OCTANEX LIMITED
A.B.N: 61 005 632 315
Level 21, 500 Collins Street
Melbourne Victoria 3000 Australia
T: +61 (0)3 8610 4702
F: +61 (0)3 8610 4799
E: admin@octanex.com.au
www.octanex.com.au
ANNUAL REPORT 2017
Contents
Chairman’s Letter
Corporate Directory
Operational Review
Auditor’s Independence
Declaration
Annual Financial Statements
Directors’ Report
Corporate Governance
Statement
Remuneration Report
Directors Declaration
Independent Auditor’s Report
Additional Information
(unaudited)
Glossary
2
4
5
11
12
12
16
17
20
21
59
61
Octanex |Annual Report | 2017
Lessons learned from Ophir are informing
our activities and approach to our other pre-
development assets.
following
formulated
The Cornea Retention Lease was granted in
significant new
the
2014
information gained from the Cornea – 3 well
in which Octanex actively participated. The
initial Cornea Retention Lease work program
was
technical
challenges; with the first three years of the
Lease designed to support the quantification
of drilling and produceability challenges. It
was prepared at a time when the oil price was
in the order of US$110 per barrel and had
been considerably higher.
to address
and
Demonstrating Cornea’s ability to achieve
threshold production is the key barrier to
commercialisation of Cornea,
a
production test well, designed to achieve
such economic production, was identified as
a key means of moving Cornea towards
development. However, the reduced oil price
environment since shortly after grant of the
Retention Lease has impacted significantly on
the required threshold production barrier.
have
development
As a result, the parameters for an economic
Cornea
changed
considerably since the Retention Lease was
granted, as has the basis of design for a
Cornea production well test. We now have a
development concept which is significantly
simplified from the originally proposed high
capex development.
Integrated reservoir modelling and facilities
work has been commenced to support design
Chairman’s Letter
Dear Shareholders,
the Ophir oil
2016/17 was a significant year for Octanex’s
field
involvement with
development, with production from the field
about to commence. Reduced industry costs,
“fit for purpose” marginal field facilities
design and focused execution have resulted in
significant cost savings against the revised
field development budget of
approved
US$90Million. Upon completion of
the
development phase, we expect the Ophir
development to set a new benchmark for low
cost development offshore Malaysia.
The Ophir wellhead platform, which was
fabricated at Port Klang, Malaysia, was
shipped to the field at the end of March 2017.
It was installed using innovative suction pile
foundation technology over a period of just
five days, delivering significant cost savings
and time efficiencies. I encourage you to
watch the short video of the installation on
our website.
The Naga-2 jack-up drilling rig mobilised to
the field at the end of May. The Naga-2 jacked
up and skidded its cantilever out and above
the well slots located on the wellhead
platform. Three horizontal production wells
were completed ahead of time, and under
budget. Completions have been run and
production assembly installed.
The FPSO for the Ophir Field, the MTC
Ledang, will shortly be moored to the seabed
and connected to the Ophir platform via a
flexible 8” pipeline, following conversion
works at Keppel Shipyard in Singapore.
Octanex |Annual Report | 2017
of a production test well capable of delivering
sufficient threshold productivity using this
development
to demonstrate
economic viability for the development of the
field.
concept
The Cornea Joint Venture has applied to the
authorities to vary the conditions of the
Retention Lease so that the work program is
focussed on a production test well which
demonstrates that threshold production, in
the current oil price regime, can be achieved.
We are also progressing evaluation activities
in relation to our 100% interest in the
Ascalon gas field, held via two exploration
permits. Having applied for Retention Leases
in respect of Ascalon in March 2016, we were
advised
Joint
Authority did not intend to grant Retention
Leases in respect of Ascalon.
in March 2017 that the
further
Through the consultation process with the
Joint Authority and NOPTA, Octanex was
that NOPTA considers Ascalon
advised
requires
activities,
evaluation
specifically relating to uncertainty regarding
resource estimates and well deliverability,
with
cost
corresponding development
uncertainty. Moreover, NOPTA considered
that such activities should be undertaken as
activities within the Exploration Permit
instruments held over Ascalon, rather than
Retention Lease titles.
Accordingly, Octanex has withdrawn the
Retention Lease applications and has
initiated independent studies of the Ascalon
gas discovery which are designed to review
the
inform
for a Location over
resource estimates and well deliverability.
These studies will
future
workscopes to further evaluate Ascalon.An
the
application
Winchester gas discovery will shortly be
lodged by Santos, the Operator of WA-323-P,
interest.
in which Octanex has a 25%
Declaration of Location is a pre-requisite for
seeking a Retention Lease over Winchester.
The Winchester gas discovery was made in
2013 via the Winchester-1/ST1 well and is
located near existing pipeline and processing
infrastructure.
During the year we changed our status and
simplified our capital structure, changing
from a public no liability company to a public
limited company, with our name changed to
Octanex Limited. As a statutory prerequisite
for the conversion of status, we cancelled all
uncalled capital on partly paid shares and
consolidated them on an equitable basis so
that each five partly paid (paid to 15c) shares
became three fully paid shares.
I extend my thanks to Sabah International
Petroleum for their support of Octanex and
the Ophir project, as well as to our staff and
contractors. I thank my co-directors and
shareholders for their ongoing support of
Octanex and look forward to sharing news of
production at Ophir with you shortly.
E.G. Albers
Melbourne
28 September 2017
Octanex |Annual Report | 2017
Corporate Directory
Share Registry
Automic Pty Ltd
Level 3
50 Holt Street
Surry Hills, NSW 2010, Australia
Telephone: 1300 288 664 (within Australia)
Telephone: +61 (2) 9698 5414 (outside Australia)
Website: www.automic.com.au
Auditor
Grant Thornton Audit Pty Ltd
Level 30, 525 Collins Street
Melbourne, Victoria 3000 Australia
Stock Exchange
ASX Limited
Level 45, South Tower, Rialto,
525 Collins Street,
Melbourne Victoria 3000 Australia
ASX Code
OXX
Registered office
Level 21,
500 Collins Street,
Melbourne, Victoria 3000 Australia
Telephone: +61 (03) 8610 4702
Facsimile: +61 (03) 8610 4799
E-mail: admin@octanex.com.au
Website: www.octanex.com.au
Incorporation
Incorporated in Victoria on 13 March 1980
Directors
Mr Geoffrey Albers
Chairman & Chief Executive Officer
Ms Raewyn Clark
Executive Director
Mr David Coombes
Independent Non Executive Director
Mr Giustino Guglielmo
Independent Non Executive Director
Datuk Kevin Kow How
Non-executive Director
Ms Suhnylla Kler
Non-executive Director
Mr James Willis
Independent Non Executive Director
Company Secretaries
Mr Robert Wright
Mr John Tuohy
Operational Review
Summary of Operations
Bringing the Ophir field closer to production was a key focus in 2016/17, together with advancing
our pre-development asset interests (Cornea and Ascalon), while maintaining interests in
exploration permits with potential for high-impact discoveries.
Octanex |Annual Report | 2017
Development Asset
Ophir Oil Development Project,
Malaysia, 50% interest
Octanex |Annual Report | 2017
depth
a water
The Ophir field is located offshore Peninsular
Malaysia, with
of
approximately 70m and has been developed
via three production wells, a well head
platform (WHP) and Floating Production
Storage and Offload (FPSO) vessel. The Ophir
development will set a new benchmark for
low cost development offshore Malaysia,
having leveraged reduced industry costs,
marginal field facilities design and focused
execution. First Oil from the Ophir field is
scheduled to be produced later this year.
Octanex’s share of the Ophir project is fully
funded via OPSB’s 75% project financing and
Octanex’s US$12Million Convertible Note
facility (presently drawn to US$8Million)
with Sabah International Petroleum, which is
wholly owned by Sabah Development Berhad
("SDB"). SDB itself is wholly owned by the
Ministry of Finance of the Malaysian state of
Sabah.
The Ophir field is being developed pursuant
to a Risk Service Contract (RSC) issued by
PETRONAS in 2014 to OPSB. Octanex holds a
50% interest in OPSB. Under the terms of the
RSC, OPSB is the service provider and
Operator of the field, while PETRONAS is the
resource owner. Upfront
investment of
is contributed by OPSB who is
capital
compensated, following commencement of
production, via the reimbursement of costs
for services
plus a remuneration
fee
rendered. The remuneration fee is linked to
production volume and capital cost key
performance indicators. Reimbursement of
capital and operating costs is guaranteed to
OPSB by PETRONAS pursuant to the RSC. Our
interest in OPSB is equity accounted with the
result that the value of our equity investment
and advances made to OPSB are reduced by
our share of OPSB losses (being costs that are
not reimbursable from PETRONAS, such as
financing costs). Our advances and the equity
investment are expected to be recovered
from OPSB after it has repaid its project
financing facilities.
Production Drilling Campaign
The Ophir drilling campaign was completed
ahead of time and under budget. It comprised
three horizontal production wells drilled and
completed in the J20 oil reservoirs of the
Lower Miocene Tapis formation. Ophir A1
and A2 wells were batch drilled with A1
spudded on 2 June 2017 and A2 spudded on
5 June 2017. The Ophir A3 well spudded on
11 July 2017.
Naga 2 Jack-Up Drilling Rig and Support Vessels
approaching Ophir Platform
Octanex |Annual Report | 2017
Completions have been run and production
assembly installed. All wells have been flowed to
clean-up the drilling and completion fluids, prior
to being shut-in for the impending tie-in works to
the FPSO .
Wellhead Platform
The Wellhead Platform was installed at the Ophir
Field in April after being loaded out from the
Muhibbah Engineering yard at Port Klang,
Malaysia in late March.
The Platform is comprised of 350 metric tonnes
topsides on a tri-legged jacket secured using
suction pile foundation technology. Dutch firm,
SPT Offshore, as a sub-contractor to the Wellhead
Contractor, Muhibbah Engineering, conducted the
offshore transportation and installation of the
platform. Video footage of the Installation of the
Wellhead Platform can be found on the Octanex
website at:
ww.octanex.com.au/activities/ophir/ophir-
videos/
FPSO
FPSO contractor, MTC Engineering Sdn Bhd
(MTCE) purchased an oil tanker, Puteri Bangsa, for
conversion to the MTC Ledang FPSO for the Ophir
field.
MTCE undertook engineering design works for the
conversion and conversion works were carried
out at the Keppel Shipyard in Singapore.
The MTC Ledang has a small process facility
module with capacity for 15,000 barrels of fluid
per day and gas flaring, and is capable of storing
up to 300,000 barrels of crude. It will be moored
to the seabed and connected to the Ophir platform
via a flexible 8” pipeline.
The MTC Ledang is contracted to be at the Ophir
field for a period of three years, with a one year
extension option.
MTC Ledang Conversion Works at Keppel Shipyard
Ophir Platform Installation - Jacket installed, boat
landing installation in process
Ophir Platform Installation – Jacket on barge, topsides
in background
Crude Stabilisation Unit being lifted onto MTC Ledang
MTC Ledang Conversion Works at Keppel Shipyard
Pre-Development Interests
Greater Cornea Fields, Brown
Basin, 18.75% interest
The Greater Cornea Fields (being the Cornea,
Focus and Sparkle Oil Fields and the Cornea
North (Tear) Gas Field) are located in the
from Western
Browse Basin, offshore
Australia and held via a Retention Lease (WA-
54-R).
Octanex |Annual Report | 2017
The Greater Cornea Fields present a large in
place oil resource contained in a challenging
reservoir. At the time the Retention Lease
was applied for and granted, production
uncertainty was identified as the primary
constraint to the development of the Greater
Cornea Fields. A successful production test
well designed to demonstrate threshold
productivity for development initiation is
Cornea.
required
A production test well must be placed and
constructed in the same manner as intended
for field development in order to prove up
viable well construction methodologies and
technologies,
representative
ensure
threshold oil production is achieved and
control of gas and water ingress.
commercialise
to
Given the favourable prevailing oil price
when the Retention Lease was applied for
and granted, numerous field development
concepts were then considered likely to be
economic (subject to achieving threshold
production volumes).
sustained
The current
low oil price
environment presents a further significant
challenge to the field’s commerciality, having
rendered as non-viable the field development
concepts previously considered likely to have
been implemented.
Greater Cornea Field Retention Lease Location Map
Middle Albian B & C
Oil In-Place mmbbl
Sands
Recovery Factor %
P90 P50 P10
298.0 411.7 567.2
2
25
7
Cont. Oil Resources
Octanex 18.75%
(mmbbl)
Probabilistic In-place and Contingent Oil Resources for Cornea
Interest (mmbbl)
Central and South Fields (no development risk applied)
101.9
19.11
7.9
1.48
28.8
5.40
the year with
Reflecting the changed oil price environment,
new development concept screening was
undertaken during
the
objective of identifying a field development
concept with the potential to be commercial
at current oil prices (US$50/Bbl). Following
this screening, a field development concept
predicated on the use of a Mobile Offshore
Production Unit (MOPU) with a subsea tank
and single point mooring has been selected
for further investigation. This concept is
significantly different to earlier concepts with
implications.
significant
Integrated reservoir modelling and facilities
work has been commenced to support design
of a production test well capable of delivering
this
threshold
development concept. The Cornea
Joint
Venture has applied to vary the conditions of
WA-54-R to facilitate this work.
productivity
reduction
using
cost
Octanex |Annual Report | 2017
Ascalon Proximity to Gas Infrastructure
may provide opportunities for Ascalon to be
developed to tie-back to other developments.
The field is also located in close proximity to
the Bayu-Undan pipeline to Darwin as well as
the Icythys pipeline to the Inpex LNG facility
under development in Darwin, thus offering
other potential opportunites.
Should the high gas prices now present in
eastern Australia continue, there may be
opportunities to address this market through
an east/west pipeline in Northern Australia.
The Ascalon Location also has the advantages
of being outside the area of disputed
sovereignty between East Timor and
Australia.
should
Ascalon
requires
undertaken
Octanex has been advised that NOPTA
further
considers
evaluation activities, specifically relating to
uncertainty regarding resource estimates
and well deliverability, with corresponding
development cost uncertainty and such
activities
as
be
Exploration Permit activities rather than
Retention Lease matters.
Octanex has
accordingly initiated independent studies
identified
review
designed
uncertainties, at the same time withdrawing
the Retention Lease applications previously
lodged in relation to the Permits. These
studies will assist Octanex in determining
future workscopes to reduce uncertainty.
the
to
Ascalon Gas Discovery, Bonaparte
Basin 100% interest
Discovered in 1995 by Mobil, the Ascalon gas
accumulation
located mostly within
exploration permit WA-407-P and extends
into the adjacent WA-420-P.
is
The gas is contained in a faulted horst
structure within marine sandstones of Late
Permian age. Mapping of the modern 3D
seismic database, which we shot over the
feature,
together with reprocessed 2D
seismic, indicates a closure over an area of
260km2 with a maximum closure height of
380m. The lowest closing contour appears
coincident with lowest known gas defined
from logs in the Ascalon-1A well.
