OILEX LTD
ABN 50 078 652 632
CONTENTS
Chairman’s Review .................................................................................................................................................................. 2
Business Review ...................................................................................................................................................................... 3
Permit Schedule ..................................................................................................................................................................... 11
Directors’ Report .................................................................................................................................................................... 13
Remuneration Report - Audited ............................................................................................................................................. 21
Lead Auditor’s Independence Declaration ............................................................................................................................ 29
Consolidated Statement of Profit or Loss and Other Comprehensive Income ...................................................................... 30
Consolidated Statement of Financial Position ....................................................................................................................... 31
Consolidated Statement of Changes in Equity ...................................................................................................................... 32
Consolidated Statement of Cash Flows ................................................................................................................................. 33
Notes to the Consolidated Financial Statements ................................................................................................................... 34
Directors' Declaration ............................................................................................................................................................. 68
Independent Audit Report ...................................................................................................................................................... 69
Shareholder Information ........................................................................................................................................................ 74
Definitions .............................................................................................................................................................................. 76
Corporate Information ............................................................................................................................................................ 77
CHAIRMAN’S REVIEW
Dear Shareholder,
The 2018 financial year has seen the Company deliver on essential outcomes, as well as undertake some difficult challenges.
The Company gained a new cornerstone shareholder, an institutional investor, Republic Investment Management Pte Ltd
(Republic). In December 2017 Republic agreed to participate in the January 2018 share placement, taking up an initial 7%
interest in Oilex, which increased to just over 12% in May 2018 when Republic subscribed for an additional 112,500,000
shares. The subscription by Republic is seen by the Board as a vote of faith in the direction of the Company. Republic also
participated in the debt and equity fundraisings in July and September 2018.
The Company has a significant multi TCF gas resource at the Cambay PSC in Gujarat state in India in the EP-IV tight siltstones
that requires drilling and stimulation optimisation technologies to achieve commercial flow rates. In August 2017,
Schlumberger, Baker Hughes GE and ODSI completed a technical evaluation of the optimal well and stimulation design
required to achieve potential commercial flow rates in the EP-IV reservoir in Cambay Basin.
Schlumberger and Baker Hughes were appointed to complete the core analysis and to report on the reasons for under-
performance of past wells. The purpose of their work was to identify any substantial impediments to achieving potential
commercial flow rates and to advise on the optimal well and stimulation design required to take the project forward. Notably
the results from their analysis has confirmed the potential for substantially increased flow rates with the application of the
appropriate stimulation technology suite.
At the start of April 2018, the Company received notification that the Ministry of Petroleum and Natural Gas had approved the
proposal for the grant of ten year extensions to both the Cambay and Bhandut PSC. The applications were lodged in
September 2017 ahead of the PSC expiry dates of September 2019. Securing this extension was important to regaining
momentum in the Company’s key asset at Cambay.
In May 2018 the Company, having exhausted all other avenues to recover outstanding Cambay cash calls, issued an Event
of Default Notice to GSPC in the amount of equivalent US$3,054,832. This notice, issued pursuant to the Joint Operating
Agreement (JOA), is a consequence of GSPC’s ongoing failure to pay its participating interest share of the expenses of the
Cambay PSC.
In July 2018, after year end the Company formally requested the Directorate General of Hydrocarbons and the Ministry of
Petroleum and Natural Gas to affect the transfer of GSPC’s participating interest in the Cambay PSC to Oilex. Subsequently,
GSPC served notice of an ex-parte Order from the High Court of Gujarat directing the Company not to take any coercive steps
against GSPC until a hearing on 4 September 2018, with the High Court then adjourning this matter to 19 September 2018.
Whilst the Company is confident in its position, it may take some time to have this matter resolved and for the Company to
consider other remedial strategies.
2018 also saw some governance changes to the Board, with the non-executive Board now consisting entirely of independent
directors.
The Company is continuing to actively pursue new opportunities in order to create value by diversifying the Company’s project
portfolio.
Finally, on behalf of the Board, I wish to thank our staff, contractors, local communities, shareholders and stakeholders for
their ongoing support.
Mr B Lingo
Chairman
12 September 2018
OILEX LTD
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External Impact on the Petroleum Industry
BUSINESS REVIEW
This last year has seen a gradual increase in both oil and regional gas prices as the hydrocarbon exploration and production
industry shows recovery from previous low prices. However, the industry has not yet fully recovered as shown by lowered
activity levels in exploration and companies still going through re-structuring processes.
The Indian economy remains strong, maintaining the highest global growth rate of the large economies. The Indian
government initiatives to boost industry and commerce continue across the board underpinning strong energy growth. India
is now the world’s third largest hydrocarbon consumer with energy security seen as a major concern for the Indian
Government.
Figure 1: Bhandut Production Facility
Oilex Strategy
During 2017-2018, Oilex has continued to focus on its core project, Cambay, in India while also evaluating potentially value
accretive new business opportunities elsewhere, ranging from discovered undeveloped resources with exploration upside to
existing discoveries and production. These evaluations are aimed at broadening the Company’s opportunity base and
investment opportunities, both within and outside of India.
Introduction
The Cambay Project is located onshore in the state of Gujarat in the heart of one of India’s most prolific hydrocarbon and
leading industrialised provinces. The project is ideally located near a major industrial corridor and approximately 20 km from
the existing national gas pipeline grid. The project is well-positioned to commercialise production in the fast-growing, demand-
driven domestic energy market.
The area has a long history of hydrocarbon production from a number of vertically stacked reservoir sections. Oilex continues
to focus on a tight siltstone Eocene aged reservoir which has potential for Multi-TCF gas resources within the license area of
the Cambay Production Sharing Contract (PSC). A secondary conventional reservoir is present in the Oligocene section.
Oilex has made very significant advances during the year with technical studies providing an advanced understanding of the
reasons for past failures/modest success as well as providing confidence for undertaking future drilling, stimulation and flow
testing. The studies have identified a number of field procedures required for favourable execution of the Field Development
Plan (FDP) work programme. All procedures use materials and processes that are readily available with careful field execution
OILEX LTD
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BUSINESS REVIEW
being the key requirement. A full FDP for both the primary Eocene and secondary Oligocene reservoir sections was submitted
to the Government of India as part of an application for a 10 year extension to the PSC. This application has been approved
by the Government of India.
Production of gas and condensate from Cambay continued throughout the year at low rates. Gas continues to be sold into
the low pressure system and the liquid component is stored in Oilex facilities until sale. Approximately 3,840 barrels (gross)
of the accumulated volumes were sold after June 2018.
Gujarat
Cambay PSC
Figure 2: Gas Pipeline Network to the Nation
Cambay Field, Onshore Gujarat, India
(Oilex - 45%, Operator)
Oilex is the Operator of the Cambay Field and holds a 45% participating interest. The remaining 55% interest is held by Joint
Venture partner, Gujarat State Petroleum Corporation Limited (GSPC).
Exploration and production in the region started in the late 1950s and early 1960s. Oilex’s focus on the tight Eocene siltstone
reservoir is a step away from the conventional exploration and production that has dominated the basin. It requires application
of specific drilling and stimulation technologies to test whether the reservoir will produce at commercial rates. Core samples
from a well drilled in 2008 were analysed by Schlumberger for geomechanics properties and matching of introduced fluids and
proppant to the local rock type. This core test analysis along with the data from previous vertical and horizontal wells has been
the subject of an in-depth review by Baker Hughes GE aimed specifically to identify reasons for the limited success of past
drilling and stimulation, and to outline optimal drilling and stimulation methodologies for future work programmes to establish
commercial gas production.
The Baker Hughes evaluation was successful in identifying very specific and correctable reasons for past poor results.
Technologies and understanding have progressed since the drilling of the C-76 horizontal well in 2011. The evaluation
provides a technical recommendation of the optimal well and stimulation design required to achieve commercial flow rates in
the EP-IV reservoir. The results confirm the potential for substantially increased flow rates with the application of the
appropriate stimulation technology suite. A second US based independent expert group, ODSI was engaged to review the
Baker Hughes conclusions, providing corroboration to all the study outcomes as well as providing some additional insights on
some aspects of the study.
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OILEX LTD
BUSINESS REVIEW
In concert with this, a detailed Field Development Plan (FDP) covering both the high potential EP-IV reservoir and the modest
potential OS-II reservoir was completed. It was submitted to the Government as a requirement for the application to secure a
10 year extension to the PSC beyond 2019. The development plan encompasses a staged approach, initially focussing on
drilling of a small number of new wells to gather key information on reservoir performance.
The Government of India was very prompt in providing approval to both the FDP and the PSC application ahead of expected
dates. The amended Cambay contract, reflecting the new expiry date of 2029, is now pending finalisation by the Directorate
General of Hydrocarbons.
Further technical studies were undertaken in-house concentrating on the execution in the field for the drilling and stimulation
programme. Planning for the drilling and stimulation of two vertical wells is well advanced and discussions have been held
with major service providers. Upon success of this initial pilot programme, which is subject to securing the necessary funding,
a larger drilling programme will follow, with the aim of aggregating sufficient production volumes to connect to the high-pressure
pipelines which offer greater offtake stability and improved gas prices.
Upon the approval of a revised work programme and budget (WP&B) by the Joint Venture Management Committee (MC) and
subject to securing the necessary funding, the Company will proceed to order the long lead items for the planned work
programme. Any early production will utilise existing processing and storage facilities upgraded as required to provide a low-
cost path to commercialisation.
Figure 3: Cambay Field – recorded hydrocarbon flowrates from EP-IV (Y Zone) reservoir
During the year, a small volume of gas was produced into the local low pressure pipeline from the Eocene reservoir. The C-
77H well produced 31.72 mmscf and C-73 produced 12.27 mmscf. A plan of cycling production alternately from C-77H and
C-73 is under way.
The Company is in discussion with potential partner companies who have undertaken data room reviews of the EP-IV tight
gas potential and who are interested in taking an equity position in the project.
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BUSINESS REVIEW
Joint Venture Management
Oilex has been working with its Joint Venture partner, GSPC, to resolve a number of unpaid cash calls going back several
years. During the year Oilex received the equivalent of US$78,182 gross in relation to Cambay and US$34,708 gross in
relation to Bhandut from GSPC towards outstanding cash calls. At 30 June 2018, Cambay gross unpaid cash calls issued to
GSPC totalled approximately US$5.76 million. Subsequent to 30 June 2018, Oilex received the equivalent of US$171,760
gross from GSPC attributable to the Cambay Field. Oilex endeavoured to engage positively with its Joint Venture partner to
resolve these unpaid amounts. In the meantime, Oilex continues to bear the ongoing costs of the Joint Venture.
The Company has actively engaged with GSPC and other key stakeholders for approval of the revised 2018-19 Work
Programme and Budget inclusive of drilling two vertical wells. To date GSPC has not agreed, resulting in the current approved
budget only covering general administration and maintenance of field operations and production. To ensure that the Joint
Venture has met and continues to meet its obligations and expectations of the Government of India, Oilex has met the full
cost of many of the Joint Ventures activities including the recent FDP and application for extension of the PSC.
After exhausting all reasonable efforts over an extended period, on 29 May 2018, Oilex issued an Event of Default (EoD)
Notice in the amount of equivalent US$3,054,832 to GSPC because of their ongoing failure to pay their share of the
participating interest of the expenses of Cambay. Pursuant to the Joint Operating Agreement (JOA), GSPC had the option to
remedy its default by settling the outstanding amounts within 60 days. This was not done, resulting in Oilex issuing a notice
whereby GSPC was deemed under the JOA to have transferred all its participating interest in the PSC to the non-defaulting
parties, ie. Oilex. Furthermore, the Company has formally requested the Directorate General of Hydrocarbons and the Ministry
of Petroleum and Natural Gas, India to affect the transfer of GSPC’s participating interest (PI) in the Cambay PSC to Oilex.
Oilex, is not seeking 100% interest in the PSC in the medium to long term, and follows general industry principals of seeking
to share risk and cost with capable partner companies. The action on the EoD has only taken place to progress a work program
which will advance the project and satisfy government expectations. Oilex’s principle objective is to realise value from the
project for the benefit of all stakeholders.
Following the end of the reporting period, GSPC served notice to Oilex of an Order from the High Court of Gujarat (Court)
directing it not to take any coercive steps against GSPC until a hearing held on 4 September 2018 (Order). At this hearing
the matter was adjourned until 19 September 2018. The Order has been awarded on an interim basis to delay the Company
securing a transfer of the Participating Interest in the Cambay PSC held by GSPC. The Order was obtained on an ex parte
basis and accordingly, the Company was not afforded an opportunity to assert its position. The Company notes that,
notwithstanding the Order, GSPC remains in ongoing material breach of the JOA with the Event of Default (EoD) remaining
in place and Oilex fully intends to enforce its legal and contractual rights.
While the Company is confident in its position, should GSPC fail to comply with the EoD Notice and a legal and or regulatory
challenge occurs, it may be necessary for Oilex to consider other remedial strategies.
Cambay Contingent Resources
Resource volumes for the Eocene are unchanged since June 2016 and are summarised in the following table which shows
Oilex net working interest. The development plan submitted as part of the application for extension of the PSC term addresses
a sub-set of these resources in a staged approach.
Unrisked Cambay Field Contingent Resource Estimates at June 2018
Net Gas Volume
Net Condensate Volume
Bcf
2C
1C
million bbl
3C
1C
2C
3C
X & Y Zones
215
417
728
12
27.4
54.6
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BUSINESS REVIEW
Bhandut Field, Onshore Gujarat, India
(Oilex - 40%, Operator)
Oilex N.L. Holdings (India) Limited is the Operator of the Bhandut Field Production Sharing Contract (PSC) in the Cambay
Basin onshore Gujarat, India and holds a 40% participating interest. The remaining 60% interest is held by Joint Venture
partner Gujarat State Petroleum Corporation Limited (GSPC).
The Bhandut Field was initially discovered and developed by ONGC in 1976. The field is currently on care and maintenance,
however, with ongoing production and exploration potential, coupled with existing production facilities. The Company
continued discussions with several parties for the possible sale of its participating interest in the PSC during the year.
In parallel with the Cambay PSC, a Field Development Plan in support of the application for an extension of the PSC was
submitted in September 2017 and approved by the Government of India in April 2018.
During the financial year, the Joint Venture received US$34,708 gross from GSPC against outstanding cash calls for Bhandut.
At 30 June 2018, gross unpaid cash calls issued to GSPC totalled US$106,649.
Figure 4: Bhandut Production Facility
JPDA 06-103, Timor Sea
(Oilex - 10%, Operator)
Oilex as operator, and on behalf of the JPDA 06-103 Joint Venture participants, continues to seek a resolution to the dispute
with Autoridade Nacional do Petroleo e Minerais (ANPM) in relation to matters associated with the termination of JPDA 06-
103 PSC. In July 2015, the ANPM rejected the Joint Venture request to terminate the PSC by mutual agreement in good
standing and without penalty, and the ANPM sought to impose a penalty of approximately US$17 million upon the Joint
Venture and the ANPM terminated the PSC on 15 July 2015. The Joint Venture undertook significantly more exploration
expenditure than required during the PSC term and believes the excess was not properly accounted for in accordance with
the terms of the PSC. The Joint Venture continues its dialogue with the ANPM and remains hopeful an amicable settlement
will be reached. If the parties are unable to reach an amicable settlement, any party may refer the matter to arbitration. If this
occurs, the obligations and liabilities of the Joint Venture participants under the PSC are joint and several, with parent company
guarantees provided by all Joint Venture participants. Oilex has a 10% participating interest in the Joint Venture.
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Canning Basin, Western Australia
BUSINESS REVIEW
Oilex held 3 exploration permit applications covering a large area within the Wallal Graben in the onshore Canning Basin,
Western Australia. Following an extended unsuccessful farm-out marketing effort and given that the primary term involved
significant expenditure set when the industry viewed exploration more favourably, the Company on 31 July 2018 withdrew its
application for the licences.
West Kampar PSC, Central Sumatra
(Oilex - 45%, Non operator)
The Company remains in dispute with the operating company, PT Sumatera Persada Energi (SPE) which was declared
bankrupt. The Indonesian Government regulator, SKK Migas, has confirmed that Oilex continues to retain a 45% participating
interest in the PSC. In the absence of a commercial settlement, the Company intends to preserve its rights.
Oilex has continued to pursue enforcement of the Arbitration Award and a commercial settlement. Subsequent to year end
SKK Migas advised that the Production Sharing Contract had been terminated on 15 August 2018. Oilex continues its
discussion with the Government of Indonesia seeking a solution. The carrying value of this investment had been fully provided
for in 2012.
Financial
Treasury policy
The funding requirements of the Group are reviewed on a regular basis by the Group’s Chief Financial Officer and reported
to the Board to ensure the Group is able to meet its financial obligations as and when they fall due. Internal cash flow models
are used to review and to test investment decisions. Until sufficient operating cash flows are generated from its operations,
the Group remains reliant on equity or debt funding, as well as assets divestiture or farmouts to fund its expenditure
commitments.
Formal control over the Group’s activities is maintained through a budget and cash flow monitoring process with annual
budgets considered in detail and monitored monthly by the Board and forming the basis of the Company’s financial
management strategy.
Cash flows are tested under various scenarios to ensure that expenditure commitments are able to be met under all reasonably
likely scenarios. Expenditures are also carefully monitored against budget. The Company continues to actively develop
funding options in order that it can meet its expenditure commitments and its’ planned future discretionary expenditure. During
the year several capital raisings were completed to provide for working capital for the company.
As at 30 June 2018 the Group had no loan borrowings. Subsequent to 30 June 2018, the Company entered into loan
agreements with existing investors raising $330,000 before costs with a one-year term, 5% interest rate and 91,666,666
attached unlisted options with an exercise price of $0.0036 and an expiry date of 26 July 2019.
In September 2018 the Company entered into another binding loan agreement with Republic to secure funding of $250,000
at 5% interest rate with a term to 31 October 2019 plus 60,664,887 options over ordinary shares exercisable at $0.004121,
which are subject to shareholder approval, if required.
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Corporate
BUSINESS REVIEW
The Company has dual listing on the ASX and on the Alternative Investment Market (AIM) of the London Stock Exchange with
approximately 57% of the Company’s shares held on the Company’s UK register.
During the year 11,722,222 broker options were exercised at £0.00225.
At a General Meeting in March 2018 Shareholders ratified raising of $0.6 million in January 2018 with 157,894,737 shares
issued at $0.0038. On 15 May 2018, the Company raised $0.5 million through the issue of 125,000,000 shares at $0.004.
As at 30 June 2018 the Company had:
• Available cash resources of $375,507;
• No loans or borrowings; and
•
Issued capital of 2,001,968,379 fully paid ordinary shares and unlisted options of 77,166,666.
On 11 September the Company entered into a a debt and equity capital raising to secure funding of approximately £631,980
($1,142,200) before expenses.
The equity capital raising of 259,816,694 shares at 0.19 pence (A$0.003434) per share for gross proceeds of £493,655 has
been undertaken by Novum Securities Limited and is also supported by existing shareholders. In this regard, the Company
has received firm written confirmation from Novum Securities Limited for the placing of 157,894,737 shares for £300,000 at
0.19 pence per share. In addition, the Company has entered into a subscription agreement with Republic Investment
Management Pte Ltd for 101,921,957 shares to raise £193,652 at 0.19 pence.
Pursuant to the advisory agreement with Novum, the Company will issue 9,473,684 unlisted options exercisable at 0.19 pence
on or before three years following the completion with the capital raising.
Executive and Board Changes
Max Cozijn retired as a Non-Executive Director at the November 2017 AGM. Mr Bradley Lingo agreed to act as Non-Executive
Chairman in an interim capacity. The Company has initiated a formal search process to identify a potential new Chairman.
On 18 March 2018, Mr Jonathan Salomon’s contract as Managing Director, was extended by one year.
The Board continues to review the Board composition with a view to conforming with best corporate governance requirements
while being cognisant of the need to conserve the cash resources of the group during this constrained economic environment
for the hydrocarbon industry globally.
