2018 ANNUAL REPORT
CORPORATE DIRECTORY
Registered Office
Level 2, 30 Richardson Street
West Perth WA 6005
Tel: + 61 8 9227 3240
Fax: + 61 8 9227 3211
Share Registry
Computershare Investor Services Pty Ltd
GPO Box D182
Perth WA 6840
Level 11
172 St Georges Terrace
Perth WA 6000
Telephone: 1300 850 505
NORWEST ENERGY NL
ABN 65 078 301 505
ACN 078 301 505
Directors
Mr Michael John Fry
(Non-Executive Chairman)
Mr Henry David Kennedy
(Non-Executive Director)
Managing Director/
Chief Executive Officer
Mrs Shelley Robertson
Company Secretary
Mr Bennett Greenhalgh
Internet Address
Australian Securities Exchange
www.norwestenergy.com.au
NWE
Shareholder Enquiries
shareholder@norwestenergy.com.au
Contents
Chairman’s Letter
Permit Summary
Directors' Report
Lead Auditor’s Independence Declaration
Corporate Governance Statement
Independent Audit Report
Directors' Declaration
Statement of Profit or Loss and other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Additional Shareholder Information
3
5
6
20
21
27
30
31
32
33
34
35
53
2
CHAIRMAN’S LETTER
Dear Shareholders
I am pleased to present the Company’s Annual Report for the year ended 30 June 2018. It has been a strong
year for the Norwest team, with much progress achieved – however there is still more work to do.
During the course of the financial year, Norwest has:
•
•
•
•
•
almost finalised the planning and preparation for acquisition of a 3D seismic survey over the Xanadu
Prospect;
built a strong working relationship with Joint Venture Partner Mineral Resources and progressed
planning for drilling the Lockyer Deep well in 2019;
built a strong relationship with new Joint Venture Partner Mitsui, and identified opportunities to pursue
once work on the Arrowsmith Project can resume;
received revenue from the successful restart of the Jingemia Oil Field, in which production is expected
to increase once additional wells are brought online; and
commenced a project and corporate level review to identify opportunities to improve the value of the
Company’s asset portfolio and improve the market’s perception of the Company.
TP/15 – Xanadu
The TP15 Joint Venture was established in February 2017, a period in which the oil and gas space saw virtually
zero deals due to the general downturn in the economy and low global oil prices. Achieving a free-carry on the
Xanadu-1 drilling program, whilst maintaining operatorship and a 25% interest in TP15, was a credit to
Norwest’s senior management team.
Norwest as operator rapidly commenced preparations for drilling the Xanadu-1 well and was able to acquire all
necessary approvals and drill Xanadu-1 within a 6 month period. As we all know now, the well was declared a
discovery and although there were some that wanted the Company to immediately spring into further drilling,
we are pleased the Joint Venture supported Norwest’s recommendation to acquire 3D seismic survey over the
Xanadu structure as a next step, so that the team can prepare a considered plan for how best to exploit the
discovery.
Given the rapid speed at which the Company was able to complete preparations for the Xanadu-1 well, again
the Company set an ambitious goal of late-2018 for acquisition of the 3D seismic. There are numerous
obstacles to acquiring offshore seismic data, and various factors outside the Company’s control mean that there
are only certain windows within the calendar year in which the seismic survey can take place.
Unfortunately, despite the Company’s best efforts and excellent track record up to now, delays in obtaining
approvals from the Department of Mines, Industry Regulation and Safety has meant the Joint Venture is now
targeting the window for acquisition commencing March 2019.
Although this delay is disappointing the ongoing availability of drill rigs within the area combined with Norwest
having already received the necessary approvals for further drilling means the Company will still be able to
move forward with follow-up wells at Xanadu within substantially the same timeline. Assuming the seismic data
supports such follow-up wells, the Company is confident it can secure a suitable drilling rig and progress the
Xanadu Project in the second half of 2019.
3
EP368 – Lockyer Deep
In what was considered great news for Norwest shareholders, Mineral Resources Limited (ASX:MIN) acquired
the assets of Empire Oil & Gas during the year, and the Joint Venture is currently planning a well on the exciting
Lockyer-Deep Prospect, expected to occur in the second half of 2019.
EP413 -- Arrowsmith
During the year, international trading house Mitsui & Co Ltd (Mitsui) acquired the assets of AWE Limited (AWE),
including AWE’s participating interest in EP413. Although work on EP413 is currently suspended due to the WA
Government inquiry into hydraulic fracture stimulation, it is expected once findings from the inquiry are
released the Joint Venture will be able to recommence exploration activity within the permit. Although it is not
possible to pre-empt the results of the inquiry, Norwest is very pleased at the prospect of being able to resume
work on the highly prospective Arrowsmith Project with Mitsui and its other Joint Venture partner, Bharat
PetroResources, each of which are well resourced and experienced operators.
L14 – Jingemia
Production within the Jingemia Oil Field has been steadily increasing since it was brought back online in
December 2017. There are currently two wells in production, and it is anticipated that another two wells will be
brought back into production over the coming months. This is expected to improve the revenue generated by
the Project. We believe L14 contains exploration upside, with opportunities to drill future wells on the
production licence currently under consideration.
Corporate
During the year the Company formalised its strategic relationship with major shareholder 3C Group IC Limited
(3C Group) by entering into a Strategic Cooperation Agreement and by applying for and receiving a waiver from
the ASX to ASX Listing Rule 6.18, which will allow 3C Group to maintain its current ownership interest by
participating in any future issues of equity the Company may propose. Through this strategic relationship 3C
brings a wealth of additional knowledge and experience and has so far provided the Company with
opportunities that Norwest would not otherwise have been exposed to.
Since the end of the 30 June 2018 financial year the Company has appointed KPMG Corporate Finance (KPMG)
as its corporate adviser. KPMG has been engaged to provide advice on the best way to maximise the value of
the Company’s asset portfolio which, in the Board’s opinion, has not yet been properly valued by the
market. KPMG's expertise at the corporate level is expected to enhance the identification and implementation
of opportunities as they arise, and together with the Company’s strategic relationship with 3C Group, is
expected to assist the Company promote its asset portfolio to a wider network of parties seeking exposure to
assets within the Perth Basin.
The past year has been challenging, however a great deal of preparation and groundwork for the coming year
have been achieved. I would like to take this opportunity to commend the Norwest team on their
achievements in FY2018, and look forward to seeing what they can achieve in the next 12 months to further
progress the Company’s assets and build value for all shareholders.
Michael Fry
Non-Executive Chairman
4
PERMIT SUMMARY
Permit
Location
Type of Permit
Area (100%)
Norwest (%)
NORTHERN PERTH BASIN
EP368
EP426
EP413
L14
TP/15
TIMOR SEA
Perth Basin, WA
Perth Basin, WA
Perth Basin, WA
Perth Basin, WA
Perth Basin, WA
Onshore
Onshore
Onshore
Onshore
Offshore
600.3 km2
1,197 km2
508.3 km2
39.8 km2
645.8 km2
20%
22.22%
27.945%
6.278%
100%
TOTAL AREA NET TO NORWEST 1,176.4 KM2
AC/L6 (ROYALTY)
Vulcan Sub-Basin, NT
Offshore
252.1 km2
1.25% ORRI
Table 1. Norwest Permit Schedule
Figure 1. Norwest - Northern Perth Basin Acreage
5
Directors’ Report
The Directors of Norwest Energy NL (“Norwest” or “the Company”) present their report consisting of the Company and its
subsidiaries (“Consolidated entity” or “Group”), for the financial year ended 30 June 2018.
1. DIRECTORS AND OFFICERS
The names and details of the Company's Directors in office during the financial year and until the date of this report are
as follows. Directors were in office for this entire period unless otherwise stated.
Mr Michael John Fry (Independent Non-Executive Chairman), BComm, FFin
Mr Fry became a Director of Norwest on 8 June 2009 and Chairman on 18 September 2009. Mr Fry holds a Bachelor of
Commerce degree from the University of Western Australia and is a Fellow of the Financial Services Institute of
Australasia. Mr Fry has extensive corporate and commercial experience, financial and capital market knowledge and a
background in corporate treasury management. Mr Fry has held directorships in Brookside Energy Ltd (April 2004 to
present), Challenger Energy Limited (January 2007 to present) and Technology Metals Australia Limited (May 2016 to
present).
Mr Henry David Kennedy (Non-Executive Director), MA (Geology), SEG
Mr Kennedy became a Director of Norwest on 14 April 1997. Mr Kennedy has had a long association with Australian and
New Zealand resource companies and as a technical director has been instrumental in the formation and/or development
of a number of successful listed companies including Pan Pacific Petroleum NL, New Zealand Oil and Gas Limited (NZOG),
Mineral Resources (NZ) Ltd and Otter Exploration NL. During his term as Executive Director of Otter, Pan Pacific and
NZOG, these companies were involved in the discovery of the Tubridgi and South Pepper gas fields in Western Australia,
the North Herald and Chervil oil fields in Western Australia and the Kupe South and Rua oil/gas condensate fields in New
Zealand. During the three year period to the end of the financial year, Mr Kennedy has held directorships in
Pancontinental Oil & Gas NL (August 1999 to present) and East Africa Resources Limited (March 2013 to April 2015).
Mrs Shelley Maree Robertson (Managing Director) BSc(Eng), GradDip(IT), MEngSc(Pet Eng), MBA(Oil & Gas)
Mrs Robertson joined Norwest Energy in January 2011 following her appointment to the Company’s Senior Leadership
Team. She was promoted to Chief Executive Officer in July 2016 and then Managing Director in October 2017. Mrs
Robertson has significant senior management experience in the resources industry, with over 30 years in oil and gas,
mining, infrastructure and renewables. She has extensive expertise in technical project execution, budget management,
JV management, commercial negotiations, contracts and well-site operations. Her previous oil and gas roles include
positions with Woodside, BHP Petroleum, Apache, Marathon, Tap Oil. Mrs Robertson is a Director on the Board of
Telethon Type 1 Diabetes Family Centre, is on the Guildford Grammar School P&F Committee and President of the
Guildford Arts Supporters Group.
Mr Ronald Gordon Currie (Non-Executive Director)
Mr Currie, 41, became a Director of Norwest on 31 March 2016 and resigned on 31 October 2017. Mr Currie has
extensive operational experience in oil and gas operations through his long association with Bonnie Rock Transport, a
company he co-founded in 1998 (now owned by ASCO Group) which provides transport and logistics solutions for the oil
and gas industry. Bonnie Rock Transport specialises in the mobilisation of large drilling rigs and associated equipment
across Australia, as well as providing general haulage services. During the three year period to the end of the financial
year, Mr Currie has not held any other directorships in listed companies.
Mr Bennett Greenhalgh (Company Secretary) B.Comm, LLB (Honours)
Mr Greenhalgh was appointed to the position of Company Secretary on 18 September 2018. Mr Greenhalgh is a corporate
and commercial lawyer with significant experience at both global and boutique corporate law firms. He has extensive
experience advising on corporate governance matters, as well as managing corporate transactions such as capital raising,
M&A, and cross-border commercial trade deals.
6
Ms Jo-Ann Long (Company Secretary and Chief Financial Officer) B.Comm, FCA, GAICD
Ms Long was appointed CFO and Company Secretary on 15 September 2017 and then resigned as Company Secretary on
18 September 2018. Ms Long has over 28 years of experience building, leading and advising corporations on financial
management, restructures, international expansion, acquisitions and risk management. Commencing with Deloitte’s and
then 18 years in the Oil and Gas industry, with Woodside and Transerv Energy (now Whitebark Energy) Ms Long has
specialised expertise in joint venture operations, commercial agreements, tax strategies, risk management and
governance. With strong broad commercial and business skills Ms Long brings a strong discipline of financial management
and a track record of documented contributions of improved financial performance, heightened productivity and enhanced
internal controls. MS Long is CFO and Company Secretary for Sun Resources NL, Managing Director of Eco Smart Designs,
and holds non-executive directorships with Yijiyangu Corporation Limited and B2 Yaramarri Direct Benefits Trust.
Miss Emma Curnow (Company Secretary) B.Com, CA, AGIA
Miss Curnow was appointed to the position of Company Secretary on 18 July 2016 and resigned on 15 September 2017.
