PANCONTINENTAL OIL & GA
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Corporate Information
ABN 95 003 029 543
Directors
Henry David Kennedy (Non-Executive Chairman)
Roy Barry Rushworth (Executive Director & Chief Executive Officer)
Ernest Anthony Myers (Executive Finance Director)
Anthony Robert Frederick Maslin (Non-Executive Director)
Company Secretary
Vesna Petrovic
Registered Office
288 Stirling Street
Perth WA 6000
Telephone: +61 8 9227 3220
Fax: +61 8 9227 3211
Share Register
Advanced Share Registry Services
PO Box 1156
Nedlands WA 6909
Telephone: +61 8 9389 8033
Auditors
Rothsay Chartered Accountants
Level 1, Lincoln House
4 Ventnor Avenue
West Perth WA 6005
Internet Address & Contact
www.pancon.com.au
info@pancon.com.au
ASX Code
PCL
Contents
Chairman’s Review
Review of Operations
Directors’ Report
Auditor’s Independence Declaration
Corporate Governance Statement
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Audit Report
ASX Additional Information
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63
Pancontinental Oil & Gas NL - Annual Report 2013
Chairman’s Review
Pancontinental has advanced its projects significantly this year against a backdrop of slower
activity in the resources sector and in equity markets. Your Company has positioned itself for what
we expect to be an exciting year ahead in regions where active hydrocarbon systems have only
recently been proven and where we expect to commence major drilling programmes in 2014. The
Company is financially healthy, with some $33.8 million in cash reserves at year end.
Pancontinental is in a unique position in two of the world’s newest oil and gas frontiers, namely
offshore East Africa with its Kenyan projects, and offshore southwestern Africa in Namibia. Both
regions are potentially game-changers on a global scale. We believe that the industry, including
Pancontinental, is making good progress to unlock these regions as major new hydrocarbon
provinces. These are vast areas by international standards and historic finds have been made in
the last eighteen months, with active hydrocarbon systems being proven in both regions.
The East African margin continues to host major gas discoveries offshore Mozambique and
southern Tanzania. Pancontinental is exploring in the northern part of the East African margin and
here we have four exploration areas offshore Kenya, covering a total area of some 20,000 square
kilometres.
In our Kenya projects L10A and L10B, operated by Britain’s BG Group plc (“BG”), using our two
3D seismic surveys we have identified a number of drillable prospects. We expect the first well
of a two well drilling programme to commence in these projects early in 2014. The most likely
target is one of a number of Miocene Reefs. Around the world such reefs have a notable record of
trapping hydrocarbons, and BG is pursuing the L10 reefs as oil, rather than gas, objectives.
In one of our other offshore Kenyan areas, L6, the 3D seismic programme that we carried out
in 2012 has now yielded several Prospects for possible drilling. We are seeking a farminee to
participate in the drilling that we are currently planning for 2014.
One of the main Prospects in L6 is the large Kifaru Prospect. This is an outstanding stacked
Miocene Reef prospect, with potential to contain some 170 million barrels of recoverable oil as
a best estimate by the L6 operator FAR Limited. There is excellent follow-up in the similar Kifaru
West Prospect, also mapped on 3D seismic, as well as a number of other Miocene Reefs that
have yet to be covered by 3D.
An oil discovery in any one of the reefs, either in L6 or elsewhere, would open an entire new
and potentially highly productive play off the Kenyan coast. Pancontinental holds interests over
roughly three quarters of the reef trend offshore Kenya and currently has more than twenty-five of
the reefs mapped as Prospects and Leads in its portfolio.
During the reporting year the Company made the Mbawa 1 gas discovery in L8 offshore Kenya,
and I reported on this in the previous Annual Report. This is the first-ever discovery offshore
Kenya and the first discovery of any kind in the northern part of the East African offshore margin.
The importance of the Mbawa discovery is multi-fold. Well data analysis indicates an opportunity
for oil, rather than gas, at deeper levels and the joint venture continues to look to deeper targets
for a next well.
The year ahead will be an exciting one for oil and gas exploration in Kenya. The string of world
class discoveries further south offshore Mozambique and Tanzania started in a similar way to our
first Kenyan discovery, and we have good reason to be extremely enthusiastic about the future
for oil discoveries here. As in virtually all frontier areas, the first discoveries pave the way for often
more successful future exploration.