Ascalon Gas Accumulation Location Map
location, which
Modern petrophysics indicates a 146m gross
gas column within the Cape Hay Formation at
the Ascalon-1A well
is
moderately down dip off the crest of the
structure. The reservoir sandstones within
the Cape Hay Formation are tight, considered
to be not unlike those in the nearby Petrel
and Tern gas discoveries with formations of
the same age.
Ascalon is located in proximity to a number of
gas discoveries, some of which may be
commercialised in coming years, including
the Petrel and Tern discoveries. The potential
for development of nearby gas discoveries
Exploration Assets
Octanex has interests in four high impact
permits in the Dampier sub-basin and the
Exmouth Plateau of the Northern Carnarvon
Basin. Its participation in these permits is
presently fully carried.
Dampier Sub-Basin
WA-323-P & WA-330-P, 25%
interest, Operated by Santos
Octanex |Annual Report | 2017
WA-323-P and WA-330-P comprise a discrete
project area of 640 km² on the Parker
Terrace, in reasonable proximity to the
onshore Devils Creek gas processing facility.
The Winchester-1/ST1 discovery well was
drilled from a location within WA-323-P
during 2013. The discovery, located near
processing
existing
infrastructure, is considered to be currently
uneconomic. An application for a Location
will shortly be lodged by the operator, as a
first pre-requisite for seeking a Retention
Lease over Winchester.
pipeline
and
WA-323-P & WA-330-P and Winchester-1/ST1
Location Map
the operator of
Interpretation by
the
reprocessed Winchester 3D seismic survey
and Davros Mc3D survey over the permits is
continuing with the prospects and leads
inventory being updated.
Octanex is carried by Santos though all
exploration activity in the current term of
each permit.
Exmouth Plateau Permits
Exmouth Plateau
WA-362-P & WA-363-P, 33.33%
interest, operated by Eni
The WA-362-P and WA-363-P permits are
located on the northern margin of the
Exmouth Plateau, 300 – 400 km northwest of
the Western Australian coastline and
comprise a combined exploration area of
approximately 10,956 km².
The work program in both permits calls for
reprocessing, interpretation and mapping of
2D data together with a studies program, to
be followed by a new 3D seismic survey and
an exploration well in the last two years of
each permit’s term. Seismic reprocessing has
been completed and interpretation activities
are being conducted. Octanex is fully carried
by Eni though all exploration activity,
including the next well in each permit, should
a well be drilled in either or both of the
permits.
WA-387-P, 100% interest
Octanex has applied for relief from the 2D
seismic obligation attaching to WA-387-P and
is waiting for a decision from the Joint
Authority. Octanex has fully impaired its
interest in WA-387-P, pending notification of
the Joint Authority’s decision.
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
to the Directors of Octanex Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for
the audit of Octanex Limited for the year ended 30 June 2017, I declare that, to the best of my
knowledge and belief, there have been:
a
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b
no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
B L Taylor
Partner - Audit & Assurance
Melbourne, 28 September 2017
Grant Thornton Audit Pty Ltd ACN 130 913 594
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Annual Financial Statements
Octanex |Annual Report | 2017
Directors’ Report
Directors
Mr Geoff Albers LL.B, FAICD
Executive Chairman
Appointed 2 October 1984
Mr Albers has over thirty five years oil and
gas industry experience, having first became
involved in oil exploration in 1977. Mr Albers
is a law graduate of the University of
Melbourne and has had extensive experience
as a director and administrator in corporate
law, petroleum exploration and resource
sector investment.
Mr Albers founded Octanex Limited and is a
substantial shareholder in the company. He is
also a director and substantial shareholder in
the ASX listed Peako Limited (ASX: PKO) and
Enegex Limited (ASX: ENX).
Ms Rae Clark
B.Bus(dist), CA, MAICD, AGIA, ACIS
Executive Director
Appointed 17 October 2014
Ms Clark has more than twenty years
experience focussed primarily on the natural
resource sector. She has wide operational,
and project development
commercial
knowledge and her experience
includes
business development, financial modelling
and analysis, capital raising and mergers and
joint
acquisitions, as well as managing
venture partners, government, regulator and
investor relations.
Ms Clark was previously Commercial
Manager of Octanex. Having commenced her
career with Deloitte in 1997, Ms Clark has
worked with oil and gas companies since
2005. She is also a Director of Peako Limited
(ASX: PKO) and Enegex Limited (ASX: ENX).
Ms Clark holds a Bachelor of Business (with
distinction), a Graduate Diploma (ICAA) and
Graduate Diploma
in Applied Corporate
Governance.
Mr David Coombes LL.B, M Tax, CTA
Independent Non-Executive Director
Appointed 15 May 2012
Mr Coombes is a partner in the law firm,
Gadens Lawyers, and is a member of the firm’s
corporate advisory and tax group. His practice
involves advising clients on a range of
law
corporate, commercial and taxation
matters, trusts and superannuation law and
estate and succession planning. Mr Coombes
acts for a number of Australian and overseas
listed and private clients in numerous industry
sectors.
Mr Coombes was admitted as a barrister and
solicitor of the Supreme Court of Victoria in
1971 after graduating
from Melbourne
University Law School in 1970. He has
completed a postgraduate degree in taxation
law, is a Chartered Tax Advisor and has been
accredited as a Tax Law specialist by the Law
Institute of Victoria.
Mr Coombes is a director of several charitable
organisations including Wintringham Limited,
Wintringham Housing Limited and Newsboys
Foundation Limited. He is also a director of
the Wynn group of companies.
Mr Tino Guglielmo
B.Eng(Mech), FIEAust, GAICD
Independent Non-Executive director
Appointed 18 December 2014
thirty
Mr Guglielmo is a Petroleum Engineer with
over
technical,
managerial and senior executive experience
in Australia and internationally.
three years of
two successful ASX
Mr Guglielmo was the CEO and Managing
Director of
listed
companies; Stuart Petroleum Ltd for seven
years and Ambassador Oil & Gas Ltd for three
years. Both companies merged with larger
ASX listed companies generating significant
value
the
resource
identification
potential
their respective petroleum
in
resource portfolios.
shareholders
compelling
following
for
of
listed
Mr Guglielmo also worked at Santos Ltd,
Delhi Petroleum Ltd, and internationally with
NYSE
Schlumberger Corp. Mr
Guglielmo is currently a member of the
Resources & Infrastructure Task force and
the Minerals & Energy Advisory Council, both
South Australian Government advisory
bodies. He is a Fellow of the Institution of
Engineers, Australia, a member of the Society
of Petroleum Engineers and Australian
Institute of Company Directors. Mr Guglielmo
is also a director of ASX listed Bass Oil Limited
(ASX: BAS) and during the past three years
was a director of ASX listed Ambassador Oil &
Gas Limited.
Datuk Kevin Kow How FCA
Non-Executive director
Appointed 18 December 2014
Datuk Kevin How Kow is a director of Sabah
Development Bank. He is a member of the
Institute of Accountants,
Malaysian
the
Institute of Certified Public
Malaysian
Accountants and a fellow member of the
Institute of Singapore Chartered Accountants
and the Institute of Chartered Accountants in
England & Wales. He was made a partner of
Ernst & Young (“EY”), Malaysia in 1984 and
served as the partner-in-charge of EY’s offices
in Sabah and Sarawak. Later, from 1996
onwards, he was the partner-in-charge of EY’s
practice in Sabah and Labuan until his
retirement at the end of 2003. He also serves
as a Director of Cahya Mata Sarawak Berhad,
K&N Kenanga Holdings Berhad, Kenanga
Investment Bank Berhad, Saham Sabah
Berhad, Sarawak Cable Berhad, M3nergy
Berhad and several private limited companies.
Ms Suhnylla Kler FCCA, BSc (Hons)
Monetary Economics
Non-Executive director
Appointed 18 December 2014
Ms Kler has extensive experience in the
financial services industry, having worked
with the Arab-Malaysian Banking Group, HSBC
Bank (M) Berhad and ABN AMRO. She is
currently an Executive Director and CEO of
Sabah Development Bank Asset Management
and also serves as a Director of M3nergy
Berhad and Group.
Ms Kler is registered as Associate Member of
Persatuan Kewangan Malaysia (PKM) or Forex
Association of Malaysia, and is a member of the
Corporate Finance Faculty of the Institute of
Chartered Accountants of England & Wales
(ICAEW). She received her Bachelor degree in
Monetary Economics from the London School
of Economics and Political Sciences (LSE) and
subsequently studied Japanese at the School of
Oriental and African Studies (SOAS), U.K.
Having completed her stint with KPMG Peat
Marwick, she is additionally registered as a
Chartered Accountant and fellow of the
Association
Certified
Accountants (FCCA).
Chartered
of
Mr James Willis LL.M (Hons), Dip Acc
Independent Non-Executive Director
Appointed 18 August 2009
Previously an executive director of Octanex
is an upstream
(2009-2011) Mr Willis
petroleum
held
has
consultant who
governance positions with and consulted to
various participants
in the oil and gas
exploration sector. Mr Willis is a former
partner in the leading New Zealand law firm of
Bell Gully where his practice speciality was in
the upstream oil and gas area, particularly
relating to issues concerning gas contracting
and the development of oil and gas reserves,
joint ventures and upstream petroleum
related acquisitions.
Mr Willis is a director of New Zealand Energy
Corp, a company with New Zealand operations
and listed on the TSX Venture exchange.
Company Secretaries
Mr Jack Tuohy BCA, CA
Mr Tuohy has thirty years experience of
public and private company administration,
especially as this relates to the oil and gas
exploration sector and to public
listed
company activities.
He has acted as Company Secretary for a
number of listed public companies, and has
been a director of various public companies.
Mr Tuohy is a chartered accountant in New
Zealand.
Mr Robert Wright B Bus, CPA
Review of Operations
Mr Wright is a senior financial professional
with over 25 years commercial experience in
the resource, energy and manufacturing
industries gained at various companies and
locations, including 14 years at BHP.
He is the Chief Financial Officer (CFO) and the
Company Secretary of Octanex and CFO and
company secretary of the listed companies,
Enegex Limited and Peako Limited. Mr
Wright is a member of CPA Australia.
Principal Activities
The principal activities of the consolidated
entity during the year were petroleum
exploration and development and investment
in that sector.
Financial Results
The net loss of the consolidated entity for the
financial year was $4,800,071 (2016: loss of
$1,815,272).
Dividends
No dividend was declared or paid during the
year and to the date of this report.
A review of
Operations during the financial year
provided in the Operational Review.
the consolidated entity’s
is
Divestments and surrenders
the year
During
there have been no
divestments or surrenders of permits or
leases.
Change in State of Affairs
Other than as described in these annual
financial statements there have been no
changes in the state of affairs of the company.
Subsequent Events
Since the end of the financial year there have
been no subsequent events.
Directors’ Meetings
The table below sets out the number of
meetings held during the year and the number
of those meetings that were attended by each
director.
Board Meetings
Audit Committee
Meetings
Eligible
4
4
4
4
4
4
4
Attended
3
4
4
3
2
2
3
Eligible
2
2
2
2
2
2
2
Attended
2
2
2
1
-
1
1
Nomination &
Remuneration
Committee Meetings
Attended
Eligible
1
1
1
1
1
1
EG Albers
RL Clark
DC Coombes
G Guglielmo
KK How
S Kler
JMD Willis
Future Developments
Future developments in the company’s operations and the expected result from those operations
are dependent on exploration and development success in the permit areas in which the group
holds interests.
Share Capital
Ordinary Shares
The Company’s share capital consists of 242,712,947 ordinary fully paid shares (excluding
30,000,000 shares held by the Trustee of the Octanex Trustee Share Scheme). This follows approval
from shareholders at the General Meeting in November 2016 for the:
(a) cancelling of uncalled capital amounting to $0.10 per share on each of the 67,078,910
ordinary shares paid to $0.15 in the share capital of the Company (partly paid shares); and
(b) consolidation of the 67,078,910 partly paid shares into 40,247,386 fully paid shares on the
basis that each five partly paid shares were consolidated into three fully paid shares.
Trustee Stock Scheme
As at 30 June 2017 and to the date of this report, 30,000,000 ordinary shares, previously issued to
the Trustee pursuant to the Scheme, remain unsold. The Trustee does not exercise voting rights in
respect of the shares held pursuant to the Scheme.
Unlisted Options
Following approval by shareholders at the general meeting in November 2016 7,170,000 options
were granted to directors. The following options were granted and remained on issue at 30 June
2017 to Octanex directors, staff and other individuals. The option terms are summarised below:
Number
Expiry Date
6,600,000 15 October 2018
1,000,000 19 May 2018
1,000,000 11 June 2018
1,000,000 11 June 2018
4,000,000 11 June 2018
Exercise price Vesting criteria
$0.1534
$0.15
$0.15
$0.15
$0.15
$0.20
$0.25
7,170,000 24 November 2019 $0.08
No
No
No
Yes
Yes and varying expiry dates
No
No
No
250,000 1 February 2018
250,000 1 February 2018
Unlisted Options
Balance at beginning of year
Options granted
Options cancelled
Options expired
Balance at end of year
2017
2016
Options
Options
15,100,000
7,170,000
(1,000,000)
-
15,100,000
-
-
-
21,270,000
15,100,000
Convertible Notes
Octanex has a US$12Million convertible note
facility (Notes) with Sabah International
Petroleum (SIP), a company ultimately
wholly owned by Ministry of Finance of the
Malaysian state of Sabah. The facility was
in
approved by Octanex shareholders
three
February 2015 and consists of
US$4million
rights of
tranches with
conversion into fully paid ordinary shares of
the Company at prices of 15, 20 and 25 cents
per share for each of the tranches.
The Notes have a maturity date of 30 June
2019 and may be redeemed or converted at
SIP’s election.
The facility is primarily to be utilised to fund
the Ophir development. As at 30 June 2017,
and at the date of this report, two tranches
aggregating US$8Million has been drawn
down under the facility.
Indemnification of Directors and
Officeholders
During the year and to the date of this report,
the company did not pay premiums in respect
of contracts insuring officers or auditors of
the company against liabilities arising from
their position of officers or auditor of the
company.
The Company has entered into Deeds of
Access and Indemnity with each of the
Directors referred to in this report who held
office during the year indemnifying each
against all liabilities incurred in their capacity
as directors of the Company to the full extent
permitted by law.
Remuneration report
This remuneration report is set out on pages
17 to 19 and forms part of the Directors’
Report for the financial year ended 30 June
2017.
Corporate Governance
goals, and the monitoring of the business and
affairs of the Company on behalf of its
shareholders.
The Board delegates responsibility for the
day-to-day management of Octanex to the
Chief Executive Officer. All Directors have
unrestricted access to Company records
and
information and receive detailed financial
and operational reports.
The Board is currently comprised of five Non-
two Executive
Executive Directors and
Directors. In accordance with the Company’s
Constitution and the ASX Listing Rules, the
Directors (other than the Chief Executive
Officer) are subject
to re-election by
shareholders every three years.
The Board meets regularly throughout the
year. Where appropriate, presentations are
given to the Board from management who
may be questioned directly by Board
members on technical, operational and
commercial issues.
of
Details
corporate
the Company’s
governance practices are included in the
Corporate Governance statement found on
the Company’s website.