She commenced her career as a Senior Accountant with Ernst & Young in 2003, and has since worked for a number of
listed companies in the oil and gas sector both in Australia and the United Kingdom. She is a qualified Chartered
Accountant and a Company Secretary.
2. DIRECTORS INTERESTS
As at the date of this report, the Director’s interests in the securities of the Company are as follows:
Ordinary Shares
Options over Ordinary Shares
Mr Michael John Fry (Non-Executive Chairman)
Mr Henry David Kennedy (Non-Executive Director)
Mrs Shelley Robertson (Managing Director & CEO)
Mr Ronald Currie (Non-Executive Director)
(*): 15,599,996 shares held in the name of Kemprust Pty Ltd, a company of which Ronald Currie’s father is a director.
-
-
16,000,000
-
167,494,130
892,357
(*) 15,599,996
23,179,785
3. EARNINGS PER SHARE
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
4. CORPORATE INFORMATION
2018
(0.00)
(0.00)
2017
(0.01)
(0.01)
Corporate Structure
The Company is a no liability company that is incorporated and domiciled in Australia.
Nature of Operations and Principal Activities
The principal activity of the Consolidated entity during the course of the financial year was exploration for hydrocarbon
resources. Norwest is operator of the TP/15Joint Venture and the EP413 Joint Venture.
7
Objectives
Objectives of the Group include:
continued exploration on the Company’s current permits;
seek new ventures suitable for inclusion in the Group’s assets;
•
•
• manage risks involved in the exploration industry; and
• maintain liquidity.
The Group’s targets and strategies for meeting the above objectives include:
• prepare work programmes best suited for exploration success;
•
•
•
consider strategic alliances through joint ventures to minimise risks to the Group;
focus on cost cutting in all non-essential areas; and
review appropriate fundraising proposals.
Employees
The Consolidated entity had three employees as at 30 June 2018 (2017: three employees).
5. OPERATING AND FINANCIAL REVIEW
Operations Summary
Review of Operations
As at the date of this report, the Group holds the following interests:
•
•
•
•
•
25% in TP/15(as operator);
27.945% in EP413 (as operator);
20% in EP368;
22.22% in EP426; and
6.278% in L14 Jingemia Oilfield.
TP/15
During Q3 CY2018, Norwest successfully drilled the Xanadu-1 well, being free-carried for the drilling program after
forming the TP/15 Joint Venture in Q1 CY2018. On the 18th September 2017, Norwest confirmed that hydrocarbon-
bearing reservoirs had been intersected, with elevated gas readings, oil shows, fluorescence and cut-fluorescence present
in the reservoir sections. A subsequent logging program was carried out across a 330m section of the Irwin River Coal
Measures with porosities ranging from 15-16%, and with oil recovered to surface. Norwest confirmed Xanadu a discovery
on 25th September 2017 and a Discovery Notice was subsequently lodged with the Minister for Mines, Industry Regulation
and Safety.
During Q1 CY2018, a contract for the acquisition of a 40 square kilometre seismic survey was awarded to Synterra
Technologies Pty Ltd. During Q2 CY2018, an acoustic modelling study was completed to assess the impact of seismic
acquisition on the marine environment. The results of this study have been incorporated into the relevant Environmental
Plan and submitted to DMIRS. An ongoing comprehensive stakeholder engagement program has been an important part
of the approvals process, and Norwest continues to actively engage with all relevant stakeholders.
On 5th October, Norwest announced that due to ongoing delays in the regulatory approvals process for the Xanadu 3D
Seismic Survey, the survey acquisition will be unavoidably delayed beyond the targeted window of late 2018, with the
next available opportunity for acquisition commencing in March 2019. These delays are due to heightened focus that
currently exists at a national level on offshore seismic surveys, the complexity of submission documentation, and the
requirement for a high degree of stakeholder consultation. The Environmental Plan cannot be approved until stakeholder
consultation is completed to the satisfaction of the Regulator. The acquisition timeline is also impacted by exclusion
periods for the migration of humpback whales, western rock lobster spawning and migration, commercial fishing peak
periods and school holidays. Due to these events, the next realistic opportunity for acquisition is March 2019.
Once the survey is complete and the data has been processed, interpreted and integrated with Norwest’s existing
dataset, the TP15 Joint Venture will consider an appraisal well on the Xanadu structure, with the most likely option being
a horizontal side-track well from the existing Xanadu-1 surface location. The seismic data will enable the well surface
location and trajectory to be optimally designed.
8
TP/15 Joint Venture
Name
Norwest
3C Group IC Limited
Triangle Energy (Global) Ltd
Whitebark Energy Ltd
EP413
Interest in TP/15
25%
30%
30%
15%
(Operator)
On 5th September 2017, the Western Australian government announced an independent scientific panel inquiry into
hydraulic fracture stimulation. As this inquiry directly affected EP413, Norwest applied for a suspension on the EP413
work program work commitments, which was subsequently granted.
The inquiry panel handed its findings to the State Government on 12th September 2018, and Norwest awaits the State
Government recommendations to industry in coming months.
The rehabilitation program for the 2015 3D seismic survey area continued throughout the year.
In May 2018, Mitsui & Co. successfully acquired AWE Limited, and as a result the EP413 Joint Venture welcomed Mitsui &
Co as a new partner.
EP413 Joint Venture
Name
Norwest
Mitsui & Co., Ltd
Bharat PetroResources Limited
Interest in EP413
27.945%
44.252%
27.803%
(Operator)
EP368
During the December quarter, the assets of the operating company of EP368 (Empire Oil & Gas) was 100% acquired by
Mineral Resources Limited (ASX:MIN), an Australian based mining services and processing company.
During Q2 CY2018, Mineral Resources Limited (MIN) as operator of EP368 successfully secured a 2-year suspension and
extension on EP368.
NWE and MIN are currently working collaboratively to progress plans to drill a well, with the Lockyer Deep subsurface
model showing similarities to the neighbouring Waitsia Project. The well will be subject to regulatory approvals and
funding, however the Joint Venture has already approved the budget for FY2018/19, which includes well planning,
community engagement and approvals. North Erregulla offers an excellent follow up prospect to Lockyer Deep,
straddling the two permits EP368 and EP426, offering a future drilling opportunity.
EP368 Joint Venture
Name
Norwest
Empire Oil Company (WA) Ltd
Interest in EP368
20%
80%
(Operator)
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EP426
During the December quarter, the assets of the operating company of EP426 (Empire Oil & Gas) was 100% acquired by
Mineral Resources Limited (ASX:MIN), an Australian based mining services and processing company.
During the year, Mineral Resources Limited, as operator of EP426 successfully secured a 2-year suspension, extension and
program variation on EP426. The variation was made to align future work program commitments of 2D seismic
acquisition for EP426 and EP368. The drilling of Lockyer-Deep / North Erregulla Deep has important implications for the
forward work program in EP426, and a full post-well assessment will be completed prior to finalising the design of the
seismic survey.
EP426 Joint Venture
Name
Norwest
Empire Oil Company (WA) Ltd
Interest in EP426
22.22%
77.78%
(Operator)
L14 Jingemia Oilfield
In July 2017, Cyclone Energy was placed on title as Operator of the L14 production licence, and work commenced in
bringing the Jingemia Oil Field back into production. The Jingemia Field had been in care and maintenance under
operator Origin Energy since 2012.
Production recommenced in the December Quarter from J8, with the first tanker of oil delivered to BP Kwinana Refinery
during the month.
RCMA Australia Pty Ltd assumed operatorship of L14 on 11 May 2018 and in July 2018, J4 was successfully brought back
online. This was an excellent outcome as it demonstrated the longer-term viability of the field and facilities.
Workovers planned for Q4 CY2018 should see two additional wells J10 and J12 brought back into production. Ongoing
optimisation of the production strategies for all four wells should provide the opportunity to generate additional uplift to
production. With current oil prices remaining commercial and a significantly lower cost of operations than under the
previous joint venture operator, Norwest remains optimistic that a long-term positive cashflow can be generated from
the Jingemia Field.
L14 Joint Venture
Name
Norwest
RCMA Australia Pty Ltd
Cyclone Energy Pty Ltd
Interest in L14
6.278%
60%
33.722%
(Operator)
Performance Indicators
Management and the Board monitor the Group's overall performance by:
•
•
•
evaluating whether exploration activity and expenditure is adding value to the asset portfolio;
analysis of financial budgets versus actual results; and
the Company’s share price.
The underlying drivers which contribute to the Company’s performance and can be managed internally include a
disciplined approach to reducing the Group’s non-essential costs and allocating funds to those activities which will add
shareholder value. The Company’s share price is often influenced by factors outside the control of management and the
Board, such as market conditions, however through effective communication between the Company and all of its
stakeholders the Company can provide assurance that there are regular reviews in place to determine actions which
should be implemented to increase Company performance.
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Dynamics of the Business
The Board are focussed on Norwest developing its interests in existing acreage in Western Australia. Norwest seeks to
farm out its interests where appropriate to de-risk its exposures and facilitate successful exploration and development.
Results of Operations
The net loss of the Consolidated entity for the year ended 30 June 2018 of $253,009 was higher than the loss of the prior
year of $198,305. The main contributing factor was;
• An increase in expenditure due to active operations on TP15.
Financial Position
At 30 June 2018, the Group had cash reserves of $1.6m (2017: $0.5m) and no debt. Fundraising during the financial year
raised $2.3m (before costs). The proceeds were used to fund the Group’s exploration activities and also to supplement
working capital.
At 30 June 2018, the Group had net assets of $7.3m (2017: $5.3m) an increase of $2.0m. This is largely attributable to:
• A capital raising that resulted in an increase in exploration assets due to drilling of Xanadu 1 in TP15 and an
increase in cash at bank for working capital.
6. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
In the opinion of Directors there were no significant changes in the state of affairs of the Group that occurred during the
financial year under review.
7. SIGNIFICANT EVENTS AFTER THE BALANCE DATE
Other than the events outlined in note 21 of the financial statements, at the date of this report, there are no matters or
circumstances, which have arisen since 30 June 2018 that have significantly affected or may significantly affect the
operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years.
8. LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Likely developments in the operations of the Group that were not finalised at the date of this report included:
3D Seismic Acquisition in TP15 to support drilling of an appraisal well in the Xanadu structure
•
• Well suspension activities on EP413
Further information on likely developments in the operations of the Consolidated entity and the expected results of
operations have not been included in this financial report because the Directors believe it would be likely to result in
unreasonable prejudice to the Consolidated entity.
11
9. ENVIRONMENTAL REGULATION AND PERFORMANCE
Norwest has as one of its central tenets, a policy of fully complying with and surpassing the requirements for
environmental management in whatever country/jurisdiction that it operates in. To this end Norwest has developed and
implemented where appropriate the following:
•
•
corporate environment policies and procedures that are communicated to and adhered to by all employees;
environmental management systems and programs relevant to each level of organisation based on but
surpassing the level of standards applying in each jurisdiction;
annual budgets for environmental systems implementation;
plans for continuous monitoring and improvement;
•
•
• workforce training on environmental issues including assignment of management representatives and facilitators
to monitor environmental systems;
a set of quantitative objectives and targets aimed at continuous improvements which exceed legal compliance;
continuous reviews of performance at different levels in the organisation and projects hierarchy; and
a strategy for conducting impact-assessment surveys and periodic audits.
•
•
•
Native Title
There is the risk that native title exists over the land on which the Consolidated entity holds exploration permits. It is
impossible at this stage to quantify the impact (if any), which native title may have on the operations of the Consolidated
entity.
Past History
Norwest has historically met all environmental requirements through third parties and its partner companies.
Accordingly, Norwest is conversant with environmental requirements and has developed a corporate environmental
policy based on:
government regulation and requirements;
•
• experience from past projects; and
•
assistance from expert consulting groups.
10. INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Constitution of the Company requires the Company, to the extent permitted by law, to indemnify any person who
has been an officer of the Company or Group for any liability caused as such by an officer and any legal costs incurred in
defending an action for any liability. During or since the end of the financial year, no amounts have been paid by the
Company or Group in relation to the above indemnities. During the financial year, an annualised insurance premium was
paid to provide adequate insurance cover for Directors and officers against any potential liability and the associated legal
expenses of a proceeding.
11. DIVIDENDS
No dividends were paid or declared since the start of the financial year. No recommendation for payment of dividends
has been made.
