ASX – RNS Announcement
31 October 2020
ASX: OEX
AIM: OEX
Re: Audited 2020 Annual Report
Further to the Company’s announcement Unaudited 2020 Annual Report on 30 September 2020, please find
attached the Audited 2020 Annual Report.
We note that the reported loss in the Audited 2020 Annual Report has increased from $4.5 million to $5.8 million in
the Consolidated Statement of Profit or Loss and Other Comprehensive Income reflecting a $1.3m impairment
provision for the Cambay Development Assets (refer Note 9).
For and on behalf of Oilex Ltd
Mark Bolton
Executive Director and Company Secretary
For further information, please contact:
Investor Enquires
Oilex Ltd
Joe Salomon
Managing Director
Email: oilex@oilex.com.au
Tel: +61 8 9485 3200
Australia
AIM Broker
Novum Securities
Broker
Colin Rowbury
Email:
crowbury@novumsecurities.com
Tel: +44 20 7399 9427
UK
AIM Nominated Adviser
Strand Hanson Limited
Nominated Adviser
Rory Murphy/Ritchie Balmer
Email: oilex@strandhanson.co.uk
Tel: +44 20 7409 3494
UK
Media Enquires (UK)
Vigo Communications
Public Relations
Patrick d’Ancona/Chris McMahon
Email:
patrick.dancona@vigocomms.com
chris.mcmahon@vigocomms.com
Tel:+ 44 20 7390 0230
UK
+61 (8) 9485 3200
oilex@oilex.com.au
ABN 50 078 652 632
Level 2, 11 Lucknow Place, West Perth WA 6005
PO Box 254 West Perth WA 6872 Australia
www.oilex.com.au
OILEX LTD
ABN 50 078 652 632
CONTENTS
Chairman’s Review .................................................................................................................................................................. 2
Business Review ...................................................................................................................................................................... 4
Permit Schedule ..................................................................................................................................................................... 11
Directors’ Report .................................................................................................................................................................... 13
Remuneration Report - Audited ............................................................................................................................................. 22
Lead Auditor’s Independence Declaration ............................................................................................................................ 30
Consolidated Statement of Profit or Loss and Other Comprehensive Income ...................................................................... 31
Consolidated Statement of Financial Position ....................................................................................................................... 32
Consolidated Statement of Changes in Equity ...................................................................................................................... 33
Consolidated Statement of Cash Flows ................................................................................................................................. 34
Notes to the Consolidated Financial Statements ................................................................................................................... 35
Directors' Declaration ............................................................................................................................................................. 75
Independent Audit Report ...................................................................................................................................................... 76
Shareholder Information ........................................................................................................................................................ 81
Definitions .............................................................................................................................................................................. 83
Corporate Information ............................................................................................................................................................ 84
CHAIRMAN’S REVIEW
Dear Shareholder,
The 2020 financial year produced two remarkable global events. The first of these was the effect of COVID-19 and the
fundamental change it brought to the daily and working lives of all of us. The other key event was the global oil and gas price
reduction, the third time this occurred within a 12 year period. Virtually every community in our modern world and every
industry has been affected in some way by one or both of these events. Certainly, it has brought about further changes and
downward pressure on an already embattled oil and gas industry. Our industry has seen an increase in the number of project
delays and project re-assessments along with several corporate collapses, related to combinations of reduced commodity
prices, scarcity of risk capital and significantly altered working environments. Oilex’s experiences were in line with this and
included the non-completion of the initial proposal for the Cooper-Eromanga basin package spin-out and additional and
significant delays to our Cambay project in India.
This unusual period has also produced positive occurrences with new projects becoming available as beleaguered
corporations seek funding solutions for their projects and as some governments seek to stimulate industry activity in response
to declining domestic oil and gas production.
As a result, this has been a period of consolidation for the Company. Management’s focus has been to:
i)
ii)
iii)
iv)
capitalise on held projects, determining the best value realisation for each one,
continue to press forward with the existing projects in the Oilex portfolio,
resolve long running problematic historical issues, and
reduce the company’s cost base in both India and Australia.
Despite the very challenging climate, Oilex remains focused on returning value to shareholders with the short to medium focus
of restoring value to the share price through sound management practices.
To that end, during the reporting period, Oilex successfully acquired a new package of highly prospective acreage in the
Cooper-Eromanga Basins in Australia, it worked with the Indian government to define a solution for the dispute with the joint
venture partner on the Cambay project, it continued to work to restore ownership of the West Kampar project in Indonesia, it
acquired acreage in the East Irish Sea in the United Kingdom , and it worked with joint venture partners to resolve a long
running dispute in East Timor. At the same time funding was secured while our cost base was dramatically reduced. Our
cornerstone shareholders, Singapore based Republic Investment Management and the Malta based Lombard Group deserve
particular mention, as they have continued to provide strong support for which the board and management expresses its
sincere thanks. Similarly, the company has many long-suffering shareholders who continue to hold the stock in the shared
belief in the intrinsic value proposition offered by the company and its assets.
The Company’s resolve in India is based on the significant undeveloped multi TCF gas resource within the Cambay PSC –
the Cambay Tight Gas Project. This requires further investment and appraisal work to ultimately demonstrate the project’s
commerciality and Oilex retains the support of the Indian government to re-commence an appraisal/development effort for this
project. The solution lies with the exit of GSPC through a sales process supported by the Indian National Government, the
Gujarat State Government and GSPC’s own board of directors. But for COVID, we believe that an outcome would have been
reached in the first part of the 2020 calendar year. The effect of COVID on India has been particularly severe resulting in the
unavoidable continued delay in reaching a solution. It has also changed the investment capability of companies which bid in
the GSPC sale, and this has been an additional complicating factor. We do believe that a solution will occur, however in the
current circumstance, it is difficult to provide accurate timing estimates. In the absence of senior management travel to India,
our enormously dedicated Indian staff continue to successfully drive our business forward. An eventual conclusion will allow
the Company to return to the planning and field work needed for the actual appraisal drilling, completion and stimulation
program identified by the technical studies undertaken with Schlumberger, Baker Hughes GE and Oilfield Data Services Inc.
which outlined the next stage of work program to prove the commerciality of the Cambay Tight Gas Project.
The Company’s new business development efforts bore fruit through the establishment of the focus on “super-basin areas” in
Australia’s Cooper-Eromanga Basins and the UK’s Continental Shelf. With prior knowledge and experience in both of these
areas, the company set about reviewing available opportunities, identifying target areas within proven fairways, and target
companies, following a strict set of investment and risk exposure guidelines. As a result, a high potential package of acreage
which includes existing discoveries was captured in Australia. Further work added additional acreage won in a government
bid round. Funding considerations, particularly in relation to upfront costs related to government environment and
rehabilitation bonds, meant that the best value realisation was to place the asset group into a new entity and the various
options of IPO and sales were investigated. A favourable agreement was initially struck where the assets would be purchased
by an existing entity looking for a change of focus, however, the advent of COVID and the reduction in funding options meant
that this did not materialize. Management responded quickly and secured an alternative option with Armour Energy, a company
with an existing viable asset base looking for additional projects. The move of Oilex’s immediate past Chairman, Brad Lingo,
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CHAIRMAN’S REVIEW
to an executive role in Armour provided continuity of focus on the asset set and the transaction, assuming completion, provides
Oilex with a significant value position in relation to the Australian assets.
In the UK, Oilex struck a series of deals and options with a number of UK based entities, for both discovered and exploration
assets in the highly productive East Irish Sea basin. Through a series of agreements, Oilex established line of sight over a
number of low entry cost, complementary projects in the East Irish Sea immediately adjacent to large producing gas fields
with refurbished production and processing facilities and where new sources of gas production would help to extend the
productive life of the greater projects. However, once again COVID resulted in reduced ability to secure risk capital for these
projects, and Oilex reduced its position to a single licence containing two high potential exploration targets, again adjacent to
existing producing fields.
In East Timor, a dispute with the government regulator stretching back more than 5 years had moved to the stage of arbitration
in a Singapore arbitration centre. Oilex and its partners believed that all processes had been correctly followed in executing
the historical Joint Venture work programs, and that arbitration provided a very costly resolution process with an uncertain
outcome. As a result, a settlement was agreed with the regulator that ceased the arbitration process. The settlement
agreement provided Oilex with a financial obligation of US$800,000 to be paid to the regulator, and with the uncertainties
surrounding the industry as a whole, Oilex set about finding a solution to manage the exposure. This was provided by some
of our existing joint venture partners in the form of a loan facility effectively deferring the payment schedule for several years.
In Indonesia, Oilex had continued to seek redress for a historic dispute with an Indonesian partner and operator in relation to
the West Kampar PSC, into which Oilex had paid funds, but where it was excluded from production income and project
decision making. While a successful arbitration ruling was gained in Singapore courts, it proved almost impossible to enforce
in Indonesia. With the eventual demise of the partner company, Oilex continued to press it rights with the Indonesian
government, even re-bidding for the asset in a government sponsored bid round. Oilex has an agreement with a very
reputable Indonesia entity, PT Ephindo to work together on an equal basis for the return of the rights to the PSC with
Government support for the same.
In addition to the above efforts to create and return value, Oilex continues to review business opportunities in high potential
areas, relying on its contact base, its demonstrated capabilities and its belief that good projects with good management can
be funded. It remains our objective to apply our skill base to deliver value to our shareholders through solid project and
corporate management. We seek your continued support in our efforts. On behalf of the Board, I wish to thank our staff,
contractors, local communities, shareholders, and stakeholders for your ongoing support.
Mr J Salomon
Interim Chairman
31 October 2020
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External Impact on the Petroleum Industry
BUSINESS REVIEW
This last year has seen COVID-19 and an oil/gas price slump negatively affect both project continuity and funding support
across our global industry. India in particular has been significantly affected by COVID-19, its associated lockdowns and hot
spot management and as a result there has been a general slow down in our industry and progress on projects including our
Cambay project.
None-the-less the Company remains committed to its headline Cambay Project in India with the belief that the problems of
the last few years will resolve and a return to activities in the office and the field and to restart the appraisal/development
program will occur.
Oilex Strategy
During 2019-2020, Oilex 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. As such, Oilex gained entry and subsequently on-sold a package of licences in the
Cooper-Eromanga Basins in Australia and established a foot-hold in the East Irish Sea in the UK. These activities follow a
well-defined strategy focusing on proven super-basins with world class source rocks, well defined fairways, undeveloped
discoveries, progressive regulators, open access to data, existing infrastructure and demonstrable upside potential for junior
companies.
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 and the area has a history of hydrocarbon
production from a number of vertically stacked reservoir sections. Oilex’s focus is on a tight siltstone Eocene aged reservoir
which has potential for Multi-TCF gas resources within the license area and which requires application of specific drilling and
stimulation technologies for commercialisation. A secondary conventional reservoir is present in the Oligocene section.
The PSC area 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. It is well-positioned to commercialise production in the fast-growing, demand-driven
domestic energy market.
Development of the potential gas resources in the Cambay PSC has been held up for some years as the result of a dispute
with GSPC. In May of 2018, Oilex announced that it had issued an Event of Default Notice (EOD) to GSPC for failure to pay
US$3,054,832 of its participating interest share of expenses. In July 2018, the Company announced that it had issued a notice
to require GSPC to withdraw (EoW) from the PSC and to transfer its participating interest to Oilex following the procedures
defined by the Joint Operating Agreement as GSPC had not remedied the EoD within the prescribed allowed time. Oilex’s
action were driven by its desire to return to a drilling programme in the PSC with a pilot test to drill and flow test the identified
gas resource.
In August 2018, in response to the EoD and EoW, GSPC served notice of an exparte Order from the High Court of Gujarat
directing Oilex not to take any coercive steps against GSPC to transfer its participating interest. A number of hearings in the
High Court took place until 5 November when Oilex announced the final decision of the court which further delayed the
implementation of the EoD and EoW under the conditions that GSPC deposited a sum of approximately US$1.1 million, a
bank guarantee for approximately US$3 million with the court, and commenced arbitration proceedings. GSPC met these
conditions. In September 2019, Oilex announced that it had reached an agreement with GSPC to resolve the dispute with
the support of the Indian Directorate General of Hydrocarbons (the national regulator) as a signatory to the Agreement. The
agreement revolved around GSPC’s exit from the PSC through placing its 55% Participating Interest up for sale. This process
received the approval of the State Government of Gujarat and the GSPC Board of Directors. Under the agreement GSPC
was to complete the sale process while Oilex withdrew the EoD and GSPC formally terminated arbitration proceedings lodged
with the Singapore International Arbitration Centre (SIAC) and removed the stay order granted in the High Court of Gujarat.
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BUSINESS REVIEW
While the process remains underway it has experienced a significant delay caused directly by COVID-19’s and its direct affect
on GPSC staff and the financial viability of some of the companies which had placed bids on the GSPC sale. GSPC’s intent
continues to finalise the sale of its Cambay interest and Oilex continues to work towards this end result.
Oilex remains in discussion with a number of companies who have expressed interest in the Cambay PSC and its potential.
While Oilex has formally declined the first right of refusal in relation to GSPC’s nominated highest bidder, it reserves its first
right of refusal in the event the bid should process pass to another bidder.
Oilex has developed a work plan to drill 2 vertical wells to test the EP-IV tight gas accumulation in a pilot programme involving
stimulation of the reservoir to determine flow rate potential. A Field Development Plan (FDP) has been approved by the
government regulator. This was additionally submitted to the Government as a requirement for the application to secure a 10
year extension to the PSC beyond 2019.
The FDP encompasses a staged approach, initially focussing on the drilling of a small number of new wells to gather key
information on reservoir performance. It follows 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 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 of the evaluation confirm the potential for substantially increased flow rates with
the application of the appropriate stimulation technology suite.
The Government of India was very prompt in providing approval to both the FDP and the PSC extension application. The
amended Cambay contract, reflecting the new expiry date of September 2029, is now pending finalisation by the Directorate
General of Hydrocarbons.
It is intended that this initial pilot programme, subject to securing the necessary funding will be followed by a larger drilling
programme, with the aim of aggregating sufficient production volumes to connect to the high-pressure pipelines which offer
greater offtake stability and improved gas prices.
Any early production will utilise existing processing and storage facilities upgraded as required to provide a low-cost path to
commercialisation. Further work on this work programme will restart once the GPSC sales process is complete.
Oilex is presently in the final stages in obtaining a new environmental clearance from the Ministry of Environment and Forest
and Cabinet Committee to supercede the previous clearances already obtained under the previous regulatory requirements.
The clearances are necessary to recommence production at Cambay and are in support of the planned drilling programme
at Cambay. An Environmental Impact Assessment has been prepared by the Company’s independent consultants and is
pending submission to the applicable authorities and following public hearings. The public hearings are delayed due to the
continued ‘lockdown’ on account of Covid-19. Following the necessary environmental clearances, production from well C-
73 and C-77H are on standby for production commencement.
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 2019
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
During the financial year, the Joint venture received US$0.15 million gross from GSPC against outstanding cash calls for
Cambay. At 30 June 2020, gross unpaid cash calls issued to GSPC totalled US$5.67 million.
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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 and the existing production facilities is
currently on care and maintenance. A sales process for both Oilex’s and GSPC’s holding has been underway and is nearing
completion. In January 2020, Oilex announced that it had accepted an offer from Kiri and Company Logistics (Kiri) to acquire
the Company’s participating interest in Bhandut for US$0.14 million in cash. Kiri also has expressed an interest in engaging
the services of Oilex’s office for ongoing support. All necessary documentation for the sale has been submitted to the
Government of India to affect the transfer and completion is anticipated in the fourth quarter of 2020 after some delays related
to COVID-19.
During the financial year, the Joint Venture received US$0.02 million gross from GSPC against outstanding cash calls for
Bhandut. At 30 June 2020, gross unpaid cash calls issued to GSPC totalled US$0.09 million.
JPDA 06-103, Timor Sea
(Oilex - 10%, Operator)
On 22 October 2018, the Autoridade Nacional de Petoleo e Minerais (ANPM) issued arbitration proceedings against the Joint
Venture to recover the claim it imposed upon the Joint Venture following the ANPM’s termination of the PSC. Oilex has a
10% participating interest and is acting as the Operator of the Joint Venture in the arbitration proceedings. In August 2019,
the Company announced that it had submitted the Respondent’s First Memorial to the International Chamber of Commerce
in Singapore. This was followed by lodgement of a US$23.3 million counterclaim against the ANPM as damages from the
wrongful termination. In early 2020, the arbitration panel dismissed ANPM’s application to increase their claim against the
joint venture from A$17.0 million to US$22.6 million (plus interest). Also in early 2020, Oilex announced that the arbitration
hearing, scheduled to commence on 10 February 2020, was suspended while the parties continue their commercial settlement
negotiations. In August 2020, Oilex announced that it had executed a Deed of Settlement and Release with the ANPM to
terminate the arbitration proceedings and to settle all claims and counterclaims between the parties. Under the Deed, Oilex
has committed to a settlement of US$800,000 payable in the 2021 and 2022 financial years. In addition, the Company has
entered into an unsecured loan facility agreement with two of its joint venture partners which further provides the Company
with the option, at its sole discretion, to extend the settlement payments into the 2023-24 financial year.
