
hydrocarbons that can be economically extracted from
the Groups' oil and gas permits. The Group estimates its
reserves based on all available production data, the results
of well intervention campaigns, seismic data, analytical and
numerical analysis methods, sets of deterministic reservoir
simulation models provided by the field operators and
analytical and numerical analyses. Forecasts are based on
deterministic methods. Reserves are reported in line with the
principles contained in the Society of Petroleum Engineers
Petroleum Resources Management Reporting System. As the
economic assumptions used may change and as additional
geological information is obtained during the operation of
the field, estimates of recoverable resources may change
impacting the Group's financial results.
Estimates of recoverable amounts are based on the assets'
fair value less cost to sell, determined by discounting
each asset’s estimated future cash flows at asset specific
discount rates. The discount rates applied ranged from
12.9% to 14.3% (2022: 10%). Commodity price assumptions
were based on consensus estimates of forward market
prices unless contracted prices were available.
No impairments were required.
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS 15 Other financial assets
Other financial assets are initially measured at fair value.
Transaction costs are included as part of the initial
measurement, except for financial assets which are
measured at fair value through profit or loss. Such assets
are subsequently measured at amortised cost.
Financial assets are derecognised when the rights to receive
cash flows have expired or have been transferred and the
Group has transferred substantially all the risks and rewards
of ownership. When there is no reasonable expectation of
recovering part or all of a financial asset, its carrying value
is written off.
16 Payables
$000
Trade payables
Royalties payable
Share of oil and gas
interests' payable
Other payables
2023
3,096
531
6,650
1,894
2022
5,684
973
8,413
1,423
Total payables at end of year
12,171
16,493
By currency $000:
Base
Currency
NZD
Equivalent
$000
By financial asset:
Security deposits
Abandonment and Site
Restoration Fund (ASR) - Cue
Sampang rehabilitation
Total other financial
assets at end of year
$000
Movement
Opening balance
Security deposits
Abandonment and Site
Restoration Fund (ASR) - Cue
Sampang rehabilitation
Revaluation of foreign
currency financial assets
Total other financial
assets at end of year
2023
2022
2023
1,787
280
New Zealand dollar
United States dollar
Australian dollar
Indonesian rupiah
6,520
7,067
Total payables at end of year
8,307
7,347
2022
New Zealand dollar
United States dollar
Australian dollar
Indonesian rupiah
Total payables at end of year
2023
2022
7,347
1,411
(334)
(117)
6,276
280
758
33
8,307
7,347
In accordance with legislative obligations in the respective
jurisdictions in which the Group operates, contributions
are made to funds established for the purpose of financing
future rehabilitation and restoration of sites. As at 30 June
2023, $6.5 million (2022: $7.0 million) has been contributed
to such funds in respect of the Mahato and Sampang assets
in Indonesia and $1.8 million (2022: nil) with the Northern
Territory Government in respect of the Amadeus Assets.
4,608
4,608
1,262
2,068
5,011
2,500
4,712
508
9,908
2,500
5,495
-
12,171
4,712
821
10,960
-
16,493
77
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS
17 Contract liabilities
A contract liability is recorded for obligations under
sales contracts to deliver natural gas in future periods
for which payment has already been received.
$000
Current
Non-current
Total contract liabilities
2023
2,837
15,708
18,545
2022
5,625
19,231
24,856
The Group has two obligations to deliver gas to third parties
which were assumed as part of the acquisition of the
Amadeus Basin assets in May 2021.
i.
ii.
The Group assumed performance obligations to deliver
gas to a customer by December 2023. In exchange for
agreeing to take on this obligation, the Group received a
reduction in the initial purchase price.
The Group assumed performance obligations for the
delivery of 'gas not taken' by its sole customer in the
Dingo asset. Under the take or pay arrangement, the
Group has the obligation to provide 'make up gas' (MUG)
within the contractually defined volumes which were
not previously taken by the customer. The customer
must take the future delivery of gas by 2035. During the
year, 150TJs (2022: nil) of the MUG gas was forfeited
as contractually it was no longer possible for the
customer to take all of the gas volume prior to the end
of the contract term. As a result $1.3 million has been
released from Contract liabilities and the Oil and gas
asset, these have been netted off in the profit or loss
giving a nil impact. Refer to note 14.