12. REMUNERATION REPORT - Audited
This Remuneration Report, which forms part of the Directors’ Report, outlines the remuneration of the Key Management
Personnel (“KMP”) of Norwest. For the purposes of this report, the KMP are the Directors and the Company Secretary.
12
Remuneration Policy
The Group’s remuneration policy for its KMP has been developed by taking into account the size of the management
team for the Group, the nature and stage of development of the current operations and market conditions and
comparable salary levels for companies of a similar size and operating in a similar sector.
In addition, the Board in determining the remuneration policy for KMP places emphasis on the following: the Group is
currently only undertaking exploration, appraisal and development activities, risks associated whilst undertaking these
activities and other than profit from asset sales, the Company does not expect any profitable operations until sometime
in the future.
Executive Remuneration
The Group’s remuneration policy for its executive officers is to provide a fixed component and a performance based
component (short and long term incentives). The Company aims to:
•
•
•
reward executives with a level and mix of remuneration commensurate with their position and responsibilities
within the Company;
align the interests of executives with those of shareholders and business objectives; and
ensure total remuneration is competitive by market standards.
Fixed remuneration is reviewed regularly by the Board. The process consists of a review of Company and individual
performance, relevant comparative remuneration externally and internally and, where appropriate external advice on
policies and practices. It also takes into account any change to the scope of the role performed by the executive and any
other relevant factors of influence.
The Group has chosen to provide Incentive Options to KMP as part of their remuneration and incentive arrangements in
order to attract and retain their services and to provide incentive linked to performance of the Group. The Incentive
Options have exercise prices at or above market share price (at the time of agreement/grant). As such, the Incentive
Options granted are generally only of benefit if the KMP perform to the level whereby the value of the Group increases
sufficiently to warrant exercising the Incentive Options granted.
The Company prohibits executives entering into arrangements to limit their exposure to Incentive Options granted as part
of their remuneration package.
Employment Contracts with Executives
Mrs Shelley Robertson, Chief Executive Officer – from 11 July 2016 and Managing Director from 31st October 2017
Shelley has an Executive Services Agreement (“the agreement”) which specifies the duties and obligations to be fulfilled in
her role. Mrs Robertson receives a fixed remuneration component of $240,000 (including superannuation) per annum
and $36,000 per annum for the position of Managing Director.
The agreement may be terminated by either party by giving three months’ notice. No amount is payable in the event of
negligence or incompetence in regard to the performance of duties. However where Mrs Robertson’s employment:
1.
2.
is terminated by the Company for redundancy; or
is permanently relocated to an area more than 20 kilometres from the current location of the Company’s offices,
the three (3) month notice provisions shall not apply and instead the Company shall pay Mrs Robertson a severance
payment equivalent to six (6) months of the Salary due to Mrs Robertson on the date of cessation of employment.
Mrs Robertson is also entitled to participate in a short term incentive plan and incentive option scheme.
Under the short term incentive plan, the Company shall make a $30,000 payment to Mrs Robertson on or about the 15th
of the month immediately following achievement of the following milestones:
1. a ‘net-profit’ achieved on the first 12 months of Jingemia operations following first oil from the re-start of the
Jingemia Oil Field;
2. commercial flow rates achieved on the successful drilling of Xanadu-1;
3. commercial flow rates achieved on the successful drilling of Arrowsmith-3; and
4. commercial flow rates achieved on the successful drilling of the first well within either EP368 or EP426.
13
Under the incentive option scheme, the Company will issue 3,000,000 options (Scheme Options) to Mrs Robertson upon
the Company achieving each of the following milestones:
1.
2.
3.
4.
first oil from the re-start of the Jingemia Oil Field (Scheme Milestone 1); (Already vested)
the spudding of Xanadu-1 (Scheme Milestone 2); (Already vested)
the spudding of Arrowsmith-3 (Scheme Milestone 3); and
the spudding of the first well within either EP368 or EP426 (Scheme Milestone 4).
The Scheme Options are to be issued:
1. Scheme Milestone 1 has been achieved and options vested and are exercisable at $0.01 on or before 30 June
2020;
2. Scheme Milestone 2 has been achieved and options vested and are exercisable at $0.02 on or before 30 June
2020;
3. upon achievement of Scheme Milestone 3 are exercisable at $0.03 on or before 30 June 2020; and
4. upon achievement of Scheme Milestone 4 are exercisable at $0.04 on or before 30 June 2020.
During the 2016 financial year, the Company granted 10,000,000 options to Shelley under the Company Incentive Option
Scheme, the exercise price of these options is $0.006 and the expiry is 30 June 2020.
Miss Emma Curnow Company Secretary – from 18 July 2016 – Resigned as Company Secretary 15 September 2017
Emma had an employment contract which specifies the duties and obligations to be fulfilled in her role. The contract
could be terminated by either party by giving one months’ notice. No amount was payable in the event of negligence or
incompetence in regard to the performance of duties. Miss Curnow received a fixed remuneration component of $98,400
(plus superannuation) per annum.
During the previous financial year, the Company granted 4,800,000 options to Emma under the Company Incentive
Option Scheme, the exercise price of these options is $0.006 and the expiry is 30 June 2020. The options were exercised
on 19 September 2017 and subsequently disposed of.
Ms Jo-Ann Long Chief Financial Officer and Company Secretary – from 15 September 2017
Jo-Ann offers the services of part time Chief Financial Officer and Company Secretary under a Contract with her company
which specifies the duties and obligations to be provided in her role. The contract may be terminated by either party by
giving 14 days’ notice. Ms Long received a retainer of $3,000 per month and an hourly rate for certain specialised duties.
Non-Executive Director Remuneration
The Board’s policy is for fees to Non-Executive Directors to be no greater than market rates for comparable companies for
time, commitment and responsibilities and seeks to set remuneration at a level which provides the Company with the
ability to attract and retain directors of the highest calibre, whist incurring a cost which is acceptable to shareholders.
The Board determines payments to the Non-Executive Directors and reviews their remuneration annually, based on
market practice, duties and accountability. Independent external advice is sought when required.
The non-executive directors receive a fixed fee for their services. The maximum aggregate amount of fees that can be
paid to Non-Executive Directors is subject to approval by shareholders at a General Meeting (this is currently $400,000
per annum). Fees for Non-Executive Directors are not linked to the performance of the Group. However, to align
Directors’ interests with shareholder interests, the Directors are encouraged to hold shares in the Company and given the
current size, nature and opportunities of the Company, Non-Executive Directors may receive Incentive Options in order to
secure their initial or ongoing holding and to retain their services.
Fees for the Chairman are presently $36,000 per annum (2017: $36,000) and fees for Non-Executive Directors are
presently set at $30,000 per annum (2017: $30,000). These fees cover main board activities and Non-Executive Directors
may receive additional remuneration for other services provided to the Company, including but not limited to,
membership of committees.
The Company prohibits Non-Executives entering into arrangements to limit their exposure to Incentive Options granted as
part of their remuneration package.
14
Relationship between Remuneration of KMP and Shareholder Wealth
During the Company’s exploration and development phases, the Board anticipates that the Company will retain
earnings (if any) and other cash resources for the exploration and development of its projects. Accordingly, the Group
does not have a policy with respect to the payment of dividends and returns of capital and thus there was no
relationship between the Board’s policy for determining the nature and amount of remuneration of KMP and dividends
paid and returns of capital by the Company.
The Board did not determine the nature and amount of remuneration of the KMP by reference to changes in the
Company’s shares traded between the beginning and end of the financial years. However, as noted above certain KMP
are granted Incentive Options which generally will be of greater value to KMP if the value of the Company’s share price
increases.
Relationship between Remuneration of KMP and earnings
As discussed above, the Company is currently undertaking exploration and development activities, and does not expect
to be undertaking profitable operations until sometime in the future. Accordingly, the Board does not consider earnings
during the current and previous financial years when determining, and in relation to, the nature and amount of
remuneration of KMP.
15
Emoluments of Directors and Other KMP
Short term Salary
& Fees
$
Post-Employment
Superannuation
$
Share-based
Payments
Options
$
Total
$
Performance
related
%
-
-
-
-
30,000
30,000
36,000
36,000
10,000
30,000
30,000
30,000
36,000
36,000
Directors
Michael J Fry
2018
2017
Henry D Kennedy
2018
2017
Ronald G Currie (1)
2018
2017
Other KMP
Shelley Robertson (2)
2018
2017
Emma Curnow (3)
2018
2017
Jo-Ann Long (4)
2018
2017
John Annand (5)
2018
2017
TOTAL 2018
TOTAL 2017
(1): Mr Currie resigned on 31 October 2017. (2) Mrs Robertson was appointed as CEO on 11 July 2016 and Managing
Director on 31 October 2017. (3) Miss Curnow resigned as Company Secretary on 15 September 2017 (4) Ms Long was
appointed Company Secretary on 15 September 2017 and then resigned on 18 September 2018 and (5) Mr Annand was
Company Secretary until 18 July 2016.
-
95,972
454,959
577,891
-
95,168
428,477
500,391
-
804
26,482
28,900
-
-
-
48,600
270,157
216,723
294,302
275,031
26,937
110,888
24,600
92,500
10,000
30,000
24,145
19,308
-
39,000
57,720
-
57,720
-
-
9,600
2,337
8,788
-
14.18
-
8.7
-
-
-
-
-
-
-
-
-
-
Options and rights granted to KMP
During the financial year ended 30 June 2018, the Company granted options for no consideration over unissued ordinary
shares in the Company to the following executives as part of their remuneration.
Number granted
Grant date
Fair value
per option at
grant date
($)
Emma Curnow
Shelley
Annand
Robertson
4,800,000
6,000,000
12 May 17
19 Sep 17
7 May 18
$0.002
$0.003-
$0.004
Exercise price
per option ($)
$0.006
$0.01-$0.04
Expiry date
30 June
2020
30 June
2020
Number of
options vested
and exercised
during 2018
4,800,000
6,000,000
The options granted to Shelley Robertson only vest upon the Company achieving certain milestones which are fully
detailed in note 13.
16
Details of the values of options granted, exercised or lapsed for each KMP of the Group during the past two financial years
are as follows:
Value of
Options
granted (A)
$
Value of
Options
exercised (B)
$
Value of
Options lapsed
(C)
$
Value of Options
included in
remuneration report
$
Remuneration that
consists of Options
%
2018
Emma Curnow
Shelley Robertson
2017
Emma Curnow
Shelley Robertson
-
-
9,600
39,000
28,800
-
-
-
-
-
-
-
-
-
9,600
39,000
-
-
8.7
14.18
A. The value of options granted is the fair value of the options calculated at grant date using an appropriate option pricing
model.
B. The value of options exercised during the year (if any) is calculated as the market price of the shares of the Company on
the ASX at the close of trading on the date the options were exercised after deducting the price paid to exercise the option.
C. The value of options that lapsed during the year (if any) represents the benefit forgone and is calculated at the date of
option issue using option pricing model.
For details on the valuation of the options, including models and assumptions used, please refer to Note 13 to the financial
statements.
Option holdings of Key Management Personnel
2018
Shelley Robertson
Emma Curnow
2017
Michael J Fry
Henry D Kennedy
Shelley Robertson
Emma Curnow
Held at 1 July
Granted as
Remuneration
10,000,000
4,800,000
4,000,000
4,000,000
10,000,000
-
6,000,000
-
-
-
-
4,800,000
(#): These options lapsed on 28 November 2016.
Exercised
Net Other Change
-
4,800,000
-
-
-
-
-
-
(4,000,000) (#)
(4,000,000) (#)
-
-
Vested and
exercisable at 30
June
16,000,000
-
-
-
10,000,000
4,800,000
17
Shareholdings of Key Management Personnel
Held at 1 July
Purchases
Sales
Net Other Change
Held at 30 June
2018
Michael J Fry
Henry D Kennedy
Ronald G Currie (*)
Shelley Robertson
Emma Curnow
2017
Michael J Fry
Henry D Kennedy
Ronald G Currie
Shelley Robertson
Emma Curnow
12,457,592
162,806,630
190,000,000
182,000
-
12,457,592
62,806,630
90,000,000
57,000
-
10,722,193
4,687,500
-
710,357
4,800,000
-
100,000,000
100,000,000
125,000
-
-
-
174,400,004
-
4,800,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
23,179,785
167,494,130
15,599,996
892,357
-
12,457,592
162,806,630
190,000,000
182,000
-
(*): 140,000,000 shares held in the name of Kemprust Pty Ltd which is a company which Ronald Currie’s father is a
Director.