Each Joint Venture party remained jointly and severally liable and had provided parent company guarantees. A notice of
default has been issued against Bharat PetroResources JPDA Limited, Videocon JPDA 06-103 Limited and GSPC (JPDA)
Limited for their failure to pay the joint venture cash calls.
West Kampar PSC, Central Sumatra, Indonesia
(Oilex - 50%)
The West Kampar PSC is located in central Sumatra adjacent to the most prolific oil producing basin in Indonesia. As initially
granted the PSC covered some 4,470 square kilometres. This was reduced to around 900 square kilometres through statutory
partial relinquishments over a number of years. In 2007 Oilex farmed into the PSC to earn a 45% Participating Interest (PI).
The operator for the joint venture was Indonesian company PT Sumatera Persada Energi (SPE). In the same year, the joint
venture successfully drilled an appraisal well on the earlier discovered Pendalian Oilfield confirming oil flow at commercial
rates. In 2008 Oilex signed a second farmin agreement to earn an additional 15% in the PSC. Oilex contributed funds to the
joint venture account under both farmin arrangements. With increasing concerns related to the operator’s performance, Oilex
terminated the second farmin in 2009, requesting repayment of the relevant funds. Subsequently Oilex served a default notice
on the operator and commenced arbitration against SPE’s parent company in the ICC International Court of Arbitration in
Singapore. In 2010 the arbitration tribunal ruled in favour of Oilex, instructing SPE’s parent company to return funds to Oilex
with interest along with arbitration and legal costs. While the arbitration was registered in the Indonesian courts, the
enforcement of the tribunal’s award in Indonesia proved to be unachievable. Between 2010 and 2016, SPE produced and sold
close to 700,000 barrels of oil, with no entitlements returned to Oilex. The operator failed to call any joint venture meetings
nor did it provide work program, budgets, data or reports. In late 2016, SPE was declared bankrupt and Oilex submitted its
claims as a creditor to the Curator (liquidator). In 2018, the Government of Indonesia (GoI) elected to withdraw the PSC
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BUSINESS REVIEW
following which Oilex continued to make a number of representations to the GoI in support of its application to be re-awarded
the PSC and to restart production from Pendalian and also to re-evaluate the exploration potential of the West Kampar. Oilex
also place a bid on the block in a government sponsored bid round which did not see the block offered to any company.
Technical work carried out by Oilex and its advisors estimate that the field can be quickly brought back online at 350 to 400
bopd and that significant additional production potential may be possible from infill drilling and also water injection support.
The return to production will require careful execution in the field given that it has been shut in since 2016. The oil occurs in
five good quality, stacked reservoirs with some stratigraphic complexity, and the application of 3D seismic data which has
been acquired but not interpreted, should provide a significant improvement in the understanding of the reservoir distribution
and future development planning. Access to the data is to be negotiated with the seismic company that acquired it. The oil is
good quality with no or little gas. It is believed that the previous production costs can be reduced. A number of exploration
opportunities are present both close to the Pendalian field and in the more distant parts of the block. These require further
evaluation.
Following various meetings and correspondence with the GoI and with the support of our local Indonesian partner, the GoI
has advised that our Proposed Direct Bid, through the Joint Study of the West Kampar Region, is declared administratively
complete and have recorded it as a proposal for a Direct Offer through a Joint Study as stipulated in ESDM Regulation No.
35 of 2008. The Company continues to engage with the regulator with a view to restoring its interest in West Kampar. This
confirmation from the GoI is exclusive to Oilex, and provides a pathway to return of the PSC, with final terms to be negotiated.
Oilex will share in any award of the PSC on a 50-50 joint basis with its local Indonesian partner, PT Ephindo.
Cooper Eromanga Basins
Since 2017, and as part of a focussed new business strategy, Oilex has been working to access acreage in the highly
productive Cooper Eromanga Basins, focussing on the South Australian parts of the basins. As part of this process Oilex
reviewed all available acreage and secured rights to two PELs (112 and 444) and 27 PRL’s in the north eastern focus area.
Oilex also was the successful bidder for a large adjacent block CO2019-C (PELA677)in a South Australian government bid
round. Given the requirement for an upfront cash payment of a significant government environmental/rehabilitation bond,
Oilex and its advisors determined that the most profitable approach would involve a spin-out of the highly prospective acreage
package. In January 2020 Oilex announced that it had signed an agreement with Doriemus plc for the sale of these interests.
However in response to the financial market uncertainties at the time, this process was terminated in April 2020 by Doriemus.
In May 2020 Oilex announced that it had signed a conditional binding Heads of Agreement with Armour Energy Limited, and
in June Oilex further announced it had entered into a conditional binding Share Purchase Agreement. Subsequent to the
reporting period, on 14 September 2020, a further announcement was made outlining amendments to the Share Purchase
Agreement whereby the completion date was extended from 15 September 2020 until 15 October 2020 to enable Armour to
seek its shareholder approval pursuant to ASX Listing Rule 7, with such shareholder meeting scheduled for September 18
2020, and to allow additional time to satisfy the Conditions Precedent. Armour received approval from shareholders at this
meeting.
Under the SPA Armour will acquire 100% of the issued capital of CoEra Limited, a wholly owned subsidiary of Oilex holding
the Cooper-Eromanga assets. Armour will assume all costs and liabilities associated with the asset package. As consideration
Armour will issue up to 34.5 million Armour shares to Oilex (or its nominees) upon completion of the Proposed Transaction as
follows (Consideration Shares):
Tranche 1
24,500,000 fully paid ordinary shares in Armour upon completion; and
Tranche 2
If, at any time within 60 days from completion of the Proposed Transaction, the closing Volume
Weighted Price Average of Armour shares trading on the ASX falls below $0.037 then Armour shall
be required to issue such additional shares in itself to Oilex, or its nominee to ensure Oilex receives
a consideration value of A$905, . Any such Adjustment Shares issued shall:
•
•
not exceed an amount of ten (10) million Armour shares;
be subject to any required shareholder or regulatory approval.
The issue of the Consideration Shares was approved at an Extraordinary General Meeting held by Armour on 18 September
2020. The Consideration Shares are subject to a 12 month voluntary escrow from completion. In addition, Armour will
reimburse Oilex, in cash, for past costs of A$125,000 to be paid within 5 business days of Armour’s above shareholder
approval. This amount was paid by Armour in late September 2020. Completion of the transaction occurred on 15 October
2020.
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BUSINESS REVIEW
Oilex will nominate 10% of the abovementioned Share Consideration to Orthogonal Enterprises Pty Ltd for past and future
services rendered in building the Cooper-Eromanga portfolio. Orthogonal is an unrelated party involved in providing technical
advice to the oil and gas and coal industries.
United Kingdom Continental Shelf - East Irish Sea
Oilex’s new business strategy looking at high potential, well regulated, well understood basins with ready access to data
included the UK Continental Shelf with a focus on the Southern Gas Basin and the East Irish Sea. A number of assets and
holdings have been reviewed, and discussions held with the holders of those assets.
In the September 2019 quarter, Oilex announced that an exclusivity deal with Koru Energy Limited for a potential 50% equity
holding in the “KLW” Gas Discoveries had been allowed to lapse. Oilex had elected to focus on other adjacent and larger
projects in the EIS. In December 2019, the Company announced that it had entered into a binding term sheet with Burgate
Exploration to acquire a 100% participating interest in the Doyle-Peel licence (P2446) in the East Irish Sea. In addition, the
Company entered into an exclusivity agreement for the potential acquisition of a 100% participating interest in the adjacent
Castletown licence (P2076).
In March 2020 ,and in response to rapidly changing global events, Oilex announced that it would not be exercising its rights
on Castletown allowing the agreement to lapse. At the same time, amendments to the Doyle-Peel licence were announced
with the effect that the completion date was extended from 30 June 2020 to 31 December 2020.
The completion of the acquisition is subject to the following conditions precedent by 31 December 2020:
a)
the UK Oil and Gas Authority (“OGA”) approving the assignment and transfer of the P2446 licence from Burgate to
Oilex;
the execution of applicable documents necessary to transfer the P2446 licence to Oilex;
execution of a royalty agreement in a form acceptable to the parties; and
the issue of the share consideration for the acquisition of Doyle-Peel receiving shareholder approval under Listing
Rule 7.1 (received on 30 June 2020).
b)
c)
d)
Shareholder approval required for the issue of 42,500,000 consideration shares to Burgate as part of the purchase price was
obtained at a General Meeting held on 30 June 2020.
The Doyle-Peel EIS licence is located in a proven gas fairway in the centre of the East Irish Sea Basin in shallow water near
existing infrastructure reducing the complexity, risk and cost of any future development. The EIS is a prolific basin which has
produced around 8 TCF of gas to date with considerable existing gas production, gathering, processing and transportation
infrastructure. The depth to the target reservoirs is less than 2,000 metres thus providing modest drilling costs.
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.
A number of debt and equity capital raisings were undertaken during the year to provide working capital for the Company’s
activities:
8
OILEX LTD
September 2019 quarter
BUSINESS REVIEW
-
-
-
-
First equity capital raise - placement of 257,329,999 new ordinary shares at an issue price of £0.0013 (A$0.0023)
for gross proceeds of £0.34m (A$0.6m)
Second equity capital raise - placement of 394,736,842 new ordinary shares at an issue price of £0.0019 (A$0.0035)
for gross proceeds of £0.75m (A$1.42m).
Amendment of Series A loan – extended from 26 July 2019 to 1 October 2019 with the issue of 124,060,150 options
exerciseable at A$0.00266 on or before 31 December 2019.
Amendment of Series B loan – extended from 1 October 2019 to 1 April 2020 with the issue of replacement options
on commensurate terms.
December 2019 quarter
-
-
Series A loan extension to 15 October 2019 and fully repaid.
Series B loan options approved by shareholders at the AGM on 27 November 2019.
March 2020 quarter
-
-
-
-
Equity capital raise – placement of 277,777,778 new ordinary shares at an issue price of £0.0009 (A$0.0017) for
gross proceeds of £0.25 million (A$0.5 million).
Amendment of Series B loan – extended from 1 April 2020 to 31 July 2020 with the issue of 115,727,273 options at
GBP£0.0011 per option and expiry date of 31 July 2020.
Series C Loan facility of £350,000 with issue of 166,666,667 options at £0.0021 per option with expiry date of 1
August 2020.
Series D Loan: £225,000 of existing Series C Loan facility rolled into a new £225,000 loan facility (Series D Loan)
with the terms and conditions of the remaining £125,000 under the Series C facility remained unchanged. Series D
loan repayment date reset from 1 August 2020 to 31 March 2021. In the event GSPC has not transferred its%
participating interest in the Cambay PSC by 6 November 2020 to a new joint venture partner, Lombard (the provider
of the loan) may elect that the loan is repayable within 14 days. All other terms and conditions remain the same
except for the issue of new options reflecting the revised loan repayment date. New options issued - 204,545,455
options over ordinary shares with exercise price of GBP£0.0011 per option and expiry date of 30 June 2021.
June 2020 quarter
-
-
Equity capital raise – placement of 312,500,000 new ordinary shares at an issue price of £0.0008 (A$0.0015) for
gross proceeds of £0.25 million (~A$0.5 million).
Amendment of Series C loan – extended from 1 August 2020 to 31 October 2020 with the issue of 113,636,364
replacement options at £0.0011 per option with expiry date of 29 January 2021 (subject to shareholder approval on
or before 30 November 2020).
Corporate
The Company has dual listing on the ASX and on the Alternative Investment Market (AIM) of the London Stock Exchange with
approximately 78.90% of the Company’s shares held on the Company’s UK register.
During the year broker options were not exercised.
As at 30 June 2020 the Company had:
• Available cash resources of $173,816,
• Borrowings at a carrying amount of $769,555 (face value: $804,959). (Reference should also be made to Note 29 –
Subsequent Events for further information); and
•
Issued capital of 3,648,541,110 fully paid ordinary shares and unlisted options of 188,135,965.
Executive and Board Changes
During the financial year, the following board changes were made:
OILEX LTD
9
BUSINESS REVIEW
•
•
The appointment of Mr Peter Schwarz as an Independent Non-Executive Director effective 4 September 2019
adding depth particularly to the board’s technical and business development capability, increasing the industry
and market connections in the UK and expanding the number of independent directors,
The appointment of Mr Mark Bolton as an Executive Director effective from 1 April 2020, continuing his role as
Chief Financial Officer and Company Secretary,
• Stepping down by Mr Bradley Lingo from the Board and position of Chairman effective 5 May 2020,
•
The appointment of Mr Jonathan Salomon as interim Chairman effective 5 May 2020.
The board would like to acknowledge Mr Lingo’s significant contribution to the Company and particularly to the Cooper
Eromanga Basin asset delivery.
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.
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 34 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
10
PERMIT SCHEDULE
PERMIT SCHEDULE – 30 JUNE 2020
ASSET
LOCATION
Cambay Field PSC (1)
Gujarat, India
Bhandut Field PSC (2)
Gujarat, India
JPDA 06-103 PSC (3)
Joint Petroleum
Development Area
Timor Leste and
Australia
ENTITY
Oilex Ltd
Oilex N.L. Holdings
(India) Limited
Oilex N.L. Holdings
(India) Limited
Oilex (JPDA 06-103)
Ltd
EQUITY %
OPERATOR
30.0
15.0
40.0
10.0
Oilex Ltd
Oilex N.L. Holdings
(India) Limited
Oilex (JPDA 06-
103) Ltd
PEL 112
PEL 444
South Australia,
Australia
Holloman Petroleum
Pty Ltd
79.6667
Holloman
Petroleum Pty Ltd
South Australia,
Australia
Holloman Petroleum
Pty Ltd
79.6667
Holloman
Petroleum Pty Ltd
(1) During the September 2019 quarter, the Company reached a settlement with GSPC which, upon completion, will resolve the
ongoing Cambay Production Sharing Contract (PSC) dispute. Pursuant to the settlement, GSPC has commenced a sale process
of its interest in Cambay.
(2) A Sale process of Oilex’s equity is currently underway.
(3) PSC terminated 15 July 2015.
OILEX LTD
11
DIRECTORS REPORT
FOR THE YEAR ENDED 30 JUNE 2020
2020 FINANCIAL REPORT
CONTENTS
Directors’ Report .................................................................................................................................................... 13
Remuneration Report - Audited ............................................................................................................................. 22
Lead Auditor’s Independence Declaration ............................................................................................................ 30
Consolidated Statement of Profit or Loss and Other Comprehensive Income ...................................................... 31
Consolidated Statement of Financial Position ....................................................................................................... 32
Consolidated Statement of Changes in Equity ...................................................................................................... 33
Consolidated Statement of Cash Flows ................................................................................................................. 34
Notes to the Consolidated Financial Statements……………………………………. ................................................ 35
Directors' Declaration ............................................................................................................................................. 75
Independent Audit Report ...................................................................................................................................... 76
Shareholder Information ........................................................................................................................................ 81
OILEX LTD
12
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
For the year ended 30 June 2020
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 2020 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 Jonathan Salomon
(Interim Chairman and Managing Director)
B App Sc (Geology), GAICD
Mr Salomon was appointed as a Non-Executive Director in November 2015, Managing Director on 18 March 2016, and Interim
Chairman on 5 May 2020 following the resignation of Mr Lingo. Mr Salomon has over 34 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 financial years Mr Salomon has not been a director of any other ASX listed companies.
Mr Bradley Lingo (resigned 5 May 2020)
(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 34 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, Sunshine Gas Limited, AGL Energy, Roc Oil Limited, the Commonwealth Bank of Australia, Drillsearch Energy Limited and
Elk Petroleum Limited.
During the last three financial years up to his resignation on 5 May 2020, Mr Lingo has been a director of the following ASX listed
companies:
• Elk Petroleum Limited (from August 2015 to March 2019)
Mr Mark Bolton (appointed 26 March 2020)
(Executive Director and Company Secretary)
Mr Bolton was appointed as an Executive Director on 26 March 2020. Mr Bolton has significant experience in the development and
financing of new minerals projects, particularly in emerging economies. Further details of Mr Bolton’s qualifications and experience
can be found in the Executive Management section of the Directors’ Report.
During the last three years Mr Bolton has not been a director of any other ASX listed company.
Mr Paul Haywood
(Non-Executive Director)
Mr Haywood was appointed as a Non-Executive Director in May 2017. Mr Haywood has over 16 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 oil and gas exploration and
development in UK, EU and Central Asia. Mr Haywood’s expertise stretches across UK and Australian public markets, with a cross-
functional skill set encompassing research, strategy, implementation, capital and transactional management. Mr Haywood is currently
Chief Executive Officer of Block Energy Plc.
During the last three years Mr Haywood has not been a director of any other ASX listed companies.