During the year, additional MUG accumulated as a result of
the sole customer at Dingo taking less than the annual take
or pay contracted volume. The receipt relating to the annual
take or pay adjustment for gas not delivered was taken to
Contract liabilities and is included in operating activities in
the Statement of Cashflows.
18 Rehabilitation Provisions
Provisions for rehabilitation have been recognised where
the Group has an obligation, as a result of its operating
activities, to restore certain sites to their original condition.
There is uncertainty in estimating the timing and amount
of the future expenditure. The provision is estimated based
on the present value of the expected expenditure. The initial
provision and subsequent re-measurement are recognised
as part of the cost of the related asset. The unwind of the
discount is recognised in finance costs in profit and loss.
78
$000
Carrying amount at start of year
Change in provision recognised
Addition in provision from acquisition
Unwind of discount on provision
Revaluation of foreign currency
rehabilitation provision
Total rehabilitation
provision at end of year
2023
51,856
1,838
-
1,324
2022
26,088
(1,445)
23,534
82
97
3,597
55,115
51,856
The discount rate used is the risk-free interest rate obtained
from the country related to the currency of the expected
expenditure. The discount rates used to determine the
provision ranged from 1.56% to 4.81% (2022: 0.62%
to 3.86%).
On 2 December 2021, the NZ Government Crown Minerals
Amendment Act 2021 came into effect, addressing issues
around decommissioning costs and obligations of all
oil and gas fields. This Act requires petroleum permit
and licence holders in NZ to be financially assessed and
requires provision of security towards future remediation
that may be needed to decommission fields, wells, and
any infrastructure. The full impact of the newly legislated
decommissioning provisions are not yet fully understood
given the continuing Crown consultation process regarding
permit specific security requirements.
The Maari restoration provision increased by $4.3 million
to $18.3 million, following an update to the estimated
restoration costs.
19 Share capital
$000
Number
of shares
Balance at 30 June 2022
236,883
227,369
Share capital issued
-
-
Balance at 30 June 2023
236,883
227,369
Comprised of:
Fully paid shares
Partly paid shares
236,873
223,951
10
3,418
Total shares on issue
236,883
227,369
The Group retains 3.4 million (2022: 3.4 million) of
unallocated partly paid shares that have not yet been
cancelled. All fully paid shares have equal voting rights and
share equally in dividends and equity.
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS 20 Reserves
(a) Reserves
$000
Asset revaluation reserve
Share based payments reserve
Foreign currency translation reserve
Total reserves at end of year
MOVEMENTS:
ASSET REVALUATION RESERVE
2023
781
1,757
6,677
9,215
2022
2,189
1,359
8,091
11,639
Opening balance at 1 July
2,189
1,144
Revaluation of Emissions Trading
Scheme (ETS) units for the year
Disposal of ETS units to
retained earnings
Closing balance at end of year
(1,238)
1,452
(170)
781
(407)
2,189
21 Net asset backing per share
2023
2022
Number of shares on issue (000s)
227,369
227,369
Net assets ($000s)
179,760
162,402
Net tangible assets ($000s)
162,103
143,959
Net asset backing per share (cents)
Net tangible asset backing
per share (cents)
79.1
71.3
71.4
63.3
The basis for the calculation of the net asset backing
per share is the carrying value of the assets held on the
Statement of Financial Performance divided by the number
of shares on issue at balance date. Calculation of the
measure has been revised for the comparable period.
22 Earnings per share
SHARE BASED PAYMENTS RESERVE
Opening balance at 1 July
1,359
786
Profit after tax attributable to the
shareholders of NZO ($000s)
Share based payment
expense for the year
Forfeited and expired ESOP awards
Closing balance at end of year
418
(20)
1,757
673
(100)
1,359
FOREIGN CURRENCY
TRANSLATION RESERVE
Opening balance at 1 July
8,091
3,031
Other foreign currency translation
differences for the year
Closing balance at end of year
(1,414)
6,677
5,060
8,091
(b) Nature and purpose of reserves
Asset revaluation reserve
Revaluation gains and losses on ETS units are transferred to
the asset revaluation reserve.
Share based payments reserve
The reserve is used to recognise the value of equity
benefits provided to employees under the Share Option
Scheme and ESOP (Employee Share Option Plan).
Foreign currency translation reserve
Exchange differences arising on translation of companies
within the Group with a different functional currency to the
Group are taken to the foreign currency translation reserve.
The reserve is recognised in other comprehensive income
when the net investment is disposed of. The reserve is
recognised in other comprehensive income when the net
investment is disposed of.