Turning from East Africa to the other side of the African continent, one of Pancontinental’s key
achievements, and a significant milestone in managing its risk profile and conserving funds was
the farm-out of our major Namibian project, EL 0037, to Tullow Oil plc (“Tullow”) in September 2013.
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Pancontinental Oil & Gas NL - Annual Report 2013
Chairman’s Review
Pancontinental will have a free carry of 30% through extensive 3D and 2D seismic campaigns,
as well as drilling by Tullow should a suitable prospect be defined. Before the Tullow farmin, the
Company increased its interest to 95% by the purchase of 10% from our joint venture partner
Paragon Oil & Gas (Pty) Ltd in July 2012.
The Tullow farmin has no “caps”, meaning that Pancontinental will not have any overhanging
financial exposure for the exploration work under the farmout. Pancontinental estimates that
Tullow’s total farmin expenditure could be as much as $130 million.
The Namibian EL0037 area is very large, at approximately 17,000 square kilometres, and
numerous large geological Leads have already been identified.
The farmout came after the first oil recovery ever offshore Namibia during the year just to the south
of EL 0037, by HRT in its Wingat-1 well. The proving of an oil generating system in the Central
Walvis Basin must not be underestimated. HRT also reported good mature source rocks and,
under our interpretation, some of Pancontinental’s channel and turbidite sandstone objectives are
positioned to be fed directly with oil from these mature source rocks.
Tullow is a highly successful oil finder, particularly in Africa, and it is very pleasing to see that Tullow
has recognised Pancontinental’s exploration concepts in Namibia and joined the Company’s
efforts in Block EL 0037.
Looking forward in EL 0037, we expect to see the first 3D seismic acquired by Tullow in early
2014.
In Australia, our projects continue to be advanced as a lower priority in our predominantly African
portfolio; however our Canning Basin projects have been given some encouragement by significant
discoveries elsewhere in the Basin.
Pancontinental is widely recognised in the industry for its efforts in Africa. It is one of only a few
junior oil and gas companies to successfully compete with, as well as participate alongside, some
of the world’s most notable petroleum companies.
In summary, Pancontinental has been successful in progressing its projects while the regions in
which it operates are further de-risked. Your Company continues to be prudently managed from a
capital and risk perspective. The outcome of the Mbawa well in Kenya particularly leaves us with
a very high degree of optimism for all of our Kenyan projects and we continue to be regarded as
one of the most notable junior explorers on the African scene. We look forward to building on this
in the coming year.
We have an excellent asset portfolio and intend to use our strong funding position, our established
relationships with major petroleum companies and our well defined exploration programme to
generate a strong outcome for all shareholders.
HD (David) Kennedy,
Chairman
Pancontinental Oil & Gas NL
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Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
Pancontinental Projects
Asset
Kenya L6
Kenya L8
PCL%
Sq Km
Partner
Operator
5,010
FAR 60%
FAR
40%
15%
5,115
Kenya L10A
15%
4,962
Kenya L10B
15%
5,585
Apache 50%
*
Origin 20%
Tullow 15%
BG Group 40%
PTTEP 25%
Premier 20%
BG Group 45%
PTTEP 15%
Premier 25%
Apache
BG Group
BG Group
Asset
PCL%
Sq Km
Operator
Carnarvon
Basin EP424
EP 110
Canning Basin
EP 104 / R1,
L15
38.5%
38.5%
11.11%
12.0%
79
750
736
Strike Energy
Buru Energy
*
*
AUSTRALIA
KENYA
*
*
*
NAMIBIA
Asset
Namibia
EL 0037
PCL%
Sq Km
Partner
Operator
30%
post
year end
17,295
(3 Blocks)
Tullow 65%
Paragon 5%
Tullow Oil
*
At an Operating Committee Meeting held on 10th October
Apache indicated their intention to withdraw from the block.