Mr Peter Schwarz (appointed 4 September 2019)
(Non-Executive Director)
B Sc (Geology), M Sc (Petroleum Geology)
Mr Schwarz was appointed as a Non-Executive Director in September 2019. A former director of BG Exploration and Production
Limited and CEO of independent exploration company Virgo Energy Ltd, Peter is an AAPG Certified Petroleum Geologist and business
development professional with over 40 years’ experience in the oil and gas industry. Peter has previously held various senior
management roles with Amerada Hess, BG, and Marubeni and is currently a director of Finite Energy Limited, an oil and gas
consultancy business he founded over 10 years ago, specialising in strategy and business development advice in the UK and Europe.
During the last three years Mr Schwarz has not been a director of any other ASX listed companies.
OILEX LTD
13
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
COMPANY SECRETARY
The Executive Director, Mr Mark Bolton (B Bus) was appointed Company Secretary in June 2016.
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 not early adopted the
4th edition of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations which come into
effect for the Company’s financial year commencing 1 July 2020.
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 2019/20 financial year are as follows:
Non-Executive Directors
B Lingo (3)
P Haywood
P Schwarz (5)
Executive Director
J Salomon (4)
M Bolton (5)
Board Meetings (1)
Held (2)
Attended
10
12
10
12
3
10
12
10
12
3
(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) Mr Lingo was Chairman until his resigned from the board on 5 May 2020.
(4) Current Chairman from 5 May 2020 following Mr Lingo’s resignation.
(5) Mr Schwarz and Mr Bolton were appointed to the board on 4 September 2019 and 26 March 2020, respectively.
OILEX LTD
14
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
EXECUTIVE MANAGEMENT
Mr Jonathan Salomon
(Interim Chairman and Managing Director)
B App Sc (Geology), GAICD
Mr Salomon was appointed as a Non-Executive Director in November 2015, Managing Director on 18 March 2016, and Interim
Chairman on 5 May 2020. 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 34 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
(Executive Director and Company Secretary)
B Business
Mr Bolton was appointed Chief Financial Officer and Company Secretary in June 2016, and Executive Director on 26 March 2020. 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, AIM and the TSX.
Mr Ashish Khare
(Head - India Assets)
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 19 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 operations 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.
OPERATING RESULTS
The loss after income tax of the consolidated entity for the year ended 30 June 2020 amounted to $5,841,096 (2019: loss of
$3,118,121).
Following the voluntary shut-in of the Cambay Field in Q1 2019 resulting in the cessation of production, no revenue has been
recognised during the full financial year.
In the absence of a repayment schedule for outstanding cash calls from Gujarat State Petroleum Corporation (GSPC), the Company
has continued to provide in full the amounts owing from its Joint Venture partner as well as amounts owing from the Cambay and
Bhandut Joint Ventures, with the exception of a US$110,000 (A$163,836) Cambay cash call payment received subsequent to reporting
date.
In addition to the above expected cash payment, a reduction in Joint Venture cash call and recharges since 30 June 2019 has resulted
in a reversal in the provision for doubtful debts related to Cambay and Bhandut cash calls and recharges of $226,108. This reversal
has been partially offset by a provision for doubtful debts expense of $94,794 required for the Group’s share of JPDA JV cash call
receivables, and other receivables of $24,001. As a result, operating results include a credit to the provision for doubtful debts expense
of $107,313 (2019: $108,206 expense).
OILEX LTD
15
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
OPERATING RESULTS (CONTINUED)
Exploration costs have increased to $1,008,719 (2019: $491,675) reflecting the increased activity in seeking and evaluating new
business opportunities.
Other costs $1,270,152 (2019: Cost of sales $504,926) includes an increase in write-down of inventory to net realisable values of
$1,030,060 (2019: $161,354).
The prior year results included a reduction in variable operating expenses as part of Group’s effort to reduce costs. In the current year,
efforts to contain costs have continued with further reductions in administration employee expenses $718,210 (2019: $819,627). Total
administration expenses of $2,015,477 (2019: $1,957,850) include the above-mentioned reduction in employee expenses; however,
this has been offset by increased legal expenses related to the Cambay PSC.
The impact of Covid-19, which has seen reduced global demand for energy products and caused delays to the implementation of the
dispute resolution with GSPC. Consequently an impairment charge of $1,348,458 (2019: nil) has been applied to the Cambay Field
development assets.
Other expenses $336,921 (2019: $40,990) have increased as a result of the termination penalty provision (non-cash) in relation to
JPDA 06-103 PSC (refer Note 27) increasing from USD$600,000 to USD$800,000; resulting in a termination penalty provision expense
of $297,885 (USD$200,000) (2019: $nil).
The impact of the Coronavirus (COVID-19) up to 30 June 2020 has been financially negative for the consolidated entity. This is largely
due to its general impact in India where significant delays have been experienced with the sale process being conducted by GSPC for
its’ 55% interest in the Cambay Production Sharing Contract (PSC). As a result, Indian operations have continued to be maintained
on a ‘care and maintenance’ basis for a longer period than originally anticipated.
Cash and cash equivalents held by the Group as at 30 June 2020 has decreased to $173,816 (2019: $357,970).
FINANCIAL POSITION
The net assets of the consolidated entity totalled $3,719,824 as at 30 June 2019 (2019: $6,739,041).
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 4 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 4 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 2020
SIGNIFICANT EVENTS AFTER BALANCE DATE
a)
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has been financially negative for the consolidated
entity up to 30 June 2020, it is not practicable to estimate the potential impact, positive or negative, after the reporting date.
The situation is rapidly developing and is dependent on measures imposed by the Australian and Indian Governments and
other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus
that may be provided.
b)
On 17 July 2020, the Company announced it has issued the second and final tranche of 55,555,556 ordinary shares pursuant
to the placement first announced on 16 March 2020; and amended as announced on 27 April 2020. The share issue was
pursuant to an equity capital raising to secure further funding of £0.25 million (A$0.5 million) through the subscription of
277,777,778 new shares at £0.009 per share (0.1792 AUD cents) per share.
The Company also announced:
•
•
the issue of 103,033,333 shares to advisors and consultants in lieu of cash fees payable; and
further to the approval by shareholders at the annual general meeting held on 30 June 2020 and the Company
announcement on 15 May 2020, the Company issued the following unlisted options:
-
-
Series B Loan Options
115,727,273 exercisable at £0.0011 on or before 31 July 2020
Series D Loan Options
204,545,455 exercisable at £0.0011 on or before 30 June 2021.
c)
On 27 July 2020, the Company announced that substantial progress has been made towards the Company’s strategic objective
to regain a participating interest in the West Kampar PSC in Indonesia, which is expected to lead, subject to financing, to
recommencing production from the Pendalian Oilfield.
Following various meetings and correspondence with the Government of Indonesia (GoI) and with the support of the
Company’s local Indonesian partner, the GoI has advised that our Proposed Direct Bid, through the Joint Study of the West
Kampar Region, is declared administratively complete and have recorded it as a proposal for a Direct Offer through a Joint
Study as stipulated in ESDM Regulation No. 35 of 2008.
This confirmation from the GoI, which is exclusive to Oilex, provides a pathway to conduct the Joint Study on the proposed
development of West Kampar which will then provide certain preferential rights in the ultimate award of the West Kampar PSC
by the GoI. Oilex’s interest in the study and ultimate potential award of the PSC will be on a 50-50 joint basis with its local
Indonesian partner, PT Ephindo.
d)
On 31 July 2020, the Company announced that it has taken further steps to strengthen its balance sheet as the Company
continues to navigate the impact of Covid-19 on its business and global equity markets. In particular, the Company entered
into an amendment agreement to vary the repayment obligations for its Series C (GBP£125,000) loan. Furthermore, the
Company secured additional equity investment of £0.25 million to increase its working capital flexibility and reduce its financial
debt obligations.
Amendment to Series C Loan Funding Agreement (GBP £125,000)
Pursuant to the amendment agreement, the loan repayment date has been extended from 1 August 2020 to 31 October 2020.
All other terms remain the same and are extended to 31 October 2020, except for the issue of 113,636,364 new options
exercisable at £0.0011 on or before 29 January 2021.
The options, which if exercised in their entirety, will result in a cash inflow to the Company of £125,000 (A$224,901). The
proceeds from such conversion of options will be applied to the outstanding Series C Loan balance, which is fully drawn down.
The issue of the new options is subject to shareholder approval under ASX Listing Rule 7.1 on or before 30 November 2020.
Failure to secure shareholder approval will require immediate repayment of the loan principal and accrued interest.
Equity Capital Raising
The Company has arranged an equity capital raising, through Novum Securities Limited and to existing institutional
shareholders, to secure further funding of £0.25 million (A$0.5 million) through the subscription of 312,500,000 new shares at
GBP 0.08 pence (0.144 AUD cents) per share.
OILEX LTD
17
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
SIGNIFICANT EVENTS AFTER BALANCE DATE (CONTINUED)
Funds raised from the subscription are intended to be applied towards increasing the Company’s working capital base and
debt reduction The additional funding will support the Company’s initiative to implement the settlement with GSPC, which has
been delayed by the impact from Covid-19.
On 10 August 2020, the Company announced that it has issued the 312,500,000 shares. Pursuant to advisory agreements
with Novum, the Company also issued 15,000,000 unlisted options exercisable at GBP 0.08 pence on or before 12 August
2022 upon the completion of the capital raise.
e)
On 7 August 2020, the Company, in its capacity as Operator, on behalf of the Joint Venture Participants in Joint Petroleum
Development Area (“JPDA”) 06-103 Production Sharing Contract (“PSC”) in East Timor announced it had executed a Deed of
Settlement and Release (Deed) with the Autoridade Nacional Do Petroleo E Minerais (“ANPM”) to terminate the ongoing
arbitration proceedings arising from the termination of the PSC by the ANPM in 2015 and settle all claims and counterclaims
between the parties.
The execution of the Deed sees an amicable conclusion to the arbitration proceedings, as announced in October 2018, where
Oilex and its joint venture partners in the PSC were subject to a penalty claim of US$17 million (plus interest) on a joint and
several basis. Oilex is the Operator of the PSC on behalf of the joint venture.
Under the terms of the Deed, Oilex has committed to a settlement of US$800,000 payable in the 2021 and 2022 financial
years, which has been fully provided for at 30 June 2020. In addition, the Company has entered into an unsecured loan facility
agreement for US$800,000 with two of its joint venture partners to fund the settlement. The Deed further provides the Company
with the option, at its sole discretion, to extend the settlement payments into the 2023-24 financial year. Reference is made to
Note 14 for further detail on this loan facility.
f)
On 14 September 2020, the Company announced that it has agreed to amend the Share Purchase Agreement (SPA) with
Armour Energy Limited (Armour), as announced on 15 June 2020, for the proposed sale of all of its interests in the Cooper-
Eromanga Basin (Proposed Transaction). Pursuant to the SPA, Armour will acquire 100% of the issued capital of CoEra Limited
(CoEra), a wholly owned Company subsidiary which holds all of Oilex’s interests in the Cooper-Eromanga Basin.
The amendments:
•
extend the completion date from 15 September 2020 until 15 October 2020 to enable Armour to seek its shareholder
approval pursuant to ASX Listing Rule 7, with such shareholder meeting scheduled for 18 September 2020, and allow
additional time to satisfy the Conditions Precedent. Armour received shareholder approval for the transaction at its 18
September 2020 General Meeting;
•
amend the date upon which Armour pays to Oilex the past costs of $125,000 to within 5 Business Days after receipt of
Armour’s above shareholder approval. Oilex received these funds in late September 2020; and
•
reduce the timeframe for the Tranche 2 share adjustment from 90 days to 60 days from completion.
On 15 October 2020, the Company announced the completion of the sale of all its interests in the Cooper-Eromanga Basins
to Armour Energy Limited.
g)
Pursuant to an amendment agreement to the Series C loan of GBP£125,000 loan announced on 30 October 2020, the loan
repayment date has been extended from 31 October 2020 to 31 December 2020. All other terms remain the same and are
extended to 31 December 2020.
There were no other significant subsequent events occurring after year end.
OILEX LTD
18
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
FINANCIAL POSITION
Capital Structure and Treasury Policy
As at 30 June 2020 the Group had unsecured loans at face value $804,959 (2019: $580,000). Refer note 15 of the Consolidated
Financial Statements for details of the carrying amount, terms and conditions, repayment schedule, and options attached to the loans.
Details of transactions involving ordinary shares during the financial year are as follows:
August 2019
-
Share Placements
August 2019
-
Acquisition of Petroleum Exploration Licences
October 2019
-
Share Placements
October 2019
-
Acquisition of Petroleum Exploration Licences
November 2019
-
Non-executive Director Remuneration
January 2020
-
Share Placements (exercise/underwriting of
options)
May 2020
-
Share Placements
Number of
Shares Issued
Value of Shares
$
Gross Amount
Raised $
257,329,999
-
597,488
33,416,483
100,249
-
315,789,474
-
1,104,865
29,457,413
94,750
-
78,947,368
124,060,150
222,222,222
-
-
-
282,255
330,000
380,680
2,695,288
Total
1,061,223,109
194,999
In accordance with the ASX Waiver granted 22 October 2019 the Company advises that the number of remuneration shares that were
issued to non-executive directors totalled nil. This represents 0.00% of the Company’s issued capital as at 30 June 2020.
The non-executive directors were entitled to the issue of 10,399,814 remuneration shares (representing part payment of director’s
fees) during the financial year ended 30 June 2020. These remuneration shares shall be issued in the next financial period.
As at the date of this report the Company had a total issued capital of 4,119,629,999 ordinary shares and 241,014,753 unlisted options
exercisable at weighted average price of $0.002 per share.
OILEX LTD
19
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
FINANCIAL POSITION (CONTINUED)
Material Uncertainty Related to Going Concern
The financial report and audit opinion for the year ended 30 June 2020 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 Executive Director and Company Secretary,
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.
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:
J Salomon
M Bolton
P Haywood
P Schwarz
SHARE OPTIONS
Number of Ordinary Shares
Direct
-
-
3,319,101
-
Indirect
14,987,013
-
-
-
Unissued shares under options
All options were granted in the current and previous financial years.
At the date of this report, unissued ordinary shares of the Company under option (with an exercise price) are:
Expiry Date
Number of Shares
Exercise Price
Unlisted Options
Issued in 2020:
30 June 2021
20 October 2021
12 August 2022
Issued in previous financial years:
24 December 2020
Total
204,545,455 (1)
14,802,631
15,000,000
6,666,667
241,014,753
£0.0011 ($0.002)
£0.0019 ($0.004)
£0.0008 ($0.001)
£0.0036 ($0.006)
(1)
Issued in connection to Series D unsecured loans. Refer note 15 of the Consolidated Financial Statements for further
detail.
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 options expired or were cancelled upon cessation of employment:
Date Lapsed
22 May 2020
26 July 2019
1 October 2019
1 April 2020
Total
OILEX LTD
Number
2,222,222
91,666,666
60,664,887
60,664,887
215,218,662
Exercise Price
$0.004
$0.004
$0.004
$0.004
20
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2020
SHARE OPTIONS (CONTINUED)
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
Total
Since the end of the financial year
124,060,150
124,060,150
-
$0.003
$0.003
Number of Shares
Amount Paid on Each Share
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.
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 26 of the Consolidated Financial Statements for details of the amounts paid to the auditors of the Group, PKF Perth and
KPMG Perth, and their 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 2020 has been received and can be found on page 30.
OILEX LTD
21
DIRECTORS’ REPORT – REMUNERATION REPORT
FOR THE YEAR ENDED 30 JUNE 2020
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.
Reductions in remunerations introduced in 2016 and 2017 for Non-Executive Directors, the Managing Director, the Executive Director
and Company Secretary, and all staff have remained in place, with further reductions for some staff in April/May 2020, for the financial
year ended 2020.
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
22
DIRECTORS’ REPORT – REMUNERATION REPORT
FOR THE YEAR ENDED 30 JUNE 2020
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 2020.
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)
2020
0.2
2019
0.2
2018
0.3
2017
0.3
2016
1.0
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 2020.
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 2020.
The annual fee for Mr Lingo (Chairman until his resignation on 5 May 2020) including superannuation was set at $70,956 per annum
effective from 1 October 2016 and remained in place until 31 July 2019.
On 6 September 2019, the Company announced an expanded operational role for Mr Lingo to drive the Cooper Basin Strategy. A
new agreement for Mr Lingo, effective from 1 August 2019, had an initial term of 6 months and provided for a monthly consultancy
fee of $20,000 per month, plus superannuation; and is also inclusive of the Chairman’s fees. The agreement was subsequently
extended until 30 March 2020 with a further one-month extension to 30 April 2020.
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.
OILEX LTD
23
DIRECTORS’ REPORT – REMUNERATION REPORT
FOR THE YEAR ENDED 30 JUNE 2020
1. PRINCIPLES OF COMPENSATION (CONTINUED)
The annual fee for Mr Schwarz, the Company’s United Kingdom based Non-Executive Director was set at £30,000 per annum on
commencement in September 2019.
At the Annual General Meeting held 29 November 2018 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 2018 through to 31 October 2019, in order to conserve the cash reserves of the Company. Similar shareholder
approval was also received at the Annual General Meeting held on 27 November 2019 for the period 1 November 2019 through to 31
October 2020.
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 2020.