Loans with KMP
No loans were provided to or received from Key Management Personnel during the year ended 30 June 2018 (2017: nil).
Other Transactions with KMP
Nil.
End of Remuneration Report.
13. SHARE OPTIONS
At 30 June 2018 unissued ordinary shares under options were:
Expiry date
Exercise price
30 June 2020
30 June 2020
30 June 2020
Total outstanding as at 30 June 2018
$0.006
$0.01
$0.02
Number of options
15,200,000
3,000,000
3,000,000
21,200,000
14. DIRECTORS’ MEETINGS
The number of Board meetings held during the year and the number of meetings attended by each Director was as follows:
Mr Michael John Fry (Non-Executive Chairman)
Mr Henry David Kennedy (Non-Executive Director)
Mr Ronald Gordon Currie (Non-Executive Director)
Shelley Robertson
(Executive Director)
Number eligible to
attend
4
4
2
2
Number attended
4
4
2
2
The Board also dealt with various matters by circular resolution, as such eight circular resolutions were signed.
COMMITTEE MEMBERSHIP
As at the date of this report, the Company did not have any formal committees.
18
15. AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration is set out on page 15 and forms part of the Directors’ Report for the year ended 30
June 2018.
16. NON-AUDIT SERVICES
The Company’s auditor, Rothsay Chartered Accountants, did not provide any non-audit services during the year (2017: nil).
Dated this 28th day of September 2018 in accordance with a resolution of the Directors and signed for and behalf of the
Board by Mr Michael John Fry
Michael John Fry
Non-Executive Director and Chairman
19
20
Corporate Governance Statement
This Corporate Governance Statement has been prepared on the basis of disclosure under the 3rd Edition of the ASX
Corporate Governance Council's Corporate Governance Principles and Recommendations (“ASX Principles and
Recommendations”).
The Company has followed each recommendation where the Board has considered the recommendation to be an
appropriate benchmark for corporate governance practices, taking into account factors such as the size of the Company
and the Board, resources available and activities of the Company. Where, after due consideration, the Company's
corporate governance practices depart from the ASX Principles and Recommendations, the Board has offered full
disclosure of the nature of and reason for the departure.
The Company's website www.norwestenergy.com.au contains a corporate governance section that includes copies of the
Company’s corporate governance policies and practices mentioned in this statement.
Recommendation
Principle 1 – Lay solid foundations for management and oversight
1.1
1.2
1.3
1.4
1.5
1.6
1.7
Disclose the respective roles and responsibilities of the Board and management and disclose those
matters expressly reserved to the Board and those delegated to management.
Undertake appropriate checks before appointing a Director or putting forward for their election and
provide security holders with all material information in its possession relevant to their election or
re-election as a director.
Written agreement with each director and senior executive setting out the terms of their
appointment.
The Company Secretary should be accountable to the Board through the Chair, on all matters to do
with the proper functioning of the Board.
Have a diversity policy with the measurable objectives for achieving gender diversity and to assess
annually both the objectives and the entity's progress in achieving them. The proportion of men and
woman on the Board, Senior Management and the whole organisation should be disclosed.
Disclose a process for periodically evaluating the performance of the Board, its committees and
individual directors and disclose whether a performance evaluation was undertaken during the
reporting period.
Disclose a process for periodically evaluating the performance of the senior executives and disclose
in relation to each reporting period whether an evaluation took place during the reporting period.
Principle 2 – Structure the Board to add value
2.1
2.2
2.3
2.4
2.5
2.6
If the entity does not have a Nomination Committee disclose that fact and the processes it employs
to address board succession issues and to ensure the Board has the correct mix of directors to
enable it to discharge its duties and responsibilities effectively.
Disclose a Board skills matrix setting out the mix of skills and diversity that the Board has or would
like to achieve.
Disclose the names of the independent Directors, along with the length of service of each director.
A majority of the Board should be independent.
The Chair of a Board should be an independent director, and should not be the same person as the
CEO.
Have a program for inducting new directors and provide appropriate professional development
opportunities for directors to develop and maintain the skills and knowledge needed to perform
their role as directors effectively.
Principle 3 – Act ethically and responsibly
3.1
Establish a code of conduct for its directors, senior executives and employees.
Comply
Yes/No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
21
Principle 4 – Safeguard integrity in corporate reporting
4.1
4.2
4.3
If the entity does not have an Audit Committee disclose that fact and the processes it employs that
independently safeguard the integrity of its corporate reporting, including the processes for the
appointment and removal of the external auditor and the rotation of the audit engagement partner.
Before the Board approves its’ financial statements, it should receive from its CFO and CEO a
declaration that in their opinion the financial records have been maintained properly and that the
financial records comply with the appropriate accounting standards and the opinion has been
formed on the basis of a sound system of risk management and internal control.
Ensure that its external auditor attends its AGM and is able to answer questions from security
holders relevant to the audit.
Yes
Yes
Yes
Principle 5 – Make timely and balanced disclosure
5.1
The entity should have a written policy for complying with its continuous disclosure obligations
under the Listing Rules.
Yes
Principle 6 – Respect the rights of the shareholders
6.1
6.2
6.3
6.4
Provide information about the entity and its governance to investors via its website.
Design and implement an investor relations program to facilitate effective two-way communication.
Disclose the policies and processes to facilitate and encourage participation at meetings of
shareholders.
Give shareholders the option to receive and send communications to the entity and it share registry
electronically.
Principle 7 – Recognise and manage risk
7.1
7.2
7.3
7.4
If the entity does not have a Risk Committee disclose that fact and the processes it employs for
overseeing the entity’s risk management framework.
The Board should review the entity's risk management framework at least annually to satisfy itself
that it continues to be sound and disclose when the review is undertaken.
If the entity does not have an internal audit function, disclose that fact and the processes it employs
for evaluating and improving the effectiveness of its risk management and internal control
processes.
Disclose whether it has any material exposure to economic, environmental and social sustainability
risks and if it does, how it manages or intends to manage those risks.
Principle 8 – Remunerate fairly and responsibly
8.1
8.2
8.3
If the entity does not have a Remuneration Committee disclose that fact and the processes it
level and composition of remuneration for directors and senior
employs for setting the
management and ensuring that such remuneration is appropriate.
Separately disclose its policies and practices regarding the remuneration of non-executive directors,
executive directors and other senior executives.
If the entity has an equity based remuneration scheme, it should have a policy on whether
participants are permitted to enter into derivative or other transactions to limit their risk.
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Further information required and non-compliance explanations
Recommendation 1. 5 - Diversity Policy with measurable objectives
The Company’s primary objectives with regard to diversity are as follows:
➢ the Company’s composition of the Board, executive, management and employees to be as diverse as
practicable;
and
to provide equal opportunities for all positions within the Company and continue the Company’s
commitment to employment based on merit.
➢
22
➢
and
to provide equal opportunities for all positions within the Company and continue the Company’s commitment
to employment based on merit.
The measurable objectives set by the Company with regard to diversity have been met, as described below:
➢
➢
➢
➢
blend of skills – wide range of backgrounds; geology, engineering, finance and corporate experience;
cultural backgrounds – Australian, American and South African;
gender – both male and female members; and
age – the age range spans over 25 years.
The above points relate to the composition of the Board and full time employees.
The Company’s annual reporting on the percentage of females in the organisation is as follows:
Full Time Employees
Executive Employees & Board Members
% Female
2018
100%
50%
2017
100%
40%
Recommendation 1.6 and 1.7 – Performance evaluation
During the year an evaluation of the Board and its individual directors was not carried out. The Board and management’s
suitability, overall structure and composition to carry out the Company's objectives is however, discussed and reviewed on
an as-required basis.
Performance evaluation of the CEO, senior executives and employees is undertaken annually through a performance
appraisal process which involves reviewing and assessment of performance against agreed corporate, industry and
individual key performance indicators.
Recommendation 2.1 – Nomination Committee
The Board does not have a separate Nomination Committee, rather the full Board considers those matters that would
usually be the responsibility of a Nomination Committee. Given the size and composition of the Board, it is not practicable
for a separate committee to be formed.
Recommendation 2.2 – Board skills matrix – composition of the Board
The names of the Directors of the Company in office at the date of this statement and information regarding Director’s
skills, experience and expertise are set out in the Directors’ Report. The Company seeks to maintain a Board which brings
together a diverse range of skills, experience, and perspectives to support the strategic direction of the Company and
enable effective management oversight and governance.
The below is the preferred combination of capabilities, skills and experience for the Board:
risk and governance knowledge;
technical disciplines of upstream oil and gas exploration, development and production;
finance, taxation, treasury and accounting;
➢
➢
➢ company strategy and business planning;
➢
➢ business growth and corporate development;
➢ corporate social responsibility including sustainability and community stakeholder;
➢
local and international experience; and
➢ ASX listed public company administration.
Each of these skills are currently represented on the Board and the Board considers that collectively it has the appropriate
range of skills and experience to direct the Company.
23
Recommendation 2.3– Name of independent Directors and length of service of each Director
In considering the independence of a director, the “Factors relevant to assessing the independence of a director” in Box 2.3
of the ASX Principles and Recommendations ("Independence Criteria") have been applied. Mr Fry has been considered an
independent Director, whilst Mr Kennedy is a substantial shareholder and he is not considered independent.
The length of service of Messrs Fry and Kennedy are nine and twenty one years respectively.
Recommendation 2.4 – Majority of the Board should be independent
As at 30 June 2018, only one of the three Directors are considered to be independent.
Given the size and scope of the Company's operations the Board considers that it is appropriately structured to discharge
its duties in a manner that is in the best interests of the Company. Further, mechanisms are in place so that if a director
considers it necessary, they may obtain independent professional advice.
Recommendation 4.1 – Audit Committee
The Board does not have a separate Audit Committee, rather the full board fulfils the function of an audit committee and
therefore no separate audit committee has been formed in accordance with the compositional recommendation. Given the
size and composition of the Board, it is not practicable that a separate audit committee be formed.
To assist the Board in carrying out its function in relation to audit matters, the Company has adopted an Audit Committee
Charter, which includes the following responsibilities:
➢ monitor and review the integrity of the financial reporting of the Company;
➢ review the Company’s internal financial control system; and
➢ monitor, review and oversee the external audit function
including matters concerning appointment,
remuneration, independence and non-audit services.
The Charter provides that independent directors may meet with the external auditor.
Recommendation 7.1 – Risk Committee
The Company believes that it is crucial for all Board members to be a part of overseeing the risk management process, and
as such the Board has not established a separate committee to oversee risk. This along with the size and composition of
the Board has meant that the full Board fulfils the function of a risk committee. The Board is responsible for reviewing the
Company’s policies on risk oversight and management and satisfying itself that management has developed a sound
system of risk management and internal control.
Recommendation 7.2 – Risk Management Framework review
The Company takes a proactive approach to risk management. The Board is responsible for ensuring that risks and
opportunities are identified on a timely basis and that the Company’s objectives and activities are aligned with the risks
and opportunities identified by the Board. The Company has a risk management policy in place.
The Board is ultimately responsible for risk management, however implementation of the risk management system and
day-to-day management of risk is the responsibility of the CEO, with the assistance of senior management. Management
reports to the Board annually, or more frequently as required, on the Company’s key risks and the extent to which it
believes these risks are being managed. During 2018, the Board reviewed the overall risk profile for the Company and
received input from management on the effectiveness of the Company’s management of its material business risks.
The Board has a number of active mechanisms in place to ensure that management's objectives and activities are aligned
with the business risks identified. These include the following:
➢
Implementation of approved operating plans and cash flow forecasts and Board monitoring of progress against
these plans and forecasts;
➢ Management reporting on specific business risks, including matters such as environmental issues and occupational
health and safety concerns.
24
➢ The Company has advised each director, manager and employee that they must comply with a set of ethical
standards maintaining appropriate core company values and objectives. Such standards ensure shareholder value
is maintained and developed. Standards cover legal compliance, conflict resolution, employment best practices,
privileged information and fair dealing.