Auditor independence and non–
audit services
independence
the auditor’s
A copy of
declaration, as required under Section 307C
of the Corporations Act 2001, is attached and
forms part of this Directors’ Report for the
year ended 30 June 2017.
No fees were paid to the auditor for non-audit
services.
This Directors’ Report is made in accordance
with a resolution of the directors and forms
part of the financial statements.
On behalf of the Directors:
The Board is responsible for the strategic
direction of the Company, the identification
and implementation of corporate policies and
E.G. Albers
Director
28 September 2017
Remuneration Report
This Remuneration Report for the year ended 30 June 2017 outlines the key management
personnel remuneration arrangements of the Company in accordance with the requirements of the
Corporations Act 2001 (Act) and its regulations. The disclosures in this Remuneration Report have
been audited as required by section 308(3C) of the Act.
Key Management Personnel
For the purpose of this report, Key Management Personnel (KMPs) of the Company are defined as
those persons having authority and responsibility for planning, directing and controlling the major
activities of the Company directly or indirectly. The following have been identified as KMPs for the
purpose of this Remuneration Report:
Executive Directors
EG Albers
RL Clark
Chairman & Chief Executive Officer
Executive Director & Chief Operating Officer
Non-executive Directors
DC Coombes
G Guglielmo
KK How
SK Kler
JMD Willis
Director
Director
Director
Director
Director
The board of directors is responsible for determining and reviewing compensation arrangements
for the directors and executives. The board assesses the appropriateness of the nature and amount
of emoluments on a periodic basis by reference to relevant employment market conditions, with
the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality
board and executives.
Remuneration levels for directors and executives of the company are competitively set to attract and
retain appropriately qualified and experienced directors and executives. The remuneration
structures explained below are designed to attract suitably qualified candidates, reward the
achievement of strategic objectives and achieve the broader outcome of creation of value for
shareholders. The remuneration structure takes into account:
•
•
•
The capability and experience of the directors and executives;
The ability of directors and executives to control the entity’s performance; and
The requirement that directors apply a portion of their remuneration to the purchase of shares
in the company, at market price, so as to align the interests of directors with that of
shareholders.
In accordance with the company’s constitution, directors’ non-executive remuneration was
approved by shareholders on 28 November 2014 at $250,000 per annum.
During the year, non-executive director remuneration of $60,822 was paid and payable (2016:
$nil). In 2016 adjustments from the signing of deeds of release were $(95,305). Total director
remuneration (exclusive of consulting fees which are included at note 21) of $311,403 was paid
and payable during the year (2016: $219,000). In 2016 adjustments from the signing of deeds of
release were $(151,104).
There is no performance related remuneration for directors. Remuneration paid to directors covers
all board activities, including serving on committees.
Apart from a retirement benefit for the chairman and four weeks annual leave for RL Clark, the other
directors do not receive employee benefits such as annual leave and long service leave, but
remuneration may include the grant of options over shares of the company to align directors’
interests with that of the shareholders. There is no direct relationship between remuneration and
the company’s performance for the last five years.
Components of directors’ compensation paid and otherwise payable (refer Note (1)) are disclosed
below.
Short Term
Post Employment
Equity
Settled
Total
Directors Fees
Salary
Super-
annuation
Retirement
Benefits
Options
$
$
$
$
$
$
-
-
-
-
-
-
(30,000)
-
(2,850)
-
- (32,850)
-
-
-
-
11,490
11,490
(15,000)
-
(1,425)
-
- (16,425)
-
-
-
-
15,611
15,611
(32,850)
-
-
-
- (32,850)
-
202,666
19,190
-
28,725 250,581
(20,959)
200,000
17,010
-
- 196,051
-
-
-
-
10,990
10,990
(14,285)
-
-
-
- (14,285)
-
-
-
-
10,990
10,990
(14,285)
-
-
-
- (14,285)
-
-
-
-
11,741
11,741
(15,945)
-
(1,515)
-
-
(17,460)
-
(143,324)
202,666
200,000
19,190
11,220
-
-
89,547 311,403
67,896
-
EG Albers (1)
DC Coombes
JMD Willis
RL Clark
S K Kler
K K How
G Guglielmo
TOTAL
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
(1) On 29 October 1997, a Deed of Appointment was signed with EG Albers. The deed detailed terms of continuation
of his appointment as chairman of Octanex Limited. Among other things, it provides for a payment of a retirement
benefit to EG Albers as chairman.
Interests in Equity Instruments of Octanex Limited
The disclosures relating to equity instruments of directors includes equity instruments of
personally related entities, being relatives and the spouses of relatives of the director and any entity
under the joint or several control or significant influence of the director.
All equity transactions with directors, other than options granted as remuneration, have been
entered into under terms and conditions, applicable to all shareholders.
Interests in fully paid ordinary shares
EG Albers
RL Clark
DC Coombes
G Guglielmo
KK How
SK Kler
JMD Willis
Balance Received as
Remuneration
Options Net Change
Other*
Exercised
Balance
1/7/2016
121,761,441
57,551
165,000
3,000,000
50,000
50,000
2,398,130
-
-
-
-
-
-
-
30/6/2017
-
-
-
-
-
-
-
27,486,193 149,247,634
57,551
189,900
3,120,000
50,000
50,000
3,117,382
-
24,900
120,000
-
-
719,252
* See Note (1) below.
Interests in partly paid ordinary shares
EG Albers
RL Clark
DC Coombes
G Guglielmo
KK How
SK Kler
JMD Willis
Balance Received as
Remuneration
Options Net Change
Other (1)
Exercised
Balance
1/7/2016
44,637,357
-
41,500
200,000
-
-
1,198,752
-
-
-
-
-
-
-
30/6/2017
-
-
-
-
-
-
-
(44,637,357)
-
(41,500)
(200,000)
-
-
(1,198,752)
-
-
-
-
-
-
-
(1) At the annual general meeting on 24 November 2016, shareholders provided approval for the share capital
of the Company to be reduced by:
(a)
(b)
cancelling uncalled capital amounting to $0.10 per share on each of the 67,078,910 ordinary
shares paid to $0.15 in the share capital of the Company (partly paid shares); and
the consolidation of the partly paid shares into fully paid shares on the basis that each five partly
paid shares be consolidated into three fully paid shares.
Interests in unlisted options
Held at
Granted as
Compensation
Exercised
Other
Changes
Held at
30 June
Vested and
Vested
during exercisable at
30 June
the year
1/1/2016
EG Albers
-
-
RL Clark 2,000,000 2,300,000
DC Coombes
500,000
920,000
-
-
-
JMD Willis
500,000
1,250,000
-
G Guglielmo
KH Kow
SK Kler
-
-
-
940,000
880,000
880,000
-
-
-
2017
-
2017
-
-
4,300,000
2,300,000
4,300,000
1,420,000
920,000
1,420,000
1,750,000
1,250,000
1,750,000
940,000
940,000
880,000
880,000
940,000
880,000
880,000
880,000
880,000
-
-
-
-
-
-
-
End of Remuneration Report.
Directors Declaration
The directors of the company declare that:
1.
The financial statements, comprising the statement of profit or loss and other comprehensive
income, statement of financial position, statement of cash flows, statement of changes in equity, and
accompanying notes, are in accordance with the Corporations Act 2001 and:
(a)
(b)
(c)
comply with Australian Accounting Standards and the Corporations Regulations
2001; and
give a true and fair view of the consolidated entity’s financial position as at 30 June
2017 and of its performance for the year ended on that date.
the financial report also complies with International Financial Reporting Standards
as disclosed in Note 1(a).
In the directors’ opinion, there are reasonable grounds to believe that the company will be
2.
able to pay its debts as and when they become due and payable.
3.
The remuneration disclosures included in pages 17 to 19 of the directors’ report, (as part of
audited Remuneration Report), for the year ended 30 June 2017, comply with section 300A of the
Corporations Act 2001.
The directors have been given the declarations by the chief executive officer and chief
4.
financial officer required by section 295A.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for
and on behalf of the directors by:
E.G. Albers
Director
Melbourne
28 September 2017
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
to the Directors of Octanex Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Octanex Limited (the Company), and its subsidiaries (the Group)
which comprises the consolidated statement of financial position as at 30 June 2017, the consolidated
statement of profit or loss and other comprehensive income, consolidated statement of changes in
equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated
financial statements, including a summary of significant accounting policies, and the directors’
declaration.
In our opinion, the accompanying consolidated financial report of Octanex Limited, is in accordance with
the Corporations Act 2001, including:
a
giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its
performance for the year ended on that date; and
b
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations Act
2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context
requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal
entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s
acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities.
GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the consolidated financial report of the current period. These matters were addressed in the
context of our audit of the consolidated financial report as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
Key audit matter
Exploration expenditure (Note 10)
How our audit addressed the key audit matter
At 30 June 2017 the carrying value of
Our procedures included, amongst others:
Exploration and Evaluation Assets was
$39,657,763.
• Obtaining the management prepared reconciliation
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources, the company is
required to assess at each reporting date if there
of capitalised exploration and evaluation
expenditure and agreeing to the general ledger;
• Reviewing management’s area of interest
are any triggers for impairment which may
considerations against AASB 6;
suggest the carrying value is in excess of the
recoverable value.
• Conducting a detailed review of management’s
The process undertaken by management to
accordance with AASB 6 including;
assessment of trigger events prepared in
assess whether there are any impairment
triggers in each area of interest involves an
element of management judgement.
- Tracing projects to statutory registers,
exploration licenses and third party
confirmations to determine whether a right of
This area is a key audit matter due to the
tenure existed;
valuation of exploration and evaluation assets
being a significant risk.
- Enquiry of management regarding their
intentions to carry out exploration and
evaluation activity in the relevant areas,
including review of managements’ budgeted
expenditure;
- Understanding whether any data exists to
suggest that the carrying value of these
exploration and evaluation assets are unlikely
to be recovered through development or sale;
• Assessing the accuracy of impairment recorded for
the year as it pertained to exploration interests;
and
• Reviewing the appropriateness of the related
disclosures within the financial statements.
Information Other than the Financial Report and Auditor’s Report Thereon
The Directors are responsible for the other information. The other information comprises the information
in the Group’s financial report for the year ended 30 June 2017, but does not include the financial report
and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Directors’ Responsibilities for the Financial Report
The Directors of the Group are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and
for such internal control as the Directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 26 to 28 of the directors’ report for the
year ended 30 June 2017. In our opinion, the Remuneration Report of Octanex Limited, for the year
ended 30 June 2017, complies with section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Group are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express
an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
B L Taylor
Partner – Audit & Assurance
Melbourne, 28 September 2017
OCTANEX LIMITED
ABN 61 005 632 315
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Year Ended 30 June 2017
Revenue - interest received
Other income
Interest and finance costs
Expenses
Share of loss of Ophir Production Sdn Bhd
Share of (loss) / profit of Peako Limited
Impairment of investment in Peako Limited
Loss before tax
Income tax benefit
Net Loss after tax
Other comprehensive income
NOTE
2
3
8
9
9
4
2017
$
2,555
2016
$
4,867
79,649
339,786
(410,667)
-
(2,746,655)
(1,403,318)
(2,520,364)
(1,261,490)
(24,884)
(39,218)
237,960
(355,842)
(5,659,584)
(2,438,037)
859,513
622,765
(4,800,071)
(1,815,272)
Items that may be reclassified subsequently to profit or
loss
Exchange differences on translation of foreign operation
Income tax effect
Items that will not be reclassified subsequently to profit
or loss
Changes in financial assets at fair value through other
comprehensive income
Income tax on items of comprehensive income
Other comprehensive income for the year net of tax
Total comprehensive income for the year
(409,472)
-
101,884
-
17
17,693
(1,179,797)
(5,307)
(397,086)
(5,197,157)
353,938
(723,975)
(2,539,247)
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
26
26
(2.202)
(2.202)
(0.758)
(0.758)
The above Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the
accompanying notes.
Octanex |Annual Report |
2017
25
OCTANEX LIMITED
ABN 61 005 632 315
Consolidated Statement of Financial Position
As at 30 June 2017
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Advance to Ophir Production Sdn Bhd
Financial assets at fair value through other
comprehensive income
Investments in an associate and a joint venture
Exploration and evaluation assets
NOTE
2017
$
2016
$
5
6
6
7
8,9
10
5,666,779
3,147,294
308,007
382,323
5,974,786
3,529,617
10,040,613
6,568,663
38,928
78,347
21,235
142,449
39,657,763
41,208,791
TOTAL NON-CURRENT ASSETS
49,815,651
47,941,138
TOTAL ASSETS
55,790,437
51,470,755
CURRENT LIABILITIES
Trade and other payables
Provisions
Derivative financial liability
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
Deferred tax liabilities
11
12
14
13
15
359,284
138,008
386,596
883,888
634,419
130,176
-
764,595
10,162,204
-
7,667,744
8,521,949
TOTAL NON-CURRENT LIABILITIES
17,829,948
8,521,949
TOTAL LIABILITIES
18,713,836
9,286,544
NET ASSETS
EQUITY
Issue capital
Reserves
Accumulated losses
TOTAL EQUITY
37,076,601
42,184,211
16
17
68,856,339
68,856,339
1,265,110
1,572,649
(33,044,848)
37,076,601
(28,244,777)
42,184,211
The above Statement of Financial Position is to be read in conjunction with the accompanying notes.
Octanex |Annual Report |
2017
26
OCTANEX LIMITED
ABN 61 005 632 315
Consolidated Statement of Changes in Equity
Year Ended 30 June 2017
Contributed
equity
Accumulate
d losses
Financial
assets at fair
value through
other
comprehensiv
e income
Foreign
currency
translation
reserve
Option
reserve
Total
$
$
$
$
$
$
68,856,339
(28,244,777)
-
(4,800,071)
(827,364)
-
1,451,997
948,016
42,184,211
-
-
(4,800,071)
-
-
-
-
-
-
(409,472)
-
(409,472)
-
-
(4,800,071)
12,386
12,386
12,386
-
-
12,386
(409,472)
(409,472)
-
-
(397,086)
(5,197,157)
-
-
-
-
89,547
89,547
CONSOLIDATED ENTITY
At 1 July 2016
Loss after tax
Other comprehensive income
Exchange differences of translation of foreign
operations net of tax
Changes in fair value on financial assets at fair value
through other comprehensive income net of tax
Total other comprehensive income
Total comprehensive income for the year
Transactions with owners in their capacity as
owners
Share-based payments expense
At 30 June 2017
68,856,339
(33,044,848)
(814,978)
1,042,525
1,037,563
37,076,601
The above Statement of Changes in Equity is to be read in conjunction with the accompanying notes.