1.6 Adoption of year ended 30 June 2019 Remuneration Report
At the Annual General Meeting held 27 November 2019 shareholders adopted the 30 June 2019 Remuneration Report with a clear
majority of 401,127,006 votes in favour, being 99.56% of the votes cast.
OILEX LTD
24
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 2019
Executive
Position
J Salomon
Chairman and
Managing Director
Contract Start
Date
18 March 2016
Contract
Termination Date
Resignation Notice
Required
Unvested Options on
Resignation
Termination Notice
Required from the
Company (1)
31 December 2020 (2)
3 months
Forfeited
3 months
M Bolton
Executive Director and
Company Secretary
3 June 2016
31 December 2020 (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 has extended by mutual agreement between the Company and Mr Salomon on an ongoing basis as at the date of this report.
The Executive Director and Company Secretary’s contract has been extended by mutual agreement between the Company and Mr Bolton on an ongoing basis as at the date of this report.
OILEX LTD
25
DIRECTORS’ REPORT – REMUNERATION REPORT
FOR THE YEAR ENDED 30 JUNE 2020
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:
Short-Term
Salary & Fees
Year
$
STI Cash
Bonus
$
Non-Executive Directors
B Lingo (5)
Chairman (resigned 5 May 2020)
P Haywood (6)
Non-Executive Director
P Schwarz (7)
Non-Executive Director
Executive Directors
J Salomon (8)
Chairman and Managing Director
M Bolton (8)
Executive Director and Company Secretary
Executive
A Khare (10)
Head of India Assets
Total
Total
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
188,772
20,232
44,348
44,069
23,354
-
199,637
209,670
154,375
190,000
147,362
151,504
757,848
615,475
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Benefits
(including
Non-Monetary)
(1)
$
-
-
-
-
-
-
3,765
9,127
1,687
7,141
325
4,984
5,777
21,252
Total
$
188,772
20,232
44,348
44,069
23,354
-
203,402
218,797
156,062
197,141
147,687
156,488
763,625
636,727
Post-
Employment
Super-
annuation
Benefits
$
17,613
6,156
-
-
-
-
18,966
19,945
14,666
18,050
16,127
15,517
67,732
59,668
Other
Long-Term
Benefits (2)
Termination
Benefits
Share-based
Payments
Shares,
Options and
Rights (3)
$
-
-
-
-
-
-
18,792
21,316
11,849
15,489
3,905
3,737
34,546
40,452
$
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
44,568
10,725
10,886
22,378
-
-
-
-
-
-
-
33,103
55,454
Proportion of
Remuneration
Performance
Related (4)
%
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
206,385
70,956
55,073
54,955
45,732
-
241,160
260,058
182,577
230,680
167,719
175,742
898,646
792,391
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
26
DIRECTORS’ REPORT – REMUNERATION REPORT
FOR THE YEAR ENDED 30 JUNE 2019
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 2020 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 2019 or 30 June 2020.
In accordance with the ASX waiver granted 22 October 2019, the Company advises that the number of remuneration shares that
were issued to directors in the year ended 30 June 2020 totalled nil and the percentage of the Company’s issued capital
represented by these remuneration shares was 0.00%.
The Non-Executive directors were entitled to the issue of 10,399,814 remuneration shares during the financial year ended 30
June 2020. These remuneration shares shall be issued in the next financial year.
(4) Fees for Non-Executive Directors are not linked to the performance of the Group. At the Annual General Meeting held 29
November 2018 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 2018 through
to 31 October 2019, in order to conserve the cash reserves of the Company. Similar shareholder approval was also received at
the Annual General Meeting held on 27 November 2019 for the period 1 November 2019 to 31 October 2020.
(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. On 6 September 2019, the Company announced an expanded
operational role for Mr Lingo to drive the Cooper Basin Strategy. A new agreement for Mr Lingo, effective from 1 August 2019,
had an initial term of 6 months and provided for a monthly consultancy fee of $20,000 per month, plus superannuation; and is
also inclusive of the Chairman’s fees. The agreement was subsequently extended until 30 March 2020 with a further one-month
extension to 30 April 2020.
During 2020 Mr Lingo elected to receive no remuneration shares.
(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 2020 Mr Haywood received no remuneration shares (refer point 3 above). As at 30 June 2020 remuneration
shares not yet issued to Mr Haywood had a value of $12,531. These shares shall be issued in the next financial year.
(7) Mr Schwarz was appointed a Non-Executive Director on 4 September 2019. Mr Schwarz 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 2020 Mr Schwarz received no remuneration shares (refer point 3 above). As at 30 June 2020 remuneration
shares not yet issued to Mr Schwarz had a value of $22,377. These remuneration shares shall be issued in the next financial
year.
(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 up to 31 March
2020, Mr Salomon, requested and was granted 18.5 days leave without pay, further reducing his salary by $19,350, inclusive of
statutory superannuation. A reduction in Mr Solomon’s working hours to further reduce costs was implemented on 1 April 2020.
(9) Mr Bolton was appointed Chief Financial Officer and Company Secretary on 3 June 2016 and Executive Director on 26 March
2020, 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 2020 reflects the reduced working hours implemented 1
October 2017 to facilitate a 20% reduction in salaries. A reduction in Mr Bolton’s working hours to further reduce costs was
implemented on 1 April 2020.
(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 2020 reflects the reduced working hours implemented 1 October 2017 to facilitate a 20% reduction in salaries. A further
reduction in working hours was implemented on 1 May 2020. 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
27
DIRECTORS’ REPORT – REMUNERATION REPORT
FOR THE YEAR ENDED 30 JUNE 2020
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
(2019: nil).
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, (2019: nil).
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 2019 through to 30 June 2020.
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 2020 (2019:
nil).
OILEX LTD
28
DIRECTORS’ REPORT – REMUNERATION REPORT
FOR THE YEAR ENDED 30 JUNE 2020
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:
Held at
1 July 2019
Received on
Exercise of
Options
Remuneration
Shares Issued (1) Other Changes (2)
Held at
30 June 2020
J Salomon
B Lingo (3)
M Bolton
P Haywood
P Schwarz
A Khare
14,987,013
13,648,950
-
3,319,101
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,987,013
13,648,950
-
3,319,101
-
-
(1)
At the AGM held 29 November 2018 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 2018 through to 31 October 2019, in order to
conserve the cash reserves of the Company. Similar shareholder approval was also received at the Annual General Meeting held on 27 November 2019 for
the period 1 November 2019 to 1 October 2020.
The non-executive directors, Mr Haywood and Mr Schwarz, were entitled to the issue of 10,399,814 remuneration shares during the financial year ended 30
June 2020. These remuneration shares shall be issued in the next financial year.
(2) Other changes represent shares that were granted, purchased or sold during the year.
(3)
Includes Mr Lingo’s shareholdings up until his resignation effective 5 May 2020 only.
END OF REMUNERATION REPORT - AUDITED
Mr Jonathan Salomon
Interim Chairman and Managing Director
Mr Mark Bolton
Executive Director and Company Secretary
Signed in accordance with a resolution of the Directors.
West Perth
Western Australia
31 October 2020
OILEX LTD
29
PKF Perth
AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF OILEX LTD
In relation to our audit of the financial report of Oilex Ltd for the year ended 30 June 2020, to the best of my knowledge
and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001
or any applicable code of professional conduct.
PKF PERTH
SIMON FERMANIS
PARTNER
31 October 2020
WEST PERTH,
WESTERN AUSTRALIA
Level 4, 35 Havelock Street, West Perth, WA 6005
PO Box 609, West Perth, WA 6872
T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au
PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or
inactions of any individual member or correspondent firm or firms.
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 2020
`
Revenue
Cost of sales
Gross loss
Other income
Exploration expenditure
Other costs
Administration expense
Share-based payments expense
Reversal of/(Provision for) doubtful debts expense
Impairment of development assets
Other expenses
Results from operating activities
Finance income
Finance costs
Foreign exchange (loss)/gain
Net finance costs
Loss before tax
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
5(a)
5(b)
5(c)
5(d)
5(b)
5(e)
24
13
9
5(f)
5(g)
5(h)
5(i)
6
7
7
2020
$
-
-
98,000
(1,008,719)
(1,270,151)
(2,015,477)
-
107,313
(1,348,458)
(336,921)
(5,774,413)
1,659
(70,977)
2,635
(66,683)
2019
$
188,220
(504,926)
(316,706)
-
(491,675)
-
(1,957,850)
(110,935)
(108,206)
-
(40,990)
(3,026,362)
4,403
(97,162)
1,000
(91,759)
(5,841,096)
(3,118,121)
-
(5,841,096)
-
(3,118,121)
(34,949)
(34,949)
79,951
79,951
(5,876,045)
(3,038,170)
(0.18)
(0.18)
(0.13)
(0.13)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the accompanying notes.
OILEX LTD
31
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
Assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Inventories
Assets held for sale
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
Borrowings
Provisions
Liabilities directly associated with the assets held for sale
Total current liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
12
13
10
20
8
9
17
14
11
15
11, 28
20
11
2020
$
Restated
2019
$
Restated
1 July 2018
$
173,816
645,344
24,212
146,084
989,456
327,791
1,317,247
357,970
497,974
156,464
1,141,309
2,153,717
-
2,153,717
375,507
738,784
115.271
1.303.245
2,532,807
-
2,532,807
581,322
9,823,965
104,040
10,509,327
568,888
9,869,770
145,927
10,584,585
539,793
9,539,435
178,930
10,257,618
11,826,574
12,738,302
12,790,425
1,071,344
143,110
769,555
1,165,671
3,149,680
451,469
3,601,149
697,184
148,731
563,955
855,554
2,265,424
-
2,265,424
4,505,601
4,505,601
3,733,837
3,733,837
779,249
274,651
-
811,798
1,865,698
-
1,865,698
3,542,877
5,408,575
8,106,750
5,999,261
5,408,575
3,719,824
6,739,041
7,382,390
18(a)
18(b)
179,254,814
7,445,820
(182,980,810)
176,502,200
7,501,388
(177,264,547)
174,046,036
7,628,101
(174,291,747)
3,719,824
6,739,041
7,382,390
Refer to Note 3 in relation to details of the restatement.
The above Consolidated Statement of Financial Position is to be read in conjunction with the accompanying notes.
OILEX LTD
32
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
Attributable to Owners of the Company
Issued Capital
$
18(a)
Option Reserve
$
18(b)
Note
Loans Options
Reserve
$
18(b)
Foreign
Currency
Translation
Reserve
$
18(b)
Accumulated
Losses
$
Total Equity
$
Balance at 30 June 2018
Additional doubtful debts provision recognised on
implementation of AASB 9
Balance at 30 June 2018 - adjusted
Total comprehensive (loss)/income
Loss
Other comprehensive income
Foreign currency translation differences
Total other comprehensive (loss)/income
Total comprehensive loss
Transactions with owners of the Company
Contributions and distributions
Shares issued
Capital raising costs (1)
Shares issued on exercise of options
Transfers on forfeited options
Recognition of equity component of loans (Note 15)
Derecognition of equity component of loan upon
repayment
Share-based payment transactions
Total transactions with owners of the Company
Balance at 30 June 2019
Total comprehensive (loss)/income
Loss
Other comprehensive income
Foreign currency translation differences
Total comprehensive (loss)/income
Total comprehensive loss
Transactions with owners of the Company
Contributions and distributions
Shares issued
Shares to be issued
Capital raising costs (1)
Shares issued on exercise of options
Transfers on forfeited options
Recognition of equity component of loans (Note 15)
Derecognition of equity component of loan upon
repayment
Share-based payment transactions
Total transactions with owners of the Company
174,046,036
-
174,046,036
331,889
-
331,889
-
-
-
-
2,126,049
(176,187)
395,367
-
-
-
110,935
2,456,164
-
-
-
-
-
27,791
(293,217)
(29,978)
-
-
-
(295,404)
-
-
-
-
-
-
-
-
-
-
-
98,685
(9,945)
-
88,740
7,296,212
(174,291,747)
7,382,390
-
7,296,212
(177,874)
(174,469,621)
(177,874)
7,204,516
-
(3,118,121)
(3,118,121)
79,951
79,951
-
-
79,951
79,951
79,951
(3,118,121)
(3,038,170)
-
-
-
-
-
-
-
-
-
-
293,217
29,978
-
-
-
323,195
2,126,049
(148,396)
395,367
-
98,685
(9,945)
110,935
2,572,695
176,502,200
36,485
88,740
7,376,163
(177,264,547)
6,739,041
-
-
-
2,560,287
90,449
(228,122)
330,000
-
-
-
-
2,752,614
-
-
-
-
-
-
-
(8,698)
-
-
41,415
32,717
-
-
-
-
-
-
-
(65,644)
62,978
(50,490)
-
(53,336)
-
(5,841,096)
(5,841,096)
(34,949)
-
(34,949)
(34,949)
(5,841,096)
(5,876,045)
-
-
-
-
-
-
-
-
-
-
-
-
-
74,342
-
50,490
-
124,832
2,560,287
90,449
(228,122)
330,000
-
62,978
-
41,415
2,856,827
Balance at 30 June 2020
179,254,814
69,202
35,404
7,341,214
(182,980,810)
3,719,824
(1)
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
33
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
Note
2020
$
2019
$
Cash flows from operating activities
Cash receipts from customers
Payments to suppliers and employees
Cash outflow from operations
Payments for exploration and evaluation expenses
Proceeds from government assistance arrangements
Interest received
Interest paid
Net cash used in operating activities
Cash flows from investing activities
Proceeds from sale of assets and scrap materials
Acquisition of exploration assets (Note 19)
Acquisition of exploration licence interests
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
Proceeds from borrowings
Repayment of borrowings
Net cash from financing activities
Net decrease 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
-
(2,018,352)
(2,018,352)
(897,455)
98,000
1,659
(21,513)
(2,837,661)
-
(72,750)
(49,583)
(1,453)
(123,786)
2,365,288
330,000
(186,708)
597,781
(330,000)
2,776,361
(185,086)
357,970
932
173,816
260,501
(2,575,376)
(2,314,875)
(629,639)
-
6,417
(24,466)
(2,962,563)
572
-
-
(2,149)
(1,577)
2,126,049
395,367
(148,396)
645,000
(65,000)
2,953,020
(11,120)
375,507
(6,417)
357,970
12
18(a)
12
The above Consolidated Statement of Cash Flows is to be read in conjunction with the accompanying notes.
OILEX LTD
34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
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.
Parent Entity Information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only.
Supplementary information about the parent entity is disclosed in note 25.
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 31 October 2020.
(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 $5,841,096 (2019: $3,118,121) and had cash outflows from operating activities of $2,837,661
(2019: $2,962,563). As at 30 June 2020, the Group’s current liabilities exceeded current assets by $2,283,902 (2019:
$111,707) and the Group has cash and cash equivalents of $173,816 (2019: $357,970).
On 17 July 2020, the Company announced that it had issued the second tranche of 55,555,555 shares at £0.0009
(A$0.001792) pursuant to the equity raise announcements on 15 March 2020 and 23 April 2020.
On 27 July 2020, the Company entered into an amendment agreement to vary the terms of its Series C loan funding facility
of £125,000 entered into on 3 February 2020. Pursuant to the amendment, the loan repayment date was extended from 1
August 2020 to 31 October 2020. In addition, the Company will issue 113,636,364 new options to the lender at an exercise
price of £0.0011 (A$0.00197) and expiry date of 29 January 2021, which is subject to shareholder approval on or before 30
November 2020. All other loan terms and conditions remain the same; and are extended to 31 October 2020.
On 31 July 2020, the Company announced that it had arranged an equity capital raising to secure funding of £0.25m (A$0.5m)
through the placing of 312,500,000 new shares at £0.0008 (A$0.00144) per share. All shares were subsequently issued on
10 August 2020.
Pursuant to an amendment agreement to the Series C loan of GBP£125,000 loan announced on 30 October 2020, the loan
repayment date has been extended from 31 October 2020 to 31 December 2020. All other terms remain the same and are
extended to 31 December 2020.
OILEX LTD
35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 2 – BASIS OF PREPARATION (CONTINUED)
(c) Going Concern Basis (Continued)
The Group also requires further funding within the next twelve months in order to repay the Series C & D loans (amount drawn
at 30 June 2020: £310,000), meet planned expenditures for its projects and ongoing administrative expenses and to progress
the Cambay drilling programme, and for any new business opportunities that the Group may pursue.
The Directors believe that the Group 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, acknowledging that 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 sale process towards securing a new
joint venture partner for the Cambay Production Sharing Contract (PSC) continues to progress despite the delays being
experienced by all parties due to the impact of Covid-19 in India.
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 and to reduce discretionary administrative expenditure.
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 19. 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 21.
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
36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
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 6
Exploration and Evaluation Assets - refer note 8
Development Assets - refer note 9
Provisions - refer note 11
Trade and other receivables - refer note 13
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have,
on the consolidated entity based on known information. This consideration extends to the nature of the products and services
offered, customers, supply chain, staffing and geographic regions in which the consolidated entity operates.