Recommendation 7.3 – Internal Audit function or process for reviewing internal controls
The Company does not have a dedicated internal audit function, however strong internal control policies and procedures
are in place to effectively manage potential risks and detect any control breakdowns. These are reviewed (and if necessary
improved) on an annual basis, as well as when any new risks are identified or changes occur in the business or industry.
The processes for the review are as follows:
➢ External auditors independently evaluating the Company’s internal control environment and its compliance with
the International Financial Reporting Standards on an annual basis;
➢ Ongoing oversight of strategic matters by executive management and of operational matters ensuring that risks
identified are assessed and proactively managed;
➢ Written internal control assurance from the CEO and CFO prior to sign off of financial statements by the Board;
and
➢ Monthly reporting and review of financial and budgetary information.
Recommendation 7.4 – Material exposure to economic, environmental and social sustainability risks
The Company has identified a series of business risks (economic, environmental and social sustainability risks) which the
Group believes to be inherent in the industry.
Economic risks
➢ Ability to gain additional funding or a farm-out partner
The Company is not in production as yet and the development of its permits will require substantial additional financing.
Failure to obtain sufficient financing may result in delaying or indefinite postponement of exploration and any
development or a loss of interest. However, the Board is experienced in capital markets and financing resource projects as
well as having an extensive reach for potential farm-in partners (as evidenced during the previous financial year by
successfully farming out 75% of TP/15 and being free carried for the costs associated with drilling the Xanadu-1 well).
There are various other economic risks including; commodity risk, exchange rate risk and market risk (these risks are
examined in Note 7).
Environmental and social sustainability risks
➢
Impact on the environment and community from Company activities
The Board and management are committed to developing and building a sustainable business, ensuring the Company is an
active and responsible member of the communities in which we operate. Corporate environmental policies and procedures
are in place and communicated to and adhered to by all employees.
External impact-assessment surveys and audits are conducted using third-party consultants who are specialists in their
field.
➢ Native title risk in relation to claims over the permits held by the Company
Norwest works closely with the respective parties associated with any claim to come to a mutually beneficial agreement.
Recommendation 8.1 – Remuneration Committee
The Board does not have a separate Remuneration Committee, rather the full Board fulfils the function of a remuneration
committee and therefore no remuneration committee has been formed in accordance with the compositional
recommendation. Given the size and composition of the Board, it is not practicable that a separate remuneration
committee be formed.
To assist it in carrying out its function in relation to remuneration matters, the Company has adopted a Remuneration
Committee Charter to assist it to fulfil its role as the Remuneration Committee, which states the function of the committee
is to assist the Board in fulfilling its corporate governance responsibilities with respect to remuneration by reviewing and
making appropriate recommendations on:
➢ Remuneration packages of directors and senior executives; and
25
➢ Employee incentive and equity-based plans.
Recommendation 8.2 – Remuneration policies and practices
The Company’s remuneration policy has been developed by taking into account the size of the management team, the
nature and stage of development of the current operations and market conditions and comparable salary levels for
companies of a similar size and operating in a similar sector.
For details of the Company’s policies and practices regarding the remuneration of directors and senior executives refer to
the Remuneration Committee Charter on the Company’s website as well as the Remuneration Report included within the
Directors’ Report which includes the remuneration paid to Key Management Personnel and other relevant information.
Recommendation 8.3 – Transactions to limit exposure to economic risk from participating in equity-based remuneration
schemes
The Company prohibits executives entering into arrangements to limit their exposure to Incentive Options granted as part
of their remuneration package.
26
27
28
29
Directors’ Declaration
The Directors of the Company declare that, in the opinion of the Directors:
(a)
The attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the financial position and performance of the consolidated entity; and
complying with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements.
The financial statements and notes thereto also comply with International Financial Reporting Standards, as
disclosed in Note 1 and other mandatory professional reporting requirements.
The Directors have been given the declarations required by s.295A of the Corporations Act 2001.
There are reasonable grounds to believe that Norwest Energy NL will be able to pay its debts as and when they
become due and payable.
(b)
(c)
(d)
Signed in accordance with a resolution of the Directors made pursuant to s.295(5) of the Corporations Act 2001.
Dated in Perth on this 28th day of September 2018
Michael John Fry
Non-Executive Director and Chairman
30
Statement of Profit or Loss and Other Comprehensive
Income for the year ended 30 June 2018
Continuing Operations
Interest income
Oil Sales
Other Income
Depreciation
Audit fees
Legal expense
Exploration expenditure impairment
Amortisation of producing assets
Operating costs to P & L
Reversal of site restoration provision
Reversal of provision – SPA16
Employee, consulting and administration expenses
Share based payment expense
Note
Consolidated Entity
2018
$
2017
$
2
2
2
18
9
9
9
12(b)
5,543
3,039
44,657
265,328
139,742
315,528
142,781
(13,532)
(21,500)
(20,117)
-
(53,067)
-
-
-
(460,321)
-
(15,850)
(21,500)
(29,790)
(415,878)
-
(66,402)
396,895
538,000
(623,694)
(101,000)
(Loss) from continuing operations before income tax
(253,009)
(196,438)
Income tax benefit
4
-
-
(Loss) from continuing operations for the year
(253,009)
(196,438)
Other Comprehensive Income
Exchange differences on translation of foreign operations
Net change in fair value of available for sale financial assets transferred to
profit and loss
-
-
-
(1,867)
Total Comprehensive (Loss) attributable to Members of Norwest Energy NL
(253,009)
(198,305)
Profit/(Loss) per share attributable to the ordinary equity holders of the
company:
Basic and diluted earnings/(loss) per share
5
(0.00)
(0.01)
The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
31
Statement of Financial Position
as at 30 June 2018
Current Assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Total Current Assets
Non-Current Assets
Property, plant and equipment
Exploration and evaluation expenditure
Investments
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Provision for Annual Leave
Total Current Liabilities
Non-Current Liabilities
Provision for Long Service Leave
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Contributed equity
Reserves
Accumulated losses
Total Equity
Note
Consolidated Entity
2018
$
2017
$
6
8
9
10
1,630,711
24,424
9,266
1,664,401
541,919
71,255
25,000
638,174
9,884
5,772,741
-
5,782,625
17,732
4,950,269
133
4,968,134
7,447,026
5,606,308
38,757
18,028
56,785
228,359
31,675
260,034
43,374
43,374
36,544
36,544
100,159
296,578
7,346,867
5,309,730
11
12(b)
12(a)
59,645,137
91,400
(52,389,670)
57,345,391
101,000
(52,136,661)
7,346,867
5,309,730
The above Statement of Financial Position should be read in conjunction with the accompanying notes.
32
Statement of Changes in Equity
for the year ended 30 June 2018
Contributed
Equity
$
Share-Based
Payment
Reserve
$
Accumulated
Losses
$
Total Equity
$
57,345,391
101,000
(52,136,661)
5,309,730
Consolidated Entity
Balance at 1 July 2017
Comprehensive income for the year
Profit/(Loss) for the year
Total Comprehensive Income for the Year
Transactions with owners in their capacity
as owners:
Share issue (net of costs)
2,299,746
Share options expired/exercised(1)
Share based payments expense
-
-
(9,600)
-
Balance at 30 June 2018
59,645,137
91,400
(52,389,670)
7,346,867
-
-
-
(253,009)
(253,009)
(253,009)
(253,009)
-
-
-
2,299,746
(9,600)
-
56,076,464
1,409,600
(53,347,956)
4,138,108
Balance at 1 July 2016
Comprehensive income for the year
Profit/(Loss) for the year
Total Comprehensive Income for the Year
Transactions with owners in their capacity
as owners:
Share issue (net of costs)
1,268,927
-
-
-
(198,305)
(198,305)
(198,305)
(198,305)
-
1,268,927
-
-
-
-
Share options expired/exercised
Share based payments expense
-
-
(1,409,600)
1,409,600
-
101,000
-
101,000
Balance at 30 June 2017
57,345,391
101,000
(52,136,661)
5,309,730
(1) During the financial year ended 30 June 2017 Ms Curnow was granted options valued at $9,600 as part of her remuneration
package and included as part of the Share Payments Reserve. On exercising the options in the financial year ended 30 June 2018
Ms Curnow paid $28,800 to the company. The Share Payments Reserve was adjusted by $9,600 to reflect the value of the
transaction.
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
33
Statement of Cash Flows
for the year ended 30 June 2018
Cash Flows from Operating Activities
Payments to suppliers and employees
Interest received
Net Cash Used In Operating Activities
Cash Flows from Investing Activities
Payments for property, plant and equipment
Payments for exploration and evaluation expenditure
Net Cash Used In Investing Activities
Cash Flows from Financing Activities
Proceeds from share issue
Share issue costs
Net Cash Provided by Financing Activities
Note
Consolidated Entity
2018
$
2017
$
(325,672)
5,543
(320,129)
(596,356)
3,039
(593,317)
6(b)
(5,685)
(875,539)
(881,224)
(383)
(468,451)
(468,834)
2,378,451
(88,306)
2,290,145
1,330,000
(61,073)
1,268,927
Net Increase/ (Decrease) in Cash Held
1,088,792
206,776
Cash and Cash Equivalent at the Beginning of the Financial Year
Effects of exchange rate changes on cash held
Cash and Cash Equivalents at 30 June
541,919
-
1,630,711
6(a)
335,143
-
541,919
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
34
Notes to the Financial Statements
1
ABOUT THIS FINANCIAL REPORT
Reporting Entity
This financial report of Norwest Energy NL (‘the Company’) for the year ended 30 June 2018 comprises the Company and
its subsidiary (collectively referred to as ‘the consolidated entity’ or ‘Group’). Norwest Energy NL is a company limited by
shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange.
The notes to the financial statements are organised into the following sections:
(a) Key Performance: Provides a breakdown of the key individual line items in the statement of comprehensive
income that is most relevant to understanding performance and shareholder returns for the year:
Notes
2
3
4
5
Revenue from continuing operations
Segment information
Income tax expense
Profit/(Loss) per share
(b) Financial Risk Management: Provides information about the Consolidated Entity’s exposure and management of
various financial risks and explains how these affect the Consolidated Entity’s financial position and performance:
Notes
6
7
Cash and cash equivalents
Financial risk management
(c) Other Assets and Liabilities: Provides information on other balance sheet assets and liabilities that do not
materially affect performance or give rise to material financial risk:
Notes
8
9
10 Trade and other payables
Trade and other receivables
Exploration and evaluation expenditure
(d) Capital Structure: This section outlines how the Consolidated Entity manages its capital structure and related
financing costs (where applicable), as well as capital adequacy and reserves. It also provides details on the
dividends paid by the Company:
Notes
11 Contributed equity
12 Reserves and accumulated losses
13 Share-based payments
(e) Consolidated Entity Structure: Provides details and disclosures relating to the parent entity of the Consolidated
Entity, controlled entities, investments in associates and any acquisitions and/or disposals of businesses in the
year. Disclosure on related parties is also provided in the section:
Notes
14 Parent entity information
15
16 Key Management Personnel Disclosures & Related party transactions
Investment in controlled entities
(f) Other: Provides information on items which require disclosure to comply with Australian Accounting Standards
and other regulatory pronouncements however, are not considered significant in understanding the financial
performance or position of the Consolidated Entity:
Notes
17 Remuneration of Auditors
18 Commitments for expenditure
19 Contingencies
20 Events occurring after reporting period
35
Basis of Preparation
1a
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards, other
authoritative pronouncements of the Australian Accounting Standards Board, Australian Accounting Interpretations and
the Corporations Act 2001. Norwest Energy NL is a for-profit entity for the purposes of preparing the financial statements.
Compliance with IFRSs
The financial statements of Norwest Energy NL also comply with International Financial Reporting Standards (IFRSs) as
issued by the International Accounting Standards Board (IASB).
New, revised or amending Accounting Standards and Interpretations adopted
The Consolidated Entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued
by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
Any significant impact on the accounting policies of the Consolidated Entity from the adoption of these Accounting
Standards and Interpretations are disclosed below. The adoption of these Accounting Standards and Interpretations did not
have any significant impact on the financial performance or position of the Consolidated Entity.
New Accounting Standards and Interpretations
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2018. The Group's
assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the
consolidated entity, are set out below.