Weighted average number of
ordinary shares (000s)
Weighted average number
of ordinary shares including
share options (000s)
Basic earnings per share
attributable to shareholders
of the Group (cents)
Diluted earnings per share
attributable to shareholders
of the Group (cents)
2023
2022
10,757
17,159
227,369
173,393
227,369
173,393
4.7
4.7
9.9
9.9
The potentially dilutive effects of employee share options
have not been considered in the diluted profit per share
calculation for the year ended 30 June 2023. In the current
reporting period, the exercise price of the employee share
options are lower than the average market price, therefore
are anti-dilutive. Calculation of diluted earnings per share
has been revised for the comparable period.
79
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS 23 Financial risk management
Risk exposure to market, credit, liquidity, capital
management, sensitivity, financial instruments arises in the
normal course of the Group’s business.
(a) Market risk
(i) Foreign exchange risk
The Group is exposed to foreign currency risk on cash and
cash equivalents, oil sales, recoverable value of oil and gas
assets and capital commitments that are denominated in
foreign currencies. The Group manages its foreign currency
risk by monitoring its foreign currency cash balances and
future foreign currency cash requirements. The Group
may enter into foreign currency hedge transactions
in circumstances where the risk-adjusted returns to
shareholders are enhanced as a consequence.
(ii) Commodity price risk
Commodity price risk is the risk that the Group’s sales
revenue and recoverable value of oil and gas assets will
be impacted by fluctuations in world commodity prices.
The Group is exposed to commodity prices through its
petroleum interests. The Group may enter into oil price
hedge transactions in circumstances where the risk-
adjusted returns to shareholders are enhanced as a
consequence. The Group had no call option contracts at 30
June 2023 (2022: nil).
(iii) Concentrations of interest rate exposure
The Group has no external bank debt and therefore its main
interest rate risk arises from short-term deposits held.
(b) Credit risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to
the Group. The Group has adopted a policy of only dealing
with credit worthy counterparties and obtaining sufficient
collateral where appropriate as a means of minimising
the risk of financial defaults. Financial instruments
which potentially subject the Group to credit risk consist
primarily of securities and short-term cash deposits,
trade receivables and short-term funding arrangements.
The credit risk on liquid funds is limited because the
counterparties are banks with high credit ratings, with
funds required to be invested with a range of separate
counterparties. The Group’s maximum exposure to credit
risk for trade and other receivables is its carrying value.
The Group may be exposed to financial risk if one or
more of their joint venture partners is unable to meet
their obligation in relation to the rehabilitation costs for
jointly owned oil and gas assets. Under the joint venture
operating agreement if one or more partners fails to meet
their financial obligation, the other partners may become
proportionately liable for their share of the financial
obligations but would have contractual rights of recovery
against the defaulting party.
(c) Liquidity risk
Liquidity risk represents the Group’s ability to meet its
contractual obligations. The Group evaluates its liquidity
requirements on an ongoing basis. In general, the Group
generates sufficient cash flows from its operating activities
to meet its obligations arising from its financial liabilities
and has liquid funds to cover potential shortfalls.
The following table sets out the contractual cash flows for
all non-derivative financial liabilities and for derivatives that
are settled on a gross cash flow basis:
$000
30 JUNE 2023
Payables
Total non-derivative liabilities
30 JUNE 2022
Payables
Total non-derivative liabilities
6 months
or less
6–12
months
1–2
years
2–5
years
More than
5 years
Contractual
cash flows
12,171
12,171
16,493
16,493
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12,171
12,171
16,493
16,493
At 30 June 2023 the Group had no derivatives to settle (2022: nil).
80
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS 23 Financial risk management (continued)
(d) Capital management
The Group manages its capital through the use of cash
flow and corporate forecasting models to determine its
future capital requirements and maintains a flexible capital
structure which allows access to debt and equity markets
to draw upon and repay capital as required. In July 2009
the Group established a Dividend Reinvestment Plan which
applies to dividends declared after 29 July 2009. The Group
has an adequate capital base and significant cash reserves.
(e) Sensitivity analysis
The Group’s reporting result at the end of each year is
sensitive to financial risks from fluctuations in interest
rates, commodity prices and foreign currency exchange
rates. The sensitivity table below shows the impact of
exchange rate changes on current assets and liabilities
and the impact of interest rate changes on current
cash balances.