Octanex |Annual Report |
2017
27
OCTANEX LIMITED
ABN 61 005 632 315
Consolidated Statement of Changes in Equity
Year Ended 30 June 2016
Contributed
equity
Accumulate
d losses
Financial
assets at fair
value through
other
comprehensiv
e income
Foreign
currency
translation
reserve
Option
reserve
Total
$
$
$
$
$
$
67,848,339
(26,429,505)
-
(1,815,272)
(1,505)
-
1,350,113
948,016
43,715,458
-
-
(1,815,272)
-
-
-
-
-
-
101,884
-
101,884
-
-
(1,815,272)
(825,859)
(825,859)
(825,859)
101,884
101,884
-
-
(825,859)
1,020,000
(12,000)
-
-
-
-
-
-
68,856,339
(28,244,777)
(827,364)
1,451,997
948,016
42,184,211
-
-
-
-
(723,975)
(2,539,247)
1,020,000
(12,000)
CONSOLIDATED ENTITY
At 1 July 2015
Loss after tax
Other comprehensive income
Exchange differences of translation of
operations net of tax
Changes in fair value on financial assets at fair value
through other comprehensive income net of tax
foreign
Total other comprehensive income
Total comprehensive income for the year
Transactions with owners in their capacity as
owners
Share issue
Cost of issue
At 30 June 2016
The above Statement of Changes in Equity is to be read in conjunction with the accompanying notes.
Octanex |Annual Report |
2017
28
OCTANEX LIMITED
ABN 61 005 632 315
Consolidated Statement of Cash Flows
Year Ended 30 June 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Administration fees received
Interest received
Payments to suppliers
Interest paid
NOTE
2017
$
61,007
2,555
2016
$
42,120
4,828
(1,137,904)
(1,948,108)
(208,008)
-
Net cash outflow from operating activities
(i)
(1,282,350)
(1,901,160)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments to suppliers - exploration
Repayment of loan from Peako Limited
Loans to Ophir Production Sdn Bhd
Proceeds from sale of investments
Net cash outflow from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowing
Proceeds from share issue
Cost of share issue
Net inflow from financing activities
Net increase / (decrease) in cash and cash equivalents
Exchange (losses) / gains
Cash and cash equivalents at beginning of the year
6,9
8
14
16
16
CASH AND CASH EQUIVALENTS AT 30 JUNE
5
(194,137)
(206,949)
-
440,000
(6,391,207)
-
(2,268,364)
53,964
(6,585,344)
(1,981,349)
10,583,788
-
-
1,020,000
-
10,583,788
2,716,094
(196,609)
3,147,294
5,666,779
(12,000)
1,008,000
(2,874,509)
189,719
5,832,084
3,147,294
(i) RECONCILIATION OF NET CASH FROM OPERATING ACTIVITIES WITH LOSS AFTER INCOME TAX
Loss after income tax
Non cash items:
Borrowing Costs
Exchange rate changes on the balances held in a foreign
currency
Employee Provisions expense
Depreciation
Share based payments expense
Share of loss and impairment of Peako Limited
Share of loss of Ophir Production Sdn Bhd
Finance costs
Impairment of exploration assets
Changes in assets and liabilities:
Decrease in receivables
Decrease in tax liabilities
Increase in payables
Net Cash outflow from Operating Activities
9
8
(4,800,071)
(1,815,272)
54,275
2,659
7,832
-
89,547
64,103
2,520,364
356,392
1,745,165
-
(229,603)
5,108
1,832
-
117,883
1,261,490
-
-
20,040
(483,143)
(859,513)
(1,282,350)
30,056
(649,889)
(622,765)
(1,901,160)
The above Statement of Cash Flows is to be read in conjunction with the accompanying notes.
Octanex |Annual Report | 2017
29
2
2
9
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 June 2017
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Octanex Limited (“Octanex” or “the company”) is a
for-profit company incorporated and domiciled in
Australia with its registered office and principal
place of business located at Level 21, 500 Collins
Street, Melbourne, Victoria 3000. The consolidated
financial report of the company for the year ended
30 June 2017 comprises the company and its
the
subsidiaries
“consolidated entity” or “the group”) and the
consolidated entity’s interest in joint operations.
Financial information for Octanex Limited as an
individual entity is included in Note 27. The
financial report was authorised by the directors for
issue on 28 September 2017.
(together
referred
as
to
(a) Statement of compliance
The consolidated financial report is a general
purpose financial report which has been prepared
in
accordance with Australian Accounting
Standards, including the Accounting Interpretations
issued by the Australian Accounting Standards
Board (‘AASB’) and the Corporations Act 2001. The
consolidated financial statements and notes comply
with International Financial Reporting Standards
and Interpretations issued by the International
Accounting Standards Board.
(b) Basis of preparation
The financial report is presented in Australian
dollars, which is the consolidated group’s functional
currency, rounded to the nearest dollar. It has been
prepared under the historical cost convention as
modified by the revaluation of the available for sale
investments at fair value.
The preparation of a financial report in conformity
with Australian Accounting Standards requires
management to make judgements, estimates and
assumptions that affect the application of policies
and reported amounts of assets and liabilities,
income and expenses. The estimates and associated
assumptions are based on historical experience and
various other factors that are believed to be
reasonable under the circumstances, the results of
which form the basis of making the judgements
about carrying values of assets and liabilities that
are not readily apparent from other sources. Actual
results may differ from these estimates. The
estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in
which the estimate is revised if the revision affects
only that period, or in the period of the revision and
future periods if the revision affects both current
and
Judgements made by
in the application of Australian
management
future periods.
Accounting Standards that have a significant effect
on the financial report and estimates with a
significant risk of material adjustment in the next
year are discussed in note 1(q). The accounting
policies set out below have been applied
consistently to all periods presented in the financial
report.
issued
(c) Early adoption of standards
From 1 July 2010 the group has elected to apply
AASB 9 Financial Instruments (as
in
December 2009) and AASB 2009-11 Amendments
to Australian Accounting Standards arising from
AASB 9 from 1 July 2010, because the new
accounting policies provide more reliable and
relevant
information for users to assess the
amounts, timing and uncertainty of future cash
flows. In accordance with the transition provisions,
comparative figures have not been restated. Refer
Note 1(k) for further details on the impact of the
change in accounting policy. As permitted under the
transitional provisions, the group has elected not to
adopt the December 2010 revised version of AASB
9, which addresses the accounting for financial
liabilities and derecognition of financial assets and
liabilities.
(d) Principles of consolidation
financial statements
The consolidated entity
consolidate those of the company and all of its
subsidiaries as at year end.
from
The
(i) Subsidiaries
The company controls a subsidiary if it is exposed,
or has rights, to variable returns
its
involvement with the subsidiary and has the ability
to affect those returns through its power over the
financial statements of the
subsidiary.
subsidiaries are prepared for the same reporting
period as the parent company using consistent
accounting policies. The financial statements of
in the consolidated
subsidiaries are
financial statements from the date that control
commences until the date that control ceases.
Investments in subsidiaries are carried at their cost
of acquisition in the parent entity note
included
All transactions and balances between companies
within the consolidated entity are eliminated on
consolidation, including unrealised gains and losses
on transactions between group companies. Where
unrealised losses on intra-group asset sales are
reversed on consolidation, the underlying asset is
also tested for impairment from a consolidated
entity perspective. Amounts reported in the
Octanex |Annual Report | 2017
30
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3
0
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 June 2017
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
financial statements of subsidiaries have been
adjusted where necessary to ensure consistency
with the accounting policies adopted by the
loss and other
consolidated entity. Profit or
comprehensive income of subsidiaries acquired or
disposed of during the year are recognised from the
effective date of acquisition, or up to the effective
date of disposal, as applicable.
(ii) Investments in associates and joint ventures
Associates are those entities over which the
consolidated entity is able to exert significant
influence but which are not subsidiaries. Peak Oil &
Gas Limited is an Associate of Octanex for the
purposes of these accounts.
joint venture
investors, and over which
is an arrangement that the
A
consolidated entity controls jointly with one or
more other
the
consolidated entity has rights to a share of the
arrangement’s net assets rather than direct rights to
underlying assets and obligations for underlying
liabilities.
A joint arrangement in which the
consolidated entity has direct rights to underlying
assets and obligations for underlying liabilities is
classified as a joint operation. Ophir Production Sdn
Bhd is treated as a joint venture company for the
purposes of these accounts.
in
associates and joint ventures are accounted for
joint
using the equity method.
operations are accounted for by recognising the
consolidated entity’s assets (including its share of
any assets held jointly), its liabilities (including its
share of any liabilities incurred jointly), its revenue
from the sale of its share of the output arising from
the joint operation, its share of the revenue from the
sale of the output by the joint operation and its
expenses (including its share of any expenses
incurred jointly).
Investments
Interests
in
Any goodwill or fair value adjustment attributable
to the consolidated entity’s share in the associate or
joint venture is not recognised separately and is
included in the amount recognised as investment.
The carrying amount of the investment in associates
and joint ventures is increased or decreased to
recognise the consolidated entity’s share of the
profit or loss and other comprehensive income of
the associate and joint venture, adjusted where
necessary
the
consistency with
accounting policies of the consolidated entity.
to ensure
When the consolidated entity’s share of losses
exceeds its interest in the associate or joint venture
the entity discontinues recognising its share of
further losses. The interest in an associate or joint
venture is the carrying amount of the investment in
the associate or joint venture (refer Notes 8 and 9)
together with long-term interests that in substance
form part of the entity’s net investment in the
associate or joint venture (refer Note 6).
losses on
transactions
Unrealised gains and
between the consolidated entity and its associates
and joint ventures are eliminated to the extent of the
consolidated entity’s interest in those entities.
losses are eliminated, the
Where unrealised
underlying asset is also tested for impairment.
(iii) Joint operations
Jointly controlled operations and assets
The interest of the company and of the consolidated
entity in unincorporated joint operations and jointly
controlled assets are brought to account by
recognising in its financial statements the assets it
controls, the liabilities that it incurs, the expenses it
incurs and its share of income that it earns from the
sale of goods or services by the joint operation.
The financial statements of the jointly controlled
operations and assets are prepared for the same
reporting period as the parent company using
consistent accounting policies.
eliminated
transactions,
(iv) Transactions eliminated on consolidation
Intragroup balances and any unrealised gains and
income and expenses arising from
losses or
intragroup
in
are
preparing the consolidated financial statements.
Unrealised gains arising from transactions with
associates are eliminated to the extent of the
consolidated entity’s interest in the entity with
adjustments made to the ‘Investment in associates’
and
‘Share of associates’ net profit accounts.
Unrealised losses are eliminated in the same way as
unrealised gains, but only to the extent that there is
no evidence of impairment. Gains and losses are
recognised as the contributed assets are consumed
or sold by the associates or, if not consumed or sold
by the associate, when the consolidated entity’s
interest in such entities is disposed of.
(e) Taxes
Income Tax
Income
taxes are accounted
comprehensive balance sheet
whereby:
for using
the
liability method
Octanex |Annual Report | 2017
31
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1
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 June 2017
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The tax consequences of recovering (settling)
all assets (liabilities) are reflected in the
financial statements;
Current and deferred tax is recognised as
income or expense except to the extent that the
tax related to equity items or to a business
combination;
A deferred tax asset is recognised to the extent
that it is probable that future taxable profit will
be available to realise the asset;
Deferred tax asset and liabilities are measured
at the tax rates that are expected to apply to the
period where the asset is realised or the
liability settled.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of
the amount of GST, except where the amount of GST
incurred is not recoverable from the taxation
authority. In these circumstances, the GST is
recognised as part of the cost of acquisition of the
asset or as part of the expense. Receivables and
payables are stated with the amount of GST
included. The net amount of GST recoverable from,
or payable to, the ATO is included as a current asset
or liability in the balance sheet. Cash flows are
included in the cash flow statement on a gross basis.
The GST components of cash flows arising from
financing activities which are
investing and
recoverable from, or payable to, the ATO are
classified as operating cash flows. Commitments
and contingencies are disclosed net of the amount of
GST recoverable from, or payable to, the taxation
authority.
Tax Consolidation
The company and its wholly owned resident entities
are part of a tax-consolidated group. As a
consequence, all members of the tax-consolidated
group are taxed as a single entity. The head entity
within the tax-consolidated group
is Octanex
Limited. Current tax expense / income, deferred tax
liabilities and deferred tax assets arising from
temporary differences of the members of the tax-
consolidated group are recognised in the separate
financial statements of the members of the tax-
consolidated group using the ‘separate taxpayer
within group’ approach by reference to the carrying
amounts of the assets and liabilities in the separate
financial statements of each entity and the tax
values applying under tax consolidation. Any
current tax liabilities (or assets) and deferred tax
assets arising from unused tax losses of the
subsidiaries are assumed by the head entity in the
tax-consolidated group and are recognised by the
Company as amounts payable (receivable) to /
(from) other entities in the tax-consolidated group
in conjunction with any tax funding arrangement
amounts. Any difference between these amounts is
recognised by
the Company as an equity
contribution or distribution. The Company
recognises deferred tax assets arising from unused
tax losses of the tax-consolidated group to the
extent that is probable that future taxable profits of
the tax-consolidated group will be available against
which the asset can be utilised. Any subsequent
period adjustments to deferred tax assets arising
from unused tax losses as a result of revised
assessments of the probability of recoverability is
recognised by the head entity only.
(f) Foreign Currency Translation
The
functional and presentation currency of
Octanex Limited and its Australian subsidiaries is
Australian dollars (A$).
from
foreign
Foreign currency transactions are translated into
the functional currency using the exchange rates
ruling at the date of the transaction. Monetary assets
and liabilities denominated in foreign currencies
are retranslated at the rate of exchange ruling at the
reporting date. Foreign exchange gains and losses
resulting
currency
settling
transactions, as well as from restating foreign
currency denominated monetary assets and
liabilities, are recognised in the Statement of Profit
or Loss and Other Comprehensive Income, except
when they are deferred in equity as qualifying cash
flow hedges or where they relate to differences on
foreign currency borrowings that provide a hedge
against a net investment in a foreign entity. Non-
monetary items measured at fair value in a foreign
currency are translated using the exchange rates at
the date when fair value was determined.
Group companies
On consolidation, the assets and liabilities of foreign
operations are translated into dollars at the rate of
exchange prevailing at the reporting date and their
Statements of Profit or Loss and Other
Comprehensive Income are translated at exchange
rates prevailing at the dates of the transactions. The
exchange differences arising on translation for
consolidation
other
comprehensive income. On disposal of a foreign
operation, the component of other comprehensive
income relating to that particular foreign operation
is recognised in profit or loss.
recognised
are
in
Octanex |Annual Report | 2017
32
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2
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
less an allowance
(g) Receivables
Trade receivables are recognised at original invoice
amounts
for uncollectible
amounts and have repayment terms between 30
and 90 days. Collectability of trade receivables is
assessed on an ongoing basis. Debts which are
known to be uncollectible are written off. An
allowance is made for doubtful debts where there is
objective evidence (such as significant financial
difficulties on the part of the counterparty or
default) that the company will not be able to collect
all amounts due according to the original terms.
(h) Cash and cash equivalents
Cash and cash equivalents comprise cash balances
and at call bank deposits. Bank overdrafts that are
repayable on demand and form an integral part of
the company’s cash management are included as a
component of cash and cash equivalents for the
purpose of the cash flow statement.
(i) Payables
Trade, accruals and other payables are recorded
initially at fair value and subsequently at amortised
cost. Trade and other payables are non-interest
bearing and are normally settled on 60-day terms.