Risk Management
The full Board undertakes the function of the Audit and Risk Committee and is responsible for the Group’s internal financial
control system and the Company’s risk management framework. Management of business risk, particularly exploration,
development and operational risk is essential for success in the oil and gas business. The Group manages risk through a
formal risk identification and risk management system.
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BUSINESS REVIEW
Health, Safety, Security and Environment
Policy
Oilex is committed to protecting the health and safety of everybody who plays a part in our operations or lives in the
communities where we operate. Wherever we operate, we will conduct our business with respect and care for both the local
and global, natural and social environment and systematically manage risks to drive sustainable business growth. We will
strive to eliminate all injuries, occupational illness, unsafe practises and incidents of environmental harm from our activities.
The safety and health of our workforce and our environment stewardship are just as important to our success as operational
and financial performance and the reputation of the Company.
Oilex respects the diversity of cultures and customs that it encounters and endeavours to incorporate business practices that
accommodate such diversity and that have a beneficial impact through our working involvement with local communities. We
strive to make our facilities safer and better places in which to work and our attention to detail and focus on safety,
environmental, health and security issues will help to ensure high standards of performance. We are committed to a process
of continuous improvement in all we do and to the adoption of international industry standards and codes wherever practicable.
Through implementation of these principles, Oilex seeks to earn the public’s trust and to be recognised as a responsible
corporate citizen.
Qualified Petroleum Reserves and Resources Evaluator Statement
Pursuant to the requirements of Chapter 5 of the ASX Listing Rules, the information in this report relating to petroleum reserves and
resources is based on and fairly represents information and supporting documentation prepared by or under the supervision of Mr Jonathan
Salomon, Managing Director employed by Oilex Ltd. Mr Salomon has over 32 years’ experience in petroleum geology and is a member of
the American Association of Petroleum Geologists, and the Society of Petroleum Engineers. Mr Salomon meets the requirements of a
qualified petroleum reserve and resource evaluator under Chapter 5 of the ASX Listing Rules and consents to the inclusion of this information
in this report in the form and context in which it appears. Mr Salomon also meets the requirements of a qualified person under the AIM Note
for Mining, Oil and Gas Companies and consents to the inclusion of this information in this report in the form and context in which it appears.
OILEX LTD
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PERMIT SCHEDULE
PERMIT SCHEDULE AS AT 30 JUNE 2018
ASSET
LOCATION
Cambay Field PSC
Gujarat, India
Bhandut Field PSC
Gujarat, India
ENTITY
Oilex Ltd
Oilex N.L. Holdings
(India) Limited
Oilex N.L. Holdings
(India) Limited
EQUITY %
OPERATOR
30.0
15.0
40.0
Oilex Ltd
Oilex N.L. Holdings
(India) Limited
West Kampar PSC
Sumatra, Indonesia
Oilex (West Kampar)
Limited
45.0 (1)
PT Sumatera
Persada Energi
JPDA 06-103 PSC
Joint Petroleum
Development Area
Timor Leste and
Australia
Oilex (JPDA 06-103)
Ltd
10.0
Oilex (JPDA 06-103)
Ltd
STP-EPA-0131
Western Australia
Admiral Oil Pty Ltd (3)
100.0 (3)
Admiral Oil Pty Ltd (2)
STP-EPA-0106
Western Australia
STP-EPA-0107
Western Australia
Admiral Oil and Gas
(106) Pty Ltd (3)
Admiral Oil and Gas
(107) Pty Ltd (3)
100.0 (3)
100.0 (3)
Admiral Oil and Gas
(106) Pty Ltd (2)
Admiral Oil and Gas
(107) Pty Ltd (2)
(1) Oilex (West Kampar) Limited is entitled to have assigned an additional 22.5% above its government recognised 45% to its holding
through the exercise of its rights under a Power of Attorney granted by PT Sumatera Persada Energi (SPE) following the failure of SPE to
repay funds due. The assignment request has been provided to BPMigas (now SKKMigas) but has not yet been approved or rejected. If
Oilex is paid the funds due it will not be entitled to also pursue this assignment. Subsequent to June 2018, SKK Migas advised that the West
Kampar Contract Area Production Sharing Contract had been terminated effective 15 August 2018. Oilex is continuing its discussion with
the Government of Indonesia seeking a solution.
(2) Ultimate parent entity is Oilex Ltd.
(3) Application withdrawn after the year end on 31 July 2018.
OILEX LTD
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DIRECTORS REPORT
FOR THE YEAR ENDED 30 JUNE 2018
2018 FINANCIAL REPORT
CONTENTS
Directors’ Report .................................................................................................................................................... 13
Remuneration Report - Audited ............................................................................................................................. 21
Lead Auditor’s Independence Declaration ............................................................................................................ 29
Consolidated Statement of Profit or Loss and Other Comprehensive Income ...................................................... 30
Consolidated Statement of Financial Position ....................................................................................................... 31
Consolidated Statement of Changes in Equity ...................................................................................................... 32
Consolidated Statement of Cash Flows ................................................................................................................. 33
Notes to the Consolidated Financial Statements……………………………………. ................................................ 34
Directors' Declaration ............................................................................................................................................. 68
Independent Audit Report ...................................................................................................................................... 69
Shareholder Information ........................................................................................................................................ 74
OILEX LTD
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DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2018
For the year ended 30 June 2018
The directors of Oilex Ltd present their report (including the Remuneration Report) together with the consolidated
financial statements of the Group comprising of Oilex Ltd (the Company) and its subsidiaries for the financial year
ended 30 June 2018 and the auditors’ report thereon.
DIRECTORS
The directors of Oilex Ltd in office at any time during or since the end of the financial year are:
Mr Bradley Lingo
(Non-Executive Chairman)
Bachelor of Arts with Honours, Juris Doctorate, MAICD
Mr Lingo was appointed as a Non-Executive Director in February 2016 and Non-Executive Chairman in February
2017. Mr Lingo has more than 32 years of experience in a diverse range of oil and gas leadership roles, including
business development, new ventures, mergers and acquisitions and corporate finance. Mr Lingo has worked with
Tenneco Energy and El Paso Corporation in the US and Australia, the Commonwealth Bank of Australia and
Drillsearch Energy Limited. He is currently the Managing Director and CEO of Elk Petroleum Limited.
During the last three years Mr Lingo has been a director of the following ASX listed companies:
• Elk Petroleum Limited (from August 2015 to current)
Mr Paul Haywood
(Non-Executive Director)
Mr Haywood was appointed as a Non-Executive Director in May 2017. Mr Haywood has over 15 years of
international experience in delivering value for his investment network through a blended skill set of corporate and
operational experience, including more than six years in the Middle East, building early stage and growth projects.
More recently, Mr Haywood has held senior management positions with UK and Australian public companies in
the natural resource and energy sectors including O&G exploration and development in UK, EU and Central Asia.
Mr Haywood’s expertise stretches across a broad UK and Australian public market, with a cross-functional skill set
with diverse experience and capability encompassing research, strategy, implementation, capital and transactional
management. Mr Haywood is currently Executive Director of Block Energy Plc and resource focussed UK advisory
firm, Plutus Strategies Ltd.
During the last three years Mr Haywood has not been a director of any other ASX listed companies.
Mr Max Cozijn
(Non-Executive Director – retired 29 November 2017)
BCom CPA MAICD
Mr Cozijn was initially appointed Chairman when the Company listed on the Australian Securities Exchange (ASX)
in 2003, having been the founding director of Oilex Ltd. He stepped down as Chairman in February 2017 and
retired as a Non-Executive Director at the November 2017 AGM.
During the last three years, up to the date of his resignation, Mr Cozijn has been a director of the following ASX
listed companies:
• Jacka Resources Limited (from May 2014 to current)
• Energia Minerals Limited (from May 1997 to June 2016)
Mr Jonathan Salomon
(Managing Director)
B App Sc (Geology), GAICD
Mr Salomon was appointed as a Non-Executive Director in November 2015 and Managing Director on 18 March
2016. Mr Salomon has over 32 years of experience working for upstream energy companies. Further details of Mr
Salomon’s qualifications and experience can be found in the Executive Management section of the Directors’
Report.
During the last three years Mr Salomon has not been a director of any other ASX listed companies.
COMPANY SECRETARY
The Chief Financial Officer, Mr Mark Bolton (B Bus) was appointed Company Secretary in June 2016.
OILEX LTD
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DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2018
CORPORATE GOVERNANCE STATEMENT
The Corporate Governance Statement, which reports on Oilex’s key governance principles and practices is
available on the Oilex website.
In establishing its corporate governance framework, the Company has referred to the recommendations set out in
the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations 3rd edition.
The Company has followed each recommendation where the Board has considered the recommendation to be an
appropriate benchmark for its corporate governance practices. Where the Company's corporate governance
practices follow a recommendation, the Board has made appropriate statements reporting on the adoption of the
recommendation. In compliance with the "if not, why not" reporting regime, where, after due consideration, the
Company's corporate governance practices do not follow a recommendation, the Board has explained its reasons
for not following the recommendation and disclosed what, if any, alternative practices the Company has adopted
instead of those in the recommendation.
The Corporate Governance Statement provides detailed information on the Board and committee structure,
diversity and risk management.
DIRECTORS’ MEETINGS
Directors in office and directors’ attendance at meetings during the 2017/18 financial year are as follows:
Non-Executive Directors
B Lingo (3)
P Haywood
M D J Cozijn (4)
Executive Director
J Salomon
Board Meetings (1)
Held (2)
Attended
13
13
8
13
13
13
8
13
(1)
Following the changes to the Board at the Annual General Meeting on 25 November 2015, the Board resolved that the full Board would
perform the role of the Audit and Risk Committee and the Remuneration and Nomination Committee. The Company is considering the
appointment of additional independent non-executive directors in order to achieve best practice corporate governance and may
reconstitute the Committees at that time.
(2) Held indicates the number of meetings available for attendance by the director during the tenure of each director.
(3) Current Chairman.
(4) Retired 29 November 2017.
OILEX LTD
14
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2018
EXECUTIVE MANAGEMENT
Mr Jonathan Salomon
(Managing Director)
B App Sc (Geology), GAICD
Mr Salomon was appointed as a Non-Executive Director in November 2015 and Managing Director on 18 March
2016. Mr Salomon has a Bachelor Degree in Applied Science and is a member of the American Association of
Petroleum Geologists and the Society of Petroleum Engineers, and has over 32 years of experience working for
upstream energy companies. Mr Salomon has worked for a number of oil and gas companies in various senior
positions including General Manager Exploration and New Ventures at Murphy Oil Corporation and Global Head of
Geoscience at RISC PL, in addition to a number of executive director roles including Strategic Energy Resources,
Norwest Energy and Nido Petroleum. At several times in his career, Mr Salomon has acted as an independent
consultant for various oil and gas companies, including New Standard Energy and Pacrim Energy. Mr Salomon
first worked on Indian projects in 1994 while at Ampolex and since that time has maintained connection with the
Indian industry, at various times bidding in India’s exploration and field development rounds and working with
Indian companies as joint venture partners, both in India and internationally.
Mr Mark Bolton
(Chief Financial Officer and Company Secretary)
B Business
Mr Bolton was appointed Chief Financial Officer and Company Secretary in June 2016. He has significant
experience in the resource sector in Australia, having worked as Chief Financial Officer and Company Secretary
for a number of resource companies since 2003. Prior to this, Mr Bolton worked with Ernst & Young as an
Executive Director in Corporate Finance. Mr Bolton has experience in the areas of commercial management and
the financing of resource projects internationally. He also has extensive experience in capital and equity markets
in a number of jurisdictions including ASX and AIM.
Mr Ashish Khare
(Head - India Assets - appointed 8 November 2016)
Bachelor of Engineering (BE in Chemical Engineering, including petroleum management)
Mr Khare was appointed Head - India Assets on 8 November 2016 and is based in Gandhinagar India and has
over 17 years of experience in the petroleum industry. Mr Khare’s area of expertise include upstream oil and gas,
as well as midstream and downstream project implementation and operation management. Mr Khare originally
worked for Oilex as GM Operations & Business Development, and has experience working for various Indian
companies including Cairn India Ltd and Reliance Petroleum.
PRINCIPAL ACTIVITIES
The principal activities of the consolidated entity during the financial year included:
• exploration for oil and gas;
• appraisal and development of oil and gas prospects; and
• production and sale of oil and gas.
There were no significant changes in the nature of the activities during the year.
OILEX LTD
15
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2018
OPERATING RESULTS
The loss after income tax of the consolidated entity for the year ended 30 June 2018 amounted to $4,230,977
(2017: loss of $3,665,192).
Revenue for the period increased due to both Cambay-73 and Cambay-77 being in production, compared to the
prior year when Cambay-77 was shut in after June 2016 until May 2017.
The prior year results included other income being the recovery of $285,558 relating to joint venture receivables
reclassified to development assets in prior years, but subsequently received, as well as prior year exploration
expenses of $936,721 being offset by a reversal of $1,287,170 resulting in a net write back of $350,449. The
current years exploration expenses of $651,993 reflect the Group’s effort to reduce costs.
Administration expenses of $2,101,485 (2017: $2,982,826) also reflect the reduction in costs and staff numbers.
Other expenses include an increase in the provision for doubtful debts of $1,233,898 (2017: $473,112 write back
of the provision following recovery of amounts previously provided for).
Cash and cash equivalents held by the Group as at 30 June 2018 has decreased to $375,507 (30 June 2017:
$3,215,565).
FINANCIAL POSITION
The net assets of the consolidated entity totalled $4,008,210 as at 30 June 2018 (2017: $7,273,611).
DIVIDENDS
No dividend was paid or declared during the year and the directors do not recommend the payment of a dividend.
REVIEW OF OPERATIONS
A review of the operations of the Group during the financial year and the results of those operations are set out in
the Review of Operations on pages 3 to 10 of this report.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
The Review of Operations details those changes that have had a significant effect on the Group.
Other than those matters, there have been no other significant changes in the state of affairs of the Group that
occurred during the financial year.
LIKELY DEVELOPMENTS
Additional comments on expected results on operations of the Group are included in the Review of Operations on
pages 3 to 10.
Further disclosure as to likely developments in the operations of the Group and expected results of those
operations have not been included in this report as, in the opinion of the Board, these would be speculative and as
such, disclosure would not be in the best interests of the Group.
ENVIRONMENTAL ISSUES
The Group’s oil and gas exploration and production activities are subject to environmental regulation under the
legislation of the respective states and countries in which they operate. The majority of the Group’s activities
involve low level disturbance associated with its drilling programmes and production from existing wells. The
Board actively monitors compliance with these regulations and as at the date of this report is not aware of any
material breaches in respect of these regulations
OILEX LTD
16
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2018
SIGNIFICANT EVENTS AFTER BALANCE DATE
Subsequent to year end the Company entered into two loan agreements with existing investors. The loan
agreement on 26 July 2018 secured funding of $300,000 at 5% interest with a one year term plus 83,333,333
options over ordinary shares exercisable at $0.0036, which are subject to shareholder approval at a general
meeting to be held 14 September 2018. The loan agreement on 15 August 2018 secured funding of $30,000 at
5% interest with a one year term plus 8,333,333 options over ordinary shares exercisable at $0.0036.
The loan agreements include the following key undertakings:
• Not to dispose of assets having an aggregate value more than A$1 million
• Not to incur any financial indebtedness more than A$50,000
• Not to incur any aggregate payment or outgoing exceeding A$1 million (except for wages)
Subsequent to year end the Group received $232,390 from GSPC towards outstanding cash calls.
On 29 July, the Company exercised its right to require the transfer of GSPC’s interest in Cambay as GSPC had
not remedied the Event of Default Notice within 60 days. Accordingly, pursuant to the terms of the Joint Operating
Agreement, GSPC shall be deemed to have transferred all of its right, title and beneficial interest in the Cambay
project. The Company has formally requested the Directorate General of Hydrocarbons and the Ministry of
Petroleum and Natural Gas, India to affect the transfer of GSPC’s participating interest (PI) in the Cambay PSC to
Oilex.
GSPC served notice to Oilex of an Order from the High Court of Gujarat directing it not to take any coercive steps
against GSPC until a hearing held on 4 September 2018 (Order). At this hearing the matter was adjourned until 19
September 2018. The Order has been awarded on an interim basis to delay the Company securing a transfer of
the Participating Interest in the Cambay PSC held by GSPC. The Order was obtained on an ex parte basis and
accordingly, the Company was not afforded an opportunity to assert its position. The Company notes that,
notwithstanding the Order, GSPC remains in ongoing material breach of the JOA with the Event of Default (EoD)
remaining in place and Oilex fully intends to enforce its legal and contractual rights.
While the Company is confident in its position, should GSPC fail to comply with the EoD Notice and a legal and or
regulatory challenge occurs, it may be necessary for Oilex to consider other remedial strategies.
On 11 September the Company entered into a debt and equity capital raising to secure funding of approximately
$1,142,200 (£631,980) before expenses.
The equity capital raising of 259,816,694 shares at $0.003434 (0.19 pence) per share for gross proceeds of
$892,196 (£493,652) has been undertaken by Novum Securities Limited (Novum) and is also supported by
existing shareholders. In this regard, the Company has received firm written confirmation from Novum for the
placing of 157,894,737 shares for £300,000 at 0.19 pence per share. In addition, the Company has entered into a
subscription agreement with Republic Investment Management Pte (Republic) Ltd for 101,921,957 shares to raise
£193,652 at 0.19 pence.
Pursuant to the advisory agreement with Novum, the Company will issue 9,473,684 unlisted options exercisable at
0.19 pence on or before three years following the completion with the capital raising.
The Company has also entered into a binding loan agreement with Republic to secure funding of $250,000 at 5%
interest rate with a term to 31 October 2019 plus 60,664,887 options over ordinary shares exercisable at
$0.004121, which are subject to shareholder approval, if required. The key undertakings are the same as then
loan agreement entered into on 26 July 2018.
There were no other significant subsequent events occurring after year end.
OILEX LTD
17
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2018
FINANCIAL POSITION
Capital Structure and Treasury Policy
As at 30 June 2018 the Group had no loan borrowings.
Details of transactions involving ordinary shares during the financial year are as follows:
September 2017 – Exercise of Broker Options
September 2017 – Shares Issued for Consulting Services
December 2017 – Shares Issued for Consulting Services
January 2018 – Tranche One Placement
March 2018 – Non-Executive Director Remuneration
March 2018 – Shares Issued for Consulting Services
May 2018 – Non-Executive Director Remuneration
May 2018 – Placement
Number of Shares
Issued
11,722,222
2,087,044
13,945,833
157,894,737
2,759,844
1,485,000
2,770,800
125,000,000
Value of
Shares $
-
8,348
46,785
-
13,799
7,425
13,854
-
Gross Amount
Raised $
43,146
-
-
600,000
-
-
-
500,000
Totals
317,665,480
90,211
1,143,146
In accordance with the ASX Waiver granted 20 October 2017, the Company advises that the number of
remuneration shares that were issued to directors totalled 5,530,644. This represents 0.28% of the Company’s
issued capital as at 30 June 2018.
At the date of this report, the Company had a total issued capital of 2,001,968,379 ordinary shares and
77,166,666 unlisted options exercisable at Australian Dollar equivalent price of $0.004 per share.
Material Uncertainty Related to Going Concern
The audit opinion for the year ended 30 June 2018 identifies a material uncertainty regarding continuation as a
going concern. The consolidated financial statements have been prepared on a going concern basis, which
contemplates the realisation of assets and settlement of liabilities in the normal course of business. The Group will
require funding in order to continue its exploration activities and progress the Cambay Project.
The funding requirements of the Group are reviewed on a regular basis by the Group’s Chief Financial Officer and
Managing Director and are reported to the Board at each board meeting to ensure the Group is able to meet its
financial obligations as and when they fall due. Until sufficient operating cash flows are generated from its
operations, the Group remains reliant on joint venture contributions, equity raisings or debt funding, as well as
asset divestitures or farmouts to fund its expenditure commitments.
The Company continues to actively develop funding options in order that it can meet its expenditure commitments
and its planned future discretionary expenditure, as well as any contingent liabilities that may arise.