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Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
Block
Block
Kenya L6
Kenya L6
Kenya L8
Kenya L8
Kenya L10A
Kenya L10A
Kenya L10B
Kenya L10B
Namibia EL 0037
Namibia EL 0037
EP 424 (Australia)
EP 424 (Australia)
EP 110 (Australia)
EP 110 (Australia)
EP 104 / R1 (Australia)
EP 104 / R1 (Australia)
L15 (Australia)
L15 (Australia)
Area
(km2)
Area
(km2)
5,010
5,010
5,115
5,115
4,962
4,962
5,585
5,585
17,295
17,295
79
79
750
750
736
736
150
150
PCL Interest
(%)
PCL Interest
(%)
40.0%
Operator
(%)
Operator
ASSET SUMMARY
(%)
FAR Limited(60%)
FAR Limited(60%)
Apache (50%)
40.0%
15.0%
Partners
(%)
Partners
(%)
FAR Limited (60%)
FAR Limited (60%)
Apache (50%) Origin Energy (20%), Tullow (15%)
*
Apache (50%) Origin Energy (20%), Tullow (15%)
BG (40%) PTTEP (25%), Premier (20%)
BG (40%) PTTEP (25%), Premier (20%)
BG (45%) PTTEP (15%), Premier (25%)
BG (45%) PTTEP (15%), Premier (25%)
Tullow Oil (65%)
Paragon (Local Partner) (5%)
Tullow Oil (65%)
Paragon (Local Partner) (5%)
Strike Energy (61.5%)
Strike Energy (61.5%)
Strike Energy (61.5%)
Strike Energy (61.5%)
Buru Energy (43.28%) Emerald Gas (14.17%),
Buru Energy (43.28%) Emerald Gas (14.17%),
Gulliver (16.44%), FAR (8.89%), Indigo Oil (6.11%)
Gulliver (16.44%), FAR (8.89%), Indigo Oil (6.11%)
Buru Energy (15.5%) Gulliver (49%), FAR (12%),
Indigo Oil (11.5%)
Buru Energy (15.5%) Gulliver (49%), FAR (12%),
Indigo Oil (11.5%)
*
At an Operating Committee Meeting held on
10th October Apache indicated their intention
to withdraw from the block.
15.0%
15.0%
15.0%
15.0%
15.0%
30.0%
30.0%
38.5%
38.5%
38.5%
38.5%
11.11%
11.11%
Apache (50%)
BG (40%)
BG (40%)
BG (45%)
BG (45%)
Tullow Oil (65%)
Tullow Oil (65%)
Strike Energy (61.5%)
Strike Energy (61.5%)
Strike Energy (61.5%)
Strike Energy (61.5%)
Buru Energy (43.28%)
Buru Energy (43.28%)
12.00%
12.00%
Buru Energy (15.5%)
Buru Energy (15.5%)
HIGHLIGHTS
Namibia EL 0037 – Pancontinental Farmed out 65% to Tullow Oil plc for 2D and 3D Seismic and
Drilling. Tullow becomes EL 0037 Operator.
Namibia EL 0037 – Pancontinental increased its interest from 85% to 95% by a purchase from
Paragon Oil & Gas in July 2012.
Namibia EL 0037 – Independent assessment of potential for 8.7 Billion Barrels Prospective Oil
Resources (Pmean).
Kenya L10A & L10B – 3D and 2D seismic surveys identify multiple Prospects including extensive
Miocene Reefs. Preparations under way for two wells in 2014.
Kenya L8 – Mbawa-1 gas discovery September 2012; the first hydrocarbon discovery offshore
northern East Africa.
Kenya L6 - Kifaru, Kifaru West and Tembo Prospects fully mapped on 3D. Farminee now sought
for drilling.
Corporate - Available funds of $33.8 million, 30 June 2013.
Pancontinental continues to assess a number of acquisition and new venture opportunities with
a primary African focus.
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Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
INTERNATIONAL
KENYA
Pancontinental’s Strategy Offshore Kenya
Kenya’s stable legal and fiscal regimes and Pancontinental’s strong acreage position place the
company very favourably in the East African region.
Offshore East Africa has become an industry focus through recent major deepwater gas discoveries
offshore Tanzania and Mozambique.
Pancontinental proposes that the prime areas to develop good oil source rocks, and to have
these fully mature to generate oil, is the restricted environment where the Tana River delta carried
sediments and nutrients into the deep troughs inboard of the Davie Walu Ridge.