($m)
Risk area
Sensitivity
2023
Impact on Group profit before tax
Impact on foreign currency
translation reserves in equity
Impact on interest income
Exchange
rate
Exchange
rate
Interest
rate
+5%
-5%
+5%
-5%
+1%
-1%
(0.4)
0.4
(1.2)
1.2
0.3
(0.3)
2022
(0.4)
0.4
(3.4)
3.4
0.6
(0.6)
(f) Financial instruments by category
$000
ASSETS
Cash and cash equivalents
Trade and other receivables
Contract assets
TOTAL ASSETS
LIABILITIES
Payables
TOTAL LIABILITIES
2023
carrying
value
2022
carrying
value
36,380
16,458
5,567
58,405
64,590
14,043
2,032
80,665
12,171
12,171
16,493
16,493
The fair value and amortised cost of financial instruments is
equivalent to their carrying value.
81
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS
24 Related party transactions
All transactions and outstanding balances with related
parties are in the ordinary course of business on normal
trading terms. Any transactions within the Group are
eliminated on consolidation.
During the year certain activities were undertaken between
the Group and OGE. The inter-group services agreement,
which was entered into on 21 June 2019, allows the Group
to provide technical services and related activities to OGE.
For the year ended 30 June 2023, $0.7 million (2022: $0.6
million) of income has been included in 'Other income' in the
profit and loss.
In June 2022, NZO granted Cue an unsecured loan of $7.6
million at an interest rate of 10%. During the year, Cue
repaid $3.3 million to NZO leaving $4.3 million outstanding
at 30 June 2023. Full repayment is due by 30 June 2024.
A number of Directors are also directors of other companies
and any transactions undertaken with these entities have
been entered into as part of the ordinary business of
the Group.
As in previous years, Alastair McGregor, Samuel Kellner,
Andrew Jefferies and Marco Argentieri declined to receive
compensation for the provision of Directorial services
from the Group, nor was any compensation paid to any
related parties on their behalf. The deemed compensation
shown below reflects the estimated compensation paid by
those Directors’ employers considered attributable to the
company for services provided. The Directorial services
provided by Andrew Jefferies for NZO are included in
remuneration received as Chief Executive of NZO.
Directors' expenses are reimbursed and are not separately
disclosed as they are not material.
The Group's related parties also include key management
personnel, which have been defined as the Directors, the
Chief Executive and the Executive team for the Group.
Key Cue management personnel are included.
82
$000
Short term employee benefits
Share based payments
Termination benefits
Post employment benefits
Key management personnel
related costs
Deemed Directors' compensation
for related party Directors *
Total key management
personnel related costs
2023
3,922
249
218
155
2022
3,333
167
107
4,544
3,607
439
407
4,983
4,014
* Prior year comparatives for Total key management personnel
related costs have been updated as a result of the inclusion of
Deemed Directors' compensation; this was previously disclosed
as nil. The disclosure of Deemed Directors' compensation solely
arose from the technical application of required accounting
standards. The $0.4 million is deemed only and neither NZO nor
any member of the Group is paid or in any way settled or has
obligations to settle, the deemed remuneration. The Group's
actual obligations for the settlement of Directors' compensation
is unchanged from what has been previously reported.
25 Share-based payments
Accounting policy
Share-base payments are equity or cash settlements to
employees in exchange for services. Equity transactions are
settled in shares or options over shares. Cash settlements
are determined by the share price.
The cost of equity settled transactions are measured at
fair value on grant date. Fair value is determined using the
Black-Scholes option pricing model that takes into account
the exercise price, the term of the option, the impact of
dilution, the share price at grant date and expected price
volatility of the underlying share, the expected dividend yield
and the risk free interest rate for the term of the option,
together with non-vesting conditions that do not determine
whether the consolidated Group received the services that
entitle the employees to receive payment no account is
taken of any other vesting conditions.
Market conditions are taken into consideration in
determining fair value. Therefore any awards subject to
market conditions are considered to vest irrespective
of whether or not that market condition has been met,
provided all other conditions are satisfied.
Equity transactions are recognised as an expense with the
corresponding increase in equity over the vesting period.
The cumulative charge to a profit or loss is calculated based
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS 25 Share-based payments (continued)
on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion
of the vesting period.
If the non-vesting condition is within the control of the consolidated Group or employee the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the consolidated Group or employee and is not satisfied
during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award
is forfeited. Cancellations are accounted for on the date of cancellation, as if it had vested.