OILEX LTD
18
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2018
DIRECTORS’ INTERESTS
The relevant interest of each director in shares and unlisted options issued by the Company, as notified by the
directors to the ASX in accordance with Section 205G (1) of the Corporations Act 2001, at the date of this report is
as follows:
B Lingo
P Haywood
J Salomon
SHARE OPTIONS
Number of Ordinary Shares
Direct
Indirect
4,456,800
1,073,844
14,987,013
-
-
-
Unissued shares under options
All options were granted in previous financial years. No options have been granted since the end of the previous
financial year.
At the date of this report unissued ordinary shares of the Company under option (with an exercise price) are:
Expiry Date
Unlisted Options
22 May 2020
Total
Number of Shares
Exercise Price
77,166,666
77,166,666
£0.00225 ($0.004)
These options do not entitle the holder to participate in any share issue of the Company or any other body
corporate.
Unissued shares under option that expired during the year
During the financial year, the following unlisted employee and advisor options expired or were cancelled upon
cessation of employment:
Date Lapsed
11 November 2017
22 November 2017
22 December 2017
Total
Number
2,000,000
190,535,385
5,000,000
197,535,385
Exercise Price
$0.25
£0.0036 ($0.006)
$0.10
In addition, 275,000 employee options with an exercise price of $0.35 lapsed unexercised after year end on 5
August 2018.
Shares issued on exercise of unlisted options
During or since the end of the financial year, the Company issued ordinary shares as a result of the exercise of
unlisted options as follows (there were no amounts unpaid on the shares issued):
During the financial year
Since the end of the financial year
Number of Shares
11,722,222
-
Amount Paid on Each Share
£0.00225 ($0.004)
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Group paid a premium in respect of insurance cover for the directors and officers of the Group. The Group
has not included details of the nature of the liabilities covered or the amount of the premium paid in respect of the
directors’ liability and legal expense insurance contracts, as such disclosure is prohibited under the terms of the
insurance contract.
PROCEEDINGS ON BEHALF OF THE COMPANY
No proceedings have been brought on behalf of the Company, nor has any application been made in respect of
the Company under Section 237 of the Corporations Act 2001.
OILEX LTD
19
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2018
NON-AUDIT SERVICES
The Company may decide to employ the Auditor on assignments additional to their statutory audit duties where
the Auditor’s expertise and experience with the Group is important.
The Board has considered the non-audit services provided during the year and is satisfied that the provision of the
non-audit services is compatible with, and did not compromise, the general standard of independence for auditors
imposed by the Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the
auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act
2001 for the following reasons:
• all non-audit services were subject to the corporate governance procedures adopted by the Group and
these have been reviewed by the Board to ensure they do not impact the impartiality and objectivity of
the auditor; and
the non-audit services provided do not undermine the general principles relating to auditor independence
as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or
auditing the auditor’s own work, acting in a management or decision making capacity for the Group,
acting as an advocate for the Group or jointly sharing risks and rewards.
•
Refer note 23 of the Consolidated Financial Statements for details of the amounts paid to the auditor of the Group,
KPMG Australia, and its network firms for audit and non-audit services provided during the year.
ROUNDING OF AMOUNTS
The Company is a company of the kind referred to in ASIC Corporations (Rounding in Financial/Directors’
Reports) Instrument 2016/191 and therefore the amounts contained in this report and in the financial report have
been rounded to the nearest dollar, unless otherwise stated.
LEAD AUDITOR’S INDEPENDENCE DECLARATION
The Lead Auditor’s Independence Declaration for the year ended 30 June 2018 has been received and can be
found on page 29.
OILEX LTD
20
DIRECTORS’ REPORT – REMUNERATION REPORT
FOR THE YEAR ENDED 30 JUNE 2018
REMUNERATION REPORT - AUDITED
The Board has performed the function of the Nomination and Remuneration Committee since June 2016 when the
Board considered that, given the size and composition of the existing Board, that there are no efficiencies to be
gained by having a separate committee. The Board has adopted a Nomination and Remuneration Committee
Charter, which describes the role, composition, functions and responsibilities of the committee. The Nomination
and Remuneration Committee is responsible for the review and recommendation to the Board, of the Company’s
Remuneration Policy, senior executives’ remuneration and incentives, the remuneration framework for directors,
superannuation arrangements, incentive plans and remuneration reporting.
1. PRINCIPLES OF COMPENSATION
Remuneration is referred to as compensation throughout this report. The Remuneration Report explains the
remuneration arrangements for directors and senior executives of Oilex Ltd who have authority and responsibility
for planning, directing and controlling the activities of the Group (key management personnel).
The compensation structures explained below are designed to attract, retain and motivate suitably qualified
candidates, reward the achievement of strategic objectives and achieve the broader outcome of creation of value
for shareholders. The compensation structures take into account:
•
•
•
•
•
•
the capability and experience of the key management personnel;
the ability of key management personnel to control the performance of the relevant segments;
the current downturn of the resources industry;
the Company’s performance including:
•
•
the Group’s earnings; and
the growth in share price and delivering constant returns on shareholder wealth;
exploration success; and
development of projects.
Compensation packages include a mix of fixed compensation and long-term performance-based incentives. In
specific circumstances the Group may also provide short-term cash incentives based upon the achievement of
Company performance hurdles or in recognition of specific achievements.
1.1 Fixed Compensation
Fixed compensation consists of base compensation and employer contributions to superannuation funds.
Compensation levels are reviewed annually through a process that considers individual, sector and overall
performance of the Group. In addition, reviews of available data on oil and gas industry companies provide
comparison figures to ensure the directors’ and senior executives’ compensation is competitive in the market.
In September 2016 the Board resolved to reduce the remuneration of Non-Executive Directors by 10%, the
Managing Director by 22.3% and the Chief Financial Officer by 5% effective from 1 October 2016, and these
reductions remained in place during the year ended 30 June 2018. In addition, further salary reductions of 20%
were implemented, with the introduction of reduced working hours for all staff and the Chief Financial Officer,
effective from 1 October 2017.
Compensation for senior executives is separately reviewed at the time of promotion or initial appointment.
1.2 Performance Linked Compensation
Performance linked compensation includes both short-term and long-term incentives designed to reward key
management personnel for growth in shareholder wealth. The short-term incentive (STI) is an “at risk” bonus
provided in the form of cash or shares, while the long-term incentive plan (LTI) is used to reward performance by
granting options over ordinary shares of the Company.
Short-term incentive bonus
The Group does not utilise short-term incentives on an annual or regular basis, as these are not considered part of
the standard compensation package for key management personnel.
In certain circumstances the Board may, for reasons of retention, motivation or recognition, consider the use of
short-term incentives.
Short-term incentives, if granted, are at the discretion of the Board having regard to the business plans set before
the commencement of the financial year as well as the achievement of performance targets as determined by the
Board. These targets include a combination of key strategic, financial and personal performance measures which
may have a major influence over company performance in the short-term.
OILEX LTD
21
DIRECTORS’ REPORT – REMUNERATION REPORT
FOR THE YEAR ENDED 30 JUNE 2018
1. PRINCIPLES OF COMPENSATION (CONTINUED)
Short-term incentive bonus (continued)
There were no short-term incentives, performance bonuses or shares granted to senior executives or staff during
the year ended 30 June 2018.
Long-term incentive bonus
Shareholders approved the 2017 Employee Incentive Plan (the Plan) at the AGM held 29 November 2017, which
has yet to be implemented.
The Plan is a long-term incentive plan designed to allow the Group to attract and retain talented employees. The
Plan aims to closely align the interests of directors, senior executives, employees and eligible contractors with
those of shareholders and create a link between increasing shareholder value and employee reward.
The Plan permits the Board to grant shares and rights to acquire shares in the Company. Rights granted under the
Plan may be in the form of options with a market based exercise price, or performance rights, or a combination of
these depending upon the Company’s objectives in making the grant.
Vesting conditions may include one or more objectives and/or time-based milestones set at the discretion of the
Board.
Whilst the Company moved certain assets to development in previous financial years, these have been impaired,
and the Company does not generate profits or net operating cash inflows and as such does not pay any dividends,
and consequently remuneration packages are not linked to profit performance. It is the performance of the overall
exploration and appraisal programme and ultimately the share price that largely determines Oilex’s performance.
The Board therefore considered that fixed compensation combined with short-term and long-term incentive
components is the best remuneration structure for achieving the Company’s objectives to the benefit of
shareholders. The table below sets out the closing share price at the end of the current and four previous financial
years.
Share Price (cents)
2018
0.3
2017
0.3
2016
1.0
2015
6.1
2014
11.5
The remuneration of directors, may consist of a cash component as well as an equity component, and is designed
to retain directors of a high calibre, whilst rewarding them for their ongoing commitment and contribution to the
Company on a cost effective basis. The issue of shares, rights or options to directors, subject to shareholder
approval, is judged by the Company, to further align the directors’ interests with that of shareholders, whilst
maintaining the cash position of the Company. The Board does not consider that there are any significant
opportunity costs to the Company or benefits foregone by the Company in issuing shares, rights or options to
directors.
The Company did not issue any long-term incentives to directors, senior executives or staff during the year ended
30 June 2018.
OILEX LTD
22
DIRECTORS’ REPORT – REMUNERATION REPORT
FOR THE YEAR ENDED 30 JUNE 2018
1. PRINCIPLES OF COMPENSATION (CONTINUED)
1.3 Non-Executive Directors
Total compensation for all Non-Executive Directors is based on comparison with external data with reference to
fees paid to Non-Executive Directors of comparable companies. Directors’ fees cover all main Board activities and
membership of committees, if applicable.
The Board resolved to further reduce the remuneration of Non-Executive Directors by 10% effective from 1
October 2016 and these reductions remained in place during the year ended 30 June 2018.
The Chairman’s annual fee including superannuation was set at $70,956 per annum effective from 1 October 2016
and remains unchanged.
The Australian based Non-Executive Directors fees including superannuation was set at $49,275 per annum
effective 1 October 2016 and remains unchanged.
The annual fee for Mr Haywood, the Company’s United Kingdom based Non-Executive Director was set at
£30,000 per annum on commencement in May 2017 and remains unchanged.
At the Annual General Meeting held 29 November 2017 shareholders approved the issue of remuneration shares,
whereby Non-Executive Directors agreed to receive part of their Directors fees paid through the issue of shares in
lieu of cash payments, for the period of 1 November 2017 through to 31 October 2018, in order to conserve the
cash reserves of the Company.
The aggregate maximum fixed annual amount of remuneration available for Non-Executive Directors of $500,000
per annum was approved by Shareholders on 9 November 2011.
In addition to the fixed component, the Company can remunerate any director called upon to perform extra
services or undertake any work for the Company beyond their general duties. This remuneration may either be in
addition to, or in substitution for, the director’s share of remuneration approved by Shareholders.
1.4 Clawback Policy
The Board has adopted the following Clawback Policy applicable from August 2015.
In relation to circumstances where an employee acts fraudulently or dishonestly, or wilfully breaches his or her
duties to the Company or any of its subsidiaries, the Board has adopted a clawback policy in relation to any cash
performance bonuses (including deferred share awards) or LTIs. The Board reserves the right to take action to
reduce, recoup or otherwise adjust an employee’s performance based remuneration in circumstances where in the
opinion of the Board, an employee has acted fraudulently or dishonestly or wilfully breached his or her duties to
the Company or any of its subsidiaries. The Board may:
•
•
•
•
•
•
•
deem any bonus payable, but not yet paid, to be forfeited;
require the repayment by the employee of all or part of any cash bonus received;
determine that any unvested and/or unexercised LTIs will lapse;
require the repayment of all or part of the cash amount received by the employee following vesting
and subsequent sale of a LTI;
reduce future discretionary remuneration to the extent considered necessary or appropriate to take
account of the event that has triggered the clawback;
initiate legal action against the employee; and/or
take any other action the Board considers appropriate.
1.5 Remuneration Consultants
There were no remuneration recommendations made in relation to key management personnel by remuneration
consultants in the financial year ended 30 June 2018.
1.6 Adoption of year ended 30 June 2017 Remuneration Report
At the Annual General Meeting held 29 November 2017 shareholders adopted the 30 June 2017 Remuneration
Report with a clear majority of 138,702,830 votes in favour, being 89.9% of the votes cast.
OILEX LTD
23
2. EMPLOYMENT CONTRACTS
The following table summarises the terms and conditions of contracts between key executives and the Company:
DIRECTORS’ REPORT – REMUNERATION REPORT
FOR THE YEAR ENDED 30 JUNE 2018
Executive
J Salomon
Position
Managing Director
Contract Start Date
18 March 2016
Contract Termination
Date
18 March 2019 (2)
Resignation Notice
Required
3 months
Unvested Options on
Resignation
Forfeited
Termination Notice
Required from the
Company (1)
3 months
M Bolton
Chief Financial Officer
and Company Secretary
3 June 2016
31 May 2019 (3)
3 months
Forfeited
3 months
A Khare
Head of India Assets
1 May 2015
n/a
30 days
Forfeited
30 days
Termination Payment
For termination by the Company, three months’ salary plus any
accrued leave entitlement. If a Material Change Event occurs,
employee may give notice to the Company within one month of
the Material Change Event, terminating the Contract of
Employment and following that effective date, the Company will
pay a Termination Payment equal to six months’ fixed annual
remuneration. The fixed annual remuneration of $350,000 was
reduced by agreement to $271,950 effective from 1 October
2016. Subject to the Corporations Act 2001 and any necessary
approvals required thereunder.
For termination by the Company, three months’ salary plus any
accrued leave entitlement.
For termination by the Company, one months’ salary plus any
accrued leave entitlement.
(1)
(2)
(3)
The Company may terminate the contract immediately if serious misconduct has occurred. In this case the termination payment is only the fixed remuneration earned until the date of termination and any unvested options will immediately be forfeited.
The Managing Director’s contract had an initial term of one year expiring 18 March 2017 and has been extended by mutual agreement between the Company and Mr Salomon to 18 March 2019.
The Chief Financial Officer’s contract had an initial term of one year expiring 31 May 2017 and has been extended by mutual agreement between the Company and Mr Bolton to 31 May 2019.
OILEX LTD
24
3. DIRECTORS’ AND EXECUTIVE OFFICERS’ REMUNERATION
Details of the nature and amount of each major element of remuneration of each director of the Company and other key management personnel of the consolidated entity are:
DIRECTORS’ REPORT – REMUNERATION REPORT
FOR THE YEAR ENDED 30 JUNE 2018
Short-Term
Salary &
Fees
$
STI Cash
Bonus
$
Benefits
(including
Non-
Monetary) (1)
$
Post-Employment
Superannuation
Benefits
$
Other
Long-Term
Benefits (2)
$
Termination
Benefits
$
Share-based
Payments
Shares, Options
and Rights (3)
$
Total
$
Proportion of
Remuneration
Performance
Related (4)
%
Non-Executive Directors
B Lingo (5)
Chairman
P Haywood (6)
Non-Executive Director
M D J Cozijn (7)
Non-Executive Director
Executive Director
J Salomon (8)
Managing Director
Executives
M Bolton (9)
Chief Financial Officer / Company Secretary
A Khare (10)
Head of India Assets
Total
Total
Year
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
31,716
53,175
46,052
4,685
18,750
84,675
223,043
266,176
201,875
240,625
155,788
113,716
677,224
763,052
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
31,716
53,175
46,052
4,685
18,750
84,675
-
-
-
-
-
-
8,259
7,321
231,302
273,497
6,620
5,764
313
832
15,192
13,917
208,495
246,389
156,101
114,548
692,416
776,969
6,156
5,052
-
-
1,781
5,669
21,189
25,286
19,178
22,859
15,616
10,341
63,920
69,207
-
-
-
-
-
-
21,316
16,748
15,489
13,653
-
941
36,805
31,342
-
-
-
-
-
-
-
-
-
-
-
-
-
-
33,084
-
7,144
-
-
-
70,956
58,227
53,196
4,685
20,531
90,344
-
14,000
273,807
329,531
-
-
-
-
40,228
14,000
243,162
282,901
171,717
125,830
833,369
891,518
The Directors of the Company may be Directors of the Company’s subsidiaries. No remuneration is received for directorships of subsidiaries. All key management personnel other than A Khare are employed by the parent entity.
Refer to the following explanatory notes for additional information.
OILEX LTD
-
-
-
-
-
-
-
4%
-
-
-
-
25
DIRECTORS’ REPORT – REMUNERATION REPORT
FOR THE YEAR ENDED 30 JUNE 2018
3. DIRECTORS’ AND EXECUTIVE OFFICERS’ REMUNERATION (CONTINUED)
Notes in Relation to Directors’ and Executive Officers’ Remuneration
(1) Benefits, including non-monetary include relocation costs and related expenses, as well as minor benefits,
such as payments on behalf of employees considered personal, insurance premiums, car parking and any
associated fringe benefits tax.
(2)
Includes, where applicable, accrued employee leave entitlement movements.
(3) The 2018 share-based payment disclosures relate to the issue of remuneration shares (refer point 4 below).
No unlisted options were issued to key management personnel or executives as remuneration during the
year ended 30 June 2017 or 30 June 2018. In accordance with the ASX waiver granted 20 October 2017,
the Company advises that the number of remuneration shares that were issued to directors in the year
ended 30 June 2018 totalled 5,530,644 and the percentage of the Company’s issued capital represented by
these remuneration shares was 0.28%.
(4) Fees for Non-Executive Directors are not linked to the performance of the Group. At the Annual General
Meeting held 29 November 2017 shareholders approved the issue of remuneration shares, whereby Non-
Executive Directors agreed to receive part of their Directors fees paid through the issue of shares in lieu of
cash payments, for the period of 1 November 2017 through to 31 October 2018, in order to conserve the
cash reserves of the Company.
(5) Mr Lingo was appointed a Non-Executive Director on 11 February 2016 and interim Chairman on 23
February 2017 at an annual salary of $70,956 inclusive of statutory superannuation. During 2018 Mr Lingo
received 4,456,800 remuneration shares (refer point 3 above) at a value of $22,284. As at 30 June 2018
remuneration shares not yet issued to Mr Lingo had a value of $10,800. These shares will be issued in the
next financial year.
(6) Mr Haywood was appointed a Non-Executive Director on 29 May 2017. Mr Haywood is based in the United
Kingdom and is paid £30,000 per annum. The amount disclosed is converted into Australian dollars at the
applicable exchange rate at the date of payment. During 2018 Mr Haywood received 1,073,844
remuneration shares (refer point 3 above) at a value of $5,369. As at 30 June 2018 remuneration shares not
yet issued to Mr Haywood had a value of $1,775. These shares will be issued in the next financial year.
(7) Mr Cozijn elected to retire from the Board at the AGM held on 29 November 2017.
(8) Mr Salomon was appointed Managing Director in March 2016 with an initial fixed annual remuneration of
$350,000 per annum, inclusive of statutory superannuation, which was reduced to $271,950 inclusive of
statutory superannuation effective from 1 October 2016, following the implementation of cost reductions by
the Company.
During the current financial year, Mr Salomon, requested and was granted 26.5 days leave without pay,
further reducing his salary by $27,718 inclusive of statutory superannuation.
The 2 million retention rights were issued to Mr Salomon on 19 December 2016 and converted into ordinary
shares on 17 March 2017 upon Mr Salomon’s employment being extended to 18 March 2018.
(9) Mr Bolton was appointed CFO on 3 June 2016, with an initial fixed annual remuneration of $273,750
inclusive of statutory superannuation, which was reduced to $260,063 effective 1 October 2016. The amount
paid in the year ended 30 June 2018 reflects the reduced working hours implemented 1 October 2017 to
facilitate a 20% reduction in salaries.
(10) Mr Khare became key management personnel on 8 November 2016 and is based in India. The amount paid
in the year ended 30 June 2018 reflects the reduced working hours implemented 1 October 2017 to facilitate
a 20% reduction in salaries. Mr Khare’s remuneration has been converted from Indian Rupees at the
average exchange rate for the year.
Analysis of bonuses included in remuneration
There were no short-term incentive cash bonuses awarded as remuneration to key management personnel during
the financial year.
OILEX LTD
26
DIRECTORS’ REPORT – REMUNERATION REPORT
FOR THE YEAR ENDED 30 JUNE 2018
4. EQUITY INSTRUMENTS
All rights and options refer to rights and unlisted options over ordinary shares of the Company, which are
exercisable on a one-for-one basis.