Tana River Delta Concept
The Tana River delta developed inboard from the Davie - Walu Ridge into the Tembo and Maridadi Troughs
Restricted depositional environments, from the Jurassic to Tertiary
Pancontinental recognised this opportunity early and acquired exploration licences
Residual Gravity Map
Coastal & Offshore Kenya
KENYA
R
L6
L8
L10A
L10B
L5
L7
L12
L11A
L11B
Tana River feeds
sediment into the
offshore troughs
KENYA
Tertiary
carbonate shelf
and reefs
L6
L8
Davie - Walu Ridge restricts
depositional environment ,
directing Tana delta to the
south
L10A
L10B
Tana River Delta
progrades to the
South
Schematic of Cretaceous
and Tertiary Deposition
Figure 1 - Tana River Delta Concept
Pancontinental has identified a major oil and gas play offshore Kenya and has acquired four
licence areas. Pancontinental participated in the first-ever discovery, the Mbawa gas discovery, in
September 2012 (Pancontinental 15%).
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Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
Offshore Kenya (cid:177) Pancontinental Licence Areas
Pancontinental has four licence areas offshore Kenya covering 20,672 sq km (5,108,162 acres)
Mbawa Gas discovery (2012) and Kubwa oil shows (2013) prove working oil and gas systems offshore Kenya
L6
5,010 sq km (Reinstated)
Pancontinental 40%
L8
5,115 sq km
Pancontinental 15%*
L10A
4,962 sq km
Pancontinental 15%
L10B
5,585 sq km
Pancontinental 15%
Mbawa 1
Gas Discovery Sept 2012
Kubwa 1 April 2013
(cid:179)(cid:49)(cid:82)(cid:81)-commercial Oil
shows in reservoir -
(cid:84)(cid:88)(cid:68)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:86)(cid:68)(cid:81)(cid:71)(cid:86)(cid:171)(cid:17)(cid:17)(cid:87)(cid:75)(cid:72)(cid:3)
presence of a working
(cid:83)(cid:72)(cid:87)(cid:85)(cid:82)(cid:79)(cid:72)(cid:88)(cid:80)(cid:3)(cid:86)(cid:92)(cid:86)(cid:87)(cid:72)(cid:80)(cid:180)
L6
FAR
Kiboko 1
Drilling April- Aug 2013
3
Figure 2 - Pancontinental’s Licence Areas offshore Kenya
Pancontinental has extended its strategy of exploring for oil to the south of the L8 and L6 blocks
by acquiring the L10 blocks in 2011. The new blocks cover the same deep Tertiary troughs that
the company interprets to be oil-generating in L8 and L6.
Pancontinental has participated in five 3D surveys offshore Kenya and these have generated
numerous prospects and leads.
The Mbawa gas discovery is only the first to be drilled out of numerous prospects and leads
in Pancontinental’s four licence areas offshore Kenya. The Mbawa discovery establishes the
existence of a working hydrocarbon system offshore Kenya. The source material of the gas is
interpreted to be a thermally mature mixed gas and oil-prone source and this means that oil may
also have been generated.
Pancontinental is well funded for exposure to up to four offshore Kenyan wells directly (one well
depends on the completion of farmout in Block L6) over the coming 12-18 months.
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Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
Prospects and Leads Offshore Kenya
Figure 3 - Schematic of Prospects and Leads offshore Kenya (Not definitive)
KENYA
BLOCK L8 OFFSHORE LAMU BASIN
Pancontinental 15%
Licence area L8 covers 5,114.9 sq km offshore Kenya in water depths from 100m to 1,300m. L8
holds the Mbawa gas discovery made in September 2012.
Mbawa 1 Discovery
The Mbawa Prospect, drilled during August and September 2012, is the first well on the numerous
prospects and leads in Pancontinental’s four licence areas offshore Kenya. The interpreted
extensive deep oil and gas generating “kitchen” near the Prospect extends to the north into area
L6 and south into L10A and L10B.
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Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
Mbawa 1 is the first ever Natural Gas discovery and the first ever hydrocarbon (oil or gas) discovery
offshore Kenya. The three discovery zones have 51.8 net metres (~170 feet) of natural gas pay
with favourable reservoir characteristics (porosity approximately 24%).
The discovery was on a single culmination on the southern extremity of the Mbawa structure and
the potential of the remainder of the structure remains to be assessed.
The Mbawa 1 exploration well was spudded in August 2012 and drilled to a TD of 3,151m MD.
The well was plugged and abandoned according to the drilling programme and has been left in a
state that allows re-entry.
The well proves the existence of a working hydrocarbon system that, in the case of the Mbawa
gas, is interpreted to be derived from a mature Type II (gas / oil) source.
L8 Prospects and Leads
The extensive 3D seismic surveys in L8 have generated a large number of prospects and leads.