(j) Assets Held for sale
When the group intends to sell a non-current asset
or a group of assets (a disposal group), and if sale
within 12 months is highly probable, the asset or
disposal group is classified as ‘held for sale’ and
presented separately in the statement of financial
position. Liabilities are classified as ‘held for sale’
and presented as such in the statement of financial
position if they are directly associated with a
disposal group
Assets classified as ‘held for sale’ are measured at
the lower of their carrying amounts immediately
prior to their classification as held for sale and their
fair value less costs to sell. However, some ‘held for
sale’ assets such as financial assets or deferred tax
assets, continue to be measured in accordance with
the group's accounting policy for those assets.
(k) Equity investments
All equity investments are measured at fair value.
Equity investments that are held for trading are
measured at fair value through profit or loss. For all
other equity investments, the group can make an
irrevocable election at initial recognition of each
investment to recognise changes in fair value
through other comprehensive
income (“OCI”)
rather than profit or loss.
At initial recognition, the group measures a financial
asset at its fair value plus, in the case of a financial
asset not at fair value through profit or loss,
transaction costs that are directly attributable to the
acquisition of the financial asset. Transaction costs
of financial assets carried at fair value through profit
or loss are expensed as profit or loss. The group
subsequently measures all equity investments at
fair value. The directors have elected to present fair
value gains and losses on equity investments in OCI.
There is no subsequent reclassification of fair value
gains and losses to profit or loss. Dividends from
such investments continue to be recognised in profit
or loss as other revenue when the group’s right to
receive payments is established and as long as they
represent a return on investment.
(l) Property, plant and equipment
Computer and other equipment
Computer and other equipment (comprising fittings
and furniture) are initially recognised at acquisition
cost or manufacturing cost, including any costs
directly attributable to bringing the assets to the
location and condition necessary for it to be capable
of operating in the manner intended by the Group’s
management. Computer equipment and other
equipment are subsequently measured using the
cost model, cost less subsequent depreciation and
impairment losses. Depreciation is recognised on a
straight-line basis to write down the cost less
estimated residual value of computer equipment
and other equipment. The following useful lives are
applied:
Computer equipment:
Other equipment:
4 years
10 years
Gains or losses arising on the disposal of property,
plant and equipment are determined as the
difference between the disposal proceeds and the
carrying amount of the assets and are recognised in
profit or loss within other income or other expenses.
(m) Share capital
Ordinary share capital is recognised at the fair
value of the consideration received by the
company. Transactions costs arising on the issue of
ordinary shares are recognised directly in equity as
a reduction of the consideration received, net of any
income tax benefit. Ordinary shares are classified
as equity.
Octanex |Annual Report | 2017
33
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3
3
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Costs directly attributable to the issue of new shares or
options are shown as a deduction from the equity
proceeds, net of any income tax benefit. Costs directly
attributable to the issue of new shares or options
associated with the acquisition of a business are
included as part of the purchase consideration
i.
ii.
(n) Impairment
At each reporting date the Group assesses whether
there is any indication that individual assets are
impaired. Where
indicators exist,
impairment
recoverable amount is determined and impairment
losses are recognised in the profit or loss where the
asset's carrying value exceeds its recoverable amount.
(i) Calculation of recoverable amount
Recoverable amount is the greater of fair value less
costs to sell and value in use. It is determined for an
individual asset, unless the asset’s value in use cannot
be estimated to be close to its fair value less costs to
sell and it does not generate cash inflows that are
largely independent of those from other groups or
assets, in which case, the recoverable amount is
determined for the class of assets to which the asset
belongs.
(ii) Reversals of impairment
Impairment losses are reversed when there is an
indication that the impairment loss may no longer
exist and there has been a change in the estimate used
to determine the recoverable amount. An impairment
loss is reversed only to the extent that the asset’s
carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation
or amortisation, if no impairment loss had been
recognised.
(o) Restoration, rehabilitation and environment
expenditure
Restoration, rehabilitation and environmental costs
necessitated by exploration and evaluation activities
are provided for as part of the cost of those activities.
Costs are estimated on the basis of current legal
requirements, anticipated technology and future costs
that have been discounted to their present value.
Estimates of future costs are reassessed at each
reporting date.
(p)Exploration and evaluation assets
Exploration and evaluation assets, including the costs
of acquiring permits or licences, are capitalised as
exploration and evaluation assets on an area of
interest basis. Exploration and evaluation assets are
only recognised if the rights to tenure of the area of
interest are current and either:
the expenditures are expected to be recouped
through successful development and exploitation
of the area of interest, or alternatively, by its sale or
partial sale: or
activities in the area of interest have not at the
reporting date, reached a stage which permits a
reasonable assessment of
the existence or
otherwise of economically recoverable reserves
and active and significant operations in, or in
relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for
impairment if the facts and circumstances suggest that
the carrying amount of an exploration and evaluation
asset may exceed its recoverable amount. One or more
of the following facts and circumstances indicate that
an entity should test exploration and evaluation assets
for impairment (the list is not exhaustive):
i. the exploration and evaluation tenure right has
expired or are expected to expire in the near future,
and is not expected to be renewed.
ii. substantive expenditure on further exploration for
and evaluation of mineral resources in the specific
area is neither budgeted nor planned.
iii. exploration for and evaluation of mineral resources
in the specific area have not led to the discovery of
commercially viable quantities of mineral
resources and the entity has decided to discontinue
such activities in the specific area.
iv. sufficient data exist to indicate that, although a
development in the specific area is likely to
proceed, the carrying amount of the exploration
and evaluation asset is unlikely to be recovered in
full from successful development or by sale
from
Proceeds from the sale of exploration permits or
recoupment of exploration costs
farmin
arrangements are credited against exploration costs
previously capitalised. Any excess of the proceeds
overs costs recouped are accounted for as a gain on
disposal. Farmouts in the exploration and evaluation
phase The group does not record any expenditure
made by the farminee on its account. It also does not
recognise any gain or loss on its exploration and
evaluation farmout arrangements, but redesignates
any costs previously capitalised in relation to the
whole interest as relating to the partial interest
retained. Any additional cash consideration received
directly from the farminee is credited against costs
previously capitalised in relation to the whole interest,
with any excess accounted for as a gain on disposal.
Octanex |Annual Report | 2017
34
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3
4
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(q) Accounting estimates and judgements
Management determine the development, selection
and disclosure of the company’s critical accounting
policies and estimates and the application of these
policies and estimates. There are no estimates and
judgements that are considered to have a significant
risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next
financial year. There is, however, a risk that actual
expenditure to achieve minimum work obligations
could differ from estimates disclosed in the notes to
the financial statements (see Note 18). The estimated
amounts represent the higher end of possible future
expenditure. Work requirements achieved by farm-
ins materially reduce the level of expenditure
incurred by the company to comply with work
program commitments.
Per Notes 1(p), management exercises judgement as
to the recoverability of exploration expenditure. Any
judgment may change as new information becomes
available. If, after having capitalised exploration and
evaluation expenditure, management concludes,
once activities in the area of interest have reached a
stage which permits a reasonable assessment of
technical feasibility and commercial viability, that
the capitalised expenditure
is unlikely to be
recovered by future sale or exploitation, then the
relevant capitalised amount will be written off
through the statement of profit or loss and other
comprehensive income.
in which such determination
and liabilities involves significant judgements and
estimates on certain matters and transactions, for
which the ultimate outcome may be uncertain. If the
final outcome differs from the consolidated entity's
estimates, such differences will impact the current
and deferred income tax assets and liabilities in the
period
is made.
Management has assessed the company’s investment
in Ophir Production Sdn Bhd (OPSB) and Peako
Limited (Peak). Management has concluded that
OPSB is a joint venture company and that Peak meets
the definition of an associate. AASB 128 requires the
use of equity accounting for investment in joint
venture companies and associates. Management has
assessed recoverability of the advance to Ophir
Production Sdn Bhd (“OPSB’) and has decided its
carrying value to be appropriate (Refer Note 6). In
determining the recoverable amount management
have made assumptions and estimates regarding the
present value of future cashflows based on the latest
data; including oil prices, production levels, interest
rates and an appropriate risk based discount rate.
These cash flows are particularly sensitive to future
production and oil prices.
the
is recognised at
(r) Revenue
Revenue
fair value of
consideration received or receivable. Amounts
disclosed as revenue are net of returns, trade
allowances and duties and taxes paid. The following
specific recognition criteria must also be met before
revenue is recognised:
to address Cornea’s key barriers
Management have determined that there are no
impairment indicators for the capitalised exploration
and evaluation expenditure relating to WA-54-R
(note 10) relying upon and applying the tests
contained in AASB 6.20, in particular on the basis
that the Cornea Joint Venture continues to undertake
work
to
commercialisation. The objective of the current work
activities is to support design of a production test
well to achieve economic production. The Joint
Venture has applied to the regulator to vary the
conditions of the Retention Lease to move the timing
for a production test well from the current year (May
17-May 18) so that integrated reservoir modelling
and facilities work using the recently identified low-
capex development concept can be completed in
order to design a production test well capable of
delivering sufficient
to
demonstrate economic viability for the development
of the field. The consolidated entity is subject to
income
jurisdictions. The
determination of the consolidated entity's provision
for current income tax as well as deferred tax assets
threshold productivity
in numerous
taxes
Interest
Revenue is recognised as interest accrues using the
effective interest method. The effective interest
method uses the effective interest rate which is the
rate that exactly discounts the estimated future cash
receipts over the expected life of the financial asset.
(s) Share-based payment transactions
Equity settled transactions
The fair value of options granted are recognised as an
expense with a corresponding increase in equity. The
fair value is measured at grant date and recognised
over the period during which the grantee become
unconditionally entitled to the options. 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 impact of
dilution, the share price at grant date and expected
price volatility of the underlying share, the expected
dividend yield and the risk free interest rate for the
term of the option.
Octanex |Annual Report | 2017
35
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3
5
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The fair value of the options granted is adjusted to
reflect market vesting conditions, but excludes the
impact of any non-market vesting conditions (for
example, profitability and sales growth targets).
Non-market vesting conditions are included in
assumptions about the number of options that are
expected to become exercisable. At each reporting
date, the entity revises its estimate of the number of
options that are expected to become exercisable.
The expense recognised each period takes into
account the most recent estimate. The impact of the
revision to original estimates, if any, is recognised in
the statement of profit or
loss and other
comprehensive
income with a corresponding
adjustment to equity.
(t) Fair value
Fair values may be used for financial asset and
liability measurement as well as for sundry
disclosures.
Fair values for financial instruments traded in active
markets are based on quoted market prices at
reporting date. The quoted market price for
financial assets is the current bid price and the
quoted market price.
The fair value of financial instruments that are not
traded in an active market are determined using
valuation techniques. Assumptions used are based
on observable market prices and rates at reporting
date. Estimated discounted cash flows are used to
determine fair value of the remaining financial
instruments.
The carrying value less impairment provision of
trade receivables and payables are assumed to
approximate their fair values due to their short-
term nature. The fair value of financial liabilities for
disclosure purposes is estimated by discounting the
future contractual cash flows at the current market
interest rate that is available to the company for
similar financial instruments.
(u) Borrowing Costs
Borrowing costs incurred for the construction of a
qualifying asset are capitalised during the period of
time that it is required to complete and prepare the
asset for its intended use or sale. Other borrowing
costs are expensed when incurred.
(v) Convertible Notes
The conversion feature of the convertible notes
represents an embedded financial liability (Note 14)
in a host liability (Note 13). The embedded financial
liability is recognised separately from the host
liability. On initial recognition the derivative was
measured at fair value, with the residual face value
of the convertible notes assigned to the host
liability. Subsequently, the embedded financial
liability is measured at fair value through profit and
loss, and the host liability is measured at amortised
cost using the effective interest rate method.
(w) Earnings per Share
Basic earnings per share
Basic earnings per share is calculated by dividing
the profit attributable to members of Octanex by the
weighted average number of ordinary shares
outstanding during the financial year, adjusted for
bonus elements in ordinary shares during the year.
In calculating the weighted average number of
ordinary shares outstanding, the partly paid shares
are accounted for on a pro-rata basis according to
the amount of call outstanding in relation thereto.
Diluted earnings per share
Earnings used to calculate diluted earnings per
share are calculated by adjusting the basic earnings
by the after-tax effect of dividends and interest
associated with dilutive potential ordinary shares.
The weighted average number of shares used is
adjusted for the weighted average number of
ordinary shares that would be issued on the
conversion of all the dilutive potential ordinary
shares into ordinary shares.
(x) New and revised accounting standards
issued not yet effective
The company has adopted all of the new and revised
Accounting Standards issued by the Australian
Accounting Standards Board (AASB) that are
relevant to its operations and effective for annual
reporting periods beginning on 1 July 2016.
The Directors do not believe that new and revised
standards issued by AASB that are not yet effective
will have any material financial impact on the
financial statement
Octanex |Annual Report | 2017
36
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3
6
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE 2 OTHER INCOME
Sundry income – director related
Net foreign exchange gain
Sundry income - other
Total income
NOTE 3 EXPENSES
Audit fees
Consulting
Directors’ remuneration
Exploration expensed
Management fees
NOTE
21
23
20
Reporting, registry and stock exchange
Office expenses
Other expenses
Project costs
Salaries
Share based payments: fair value of directors’ options at
grant date
Impairment of exploration assets
16
Total expenses
NOTE 4 INCOME TAX
Components of income tax benefit
Current tax expense
Current period
Adjustment for prior period
Deferred tax expense
Origination and reversal of temporary differences
Total
Consolidated
2017
$
52,830
26,819
-
79,649
62,128
44,207
-
-
(16,397)
32,567
222,117
192,590
34,515
340,216
89,547
2016
$
18,840
271,943
49,003
339,786
66,955
191,246
(151,104)
575
75,000
41,383
234,622
200,069
206,939
412,100
-
1,745,165
2,746,655
125,533
1,403,318
(859,513)
-
-
(351,418)
(271,347)
-
(859,513)
(622,765)
Octanex |Annual Report | 2017
37
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3
7
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE 4 INCOME TAX (Continued)
Reconciliation between tax benefit and pre-tax loss
Loss before tax
Income tax benefit using statutory income tax rate of
30%
Tax effect of adjustment recognised in the period for:
Prospectus costs
Adjustment for prior periods
Non-assessable income
Impairment of OPSB advance
Other non–deductible expenses
Income tax benefit
Franking credit balance:
NOTE
Consolidated
2017
$
2016
$
(5,659,584)
(2,438,037)
(1,697,875)
(731,411)
(3,005)
-
(7,812)
756,109
93,070
(3,005)
(271,347)
(108,220)
378,447
112,771
(859,513)
(622,765)
Franking account balance as at end of year
1,741,532
1,741,532
NOTE 5 CASH AND CASH EQUIVALENTS
Cash at bank and on hand
5,666,779
3 ,417,2
Cash at bank and on hand includes $5,142,101 held with the OCBC Bank in Singapore (2016: $5,023,806l). As
required by the financing arrangement with Sabah International Petroleum Ltd (“SIP”), there are restrictions
on the use of these funds such that they are primarily to be used to fund cash calls for the Ophir project or to
repay borrowings from SIP.