The Company has the following share based payment schemes:
(a) New Zealand Oil & Gas Share Option Scheme - established 19 March 2020.
(b) Cue Energy Share Option Scheme - established July 2019.
(a) New Zealand Oil & Gas Share Option Scheme
On 22 November 2022, the Group issued 2,631,017 unlisted options to eligible New Zealand Oil & Gas Limited employees under
the share option scheme. The options are exercisable at $0.54 (54 cents) per option, which will vest on 1 July 2025 and expire on
1 July 2028. The exercise price was determined by adding a 20% premium to the average market price on the date of the offer
(being the volume weighted average market price over the previous 10 business days) at 30 June 2022. The options were valued
using Black- Scholes option pricing model.
During the year $0.3 million of share-based payment expense was recorded in relation to the New Zealand Oil & Gas Share Option
Scheme for the financial year ending 30 June 2023 (2022: $0.4 million).
Set out below are summaries of options granted under the plan:
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Forfeited
Grant date
Expiry date
2023
19/03/2020
01/07/2025
08/10/2020
01/07/2026
01/11/2021
01/07/2027
01/11/2022
01/07/2028
Weighted average exercise price
2022
19/03/2020
01/07/2025
08/10/2020
01/07/2026
01/11/2021
01/07/2027
Weighted average exercise price
$0.61
$0.65
$0.52
$0.54
$0.61
$0.65
$0.52
2,761,444
1,828,603
2,370,333
-
-
-
-
2,631,017
6,960,380
2,631,017
$0.59
$0.54
2,832,048
1,876,930
-
-
-
2,370,333
4,708,978
2,370,333
$0.63
$0.52
-
-
-
-
-
-
-
-
-
-
Balance at
the end of
the year
2,761,444
1,785,499
2,215,110
2,401,636
-
(43,104)
(155,223)
(229,381)
(427,708)
9,163,689
$0.54
$0.58
(70,604)
(48,327)
-
2,761,444
1,828,603
2,370,333
(118,931)
6,960,380
$0.63
$0.59
For the options granted during the current financial year, the valuation model inputs
used to determine the fair value at the grant date, are as follows:
Grant date
Expiry date
Share price
at grant date
1/11/2022
01/07/2028
$0.43
Exercise
price
$0.54
Expected
volatility
38%
Dividend
yield
Risk-free
interest rate
Fair value
at grant date
-
4.31%
$0.14
83
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS
25 Share-based payments (continued)
(b) Cue Energy Share Option Scheme
On 30 August 2022, the Company issued 3,649,298 unlisted options to an eligible employee under the share option scheme.
The options are exercisable at $0.097 (9.7 cents) per option and will vest on 1 July 2025 and expire on 1 July 2027. The options
were valued using Black-Scholes option pricing model.
During the year $0.1 million of share-based payment expense was recorded in relation to the Cue share option scheme for the
financial year ending 30 June 2023 (2022: $0.1 million).
Set out below are summaries of options granted under the plan:
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
Grant date
Expiry date
Exercise price
2023
29/07/2017
01/07/2023
04/10/2019
01/07/2024
16/07/2020
01/07/2025
23/07/2021
22/07/2026
30/08/2022
01/07/2027
Weighted average exercise price
2022
29/07/2017
01/07/2023
04/10/2019
01/07/2024
16/07/2020
01/07/2025
23/07/2021
22/07/2026
Weighted average exercise price
$0.08
$0.10
$0.13
$0.08
$0.10
$0.08
$0.10
$0.13
$0.09
Balance at
the start of
the year
3,513,430
3,569,765
3,241,067
4,047,966
-
-
-
-
-
3,649,298
14,372,228
3,649,298
$0.10
$0.10
3,784,025
3,853,298
3,743,260
-
-
-
4,599,003
11,380,583
4,599,003
$0.10
$0.09
-
-
-
-
-
-
-
-
-
-
-
-
-
(39,777)
3,473,653
(46,750)
(36,830)
(42,167)
(50,600)
3,523,015
3,204,237
4,005,799
3,598,698
(216,124)
17,805,402
$0.08
$0.10
(270,595)
(283,533)
(502,193)
(551,037)
3,513,430
3,569,765
3,241,067
4,047,966
(1,607,358)
14,372,228
$0.10
$0.10
For the options granted during the current financial year, the valuation model inputs used to determine the fair value at the grant
date, were as follows:
Grant date
Expiry date
Share price
at grant date
30/08/2022
01/07/2027
$0.08
Exercise
price
$0.10
Expected
volatility
58%
Dividend
yield
Risk-free
interest rate
Fair value
at grant date
-
3.39%
$0.03
84
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS 26
Commitments and contingent assets and liabilities
27 Events occurring after balance date
On 27 July 2023, the Group announced an upgrade in
reserves at the Palm Valley and Dingo gas fields in the
Amadeus Basin, Northern Territory, Australia.