These are shown in Figure 4 below.
Kenya L8 Prospects and Leads
Figure 4 - Kenya L8 Prospects and Leads
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Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
L8 - Forward Exploration Programme
Following the Mbawa 1 discovery a major, second, deeper play type has yet to be tested. The
deeper play is regarded as being oil prone, rather than gas prone. The L8 Joint Venture has yet
to make a formal decision on the second well.
The Kipungu Prospect (formerly the “Tai Prospect”) is amongst a number of main prospects under
consideration for drilling. The Kipungu Prospect is the updip extremity of an interpreted large
channel and “fan” system that extends to the south.
Kipungu and similar follow-up prospects are Lower Cretaceous channel and turbidite sandstone
plays (“Tai Sands”) that are deeper than the gas discovery sands in Mbawa 1 and are considered
to be in a separate petroleum system that is more favourable to trap oil (see Figure 5 below).
Kipungu Prospect- Follow Up to Mbawa
220 Million Bbls Oil Potential (P Mean)
Detachment Level
-------------
2 Km
130 m
-
-
-
-
-
Tai Sands
Cretaceous Faulting
Seismic Cross Section through Tai Prospect
Figure 5 - Seismic Cross Section through Kipungu (Tai) Prospect
Oil remains Pancontinental’s prime focus offshore Kenya and the deeper levels and numerous
other prospects at various levels remain untested and are the subject of current exploration
work.
KENYA
BLOCKS L10A & L10B OFFSHORE LAMU BASIN
Pancontinental 15%
The L10A and L10B Blocks have respective areas of 4,962.03 sq km and 5,585.35 sq km and
water depths of 200 to 1,900m, which is easily within the reach of modern drilling and development
technology. Pancontinental joined the UK major BG Group plc (“BG”), Premier Oil plc and PT
Exploration and Production Public Company Limited (following its takeover of Cove Energy plc)
in the award of the two Production Sharing Contracts L10A and L10B in 2011.
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Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
With BG as operator, the Joint Venture has undertaken an aggressive exploration programme
leading to future drilling in this highly promising exploration province.
The L10A and L10B joint venture completed a second 3D survey in the western portion of the
licence areas in January 2013. The joint venture now has excellent 3D coverage totalling 4,872
square kilometres over a large number of leads and prospects.
The two 3D surveys cover the areas shown below in Figure 6. The latest survey covers a cluster
of Miocene reefs and the large Crombec Lead. These leads are possible drilling targets.
Prospects and Leads
In the western sector of the L10A and L10B areas, the joint venture operator BG has mapped a
number of very large leads for further work and possible drilling.
Kenya L10A & L10B Prospects & Leads
L10A & L10B EXPLORATION
Numerous Prospects and Leads
Multiple Play Types
Opportunity for multiple follow-ups over large area
Extensive 3D coverage
Aggressive Exploration Programme led by BG Group
L10A & L10B PROSPECTS AND LEADS MAP
Mombasa
Sunbird
L10A
Turaco
Chatterer
KENYA
---------------
0 Km 20
Longclaw
Hoopoe
Prospects and Leads
(cid:41)
>20 Main closures
(cid:41) Miocene reefs -
Sunbird, Chatterer,
Turaco, Babbler etc
(cid:41) Crombec 550 sq km
(cid:41) Numerous other
Outboard clastic
prospects
Multiple Play Types
(cid:41) Miocene Reefs
Babbler
L10B
3D Area
2,289 sq km
Crombec
Akalat
Francolin
3D Area
2,583 sq km
Pipit
(cid:41)
Tertiary & Cretaceous
Channels
(cid:41) Cretaceous anticlines
Weaver
East
Extensive 3D Coverage
Weaver
(cid:41)
3D surveys totalling
~ 4,800 sq km
(cid:41) Plus extensive 2D
data
Figure 6 - Kenya L10A and L10B Prospects and Leads Map
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Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
The largest Leads targeted by the new 3D survey in the western sector are-
(i) A cluster of more than 10 interpreted Miocene Reefs. Miocene reefs are known globally to have
very high per-well production potential. The L10 reefs are in water depths of approximately 500m
and within 50km of the major Kenyan port of Mombasa.
(ii) The Crombec Prospect is a large anticline in the western sector of the areas. Crombec has
four-way dip closure from the Tertiary to the Lower Jurassic. It has sands onlapping the crest,
indicating a likely growth structure.