AASB 9 Financial Instruments
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces all
previous versions of AASB 9 and completes the project to replace IAS 39 'Financial Instruments: Recognition and
Measurement'. AASB 9 introduces new classification and measurement models for financial assets. A financial asset shall
be measured at amortised cost, if it is held within a business model whose objective is to hold assets in order to collect
contractual cash flows, which arise on specified dates and solely principal and interest. All other financial instrument assets
are to be classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on
initial recognition to present gains and losses on equity instruments (that are not held-for-trading) in other comprehensive
income ('OCI'). For financial liabilities, the standard requires the portion of the change in fair value that relates to the
entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge
accounting requirements are intended to more closely align the accounting treatment with the risk management activities
of the entity. New impairment requirements will use an 'expected credit loss' ('ECL') model to recognise an allowance.
Impairment will be measured under a 12-month ECL method unless the credit risk on a financial instrument has increased
significantly since initial recognition in which case the lifetime ECL method is adopted. The standard introduces additional
new disclosures. The Company will adopt this standard from 1 July 2018 and the impact of its adoption is expected to be
minimal on the Company.
AASB 15 Revenue from Contracts with Customers
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard provides a single
standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue to depict the
transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services. The standard will require: contracts (either written, verbal
or implied) to be identified, together with the separate performance obligations within the contract; determine the
transaction price, adjusted for the time value of money excluding credit risk; allocation of the transaction price to the
separate performance obligations on a basis of relative stand-alone selling price of each distinct good or service, or
estimation approach if no distinct observable prices exist; and recognition of revenue when each performance obligation is
satisfied. Credit risk will be presented separately as an expense rather than adjusted to revenue. For goods, the
performance obligation would be satisfied when the customer obtains control of the goods. For services, the performance
obligation is satisfied when the service has been provided, typically for promises to transfer services to customers. For
performance obligations satisfied over time, an entity would select an appropriate measure of progress to determine how
much revenue should be recognised as the performance obligation is satisfied. Contracts with customers will be presented
in an entity's statement of financial position as a contract liability, a contract asset, or a receivable, depending on the
relationship between the entity's performance and the customer's payment. Sufficient quantitative and qualitative
36
disclosure is required to enable users to understand the contracts with customers; the significant judgments made in
applying the guidance to those contracts; and any assets recognised from the costs to obtain or fulfil a contract with a
customer. The Company will adopt this standard from 1 July 2018 and the impact of its adoption is expected to be minimal
on the Company.
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces AASB
117 'Leases' and for lessees will eliminate the classifications of operating leases and finance leases. Subject to exceptions, a
'right-of-use' asset will be capitalised in the statement of financial position, measured at the present value of the
unavoidable future lease payments to be made over the lease term. The exceptions relate to short-term leases of 12
months or less and leases of low-value assets (such as personal computers and small office furniture) where an accounting
policy choice exists whereby either a 'right-of-use' asset is recognised or lease payments are expensed to profit or loss as
incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for lease prepayments, lease
incentives received, initial direct costs incurred and an estimate of any future restoration, removal or dismantling costs.
Straight-line operating lease expense recognition will be replaced with a depreciation charge for the leased asset (included
in operating costs) and an interest expense on the recognised lease liability (included in finance costs). In the earlier
periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease
expenses under AASB 117. However EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results will be
improved as the operating expense is replaced by interest expense and depreciation in profit or loss under AASB 16. For
classification within the statement of cash flows, the lease payments will be separated into both a principal (financing
activities) and interest (either operating or financing activities) component. For lessor accounting, the standard does not
substantially change how a lessor accounts for leases. The Company will adopt this standard from 1 July 2019. but the
impact of its adoption is expected to be minimal on the Company because, at the date of this report, there are no lease
agreements with a term of more than 12 months.
Principles of Consolidation
1b
The consolidated financial statements incorporate the assets and liabilities of the Company as at 30 June 2018 and the
results of its subsidiaries for the year then ended. The Company and its subsidiaries are referred to in this financial report as
Reward or the Consolidated Entity.
All inter-company balances and transactions between entities in the Consolidated Entity, including any unrealised profits or
losses, have been eliminated on consolidation.
GST
1c
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part
of the expense.
Receivables and payables are stated as inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included with other receivables or payables in the Statement of
Financial Position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the taxation authority, are presented as operating cash flow.
REVENUE FROM CONTINUING OPERATIONS
2
Interest income
Oil sales
JV Operator fees and other recoveries
Research and development tax rebate received
2018
$
2017
$
5,543
44,657
265,328
-
3,039
-
108,314
31,428
315,528
142,781
37
3
SEGMENT INFORMATION
The Group has adopted AASB 8 Operating Segments which requires operating segments to be identified on the basis of
internal reports of the Group that are reviewed by the chief operating decision-maker in order to allocate resources to
the segment and to assess its performance.
The Board of Norwest reviews internal reports prepared as Consolidated financial statements and strategic decisions of
the Group are determined upon analysis of these internal reports. During the period the Group operated in one
business segment, being the oil and gas sector. Accordingly under the management approach outlined only one
operating sector has been identified and no further disclosures are required in the notes to the Consolidated financial
statements.
4
(a)
INCOME TAX EXPENSE
The major components of income tax expense are
Income statement
Current income tax:
Current income tax benefit
Deferred income tax:
Relating to origination and reversal of temporary differences
Unused tax losses not recognised as a DTA
Income tax (expense)/income reported in the income statement
2018
$
2017
$
362,977
489,503
(293,650)
(69,327)
(123,869)
(365,634)
-
-
The aggregate amount of income tax attributable to the financial period differs from the amount calculated on the
operating loss.
The differences are recorded as follows:
Accounting loss
Prima facie tax payable at 27.5%
Add tax effect of items not brought to account:
Non-deductible and non-assessable permanent items
Tax losses not bought to account
2018
$
(253,009)
(69,577)
250
69,327
2017
$
(198,305)
(54,534)
(311,099)
365,635
-
-
38
(b) Deferred income tax
Deferred income tax at 30 June relates to the following:
Deferred tax liabilities
Tax effect of exploration expenses
Set-off against carry forward losses
Deferred tax liability balance
Deferred tax assets
Tax value of carry forward losses
Set off against deferred tax liability
Non-recognition of deferred tax asset
Deferred tax assets
Deferred tax asset balance
(c) Tax losses
Deferred tax assets
Tax losses – revenue
Tax losses – capital
2018
$
2017
$
1,564,974
(1,564,974)
-
1,331,998
(1,331,998)
-
11,645,594
(1,564,974)
(10,080,620)
-
11,248,224
(1,331,998)
(9,916,226)
-
9,334,838
1,947,779
11,282,617
9,156,764
1,947,779
11,104,543
At 30 June 2018, the Consolidated entity has $42,347,614 (2017: $40,380,155) of tax losses that are available indefinitely
for offset against future taxable profits of the Company. A net deferred tax asset balance has not been recognised on the
Statement of Financial Position in respect of the amount of these losses.
The recognition and utilisation of losses is subject to the loss recoupment rules being satisfied. The potential deferred tax
asset will only be obtained if:
- assessable income is derived of a nature and of amount sufficient to enable the benefit from the deductions to be
realised or the benefit can be utilised by the Company and/or the Consolidated entity providing that;
- the conditions for deductibility imposed by the law are complied with; and
- no changes in tax legislation adversely affect the realisation of the benefit from the deductions.
(d) Tax consolidation legislation
The Company had not elected to consolidate for tax purposes at balance date.
5
PROFIT/(LOSS) PER SHARE
Basic loss per share
The profit/(loss) for the year and the weighted average number of ordinary
shares used in the calculation of basic loss per share are as follows:
Loss for the year after income tax
2018
Cents Per Share
2017
Cents Per Share
(0.00)
(0.01)
2018
$
2017
$
(253,009)
(198,305)
2018
No.
2017
No.
Weighted average number of ordinary shares for the purposes of basic
earnings per share
3,162,238,617
2,499,176,700
39
2018
$
2017
$
CASH AND CASH EQUIVALENTS
Reconciliation of Cash
6
6a
For the purposes of the Statements of Cash Flows, cash includes cash on hand
and in banks. Cash at the end of the financial year as shown in the Statement
of Cash Flows is reconciled to the related items in the Statement of Financial
Position as follows:
Cash and short term deposits
1,630,711
541,919
6b
Reconciliation of Net Cash used In Operating Activities to Operating
Profit/(Loss) after Income Tax
Profit/(Loss) for the year
Depreciation
Exploration costs expensed included in investing activities
Equity settled share-based payment
Change in assets and liabilities during the financial year:
Trade and other receivables
Investments and assets
Provisions
Trade and other payables
(253,009)
13,532
-
-
46,831
15,867
46,252
(189,602)
(198,305)
15,850
415,879
101,000
2,529
1,867
(934,118)
1,981
Net cash inflow/(outflow) from operating activities
(320,129)
(593,317)
7
FINANCIAL RISK MANAGEMENT
The consolidated entity's activities expose it to a variety of financial risks: market risk, credit risk, liquidity risk and cash
flow interest rate risk. The consolidated entity's overall risk management program focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects on the financial performance of the consolidated entity.
The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting
policies to these financial statements, are as follows:
Financial Assets
Cash and cash equivalents
Loans and receivables
Total Financial Assets
Financial Liabilities
Financial liabilities at amortised cost
Trade and other payables
Total Financial Liabilities
Note
6a
8
2018
$
2017
$
1,630,711
24,424
541,919
71,255
1,655,135
613,174
10
38,757
228,359
38,757
228,359
Risk management is carried out by the Board of Directors, who identify, evaluate and manage financial risks as they
consider appropriate.
40
7a Market Risk
(i)
Cash Flow Interest Rate Risk
Refer to (d) below.
Credit Risk
7b
The Group does not have any significant concentrations of credit risk. Credit risk is managed by the Board and arises from
cash and cash equivalents as well as credit exposure including outstanding receivables and committed transactions.
All cash balances held at banks are held at internationally recognised institutions. The majority of receivables are
immaterial to the Group. Given this, the credit quality of financial assets that are neither past due or impaired can be
assessed by reference to historical information about default rates. The maximum exposure to credit risk at reporting date
is the carrying amount of the financial assets as summarised at the start of this note.
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit
ratings (if available) or to historical information about counterparty default rates. Financial assets that are neither past due
and not impaired are as follows:
Cash and cash equivalents
‘AA’ S&P rating
2018
$
2017
$
1,630,711
541,919
Liquidity Risk
7c
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and, the availability of
funding through the ability to raise further equity or through related party entities. Due to the dynamic nature of the
underlying businesses, the Board aims at maintaining flexibility in funding through management of its cash resources. The
Group has no financial liabilities at the year-end other than normal trade and other payables incurred in the general course
of business. All financial liabilities mature in less than 6 months.
Cash Flow Risk
7d
As the Group has significant interest-bearing assets in the form of cash, the Group's income and operating cash flows are
exposed to changes in market interest rates.
Based on the year-end balances, a 1% increase in interest rates would have decreased the consolidated loss by $16,300
(2017: Profit $49,570) and increased the cash balances by a corresponding amount. There were no other amounts
included in Net Assets subject to material interest rate risks.
TRADE AND OTHER RECEIVABLES
8
GST receivable
Trade and other receivables
2018
$
2017
$
1,235
23,189
6,414
64,841
24,424
71,255
No receivables are impaired or past due but not impaired. Refer to Note 7 for Financial Risk considerations. The carrying
value of all receivables approximates their fair value.
41
9 EXPLORATION AND EVALUTION EXPENDITURE
Exploration and evaluation phase:
Carrying amount at the beginning of the year
Additions
Exploration expenditure impairment
2018
$
2017
$
5,772,741
4,950,269
4,950,269
610,204
-
4,897,697
259,799
(207,227)
Carrying amount at the end of the year
5,560,473
4,950,269
Production phase:
Carrying amount at the beginning of the year
Additions
Operating costs to P & L
Amortisation of production costs
Production expenditure impairment
Balance at 30 June 2018
-
265,335
-
(53,067)
-
212,268
-
275,053
(66,402)
-
(208,651)
-
The recoverability of the carrying amounts of exploration and evaluation assets is dependent on the successful
development and commercial exploitation or sale of the respective area of interest. This is assessed at balance date on an
annual basis. During the year the Jingemia field began producing oil. The carrying cost of the asset will be amortised over
the life of the producing field, which is considered to be 5 years.