4.1 Rights and Options Over Equity Instruments Granted as Compensation
There were no rights or options over ordinary shares granted as compensation to key management personnel
during the financial year, (2017: 2,000,000 rights granted to Joe Salomon, Managing Director and converted to
ordinary shares on 17 March 2017 upon entering into a subsequent term of employment).
4.2 Rights and Options Over Equity Instruments Granted as Compensation Granted Since Year End
No rights and options over ordinary shares in the Company were granted as compensation to key management
personnel and executives since the end of the financial year.
4.3 Modification of Terms of Equity-Settled Share-based Payment Transactions
No terms of equity-settled share-based payment transactions (including options granted as compensation to key
management personnel) have been altered or modified by the issuing entity during the financial year.
4.4 Exercise of Options Granted as Compensation
During the financial year no shares were issued on the exercise of options previously granted as compensation.
4.5 Details of Equity Incentives Affecting Current and Future Remuneration
There are no rights or options currently held by key management personnel, (2017: 2,000,000 rights granted to
Joe Salomon, Managing Director and converted to ordinary shares on 17 March 2017 upon entering into a
subsequent term of employment).
4.6 Analysis of Movements in Equity Instruments
There were no shares, rights or options over ordinary shares in the Company granted to or exercised by key
management personnel in the current year.
4.7 Options or Rights over Equity Instruments Granted as Compensation
There are no rights or options held by key management personnel, or their related parties as at 1 July 2017
through to 30 June 2018.
5. KEY MANANGEMENT PERSONNEL TRANSACTIONS
5.1 Other Transactions with Key Management Personnel
There were no other transactions with entities associated with key management personnel in the year ended 30
June 2018, (30 June 2017: $25,000 for management services was paid to Diplomat Holdings Pty Ltd, of which Mr
Cozijn is a director and disclosed in the remuneration table).
OILEX LTD
27
DIRECTORS’ REPORT – REMUNERATION REPORT
FOR THE YEAR ENDED 30 JUNE 2018
5. KEY MANANGEMENT PERSONNEL TRANSACTIONS (CONTINUED)
5.2 Movements in Shares
The movement during the financial year in the number of ordinary shares in the Company held, directly, indirectly
or beneficially, by each key management person, including their related parties, is as follows:
J Salomon
B Lingo
P Haywood
M D J Cozijn (3)
M Bolton
A Khare
Held at
1 July 2017
14,987,013
-
-
1,848,218
-
-
Received on
Exercise of
Options
Remuneration
Shares Issued (1)
-
4,456,800
1,073,844
-
-
-
-
-
-
-
-
-
Other
Changes (2)
-
-
-
-
-
-
Held at
30 June 2018
14,987,013
4,456,800
1,073,844
n/a
-
-
(1)
At the AGM held 29 November 2017 shareholders approved the issue of remuneration shares, whereby two Non-Executive Directors
agreed to receive part of their Directors fees paid through the issue of shares in lieu of cash payments, for the period of 1 November
2017 through to 31 October 2018, in order to conserve the cash reserves of the Company.
(2) Other changes represent shares that were granted, purchased or sold during the year.
(3) Mr Cozijn retired from the Board on 29 November 2017.
END OF REMUNERATION REPORT - AUDITED
Mr Brad Lingo
Chairman
Mr Jonathan Salomon
Managing Director
Signed in accordance with a resolution of the Directors.
West Perth
Western Australia
12 September 2018
OILEX LTD
28
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Oilex Ltd
I declare that, to the best of my knowledge and belief, in relation to the audit of Oilex Ltd for the
financial year ended 30 June 2018 there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the Corporations
Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Derek Meates
Partner
Perth
12 September 2018
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under
Professional Standards Legislation.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
Revenue
Cost of sales
Gross loss
Other income
Exploration expenditure
Impairment of exploration and evaluation assets
Administration expense
Share-based payments expense
Other expenses
Results from operating activities
Finance income
Finance costs
Foreign exchange (loss)/gain
Net finance (loss)/income
Loss before income tax
Income tax expense
Loss
Other comprehensive income/(loss)
Items that may be reclassified to profit or loss
Foreign operations - foreign currency translation differences
Other comprehensive income, net of tax
Total comprehensive loss
Earnings per share
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
Note
4(a)
4(b)
4(c)
4(d)
7
4(e)
21
4(f)
4(g)
5
6
6
2018
$
163,562
(199,266)
(35,704)
13,139
(651,993)
-
(2,101,485)
(90,211)
(1,344,293)
(4,210,547)
6,358
(20)
(26,768)
(20,430)
2017
$
91,744
(620,067)
(528,323)
311,601
350,449
(373,780)
(2,982,826)
(8,262)
(382,789)
(3,613,930)
56,071
(63)
(107,270)
(51,262)
(4,230,977)
(3,665,192)
-
(4,230,977)
-
(3,665,192)
(213,981)
(213,981)
15,074
15,074
(4,444,958)
(3,650,118)
(0.24)
(0.24)
(0.28)
(0.28)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the accompanying notes.
OILEX LTD
30
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
Note
11
12
9
7
8
15
13
10
10
10
2018
$
375,507
738,784
115,271
1,303,245
2,532,807
539,793
6,165,255
178,930
6,883,978
9,416,785
779,249
274,651
811,798
1,865,698
3,542,877
3,542,877
5,408,575
4,008,210
2017
$
3,215,565
1,742,283
128,549
1,188,110
6,274,507
518,670
5,927,288
220,954
6,666,912
12,941,419
1,253,787
229,752
955,538
2,439,077
3,228,731
3,228,731
5,667,808
7,273,611
16(a)
16(b)
174,046,036
7,628,101
(177,665,927)
172,866,479
8,093,764
(173,686,632)
4,008,210
7,273,611
Assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Inventories
Total current assets
Exploration and evaluation
Development assets
Property, plant and equipment
Total non-current assets
Total assets
Liabilities
Trade and other payables
Employee benefits
Provisions
Total current liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
The above Consolidated Statement of Financial Position is to be read in conjunction with the accompanying notes.
OILEX LTD
31
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
Attributable to Owners of the Company
Foreign
Currency
Translation
Reserve
$
16(b)
Option Reserve
$
16(b)
Accumulated
Losses
$
Total Equity
$
Issued Capital
$
16(a)
Note
Balance at 30 June 2016
Total comprehensive (loss)/income
Loss
Other comprehensive income
Foreign currency translation differences
Total other comprehensive income
Total comprehensive (loss)/income
Transactions with owners of the Company
Contributions and distributions
Shares issued
Capital raising costs (1)
Managing director special award shares
Shares issued on exercise of listed options
Transfers on forfeited options
Share-based payment transactions
Total transactions with owners of the Company
171,513,760
930,742
7,495,119
(170,610,647)
9,328,974
-
-
-
-
-
-
-
-
-
(3,665,192)
(3,665,192)
15,074
15,074
-
-
15,074
15,074
15,074
(3,665,192)
(3,650,118)
1,836,214
(597,495)
114,000
-
-
-
1,352,719
-
347,774
(114,000)
-
(589,207)
8,262
(347,171)
-
-
-
-
-
-
-
-
-
-
-
589,207
-
589,207
1,836,214
(249,721)
-
-
-
8,262
1,594,755
Balance at 30 June 2017
172,866,479
583,571
7,510,193
(173,686,632)
7,273,611
Balance at 30 June 2017
Total comprehensive (loss)/income
Loss
Other comprehensive income
Foreign currency translation differences
Total other comprehensive (loss)/income
Total comprehensive (loss)/income
Transactions with owners of the Company
Contributions and distributions
Shares issued
Capital raising costs
Managing director special award shares
Shares issued on exercise of listed options
Transfers on forfeited options
Share-based payment transactions
Total transactions with owners of the Company
172,866,479
583,571
7,510,193
(173,686,632)
7,273,611
-
-
-
-
-
-
-
-
-
(4,230,977)
(4,230,977)
(213,981)
(213,981)
-
-
(213,981)
(213,981)
(213,981)
(4,230,977)
(4,444,958)
1,100,000
(53,800)
-
43,146
-
90,211
1,179,557
-
-
-
-
(251,682)
-
(251,682)
-
-
-
-
-
-
-
-
-
-
-
251,682
-
251,682
1,100,000
(53,800)
-
43,146
-
90,211
1,179,557
Balance at 30 June 2018
174,046,036
331,889
7,296,212
(177,665,927)
4,008,210
(1)
Prior period capital raising costs include cash payments and the fair value of options granted to the underwriter.
The above Consolidated Statement of Changes in Equity is to be read in conjunction with the accompanying notes.
OILEX LTD
32
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2018
Note
2018
$
2017
$
Cash flows from operating activities
Cash receipts from customers
Payments to suppliers and employees
Cash outflow from operations
(Payments for)/proceeds from exploration and evaluation expenses
Interest received
Interest paid
Net cash used in operating activities
11
Cash flows from investing activities
Payments for capitalised exploration and evaluation
Proceeds from sale of assets and scrap materials
Acquisition of development assets
Acquisition of property, plant and equipment
Net cash from/(used in) investing activities
Cash flows from financing activities
Proceeds from issue of share capital
Proceeds from exercise of share options
Payment for share issue costs
Net cash from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at 1 July
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at 30 June
16(a)
11
101,733
(2,642,215)
(2,540,482)
(1,419,516)
6,247
(20)
(3,953,771)
-
13,139
-
-
13,139
1,100,000
43,146
(47,415)
1,095,731
(2,844,901)
3,215,565
4,843
375,507
110,997
(4,535,094)
(4,424,097)
980,930
55,852
(63)
(3,387,378)
(1,380)
20,493
(1,499)
(24,275)
(6,661)
1,836,214
-
(249,721)
1,586,493
(1,807,546)
5,158,361
(135,250)
3,215,565
The above Consolidated Statement of Cash Flows is to be read in conjunction with the accompanying notes.
OILEX LTD
33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
ABOUT THIS REPORT - OVERVIEW
NOTE 1 – REPORTING ENTITY
Oilex Ltd (the Company) is a for-profit entity domiciled in Australia. These consolidated financial statements comprise the
Company and its subsidiaries (collectively the Group and individually Group Entities). Oilex Ltd is a company limited by shares
incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange (ASX) and on the Alternative
Investment Market (AIM) of the London Stock Exchange. The Group is primarily involved in the exploration, evaluation,
development and production of hydrocarbons.
NOTE 2 – BASIS OF PREPARATION
(a) Statement of Compliance
The consolidated financial statements are general purpose financial statements which have been prepared in accordance with
Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board (AASB) and the
Corporations Act 2001. The consolidated financial statements comply with International Financial Reporting Standards (IFRS)
adopted by the International Accounting Standards Board (IASB).
The consolidated financial statements were authorised for issue by the Board of Directors on 12 September 2018.
(b) Basis of Measurement
The consolidated financial statements have been prepared on the historical cost basis except for share-based payment
arrangements measured at fair value and the foreign currency translation reserve.
A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-
financial assets and liabilities. Fair values have been determined for some measurement and/or disclosure purposes and
where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific
to that asset or liability.
(c) Going Concern Basis
The Directors believe it is appropriate to prepare the consolidated financial statements on a going concern basis, which
contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary
course of business.
The Group has incurred a loss of $4,444,958, including a $1,233,898 increase in the doubtful debt provision, and had cash
outflows from operating activities of $3,953,771. As at 30 June 2018, the Group’s current assets exceeded current liabilities
by $667,109 and the Group has cash and cash equivalents of $375,507.
On the 26 July 2018, the Group entered into loan agreements with existing investors to secure funding of $330,000 which has
been received after year end. As part of the loan funding, options will be issued to the subscribers, which if exercised, the
proceeds will be applied to the outstanding loan balance on the 26 July 2019. The issue of the options is subject to shareholder
approval within 75 days after drawdown. Failure to secure shareholder approval will require immediate repayment of the loan
principal and accrued interest.
On the 11 September 2018, the Group has entered into subscription and loan agreements for a capital raising to secure
funding of up to A$1.14 million (£630,762).
The share issue will be made to clients of Novum Securities Limited (£300,000) and to existing shareholders including Republic
Investment Management Pte Ltd (£193,652).
The Company anticipates that settlement for the equity placement will occur in two tranches in mid-September and in early
October.
The Company has also entered into a binding loan agreement with Republic Investors Pte Ltd to secure funding of A$250,000.
As part of the loan funding options will be issued to the subscribers, which if exercised, the proceeds will be applied to the
outstanding loan balance on the 1 October 2019. The issue of the options is subject to shareholder approval within 75 days
after drawdown. Failure to secure shareholder approval will require immediate repayment of the loan principal and accrued
interest.
The Group has further reduced its discretionary administration expenditure by implementing further cost reductions.
The Group will require additional funds by early 2019 and further funding within the next twelve months in order to meet
planned expenditures for its projects, ongoing administrative expenses and to progress the Cambay Field drilling programme,
and for any new business opportunities that the Group may pursue. The Group may also require funds in relation to the matter
set out in note 25.
OILEX LTD
34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 2 – BASIS OF PREPARATION (CONTINUED)
(c) Going Concern Basis (Continued)
The Directors believe that the Company will be able to secure sufficient funding to meet the requirements to continue as a
going concern, due to its history of previous capital raisings, through equity capital and debt raisings. The structure and timing
of any capital raising is dependent upon investor support, prevailing capital markets, shareholder participation, oil and gas
prices and the outcome of planned exploration and evaluation activities, which creates uncertainty. In addition, the Group is
working towards securing a new Joint venture partner for the Cambay PSC.
The Directors consider the going concern basis of preparation to be appropriate based on its forecast cash flows for the next
twelve months and that the Group will be in a position to continue to meet its minimum administrative, evaluation and
development expenditures and commitments for at least twelve months from the date of this report.
If further funds are not able to be raised or realised, then it may be necessary for the Group to sell or farmout its exploration
and development assets.
The ability of the Group to achieve its forecast cash flows, particularly the raising of additional funds, represents a material
uncertainty that may cast significant doubt about whether the Group can continue as a going concern, in which case it may
not be able to realise its assets and extinguish its liabilities in the normal course of business and at the stated amounts in
the financial statements.
(d) Currency and Foreign Currency Transactions
These consolidated financial statements are presented in Australian dollars, which is the Company’s functional currency. The
functional currency of the Company’s subsidiaries is United States or Australian dollars.
Transactions in foreign currencies are translated into the respective functional currencies of Group entities at exchange rates
at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the foreign
exchange rate at the reporting date.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated into the
functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items that are measured
in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Foreign
currency differences are generally recognised in profit or loss.
(e) Basis of Consideration
These consolidated financial statements comprise the Company and its subsidiaries (collectively the Group and individually
Group Entities).
i) Subsidiaries
Subsidiaries are entities controlled by the Group. The list of controlled entities is contained in note 17. The financial
statements of subsidiaries are included in the consolidated financial statements from the date that control commences
until the date that control ceases.
ii) Joint Arrangements - Joint Operations
The interests of the Group in unincorporated joint operations and jointly controlled assets are recorded in note 18.
iii) Transactions Eliminated on Consolidation
Intragroup balances and transactions, and any unrealised gains and losses or income and expenses arising from
intragroup transactions, are eliminated in preparing the consolidated financial statements.
OILEX LTD
35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 2 – BASIS OF PREPARATION (CONTINUED)
(f) Key Estimates, Judgements and Assumptions
In preparing these consolidated financial statements, management continually evaluate judgements, estimates and
assumptions that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities,
income and expenses. All judgements, estimates and assumptions made are believed to be reasonable based on the most
current set of circumstances. Actual results may differ from these judgements, estimates and assumptions. Estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
A key assumption underlying the preparation of the financial statements is that the entity will continue as a going concern. An
entity is a going concern when it is considered to be able to pay its debts as and when they fall due, and to continue in
operation, without any intention or necessity to liquidate or otherwise wind up its operations.
Judgement has been required in assessing whether the entity is a going concern as set out in note 2(c).
In the process of applying the Group’s accounting policies, management have made judgements, assumptions and estimation
uncertainties that have a significant risk of resulting in a material adjustment within the next financial year as follows:
Income Tax - refer note 5
Exploration and Evaluation Assets - refer note 7
Development Assets - refer note 8
Provisions - refer note 10
Trade receivables - refer note 12
(g) Rounding of Amounts
The Company is a company of the kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191 and therefore the amounts contained in this report and in the financial report have been rounded to the nearest
dollar, unless otherwise stated.
(h) Accounting Policies
Significant accounting policies that are relevant to the understanding of the consolidated financial statements have been
provided throughout the notes to the financial statements. Accounting policies that are determined to be non-significant have
not been included in the consolidated financial statements.
The accounting policies disclosed have been applied consistently to all periods presented in these consolidated financial
statements and have been applied consistently by Group entities, except for the following changes in accounting policies.
• AASB 2016-5 Amendments to Australian Accounting Standards - Classification and Measurement of Share-based
Payment Transactions. The standard makes amendments to AASB 2 Share-based Payment. The amendments
address the accounting for the effects of vesting and non-vesting conditions and the accounting for a modification
to the terms and conditions of a share-based payment that changes the classification of the transaction from cash-
settled to equity-settled.
The adoption of new and amended Standards had no impact on the financial position or the consolidated financial statements
of the Group.
The Group has not elected to early adopt any other new or amended AASB’s that are issued but not yet effective (refer note
27).
OILEX LTD
36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
OILEX LTD’S RESULTS FOR THE YEAR
This section focuses on the results and performance of the Group.
NOTE 3 – OPERATING SEGMENTS
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and
incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. The
Group has identified its operating segments based upon the internal management reports that are reviewed and used by the
executive management team in assessing performance and that are used to allocate the Group’s resources. The operating
segments identified by management are based on the geographical location of the business. Each segment has responsible
officers that are accountable to the Managing Director (the Group’s chief operating decision maker). The operating results of
all operating segments are regularly reviewed by the Group’s Managing Director to make decisions about resources to be
allocated to the segment and assess its performance and for which discrete financial information is available. Segment results
that are reported to the Managing Director include items directly attributable to a segment as well as those that can be allocated
on a reasonable basis.
The Group’s executive management team evaluates the financial performance of the Group and its segments principally with
reference to revenues, production costs, expenditure on exploration evaluation and development costs.
The Group undertakes the exploration, development and production of hydrocarbons and its revenue is from the sale of oil
and gas. Information reported to the Group’s chief operating decision maker is on a geographical basis.
Financing requirements, finance income and expenses are managed at a Group level.
Corporate items include administration costs comprising personnel costs, head office occupancy costs and investor and
registry costs. It may also include expenses incurred by non-operating segments, such as new ventures and those undergoing
relinquishment. Assets and liabilities not allocated to operating segments and disclosed are corporate, and mostly comprise
cash, plant and equipment, receivables as well as accruals for head office liabilities.
Major Customer
The Group’s most significant customers are Enertech Fuel Solutions Pvt Limited with gas sales representing 61% of the
Group’s total revenues (2017: 89%) and Indian Oil Corporation Limited, in its capacity as nominee of the Government of India,
with oil sales representing 39% of the Group’s total revenues (2017: 11%).
Revenue
Revenue is recognised when the significant risks and rewards of ownership have transferred to the buyer. Risks and rewards
of ownership are considered passed to the buyer at the time of delivery of the product to the customer. Revenues from test
production are accounted for as revenue.