The impact of the Coronavirus (COVID-19) up to 30 June 2020 has been financially negative for the consolidated entity. This
is largely due to its general impact in India where significant delays have been experienced with the sale process being
conducted by GSPC for its 55% interest in the Cambay Production Sharing Contract (PSC). As a result, Indian operations
have continued to be maintained on a ‘care and maintenance’ basis for a longer period than originally anticipated.
Other than this mater and those addressed in specific notes, there does not currently appear to be either any other significant
impact upon the financial statements or any significant uncertainties with respect to events or conditions which may impact
the consolidated entity unfavourably as at the reporting date or subsequently as a result of the Coronavirus (COVID-19)
pandemic.
(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.
Changes in significant accounting policies
a) Leases
The Group has initially adopted AASB 16 Leases from 1 July 2019. A number of other new standards are effective from 1
July 2019 but they do not have a material effect on the Group’s financial statements.
AASB 16 introduced a single, on-balance sheet accounting model for leases. As a result, the Group, as a lessee, is required
to recognise use-of-right assets representing its right to use the underlying assets and lease liabilities representing its
obligation to make lease payments.
OILEX LTD
37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 2 – BASIS OF PREPARATION (CONTINUED)
The Group has applied AASB 16 using the modified retrospective approach, under which the cumulative effect of initial
application is recognised in retained earnings at 1 July 2019. Accordingly, the comparative information presented for 2018
has not been restated. – i.e. it is presented, as previously reported, under AASB 117 and related interpretations. The details
of the changes in accounting policies are disclosed below.
Definition of a lease
Previously, the Group determined at contract inception whether an arrangement was or contained a lease under AASB
Interpretation 4 Determining Whether an Arrangement contains a Lease. The Group now assesses whether a contract is, or
contains, a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for
consideration.
At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the
contract to each lease and non-lease component on the basis of their stand-alone prices. However, for leases of properties
in which it is a lessee, the Group has elected not to separate non-lease components and will instead account for the lease
and non-lease components as a single lease component.
As a lessee
Accounting policy (applied from 1 July 2019)
As a lessee, the Group previously classified leases as operating or finance leases based on its assessment of whether the
lease transferred substantially all of the risks and rewards of ownership. Under AASB 16, the Group recognises right-of-use
assets and lease liabilities for most leases – i.e. these leases are on the balance sheet.
However, the Group has elected not to recognise right-of-use assets and lease liabilities for some leases of low-value assets
and short-term leases (lease term of 12 months or less). The Group recognises the lease payments associated with these
leases as an expense on a straight-line basis over the term lease.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
initially measured at cost, and subsequently at cost less any accumulated depreciation and impairment losses; and adjusted
for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental
borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payment made.
It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the
estimate of the amount expected to be payable under a residual value guarantee, or as appropriate, changes in the
assessment of whether a purchase or extension option is certainly reasonable certain to be exercised or a termination option
is reasonably certain not to be exercised.
The Group shall apply judgement to determine the lease term for some lease contracts in which it is a lessee that include
renewal options. The assessment of whether the Group is reasonably certain to exercise such options impacts the lease
term, which significantly affects the amount of lease liabilities and right-of-use assets recognised.
Transition
The Group has applied the exemption not to recognise right-of-use assets and liabilities for leases with less than 12 months
of lease term when applying AASB 16 to leases previously classified as operating leases under AASB 117.
As a result of initially applying AASB 16 as at 1 July 2019, there has been $nil impact to the balance sheet including retained
earnings, and the current loss for the financial period ending 30 June 2020.
b)
Initial application of IFRIC Uncertainty over Income Tax Treatments
The Group has adopted IFRIC 23 with an initial application date of 1 July 2019.
The IFRIC outlines what to do when there is uncertainty over income tax treatments. The Group will determine if the uncertain
tax position needs to be assessed on an entity-by-entity-basis or as a group. Furthermore, an assessment will be done on the
probability that the ATO (or relevant tax authority) will accept the treatment of the uncertain tax event and determine its
accounting tax position.
In the event that it is not probable that the relevant tax authority will accept the treatment, the Group will determine the effect
of the uncertain tax event and the accounting tax position using either the expected value method or the most likely amount.
OILEX LTD
38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 2 – BASIS OF PREPARATION (CONTINUED)
(i) Standards issued but not yet effective
A number of new standards are effective for annual periods beginning after 1 January 2020 and earlier application is
permitted; however, the Group has not early adopted the new or amended standards in preparing these consolidated
financial statements.
The following amended standards and interpretations are not expected to have a significant impact on the Group’s
consolidated financial statements.
-
-
-
Amendments to References to Conceptual Framework in IFRS Standards.
Definition of a Business (Amendments to AASB 3).
Definition of Material (Amendments to AASB 1 and AASB 8).
NOTE 3 – RESTATEMENT OF COMPARATIVES – ERROR IN FINANCIAL STATEMENTS
An adjustment has been made to opening retained earnings at 1 July 2018 with respect to an accounting error made with
initial recognition and subsequent adjustments to the Provision for Restoration related to Development Assets (Note 9). In
accordance with AASB 116 - Property, Plant and Equipment the correct accounting treatment for the costs to restore a mine
site is to recognise a Restoration Development Asset to the extent that the development relates to future production activities.
In prior years the rehabilitation costs and respective adjustments have been incorrectly charged to the profit and loss. The
adjustment has been made as follows:
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
OILEX LTD
1 July 2018
$
Restated
$
Adjustment
1 July 2018
$
Reported
375,507
738,784
115,271
1,303,245
2,532,807
539,793
9,539,435
178,930
10,257,618
-
-
-
-
-
3,374,180
-
3,374,180
375,507
738,784
115.271
1.303.245
2.532,807
539,793
6,165,255
178,930
6,883,978
12,790,425
3,374,180
9,416,785
779,249
274,651
811,798
1,865,698
3,542,877
3,542,877
5,408,575
-
-
-
-
-
-
-
779,249
274,651
811,798
1,865,698
3,542,877
3,542,877
5,408,575
7,382,390
3,374,180
4,008,210
174,046,036
7,628,101
(174,291,747)
-
-
3,374,180
174,046,036
7,628,101
(177,665,927)
7,382,390
3,374,180
4,008,210
39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
OILEX LTD’S RESULTS FOR THE YEAR
This section focuses on the results and performance of the Group.
NOTE 4 – 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 0% of the Group’s
total revenues (2019: 39%) and Indian Oil Corporation Limited, in its capacity as nominee of the Government of India, with oil
sales representing 0% of the Group’s total revenues (2019: 61%).
No revenues were recognised during the financial period as oil and gas operations were maintained on a ‘care and
maintenance’ basis.
Revenue
The Group recognises revenue as follows:
a) Revenue from Contracts with Customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange
for transferring goods or services to a customer. For each contract with a customer, the Group: identifies the contract with a
customer; identifies the performance obligations in the contract; determines the transaction price which takes into account
estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance
obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and recognises
revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods
or services promised.
OILEX LTD
40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 4 – OPERATING SEGMENTS (CONTINUED)
b)
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
c) Other Revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Expenses
Impairment – refer notes 8 and 9
Doubtful debts – refer note 13
Depreciation – refer note 17
Amortisation – refer note 9
Employee benefits – refer note 11
Leases – refer note 27
Goods and Services Tax (‘GST’) and other similar Taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of
the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial
position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
OILEX LTD
41
NOTE 4 – OPERATING SEGMENTS (CONTINUED)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
India
Australia
JPDA (1)
Indonesia
United Kingdom
Corporate (2)
Consolidated
2020
$
2019
$
2020
$
2019
$
2020
$
2019
$
2020
$
2019
$
2020
$
2019
$
2020
$
2019
$
2020
$
2019
$
-
188,220
(230,684)
(275,455)
(18)
(9,389)
(1,931)
(66,186)
(1,030,060)
(161,354)
(1,270,151)
(1,270,151)
(587,546)
(1,348,458)
(19,231)
-
-
(504,926)
(316,706)
(456,892)
-
(21,680)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(7,663)
-
(10,459)
-
123,332
(3,233,049)
(805,737)
123,332
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(128,847)
-
-
-
-
-
(476,017)
-
(85,050)
-
(49,028)
-
233,653
-
-
(476,017)
(85,050)
(49,028)
233,653
(128,847)
Revenue
External revenue
Other costs (30 June 2019: Cost
of sales)
Care and maintenance costs (30
June 2019: Production costs)
Amortisation of development assets
Movement in oil stocks inventory
Write-down of inventories to net
realisable values
Total other costs (30 June 2019:
Cost of sales)
Gross loss
Exploration expenditure expensed
Impairment of development assets
Depreciation
Share-based payments
Other income
Provision for doubtful debts
expense
Other expenses
Reportable segment profit/(loss)
before income tax
Net finance income
Foreign exchange (loss)/gain
Income tax expense
Net loss for the year
Segment assets
Segment liabilities
11,025,333
5,449,819
8,721,862
4,104,158
317,341
-
7
-
17,340
1,227,090
14,238
861,776
-
84,950
-
78,454
-
121,673
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.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
188,220
(230,684)
(275,455)
(18)
(9,389)
(1,931)
(66,186)
(1,030,060)
(161,354)
-
-
(292,326)
-
(7,635)
-
98,000
-
-
(34,783)
-
(11,084)
(110,935)
-
(1,270,151)
(1,270,151)
(1,008,718)
(1,348,458)
(26,866)
-
98,000
(504,926)
(316,706)
(491,675)
-
(32,763)
(110,935)
-
107,313
(1,916,155)
(108,206)
(2,104,219)
107,313
(2,325,532)
(108,206)
(1,966,075)
(2,010,804)
(2,369,226)
(5,774,413)
(3,026,360)
(69,318)
2,635
-
(5,841,096)
(92,759)
998
-
(3,118,121)
466,560
1,223,218
628,015
954,873
11,826,574
8,106,750
12,738,302
5,999,261
OILEX LTD
42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 5 – REVENUE AND EXPENSES
Loss from ordinary activities before tax has been determined after the following revenues and expenses:
(a) Revenue
Oil sales
Gas sales
(b) Other costs (30 June 2019: Cost of sales)
Care and maintenance costs (30 June 2019: Production costs)
Amortisation of development assets
Movement in oil stocks inventory
Write-down of inventory to net realisable values
(c) Other income
Government assistance arrangements (1)
(d) Exploration expense
(e) Administration expenses
Employee benefits expense
Redundancy benefits
Administration expense
(f) Other Expenses
Depreciation expense
Termination penalty provision JPDA 06-103 PSC
Loss on disposal of plant and equipment
17
(g) Finance income
Interest income
(h) Finance costs
Interest expense - borrowings
(i) Foreign exchange (Loss)/Gain - net
Foreign exchange (loss)/gain- realised
Foreign exchange (loss)/gain - unrealised
Note
2020
$
-
-
-
(230,684)
(18)
(9,389)
(1,030,060)
(1,270,151)
98,000
98,000
2019
$
115,673
72,547
188,220
(275,455)
(1,931)
(66,186)
(161,354)
(504,926)
-
-
4
(1,008,719)
(491,675)
(718,210)
-
(1,297,267)
(2,015,477)
(26,867)
(297,885)
(12,169)
(336,921)
(819,627)
(31,928)
(1,106,295)
(1,957,850)
(32,763)
-
(8,227)
(40,990)
1,659
4,403
(70,977)
(97,162)
10,912
(8,277)
2,635
5,582
(4,582)
1,000
(1) Assistance packages provided by the Federal and State government to provide assistance to businesses and
employers in response to the negative impacts of Covid-19 upon the Australian and Western Australia
economies.
Accounting Policy - Revenue
The Group’s Revenue policy is outlined in note 4.
OILEX LTD
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 6 – INCOME TAX EXPENSE
Numerical reconciliation between tax expense and pre-tax accounting loss:
Loss before tax
Tax using the domestic corporation tax rate of 27.5% (2019: 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
Government assistance arrangements
Unrecognised deferred tax assets generated during the year and not
brought to account at reporting date as realisation is not regarded as probable
Tax expense
Tax losses utilised not previously brought to account
Impact of reduction in future tax rates
Unrecognised deferred tax assets not brought to account
Tax expense for the year
2020
$
(5,841,096)
(1,606,301)
(265,604)
-
1,939,864
149,560
(13,750)
203,769
-
203,769
(203,769)
448,166
(448,166)
-
2019
$
(3,118,121)
(857,483)
(497,254)
30,507
1,609,412
208,577
-
493,759
-
493,759
(493,759)
-
-
-
Tax Assets and Liabilities
During the year ended 30 June 2020, $203,769 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 reporting 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
2020
$
2019
$
28,520,335
16,819,556
45,339,891
27,482,151
17,018,120
44,500,271
The deductible temporary differences and tax losses do not expire under current tax legislation.
The deferred tax asset not brought to account for the 2020 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 2020 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.
Change in Corporate Tax Rate
There has been a legislated change in the corporate tax rate that will apply to future income tax years. The impact of this
reduction in the corporate tax rate has been reflected in the unrecognised tax positions and the prima facie income tax
reconciliation above.
OILEX LTD
44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 6 – 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 $4,501,080 (2019: $5,480,637).
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
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 7 – LOSS PER SHARE
(a) Basic Loss Per Share
Loss used in calculating earnings per share
2020
$
2019
$
Loss for the period attributable to ordinary shareholders
5,841,096
3,118,121
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
Note
18
2020
Number
2019
Number
2,587,318,001
575,564,712
57,280,753
3,220,163,466
2,001,968,379
312,684,194
61,790,019
2,376,442,592
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.
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
46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
ASSETS AND LIABILITIES
This section provides information on the assets employed to develop value for shareholders and the liabilities incurred as a
result.
NOTE 8 – EXPLORATION AND EVALUATION
Balance at 1 July
Acquisition of exploration licence interests
Reclassification to assets held for sale (Note 20)
Effect of movements in foreign exchange rates
Balance at 30 June
2020
$
568,888
238,000
(238,000)
12,434
581,322
2019
$
539,793
-
-
29,095
568,888
As at 30 June 2020, the balance of exploration and evaluation assets relates to the Cambay Field, which is currently at
evaluation stage, and there was no impairment of this asset (2019: Nil).
The Cambay Field has minimal production that is sold to a third party.
Further development of the Cambay field is presently on hold pending the completion of the sale process being conducted
by GSPC for its 55% PI in the Cambay PSC. This sale process, however, has been subject to significant delays due to the
impact of Covid-19 in India.
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 reporting 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.
47
OILEX LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 9 – DEVELOPMENT ASSETS
Cost - Cambay Development Assets
Balance at 1 July
Effect of movements in foreign exchange rates
Balance at 30 June
Amortisation and Impairment Losses – Cambay Development Assets
Balance at 1 July
Impairment of development assets
Amortisation charge for the year
Effect of movements in foreign exchange rates
Balance at 30 June
Carrying Amount – Cambay Development Assets
Cost – Cambay Restoration Asset
Balance at 1 July
Additions during the period
Effect of movements in foreign exchange rates
Balance at 30 June
2020
$
17,066,528
355,248
17,421,776
10,570,938
1,348,458
17
183,999
12,103,412
5,318,364
3,374,181
1,131,420
-
4,505,601
2019
$
16,235,257
831,271
17,066,528
10,070,002
-
1,931
499,005
10,570,938
6,495,436
3,374,181
-
-
3,374,181
Amortisation and Impairment Losses – Cambay Restoration Asset
Balance at 30 June
Carrying Amount – Cambay Restoration Asset
-
4,505,601
-
3,374,181
Carrying Amounts - Total
At 1 July
At 30 June
Cambay Field Development Assets
9,869,770
9,539,435
9,823,965
9,869,770
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 dispute resolution with GSPC. An
indicator of impairment identified in the 2020 financial year is Covid-19, which has seen reduced global demand for energy
products and caused delays to the implementation of the dispute resolution with GSPC. (2019: No indicators were identified)
An impairment charge of $1,348,458 has been applied to the Cambay Field development assets for the financial year ended
30 June 2020 (2019: Nil).
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.
Restoration costs expected to be incurred are provided for as part of development mine assets that give rise to the need for
restoration.
OILEX LTD
48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 9 – DEVELOPMENT ASSETS (CONTINUED)
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.
NOTE 10 – INVENTORIES
Oil on hand - net realisable value
Drilling inventory - net realisable value
2020
$
21,857
124,227
146,084
2019
$
31,632
1,109,677
1,141,309
Inventories have been reduced by $995,225 (2019: $161,354) as a result of write-down to net realisable value, which includes
a $166,916 write-down to Bhandut JV inventories which have been reclassified to Assets held for sale (note 20).
Accounting Policy
Inventories comprising materials and consumables and petroleum products are measured at the lower of cost and net
realisable value, on a ‘weighted average’ basis. Costs comprises direct materials and delivery costs, direct labour, import
duties and other taxes, an appropriate portion of variable and fixed overhead expenditure based on normal operating
capacity. Given that oil activities have not achieved commercial levels of production, oil on hand is recognised at 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.