On 24 August 2023, the Group announced that the BA-01
exploration well in the Mahato PSC, Indonesia was tested
but had produced no hydrocarbons. The well has been
plugged and abandoned and the rig demobilised.
There are no further material events that have occurred
after the balance date.
(a) Development and exploration expenditure
To maintain the various permits in which the Group is
involved the Group has ongoing operational expenditure
as part of its normal operations. The actual costs will be
dependent on a number of factors such as joint venture
decisions including final scope and timing of operations.
The Group participates in a number of development projects
that were in progress at the end of the year. These projects
require the Group, either directly or through joint operation
arrangements, to enter into contractual commitments for
future expenditures.
The Group has commitments of $4.6 million for the drilling
and infrastructure works at the Mahato PSC.
At Kupe the Group has entered into a rig contract to enable
the drilling of an additional infill well. The Group's share of
the commitment is $0.7 million.
The Group’s share of commitments associated with the
Amadeus Basin Permits for production and development
expenditure is $0.8 million.
On 20 March 2023, the Group entered into a FOA with
Triangle (refer to note 13). As part of this agreement the
Group are committed to paying Triangle's drilling costs, in
the form of a carry, capped at $3.9 million, as well as its own
costs of approximately the same value. Completion of the
transaction is subject to regulatory approval.
(b) Contingent assets and liabilities
The Directors are not aware of any contingent assets or
contingent liabilities at 30 June 2023.
85
New Zealand Oil & Gas Annual Report 2023CONSOLIDATED FINANCIAL STATEMENTS Independent
Auditor’s Report
To the shareholders of
New Zealand Oil & Gas Limited
REPORT ON THE AUDIT OF THE
CONSOLIDATED FINANCIAL STATEMENTS
Opinion
In our opinion, the accompanying consolidated financial
statements of New Zealand Oil & Gas Limited (the
’company’) and its subsidiaries (the 'Group') on pages 4
to 27 present fairly, in all material respects:
i) The Group’s financial position as at 30 June 2023 and its
financial performance and cash flows for the year ended on
that date;
¬ in accordance with New Zealand Equivalents to
International Financial Reporting Standards and
International Financial Reporting Standards issued by the
New Zealand Accounting Standards Board.
We have audited the accompanying consolidated financial
statements which comprise:
¬ The consolidated statement of financial position as at 30
June 2023;
¬ The consolidated statements of comprehensive income,
changes in equity and cash flows for the year then ended;
and
¬ Notes, including a summary of significant accounting
policies.
© 2023 KPMG, a New Zealand Partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International
Limited, a private English company limited by guarantee. All rights reserved.
86
New Zealand Oil & Gas Annual Report 2023INDEPENDENT AUDITOR’S REPORT Basis for opinion
Scoping
We conducted our audit in accordance with International
Standards on Auditing (New Zealand) (‘ISAs (NZ)’). We
believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
We are independent of the Group in accordance with
Professional and Ethical Standard 1 International Code of
Ethics for Assurance Practitioners (Including International
Independence Standards) (New Zealand) issued by the
New Zealand Auditing and Assurance Standards Board and
the International Ethics Standards Board for Accountants’
International Code of Ethics for Professional Accountants
(including International Independence Standards)
(‘IESBA Code’), and we have fulfilled our other ethical
responsibilities in accordance with these requirements and
the IESBA Code.
Our responsibilities under ISAs (NZ) are further described
in the Auditor’s responsibilities for the audit of the
consolidated financial statements section of our report.
Our firm has also provided other services to the Group in
relation to tax compliance and advisory services. Subject
to certain restrictions, partners and employees of our firm
may also deal with the Group on normal terms within the
ordinary course of trading activities of the business of the
Group. These matters have not impaired our independence
as auditor of the Group. The firm has no other relationship
with, or interest in, the Group.