Expenses
Impairment – refer notes 7 and 8
Doubtful debts – refer note 12
Depreciation – refer note 15
Amortisation – refer note 8
Employee benefits – refer note 10
Leases – refer note 24
OILEX LTD
37
NOTE 3 – OPERATING SEGMENTS (CONTINUED)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
India
Australia
JPDA (1)
Indonesia
Corporate (2)
Consolidated
2018
$
2017
$
2018
$
2017
$
2018
$
2017
$
2018
$
2017
$
2018
$
2017
$
2018
$
2017
$
Revenue
External revenue
Cost of sales
Production costs
Amortisation of development assets
Movement in oil stocks inventory
Total cost of sales
Gross loss
Exploration expenditure expensed
Impairment of exploration and expenditure
Impairment of development assets
Depreciation
Share-based payments
Other income
Other expenses
Reportable segment profit/(loss) before income tax
163,562
91,744
(259,799)
(637,921)
(3,263)
63,796
(199,266)
(35,704)
(553,369)
-
-
(24,514)
-
13,139
(1,341,374)
(1,941,822)
(944)
18,798
(620,067)
(528,323)
517,625
-
-
(30,488)
-
20,019
479,442
458,275
Net finance income
Foreign exchange (loss)/gain
Income tax expense
Loss for the period
Segment assets
Segment liabilities
8,653,049
3,917,537
11,191,203
3,868,800
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7
-
-
-
-
-
-
-
(62,780)
(373,780)
-
-
-
-
-
(436,560)
-
-
-
-
-
-
-
-
-
-
-
-
(23,557)
(23,557)
-
-
-
-
-
-
-
-
-
-
-
-
(840,455)
(840,455)
-
-
-
-
-
-
-
-
-
-
-
-
(6,737)
(6,737)
-
-
-
-
-
-
-
-
-
-
-
-
(220,433)
(220,433)
-
-
-
-
-
-
(98,624)
-
-
(18,488)
(90,211)
-
(2,031,108)
(2,238,431)
-
-
-
-
-
-
(104,396)
-
-
(26,849)
(8,262)
291,582
(2,726,832)
(2,574,757)
163,562
91,744
(259,799)
(637,921)
(3,263)
63,796
(199,266)
(35,704)
(651,993)
-
-
(43,002)
(90,211)
13,139
(3,402,776)
(4,210,547)
6,338
(26,768)
-
(4,230,977)
(944)
18,798
(620,067)
(528,323)
350,449
(373,780)
-
(57,337)
(8,262)
311,601
(3,308,278)
(3,613,930)
56,008
(107,270)
-
(3,665,192)
215
-
16,809
815,900
6,791
784,834
-
297,022
-
302,418
746,920
378,116
1,743,210
711,756
9,416,785
5,408,575
12,941,419
5,667,808
There were no significant inter-segment transactions during the year.
(1) Joint Petroleum Development Area.
(2) Corporate represents a reconciliation of reportable segment revenues, profit or loss, assets and liabilities to the consolidated figure.
OILEX LTD
38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 4 – REVENUE AND EXPENSES
Loss from ordinary activities before income tax has been determined after the following revenues and expenses:
Note
(a) Revenue
Oil sales
Gas sales
(b) Cost of Sales
Production costs
Amortisation of development assets
Movement in oil stocks inventory
(c) Other Income
Recovery of recharges
Oilex Oman Limited liquidation recovery
Profit on disposal of other assets
(d) Exploration Expenditure
Exploration expense
Write back joint venture partners share of costs previously provided for
3
(e) Administration Expenses
Employee benefits expense
Redundancy benefits
Administration expense
Corporate advisory fee
Zeta Resources Limited settlement and legal costs
Insurance recovery
(f) Other Expenses
Depreciation expense
Doubtful debts provision
Doubtful debts provision reversal
Oil sale debts written off
Well abandonment adjustment/(expense)
Termination penalty provision JPDA 06-103 PSC
Loss on disposal of fixed assets
(g) Foreign Exchange (Loss)/Gain - net
Foreign exchange (loss)/gain- realised
Foreign exchange (loss)/gain - unrealised
15
12
12
10
10 & 25
2018
$
63,337
100,225
163,562
(259,799)
(3,263)
63,796
(199,266)
-
-
13,139
13,139
(651,993)
-
(651,993)
(925,660)
(20,320)
(1,155,505)
-
-
-
(2,101,485)
(43,002)
(1,233,898)
-
(63,590)
-
-
(3,803)
(1,344,293)
(19,858)
(6,910)
(26,768)
OILEX LTD
2017
$
9,749
81,995
91,744
(637,921)
(944)
18,798
(620,067)
285,558
6,024
20,019
311,601
(936,721)
1,287,170
350,449
(1,241,565)
(191,519)
(1,633,611)
(600,000)
(9,531)
693,400
(2,982,826)
(57,337)
-
473,112
-
-
(795,229)
(3,335)
(382,789)
15,782
(123,052)
(107,270)
39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 5 – INCOME TAX EXPENSE
Numerical reconciliation between tax expense and pre-tax accounting loss:
Loss before income tax
Income tax using the domestic corporation tax rate of 27.5% (2017: 27.5%)
Effect of tax rate in foreign jurisdictions
Non-deductible expenses
Share-based payments
Foreign expenditure non-deductible
Other non-deductible expenses
Non-assessable income
Recovery of fully impaired development asset receivable
Unrecognised deferred tax assets generated during the year and not
brought to account at balance date as realisation is not regarded as probable
Income tax expense
Tax losses utilised not previously brought to account
Income tax expense for the period
2018
$
(4,230,977)
(1,163,519)
(401,298)
24,808
1,404,174
200,478
-
64,643
-
64,643
(64,643)
-
2017
$
(3,665,192)
(1,007,928)
(372,567)
2,272
1,785,848
309,554
(76,275)
640,904
-
640,904
(640,904)
-
Tax Assets and Liabilities
During the year ended 30 June 2018, $64,643 of tax losses were recognised and were offset against the current tax liability
resulting in nil tax assets and liabilities.
Unrecognised deferred tax assets not brought to account at balance date as
realisation is not regarded as probable – temporary differences
Other
Losses available for offset against future taxable income
Deferred tax asset not brought to account
2018
$
2017
$
26,397,805
16,204,468
42,602,273
25,495,372
15,286,865
40,782,237
The deductible temporary differences and tax losses do not expire under current tax legislation.
The deferred tax asset not brought to account for the 2018 financial year will only be realised if:
•
It is probable that future assessable income will be derived of a nature and of an amount sufficient to enable the
benefit to be realised;
• The conditions for deductibility imposed by the tax legislation continue to be complied with; and
• The companies are able to meet the continuity of ownership and/or continuity of business tests.
The foreign component of the deferred tax asset not brought to account for the 2018 financial year will only be realised if the
Group derives future assessable income of a nature and of an amount sufficient to enable the benefit to be realised and the
Group continues to comply with the deductibility conditions imposed by the Income Tax Act 1961 (India) and there is no
change in income tax legislation adversely affecting the utilisation of the benefits.
OILEX LTD
40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 5 – INCOME TAX EXPENSE (CONTINUED)
Tax Consolidation
In accordance with tax consolidation legislation the Company, as the head entity of the Australian tax-consolidated group,
has assumed the deferred tax assets initially recognised by wholly owned members of the tax-consolidated group with effect
from 1 July 2004. Total tax losses of the Australian tax-consolidated group, available for offset against future taxable income
are $6,003,749 (2017: $6,518,031).
Accounting Policy
Income tax expense comprises current and deferred tax. Income tax is recognised in profit or loss except to the extent that
it relates to a business combination, or items recognised directly in equity, or in other comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted
at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets,
and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but
they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised
simultaneously.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for differences
relating to investments in subsidiaries to the extent that they probably will not reverse in the foreseeable future. Deferred tax
is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the
laws that have been enacted or substantively enacted by the reporting date.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which
the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and reduced to the extent
that it is no longer probable that the related tax benefit will be realised.
Key Estimates and Assumptions
The application of the Group’s accounting policy for recognition of tax losses requires management to make certain estimates
and assumptions as to future events and circumstances, including the assessment of whether economic quantities of
resources have been found, or alternatively, that the sale of the respective areas of interest will be achieved. Any such
estimates and assumptions may change as new information becomes available. A deferred tax asset is only recognised for
unused losses if it is probable that future taxable profits will be available to utilise those losses.
In determining the amount of current and deferred tax the Group considers the impact of uncertain tax positions and whether
additional taxes and interest may be due. The Group believes that its accruals for tax liabilities are adequate for all open tax
years based on its assessment of many factors, including interpretations of tax law and prior experience. This assessment
relies on estimates and assumptions and may involve a series of judgements about future events. New information may
become available that causes the Group to change its judgement regarding the adequacy of existing tax liabilities, such
changes to tax liabilities will impact tax expense in the period that such a determination is made.
OILEX LTD
41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 6 – LOSS PER SHARE
(a) Basic Loss Per Share
Loss used in calculating earnings per share
2018
$
2017
$
Loss for the period attributable to ordinary shareholders
4,230,977
3,665,192
Weighted average number of ordinary shares
Issued ordinary shares at 1 July
Effect of shares issued
Effect of share options exercised
Weighted average number of ordinary shares at 30 June
(b) Diluted Loss Per Share
2018
Number
2017
Number
1,684,302,899
93,452,655
9,634,703
1,787,390,257
1,180,426,999
115,920,908
-
1,296,347,907
The Company’s potential ordinary shares, being its options granted, are not considered dilutive as the conversion of these
instruments would result in a decrease in the net loss per share.
(c) Subsequent Transactions
The Company has entered into two loan agreements with existing investors since year end. The loan agreement on 26 July
2018 secured funding of $300,000 at 5% interest with a one year term plus 83,333,333 options over ordinary shares
exercisable at $0.0036, which are subject to shareholder approval at a general meeting to be held 14 September 2018. The
loan agreement on 15 August 2018 secured funding of $30,000 at 5% interest with a one year term plus 8,333,333 options
over ordinary shares exercisable at $0.0036.
On 11 September the Company entered into a debt and equity capital raising to secure funding of approximately $1,142,200
(£631,980) before expenses.
The equity capital raising of 259,816,694 shares at A$0.003434 (0.19 pence) per share for gross proceeds of $892,196
(£493,655) has been undertaken by Novum Securities Limited (Novum) and is also supported by existing shareholders. In
this regard, the Company has received firm written confirmation from Novum for the placing of 157,894,737 shares for
£300,000 at 0.19 pence per share. In addition, the Company has entered into a subscription agreement with Republic
Investment Management Pte Ltd (Republic) for 101,921,957 shares to raise £193,652 at 0.19 pence.
Pursuant to the advisory agreement with Novum, the Company will issue 9,473,684 unlisted options exercisable at 0.19
pence on or before three years following the completion with the capital raising.
The Company has also entered into a binding loan agreement with Republic to secure funding of $250,000 at 5% interest
rate with a term to 31 October 2019 plus 60,664,887 options over ordinary shares exercisable at $0.004121, which are
subject to shareholder approval, if required.
Accounting Policy
Basic earnings per share is calculated by dividing net profit or loss attributable to ordinary shareholders of the parent entity
by the weighted average number of ordinary shares outstanding during the year, adjusted for any bonus element.
Diluted earnings per share is determined by adjusting the profit attributable to ordinary shareholders and weighted average
number of shares outstanding for the dilutive effect of potential ordinary shares, which may comprise outstanding options,
warrants and their equivalents.
OILEX LTD
42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
ASSETS AND LIABILITIES
This section provides information on the assets employed to develop value for shareholders and the liabilities incurred as a
result.
NOTE 7 – EXPLORATION AND EVALUATION
Balance at 1 July
Expenditure capitalised
Impairment
Effect of movements in foreign exchange rates
Balance at 30 June
2018
$
518,670
-
-
21,123
539,793
2017
$
909,593
1,380
(373,780)
(18,523)
518,670
As at 30 June 2018, the balance of exploration and evaluation assets relates to the Cambay Field, which is currently under
evaluation, and there was no impairment of this asset, (2017: $373,780 was impaired in relation to STP-EPA-0131 in the
Canning Basin).
The Cambay Field has minimal production that is sold to a third party.
Accounting Policy
Accounting for exploration and evaluation expenditure is assessed separately for each area of interest. Exploration and
evaluation expenditure in respect of each area of interest is accounted for under the successful efforts method. An area of
interest is an individual geological area which is considered to constitute a favourable environment for the presence of
hydrocarbon resources or has been proven to contain such resources.
Expenditure incurred prior to securing legal rights to explore an area is expensed. Exploration licence acquisition costs
relating to established oil and gas exploration areas are capitalised.
The costs of drilling exploration wells are initially capitalised pending the results of the well. Costs are expensed where the
well does not result in a successful discovery.
All other exploration and evaluation expenditure, including general administration costs, geological and geophysical costs
and new venture expenditure is expensed as incurred, except where:
• The expenditure relates to an exploration discovery for which, at balance date, an assessment of the existence
or otherwise of economically recoverable reserves is not yet complete; or
• The expenditure relates to an area of interest under which it is expected that the expenditure will be recouped
through successful development and exploitation, or by sale.
When an oil or gas field has been approved for commercial development, the accumulated exploration and evaluation costs
are first tested for impairment and then reclassified as development assets.
Impairment of Exploration and Evaluation Expenditure
The carrying value of exploration and evaluation assets are assessed at each reporting date if any of the following indicators
of impairment exist:
• The exploration licence term in the specific area of interest has expired during the reporting period or will expire
in the near future and it is not anticipated that this will be renewed;
• Expenditure on further exploration and evaluation of specific areas is not budgeted or planned;
• Exploration for and evaluation of oil and gas assets in the specific area has not lead to the discovery of potentially
commercial reserves; or
• Sufficient data exists to indicate that the carrying amount of the asset is unlikely to be recovered in full, either by
development or sale.
Key Estimates and Assumptions
The application of the Group’s accounting policy for exploration and evaluation expenditure necessarily requires
management to make certain estimates and assumptions as to future events and circumstances, particularly the assessment
of whether economic quantities of resources have been found, or alternatively, that the sale of the respective areas of interest
will be achieved. Critical to this assessment are estimates and assumptions as to contingent and prospective resources, the
timing of expected cash flows, exchange rates, commodity prices and future capital requirements. These estimates and
assumptions may change as new information becomes available. If, after having capitalised expenditure under this policy, it
is determined that the expenditure is unlikely to be recovered by future exploitation or sale, then the relevant capitalised
amount will be written off to the consolidated statement of profit or loss and other comprehensive income.
OILEX LTD
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 8 – DEVELOPMENT ASSETS
Cost
Opening balance
Acquisition of development assets
Effect of movements in foreign exchange rates
Closing balance
Amortisation and Impairment Losses
Opening balance
Impairment of development assets
Amortisation charge for the year
Effect of movements in foreign exchange rates
Closing balance
Carrying Amounts
Opening balance
Closing balance
2018
$
15,631,750
-
603,507
16,235,257
9,704,462
-
3,263
362,277
10,070,002
2017
$
16,161,010
1,499
(530,759)
15,631,750
10,022,006
-
943
(318,487)
9,704,462
5,927,288
6,139,004
6,165,255
5,927,288
Cambay Field Development Assets
There was no impairment of the Cambay Field development assets during the year ended 30 June 2018 (2017: Nil).
Development assets are reviewed at each reporting date to determine whether there is any indication of impairment or
reversal of impairment. Indicators of impairment can include changes in: market conditions, future oil and gas prices and
future costs, extension of the Cambay Production Sharing Contract and the status of the disputes arising from the issue of
the event of default notice to GSPC.
No indicators of impairment were identified as at 30 June 2018 based on a review of key assumptions.
OILEX LTD
44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 8 – DEVELOPMENT ASSETS (CONTINUED)
Accounting Policy
Development expenditure includes past exploration and evaluation costs, pre-production development costs, development
drilling, development studies and other subsurface expenditure pertaining to that area of interest. Costs related to surface
plant and equipment and any associated land and buildings are accounted for as property, plant and equipment.
The definition of an area of interest for development expenditure is narrowed from the exploration permit for exploration and
evaluation expenditure to the individual geological area where the presence of an oil or natural gas field exists, and in most
cases will comprise an individual oil or gas field.
Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until production
commences. When production commences, carried forward development costs are amortised on a units of production basis
over the life of economically recoverable reserves.
Impairment of Development Assets
The carrying value of development assets are assessed on a cash generating unit (CGU) basis at each reporting date to
determine whether there is any indication of impairment or reversal of impairment. Indicators of impairment can include
changes in market conditions, future oil and gas prices and future costs. Where an indicator of impairment exists, the assets
recoverable amount is estimated.
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount.
A CGU is the smallest identifiable asset group that generates cash flows that are largely independent from other assets and
groups. The CGU is the Cambay Field, India. Impairment losses are recognised in profit or loss.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell (FVLCS). As
a market price is not available, FVLCS is determined by using a discounted cash flow approach. In assessing FVLCS, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. Valuation principals that apply when determining
FVLCS are that future events that would affect expected cash flows are included in the calculation of FVLCS.
Impairment losses are reversed when there is an indication that the loss has decreased or no longer exists and there has
been a change in the estimate used to determine the recoverable amount. Such estimates include beneficial changes in
reserves and future costs, or material increases in selling prices. 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 amortisation, if no
impairment loss had been recognised.
Key Estimates and Assumptions
Significant judgements and assumptions are required by management in estimating the present value of future cash flows
particularly in the assessment of long life development assets. It should be noted that discounted cash flow calculations are
subject to variability in key assumptions including, but not limited to, the expected life of the relevant area of interest, long-
term oil and gas prices, currency exchange rates, pre-tax discount rates, number of future wells, production profiles and
operating costs.
An adverse change in one or more of the assumptions used to estimate FVLCS could result in an adjustment to the
development asset's recoverable amount.
Development costs are amortised on a units of production basis over the life of economically recoverable reserves, so as to
write off costs in proportion to the depletion of the estimated reserves. The estimation of reserves requires interpretation of
geological and geophysical data. The geological and economic factors which form the basis of reserve estimates may change
over reporting periods. There are a number of uncertainties in estimating resources and reserves, and these estimates and
assumptions may change as new information becomes available.
OILEX LTD
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 9 – INVENTORIES
Oil on hand - net realisable value
Drilling inventory - net realisable value
2018
$
94,096
1,209,149
1,303,245
2017
$
26,112
1,161,998
1,188,110
There were no reversal of writedowns to net realisable value.
Accounting Policy
Inventories comprising materials and consumables and petroleum products are measured at the lower of cost and net
realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated
costs of completion and selling expenses.
NOTE 10 – PROVISIONS
Site Restoration, Well Abandonment and Other Provisions
Balance at 1 July
Provision adjustments during the year - Termination (refer note 25)
Effect of movements in exchange rates
Balance at 30 June
Current - Termination
Non-current - Restoration
2018
$
4,184,269
-
170,406
4,354,675
811,798
3,542,877
4,354,675
2017
$
3,526,179
795,229
(137,139)
4,184,269
955,538
3,228,731
4,184,269
Current - Employee Entitlements
274,651
229,752
Accounting Policy
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, and it
is probable that an outflow of economic benefits will be required to settle the obligation and when a reliable estimate can be
made of the amount of the obligation.
Provisions are made for site rehabilitation of an oil and gas field on an incremental basis during the life of the field (which
includes the field plant closure phase). Provisions include reclamation, plant closure, waste site closure and monitoring
activities. These costs have been determined on the basis of current costs, current legal requirements and current
technology. At each reporting date the rehabilitation provision is re-measured to reflect any changes in the timing or amounts
of the costs to be incurred. Any such changes are dealt with on a prospective basis.
Short-term employee benefits for wages, salaries and fringe benefits are measured on an undiscounted basis and expensed
as the related service is provided. A liability is recognised based on remuneration wage and salary rates that the Group
expects to pay as at the reporting date as a result of past service provided by the employee, if the obligation can be measured
reliably.
The Group’s net obligation in respect of long-term service benefits is the amount of future benefit that employees have earned
in return for their service up to the reporting date. The obligation is calculated using expected future increases in wage and
salary rates including related on-costs and expected settlement dates, and is discounted using the high quality corporate
bond rate at the balance sheet date which have maturity dates approximating to the terms of the Group’s obligations.
Key Estimates and Assumptions
In relation to rehabilitation provisions the Group estimates the future removal costs of onshore oil and gas production facilities,
wells and pipeline at the time of installation of the assets. In most instances, removal of assets occurs many years into the
future. This requires judgemental assumptions regarding removal date, future environmental legislation, the extent of
reclamation activities required, the engineering methodology for estimating cost, future removal technologies in determining
the removal cost, and discount rates to determine the present value of these cash flows.
OILEX LTD
46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 11 – CASH AND CASH EQUIVALENTS
Cash at bank and on hand
2018
$
2017
$
375,507
3,215,565
The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in note
20.