OILEX LTD
49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 11 – PROVISIONS
Site Restoration, Well Abandonment and Other Provisions
Balance at 1 July
Provision adjustments during the year - Termination (refer note 28)
Provision adjustments during the year- Restoration
Reclassification to liabilities directly associated with the assets held for sale
(Note 20)
Effect of movements in exchange rates
Balance at 30 June
Current – Termination (refer note 28)
Non-current - Restoration
Current - Employee benefits
Accounting Policy
2020
$
4,589,391
297,885
1,131,420
(441,264)
93,840
5,671,272
1,165,671
4,505,601
5,671,272
2019
$
4,354,675
-
-
-
234,716
4,589,391
855,554
3,733,837
4,589,391
143,110
148,731
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 reporting 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
50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 12 – CASH AND CASH EQUIVALENTS
Cash at bank and on hand
2020
$
2019
$
173,816
357,970
The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in note
23.
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
Amortisation of development assets
Depreciation
Interest expense
Provision for doubtful debts expense
Impairment of development assets
Loss on disposal of assets
Equity settled share-based payments
Unrealised foreign exchange (gain)/loss
2020
$
2019
$
(5,841,096)
18
26,867
43,439
(107,313)
1,348,458
12,169
-
(6,083)
(3,118,121)
1,931
32,763
72,695
108,206
-
8,227
110,935
(46,688)
Operating Loss Before Changes in Working Capital and Provisions
(4,523,541)
(2,830,052)
Movement in trade and other payables
Movement in prepayments
Movement in trade and other receivables
Movement in provisions
Movement in inventories
Movement in employee benefits
Net Cash Used in Operating Activities
384,409
132,253
(114,927)
277,744
991,935
14,520
(2,837,661)
(82,065)
(41,193)
(45,269)
-
161,936
(125,920)
(2,962,563)
OILEX LTD
51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 13 – TRADE AND OTHER RECEIVABLES
Current
Allocation of receivables
Joint venture receivables
Other receivables
Shares to be issued
Joint venture receivables
Joint venture receivables
Provision for doubtful debts
Other receivables
Corporate receivables
Provision for doubtful debts
2020
$
458,829
96,066
90,449
645,344
2019
$
353,492
144,482
-
497,974
6,394,990
(5,936,161)
458,829
6,272,808
(5,919,316)
353,492
240,793
(144,727)
96,066
288,040
(143,558)
144,482
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
(GSPC), 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 2020. 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.
The Group is in continuing discussions with GSPC in order to resolve the outstanding issues and recover the outstanding
amounts.
The carrying value of trade and other receivables approximates its fair value due to the assessment of recoverability.
Details of the Group’s credit risk are disclosed in note 23(b).
Movement in provision for doubtful debts
Balance at 1 July
Provisions (made)/reversed during the year
Provision adjustment, as at 1 July 2018, on adoption of AASB 9
Effect of movements in exchange rates
Balance at 30 June
Allocation of impairment loss
Joint venture receivables
Other receivables
2020
$
2019
$
(6,062,874)
107,313
-
(125,327)
(6,080,888)
(5,497,703)
(108,206)
(177,874)
(279,091)
(6,062,874)
(5,936,161)
(144,727)
(6,080,888)
(5,919,316)
(143,558)
(6,062,874)
OILEX LTD
52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 13 – TRADE AND OTHER RECEIVABLES (CONTINUED)
Trade and other receivables, which includes receivables, loans and deposits, are initially recognised when they are
originated. All other financial assets are initially recognised when the Group becomes a party to the contractual provisions
of the instrument.
All trade and other receivables do not include a significant financing component and are therefore initially measured at the
transaction price.
On initial recognition, trade and other receivables are classified as measured as at amortised cost. Financial assets are not
reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
-
-
It is held within a business model whose objective is to hold assets to collect contractual cash flows; and
Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on
the principal amount outstanding.
For the purpose of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’
is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding
during a particular amount of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs).
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire , or it
transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of
ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks
and rewards of ownership and it does not retain control of the financial asset.
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.
Impairment of Receivables
The Group recognises loss allowances for ‘expected credit loss’ (ECL’s) on financial assets measured at amortised cost.
Loss allowances for trade and other receivables are always measured at an amount equal to lifetime ECL’s.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when
estimating ECL’s, the Group considers reasonable and supportable information that is relevant and available without undue
cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical
experience and informed credit assessment and including forward-looking information.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.
The Group considers a financial asset to be in default when the financial asset is more than 90 days due past.
Lifetime ECL’s are the ECL’s that result from all possible default events over the expected life of a financial instrument.
Measurement of ECL’s
ECL’s are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash
shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that
the Group expects to receive. ECL’s are discounted at the effective interest rate of the financial asset.
Expected credit loss assessment
The Group uses its allowance schedule to measure the ECLs of trade and other receivables. The allowance schedule is
based on actual credit loss experience over the past years. The ECL computed is purely derived from historical data which
management is of the view that the historical conditions are representative of the conditions prevailing at the reporting date.
Write-off
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a
financial asset in its entirety or a portion thereof.
OILEX LTD
53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 14 – TRADE AND OTHER PAYABLES
Trade creditors
Accruals
2020
$
507,204
564,140
1,071,344
2019
$
302,338
394,846
697,184
The Company’s assessment in note 13, 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
$156,946 at 30 June 2020 (2019: $76,116) to cover Cambay and Bhandut Joint Venture third party liabilities.
The carrying value of trade and other payables 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.
OILEX LTD
54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 15 – BORROWINGS
Unsecured Loans
2020
$
769,555
769,555
2019
$
563,955
563,955
Terms and repayment schedule
At 30 June 2020, the terms and conditions of outstanding loans are as follows:
Currency
Nominal
interest rate
Year of
maturity
Face
value
Carrying
amount
Face value
Carrying
amount
2020
$
2019
$
Unsecured loans – from shareholders and financiers
Series A loan – AUD $330,000 (fully repaid)
Series B loan – AUD $250,000 (fully drawn)
Series C loan – GBP £125,000 (fully drawn)
Series D loan – GBP £225,000 (drawn £185,000))
AUD
AUD
GBP
GBP
5.0%
5.0%
5.0%
5.0%
-
-
-
330,000
325,205
2020
250,000
247,357
250,000
238,750
2020
223,774
221,409
2021
331,185
300,789
-
-
-
-
804,959
769,555
580,000
563,955
At balance date, options had been issued to the lenders in connection to the above loans, as follows:
a) Series B: 115,723,273 share options @ £0.0011 exercisable on or before the loan maturity date of 31 July 2020;
b) Series C: 59,523,810 share options @ £0.0021 exercisable on or before the loan maturity date of 1 August 2020;
and
c) Series D: 107,142,857 share options @ £0.0021 exercisable on or before 1 August 2020, and 204,545,455 share
options @£0.0011 exercisable on or before the loan maturity date of 30 June 2021.
In determining the fair value of the liability component of these borrowing arrangements, it has been estimated that the
effective interest rate of similar borrowings without a share option component is 18%. The fair value of the share options
equity component of these borrowing arrangements has been recognised in the Loans Options Reserve as the loans have
been treated as a convertible note. That is, the borrowing arrangement falls within the definition of a compound financial
instrument and as such as been classified as both a financial liability and equity.
The 115,723,273 share options @ £0.0011 exercisable on or before 31 July 2020, attached to the above-mentioned Series
B loans, were not exercised and have lapsed.
The 59,523,810 share options @ £0.0021 exercisable on or before 1 August 2020, attached to the above-mentioned Series
C loans, were not exercised and have lapsed.
The 107,142,857 share options @ £0.0021 exercisable on or before 1 August 2020, attached to the above-mentioned Series
D loans, were not exercised and have lapsed.
On 23 July 2019, the Company entered into an amendment agreement to vary the terms of its Series C loan funding facility
of £125,000 entered into on 3 February 2020. Pursuant to the amendment, the loan repayment date has been extended
from 1 August 2020 to 31 October 2020. In addition, the Company will issue 113,636,364 new options to the lenders at an
exercise price of £0.0011 and expiry date of 29 January 2021, which is subject to shareholder approval on or before 30
November 2020. All other loan terms and conditions remain the same; and are extended to 31 October 2020.
On 24 August 2020, the Series B A$250,000 loan was fully repaid, together with interest payable.
Pursuant to an amendment agreement to the Series C loan of GBP£125,000 loan announced on 30 October 2020, the loan
repayment date has been extended from 31 October 2020 to 31 December 2020. All other terms remain the same and are
extended to 31 December 2020.
The loans are subject to the following key undertakings without prior approval by the lenders:
• Not to dispose of assets having an aggregate value of more than $1 million;
• Not to incur any financial indebtedness more than $50,000; and
• Not to incur any aggregate payment or outgoing exceeding $1m (except for employee benefit expenses).
OILEX LTD
55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 15 – BORROWINGS (CONTINUED)
Accounting Policy
General
All borrowings are initially recognised when the Group becomes a party to the contractual provisions of the lending
instrument. All borrowings are initially recognised at fair value less transaction costs. Borrowings are subsequently carried
at amortised cost.
The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire. The Group
also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially
different, in which case a new financial liability based on the modified terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid
(including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.
Series A, B, C and D Loans
The liability component of loans is initially recognised at the fair value of a similar liability that does not have an equity
conversion option. The equity component is initially recognised at the difference between the fair value of the loan as a whole
and the fair value of the liability component. Subsequent to initial recognition, the liability component of the loan is measured
at amortised cost using the effective interest method. The equity component of a loan is not remeasured. Interest related to
the financial liability is recognised in profit or loss.
NOTE 16 – 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 $nil (2019: $nil).
There are no minimum exploration work commitments in the Cambay and Bhandut Production Sharing Contracts.
There are no minimum exploration work commitments in the Cooper-Eromanga Basins as the two Petroleum Exploration
Licences and the 27 Petroleum Retention Licences in the Basins are currently in suspension status with the Department for
Energy and Mining, South Australia.
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 2020 (2019: Nil).
OILEX LTD
56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 17 – PROPERTY, PLANT AND EQUIPMENT
Motor
Vehicles
$
Plant and
Equipment
$
Office
Furniture
$
Cost
Balance at 1 July 2018
Disposals
Currency translation differences
Balance at 30 June 2019
Additions
Disposals
Currency translation differences
Reclassification to assets held for sale (Note 19)
Balance at 30 June 2020
Depreciation and Impairment Losses
Balance at 1 July 2018
Depreciation charge for the year
Disposals
Currency translation differences
Balance at 30 June 2019
Depreciation charge for the year
Disposals
Currency translation differences
Reclassification to assets held for sale (Note 19)
Balance at 30 June 2020
Carrying amounts
At 1 July 2019
At 30 June 2020
Accounting Policy
9,781
-
527
10,308
-
-
225
-
10,533
9,397
108
-
508
10,013
94
-
217
-
10,324
295
209
888,121
(681)
24,998
912,438
1,453
(21,221)
10,684
(36,354)
867,000
743,779
28,682
(655)
19,095
790,901
23,275
(17,728)
8,100
(29,186)
775,362
121,537
91,638
144,376
(13,841)
4,146
136,830
-
(43,673)
1,772
-
94,929
110,172
3,973
(5,068)
3,658
112,735
3,498
(35,049)
1,551
-
82,736
24,095
12,193
Total
$
1,042,278
(14,522)
29,671
1,059,576
1,453
(64,894)
12,681
(36,354)
972,462
863,348
32,763
(5,723)
23,261
913,649
26,867
(52,777)
9,869
(29,186)
868,422
145,927
104,040
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 or straight line 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
57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
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 18 – ISSUED CAPITAL AND RESERVES
The reconciliation of the movement in capital, reserves and accumulated losses for the consolidated entity can be found in
the consolidated statement of changes in equity.
(a) Issued Capital
Ordinary Shares
On issue at 1 July - fully paid
Issue of share capital
Shares issued for cash (2) (4) (5) (7)
Shares issued for non-cash (1) (3)
Shares to be issued (7)
Exercise of unlisted options (6)
Capital raising costs
Balance at 30 June - fully paid
2020
Number
of Ordinary
Shares
2020
$
Issued Capital
2019
Number
of Ordinary
Shares
2019
$
Issued Capital
2,587,318,001
176,502,200
2,001,968,379
174,046,036
874,289,063
62,873,896
55,555,556
124,060,150
-
3,704,096,666
2,365,288
194,999
90,449
330,000
(228,122)
179,254,814
458,793,303
26,365,320
2,126,049
110,936
100,190,999
-
2,587,318,001
395,367
(176,188)
176,502,200
Refer notes following for additional information and Note 23 for details of unlisted options.
The issue of shares in lieu of non-executive director income were approved by shareholders at the Annual General Meeting
(AGM) held on 29 November 2018 for the period from 1 November 2018 to 31 October 2019; and the AGM held on 27
November 2019 for the period from 1 November 2019 to 1 October 2020. The shares shall be issued at a price based upon
the 10-Day VWAP up to the applicable quarter end for the period.
In accordance with the ASX waiver granted on 22 October 2019, the Company advises that the number of remuneration
shares that were issued to directors totalled nil for the year ended 30 June 2020, which was equivalent to 0% of the
Company’s issued capital as at 30 June 2020.
The Non-Executive directors were entitled to the issue of 10,399,814 remuneration shares during the financial year ended
30 June 2020. These remuneration shares will be issued in the next financial year.
Additional information of the issue of ordinary shares and unlisted options:
1) Pursuant to an announcement on 7 August 2019 relating to an agreement with Holloman Energy Corporation to acquire
an interest in petroleum exploration licences (PEL’s 112 & 114) in the Cooper-Eromanga Basins in South Australia, the
Company issued, in accordance with the agreement:
-
-
24,250,150 new ordinary shares on 7 August 2019 at a deemed price of $0.003; and
16,166,767 new ordinary shares on 14 October 2019 at the above-mentioned deemed price.
2) Pursuant to an equity raise announcement on 31 July 2019, relating to the placement of 257,329,999 new ordinary
shares at an issue price of £0.0013 (A$0.002330), the Company issued the shares on 13 August 2019.
3) Pursuant to an announcement on 14 August 2019 relating to an agreement with Perseville Investing Inc and Terra Nova
Energy (Australia) Pty Ltd to acquire additional interests in petroleum exploration licenses (PEL’s 112 & 114), the
Company issued, in accordance with the agreement:
-
-
9,166,333 new ordinary shares on 14 August 2019 at a deemed price of $0.003; and
13,290,646 new ordinary shares on 14 October 2019 at the above-mentioned deemed price.
4) Pursuant to an equity raise announcement on 30 September 2019, relating to the placement of 315,789,474 new
ordinary shares at an issue price of £0.0019 (A$0.003480):
-
-
118,421,053 shares were issued on 14 October 2019; and
197,368,421 shares were issued on 21 October 2019.
5) Pursuant to an equity raise announcement on 30 October 2019, relating to the placement of 78,947,368 new ordinary
shares at a price of £0.0019 (A$0.00356), all 78,947,368 shares were issued on 5 November 2019.
OILEX LTD
58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 18 – ISSUED CAPITAL AND RESERVES (CONTINUED)
6) Pursuant to the Company’s announcement on 31 December 2019 relating to the exercise/underwriting of 124,060,150
options convertible at $0.00266 each, 124,060,150 shares were issued on 3 January 2020.
7) Pursuant to equity raise announcements on 15 March 2020 and 23 April 2020, relating to the placement of 277,777,778
new ordinary shares at an issue price of £0.0009 (A$0.001792), the first tranche of 222,222,222 shares were issued on
15 May 2020.
Other receivables (refer Note 13) include an amount of $90,449 receivable in connection to the second tranche of
55,555,555 shares which have been recognised at balance date given that a contractual right to receive settlement
exists. This amount was received in July 2020.
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.
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.
Subsequent Event
On 17 July 2020, the Company announced that it had issued the second tranche of 55,555,555 shares at £0.0009
(A$0.001792) pursuant to the equity raise announcements on 15 March 2020 and 23 April 2020.
(b) Reserves
Foreign Currency Translation Reserve
Option Reserve
Loans Option Reserve
Foreign Currency Translation Reserve (FCTR)
2020
$
7,341,214
69,202
35,404
7,445,820
2019
$
7,376,163
36,485
88,740
7,501,388
The foreign currency translation reserve is comprised of 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.
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.
OILEX LTD
59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 19 – CONSOLIDATED ENTITIES
Country of
Incorporation
Ownership Interest %
2020
2019
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
Oilex N.L. Holdings (India) Limited
Oilex (West Kampar) Limited
CoEra Limited (incorporated 7 October 2019)
Holloman Petroleum Pty Ltd
Cordillo Energy Pty Ltd (incorporated 18 October 2019)
Oilex EIS Limited (incorporated 12 December 2019)
Australia
Australia
Australia
Australia
Australia
Australia
Australia
India
Cyprus
Cyprus
Australia
Australia
Australia
United Kingdom
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
-
-
-
Acquisition of Subsidiary
On 16 October 2019, the Group completed the acquisition of 100% of the shares in Holloman Petroleum Pty Ltd pursuant to
the share purchase agreement entered into with Holloman Energy Corporation.
Consideration transferred
The following table summarises the acquisition-date fair value of each major class of consideration transferred.
Cash
Equity instruments (40,416,917 ordinary shares)
Total consideration transferred
72,750
121,251
194,001
The fair value of the ordinary shares issued was based on the listed share price of the Company at 7 August 2019 of $0.003
per share.