10
TRADE AND OTHER PAYABLES
Trade Payables
Accrued Expenses
Other payable
2018
$
2017
$
2,043
23,525
13,189
47,491
163,500
17,368
38,757
228,359
42
11
11a
CONTRIBUTED EQUITY
Issued capital
3,382,092,727 fully paid ordinary shares (30 June 2017: 2,673,902,727)
59,645,137
57,345,391
11b
Movements in Ordinary Shares during the past two years
2018
$
2017
$
Date
01-Jul-17
04-Aug-17
04-Aug-17
17-Sep-17
06-Dec-17
10-Feb-18
13-Feb-18
30 Jun-18
30 Jun-18
01-Jul-16
20-Jul-16
01-Sep-16
10-Feb-17
30 Jun-17
30 Jun-17
Details
Opening balance
Share placement
Share placement
Share Issue
Share placement
Share issue
Share Issue
Share issue costs
Closing balance
Opening balance
Share placement
Share placement
Share placement
Share issue costs
Closing balance
No. of Ordinary
Shares
2,673,902,727
Issue price $
$
-
57,345,391
159,390,000
167,500,000
4,800,000
250,000,000
60,000,000
66,500,000
-
3,382,092,727
2,050,569,394
215,000,000
200,000,000
208,333,333
-
2,673,902,727
0.0032
0.0032
0.008
0.004
0.0024
0.0024
-
-
0.002
0.002
0.0024
-
510,048
536,000
38,400
1,000,000
144,000
159,600
(88,302)
59,645,137
56,076,464
430,000
400,000
500,000
(61,073)
57,345,391
11c Terms of Conditions of Ordinary Shares
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the company, to participate
in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
11d Unissued Capital - Options
There are no unissued Options at 30 June 2018. Incentive Options are described in detail in note 13.
11e Capital Risk Management
The Group defines its Capital as total equity of the Group, being $7,346,867 for the year ended 30 June 2018 (2017:
$5,309,730). The Group manages its capital to ensure that it is able to continue as a going concern while financing the
development of it projects through primarily equity-based financing. The Board’s policy is to maintain a strong capital base
so as to maintain investor, creditor and market confidence and to sustain future development of the business. Given the
stage of development of the Group, the Board’s objective is to minimise debt and to raise funds as required through the
issue of new shares.
There were no changes in the Consolidated entity’s approach to capital management during the year. During the next 12
months, the Group will continue to explore farm-out opportunities and additional issues of equity.
43
RESERVES AND ACCUMULATED LOSSES
Accumulated Losses
12
12a
Accumulated losses at the beginning of the year
Net loss for the year
Other comprehensive income
Transfer of reserves due to cancelled incentive options
Accumulated Losses at the end of the year
Reserves
12b
Share based payments reserve (i)
(i)
Share-Based Payments Reserve
The share-based payments reserve is used to recognise the fair value of
incentive options issued by the Group.
Balance at beginning of the year
Expired during the year
Exercised during the period
Granted during the period
Balance at the End of the Year
2018
$
2017
$
(52,136,661)
(253,009)
-
-
(52,389,670)
(53,347,956)
(196,438)
(1,867)
1,409,600
(52,136,661)
91,400
91,400
101,000
101,000
101,000
-
(9,600)
-
91,400
1,409,600
(1,409,600)
-
101,000
101,000
13
SHARE-BASED PAYMENTS
(a) Recognised Share-based Payments Expense
The Group provides Incentive Options to officers, employees and consultants as part of remuneration and incentive
arrangements from time to time. The number of options granted and the terms of the options are determined by the
Board. Shareholder approval is sought where required. During the past two years, the following equity settled share-
based payments have been recognised:
(b) Summary of Incentive options granted as Share-based payments
The following table illustrates the number and weighted average exercise prices (“WAEP”) of Incentive Options granted
as share-based payments at the beginning and end of the financial year.
Outstanding at the beginning of year
Expired/lapsed during the year
Exercised during the year
Granted during the year
Outstanding and exercisable at end of year
Number
•
201
8
20,000,000
-
(4,800,000)
6,000,000
21,200,000
•
•
WAEP
•
Number
2018
•
2017
•
•
WAEP
2017
0.1111
-
0.006
54,150,000
(44,150,000)
-
10,000,000
20,000,000
0.1111
0.1111
-
0.006
44
(c) Valuation models and key assumptions used
The fair value of the equity-settled share options granted is estimated as at the date of grant using a Binomial option
valuation model taking into account the terms and conditions upon which the options were granted.
The table below lists the inputs to the valuation model used for the share options granted by the Group that are currently
on issue and outstanding at the end of year:
May 2017
Nov 2015
July 2015
Number of options
Fair value at grant date
Share price at grant date
Exercise price
Expected volatility¹
Expected life²
Dividend yield (%) ³
Risk-free interest rate
5,200,000
$0.002
$0.003
$0.006
150%
3.13 years
Nil
1.79%
6,000,000
$0.003
$0.004
$0.006
110%
4.62 years
Nil
2.32%
4,000,000
$0.006
$0.007
$0.006
110%
4.98 years
Nil
2.22%
July 2015 (*)
6,000,000
Various - see below
$0.005
Various - see below
120%
4.98
Nil
2.06%
(*): 3 million options will vest when each of the following milestones are achieved and each milestone has a specific exercise price,
however the expiry date is the same of 30 June 2020:
1. first oil from the re-start of the Jingemia Oil Field (Scheme Milestone 1) with an exercise price of $0.01 (vested);
2. the spudding of Xanadu-1 (Scheme Milestone 2) with an exercise price of $0.02 (vested);
3. the spudding of Arrowsmith-3 (Scheme Milestone 3) with an exercise price of $0.03; and
4. the spudding of the first well within either EP368 or EP426 (Scheme Milestone 4) with an exercise price of $0.04.
The fair value of the options granted under Milestone 1 was $0.004 and the fair value of the remaining options granted under Milestone
2, 3 and 4 was $0.003 each.
¹: The expected volatility is indicative of future trends, which may not necessarily be the actual outcome.
²: The dividend yield reflects the assumption that the current dividend pay-out will remain unchanged.
³: The expected life of the options is based on the expiry date of the options as there is limited track record of early
exercise of options.
(d) Weighted Average Remaining Contractual Life
As 30 June 2018, the weighted average remaining contractual life of Incentive Options on issue that had been granted as
share-based payments was 2 years (2017: 3 years).
(e) Range of Exercise Prices
At 30 June 2018, the range of exercise prices of Incentive Options granted as share-based payments is $0.006 to $0.04
(2017: $0.006 to $0.04).
(f) Weighted average Fair Value
The weighted average fair value of Incentive Options granted as share-based payments by the Group is $0.006 (2017:
$0.06).
45
14
14a
PARENT ENTITY INFORMATION
Summary Financial Information
Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Financial Performance
Profit/(Loss) for the year
Other comprehensive income
Total comprehensive profit/ (loss) for the year
Parent
2018
$
2017
$
1,445,772
5,675,362
506,084
5,081,020
7,121,134
5,587,104
56,353
43,378
240,730
36,543
99,731
277,273
59,645,137
91,400
(52,715,140)
57,345,391
101,000
(52,136,560)
7,021,403
5,309,831
578,569
-
745,179
-
578,569
745,179
14b Guarantees
Norwest Energy NL has not entered into any guarantees in relation to the debts of its subsidiary.
14c Other Commitments and Contingencies
Norwest Energy NL has no commitments to acquire property, plant and equipment. Refer to Note 20 for the Company’s
contingent liabilities.
15
INVESTMENT IN CONTROLLED ENTITIES
Name of Entity
Country of
Incorporation
Class of Shares
Westranch Holdings Pty Ltd
Australia
Ordinary
Equity Holding
2018
%
100
2017
%
100
46
16
KEY MANAGEMENT PERSONNEL DISCLOSURES & RELATED PARTY
TRANSACTIONS
16a Details of Remuneration of Key Management Personnel
Short-term salary and fees
Post-employment benefits
Share-based payments
Detailed remuneration disclosures are provided in the remuneration report
on pages 8 - 14.
REMUNERATION OF AUDITORS
17
Australia – Rothsay Chartered Accountants
No non-audit services have been provided to the Group by the auditor.
18
18a
COMMITMENTS FOR EXPENDITURE
Exploration expenditure commitments
Within one year
One year or later and no later than five years
Later than five years
2018
$
2017
$
428,477
26,482
-
454,959
2018
$
\
21,500
21,500
500,391
28,900
48,600
577,891
2017
$
21,500
21,500
2018
$
30,000
13,115,550
-
2017
$
1,738,090
10,496,780
-
13,145,550
12,234,870
In order to maintain current rights of tenure to exploration permits, the Consolidated entity is required to perform
minimum exploration work to meet the minimum expenditure requirements specified by various Governments. These
obligations are subject to renegotiation. These obligations are not provided for in the financial report.
The permit commitments above will be met through either capital raisings, free carry from farm-in partners, or asset sales.
In order to ensure that the Group’s permits remain in good order, discussions and negotiations with the relevant regulatory
bodies take place on an as required basis to amend the timing of permit commitments where possible so as to align the
permit commitments with the financial capacity of the Group. Should the Group not be permitted to amend the timing of
the permit commitments, or have sufficient funds to satisfy those commitments, the Group risks having to relinquish title
to those permits and return the permit(s) to the relevant regulatory body.
18b Other commitments
Management have identified the operating lease for the registered office as a commitment (other than the exploration
commitments disclosed above):
Within one year
One year or later and no later than five years
Later than five years
2018
$
43,380
-
-
43,380
2017
$
68,517
-
-
68,517
47
CONTINGENCIES
19
19a Contingent Assets
There are no other contingent liabilities at reporting date.
19b Contingent Liabilities
There are no contingent liabilities at this reporting date.
20
EVENTS OCCURRING AFTER REPORTING DATE
No matters or circumstances have arisen other than the above, since the end of the financial year which significantly
affected or may significantly affect the operations of the Consolidated Entity, the results of the Consolidated Entity, or the
state of affairs of the Consolidated Entity as reported to the year ended 30 June 2018.
21
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
21a Historical Cost Convention
These financial statements have been prepared under the historical cost convention, as modified by the revaluation of
available-for-sale financial assets.
Critical Accounting Estimates
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements are disclosed in Note 23.
Income Tax
21b
The consolidated entity adopts the liability method of tax-effect accounting whereby the income tax expense is based on
the profit adjusted for any non-assessable or disallowed items.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be
recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on
accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is
settled. Deferred tax is credited in the Statement of Profit or Loss and Other Comprehensive Income except where it
relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against
which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that no
adverse change will occur in income taxation legislation and the anticipation that the consolidated entity will derive
sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility
imposed by the law.
48
Revenue Recognition
21c
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of
returns, trade allowances and amounts collected on behalf of third parties. Revenue is recognised for major business
activities as follows:
(i)
(ii)
Interest Income
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the
financial assets.
Other Services
Other debtors are recognised at the amount receivable and are due for settlement within 30 days from the end of
the month in which services were provided.
Exploration and Evaluation Expenditure
21d
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs
are only carried forward to the extent that they are expected to be recouped through the successful development of the
area or where activities in the area have not yet reached a stage which permits reasonable assessment of the economically
recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against operating results in the year in which the
decision to abandon the area is made. When production commences the accumulated costs for the relevant area of
interest are classified as development costs and amortised over the life of the project area according to the rate of
depletion of the economically recoverable reserves.
Where independent valuations of areas of interest have been obtained, these are brought to account. Subsequent
expenditure on re-valued areas of interest is accounted for in accordance with the above principles. A regular review is
undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to
that area of interest.
At 30 June 2018 the Directors considered that the carrying value of the mineral tenement interests of the consolidated
entity was as shown in the Statement of Financial Position and no further impairments arises other than that already
recognised.
Plant and Equipment
21e
Each class of plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and
impairment losses.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the consolidated entity and the cost of the
item can be measured reliably. All other repairs and maintenance are charged to the Statement of Comprehensive Income
during the financial period in which they are incurred.
The carrying amount of plant and equipment is reviewed annually by the Directors to ensure it is not in excess of the
recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows
that will be received from the assets’ employment and subsequent disposal. The expected net cash flows have been
discounted to their present values in determining recoverable amounts.