In the eastern sector of the areas, mapping continues on a number of Prospects. Two of the
diverse play types are-
(i) An extensive system of Tertiary channels. The Tertiary section holds most of the gas discovered
to date offshore Mozambique and Tanzania. The channels in L10A and L10B may be gas charged,
possibly representing a very large resource.
(ii) Structural Leads in the Tertiary to Cretaceous section. Some of the Leads are dip reversals
associated with faults. These have stacked potential within Tertiary stacked channels and
Cretaceous thrust and sub-thrust plays.
Kenya L10A & L10B Prospects & Leads
Sunbird Prospect
(cid:135) Stacked reefs developed over
Turaco Prospect
carbonate platform
Miocene Reef Prospects
Babbler Prospect
(cid:135)
Multiple follow (cid:177)ups
(cid:135) Highly productive global
analogues
(cid:135) Various drill depths & sizes
(cid:135)
Full 3D coverage
Crombec Prospect
Very large Cretaceous
anticline --- 550 sq km
(cid:135)
(cid:135) Multiple potential shoreface
and deepwater sandstone
reservoirs
(cid:135)
(cid:135)
Onlap / pinchouts at various
levels
Fully covered by 3D
Interpreted underlying
Eocene source rocks
Crombec
Prospect
Figure 7 - Seismic Cross-Sections through Miocene Reefs and Crombec Prospects
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Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
Drilling Plans
A number of Prospects and play types have been mapped and the two major series of prospects
are Miocene reefs and clastic (sandstone) plays. Three main Miocene reefs have been fully
mapped using 3D seismic data - Turaco, Sunbird and Babbler.
The L10A and L10B joint ventures are planning a two well drilling programme commencing early
2014.
Subject to Joint Venture approval it is expected that one of three fully mapped Miocene reef
prospects will be the first well in the drilling campaign in 2014.
The location of further drilling will be determined by additional 3D mapping and the outcome of
the first well.
KENYA
BLOCK L6 OFFSHORE / ONSHORE LAMU BASIN
Pancontinental 40%
The L6 area is the northernmost of Pancontinental’s four areas offshore Kenya.
L6 covers 5,010 sq km (following a reinstatement of relinquished acreage) with about one quarter
onshore and the rest offshore to 400 meters water depth.
L6 is areally and geologically continuous to L8 with a deep sedimentary section extending from
the Tertiary to at least the Jurassic. L6 lies in the Lamu Basin and within the Tana River delta,
north of recent world-scale natural gas discoveries off the coasts of Mozambique and Tanzania.
Following encouraging hydrocarbon generation and migration studies, the joint venture is exploring
the offshore portion of the licence area. A deep central graben in this area is considered to be an
oil and gas “source kitchen” and potential hydrocarbon trapping prospects have been identified
immediately adjacent to this area.
The largest prospect is the Kifaru Prospect in water depths of 80m to 100m in the southwest of the
L6 area. This prospect and several others have been covered by a 3D seismic survey.
The L6 joint venture is operated by FAR Limited (ASX: FAR). The L6 joint venture group intends
to secure a farminee for drilling.
Completion of Kifaru 3D Offshore Seismic Survey
The Kifaru 3D seismic survey acquisition was completed in offshore Kenya during July 2012. The
survey covered 778 sq km over several prospects, including the primary Kifaru Prospect, in a
southern portion of the L6 area.
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Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
Prospective Resource Estimates
According to an assessment by operator FAR Limited, the L6 area has potential to contain
approximately 3.7 billion barrels of oil or 10.2 trillion cubic feet of gas prospective resources on a
gross, un-risked, best-estimate basis.
The three prospects covered by new 3D seismic (Kifaru, Kifaru West and Tembo) have combined
potential for approximately 630 million barrels of oil on an un-risked, best estimate, undivided
100% basis.
Pancontinental’s 40% share of the total Gross Prospective Resources is 1.5 billion barrels of oil
or 4.09 trillion cubic feet of gas on the same basis.