Acquisition related costs
The Group incurred acquisition-related costs of $17,000 relating to external legal fees. These costs have been included in
‘administration expense’ in the condensed consolidated statement of profit or loss and OCI.
Identifiable assets acquired
The following table summarises the recognised amounts of assets acquired at the date of acquisition. Nil liabilities were
assumed.
Trade and other receivables
Exploration and evaluation
Total identifiable assets acquired
48,500
145,501
194,001
Trade and other receivables comprised Petroleum Exploration Licence bonds of $48,500, of which $nil was expected to be
uncollectable at the date of acquisition.
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
60
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 20 - DISPOSAL GROUPS HELD FOR SALE
On 28 January 2020, the Company announced that it had accepted an offer from Kiri to acquire the Company’s PI in Bhandut.
Pursuant to the Agreement entered with Kiri, the Company advised it will receive US$0.14 million in cash proceeds for the
sale of its PI to Kiri. The sale has since progressed substantially with all the necessary documentation submitted to the
Government of India to affect the transfer of the PI to Kiri. Delays with the process; however, have been experienced due
to the impact of Covid-19 in India.
On 27 May 2020, the Company announced that it has signed a conditional binding Heads of Agreement with Armour Energy
Limited, an ASX-listed company, for the proposed sale of all of its interests in the Cooper-Eromanga Basin to Armour. On
the 15 June 2020 the Company further announced it has entered into a conditional binding Share Purchase Agreement
(SPA) with Armour. The transaction is subject to the satisfaction of various conditions precedent which are expected to be
satisfied.
Accordingly, these operations are presented as a disposal group held for sale.
As at 30 June 2020, the disposal group comprised assets of $327,791 less liabilities of $451,469, detailed as follows:
Trade and other receivables
Inventories
Exploration and evaluation
Property, plant and equipment
Trade and other payables
Provisions (non-current)
Accounting Policy
$
79,333
3,290
238,000
7,168
(10,205)
(441,264)
(123,678)
Non-current assets and assets of disposal groups are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continued use. They are measured at the lower of their carrying
amount and fair value less costs of disposal. For non-current assets or assets of disposal groups to be classified as held for
sale, they must be available for immediate sale in their present condition and their sale must be highly probable.
An impairment loss is recognised for any initial or subsequent write down of the non-current assets and assets of disposal
groups to fair value less costs of disposal. A gain is recognised for any subsequent increases in fair value less costs of
disposal of a non-current assets and assets of disposal groups, but not in excess of any cumulative impairment loss
previously recognised.
Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other expenses
attributable to the liabilities of assets held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of disposal groups classified as held for sale are presented
separately on the face of the statement of financial position, in current assets. The liabilities of disposal groups classified as
held for sale are presented separately on the face of the statement of financial position, in current liabilities.
OILEX LTD
61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 21 – JOINT ARRANGEMENTS
The Group’s interests in joint arrangements as at 30 June 2020 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 (3)
Timor Leste and Australia (JPDA)
India (Cambay Basin)
India (Cambay Basin)
India (Cambay Basin)
Indonesia (Central Sumatra)
2020
%
10.0
45.0
40.0
40.0
67.5
2019
%
10.0
45.0
40.0
40.0
67.5
(1) The JPDA 06-103 Production Sharing Contract was terminated on 15 July 2015. The Joint Operating Agreement between
the Joint Venture participants is still in effect.
(2) The Sabarmati Production Sharing Contract was cancelled on 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. The West Kampar Contract Area Production Sharing Contract was terminated on 15
August 2018.
On 27 July 2020, the Company announced that substantial progress has been made towards the Company’s strategic
objective to regain a participating interest in the West Kampar PSC in Indonesia, which is expected to lead, subject to
financing, to recommencing production from the Pendalian Oilfield (refer Note 29 c) for further commentary.
(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)
Inventories
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
2020
$
2019
$
33,360
2,109,359
1,133,931
5,399
3,282,049
81,872
1,907,808
1,054,795
36,286
3,080,761
581,321
9,823,965
95,509
10,500,797
568,887
6,495,591
111,877
7,176,355
13,782,846
10,257,116
(283,038)
(283,038)
(137,094)
(137,094)
13,499,808
10,120,022
(1) Trade and other receivables of the joint operations is before any impairment and provisions.
OILEX LTD
62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 21 – JOINT ARRANGEMENTS (CONTINUED)
(c) Joint Operations Commitments
In order to maintain the 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 Group’s has no exploration expenditure commitments attributable to joint operations during the year (2019: $nil).
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
63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 22 – RELATED PARTIES
Identity of Related Parties
The Group has a related party relationship with its subsidiaries (refer note 19), joint operations (refer note 21) 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 (resigned 5 May 2020)
Paul Haywood
Peter Schwarz (appointed 4 September 2019)
Position
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Executive Directors
Joe Salomon (1)
Mark Bolton (2)
Executive
Ashish Khare
Position
Chairman and Managing Director
Executive Director and Company Secretary
Position
Head - India Assets
(1) Current Chairman from 5 May 2020 following Mr Lingo’s resignation.
(2) Mr Bolton, previously Chief Financial Office and Company Secretary, was appointed to the board on
26 March 2020.
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
Equity compensation benefits – shares issued in lieu of salary
2020
$
757,848
34,546
5,777
67,372
33,103
898,646
2019
$
615,475
40,542
21,252
59,668
55,454
792,391
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
There were no transactions in the current year between the Group and entities controlled by key management personnel.
OILEX LTD
64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 23 – 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
2020
$
173,816
564,397
738,213
2019
$
357,970
497,974
855,944
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
$6,294,032 (2019: $6,129,333).
The Group’s most significant customers are Enertech Fuel Solutions Pvt Limited (Enertech) with gas sales representing nil%
of the Group’s total revenues (2019: 39%) and Indian Oil Corporation Limited, in its capacity as nominee of the Government
of India, with oil sales representing nil% of the Group’s total revenues (2019: 61%). Enertech accounts for $nil of trade
receivables as at June 2020 (2019: $nil), whilst the Indian Oil Corporation Limited accounts for $nil of trade receivables
(2019: $nil).
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
2020
$
2019
$
226,557
177,421
141,146
738,319
5,442,789
6,726,232
(6,080,888)
645,344
189,941
111,566
202,591
524,518
5,532,232
6,560,848
(6,062,874)
497,974
NOTE 23 – FINANCIAL INSTRUMENTS (CONTINUED)
OILEX LTD
65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
(b) Credit Risk (continued)
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 an allowance for expected credit losses (ECL’s) for all debt instruments. The Group applies a simplified
approach in calculating ECL’s. The Group bases its ECL assessment on its historical credit loss experience, adjusted for
factors specific to the debtors and the economic environment including, but not limited to, financial difficulties of the debtor,
probability that the debtor will enter bankruptcy or financial reorganisation and delinquency in payments.
The Group has been in discussions with its joint venture partner for repayment of disputed and other amounts owing. 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, is uncertain 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
reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash
flows.
Carrying
Amount
Face Value
Total
Contractual Cash Flows
2 months
or less
2 – 12
months
$
$
$
$
$
Greater
than
1 year
$
1,071,341
769,555
1,840,896
1,071,341
804,959
1,876,300
1,071,341
804,959
1,876,300
1,071,341
250,000
1,321,341
-
554,959
554,959
697,184
563,955
1,261,139
697,184
580,000
1,277,184
697,184
580,000
1,277,184
697,184
-
697,184
-
580,000
580,000
-
-
-
-
-
2020
Trade and other payables
Borrowings
Total financial liabilities
2019
Trade and other payables
Borrowings
Total financial liabilities
Subsequent Events
On 31 July 2020, the Company announced that it has entered into an amendment agreement to vary the repayment
obligations for its Series C (GBP£125,000) loan. Pursuant to the amendment agreement, the loan repayment date has been
extended from 1 August 2020 to 31 October 2020. All other terms remain the same and are extended to 31 October 2020,
except for the issue of 113,636,364 new options exercisable at £0.0011 on or before 29 January 2021.
The options, which if exercised in their entirety, will result in a cash inflow to the Company of £125,000 (A$224,901). The
proceeds from such conversion of options will be applied to the outstanding Series C Loan balance, which is fully drawn
down.
Pursuant to an amendment agreement to the Series C loan of GBP£125,000 loan announced on 30 October 2020, the loan
repayment date has been extended from 31 October 2020 to 31 December 2020. All other terms remain the same and are
extended to 31 December 2020.
OILEX LTD
66
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 23 – 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 (USD), Indian rupee (INR) and British
pound (GBP).
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
Loans
Net balance sheet exposure
USD
$
1,591
267,162
(29,971)
-
238,782
2020
INR
$
GBP
$
67,746
3,136,248
(403,585)
-
2,800,409
20,346
-
(128,669)
(522,198)
(630,521)
USD
$
20,095
229,196
(3,978)
-
245,313
2019
INR
$
139,811
3,219,109
(312,161)
-
3,046,759
GBP
$
24,467
-
(4,665)
-
19,802
(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
2020
0.6714
48.5957
0.5329
2019
0.7156
50.5060
0.5527
Reporting Date Spot Rate
2019
2020
0.7013
0.6863
48.4100
51.8000
0.5535
0.5586
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 2019.
10% Strengthening
United States dollars (USD)
Indian rupees (INR)
British pounds (GBP)
10% Weakening
United States dollars (USD)
Indian rupees (INR)
British pounds (GBP)
2020
$
23,274
290,819
63,052
2019
$
24,351
304,676
1,980
(23,274)
(290,819)
(63,052)
(24,351)
(304,676)
(1,980)
OILEX LTD
67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 23 – 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)
Financial liabilities (borrowings)
Variable Rate Instruments
Financial assets (cash and cash equivalents)
Carrying Amount
2020
$
50,000
(769,555)
2019
$
100,000
(563,955)
173,816
357,970
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 2019.
Impact on profit or loss
iii) Other market price risks
2020
$
1,738
2019
$
3,580
At 30 June 2020, the Group had no financial instruments with exposure to other price risks (2019: $nil).
Equity Price Sensitivity
At 30 June 2020, the Group had no exposure to equity price sensitivity (2019: $nil).
(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
68
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
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 24 – 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)
Technical and administrative contractors
Total share-based payments expense
2020
$
-
-
-
2019
$
55,422
55,513
110,935
(1) At the Annual General Meeting held on 29 November 2018, the shareholders of the Company approved the issue of
shares in lieu of cash for part of the remuneration for the Non-Executive Directors. The Directors have also agreed to
receive part of their Directors fees in the form of the Company’s shares in lieu of cash payments for the period from 1
November 2018 to 31 October 2019, in order to conserve the cash reserves of the Company. Similar shareholder
approval was also received at the Annual General Meeting held on 27 November 2019 for the period from 1 November
2019 to 31 October 2020.
In accordance with the ASX waiver granted 22 October 2019, the Company advised that the number of remuneration
shares that were issued to directors for the year ended 30 June 2020 totalled nil (2019 11,437,407) and the percentage
of the Company’s issued capital represented by these remuneration shares was nil% (2018 0.44%).
The Non-Executive directors were entitled to the issue of 10,399,814 remuneration shares during the financial year
ended 30 June 2020. These remuneration shares shall be issued in the next financial year.
As at 30 June 2020, the accrued non-executive director fees, being remuneration shares not yet issued totalled $34,908
(2019: $12,607).
Unlisted Options
At 30 June 2020, 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
Key Management Personnel
Nil
Vesting Conditions
Contractual Life of Options
Other Employees
Nil
Financiers and Advisors
19 December 2018
30 September 2019
30 October 2019
3 February 2020
19 May 2020
19 May 2020
Total Options
6,666,667
11,842,105
2,960,526
166,666,667
115,727,273
204,545,455
508,408,693
Upon granting
Upon granting
Upon granting
Upon granting
Upon granting
Upon granting
2 years
2 years
2 years
6 months
10 weeks
13 months
Subsequent to reporting date, no options have been exercised; however, the 166,666,667 and 115,727,273 options have
lapsed.
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.
OILEX LTD
69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 24 – SHARE-BASED PAYMENTS (CONTINUED)
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.
The number and weighted average exercise prices (WAEP) of unlisted share options are as follows:
Outstanding at 1 July
Lapsed during the year
Exercised during the year
Granted during the year
WAEP
2020
161,220,442
(215,218,662)
(124,060,150)
Number
2020
$0.004
$0.004
$0.003
WAEP
2019
$0.005
$0.35
$0.004
Number
2019
77,441,666
(275,000)
(100,190,999)
- Granted to Brokers and Financial
14,802,631
$0.004
$0.005
16,140,351
Advisers (1)
Series A Loan Options (2)(3)
Series B Loan Options (3)
Series C Loan Options (3)
Series D Loan Options (3)
-
-
-
-
Outstanding at 30 June
124,060,150
176,392,160
59,523,810
311,688,312
508,408,693
$0.003
$0.003
$0.004
$0.003
$0.003
$0.004
$0.004
-
-
$0.004
91,666,666
76,437,758
-
-
161,220,442
Exercisable at 30 June
508,408,693
$0.003
$0.004
161,220,442
The unlisted options outstanding at 30 June 2020 have an exercise price in the range of $0.002 to $0.004 (2019: $0.004 to
$0.006) and a weighted average remaining contractual life of 0.5 years (2019: 0.2 years).
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.
(1) The following factors and assumptions were used to determine the fair value of 14,802,631 options issued to brokers
and financial advisors during the year.
2020
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
30 Sept 2019
30 Oct 2019
21 Oct 2019
5 Nov 2019
21 Oct 2019
21 Oct 2019
$0.004
$0.004
$0.004
$0.004
$0.005
$0.004
133.61%
133.61%
0.75%
0.75%
-
-
(2) 124,060,150 Series A loan options were exercised during the period.
(3) The fair value equity component of the 124,060,150 Series A, 176,392,160 Series B, 59,523,840 Series C, and
311,688,312 Loan Options has been determined using an implied effective interest rate of 18% pa (effective interest
rate on a similar borrowing without an equity component.. At loan drawdown, this amount is recognised in the Loan
Option Reserve as the loans have been recognised as convertible notes.
For further information refer to Note 15: Borrowings.
OILEX LTD
70
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 25 – PARENT ENTITY DISCLOSURE
As at, and throughout, the financial year ended 30 June 2020 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 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
Loans Options Reserve
Foreign currency translation reserve
Accumulated losses
Total equity
2020
$
(3,812,707)
(275,240)
(4,087,947)
224,271
5,325,470
1,613,752
3,863,201
2019
$
(3,382,300)
143,085
(3,239,215)
1,164,081
5,995,034
1,160,603
3,361,943
1,462,269
2,633,091
179,254,814
35,404
69,202
4,776,928
(182,674,079)
1,462,269
176,502,200
36,485
88,740
5,052,168
(179,046,502)
2,633,091
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 a guarantee in relation to corporate credit cards. The bank guarantee amounts to $50,000. An equal
amount is held in cash and cash equivalents as security by the bank. (2019: $100,000).
Parent entity capital commitments for acquisition of property plant and equipment
Oilex Ltd had no capital commitments as at 30 June 2020 (2019: Nil).
Parent entity guarantee (in respect of debts of its subsidiaries)
On 7 November 2006, Oilex Ltd 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.
Oilex Ltd has issued no other guarantees in respect of debts of its subsidiaries.
OILEX LTD
71
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 26 – AUDITORS’ REMUNERATION
Audit and review services
Auditors of the Company – PKF Perth (2019:KPMG)
Audit and review of financial reports
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 – PKF Perth (2019: KPMG)
Taxation compliance services
Taxation compliance services (KPMG related practices)
Other Auditors
Taxation compliance services (India Statutory)
2020
$
50,000
414
22,687
73,101
5,821
78,922
8,389
-
8,389
7,451
15,840
2019
$
81,400
414
20,656
102,470
5,972
108,442
13,213
6,987
20,200
5,255
25,455
PKF Perth were appointed as auditors of Oilex Ltd by its shareholders at a General Meeting convened on 30 June 2020.
NOTE 27 – LEASES
Short-term leases and lease of low value assets
Lease rentals are payable as follows:
Within one year
One year or later and no later than five years
2020
$
5,126
-
5,126
2019
$
27,211
-
27,211
During the 2020 financial year, the Group leased its head office premises at Level 2, 11 Lucknow Place, West Perth, Australia.
The lease commenced on 1 June 2019 for a six-month period; with expiry on 30 November 2019. Thereafter, the Group had
the option of a month by month lease extension subject to lessor approval.
From 1 July 2020, the Group relocated its head office premises to Level 1, 11 Lucknow Place, West Perth, Australia. The
lease commenced on 1 July 2020 on a monthly rolling basis, subject to 30 days notice to terminate.
The Group leases office premises in Gandhinagar (India). The current lease had a three year term, commencing 16 October
2016; continuing thereafter on a monthly rolling basis. On 1 July 2020, the lease was renegotiated and extended for a 12
month period to 30 June 2021.