Cash and cash equivalents are subject to interest rate risk as they earn floating rates. In the year to 30 June
2017 the average floating rate for the Consolidated entity was 0.05% (2016: 0.1%). Details of interest rate
risk and sensitivity can be found in Note 22. At 30 June 2017 all bank deposits are at call.
NOTE 6 TRADE AND OTHER RECEIVABLES
Current
Other receivables
Director-related entities - other receivables
21
295,973
12,034
308,007
367,044
15,279
382,323
Non current
Advance to Ophir Production Sdn Bhd
8
10,040,613
6,568,663
Octanex |Annual Report | 2017
38
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3
8
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE 6 TRADE AND OTHER RECEIVABLES (Continued)
The carrying amount of all receivables is equal to their fair value as they are short term.
At 30 June 2017 no receivables are impaired or past due except for the impairment of the non-current
advance to Ophir Production Sdn Bhd (Note 8).
The Advance to OPSB represents total advances made by the company to OPSB less a share of OPSB’s losses
to date. OPSB losses represent costs that are not reimbursable from PETRONAS, such as financing costs. All
OPSB expenditure eligible for reimbursement from PETRONAS is capitalised by OPSB as amounts receivable
from PETRONAS.
The application of Octanex’s share of OPSB losses to the Advance is in accordance with the accounting
standards which require the company to apply its 50% share of OPSB’s losses firstly against the carrying
value of the equity investment in OPSB. Once that investment value is extinguished to nil value, the remaining
losses are then applied to the Advance made to OPSB as shown below.
Reconciliation of Advance to OPSB
Balance of equity accounted loss after application to
Equity Investment
8
NOTE
Consolidated
2017
$
2016
$
(4,061,168)
(1,540,804)
Advance to OPSB
Share of equity accounted loss applied
Carrying amount of Advance
21
14,101,781
8,109,467
(4,061,168)
(1,540,804)
10,040,613
6,568,663
The Advance and the Equity Investment in OPSB are expected to be recovered from OPSB after it has repaid
its project financing facilities. OPSB will commence receiving compensation following commencement of
production at the Ophir field, with such remuneration to comprise capital and operating costs reimbursement
as well as remuneration fee linked to capex and production factors. Reimbursement of capital and operating
costs is guaranteed to OPSB by PETRONAS pursuant to the Risk Service Contract.
All receivables are non-interest bearing.
NOTE 7 OTHER FINANCIAL ASSETS (NON-CURRENT)
Financial Assets at fair value through other
comprehensive income
Investment in director-related equities
At cost:
7(a)(b)
38,927
21,234
Shares in controlled entities
7(c)
1
38,928
1
21,235
Octanex |Annual Report | 2017
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3
9
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE
Consolidated
2017
$
2016
$
NOTE 7 OTHER FINANCIAL ASSETS (NON-CURRENT) (Continued)
(a) Director-related Entities:
Enegex Limited
Principal activity is oil and gas exploration (Note 21)
(b) Reconciliation of the carrying amount of Financial
Assets at fair value through other comprehensive
income
Balance at beginning of year
Net revaluation increment (decrement)
Details of market price risk and sensitivity can be found in Note 22.
(c) Shares in Controlled Entities
United Oil & Gas Pty Ltd
38,927
21,234
21,234
17,693
38,927
126,830
(105,596)
21,234
1
1
United Oil & Gas Pty Ltd, a company incorporated in Australia, is owned 50% by Octanex and 50% by a fully
owned subsidiary of Octanex, Strata Resources Pty Ltd.
The consolidated entity did not consolidate United Oil & Gas Pty Ltd on the grounds that balances were not
considered material
NOTE 8 INVESTMENT IN A JOINT VENTURE COMPANY
The consolidated entity has a 50% (2016: 50%) interest in Ophir Production Sdn Bhd (OPSB), a jointly
controlled entity, incorporated in Malaysia and involved with offshore oilfield development in Malaysia.
The consolidated entity’s interest in OPSB is accounted for using the equity method in the consolidated
financial statements. Summarised financial information in the joint venture, based on Malaysian accounting
standards (which follow IFRS), is set out in this note together with a reconciliation with the carrying amount
of the investment in the consolidated financial statements.
OPSB – Summarised Financial Information
OPSB Summarised Statement of Financial Position
Current Assets (including cash $3,475,937 (2016: $2,582,720)
Non-Current Assets
Current liabilities
Non-Current Liabilities
Equity
8,775,542
68,232,939
3,345,180
26,519,092
(21,744,304)
(2,712,944)
(37,645,983)
(30,704,191)
17,618,194
(3,552,862)
Octanex |Annual Report | 2017
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0
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE
Consolidated
2017
$
2016
$
NOTE 8 INVESTMENT IN A JOINT VENTURE COMPANY (Continued)
OPSB Summarised Statement of Profit or Loss
Revenue
Expenses
Loss before tax
Income tax benefit
Loss after tax
Consolidated entity’s share of loss for the year
43,633,943
(48,674,672)
(5,040,729)
-
(5,040,729)
(2,520,364)
13,194,382
(15,717,362)
(2,522,980)
-
(2,522,980)
(1,261,490)
OPSB has syndicated term loan facilities of up to US$84 million for 75% of the planned capital expenditure
for the development of the Ophir field, 75% of the first three quarters of operating expenditure and a bank
guarantee facility of US$9 million. The loan term is up to four years (from 4 January 2016) and Octanex has
provided a proportionate corporate guarantee for undertaking in respect of the facilities.
Octanex has also provided a proportionate corporate undertaking to PETRONAS for the contract
performance obligations of OPSB in relation to the Ophir Risk Service Contract.
OPSB has no contingent liabilities.
Reconciliation of Equity Investment in OPSB
The equity investment in OPSB is carried at nil cost at 30 June 2017 due to the application of accounting
standards which requires the company to apply its 50% share of OPSB’s losses to the carrying value of the
equity investment in OPSB. The cost of the investment in OPSB is expected to be recovered from OPSB in the
form of dividends after repayment of the Advance (refer Note 6).
Octanex cumulated share of OPSB losses at end of year
(Share of equity accounted loss required by accounting
standards)
Cost of OPSB equity investment
Share of equity accounted loss applied
Carrying amount of OPSB equity investment
Balance of equity accounted loss after application to
Equity Investment
OPSB – Commitments
OPSB’s capital and operating expenditure commitments
are as follows:
Payable not later than one year
Payable later than one year but not later than three years
(5,601,972)
1,458,920
(1,458,920)
-
(2,999,724)
1,458,920
(1,458,920)
-
(4,061,168)
(1,540,804)
23,639,482
20,243,839
27,158,035
50,797,518
-
20,243,839
Octanex |Annual Report | 2017
41
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4
1
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE
Consolidated
2017
$
2016
$
NOTE 9 INVESTMENT IN AN ASSOCIATE
The company has a 13.96% (2016: 13.96%) interest in Peako Limited (“Peako”), an Australian Securities
Exchange listed company involved with natural resources exploration.
The company’s interest in Peako is accounted for using the equity method in the consolidated financial
statements. The following table illustrates the summarised financial information of the company’s
investment in Peako:
Current Assets
Non-Current Assets
Current liabilities
Equity
Cost of the investment
Share of equity accounted loss required by accounting
standards
Impairment of investment
Carrying amount of the investment
There are no contingent liabilities in the associate
Exploration commitments are:
Payable not later than one year
Payable later than one year but not later than three years
114,473
14,099
(30,924)
97,648
279,606
6,850
(41,342)
245,114
1,335,305
1,335,305
(861,897)
(837,013)
(395,061)
(355,843)
78,347
142,449
20,000
60,000
80,000
-
-
-
NOTE 10 EXPLORATION AND EVALUATION ASSETS
Carrying amount at beginning of year
Impairment of exploration assets
Cost incurred during the year
Carrying amount at end of year
30
41,208,791
(1,745,165)
194,137
39,657,763
40,974,942
(125,533)
359,382
41,208,791
Exploration and evaluation assets relate to the areas of interest in the exploration and evaluation phase for
petroleum exploration permits and a retention lease.
Octanex |Annual Report | 2017
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2
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE 10 EXPLORATION AND EVALUATION ASSETS (Continued)
30/06/2017
30/06/2016
Exploration Permits
WA-323-P
WA-323-P
WA-330-P
WA-330-P
WA-362-P
WA-362-P
WA-363-P
WA-387-P
WA-407-P
WA-420-P
WA-363-P
WA-387-P
WA-407-P
WA-420-P
Retention Lease
WA-54-R
WA-54-R
WA-54-R, WA-323-P, WA-330-P, WA-362-P and WA-363-P are held through joint operations and details of
the interests held in the retention lease and six the exploration permits can be found in Note 18.
WA-407-P and WA-420-P are 100% held by the wholly-subsidiary, Octanex Bonaparte Pty Ltd (previously
named Goldsborough Energy Pty Ltd). WA-387-P is held 100% by the wholly-owned subsidiary, Octanex
Exmouth Pty Ltd (previously named Exmouth Exploration Pty Ltd).
Ultimate recovery of exploration and evaluation assets is dependent upon exploration success and/or the
company maintaining appropriate funding to support continued exploration activities.
NOTE 11 TRADE AND OTHER PAYABLES
NOTE
Consolidated
2017
$
2016
$
Financial liabilities at amortised cost
Current
Trade creditors and accruals
Director-related entities - other payables
21
109,081
250,203
359,284
361,381
273,038
634,419
Trade and other payables are current liabilities of which the fair value is equal to the current carrying amount.
Information about the company’s exposure to foreign exchange risk in relation to trade payables, including
sensitivities to changes in foreign exchange rates, is provided in Note 22.
Octanex |Annual Report | 2017
43
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4
3
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE 12 PROVISIONS
Current
Annual Leave
Directors’ retirement benefit (1)
Long service leave
NOTE
Consolidated
2017
$
2016
$
19,480
82,125
36,403
138,008
16,644
82,125
31,407
130,176
(1) On the 29th October 1997 a deed of appointment was signed by EG Albers. The deed detailed terms of
continuation of his appointment as chairman of Octanex Limited. Amongst other things, it provides for a
payment of a retirement benefit to EG Albers as chairman. A deed of variation was signed 16 August 2016,
and effective 30 June 2016, that varied the terms of calculation of the Retirement Benefit under the original
Deed. The amount reflects the 24 years of service EG Albers has provided to the company.
NOTE 13 NON CURRENT BORROWINGS
Sabah International Petroleum Ltd subscribed for 4,000,000 US$1.00 Tranche A convertible notes (Tranche
A Notes) on 7 December 2016 and 4000,000 US$1.00 Tranche B convertible notes (Tranche B Notes) on 30
June 2017 pursuant to the convertible note subscription agreement approved by shareholders in February
2015.
The notes have a maturity date of 31 December 2018, with 8% interest payable per annum. The Tranche A
Notes may be converted into 31,746,032 ordinary shares at any time, based on an agreed conversion price of
A$0.15 (US$0.126). The Tranche B Notes may be converted into 23,809,524 ordinary shares at any time,
based on an agreed conversion price of A$0.20 (US$0.168).
The convertible notes are secured by way of a charge over the Company’s shares in Octanex Pte Ltd pursuant
to a share charge between the Company and Sabah International Petroleum dated 4 December 2014.
Convertible notes
Carrying amount at beginning of year
Drawdown of convertible notes
Movements in exchange rates
Less embedded derivative liability
Effective Interest expense
Less interest paid
Carrying amount at end of year
14
-
10,583,788
(183,372)
(264,564)
234,360
(208,008)
10,162,204
-
-
-
-
-
-
-
Interest expense is calculated by applying the effective rate of interest of 8% to the host liability component.
NOTE 14 DERIVATIVE FINANCIAL LIABILITY
Convertible notes
At inception
Changes in fair value
Balance at end of year
13
264,564
122,032
386,596
-
-
-
Octanex |Annual Report | 2017
44
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4
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE 14 DERIVATIVE FINANCIAL LIABILITY (Continued)
The embedded derivative liability is valued using a binomial option valuation model. The following inputs
were used:
Tranche A
Exercise price:
Market price:
Expected volatility:
Risk free interest rate:
Tranche B
Exercise price:
Market price:
Expected volatility:
Risk free interest rate:
A$0.15
A$0.05
72.1%
2.86%
A$0.20
A$0.07
70.2%
1.66%
NOTE 15 DEFERRED TAX LIABILITIES
Consolidated
Investment
revaluations
Exploration
costs
Borrowing
costs
Accrued
expenses
Provisions
Carried
forward tax
losses
Deferred Tax Assets
Deferred Tax Liabilities
Net Deferred Tax
2017
$
2016
$
2017
$
2016
$
2017
$
2016
$
-
-
-
(1,593)
3,715
-
3,715
(1,593)
-
-
12,290,125
12,755,433
12,290,125
12,755,433
72,593
88,878
72,593
88,878
(8,250)
(9,000)
(41,402)
(39,053)
(4,649,037)
(4,272,716)
-
-
-
-
-
-
(8,250)
(9,000)
(41,402)
(39,053)
(4,649,037)
(4,272,716)
(4,698,689)
(4,322,362)
12,366,433
12,844,311
7,667,744
8,521,949
Opening
Balance at 1
July 2016
$
(1,593)
Charged /
(credited)
to Income
Statement
Charged /
(credited)
directly to
Equity
Closing
Balance at
30 June
2017
$
-
$
5,308
12,755,433
(465,308)
88,878
(9,000)
(39,053)
(16,285)
750
(2,349)
-
-
-
-
$
3,715
12,290,125
72,593
(8,250)
(41,402)
Investment revaluations
Exploration costs
Borrowing costs
Accrued expenses
Provision
Carried forward tax losses
(4,272,716)
(376,321)
-
(4,649,037)
8,521,949
(859,513)
5,308
7,667,744
Octanex |Annual Report | 2017
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5
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE 15 DEFERRED TAX LIABILITIES (Continued)
Opening
Balance at 1
July 2015
$
Consolidated
Investment revaluations
(775,820)
Charged /
(credited)
to Income
Statement
Charged /
(credited)
directly to
Equity
Closing
Balance at
30 June
2016
$
-
$
$
774,227
(1,593)
Exploration costs
Borrowing costs
Interest receivable
Accrued expenses
Provision
13,046,016
(290,583)
-
88,878
24,589
(24,589)
(9)
450
(36,534)
(2,519)
-
-
-
-
-
12,755,433
88,878
-
(9,000)
(39,053)
Carried forward tax losses
(3,878,314)
(394,402)
-
(4,272,716)
8,370,487
(622,765)
774,227
8,521,949
NOTE 16 CONTRIBUTED EQUITY
Issued Capital
2017
Shares
Ordinary shares fully paid (a)
242,712,947
Ordinary shares partly paid(b)
Ordinary shares issued pursuant to
trustee stock scheme(c)
Balance at end of year
(a) Ordinary shares fully paid
Movements during the year
2016
2017
2016
Shares
202,465,561
67,078,910
$
68,856,339
-
$
58,894,364
9,961,975
-
30,000,000
30,000,000
-
-
272,712,947
299,544,471
68,856,339
68,856,339
Balance at beginning of year
202,465,561
Trustee shares sold
Issue costs
-
-
Share cancellation and consolidation (1)
40,247,386
192,265,561
3,000,000
58,894,364
-
56,806,364
300,000
-
-
-
-12,000
9,961,975
-
Partly paid shares fully paid
Share buy back
Balance at end of year
-
-
7,200,000
-
-
-
1,800,000
-
242,712,947
202,465,561
68,856,339
58,894,364
(b) Ordinary shares partly paid(i)
Movements during the year
Balance at beginning of year
Partly paid shares fully paid
67,078,910
74,278,910
9,961,975
-
-7,200,000
-
11,041,975
-1,080,000
Share cancellation and consolidation (1)
-67,078,910
-
-9,961,975
-
Balance at end of year
-
67,078,910
-
9,961,975
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OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE 16 CONTRIBUTED EQUITY (Continued)
(1) At the annual general meeting on 24 November 2016, shareholders provided approval for the share
capital of the Company to be reduced by:
i.
ii.
cancelling uncalled capital amounting to $0.10 per share on each of the 67,078,910 ordinary shares
paid to $0.15 in the share capital of the Company (partly paid shares); and
the consolidation of the partly paid shares into fully paid shares on the basis that each five partly
paid shares be consolidated into three fully paid shares.