The scope of our audit is designed to ensure that we
perform adequate work to be able to give an opinion on the
consolidated financial statements as a whole, taking into
account the structure of the Group, the financial reporting
systems, processes and controls, and the industry in which
it operates.
Materiality
The scope of our audit was influenced by our
application of materiality. Materiality helped us
to determine the nature, timing and extent of
our audit procedures and to evaluate the effect
of misstatements, both individually and on the
consolidated financial statements as a whole. The
materiality for the consolidated financial statements
as a whole, was set at $1.9 million (2022: $1.8
million) determined with reference to a benchmark
of Group total assets. We chose the benchmark
because, in our view, this is a key measure of the
Group’s performance.
87
New Zealand Oil & Gas Annual Report 2023INDEPENDENT AUDITOR’S REPORT Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated
financial statements in the current period. We summarise below those matters and our key audit procedures to address those
matters in order that the shareholders as a body may better understand the process by which we arrived at our audit opinion. Our
procedures were undertaken in the context of and solely for the purpose of our statutory audit opinion on the consolidated financial
statements as a whole and we do not express discrete opinions on separate elements of the consolidated financial statements
The key audit matter
How the matter was addressed in our audit
RECOVERABILITY OF OIL AND GAS ASSETS
Refer to Note 14 within the
consolidated financial statements.
Our audit procedures to assess the reasonableness of the recoverable value of
the oil and gas assets included.
The recoverability of oil and gas
assets is a key audit matter due to the
judgement involved in assessing the
recoverable value of the oil and gas
assets. Key valuation assumptions
include:
•
Evaluating the Group’s impairment indicator assessment, utilising our
knowledge of the Group and the Oil and Gas industry, in which the Group
operates.
• Where an indicator of impairment was identified, in conjunction with
our valuation specialists, we evaluated the key inputs and assumptions
included in management’s valuation model. Our assessment included:
¬ Oil and gas reserves, and future
production levels;
¬ Future oil and gas prices;
¬ Discount rates; and
¬ Future operating and capital costs.
- Assessing the appropriateness of the CGUs determined;
- Assessing whether the valuation methodology applied was in accordance
with the requirements of accounting standards;
- Challenging the feasibility of reserve and resource estimates and
production profiles by comparing for consistency with other internal
and external information, including reports prepared by management’s
experts;
- Comparing management’s forecast of oil and gas prices to observable
market data and contracted prices;
- Using our valuation specialist to assess the reasonableness of the
discount rate used for each asset;
- Reviewing operator budgets and forecasts of operating costs and capital
programmes for reasonableness; and
- Performing sensitivity analysis over key assumptions included in the
Group’s impairment assessments.
88
New Zealand Oil & Gas Annual Report 2023INDEPENDENT AUDITOR’S REPORT Other information
The Directors, on behalf of the Group, are responsible for
the other information included in the entity’s Annual Report.
Other information may include the Chairman and Chief
Executive’s report, production and reserve information,
corporate and statutory information. Our opinion on the
consolidated financial statements does not cover any other
information and we do not express any form of assurance
conclusion thereon.
The Annual Report is expected to be made available to us
after the date of this Independent Auditor's Report. Our
responsibility is to read the Annual Report when it becomes
available and consider whether the other information it
contains is materially inconsistent with the consolidated
financial statements, or our knowledge obtained in the
audit, or otherwise appear misstated. If so, we are required
to report such matters to the Directors.
Use of this independent auditor’s report
This independent auditor’s report is made solely to the
shareholders as a body. Our audit work has been undertaken
so that we might state to the shareholders those matters
we are required to state to them in the independent
auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume
responsibility to anyone other than the shareholders as a
body for our audit work, this independent auditor’s report, or
any of the opinions we have formed.
Responsibilities of the Directors for the consolidated
financial statements
The Directors, on behalf of the company, are responsible for:
•
•
The preparation and fair presentation of the
consolidated financial statements in accordance
with generally accepted accounting practice in New
Zealand (being New Zealand Equivalents to International
Financial Reporting Standards) and International
Financial Reporting Standards issued by the New
Zealand Accounting Standards Board;
Implementing necessary internal control to enable
the preparation of a consolidated set of financial
statements that is free from material misstatement,
whether due to fraud or error; and
•
Assessing the ability to continue as a going concern.
This includes disclosing, as applicable, matters related
to going concern and using the going concern basis of
accounting unless they either intend to liquidate or to
cease operations or have no realistic alternative but
to do so.