Expenses related to short-term leases
Operating lease rentals expensed during the financial year
Accounting Policy
2020
$
76,104
-
2019
$
-
102,788
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term
leases, including IT equipment. The Group recognises the lease payments associated with these leases as an expense on
a straight-line basis over the lease term.
OILEX LTD
72
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 28 – 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 corporate credit cards. The bank guarantees amount to $50,000 (2019:
$100,000).
Termination Penalty
Subsequent to year end the termination penalty has been settled and this is detailed in note 29 to the financial report. The
history of this contingent liability is as follows:
In October 2018, the Company announced the Autoridade Nacional Do Petroleo E Minerais (ANPM) had commenced
arbitration proceedings against Oilex and its joint venture partners, in regard to the JPDA Production Sharing Contract (PSC).
On 16 August 2019, the Company announced that the JPDA joint venture had lodged a counterclaim against the ANPM for
the amount US$23.3 million (plus interest) as damages arising from the wrongful termination of the PSC.
During the March 2020 quarter, the arbitration panel dismissed ANPM’s application to increase their claim against the joint
venture from A$17.0 million to US$22.6 million (plus interest). The arbitration hearing, which was scheduled to commence
on 10 February 2020, was subsequently suspended while the parties continue their commercial settlement negotiations.
During the period, the Group has increased the provision by USD$200,000 to USD$800,000 in relation to this matter
(30 June 2019: USD$600,000).
NOTE 29 – SUBSEQUENT EVENTS
a) The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has been financially negative for the
consolidated entity up to 30 June 2020, it is not practicable to estimate the potential impact, positive or negative,
after the reporting date. The situation is rapidly developing and is dependent on measures imposed by the
Australian and Indian Governments and other countries, such as maintaining social distancing requirements,
quarantine, travel restrictions and any economic stimulus that may be provided.
b) On 17 July 2020, the Company announced it has issued the second and final tranche of 55,555,556 ordinary shares
pursuant to the placement first announced on 16 March 2020; and amended as announced on 27 April 2020. The
share issue was pursuant to an equity capital raising to secure further funding of £0.25 million (A$0.5 million)
through the subscription of 277,777,778 new shares at £0.009 per share (0.1792 AUD cents) per share.
The Company also announced:
•
•
the issue of 103,033,333 shares to advisors and consultants in lieu of cash fees payable; and
further to the approval by shareholders at the annual general meeting held on 30 June 2020 and the Company
announcement on 15 May 2020, the Company issued the following unlisted options:
-
-
Series B Loan Options 115,727,273 exercisable at £0.0011 on or before 31 July 2020
Series D Loan Options 204,545,455 exercisable at £0.0011 on or before 30 June 2021.
c) On 27 July 2020, the Company announced that substantial progress has been made towards the Company’s
strategic objective to regain a participating interest in the West Kampar PSC in Indonesia, which is expected to
lead, subject to financing, to recommencing production from the Pendalian Oilfield.
Following various meetings and correspondence with the Government of Indonesia (GoI) and with the support of
the Company’s local Indonesian partner, the GoI has advised that our Proposed Direct Bid, through the Joint Study
of the West Kampar Region, is declared administratively complete and have recorded it as a proposal for a Direct
Offer through a Joint Study as stipulated in ESDM Regulation No. 35 of 2008.
This confirmation from the GoI, which is exclusive to Oilex, provides a pathway to conduct the Joint Study on the
proposed development of West Kampar which will then provide certain preferential rights in the ultimate award of
the West Kampar PSC by the GoI. Oilex’s interest in the study and ultimate potential award of the PSC will be on
a 50-50 joint basis with its local Indonesian partner, PT Ephindo.
d) On 31 July 2020, the Company announced that it has taken further steps to strengthen its balance sheet as the
Company continues to navigate the impact of Covid-19 on its business and global equity markets. In particular,
the Company entered into an amendment agreement to vary the repayment obligations for its Series C
(GBP£125,000) loan. Furthermore, the Company secured additional equity investment of £0.25 million to increase
its working capital flexibility and reduce its financial debt obligations.
OILEX LTD
73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 29 – SUBSEQUENT EVENTS (CONTINUED)
Amendment to Series C Loan Funding Agreement (GBP £125,000)
Pursuant to the amendment agreement, the loan repayment date has been extended from 1 August 2020 to 31
October 2020. All other terms remain the same and are extended to 31 October 2020, except for the issue of
113,636,364 new options exercisable at £0.0011 on or before 29 January 2021.
The options, which if exercised in their entirety, will result in a cash inflow to the Company of £125,000 (A$224,901).
The proceeds from such conversion of options will be applied to the outstanding Series C Loan balance, which is
fully drawn down.
The issue of the new options is subject to shareholder approval under ASX Listing Rule 7.1 on or before 30
November 2020. Failure to secure shareholder approval will require immediate repayment of the loan principal and
accrued interest.
Equity Capital Raising
The Company has arranged an equity capital raising, through Novum Securities Limited and to existing institutional
shareholders, to secure further funding of £0.25 million (A$0.5 million) through the subscription of 312,500,000
new shares at GBP 0.08 pence (0.144 AUD cents) per share.
Funds raised from the subscription are intended to be applied towards increasing the Company’s working capital
base and debt reduction The additional funding will support the Company’s initiative to implement the settlement
with GSPC, which has been delayed by the impact from Covid-19.
On 10 August 2020, the Company announced that it has issued the 312,500,000 shares. Pursuant to advisory
agreements with Novum, the Company also issued 15,000,000 unlisted options exercisable at GBP 0.08 pence on
or before 12 August 2022 upon the completion of the capital raise.
e) On 7 August 2020, the Company, in its capacity as Operator, on behalf of the Joint Venture Participants in Joint
Petroleum Development Area (“JPDA”) 06-103 Production Sharing Contract (“PSC”) in East Timor announced it
had executed a Deed of Settlement and Release (Deed) with the Autoridade Nacional Do Petroleo E Minerais
(“ANPM”) to terminate the ongoing arbitration proceedings arising from the termination of the PSC by the ANPM
in 2015 and settle all claims and counterclaims between the parties.
The execution of the Deed sees an amicable conclusion to the arbitration proceedings, as announced in October
2018, where Oilex and its joint venture partners in the PSC were subject to a penalty claim of US$17 million (plus
interest) on a joint and several basis. Oilex is the Operator of the PSC on behalf of the joint venture.
Under the terms of the Deed, Oilex has committed to a settlement of US$800,000 payable in the 2021 and 2022
financial years, which has been fully provided for at 30 June 2020. In addition, the Company has entered into an
unsecured loan facility agreement for US$800,000 with two of its joint venture partners to fund the settlement. The
Deed further provides the Company with the option, at its sole discretion, to extend the settlement payments into
the 2023-24 financial year.
f) On 14 September 2020, the Company announced that it has agreed to amend the Share Purchase Agreement
(SPA) with Armour Energy Limited (Armour), as announced on 15 June 2020, for the proposed sale of all of its
interests in the Cooper-Eromanga Basin (Proposed Transaction). Pursuant to the SPA, Armour will acquire 100%
of the issued capital of CoEra Limited (CoEra), a wholly owned Company subsidiary which holds all of Oilex’s
interests in the Cooper-Eromanga Basin. The amendments:
•
•
extend the completion date from 15 September 2020 until 15 October 2020 to enable Armour to seek its
shareholder approval pursuant to ASX Listing Rule 7, with such shareholder meeting scheduled for September
18 2020, and allow additional time to satisfy the Conditions Precedent;
amend the date upon which Armour pays to Oilex the past costs of $125,000 to within 5 Business Days after
receipt of Armour’s above shareholder approval; and
•
reduce the timeframe for the Tranche 2 share adjustment from 90 days to 60 days from completion.
On 15 October 2020, the Company announced the completion of the sale of all its interests in the Cooper-
Eromanga Basins to Armour Energy Limited.
g) Pursuant to an amendment agreement to the Series C loan of GBP£125,000 loan announced on 30 October 2020,
the loan repayment date has been extended from 31 October 2020 to 31 December 2020. All other terms remain
the same and are extended to 31 December 2020.
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
74
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 31 to 74, 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 2019 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 Company and 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 2019.
(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 Jonathan Salomon
Interim Chairman and Managing Director
Mr Mark Bolton
Executive Director and Company Secretary
West Perth
Western Australia
31 October 2020
OILEX LTD
75
PKF Perth
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF OILEX LTD
Report on the Financial Report
Opinion
We have audited the accompanying financial report of Oilex Ltd (the “Company”), which comprises the
consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit or loss and
other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of
cash flows for the year then ended, notes comprising a summary of significant accounting policies and other
explanatory information, and the Directors’ Declaration of the Company and the consolidated entity comprising
the Company and the entities it controlled at the year’s end or from time to time during the financial year.
In our opinion the accompanying financial report of Oilex Ltd is in accordance with the Corporations Act 2001,
including:
i) Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2020 and of its
performance for the year ended on that date; and
ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Emphasis of Matter – Material Uncertainty related to Going Concern
Without modifying our opinion, we draw attention to Note 2 (c) in the financial report, which indicates that the
consolidated entity incurred a loss of $5,841,096 (2019: $3,118,121) and operating cash outflows of $2,837,661
(2019: $2,962,563) during the year ended 30 June 2020. These conditions indicate the existence of a material
uncertainty that may cast significant doubt about the consolidated entity’s ability to continue as a going concern
and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal
course of business.
The financial report of the consolidated entity does not include any adjustments in relation to the recoverability
and classification of recorded asset amounts or to the amounts and classification of liabilities that might be
necessary should the consolidated entity not continue as going concern.
Level 4, 35 Havelock Street, West Perth, WA 6005
PO Box 609, West Perth, WA 6872
T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au
PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions
or inactions of any individual member or correspondent firm or firms.
Liability limited by a scheme approved under Professional Standards Legislation.
PKF Perth
Independence
We are independent of the consolidated entity in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
Key Audit Matters
A key audit matter is a matter that, in our professional judgement, was 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 matter. For
each matter below, our description of how our audit addressed the matter is provided in that context.
1 - Carrying value of mine development assets
Why significant
How our audit addressed the key audit
At 30 June 2020 the carrying value of mine
development assets was $5,318,364
(2019:
$6,495,590), as disclosed in Note 9.
there are any
Each year management is required to assess
the
whether
the
development asset may be
impairment
significant
estimates and judgments we have identified this as
a key audit matter.
that
impaired. As
assessment
indicators
requires
Management’s impairment assessment indicated
that an impairment was required on the Cambay
Project. Therefore, an impairment of $1,348,458
was recognised, as a result the carrying amount
dropped from $6,637,547 to $5,318,364, with a
foreign exchange impact of $29,275.
matter
Our work included, but was not limited to, the
following procedures:
Reviewing management’s detailed impairment
model, including consideration of inputs and
assumptions used
the model and NPV
calculation;
in
Ensuring valid licenses are held and consider
impairment of assets for which no license is now
held;
Ensure that disclosures within the financial report
that all estimates and
are accurate and
judgements made by management are included
therein; and
Discussing
impairment model with
management and obtaining management and the
board’s representations accordingly.
the
PKF Perth
2 - Carrying value of capitalised exploration expenditure
Why significant
How our audit addressed the key audit
matter
As at 30 June 2020 the carrying value of exploration
and evaluation assets was $581,322 (2019: $
568,888), as disclosed in Note 8.
The consolidated entity’s accounting policy
in
respect of exploration and evaluation expenditure is
outlined in Note 8. Estimates and judgments in
relation to capitalised exploration and evaluation
expenditure is detailed at Note 2 (f).
Significant judgement is required:
in determining whether facts and circumstances
indicate that the exploration and evaluation
assets should be tested for impairment in
accordance with Australian Accounting
Standard AASB 6 Exploration
for and
Evaluation of Mineral Resources (“AASB 6”);
and
in determining the treatment of exploration and
evaluation expenditure in accordance with
AASB 6, and
the consolidated entity’s
accounting policy. In particular:
o whether the particular areas of interest
meet the recognition conditions for an
asset; and
o which elements of exploration and
evaluation
for
expenditures
capitalisation for each area of interest.
qualify
Our work included, but was not limited to, the
following procedures:
Conducting a detailed review of management’s
trigger events
impairment
o
assessment of
prepared in accordance with AASB 6 including:
o assessing whether the rights to tenure of the
interest remained current at
areas of
reporting date as well as confirming that
rights to tenure are expected to be renewed
for tenements that will expire in the near
future;
holding discussions with the Directors and
management as to the status of ongoing
exploration programmes for the areas of
interest, as well as assessing if there was
evidence that a decision had been made to
discontinue activities in any specific areas of
interest; and
obtaining and assessing evidence of the
consolidated entity’s future intention for the
areas of interest, including reviewing future
budgeted expenditure and related work
programmes;
o
assessment
considering whether exploration activities for the
areas of interest had reached a stage where a
reasonable
economically
recoverable reserves existed;
testing, on a sample basis, exploration and
evaluation expenditure incurred during the year
for compliance with AASB 6 and the consolidated
entity’s accounting policy; and
of
assessing the appropriateness of the related
disclosures in Note 2 (f), Note 8.
Other Information
Those charged with governance are responsible for the other information. The other information comprises the
information included in the consolidated entity’s annual report for the year ended 30 June 2020, but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon, with the exception of the Remuneration Report.
PKF Perth
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Directors’ for the Financial Report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the Directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the consolidated entity’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the Directors either intend to liquidate the consolidated entity or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
consolidated entity’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the Directors.
Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the consolidated entity’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures
in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the consolidated entity to cease to continue as a going concern.
PKF Perth
Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the consolidated entity to express an opinion on the consolidated entity financial report. We
are responsible for the direction, supervision and performance of the consolidated entity audit. We remain
solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Directors, we determine those matters that were of most significance in
the audit of the financial report of the current period and are therefore the key audit matters. We describe these
matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on the Remuneration Report
Opinion
We have audited the Remuneration Report included in the Directors’ Report for the year ended 30 June 2020.
In our opinion, the Remuneration Report of Oilex Ltd for the year ended 20 June 2020, complies with section
300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
PKF PERTH
SIMON FERMANIS
PARTNER
31 October 2020
WEST PERTH,
WESTERN AUSTRALIA
SHAREHOLDER INFORMATION
Shareholder information as at 1 September 2020
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 Level 1, 11 Lucknow Place, 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
291
462
301
718
552
2,324
-
-
-
-
4
4
Of the above total 1,968 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 241,014,753.
The Managing Director, Mr Jonathan Salomon beneficially holds 14,987,013 shares as at 3 September 2020 which
represents 0.36% of shares.
OILEX LTD
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SHAREHOLDER INFORMATION
Twenty Largest Shareholders
Shareholders
Shares Held
% of issued
capital
Vidacos Nominees Limited <151004>
Aurora Nominees Limited <2288700>
Hargreaves Lansdown (Nominees) Limited <15942>
Interactive Investor Services Nominees Limited
Barclays Direct Investing Nominees Limited
Rock (Nominees) Limited
Hargreaves Lansdown (Nominees) Limited
HSDL Nominees Limited
Hargreaves Lansdown (Nominees) Limited
Vidacos Nominees Limited
Interactive Investor Services Nominees Limited
J P Morgan Nominees Australia Pty Limited
TH Investments Pte Ltd
Jim Nominees Limited
Vidacos Nominees Limited
Zeta Resources Limited
HSDL Nominees Limited
HSBC Client Holdings Nominee (UK) Limited <731504>
HSDL Nominees Limited
HSDL Nominees Limited
452,130,367
234,831,866
221,815,107
212,285,428
195,831,750
186,131,942
152,406,582
150,929,584
149,903,240
146,154,412
140,678,572
112,575,667
111,111,111
87,628,492
80,116,084
71,323,567
69,988,860
67,827,614
65,274,636
58,455,484
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
10.98
5.70
5.38
5.15
4.75
4.52
3.70
3.66
3.64
3.55
3.41
2.73
2.70
2.13
1.94
1.73
1.70
1.65
1.58
1.42
Total
Total issued shares as at 1 October 2020
1,152,229,634
4,119,629,999
27.97
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
Shares Held
403,534,489
% of issued
capital
11.06
(#) Included within the total issued capital are 3,241,035,069 shares held on the AIM register. Included within the top
20 shareholders are certain AIM registered holders as marked.
OILEX LTD
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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
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CORPORATE INFORMATION
Directors
Joe Salomon B APP SC (Geology), GAICD
Managing Director and Interim Chairman
Mark Bolton B Business
Executive Director 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)
P Haywood
Non-Executive Director
P Schwarz
Non-Executive Director
Company Secretary
Mark Bolton B Business
Executive Director and Company Secretary
AIM Nominated Adviser
Strand Hanson Limited
26 Mount Row
London W1K 3SQ
United Kingdom
AIM Broker
Novum Securities Limited
10 Grosvenor Gardens
Belgravia
London SW1W 0DH
United Kingdom
Registered and Principal Office
Level One
11 Lucknow Place
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
PKF Perth
Level 5, 35 Havelock Street
West Perth Western Australia 6005
Australia
Website
www.oilex.com.au
Email
oilex@oilex.com.au
Oilex Ltd
ACN 078 652 632
ABN 50 078 652 632
OILEX LTD
84