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
(c) Ordinary Shares Issued Pursuant to Trustee Stock Scheme
Movements during the year
Balance at beginning of year
Trustee shares sold
Balance at end of year
2017
Shares
2016
Shares
2017
$
2016
$
30,000,000
33,000,000
-
(3,000,000)
30,000,000
30,000,000
-
-
-
-
-
-
In November 2015, the members of Octanex voted to extend the existing trustee stock scheme by five years.
The company has unlimited authorised capital with no par value.
Terms and Conditions of Contributed Equity
i.
Ordinary shares confer on the holder 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 (irrespective of the 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.
Trustee Stock Scheme
Octanex is party to a Trustee Stock Scheme, pursuant to which ordinary shares ranking equally with other
ordinary shares on issue were issued to a trustee. When those shares are sold by the trustee the net proceeds
are paid to the Company by way of subscription moneys. At reporting date all shares issued to the trustee
remained unsold. The trustee does not exercise voting rights in respect of shares held pursuant to the scheme.
Unlisted Options - (Share Based Payment)
Following approval by shareholders at the general meeting in November 2016 7,170,000 options were
granted to directors. Existing options are
Number
Expiry Date
6,600,000 15 October 2018
1,000,000 19 May 2018
1,000,000 11 June 2018
1,000,000 11 June 2018
4,000,000 11 June 2018
250,000 1 February 2018
250,000 1 February 2018
7,170,000 24 November 2019
Exercise price
$0.1534
$0.15
$0.15
$0.15
$0.15
$0.20
$0.25
$0.08
Vesting criteria
No
No
No
Yes
Yes and varying expiry dates
No
No
No
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OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE 16 CONTRIBUTED EQUITY (Continued)
Unlisted Options
Balance at beginning of year
Options granted
Options cancelled
Balance at end of year
2017
Options
2016
Options
15,100,000
15,100,000
7,170,000
(1,000,000)
-
-
21,270,000
15,100,000
The 7,170,000 options granted to directors on 24 November 2016 were valued using the Binomial Option
Valuation model and the following inputs:
Exercise price:
Share price at approval date:
Maximum option life
Expected volatility
Risk free interest rate
8.0 cents
4.5 cents
3.0 years
72%
1.55%
Expected volatility was based on the average volatility of a peer group of eleven companies within the oil and
gas exploration industry. The implied volatility of the eleven companies was in the range of 36% to 104%.
The fair value of this share based payment at grant date was $89,547. The options were fully vested at grant
date so a share based payment expense with a corresponding increase in equity of $89,547 has been
recognised for the year ended 30 June 2017.
NOTE
Consolidated
2017
$
2016
$
NOTE 17 RESERVES
Financial assets at fair value through other
comprehensive income reserve
Option reserve
Foreign currency translation reserve
fair value
through other
Financial assets at
comprehensive income reserve
Balance at beginning of financial year
Changes in fair value on financial assets at fair value
through other comprehensive income
Income tax on other comprehensive income
(814,978)
1,037,563
1,042,525
1,265,110
(827,364)
948,016
1,451,997
1,572,649
(827,364)
(1,505)
17,694
(1,179,797)
(5,308)
(814,978)
353,938
(827,364)
The financial assets at fair value through other comprehensive income reserve represents the changes in fair
value on the group’s equity instruments including realised gains or losses on those investments. Further
information on the investments is set out in Notes 7 and 22.
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OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE 17 RESERVES (Continued)
Option reserve
Balance at beginning of financial year
Share based payment expense
NOTE
Consolidated
2017
$
948,016
89,547
1,037,563
2016
$
948,016
-
948,016
The options reserve relates to share options granted to the company secretary, the directors and
individuals (Note 16).
Foreign currency translation reserve
Balance at beginning of financial year
Movement for the year
1,451,997
(409,472)
1,042,525
1,350,113
101,884
1,451,997
The foreign currency translation reserve relates to the consolidation of foreign currency denominated fully
owned subsidiary entities. At 30 June 2017 the following companies and currencies held in those companies
were consolidated.
Octanex Pte Ltd – United States Dollars
Octanex Malaysia Sdn Bhd – Malaysian Ringgits
NOTE 18 EXPLORATION AND EVALUATION EXPENDITURE COMMITMENTS
The consolidated entity share of minimum work requirements in exploration permit and retention lease
interests held by the consolidated entity or in joint operations is estimated at reporting date:
Payable not later than one year
Payable later than one year but not later than three years
196,875
7,687,500
7,884,375
116,406
1,758,594
1,875,000
NOTE 19 INTEREST IN UNINCORPORATED JOINT OPERATIONS
The consolidated entity has an interest in the assets, liabilities and output of joint operations for the
exploration and development of petroleum in Australia. The consolidated entity has taken up its share of
joint operations transactions based on its contributions to the joint operations. The consolidated entity’s
interests in the joint operations:
Joint Operation
Winchester Project
Northern Deeps
Cornea
2017
Interest
2016
Interest
Permits Held
25%
33.33%
18.75%
25% WA-323-P & WA-330-P
WA-362-P & WA-363-P
WA-54-R
33.33%
18.75%
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OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE
Consolidated
2017
$
2016
$
NOTE 19 INTEREST IN UNINCORPORATED JOINT OPERATIONS (Continued)
Assets and liabilities of the joint operations are included in the financial statements as follows:
CURRENT ASSETS
Cash and cash equivalents
Receivables
NON-CURRENT ASSETS
Exploration and evaluation assets
CURRENT LIABILITIES
Payables
Payables – director-related entity
6
10
1,730
1,410
12,411
249
30,789,438
30,731,805
11
11, 21
209
9,762
5,738
11,968
There are no contingent liabilities in any of the joint operations. Minimum work requirements in
exploration permit and retention lease interests held in joint operations is estimated at reporting date:
Payable not later than one year
Payable later than one year but not later than three years
46,875
7,687,500
7,734,375
116,406
58,594
175,000
NOTE 20 KEY MANAGEMENT PERSONNEL
Executive Directors Non-Executive Directors
EG Albers
RL Clark
SK Kler
JMD Willis
DC Coombes
G Guglielmo
KK How
Individual compensation disclosures
Information regarding individual director’s compensation is provided in the remuneration report section of the
directors’ report. There are no employees who meet the definition of key management personnel other than
the executive directors of the company. A summary of the remuneration report is shown below.
Short Term
Post Employment
Equity Settled
Total
Directors Fees
Salary
Super
Retirement Benefits
Options
TOTAL
2017
2016
$
$
- 202,666
$
19,190
(143,324)
200,000
11,220
$
-
-
$
$
89,547 311,403
-
67,896
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OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE 21 RELATED PARTY DISCLOSURES
The consolidated financial statements of the Group include:
Name
Octanex Operations Pty Ltd
Strata Resources Pty Ltd
Octanex Exmouth Pty Ltd (1)
United Oil & Gas Pty Ltd
Octanex NZ Limited - deregistered May 2017
Goldsborough Pty Ltd
Octanex Bonaparte Pty Ltd (2)
Braveheart Energy Pty Ltd
Octanex Cornea Pty Ltd (3)
Octanex Winchester Pty Ltd (4)
Winchester Exploration Pty Ltd
Octanex Pte Ltd
Octanex Malaysia Sdn Bhd
Octanex Operations Pty Ltd
Strata Resources Pty Ltd
Octanex Exmouth Pty Ltd (1)
2017
Interest
100%
100%
100%
100%
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2016
Interest
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Country of
Incorporation
Australia
Australia
Australia
Australia
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
Singapore
Malaysia
Australia
Australia
Australia
Previously named
1. Exmouth Exploration Pty Ltd
2. Goldsborough Energy Pty Ltd
3. Cornea Energy Pty Ltd
4. Winchester Resources Pty Ltd
Director-related Entities
Companies in which an Octanex director controls or significantly influences, that provide services to the
group or to a joint operation in which the group has an interest, or that also hold an interest in those joint
operations or in which the group holds an investment.
(i)Providers of Services by Related Party
During the year services and/or facilities were provided under normal commercial terms and conditions by:
Exoil Pty Ltd, (Exoil), a director-related entity of EG Albers
Natural Resources Group Pty Ltd (NRG), a director-related entity of EG Albers
Upstream Consulting Limited, (Upstream), a director-related entity of JMD Willis
Petroleum Advisors (PA), a director related entity of G Guglielmo
Samika Pty Ltd (Samika), a director-related entity of RL Clark
Consolidated
Service Provided
Exoil
NRG
NRG
NRG
PA
Samika
Upstream
Upstream
Office services and amenities in Melbourne
Management and administration services to the Group
Management of exploration tenements
Management services to Ophir project
Management services to Ophir project
Management of retention lease
Office services and amenities in New Zealand
Management services to Ophir project
2017
$
222,459
40,000
42,665
40,000
3,000
2,667
-
10,305
2016
$
234,875
80,000
59,000
120,000
28,000
-
7,188
3,000
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OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE 21 RELATED PARTY DISCLOSURES (Continued)
The group holds interests in petroleum exploration joint operations with certain director-related entities:
As a participant of the Cornea Joint Venture with Cornea Petroleum Pty Ltd, Cornea Oil & Gas Pty Ltd,
Coldron Pty Ltd, Octanex Cornea Pty Ltd, Moby Oil & Gas Pty Ltd, Enegex Limited, Cornea Resources
Pty Ltd and Auralandia Pty Ltd, all director-related entities of EG Albers.
Amounts payable to related parties including those under joint operation arrangements:
Payables
Exoil Pty Ltd
Natural Resources Group Pty Ltd
Petroleum Advisors
Samika Pty Ltd
NOTE
Consolidated
2017
$
2016
$
50,172
199,906
-
125
72,288
195,750
5,000
-
250,203
273,038
(ii)Providers of Services to Related Party
During the year accounting services were provided under normal commercial terms and conditions to:
Cornea Resources Pty Ltd, a director-related entity of EG Albers
Enegex Limited, a director-related entity of EG Albers
Peako Limited, a director-related entity of EG Albers
Sundry Revenue
Enegex Limited
Cornea Resources Pty Ltd – Operator Cornea JV
Ophir Production Sdn Bhd (Note 21 (iii)
Peako (Note 21 (iv)
Receivables from related parties:
Cornea Resources Pty Ltd – Operator Cornea JV
Enegex Limited
Peako Limited
9,380
510
28350
14,590
52,830
561
4,301
7,172
12,034
11,210
520
-
7,110
18,840
572
6,886
7,821
15,279
(iii) Advance to Ophir Production Sdn Bhd
At 30 June 2017, the company has a gross advance to OPSB of $14,101,781 (2016 $8,109,467). After
application of the company’s share of OPSB losses, the advance is $10,10,040,613 (2016 $6,568,663) (Note
6). The advance is expected to be recovered from OPSB after it has repaid its project financing facilities. OPSB
will commence receiving compensation following commencement of production at the Ophir field, with such
remuneration to comprise capital and operating costs reimbursement as well as remuneration fee linked to
capex and production factors. Reimbursement of capital and operating costs is guaranteed to OPSB by
PETRONAS pursuant to the Risk Service Contract. The group holds 50% of Ophir Production Sdn Bhd.
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OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE 21 RELATED PARTY DISCLOSURES (Continued)
(iv) Investments in director-related companies
At 30 June 2017, the company carried an investment in an ASX listed company Peako Limited, (Note 9), which
is a director-related entity of EG Albers.
At 30 June 2017, the company carried an investment in an ASX listed company Enegex Limited, (Note 7),
which is a director-related entity of EG Albers.
NOTE 22 FINANCIAL INSTRUMENTS
Categories of Financial Instruments
Financial Assets
Cash & cash equivalents
At fair value through other comprehensive income
Trade and other receivables – current ex prepayments
Trade and other receivables – non current
Financial Liabilities
Financial Liabilities at amortised cost
Trade and other payables
Convertible Notes
At fair value through profit and loss
NOTE
Consolidated
2017
$
2016
$
5,666,779
3,147,294
38,928
66,023
10,040,613
15,812,343
359,284
10,162,204
386,596
10,908,084
21,235
86,064
6,568,663
9,823,256
634,419
-
-
634,419
Recognition and derecognition
Purchases and sales of financial assets and financial liabilities are recognised on trade date which is the date
on which the consolidated entity commits to purchase or sell the financial assets or financial liabilities.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired
or have been transferred and the group has transferred substantially all the risks and rewards of ownership.
Exposure to credit, interest rate, liquidity, foreign currency, market price and currency risks arises in the
normal course of the consolidated entity’s business. The consolidated entity’s overall risk management
approach is to identify the risks and implement safeguards which seek to minimise potential adverse effects
on the financial performance of the consolidated entity’s business.
The board of directors are responsible for monitoring and managing the financial risks of the consolidated
entity.
Fair value
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement
or for disclosure purposes.
AASB 13 requires disclosure of fair value measurements by level of the fair value hierarchy, as follows:
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OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE 22 FINANCIAL INSTRUMENTS (Continued)
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The consolidated entity’s financial assets measured and recognised at fair value at 30 June 2017 and 30 June
2016 on a recurring basis are as follows:
30 June 2017
Assets
Listed securities and debentures
Liabilities
Derivative financial liability
Net fair value
30 June 2016
Assets
Listed securities and debentures
Net fair value
Level 1
$
38,928
-
38,928
Level 1
$
21,235
21,235
Level 2
$
Level 3
$
Total
$
-
-
-
-
38,928
(386,589)
(386,589)
(386,589)
(347,661)
Level 2
$
Level 3
$
Total
$
-
-
-
-
21,235
21,235
Credit risk
Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument
fails to meet its contractual obligations. At the reporting date there were is no credit risk as the consolidated
entity has no trade sales or trade receivables.
Interest rate risk
All financial liabilities and financial assets at floating rates expose the company to cash flow interest rate risk
The consolidated entity has no exposure to interest rate risk at reporting date, other than in relation to cash
and cash equivalents which attract an interest rate. Convertible notes are at a fixed rate of interest.