Accounting Policy
Cash and cash equivalents comprise bank balances, call deposits, cash in transit and short-term deposits with an original
maturity of three months or less from the acquisition date that are subject to an insignificant risk of changes in their fair value,
and are used by the Group in the management of its short-term commitments.
Reconciliation of Cash Flows from Operating Activities
Net loss for the period
Amortisation of development assets
Depreciation
Provision for doubtful debts/(net reversal)
Loss on disposal of assets
Profit on sale of scrap
Impairment of exploration and evaluation assets
Termination penalty provision
Equity settled share-based payments
Unrealised foreign exchange (gain)/loss
2018
$
2017
$
(4,230,977)
3,263
43,002
1,297,488
3,803
(13,139)
-
-
90,211
(39,134)
(3,665,192)
944
57,337
(473,112)
3,335
(20,019)
373,780
795,229
8,262
51,550
Operating Loss Before Changes in Working Capital and Provisions
(2,845,483)
(2,867,886)
Movement in trade and other payables
Movement in prepayments
Movement in trade and other receivables
Movement in provisions
Movement in inventory
Movement in employee benefits
Net Cash Used in Operating Activities
(480,924)
13,278
(570,406)
(1,034)
(115,135)
45,933
(3,953,771)
(1,652,794)
(49,108)
1,258,725
(21,211)
50,443
(105,547)
(3,387,378)
OILEX LTD
47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 12 – TRADE AND OTHER RECEIVABLES
Current
Allocation of receivables
Joint venture receivables
Other receivables
Joint venture receivables
Joint venture receivables
Provision for doubtful debts
Other receivables
Corporate receivables
Provision for doubtful debts
2018
$
2017
$
446,600
292,184
738,784
1,377,795
364,488
1,742,283
5,835,042
(5,388,442)
446,600
5,323,861
(3,946,066)
1,377,795
401,445
(109,261)
292,184
473,749
(109,261)
364,488
Joint venture receivables include the Group’s share of outstanding cash calls and recharges owing from the joint venture
partners, as well as other minor receivables.
The Group considers that there is evidence of impairment if any of the following indicators are present; financial difficulties
of the debtor, probability that the debtor will dispute amounts owing and default or delinquency in payment (more than one
year old). Whilst the Group has been in ongoing discussions with its joint venture partner Gujarat State Petroleum
Corporation, for repayment of disputed and other amounts owing, in line with identified impairment indicators, an assessment
has been made of the recoverable balance as at 30 June 2018. Each receivable has been assessed individually for recovery,
and those deemed to have a low chance of recovery have been fully provided for in the current year. Accordingly, the Indian
cash calls receivable have been fully provided for, other than the amount received subsequent to year end of $232,390.
The Group is continuing discussions in order to resolve the outstanding issues and recover the outstanding amounts.
The carrying value of trade and other receivables is considered to approximate its fair value due to the assessment of
recoverability.
Details of the Group’s credit risk are disclosed in note 20(b).
Movement in provision for doubtful debts
Balance at 1 July
Provisions (made)/reversed during the year
Effect of movements in exchange rates
Balance at 30 June
Allocation of provision
Joint venture receivables
Other receivables
2018
$
2017
$
(4,055,327)
(1,233,898)
(208,478)
(5,497,703)
(4,666,694)
473,112
138,255
(4,055,327)
(5,388,442)
(109,261)
(5,497,703)
(3,946,066)
(109,261)
(4,055,327)
OILEX LTD
48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 12 – TRADE AND OTHER RECEIVABLES (CONTINUED)
Accounting Policy
The Group initially recognises loans, receivables and deposits on the date that they are originated. All other financial assets
(including assets designated at fair value through profit or loss) are recognised initially on the trade date at which the Group
becomes a party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only
when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and
settle the liability simultaneously.
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such
assets are recognised initially at fair value and subsequently measured at amortised cost, less any impairment losses.
A provision for doubtful debts is recognised in profit or loss when there is objective evidence of non-recovery or an impairment
indicator exists. If receivables are subsequently recovered, or an event causes the amount of impairment loss to decrease,
the amounts are reversed through profit or loss.
Impairment of Receivables
In assessing collective impairment, the Group uses historical trends of the probability of default, timing of recoveries and the
amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are
such that the actual losses are likely to be greater or less than suggested by historical trends. The Group considers that there
is evidence of impairment if any of the following indicators are present; financial difficulties of the debtor, probability that the
debtor will dispute amounts owing and default or delinquency in payment (more than one year old).
Key Estimates and Assumptions
The Group considers evidence of impairment for receivables at both a specific asset and collective level. All individually
significant receivables are assessed for specific impairment. All individually significant receivables found not to be specifically
impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Receivables that
are not individually significant are collectively assessed for impairment by grouping together receivables with similar risk
characteristics. This requires judgemental assumptions regarding recoverability. Changes in these assumptions impact the
recoverable amount of the asset.
OILEX LTD
49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 13 – TRADE AND OTHER PAYABLES
Trade creditors
Accruals
2018
$
297,640
481,609
779,249
2017
$
593,978
659,809
1,253,787
The Company’s assessment in note 12, of the recoverability of outstanding cash call amounts owing from its joint venture
partner (GSPC) has resulted in an additional impairment and consequently the Company is of the opinion that the Cambay
Joint Venture will be unable to meet its third party liabilities, without financial support from the Company as Operator, due to
non-payment of outstanding cash calls by the Joint Venture partner. As a result, the Group has accrued an additional
$107,267 as at 30 June 2018 (2017: $49,800) to cover Cambay and Bhandut Joint Venture third party liabilities.
The carrying value of trade and other accruals is considered to approximate its fair value due to the short nature of these
financial liabilities.
Accounting Policy
Trade and other payables are recorded at the value of the invoices received and subsequently measured at amortised cost
and are non-interest bearing. The liabilities are for goods and services provided before year end, that are unpaid and arise
when the Group has an obligation to make future payments in respect of these goods and services. The amounts are
unsecured. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when
and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the
asset and settle the liability simultaneously.
NOTE 14 – EXPENDITURE COMMITMENTS
Exploration Expenditure Commitments
In order to maintain rights of tenure to exploration permits, the Group is required to perform exploration work to meet the
minimum expenditure requirements specified by various state and national governments. These obligations are subject to
renegotiation when application for an exploration permit is made and at other times. These obligations are not provided for
in the financial report. The expenditure commitments are currently estimated to be payable as follows:
Within one year
One year or later and no later than five years
2018
$
2017
$
-
-
-
-
-
-
There are no minimum exploration work commitments in the Cambay and Bhandut Production Sharing Contracts.
Subsequent to year end the Company withdrew its applications in relation to the Canning Basin Exploration Permit
Applications.
When obligations expire, are re-negotiated or cease to be contractually or practically enforceable, they are no longer
considered to be a commitment.
Further expenditure commitments for subsequent permit periods are contingent upon future exploration results. These cannot
be estimated and are subject to renegotiation upon expiry of the existing exploration leases.
Capital Expenditure Commitments
The Group had no capital commitments as at 30 June 2018 (2017: Nil).
OILEX LTD
50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 15 – PROPERTY, PLANT AND EQUIPMENT
Motor
Vehicles
$
Plant and
Equipment
$
Office
Furniture
$
Cost
Balance at 1 July 2016
Acquisitions
Disposals
Currency translation differences
Balance at 30 June 2017
Balance at 1 July 2017
Acquisitions
Disposals
Currency translation differences
Balance at 30 June 2018
Depreciation and Impairment Losses
Balance at 1 July 2016
Depreciation charge for the year
Disposals
Currency translation differences
Balance at 30 June 2017
Balance at 1 July 2017
Depreciation charge for the year
Disposals
Currency translation differences
Balance at 30 June 2018
Carrying amounts
At 1 July 2016
At 30 June 2017
At 1 July 2017
At 30 June 2018
Accounting Policy
9,734
-
-
(336)
9,398
9,398
-
-
383
9,781
9,031
180
-
(315)
8,896
8,896
132
-
369
9,397
703
502
502
384
1,210,458
24,275
(325,637)
(15,787)
893,309
893,309
-
(23,339)
18,151
888,121
993,757
51,567
(321,827)
(10,686)
712,811
712,811
38,244
(21,025)
13,749
743,779
216,701
180,498
180,498
144,342
148,579
-
-
(2,647)
145,932
145,932
-
(4,565)
3,009
144,376
102,583
5,590
-
(2,195)
105,978
105,978
4,626
(3,076)
2,644
110,172
45,996
39,954
39,954
34,204
Total
$
1,368,771
24,275
(325,637)
(18,770)
1,048,639
1,048,639
-
(27,904)
21,543
1,042,278
1,105,371
57,337
(321,827)
(13,196)
827,685
827,685
43,002
(24,101)
16,762
863,348
263,400
220,954
220,954
178,930
Property, plant and equipment is measured at cost less accumulated depreciation and any accumulated impairment losses.
The cost of self-constructed assets includes the cost of materials, direct labour, the initial estimate, where relevant, of the
costs of dismantling and removing the items and restoring the site on which they are located and an appropriate proportion
of overheads.
Gains and losses on disposal are determined by comparing the proceeds from disposal with the carrying amount of property,
plant and equipment and are recognised net in the consolidated statement of profit or loss and other comprehensive income.
Depreciation is calculated using the reducing balance method over the estimated useful life of the assets, with the exception
of software which is depreciated at prime cost. The estimated useful lives in the current and comparative periods are as
follows:
• Motor vehicles
• Plant and equipment
• Office furniture
Depreciation methods, useful lives and residual values are reviewed and adjusted if appropriate, at each financial year end.
4 to 7 years
2 to 7 years
2 to 10 years
Impairment of Property, Plant and Equipment
The carrying value of assets are assessed at each reporting date to determine whether there is any indication of impairment.
If any such indication exists then the assets recoverable amount is estimated.
OILEX LTD
51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
EQUITY, GROUP STRUCTURE AND RISK MANAGEMENT
This section addresses the Group’s capital structure, the Group structure and related party transactions, as well as including
information on how the Group manages various financial risks.
NOTE 16 – ISSUED CAPITAL AND RESERVES
The reconciliation of the movement in capital and reserves for the consolidated entity can be found in the consolidated
statement of changes in equity.
(a) Issued Capital
Shares
2018
Number
of Shares
2018
$
Issued Capital
2017
Number
of Shares
2017
$
Issued Capital
On issue 1 July - fully paid
Issue of share capital
Shares issued for cash
Shares issued for non-cash
Shares issued for cash (1)
Shares issued for cash (2)
Shares issued for non-cash (2)
Shares issued for non-cash (3)
Exercise of unlisted options (3)
Shares issued for non-cash (4)
Shares issued for non-cash (5)
Capital raising costs
Underwriter and sub-underwriter options
Balance at the end of the period - fully paid
1,684,302,899
172,866,479
1,180,426,999
171,513,760
-
-
157,894,737
125,000,000
2,770,800
2,087,044
11,722,222
13,945,833
4,244,844
2,001,968,379
-
-
600,000
500,000
13,854
8,348
43,146
46,785
21,224
(53,800)
-
174,046,036
488,888,887
14,987,013
-
-
-
-
-
-
-
1,684,302,899
1,836,214
114,000
-
-
-
-
-
-
-
(249,721)
(347,774)
172,866,479
Refer notes following for additional information and note 21 for details of unlisted options.
The issue of shares issued in lieu of non-executive director income was approved by shareholders at the AGM held 29
November 2017 and are issued at a price based upon the VWAP for the 10 trading days prior to issue. In accordance with
the ASX Waiver granted 20 October 2017, the Company advises that the number of remuneration shares that were issued
to directors totalled 5,530,644 in the year ended 30 June 2018, which represented 0.28% of the Company’s issued capital
as at 30 June 2018.
Additional information of the issue of ordinary shares and unlisted options:
On 12 December 2017, the Company announced a two tranche conditional placement to raise approximately $2.35 million.
The issue of the Tranche Two shares was subject to shareholder approval, as well as the successful extension of the Cambay
PSC by the Government of India, on or before 31 March 2018. This date was subsequently varied by agreement to 31 July
2018. The Company on 30 July 2018 announced that it no longer considered that the conditions precedent for the $1.75
million Tranche Two shares were capable of being met and that Tranche Two would no longer be completed.
(1) On 29 January 2018, the Company issued 157,894,737 new ordinary shares under Tranche One of the Placement at
$0.0038 per share.
(2) On 15 May 2018, the Company issued 125,000,000 new ordinary shares at an issue price of $0.004, as announced 30
April 2018. In addition, the Company issued 2,770,800 shares at $0.005 in lieu of non-executive director income.
(3) On 4 September 2017, the Company issued 11,722,222 shares upon exercise of the unlisted 0.225 pence broker options
which expire 22 May 2020, together with 2,087,044 shares issued as consideration for consulting services. Shares were
issued at $0.004 per share.
(4) On 12 December 2017, the Company issued 13,333,333 shares at 0.19 pence ($44,335) plus 612,500 shares at $0.004
per shares as consideration for consulting services.
(5) On 1 March 2018, the Company issued 2,759,844 shares at $0.005 in lieu of non-executive director income, together
with 1,485,000 shares issued as consideration for consulting services. Shares were issued at $0.005 per share.
The Company does not have authorised capital or par value in respect of its issued shares. The holders of ordinary shares
are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the
Company.
OILEX LTD
52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 16 – ISSUED CAPITAL AND RESERVES (CONTINUED)
Accounting Policy
Ordinary shares are classified as equity. Transaction costs directly attributable to the issue of ordinary shares and share
options are recognised as a deduction from equity, net of any tax effects.
(b) Reserves
Foreign Currency Translation Reserve
Option Reserve
Foreign Currency Translation Reserve (FCTR)
2018
$
7,296,212
331,889
7,628,101
2017
$
7,510,193
583,571
8,093,764
The foreign currency translation reserve comprises all foreign currency differences arising from the translation of the financial
statements of foreign operations from their functional currency to Australian dollars.
The assets and liabilities of foreign operations are translated to Australian dollars at exchange rates at the reporting date.
The income and expenses of foreign operations are translated to Australian dollars at exchange rates at the dates of the
transactions.
Foreign currency differences are recognised in other comprehensive income and accumulated in the FCTR. When the
settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable
future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment
in a foreign operation and are recognised in other comprehensive income and are presented within equity in the FCTR.
When a foreign operation is disposed of in its entirety or partially such that control, significant influence or joint control is lost,
the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the
gain or loss on disposal.
Option Reserve
The option reserve recognises the fair value of options issued but not exercised. Upon the exercise, lapsing or expiry of
options, the balance of the option reserve relating to those options is transferred to accumulated losses.
NOTE 17 – CONSOLIDATED ENTITIES
Parent Entity
Oilex Ltd
Subsidiaries
Independence Oil and Gas Limited
Admiral Oil and Gas Holdings Pty Ltd
Admiral Oil and Gas (106) Pty Ltd
Admiral Oil and Gas (107) Pty Ltd
Admiral Oil Pty Ltd
Oilex (JPDA 06-103) Ltd
Merlion Energy Resources Private Limited (1)
Oilex N.L. Holdings (India) Limited
Oilex N.L. Holdings (India) Limited
Oilex Oman Limited (2)
Oilex (West Kampar) Limited
Country of
Incorporation
Ownership Interest %
2018
2017
Australia
Australia
Australia
Australia
Australia
Australia
Australia
India
Cyprus
Cyprus
Cyprus
Cyprus
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
N/A
100
100
100
100
(1) Merlion Energy Resources Private Limited was incorporated on 24 January 2018.
(2) Oilex Oman Limited, a dormant company registered in Cyprus, was placed under voluntary liquidation and a liquidator
appointed on 19 June 2014. The Cyprus Department of Registrar of Companies and Official Receiver certified that the
company was dissolved on 6 July 2017.
Accounting Policy
The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and
has the ability to affect those returns through its power over the entity.
OILEX LTD
53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 18 – JOINT ARRANGEMENTS
The Group’s interests in joint arrangements as at 30 June 2018 are detailed below. Principal activities are oil and gas
exploration, evaluation, development and production.
(a) Joint Operations Interest
Permit
OFFSHORE
JPDA 06-103 (1)
ONSHORE
Cambay Field
Bhandut Field
Sabarmati Field (2)
West Kampar Block
Timor Leste and Australia (JPDA)
India (Cambay Basin)
India (Cambay Basin)
India (Cambay Basin)
Indonesia (Central Sumatra)
2018
%
10.0
45.0
40.0
40.0
67.5 (3)
2017
%
10.0
45.0
40.0
40.0
67.5
(1) The JPDA 06-103 Production Sharing Contract was terminated 15 July 2015. The Joint Operating Agreement between the
Joint Venture participants is still in effect.
(2) The Sabarmati Production Sharing Contract was cancelled 10 August 2016. The Joint Operating Agreement between the
Joint Venture participants is still in effect.
(3) Oilex (West Kampar) Limited is entitled to have assigned an additional 22.5% to its holding of 45% through exercise of its
rights under a Power of Attorney granted by PT Sumatera Persada Energi (SPE), following the failure by SPE to repay funds
due. The assignment request had been provided to BPMigas (now SKK Migas), the Indonesian Government regulator, and
had not been approved or rejected. Subsequent to the year ended 30 June 2018, the West Kampar Contract Area Production
Sharing Contract was terminated 15 August 2018.
(b) Joint Operations
The aggregate of the Group’s interests in all joint operations is as follows:
Current assets
Cash and cash equivalents
Trade and other receivables (1)
Inventory
Prepayments
Total current assets
Non-current assets
Exploration and evaluation
Development assets
Property, plant and equipment
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Total liabilities
Net assets
2018
$
2017
$
12,510
1,846,349
1,209,149
36,699
3,104,707
93,418
2,481,886
1,161,997
39,868
3,777,169
539,792
6,165,255
127,145
6,832,192
518,670
5,927,288
146,877
6,592,835
9,936,899
10,370,004
(193,534)
(193,534)
(205,508)
(205,508)
9,743,365
10,164,496
(1) Trade and other receivables of the joint operations is before any impairment and provisions.
OILEX LTD
54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 18 – JOINT ARRANGEMENTS (CONTINUED)
(c) Joint Operations Commitments
In order to maintain rights of tenure to exploration permits, the Group is required to perform exploration work to meet the
minimum expenditure requirements specified by various state and national governments. These obligations are subject to
renegotiation when application for an exploration permit is made and at other times. These obligations are not provided for
in the financial report.
The aggregate of the Group’s commitments attributable to joint operations is as follows:
Exploration expenditure commitments
2018
$
2017
$
-
-
There are no minimum exploration work commitments in the Cambay and Bhandut Production Sharing Contracts.
Accounting Policy
Joint arrangements are arrangements of which two or more parties have joint control. Joint control is the contractual agreed
sharing of control of the arrangements which exists only when decisions about the relevant activities required unanimous
consent of the parties sharing control. Joint arrangements are classified as either a joint operation or joint venture, based on
the rights and obligations arising from the contractual obligations between the parties to the arrangement.
To the extent the joint arrangement provides the Group with rights to the individual assets and obligations arising from the
joint arrangement, the arrangement is classified as a joint operation and as such, the Group recognises its:
• Assets, including its share of any assets held jointly;
• Liabilities, including its share of any liabilities incurred jointly;
• Revenue from the sale of its share of the output arising from the joint operation;
• Share of revenue from the sale of the output by the joint operation; and
• Expenses, including its share of any expenses incurred jointly.
The Group’s interest in unincorporated entities are classified as joint operations.
Joint Ventures provides the Group a right to the net assets of the venture and are accounted for using the equity method.
The Group currently has no joint venture arrangements.
OILEX LTD
55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 19 – RELATED PARTIES
Identity of Related Parties
The Group has a related party relationship with its subsidiaries (refer note 17), joint operations (refer note 18) and with its
key management personnel.