Auditor’s responsibilities for the audit of the consolidated
financial statements
Our objective is:
•
•
To obtain reasonable assurance about whether the
financial statements as a whole are free from material
misstatement, whether due to fraud or error; and
To issue an independent 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
ISAs NZ will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated
financial statements.
A further description of our responsibilities for the audit of
these consolidated financial statements is located at the
External Reporting Board (XRB) website at:
http://www.xrb.govt.nz/standards-for-assurance-
practitioners/auditors-responsibilities/audit-report-1/
This description forms part of our independent auditor’s
report.
The engagement partner on the audit resulting in this
independent auditor's report is Lohika Gavin Silva.
For and on behalf of
KPMG
Wellington
30 August 2023
89
New Zealand Oil & Gas Annual Report 2023INDEPENDENT AUDITOR’S REPORT 90
New Zealand Oil & Gas Annual Report 2023 Shareholder
Information
Stock Exchange Listing
The Company is listed and its shares quoted on the official list of the Australian Securities Exchange (ASX) and on the
Main Board equity security market operated by NZX Limited (NZX) as a foreign exempt entity. On both exchanges the
Company’s code is “NZO”.
Distribution of Security Holders
As at 31 August 2023
Range
1 – 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 Over
Rounding
Total
Total Holders
Units
% Units
1,344
1,821
445
534
73
919,984
4,290,464
3,204,904
15,370,169
200,165,317
4,217
223,950,838
0.41
1.92
1.43
6.86
89.38
0.00
100.00
Unmarketable Parcels
Minimum $500.00 parcel at $0.3800 per unit
Minimum Parcel Size
1,316
Holders
1,693
Units
1,322,385
91
New Zealand Oil & Gas Annual Report 2023 Securities On Issue
Substantial Shareholders
Substantial Product Holder Notices are received pursuant
to the Financial Markets Conduct Act 2013. Shareholders
are required to disclose their holding to the issuer and the
issuer’s registered exchanges when:
• They have a substantial holding (5% or more of the listed
voting securities);
• Subsequent movements of 1% or more in a substantial
holding from prior notification;
• Any change is made in the nature of any relevant interest
in the substantial holding; and
• They cease to have a substantial holding.
According to the Company’s records and Substantial
Product Holding Notices previously released to the ASX
and NZX, as at 30 June 2023, no Substantial Product
Holder Notice, has been received since the date of the last
Annual Report.
As at 31 August 2023 New Zealand Oil & Gas Limited had the
following securities
Listed Ordinary Shares
Options to acquire
ordinary shares
223,950,838
9,591,398
Option holders will be able to exercise the Options within
a three year period, three years post issue. The Board
fixes the exercise price of the Option. To date, there have
been four tranches of options issued, the first has an
exercise price of $0.61 per Option, the second $0.65 per
Option, the third $0.52 per Option and the fourth $0.54
per Option.
Shares issued on the exercise of Options will be issued
on the same terms and will rank equally in all respects
with ordinary shares currently on issue. Options do not
carry voting rights or any entitlement to receive dividends
unless and until exercised and converted to shares. In
the event of a change of control event, generally the
vesting date of Options will accelerate and the Options
will become exercisable. Options are generally forfeited
by a participant on the occurrence of a lapse event, which
includes when the participant ceases to be an employee
of the Company.
Options have been issued subject to the Scheme Rules available
here
www.nzog.com/dmsdocument/482
92
New Zealand Oil & Gas Annual Report 2023 Top 20 Shareholders
As at 31 August 2023
Security Holder
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
O.G. OIL AND GAS SINGAPORE PTE. LTD
SIK-ON CHOW
NEW ZEALAND CENTRAL SECURITIES DEPOSITORY LIMITED
LAWRENCE HERD
RADFORD SFT PTY LTD
NEW ZEALAND DEPOSITORY NOMINEE LIMITED
RIUO HAURAKI LIMITED
TRIBAL NOMINEES LIMITED
AOTEAROA RENTAL ENTERPRISES LIMITED
RUIHUI ZHANG
CHIN-YI LIN + YU-CHING LIN-CHAO
RAOUL JOHN DAROUX
RICHARD BRUCE LEES
ASB NOMINEES LIMITED
ZILSTAME NOMINEES PTY LTD
SHENG-FEI WANG
NEIL DOUGLAS WAITES
DYLAN LANCE SCHISCHKA
HOBSON WEALTH CUSTODIAN LIMITED
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