Sensitivity Analysis
At reporting date a 1% (100 basis point) increase/decrease in the interest rate would increase/decrease the
consolidated entity by $39,667 (2016: $22,031).
Liquidity risk
Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due.
Liquidity risk is monitored to ensure sufficient monies are available to meet contractual obligations as and
when they fall due.
The following are the contractual maturities of the financial liabilities, including interest payments.
Contractual amounts have not been discounted.
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OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE 22 FINANCIAL INSTRUMENTS (Continued)
Carrying
Amount
Contractual
cash flows
$
$
0-12
months
$
1-2 years
$
2-10
years
$
30 June 2017
Consolidated
Non-derivative Financial
Liabilities
Trade and other payables
359,284
359,284
359,284
Convertible notes
10,162,204
10,521,488
11,362,204
11,721,488
800,000
1,159,284
-
10,562,204
10,562,204
30 June 2016
Consolidated
Non-derivative Financial
Liabilities
Trade and other payables
Non current payables
634,419
-
634,419
634,419
-
634,419
634,419
-
634,419
-
-
-
-
-
-
-
-
-
Foreign currency risk
The consolidated entity is exposed to foreign currency risk arising from purchases of goods and services that
are denominated in a currency other than the Australian dollar functional currency. The consolidated entity
incurs seismic, exploration, development and well drillings costs in US dollars. To this extent, the
consolidated entity is exposed to exchange rate fluctuations between the Australian and US dollar. At 30 June
2017 the consolidated entity has a foreign currency exposure by holding US dollars in bank accounts totalling
US$4,221,978 (2016: $2,237,216) and an advance to Ophir Production Sdn Bhd of US$10,847,090 (2016:
$6,022,090) which is offset by borrowings of US$8,000,000 (2016: Nil). A one cent movement in the
USD/AUD exchange rate would move consolidated equity by AUD$82,560 (2016: $103,448). Loans to Ophir
Production Sdn Bhd are in USD.
Equity price risks
Equity price risk applies to at fair value through other comprehensive income investments. The portfolio of
investments is managed internally by Octanex management who buy and sell equities based on their own
analyses of returns. The investments are subject to movements in prices of the investment markets.
Financial Assets at fair value through other
comprehensive income
Investments in listed equities
Enegex Limited
NOTE
Consolidated
2017
$
2016
$
38,928
21,235
Octanex |Annual Report | 2017
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OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE 22 FINANCIAL INSTRUMENTS (Continued)
The consolidated entity and company investments in listed equities are listed on the Australian Securities
Exchange. A 10% increase / decrease at the reporting date in closing share price of each share held would
have increased/decreased consolidated equity by $3,893 (2016: $2,123). There would have been no effect
on profit.
Capital Management
When managing capital, the directors’ objective is to ensure the entity continues as a going concern as well
as to maintain optimal returns to shareholders and benefits for other stakeholders.
It is the company’s plan that capital, as and when required, further, will be raised by any one or a combination
of the following manners: placement of shares to excluded offerees, pro-rata issue to shareholders, the
exercise of outstanding options, and/or a further issue of shares. Should these methods not be considered to
be viable, or in the best interests of shareholders, then it would be the consolidated entity’s intention to meet
its exploration obligations by either partial sale of its interests or farmout.
No company in the consolidated entity is subject to any externally imposed capital requirements.
NOTE 23 AUDITOR’S REMUNERATION
Amounts received or due and receivable by:
Grant Thornton Audit Pty Ltd - Auditor of the
consolidated entity and company
Related practices of the parent company auditor
Audit and review of the financial reports
SJ Grant Thornton – Auditor of Octanex Malaysia Sdn
Bhd
Grant Thornton Singapore – Auditor of Octanex Pte Ltd
Tax services
SJ Grant Thornton - Octanex Malaysia Sdn Bhd
NOTE
2017
$
2016
$
53,000
56,730
-
9,128
-
62,128
1,652
8,573
1,324
68,279
NOTE 24 SEGMENT INFORMATION
Under AASB 8 Operating Segments, segment information is presented using a 'management approach', i.e.
segment information is provided on the same basis as information used for internal reporting purposes by
the board of directors
At regular intervals the board is provided management information at a group level for the group’s cash
position, the carrying values of exploration permits and a group cash forecast for the next twelve months of
operation. On this basis, no segment information is included in these financial statements.
All interest received has been derived in Australia , All exploration and evaluation assets are held in Australia.
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OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE 25 EVENTS AFTER THE END OF THE REPORTING PERIOD
There are no significant after balance date events to the date of signing of this report.
NOTE 26 LOSS PER SHARE
The following reflects the income and share data used in the
calculations of basic and diluted earnings per share:
Net loss
(4,800,071)
(1,815,272)
Number of
Shares
Number of
Shares
Weighted average number of shares
217,945,331
239,487,044
In calculating the weighted average number of shares for the purposes of calculating basic and diluted
earnings per share, the partly paid shares (converted into fully paid shares on a 3:5 basis (see Note 16(i))
have been accounted for on a pro‐rata basis according to the amount of call that was outstanding in relation
thereto.
Unlisted options outstanding during the year (Refer Note 16) are not dilutive at the 30th June 2017 as the
exercise price is higher than the average share price for the year then ended.
NOTE 27 PARENT ENTITY INFORMATION
The following details information related to the parent entity, Octanex Limited at 30 June 2017. The
information presented here has been prepared using consistent accounting policies as presented in Note 1,
except for the use of the cost method for investment in subsidiary companies by the parent.
NOTE
Current assets
Non‐current assets
Total assets
Current liabilities
Non‐current liabilities
Total liabilities
Contributed equity
Options reserve
Financial assets at
comprehensive income reserve
Accumulated losses
Total equity
fair value
through other
Loss for the year
Other comprehensive income for the year
Total comprehensive income for the year
Consolidated
2017
$
5,973,359
73,728,737
79,702,096
819,591
22,943,718
23,763,309
68,856,339
1,037,563
(639,113)
2016
$
3,510,120
67,579,803
71,089,923
654,535
13,115,577
13,770,112
68,856,339
948,016
(639,113)
(13,316,002)
55,938,787
(11,845,431)
57,319,811
(1,470,571)
‐
(1,470,571)
(302,251)
(203,950)
(506,201)
Octanex |Annual Report | 2017
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OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2017
NOTE 27 PARENT ENTITY INFORMATION (Continued)
No dividends were paid by the parent entity in 2017 (2016: Nil).
The company’s share of minimum work requirements contracted for under exploration permit interests held
in joint operation is estimated at reporting date:
Payable not later than one year
Payable later than one year but not later than three years
25,625
4,202,500
4,228,125
63,635
32,031
95,666
NOTE 28 CONTINGENT LIABILITIES
Performance Guarantee
Octanex has provided a proportionate corporate undertaking to PETRONAS for the contract performance
obligations of OPSB in relation to the Ophir RSC.
Corporate Guarantee
Octanex has provided a proportionate corporate guarantee to OPSB’s lenders in connection with OPSB’s term
loan facilities. The facilities are held with a syndicate of three banks (Malayan Banking Berhad (Maybank),
RHB Bank (L) Ltd and United Overseas Bank Limited Offer) for 75% of the planned capital expenditure for
the development of the Ophir Oil Field as well as 75% of the first three quarters of the planned operating
expenditure, and a bank guarantee in favour of PETRONAS.
NOTE 29 CONTINGENT ASSET
Peako Limited Loan – Proceeds Sharing Agreement
In lieu of the balance of monies of $1,284,744 owing on the Peako Limited (“Peako”) loan Octanex has agreed
to accept a proceeds sharing arrangement with Peako whereby Octanex will share proportionately in any
proceeds received by Peako in relation to any of its Cadlao interests in the period to 26 November 2017 up
to a limit of $1,603,683.
NOTE 30 IMPAIRMENT OF EXPLORATION AND EVALUATION ASSET
Octanex has decided to fully impair its interest in WA-387-P ($1,745,165 at 30 June 2017). A number of
seismic industry factors including reduced seismic vessel availability and large multi client speculative
surveys have limited Octanex’s ability to acquire 2D seismic in the Permit. Octanex has applied for relief from
the 2D seismic obligation and is waiting for a decision from the Joint Authority.
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OCTANEX LIMITED
ABN 61 005 632 315
Additional Information (unaudited)
As at 28 September 2017 Octanex holds the following interests in Petroleum Tenements:
Octanex Licences
Permit
Ophir SFRSC Malay Basin. Offshore
Location
Octanex interest %
50% (via Octanex Pte Ltd)
WA-54-R
WA-330-P
WA-323-P
WA-362-P
WA-363-P
Peninsular Malaysia
Browse Basin, Offshore
Western Australia
Dampier Sub Basin,
Carnarvon Basin, Offshore
Western Australia
Dampier Sub Basin,
Carnarvon Basin, Offshore
Western Australia
Exmouth Plateau,
Carnarvon Basin, Offshore
Western Australia
Exmouth Plateau,
Carnarvon Basin, Offshore
Western Australia
WA-420-P
WA-407-P
Bonaparte Basin, Offshore
Western Australia
Bonaparte Basin, Offshore
Western Australia
18.75% comprised of:
10.25% Octanex Limited
8.50%Octanex Cornea Pty Ltd
25% via Octanex Winchester Pty Ltd
25% via Octanex Winchester Pty Ltd
Operator
Ophir Production
Sdn Bhd
Cornea Resources
Pty Ltd
Santos Offshore
Pty Ltd
Santos Offshore
Pty Ltd
Eni Australia
Limited
33.33% comprised of:
11.667% via Octanex Limited
11.667% via Strata Resources
9.999% via Octanex Exmouth Pty Ltd
33.33% comprised of:
11.667% via Octanex Limited
11.667% via Strata Resources
9.999% via Octanex Exmouth Pty Ltd
100% via Octanex Bonaparte Pty Ltd Octanex
Eni Australia
Limited
100% via Octanex Bonaparte Pty Ltd Octanex
Bonaparte Pty Ltd
Bonaparte Pty Ltd
Shareholder Information (compiled as at 18 September 2017)
Ordinary share capital
As at 18 September 2017 the company had on issue the following shares:
Fully Paid Ordinary Shares
272,712,947 held by 1,421 shareholders
All issued fully paid ordinary shares carry
one vote per share
Trustee Shares
30,000,000 held by Doravale Enterprises Pty Ltd (the
Trustee)1
Other than in extremely limited circumstances, the
Trustee has bound itself by the deed of covenant entered
into in association with the Scheme not to vote at the
meetings of members of Octanex.
1 These ordinary shares were issued to the Trustee on trust for sale in accordance with a scheme of arrangement
approved by the Supreme Court of Victoria on 17 November 2010 in Matter SCI 210 04962 (the Scheme). As
previously advised to the ASX and to members, those shares are ordinary shares held on trust for sale by the
trustee on the basis that the net proceeds of sale will present the subsection moneys thereof. The shares may be
sold as fully paid up or as partly paid up. Until sold, by the terms of the Scheme, the Trustee will not participate in
dividends or distributions are to the account of the members of Octanex pro rata their respective shareholdings.
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OCTANEX LIMITED
ABN 61 005 632 315
Options
As at 18 September 2017 the company had on issue 21,270,000 options held by 19 option holders. Options
do not carry any voting right or rights to dividends.
Distribution of holders
Holding Ranges
Holders
Total Units
% Issued
Share Capital
53,403
1 - 1,000
1,616,965
1,001 - 5,000
1,149,497
5,001 - 10,000
12,824,982
10,001 - 100,000
257,068,100
Over 100,000
272,712,947
Totals
* Based on the price per security, number of holders with an unmarketable holding: 824
170
634
144
362
111
1,421
0.02%
0.59%
0.42%
4.70%
94.26%
100.00%
Substantial shareholders
Substantial shareholders as disclosed in substantial shareholding notices given to the Company are as
follows:
Shareholder
Interest in voting
rights
%
of Voting Rights
The Albers Group
Sabah International Petroleum
152,260,730
40,332,663
55.83
14.79%
Twenty largest shareholders as at 18th September 2017*
Holder
Number of shares
Sabah International Petroleum Ltd
Gascorp Australia Pty Ltd
Mr Ernest Geoffrey Albers & Mrs Pamela Joy Albers
Mr Ernest Geoffrey Albers
Sacrosanct Pty Ltd
Great Missenden Holdings Pty Ltd
National Gas Australia Pty Ltd
Great Australia Corporation Pty Ltd
Bass Strait Group Pty Ltd
Cue Petroleum Pty Ltd
The Albers Companies Incorporated Pty Ltd
Australis Finance Pty Ltd
Fugro Exploration Pty Ltd
Mrs Pamela Joy Albers
Miller Anderson Pty Ltd
Bond Street Custodians Limited
Great Missenden Group Pty Ltd
Albers Family Custodian Pty Ltd
Seaquest Petroleum Pty Ltd
Wilstermere Corporation Pty Ltd
Total Top 20
* Excluding 30,000,000 Trustee Shares held by Doravale Enterprise Pty Ltd
40,332,663
35,200,014
25,868,034
15,387,606
14,436,081
12,946,004
7,200,000
6,291,000
6,059,049
5,763,357
3,780,491
3,773,188
3,691,721
3,062,500
3,000,000
2,819,512
2,765,060
2,542,875
2,248,000
2,106,500
199,273,655
% of Fully
Paid Shares
14.79%
12.91%
9.49%
5.64%
5.29%
4.75%
2.64%
2.31%
2.22%
2.11%
1.39%
1.38%
1.35%
1.12%
1.10%
1.03%
1.01%
0.93%
0.82%
0.77%
73.07%
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OCTANEX LIMITED
ABN 61 005 632 315
Glossary
ASX
Australian Securities Exchange
AUD/A$
Australian currency
Bbl(s)
Barrel(s), an oil barrel is equivalent to 0.159 cubic metres
BCF
One billion cubic feet of natural gas
BOPD
Barrel of oil per day
Contingent
resources
Quantities of petroleum estimated, as of a given date, to be potentially recoverable
from known accumulations, but the applied project(s) are not yet considered mature
enough for commercial development due to one or more contingencies
Economic
interest
The working interest share of production which is adjusted for production that is
delivered to host governments under the petroleum contracts
FDP
Field Development Plan
Group
Parent entity and its subsidiaries
GST
IFRS
Goods and services tax
International Financial Reporting Standards
MMBBL
One million barrels
MMCFD
One million standard cubic feet of natural gas per day
Octanex or
company
OPSB
PRMS
RSC
Octanex Limited and includes, where the context requires, its subsidiaries
Ophir Production Sdn Bhd
Petroleum Resources Management System
Risk Service Contract (also known as Small Field Risk Service Contract)
SFRSC
Small Field Risk Service Contract (also known as Risk Service Contract)
SPE
TCF
Society of Petroleum Engineers
One trillion cubic feet of natural gas
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OCTANEX LIMITED
A.B.N: 61 005 632 315
Level 21, 500 Collins Street
Melbourne Victoria 3000 Australia
T: +61 (0)3 8610 4702
F: +61 (0)3 8610 4799
E: admin@octanex.com.au
www.octanex.com.au
ANNUAL REPORT 2017