Key Management Personnel
The following were key management personnel of the Group at any time during the financial year and unless otherwise
indicated were key management personnel for the entire period:
Non-Executive Directors
Brad Lingo
Paul Haywood
Max Cozijn
Position
Non-Executive Chairman
Non-Executive Director
Non-Executive Director (until 29 November 2017)
Executive Director
Joe Salomon
Position
Managing Director
Executives
Mark Bolton
Ashish Khare
Position
Chief Financial Officer and Company Secretary
Head - India Assets
Key Management Personnel Compensation
Key management personnel compensation comprised the following:
Short-term employee benefits
Other long-term benefits
Non-monetary benefits
Post-employment benefits
Termination benefits
Share-based payments
Equity compensation benefits – shares issued in lieu of salary
2018
$
677,224
36,805
15,192
63,920
-
-
40,228
833,369
2017
$
931,703
40,464
15,389
88,632
174,523
14,000
-
1,264,711
Individual Directors’ and Executives’ Compensation Disclosures
Information regarding individual Directors’ and Executives’ compensation is provided in the Remuneration Report section of
the Directors’ Report. Apart from the details disclosed in this note, or in the Remuneration Report, no Director has entered
into a material contract with the Company since the end of the previous financial year and there were no material contracts
involving Directors’ interests existing at year end.
Key Management Personnel Transactions with the Company or its Controlled Entities
A number of key management personnel, or their related parties, hold positions in other companies that result in them having
control or significant influence over these companies.
There were no transactions in the current year between the Group and entities controlled by key management personnel. A
number of these companies transacted with the Group during the prior year. The terms and conditions of these transactions
were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions
with non-key management personnel related entities on an arm’s length basis.
OILEX LTD
56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 19 – RELATED PARTIES (CONTINUED)
Key Management Personnel Transactions with the Company or its Controlled Entities (continued)
The aggregate value of these transactions and outstanding balances related to key management personnel and entities over
which they have control or significant influence were as follows:
Key Management
Personnel
Transaction
Note
Transactions Value
Balance Outstanding
2018
$
2017
$
2018
$
2017
$
Mr M Cozijn
Management services
1
-
25,000
-
-
(1) Oilex used the services of Diplomat Holdings Pty Ltd, of which Mr Cozijn is a director. Rates charged were as agreed
by the Oilex Board and have been included in the remuneration of key management personnel.
NOTE 20 – FINANCIAL INSTRUMENTS
(a) Financial Risk Management
The Group has exposure to the following risks arising from financial instruments.
i) Credit Risk
ii) Liquidity Risk
iii) Market Risk
This note presents qualitative and quantitative information in relation to the Group’s exposure to each of the above risks and
the management of capital.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework and
the development and monitoring of risk management policies. Risk management policies are established to identify and
analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.
Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s
activities.
(b) Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Group’s receivables from customers and joint ventures.
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics
of the Group’s customer base, including the default risk of the industry and country in which customers operate, has less of
an influence on credit risk.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset. The maximum exposure
to credit risk at the reporting date was:
Cash and cash equivalents
Trade and other receivables - current
2018
$
375,507
738,784
1,114,291
2017
$
3,215,565
1,742,283
4,957,848
OILEX LTD
57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 20 – FINANCIAL INSTRUMENTS (CONTINUED)
(b) Credit Risk (continued)
The Group’s cash and cash equivalents are held with major banks and financial institutions.
The Group’s gross share of outstanding cash calls and recharges owing from joint venture partners and joint operations is
$5,768,614 (2017: $5,188,896).
The Group’s most significant customer is Enertech Fuel Solutions Pvt Limited (Enertech) with gas sales representing 61%
of the Group’s total revenues (2017: 89%). Enertech accounts for $5,841 of trade receivables as at June 2018 (2017: $7,130),
whilst the Indian Oil Corporation Limited, in its capacity as nominee of the Government of India, accounts for $66,439 of
trade receivables (2017: $131,142).
Impairment Losses
The aging of the trade and other receivables at the reporting date was:
Consolidated Gross
Not past due
Past due 0-30 days
Past due 31-120 days
Past due 121 days to one year
More than one year
Provision for doubtful debts
Trade and other receivables net of provision
2018
$
2017
$
294,709
73,246
278,346
449,771
5,140,415
6,236,487
(5,497,703)
738,784
246,543
77,420
48,523
-
5,425,124
5,797,610
(4,055,327)
1,742,283
Receivable balances are monitored on an ongoing basis. The Group may at times have a high credit risk exposure to its joint
venture partners arising from outstanding cash calls.
The Group considers that there is evidence of impairment if any of the following indicators are present: financial difficulties
of the debtor, probability that the debtor will dispute amounts owing and default or delinquency in payment (more than one
year old). The Group has been in discussions with its joint venture partner for repayment of disputed and other amounts
owing. As at 30 June 2018, each receivable has been assessed individually for recovery and those deemed to have a low
chance of recovery, have been fully provided for in the current year. The Group is continuing discussions in order to resolve
the outstanding issues and recover payment of the outstanding amounts, however due to the age of the receivables amounts,
cannot be certain of the timing or of full recovery.
(c) Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach
to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due
without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group manages liquidity by monitoring present cash flows and ensuring that adequate cash reserves, financing facilities
and equity raisings are undertaken to ensure that the Group can meet its obligations.
The table below analyses the Group’s financial liabilities by relevant maturity groupings based on the remaining period at the
balance date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash
flows.
Carrying
Amount
Total
Contractual Cash Flows
2 – 12
2 months or
months
less
$
$
$
$
Greater
than
1 year
$
779,249
779,249
779,249
779,249
779,249
779,249
1,253,787
1,253,787
1,253,787
1,253,787
1,253,787
1,253,787
-
-
-
-
-
-
-
-
58
2018
Trade and other payables
Total financial liabilities
2017
Trade and other payables
Total financial liabilities
OILEX LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 20 – FINANCIAL INSTRUMENTS (CONTINUED)
(d) Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will
affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is
to manage and control market risk exposures within acceptable parameters, while optimising the return.
i) Currency risk
An entity is exposed to currency risk on sales and purchases that are denominated in a currency other than the functional
currency of the entity. The currencies giving rise to this risk are the United States dollar, Indian rupee and British pound.
The amounts in the table below represent the Australian dollar equivalent of balances in the Oilex Group Entities that are
held in a currency other than the functional currency in which they are measured in that Group Entity. The exposure to
currency risk at balance date was as follows:
In equivalents of Australian
dollar
Cash and cash equivalents
Trade and other receivables (1)
Trade and other payables
Net balance sheet exposure
USD
$
136,584
110,799
(3,958)
243,425
2018
INR
$
30,392
3,053,753
(188,863)
2,895,282
GBP
$
15,928
-
(13,176)
2,752
2017
INR
$
USD
$
GBP
$
587,568
16,739
(1,170)
603,137
1,754,444
2,783,076
(328,008)
4,209,512
691,048
-
(5,860)
685,188
(1) Trade and other receivables of the joint operation is before any impairment and provisions.
The following significant exchange rates applied during the year:
Average Rate
AUD
USD
INR
GBP
2018
0.7753
50.4574
0.5762
2017
0.7545
50.1493
0.5951
Reporting Date Spot Rate
2017
2018
0.7692
0.7391
49.7672
50.7392
0.5913
0.5634
Foreign Currency Sensitivity
A 10% strengthening/weakening of the Australian dollar against the following currencies at 30 June would have (increased)/
decreased the loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates,
remain constant. The analysis is performed on the same basis for 2017.
10% Strengthening
United States dollars (USD)
Indian rupees (INR)
British pounds (GBP)
10% Weakening
United States dollars (USD)
Indian rupees (INR)
British pounds (GBP)
2018
$
27,047
321,698
306
2017
$
67,037
467,724
76,132
(22,129)
(263,207)
(250)
(54,848)
(382,683)
(62,290)
OILEX LTD
59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 20 – FINANCIAL INSTRUMENTS (CONTINUED)
(d) Market Risk (continued)
ii)
Interest rate risk
At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:
Fixed Rate Instruments
Financial assets (short-term deposits included in trade receivables)
Variable Rate Instruments
Financial assets (cash at bank)
Carrying Amount
2018
$
2017
$
149,004
149,004
375,507
3,215,565
Fair Value Sensitivity Analysis for Fixed Rate Instruments
The Group does not account for any fixed rate financial instruments at fair value through profit or loss so a change in interest
rates at the reporting date would not affect profit or loss or equity.
Cash Flow Sensitivity Analysis for Variable Rate Instruments
An increase of 100 basis points in interest rates at the reporting date would have decreased the loss by the amounts shown
below. A decrease of 100 basis points in interest rates at the reporting date would have had the opposite impact by the
same amount. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The
analysis is performed on the same basis for 2017.
Impact on profit or loss
iii) Other market price risks
2018
$
3,755
2017
$
32,156
The Group had no financial instruments with exposure to other price risks at June 2018 or June 2017.
Equity Price Sensitivity
The Group had no exposure to equity price sensitivity at June 2018 or June 2017.
(e) Capital Risk Management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to
sustain future development of the business. The capital structure of the Group consists of equity attributable to equity holders
of the Company, comprising issued capital, reserves and accumulated losses as disclosed in the consolidated statement of
changes in equity.
(f) Fair Values of Financial Assets and Liabilities
The net fair values of financial assets and liabilities of the Group approximate their carrying values. The Group has no off-
balance sheet financial instruments and no amounts are offset.
OILEX LTD
60
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
OTHER DISCLOSURES
This section provides information on items which are required to be disclosed to comply with Australian Accounting
Standards, other regulatory pronouncements and the Corporations Act 2001.
NOTE 21 – SHARE-BASED PAYMENTS
Share-based Payments Expense Shares
The following equity settled share-based payment transactions have been recognised in the Consolidated Statement of Profit
or Loss and Other Comprehensive Income:
Shares and rights - equity settled
Non-Executive Directors – remuneration shares (1)
Managing Director retention rights (2)
Technical and administrative contractors
Total share-based payments expense
2018
$
27,653
-
62,558
90,211
2017
$
-
8,262
-
8,262
(1) At the Annual General Meeting held 29 November 2017 shareholders approved the issue of remuneration shares,
whereby Non-Executive Directors agreed to receive part of their Directors fees paid through the issue of shares in lieu
of cash payments, for the period of 1 November 2017 through to 31 October 2018, in order to conserve the cash reserves
of the Company. In accordance with the ASX waiver granted 20 October 2017, the Company advises that the number
of remuneration shares that were issued to directors in the year ended 30 June 2018 totalled 5,530,644 and the
percentage of the Company’s issued capital represented by these remuneration shares was 0.28%.
As at 30 June 2018 accrued non-executive director fees, being remuneration shares not yet issued totalled $12,575.
(2) 2,000,000 retention rights converted to ordinary shares on 17 March 2017 at a conversion price of $0.007.
Unlisted Options
At 30 June 2018, the terms and conditions of unlisted options granted by the Company to directors, employees, financiers
and advisors are as follows, whereby all options are settled by physical delivery of shares:
Grant Date
Number of
Instruments
Vesting Conditions
Contractual Life of Options
Key Management Personnel
Not applicable
Other Employees
5 August 2014
Financiers and Advisors
22 May 2017
275,000
One year of service
77,166,666
Vest immediately
4 years
3 years
Total Options
77,441,666
Accounting Policy
Options allow directors, employees and advisors to acquire shares of the Company. The fair value of options granted to
employees is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at
grant date and spread over the period during which the employees become unconditionally entitled to the options. The fair
value of the options granted is measured using the Black-Scholes Model, taking into account the terms and conditions upon
which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share
options that vest except where forfeiture is only due to share prices not achieving the threshold for vesting.
Options may also be provided as part of consideration for services by brokers and underwriters. Any unlisted options issued
to the Company’s AIM broker are treated as a capital raising cost.
When the Group grants options over its shares to employees of subsidiaries, the fair value at grant date is recognised as an
increase in the investments in subsidiaries, with a corresponding increase in equity over the vesting period of the grant.
OILEX LTD
61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 21 – SHARE-BASED PAYMENTS (CONTINUED)
The number and weighted average exercise prices (WAEP) of unlisted share options are as follows:
Outstanding at 1 July
Forfeited during the year
Lapsed during the year
Exercised during the year
Granted during the year
Granted to Broker
Attached to Tranche 2 shares
Outstanding at 30 June
WAEP
2018
$0.009
-
$0.011
$0.004
-
-
$0.005
Number
2018
286,974,273
-
(197,810,385)
(11,722,222)
-
-
77,441,666
WAEP
2017
$0.193
$0.296
$0.150
-
$0.006
$0.006
$0.009
Number
2017
20,250,000
(5,700,000)
(7,000,000)
-
88,888,888
190,535,385
286,974,273
Exercisable at 30 June
$0.005
77,441,666
$0.009
286,974,273
The unlisted options outstanding at 30 June 2018 have an exercise price in the range of $0.004 to $0.35 (2017: $0.004 to
$0.35) and a weighted average remaining contractual life of 1.9 years (2017: 1.2 years).
The weighted average share price at the date of exercise for share options exercised during the financial year was $0.004
(2017: no unlisted options exercised).
The fair value of unlisted options is calculated at the date of grant using the Black-Scholes Model. Expected volatility is
estimated by considering historical volatility of the Company’s share price over the period commensurate with the expected
term. No unlisted share options were granted during the year ended 30 June 2018.
The following factors and assumptions were used in the prior year to determine the fair value of options of the 88,888,888
broker options on grant date:
2017
Grant Date
Vesting Date Expiry Date
Fair Value
Per
Option
Exercise
Price
Price of
Shares on
Grant
Date
Expected
Volatility
Risk Free
Interest
Rate
Dividend
Yield
22 May 2017
22 May 2017
22 May 2020
$0.004
$0.004
$0.005
107.10%
1.50%
-
The fair value of the 190,535,385 options and tranche two shares issued to shareholders in May 2017 was the amount paid
and has been included in issued capital.
OILEX LTD
62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 22 – PARENT ENTITY DISCLOSURE
As at, and throughout, the financial year ended 30 June 2018 the parent entity of the Group was Oilex Ltd.
Result of the parent entity
Loss for the year
Other comprehensive income/(loss)
Total comprehensive (loss)/income for the year
Financial position of the parent entity at year end
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Total equity of the parent entity comprising of:
Issued capital
Option reserve
Foreign currency translation reserve
Accumulated losses
Total equity
2018
$
(4,758,767)
(110,414)
(4,869,181)
1,545,758
6,162,360
596,118
2,684,874
2017
$
(2,452,635)
(145,399)
(2,598,034)
5,483,257
9,960,325
1,192,420
3,023,934
3,477,486
6,936,391
174,046,036
331,889
4,909,084
(175,809,523)
3,477,486
172,866,479
583,571
5,019,497
(171,533,156)
6,936,391
Parent Entity Contingencies
The Directors are of the opinion that provisions are not required in respect of the following matters, as it is not probable that
a future sacrifice of economic benefits will be required or the amount is not capable of reliable measurement.
Oilex Ltd has issued guarantees in relation to the lease of corporate offices, as well as corporate credit cards. The bank
guarantees amount to $149,004. An equal amount is held in cash and cash equivalents as security by the banks.
Parent entity capital commitments for acquisition of property plant and equipment
Oilex Ltd had no capital commitments as at 30 June 2018 (2017: Nil).
Parent entity guarantee (in respect of debts of its subsidiaries)
Oilex Ltd on 7 November 2006 issued a Deed of Parent Company Performance Guarantee in relation to the Production
Sharing Contract entered into with the Timor Sea Designated Authority dated 15 November 2006. Refer note 25.
Oilex Ltd has issued no other guarantees in respect of debts of its subsidiaries.
OILEX LTD
63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 23 – AUDITORS’ REMUNERATION
Audit and review services
Auditors of the Company – KPMG
Audit and review of financial reports (KPMG Australia)
Audit of Joint Operations operated by Oilex Ltd
Operator proportion only (KPMG Australia)
Audit and review of financial reports (KPMG related practices)
Other Auditors
Audit and review of financial reports (India Statutory)
Other services
Auditors of the Company – KPMG
Taxation compliance services (KPMG Australia)
Taxation compliance services (KPMG related practices)
Other Auditors
Taxation compliance services (India Statutory)
NOTE 24 – OPERATING LEASES
Leases as Lessee
Non-cancellable operating lease rentals are payable as follows:
Within one year
One year or later and no later than five years
2018
$
82,000
419
16,252
98,671
5,543
104,214
11,723
6,449
18,172
7,094
25,266
2017
$
160,319
400
26,699
187,418
5,801
193,219
18,300
6,627
24,927
7,735
32,662
2018
$
86,738
4,711
91,449
2017
$
124,413
19,104
143,517
The Group leases its head office premises at Ground Floor, 44a Kings Park Road, West Perth under an operating lease. The
current lease was extended for a year from 1 June 2018.
The Group leases office premises in Gandhinagar (India) under an operating lease. The current lease has a three year term,
commencing 16 October 2016.
Operating lease rentals expensed during the financial year
130,981
145,560
Accounting Policy
Operating leases payments are recognised in profit or loss on a straight line basis over the term of the lease. Lease incentives
received are recognised as an integral part of the total lease expense and are allocated over the lease term.
2018
$
2017
$
OILEX LTD
64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 25 – PROVISIONS AND CONTINGENT LIABILITIES
Contingent Liabilities at Reporting Date
The Directors are of the opinion that provisions (except as noted below) are not required in respect of these matters, as it is
not probable that a future sacrifice of economic benefits will be required or the amount is not capable of reliable measurement.
Guarantees
Oilex Ltd has issued guarantees in relation to the lease of the current corporate office in West Perth, as well as corporate
credit cards. The bank guarantees amount to $149,004.
Termination Penalty
In November 2006 Oilex (JPDA 06-103) Ltd (Operator) and the Joint Venture parties entered into a Production Sharing
Contract (PSC) with the Designated Authority for JPDA 06-103 and the PSC was signed in January 2007 (effective date 15
January 2007).
On 12 July 2013, the Operator, on behalf of the Joint Venture participants, submitted to the Autoridade Nacional do Petroleo
e Minerais (ANPM), a request to terminate the PSC by mutual agreement in accordance with its terms and without penalty
or claim due to the ongoing uncertainty in relation to security of tenure. This request required the consent of the Timor Sea
Designated Authority.
On 15 May 2015, the ANPM issued a Notice of Intention to Terminate and on 15 July 2015 issued a Notice of Termination
and Demand for Payment (Notice). The demand for payment (100%) of the penalty claim of US$17,018,790 is the ANPM’s
estimate of the cost of exploration activities not undertaken in 2013, as well as certain local content obligations set out in the
PSC. In addition, the ANPM asserts that the Joint Venture partners are liable to interest on the monetary claim at a rate of
5.2% compounded monthly.
The Joint Venture has made overpayments in the PSC work programme and considers certain excess expenditure should
be included as part of any financial assessment incorporated within the termination process. Notwithstanding the Group’s
belief that no penalty is applicable, both parties have made a number of offers to settle the matter, none of which have yet
resulted in settlement of the matter. In view of ongoing activities to resolve this matter, the Group recorded a provision of
US$600,000 in the year ended 30 June 2017, being the Group’s 10% share of a proposed settlement of the JPDA matter,
refer note 10. The provision and or settlement is subject to variation dependent upon ongoing negotiations with the ANPM.
In the event the parties are unable to reach an amicable settlement, any party may refer the matter to arbitration. The
obligations and liabilities of the Joint Venture participants under the PSC are joint and several.
The equity interest of the Joint Venture participants are:
Oilex (JPDA 06-103) Ltd (Operator)
Pan Pacific Petroleum (JPDA 06-103) Pty Ltd
Japan Energy E&P JPDA Pty Ltd
GSPC (JPDA) Limited
Videocon JPDA 06-103 Limited
Bharat PetroResources JPDA Ltd
Total
10%
15%
15%
20%
20%
20%
100%
OILEX LTD
65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 26 – SUBSEQUENT EVENTS
Subsequent to year end the Company entered into two loan agreements with existing investors. The loan agreement on 26
July 2018 secured funding of $300,000 at 5% interest with a one year term plus 83,333,333 options over ordinary shares
exercisable at $0.0036, which are subject to shareholder approval at a general meeting to be held 14 September 2018. The
loan agreement on 15 August 2018 secured funding of $30,000 at 5% interest with a one year term plus 8,333,333 options
over ordinary shares exercisable at $0.0036
The loan agreements include the following key undertakings:
• Not to dispose of assets having an aggregate value more than A$1 million
• Not to incur any financial indebtedness more than A$50,000
• Not to incur any aggregate payment or outgoing exceeding A$1 million (except for wages)
Subsequent to the year end the West Kampar Contract Area Production Sharing Contract was terminated by the Indonesian
Ministry of Energy and Mineral Resources effective 15 August 2018.