Depreciation
The depreciable amount of all plant and equipment is depreciated on a diminishing value over their useful lives to the
consolidated entity commencing from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Plant and Equipment
Depreciation Rate
27%
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An
asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater
than its estimated recoverable amount.
49
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are
included in the Statement of Comprehensive Income. When revalued assets are sold, amounts included in the revaluation
reserve relating to that asset are transferred to retained earnings.
21f
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less allowance for
doubtful debts. Trade receivables are due for settlement no more than 30 days from the date of recognition.
Trade Receivables
Collectability of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off.
An allowance for bad debts is established when there is objective evidence that the consolidated entity will not be able to
collect all amounts due according to the original terms of receivables. The amount of the provision is recognised in the
Statement of Comprehensive Income. They are recognised initially at fair value and subsequently at amortised cost.
Deposits with maturity periods in excess of three months but less than twelve months are included in receivables and not
discounted if the effect of discounting is immaterial.
Trade and Other Payables
21g
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the
financial year and which are unpaid, together with assets ordered before the end of the financial year. The amounts are
unsecured and are usually paid within 30 days of recognition.
Employee Entitlements
21h
(i) Wages, salaries and annual and sick leave
A liability for wages, salaries and annual leave expected to be settled within 12 months of the reporting date is
recognised in other payables and is measured as the amount unpaid at balance date at current pay rates in respect
of employees’ services up to that date. No liability exists for sick leave.
(ii)
Long service leave
A liability for long service leave is recognised in the provision for employee benefits and is measured as the present
value of expected future payments to be made in respect of services provided by employees’ up to balance date.
Equity-Based Payments
21i
Equity-based compensation benefits are provided to Directors and executives.
The fair value of options granted to Directors and executives is recognised as an employee benefit expense with a
corresponding increase in contributed equity. The fair value is measured at grant date and recognised over the period
during which the Directors and/or executives becomes unconditionally entitled to the options. Where options are issued to
consultants the fair value of the options given is valued by the market value of the service being provided.
The fair value at grant date is independently determined using an option pricing model that takes into account the exercise
price, the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradeable nature of the
option, the share price at grant date and expected price volatility of the underlying share, the expected divided yield and
the risk-free interest rate for the term of the option.
21j
(i)
(ii)
Earnings per share
Basic earnings per share
Basic earnings per share is determined by dividing the profit attributable to equity holders of the company,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation to
dilutive potential ordinary shares.
Segment Reporting
21k
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker has been identified as the steering committee that makes strategic
decisions.
50
The standard requires a ‘management approach’, under which segment information is presented on the same basis as that
used for internal reporting purposes. The segments are reported in a manner that is consistent with the internal reporting
provided to the chief operating decision maker.
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and
incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All
operating segments’ operating results are regularly reviewed by the Group’s Managing Director to make decisions about
resources to be allocated to the segment and assess its performance, and for which discrete financial information is
available.
Segment results that are reported to the Managing Director include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the
Company’s headquarters), head office expenses, and income tax assets and liabilities.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and
intangible assets other than goodwill.
Impairment of Assets
21l
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets
that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to
sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash generating units).
23m Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash
and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities on the Statement of Financial Position.
21n Provisions
Provisions are recognised when the consolidated entity has a present legal or constructive obligation as a result of past
events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount has
been reliably estimated.
Contributed Equity
21o
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds. Incremental costs directly attributable to the issue of new shares or options, or for the acquisition of a
business, are included in the cost of the acquisition as part of the purchase consideration.
If the entity reacquires its own equity instruments, e.g. as the result of a share buy-back, those instruments are deducted
from equity and the associated shares are cancelled. No gain or loss is recognised in the Statement of Comprehensive
Income and the consideration paid including any directly attributable incremental costs (net of income taxes) is recognised
directly in equity.
Comparative Figure
21p
When required by accounting standards, comparative figures have been adjusted to conform to changes in presentation
for the current financial year.
21q Government Grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be
received and the Group satisfies all attached conditions.
When the grant relates to an expense item, it is recognised as income over the periods necessary to match the grant on a
systematic basis to the costs that it is intended to compensate.
51
When the grant relates to an asset, the fair value is credited to a deferred income account and is released to the
Consolidated Statement of Profit or Loss and other Comprehensive Income over the expected useful life of the relevant
asset by equal annual instalments.
Where a grant is received in relation to the tax benefit of research and development costs, the grant shall be credited to
other income in the Consolidated Statement of Profit or Loss and other Comprehensive Income in the year of receipt.
22
i)
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Significant accounting judgements
In the process of applying the Group’s accounting policies, management has made the following judgements, apart
from those involving estimations, which have the most significant effect on the amounts recognised in the financial
statements:
Capitalisation of exploration and evaluation expenditure
The Group has capitalised significant exploration and evaluation expenditure on the basis either that this is
expected to be recouped through future successful development (or alternatively sale) of the Areas of Interest
concerned or on the basis that it is not yet possible to assess whether it will be recouped. As at 30 June 2018, the
carrying value of capitalised exploration expenditure is $5,772,741
ii)
Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often based on estimates and assumptions of future
events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of certain assets and liabilities within the next annual reporting period are:
Impairment of capitalised exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors,
including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the
related exploration and evaluation asset through sale.
Factors that could impact the future recoverability include the level of reserves and resources, future technological
changes, costs of drilling and production, production rates, future
legal changes (including changes to
environmental restoration obligations) and changes to commodity prices.
Valuation of share based payments
The Group measures the cost of equity settled share based payments at fair value at the grant date using the Black-
Scholes model taking into account the exercise price, the term of the option, the impact of dilution, the share price
at grant date, the expected volatility of the underlying share, the expected dividend yield and risk free interest rate
for the term of the option.
Where options are issued to consultants, the Group values the service provided based on market rates. In the absence of
market rates the share based payments are valued as above.
52
1
ASX ADDITIONAL INFORMATION
Additional information required by the Australian Securities Exchange Limited and not shown elsewhere in this
report is as follows. The information is accurate as at 16 October 2018.
1.1
SUBSTANTIAL SHAREHOLDERS
The names of substantial shareholders who have notified the Company in accordance with section 671B of the
Corporations Act are set out in the table below.
No. Shareholder
1.
2.
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
TAMARIND RESOURCES PTE LTD
1.2
SHARES ON ISSUE
Number of Shares
Held
375,968,179
389,000,000
% of All
Shares
11.12
11.5
The total number of shares on issue is 3,382,092,727 and these shares are held by a total of 4,042 registered
shareholders.
1.3 DISTRIBUTION OF SHAREHOLDERS
The distribution of all shareholders is set out in the table below.
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
101,000 and over
Total
Total Holders
171
232
346
1,512
1,781
4,042
Shares
35,457
777,722
2,915,707
68,927,776
3,309,436,065
3,382,092,727
% of All Shares
0.00
0.02
0.09
2.04
97.85
100
1.4 UNMARKETABLE PARCELS
The minimum parcel size at 16 October 2018 per unit is 166,667 shares.
There are 2,542 shareholders that hold unmarketable parcels.
1.5
TOP 20 SHAREHOLDERS
The top twenty registered shareholders of the Company are set out in the table below.
No. Shareholder
Shares % of All Shares
1.
2.
3.
4.
5.
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
TAMARIND RESOURCES PTE LTD
TAMARIND CLASSIC RESOURCES PTE LTD
SUNDOWNER INTERNATIONAL LIMITED
MR VERNON REGINALD PARROTT
6.
REY CATTAMARRA PTY LTD
7.
8.
9.
MR ROBERT ANTHONY HUTCHFIELD
BUCEPHALUS PTY LTD
WALKER I P G PTY LTD
10. MR ANDREW TROTT HOPKINS + MRS ADRIENNE JANET HOPKINS
11. J P MORGAN NOMINEES AUSTRALIA LIMITED
12. MR JOHN DOUGLAS ANNAND
375,968,179
240,562,500
148,437,500
131,862,205
55,625,004
53,056,027
34,987,500
30,000,000
30,000,000
29,687,501
28,616,503
28,000,001
11.12
7.11
4.39
3.90
1.64
1.57
1.03
0.89
0.89
0.88
0.85
0.83
53
No. Shareholder
Shares % of All Shares
13. BSG SERVICES PTY LTD
14. MR MICHAEL STOKES
15. CRESCENT NOMINEES LIMITED
16. MR ANTHONY JOHN WYETH
17. CITICORP NOMINEES PTY LIMITED
23,665,848
23,022,472
22,870,862
21,640,000
20,866,117
18. MR ROBERT DUNN + MR NOEL BRUCE HOSKING
20,000,000
19. MR JASON MCLENNAN
20. MORAY HOLDINGS (QLD) PTY LTD
20,000,000
20,000,000
0.70
0.68
0.68
0.64
0.62
0.59
0.59
0.59
TOTAL
1,358,868,219
40.18
TOTAL REMAINING HOLDERS BALANCE
2,023,224,508
59.82
1.6 OPTIONS ON ISSUE
The total number of Options on issue is 21,200,000 and these Options are held by a total of 4 registered Option
holders.
1.7 DISTRIBUTION OF OPTIONS ON ISSUE
The distribution of all Option holders is set out in the table below.
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
101,000 and over
Total
1.8 VOTING RIGHTS
Total Holders
Options % of all Options on Issue
-
-
-
-
4
4
-
-
-
-
21,200,000
21,200,000
-
-
-
-
100
100
All ordinary shares (whether fully paid or not) carry one vote per share without restriction. There are no voting
rights attaching to any option. There is no other class of security in the Company.
1.9
RESTRICTED SECURITIES
The Company has no restricted securities on issue.
1.10 ON-MARKET BUY-BACK
There is no current on-market buy-back.
1.11 CORPORATE GOVERNANCE STATEMENT
A statement disclosing the extent to which the Company has followed the best practice recommendations set by the
ASX Corporate Governance Council during the period is contained on the Company’s website.
1.12 Anti-Dilution Rights
On 5 June 2018, ASX Limited (ASX) granted the Company a waiver from ASX Listing Rule 6.18. This waiver was given
to the extent necessary to permit 3C Group IC Limited (3C Group) to maintain, by way of a right to participate in any
issue of securities or to subscribe for securities, its percentage interest in the issued share capital of the Company
(Anti-Dilution Right) in respect of a diluting event which occurs.
The Anti-Dilution Right lapses on the earlier of:
54
(a)
(b)
(c)
The date on which 3C Group ceases to hold in aggregate at least 5% voting power in the Company (other
than as a result of shares (or equity securities) to which the Anti-Dilution right applies and in respect of which
3C Group is still entitled to exercise, or has exercised, the Anti-Dilution Right);
The date on which 3C Group’s voting power in the Company exceeds 25%; or
The strategic relationship between the Company and 3C Group ceasing or changing in such a way that it
effectively ceases.
The Anti-Dilution Right may only be transferred to a related body corporate of 3C Group.
Any securities issued under the Anti-Dilution Right that are offered to 3C Group must be issued to 3C Group for cash
consideration that is:
(d)
(e)
No more favourable than cash consideration paid by third parties (in the case of issues of securities to third
parties for cash consideration) or
Equivalent in value to non-cash consideration offered by third parties (in the case of issues of securities to
third parties for non-cash consideration).
The number of securities that may be issued to 3C Group under the Anti-Dilution Right in the case of any diluting event
must not be greater than the number required in order for 3C Group to maintain its percentage holding in the issued share
capital of the Company immediately before that diluting event.
55
Company Secretary
The name of the Company Secretary is Mr Bennett Greenhalgh.
Registered Office
The address and telephone details of the registered and administrative office:
Level 2, 30 Richardson Street
West Perth, Western Australia, 6005
Telephone:
Facsimile:
+ (61) 8 9227 3240
+ (61) 8 9227 3211
Securities Register
The address and telephone number of the office at which a registry of securities is kept:
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth, Western Australia 6000
Telephone:
Free line:
Facsimile:
+61 (8) 9323 2000
1300 850 505
+61 (8) 9323 2033
Securities Exchange
The Company’s listed equity securities are quoted on the Australian Securities Exchange.
Restricted Securities
The Company has no restricted securities at the current date.
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Registered Office
Level 2, 30 Richardson Street
West Perth Western Australia 6005
Telephone: +61 8 9227 3240
Facsimile: +61 8 9227 3211
Email: info@norwestenergy.com.au
www.norwestenergy.com.au