Subsequent to year end the Group received $232,390 from GSPC towards outstanding cash calls.
On 29 July 2018 the Company exercised its right to require the transfer of GSPC’s interest in Cambay, as GSPC had not
remedied the Event of Default Notice within 60 days. Accordingly, GSPC shall be deemed to have transferred all of its right,
title and beneficial interest in the Cambay project. The Company has formally requested the Directorate General of
Hydrocarbons and the Ministry of Petroleum and Natural Gas, India to affect the transfer of GSPC’s participating interest (PI)
in the Cambay PSC to Oilex.
GSPC served notice to Oilex of an Order from the High Court of Gujarat directing it not to take any coercive steps against
GSPC until a hearing held on 4 September 2018 (Order). At this hearing the matter was adjourned until 19 September 2018.
The Order has been awarded on an interim basis to delay the Company securing a transfer of the Participating Interest in
the Cambay PSC held by GSPC. The Order was obtained on an ex parte basis and accordingly, the Company was not
afforded an opportunity to assert its position. The Company notes that, notwithstanding the Order, GSPC remains in ongoing
material breach of the JOA with the Event of Default (EoD) remaining in place and Oilex fully intends to enforce its legal and
contractual rights.
While the Company is confident in its position, should GSPC fail to comply with the EoD Notice and a legal and or regulatory
challenge occurs, it may be necessary for Oilex to consider other remedial strategies.
On 11 September the Company entered into a debt and equity capital raising to secure funding of approximately $1,142,200
(£631,980) before expenses.
The equity capital raising of 259,816,694 shares at $0.003434 (0.19 pence) per share for gross proceeds of $892,196
(£493,655) has been undertaken by Novum Securities Limited (Novum) and is also supported by existing shareholders. In
this regard, the Company has received firm written confirmation from Novum for the placing of 157,894,737 shares for
£300,000 at 0.19 pence per share. In addition, the Company has entered into a subscription agreement with Republic
Investment Management Pte (Republic) Ltd for 101,921,957 shares to raise £193,652 at 0.19 pence.
Pursuant to the advisory agreement with Novum, the Company will issue 9,473,684 unlisted options exercisable at 0.19
pence on or before three years following the completion with the capital raising.
The Company has also entered into a binding loan agreement with Republic to secure funding of $250,000 at 5% interest
rate with a term to 31 October 2019 plus 60,664,887 options over ordinary shares exercisable at $0.004121, which are
subject to shareholder approval, if required. The key undertakings are the same as then loan agreement entered into on 26
July 2018.
Other than the above disclosure, there has not arisen in the interval between the end of the financial year and the date of
this report an item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company,
to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future
financial years.
OILEX LTD
66
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 27 – OTHER ACCOUNTING POLICES
New Standards and Interpretations Not Yet Adopted
The following standards, amendments to standards and interpretations have been identified as those which may impact the
entity in the period of initial application. They are not yet effective and have not been applied in preparing this financial report.
• AASB 9 Financial Instruments includes revised guidance on the classification and measurement requirements of
financial liabilities and assets, including a new expected credit loss model for calculating impairment, and general
hedge accounting requirements. AASB 9 is effective for annual periods beginning on or after 1 January 2018.
Items classified as loans and receivables are now classified as financial assets at fair value or amortised costs.
The adoption of AASB 9 will not have an impact on the Group’s financial statement presentation.
• AASB 15 Revenue from Contracts with Customers provides a single, principles based five-step model to be
applied to all contracts with customers to determine when to recognise revenue and at what amount. Revenue is
recognised when (or as) the Group transfers control of goods to a customer and is recognised either over time or
at a point in time (when control is transferred). The application of the following five steps determines the
recognition of revenue: identification of the contract, identification of the performance obligations, determination
of the contract price, allocation of the contract price and the recognition of revenue as the performance obligation
is satisfied. AASB 15 is effective for annual periods beginning on or after 1 January 2018. The Group has
undertaken an assessment of the potential impact on existing revenue contracts for the sale of oil and gas in India
and has determined that is not expected to be materially affected by the adoption of AASB 15 as there will be no
material changes in the timing of recognition or the amount of revenue recognised.
• AASB 16 Leases provides a new lessee accounting model requiring the recognition of assets and liabilities for all
leases with a term greater than twelve months, unless the underlying asset is of low value. It requires the lessee
to recognise a right-of-use asset, representing the rights to use the underlying lease asset and a lease liability
representing the obligation of lease payments. AASB 16 is effective for annual periods beginning on or after 1
January 2019. The Group has undertaken a review of all its existing leases. The Group has no material long term
contracts, other than office premises in Perth and Gandhinagar. The leases in Gandhinagar relate to the joint
operations, but with no formal sub lease arrangements in place, the operator is required to recognise the full right
of use asset and lease liability. All remaining leases in India are of low value. The impact on the Group’s financial
assets and financial liabilities of the adoption of AASB 16 is being assessed and is dependent upon the adoption
approach and application of transitional provisions, as well as assessing new leases anticipated to be entered
into. The impact of the adoption of this standard, will have a material future impact on the Group’s balance sheet
once the liability for future leases are recognised. Further information is disclosed in Note 24.
• AASB 2016-5 Amendments to Australian Accounting Standards - Classification and Measurement of Share-
based Payment Transactions. The standard makes amendments to AASB 2 Share-based Payment. The
amendments address the accounting for the effects of vesting and non-vesting conditions and the accounting for
a modification to the terms and conditions of a share-based payment that changes the classification of the
transaction from cash-settled to equity-settled, is effective for annual reporting periods beginning on or after 1
January 2018 and it is not expected that this will have a significant impact on the consolidated financial
statements.
OILEX LTD
67
DIRECTORS’ DECLARATION
(1)
In the opinion of the Directors of Oilex Ltd (the Company):
(a) the consolidated financial statements and notes thereto, and the Remuneration Report in the Directors’
Report, set out on pages 21 to 28, are in accordance with the Corporations Act 2001, including:
i) giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its performance
for the financial year ended on that date; and
ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(a) there are reasonable grounds to believe that the Group will be able to pay its debts as and when they
become due and payable.
(2) The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from
the Managing Director and Chief Financial Officer for the financial year ended 30 June 2018.
(3) The Directors draw attention to note 2(a) to the consolidated financial statements, which includes a statement
of compliance with International Financial Reporting Standards.
Signed in accordance with a resolution of the Directors.
Mr Brad Lingo
Chairman
Mr Jonathan Salomon
Managing Director
West Perth
Western Australia
12 September 2018
OILEX LTD
68
Independent Auditor’s Report
To the shareholders of Oilex Ltd
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
Oilex Ltd (the Company).
In our opinion, the accompanying Financial
Report of the Company is in accordance
with the Corporations Act 2001, including:
• giving a true and fair view of the
Group’s financial position as at 30 June
2018 and of its financial performance
for the year ended on that date; and
• complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
The Financial Report comprises:
• Consolidated statement of financial position
as at 30 June 2018
• Consolidated statement of profit or loss and
other comprehensive income, Consolidated
statement of changes in equity, and
Consolidated statement of cash flows for
the year then ended
• Notes including a summary of significant
accounting policies
• Directors’ Declaration.
The Group consists of the Company and the
entities it controlled at the year-end or from time
to time during the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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 fulfilled our other ethical responsibilities in accordance
with the Code.
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under
Professional Standards Legislation.
Material uncertainty related to going concern
We draw attention to Note 2(c), “Going Concern Basis” in the financial report. The conditions
disclosed in Note 2 (c) indicate a material uncertainty exists that may cast significant doubt on
the Group’s ability to continue as a going concern and, therefore, whether it will realise its
assets and discharge its liabilities in the normal course of business, and at the amounts stated
in the financial report. Our opinion is not modified in respect of this matter.
In concluding there is a material uncertainty related to going concern we evaluated the extent
of uncertainty regarding events or conditions casting significant doubt in the Group’s
assessment of going concern. Our approach to this involved:
• Evaluating the feasibility, quantum and timing of the Group’s plans to raise additional
shareholder funds to address going concern;
• Assessing the Group’s cash flow forecasts for incorporation of the Group’s operations and
plans to address going concern, in particular in light of the history of loss making
operations; and
• Determining the completeness of the Group’s going concern disclosures for the principle
matters casting significant doubt on the Group’s ability to continue as a going concern, the
Group’s plans to address these matters, and the material uncertainty.
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgement, were of most
significance in our audit of the Financial Report of the current year.
These matters were addressed in the context of our audit of the Financial Report as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
In addition to the matter described in the Material uncertainty related to going concern section,
we have determined the matter described below to be the Key Audit Matter.
Provision for doubtful debts for joint venture receivables ($5,388,442)
Refer to Note 12 to the Financial Report
The key audit matter
How the matter was addressed in our
audit
The provision for doubtful debts relating to joint
venture receivables is a key audit matter due to:
•
•
the size and nature of the transaction having
a pervasive impact on the Group’s financial
statements; and
the level of judgement used by the Group to
determine the amount of provision to record.
This required significant audit effort and greater
involvement of senior team members in
assessing evidence on the status of outstanding
receivables.
Our procedures included:
• We assessed the appropriateness of the
method applied by Group in determining
the provision for doubtful debts;
• Assessed the ageing of joint venture
receivables, past payments received and
payments made subsequent to year end by
the joint venture party and disputes as
applicable;
• Evaluated evidence from legal experts
obtained by the Group, on contentious
matters, where applicable;
•
Inspected the correspondence between
the Company and the joint venture party in
relation to the Event of Default notices
issued; and
• Evaluated the adequacy of the Group’s
disclosure in relation to the doubtful debt
provision, including those made with
respect to judgements and estimates.
Other Information
Other Information is financial and non-financial information in Oilex Ltd’s annual reporting
which is provided in addition to the Financial Report and the Auditor’s Report. The Directors
are responsible for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we
do not express an audit opinion or any form of assurance conclusion thereon, with the
exception of the Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other
Information. In doing so, we 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.
We are required to report if we conclude that there is a material misstatement of this Other
Information, and based on the work we have performed on the Other Information that we
obtained prior to the date of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001
•
implementing necessary internal control to enable the preparation of a Financial Report that
gives a true and fair view and is free from material misstatement, whether due to fraud or
error
• assessing the Group’s ability to continue as a going concern and whether the use of the
going concern basis of accounting is appropriate. This includes disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless
they 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 objective is:
•
•
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 Australian Auditing Standards will always detect a material
misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of 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
Directors’ responsibilities
In our opinion, the Remuneration Report of
Oilex Ltd for the year ended 30 June 2018,
complies with Section 300A of the
Corporations Act 2001.
The Directors of the Company are responsible
for the preparation and presentation of the
Remuneration Report in accordance with
Section 300A of the Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report
included in pages 21 to 28 of the Directors’
report for the year ended 30 June 2018.
Our responsibility is to express an opinion on
the Remuneration Report, based on our audit
conducted in accordance with Australian
Auditing Standards.
KPMG
Derek Meates
Partner
Perth
12 September 2018
SHAREHOLDER INFORMATION
Shareholder information as at 3 September 2018
Additional information required by the ASX Limited Listing Rules and not disclosed elsewhere in this report is set
out below.
The address of the principal registered office is Ground Floor, 44a Kings Park Road, West Perth, Western Australia
6005, Australia, Telephone +61 8 9485 3200.
The name of the Company Secretary is Mr Mark Bolton.
Detailed schedules of exploration and production permits held are included in the Business Review.
Directors’ interest in share capital options are disclosed in the Directors’ Report.
There is currently no on-market buy-back in place.
Shareholding
(a)
Distribution of share and option holdings:
Size of holding
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
Number of
shareholders
Number of unlisted
option holders
296
491
328
800
542
2,457
-
-
-
-
2
2
Of the above total 2,016 ordinary shareholders hold less than a marketable parcel.
Voting Rights:
(b)
(c)
The voting rights attached to the ordinary shares are governed by the Constitution.
On a show of hands every person present who is a Member or representative of a Member shall have one vote and
on a poll, every Member present in person or by proxy or by attorney or duly authorised representative shall have
one vote for each share held. None of the options give an entitlement to voting rights.
Register of Securities
The register of securities listed on the Australian Securities Exchange is held by Link Market Services Limited, Level
12, 250 St Georges Terrace, Perth, Western Australia 6000, Australia, Telephone +61 8 9211 6670.
The register of securities listed on the Alternative Investment Market of the London Stock Exchange is held by
Computershare Investor Services PLC, PO Box 82, The Pavilions, Bridgwater Road, Bristol BS13 8AE, United
Kingdom, Telephone +44 870 702 003.
Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of the Australian
Securities Exchange and the Alternative Investment Market of the London Stock Exchange (AIM) and trades under
the symbol OEX.
Unquoted Securities - Options
Total unlisted options on issue are 77,166,666.
The Managing Director, Mr Jonathan Salomon holds 14,987,013 shares as at 1 September 2018 which represents
0.75% of shares.
OILEX LTD
74
SHAREHOLDER INFORMATION
Twenty Largest Shareholders
Shareholders
Shares Held
% of issued
capital
HSBC Custody Nominees (Australia) Limited
Rock (Nominees) Limited
Barclays Direct Investing Nominees Limited
Interactive Investor Services Nominees Limited
Magna Energy Limited
Zeta Resources Limited
Pershing Nominees Limited
Interactive Investor Services Nominees Limited
Chase Nominees Limited
Hargreaves Lansdown (Nominees) Limited <15942>
Hargreaves Lansdown (Nominees) Limited
HSDL Nominees Limited
Hargreaves Lansdown (Nominees) Limited
HSBC Client Holdings Nominee (UK) Limited <731504>
UBS Private Banking Nominees LTD
HSDL Nominees Limited
Share Nominees Ltd
Roy Nominees Limited <127735>
HSDL Nominees Limited
BNP Paribas Nominees PTY LTD
259,071,849
174,329,710
96,096,553
79,748,506
73,505,090
71,323,567
55,757,084
50,230,697
50,000,000
45,584,067
43,143,756
40,555,051
34,804,806
33,205,567
32,266,549
28,714,340
28,336,419
26,315,789
23,792,025
21,970,715
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
12.94
8.71
4.80
3.98
3.67
3.56
2.79
2.51
2.50
2.28
2.16
2.03
1.74
1.66
1.61
1.43
1.41
1.31
1.19
1.10
Total
Total issued shares as at 1 September 2018
1,268,752,140
2,001,968,379
63.38
100.00
Substantial shareholders as disclosed in the most recent substantial shareholder notices given to the company are
as follows:
Substantial Shareholders
Republic Investment Management Pte Ltd
Zeta Resources Limited
Magna Energy Limited
Shares Held
244,078,948
121,323,567
114,320,284
% of issued
capital
12.19
6.06
5.71
Zeta Resources Limited and Magna Energy Limited hold shares on both ASX and AIM.
(#) Included within the total issued capital are 1,147,328,607 shares held on the AIM register. Included within the top
20 shareholders are certain AIM registered holders as marked.
OILEX LTD
75
DEFINITIONS
Associated Gas
Natural gas found in contact with or dissolved in crude oil in the reservoir. It can be further categorised as Gas-Cap Gas or
Solution Gas.
Bbls
BCF
BCFE
BOE
BOPD
GOR
MMscfd
MMbbls
PSC
mD
MD
Contingent
Resources
Barrels of oil or condensate.
Billion cubic feet of gas at standard temperature and pressure conditions.
Billion cubic feet equivalent of gas at standard temperature and pressure conditions.
Barrels of Oil Equivalent. Converting gas volumes to the oil equivalent is customarily done on the basis of the nominal
heating content or calorific value of the fuel. Common industry gas conversion factors usually range between 1 barrel of oil
equivalent (BOE) = 5,600 standard cubic feet (scf) of gas to 1 BOE = 6,000 scf. (Many operators use 1 BOE = 5,620 scf
derived from the metric unit equivalent 1 m³ crude oil = 1,000 m³ natural gas).
Barrels of oil per day.
Gas to oil ratio in an oil field, calculated using measured natural gas and crude oil volumes at stated conditions. The gas/oil
ratio may be the solution gas/oil, symbol Rs; produced gas/oil ratio, symbol Rp; or another suitably defined ratio of gas
production to oil production. Volumes measured in scf/bbl.
Million standard cubic feet of gas per day.
Million barrels of oil or condensate.
Production Sharing Contract.
Millidarcy – unit of permeability.
Measured Depth.
Those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations by
application of development projects, but which are not currently considered to be commercially recoverable due to one or
more contingencies.
Contingent Resources may include, for example, projects for which there are currently no viable markets, or where
commercial recovery is dependent on technology under development, or where evaluation of the accumulation is insufficient
to clearly assess commerciality. Contingent Resources are further categorised in accordance with the level of certainty
associated with the estimates and may be sub-classified based on project maturity and/or characterised by their economic
status.
Prospective
Resources
Those quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from undiscovered
accumulations.
Reserves
Reserves are those quantities of petroleum anticipated to be commercially recoverable by application of development
projects to known accumulations from a given date forward under defined conditions.
Proved Reserves are those quantities of petroleum, which by analysis of geoscience and engineering data, can be
estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and
under defined economic conditions, operating methods and government regulations.
Probable Reserves are those additional Reserves which analysis of geoscience and engineering data indicate are less likely
to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves.
Possible Reserves are those additional reserves which analysis of geoscience and engineering data indicate are less likely
to be recoverable than Probable Reserves.3P
Probabilistic methods
P90 refers to the quantity for which it is estimated there is at least a 90% probability the actual quantity recovered will equal
or exceed.
P50 refers to the quantity for which it is estimated there is at least a 50% probability the actual quantity recovered will equal
or exceed.
P10 refers to the quantity for which it is estimated there is at least a 10% probability the actual quantity recovered will equal
or exceed.
SCF/BBL
Standard cubic feet (of gas) per barrel (of oil).
TCF
Trillion cubic feet.
Tight Gas Reservoir
The reservoir cannot be produced at economic flow rates or recover economic volumes of natural gas unless the well is
stimulated by a large hydraulic fracture treatment, a horizontal wellbore, or by using multilateral wellbores.
OILEX LTD
76
CORPORATE INFORMATION
Directors
Brad Lingo Bachelor of Arts with Honours,
Juris Doctorate, MAICD
Non-Executive Chairman
Joe Salomon B APP SC (Geology), GAICD
Managing Director
P Haywood
Non-Executive Director
Company Secretary
Mark Bolton B Business
CFO and Company Secretary
Stock Exchange Listings
Oilex Ltd’s shares are listed under the code OEX on
the Australian Securities Exchange and on the
Alternative Investment Market of the London Stock
Exchange (AIM)
AIM Nominated Adviser
Strand Hanson Limited
26 Mount Row
London W1K 3SQ
United Kingdom
AIM Broker
Cornhill Capital Limited
4th Floor
18 St Swithins Lane
London EC4N 8AD
United Kingdom
Registered and Principal Office
Ground Floor
44a Kings Park Road
West Perth Western Australia 6005
Australia
Ph. +61 8 9485 3200
Fax +61 8 9485 3290
Postal Address
PO Box 254
West Perth Western Australia 6872
Australia
Share Registries
Link Market Services Limited (for ASX)
Level 12
250 St Georges Terrace
Perth Western Australia 6000
Australia
Computershare Investor Services PLC (for AIM)
The Pavilions
Bridgwater Road
Bristol BS13 8AE
United Kingdom
India Operations - Gandhinagar Project Office
3rd Floor Radhe Arcade ‘Block C’
Nr. Swagat Rainforest 1, Kudasan
Gandhinagar Koba Road
Gandhinagar 382421
Gujarat, India
Auditors
KPMG
235 St Georges Terrace
Perth Western Australia 6000
Australia
Website
www.oilex.com.au
Email
oilex@oilex.com.au
Oilex Ltd
ACN 078 652 632
ABN 50 078 652 632
OILEX LTD
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