The details of the prospective resource estimates are shown in Table 1 below:
Play
Prospect
Prospects defined on 3D seismic
Kifaru
Kifaru West
Tembo
Miocene reef
Miocene reef
Eocene clastics
Prospects defined on 2D seismic
11 Prospects
13 Prospects
6 Prospects
Miocene reef
Eocene clastics
Late Cretaceous clastics
Unrisked Prospective Resources
Best Estimate
Oil (mmbbls) Gas (bcf) Oil (mmbbls) Gas (bcf) Oil (mmbbls) Gas (bcf)
High Estimate
Low Estimate
34
30
91
297
451
21
104
87
227
821
1,287
101
178
130
327
517
388
807
849
545
1,212
2,321
1,579
2,907
1,249
1,743
126
3,461
4,515
547
5,194
6,582
684
14,032
16,132
2,808
Total Gross
925
2,627
3,754
10,235
15,066
39,779
Table 1: Table of L6 Unrisked Prospective Resource Estimates
From the new 3D data three prospects have been mapped, Tembo, Kifaru and Kifaru West, with
prospective oil equivalent resources of 327, 178 and 130 million barrels respectively (un-risked
best estimate, 100% basis).
In a gas-only case the respective volumes are 807, 517 and 388 billion cubic feet. The chance of
a discovery has been assessed at 21%, 19% and 18% respectively.
The Kifaru Prospect and Kifaru West Prospects are interpreted to be large stacked Miocene
reefs, with interpreted good lateral and top seals and close proximity to mature Eocene source
rocks. Tembo is a large tilted fault block trap, with interpreted sandstone reservoirs at a number
of levels.
L6 Prospect Inventory
A number of oil and gas play types and prospects have been mapped and it is on this basis that
the location of the first exploration well will be selected (See Figure 8 below).
Following the reinstatement of a previously relinquished area, re-examination of 2D seismic data
has revealed a cluster of interpreted Miocene Reefs that will be subject to further mapping. These
reefs are on trend and north of the Kifaru Prospect.
The L6 Joint Venture is in a strong position to secure a farminee partner for drilling.
13
Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
Figure 8 - L6 Prospects and Leads Map
Several major prospects have potential in excess of 100 million barrels recoverable oil or 0.5
trillion cubic feet of gas. Eight prospects have been mapped in five clusters:
(cid:118)(cid:0)
(cid:118)(cid:0)
(cid:118)(cid:0)
(cid:118)(cid:0)
The Kifaru Prospects in the southwest of the block in water depths of 60 metres (Kifaru West)
and 100 metres (Kifaru East). These Prospects are now one of the main focuses of exploration
work;
The Kiboko and Nyati clusters are large and well situated in water depths from 100 metres to
350 metres;
The Chui Prospects are large features in near-shore water depths up to 120 metres; and
The Kudu Prospect, being onshore, is located where a smaller gas or oil discovery could be
readily commercialised.
14
Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
Figure 9 - Seismic Cross Section through Kifaru Prospect
The Kifaru Prospect, a Miocene reef accumulation, has been assessed by L6 operator FAR to
have potential to contain approximately 178 Million Barrels of recoverable oil (Best Estimate
Unrisked Prospective Resource).
Kenya L6 (cid:177) Kifaru & Tembo Prospects
KIFARU WEST PROSPECT
Miocene reef play
(cid:135)
KIFARU PROSPECT
Miocene reef play
(cid:135)
(cid:135)
130 MmBbls OR 388 Bcf
Unrisked Recoverable Prospective
Resource (Best Estimate)
(cid:135)
178 MmBbls OR 517 Bcf
Unrisked Recoverable Prospective
Resource (Best Estimate)
TEMBO PROSPECT
(cid:135)
(cid:135)
Eocene sand play
327 MmBbls OR 807 Bcf
Unrisked Recoverable Prospective
Resource (Best Estimate)
Kifaru
Kifaru West
Tembo
Figure 10 - Kenya L6 -Maps of Kifaru, Kifaru West and Tembo Prospects
15
Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
The similar Kifaru West Prospect has potential for 130 Million Barrels. A number of other possible
Miocene Reefs have been identified to the north of the Kifaru area.
L6 Forward Programme
With the increasing recognition of the hydrocarbon potential offshore Kenya, the L6 joint venture
is seeking a farminee for drilling.
Planning has commenced for drilling in 2014. The location, timing, depth and stratigraphy of the
well will be determined after final interpretation of the 3D seismic data and discussions with any
farminee.
NAMIBIA
EL 0037 OFFSHORE WALVIS BASIN
Pancontinental 30% (post year end)
Petroleum Exploration Licence No. 0037 (“EL 0037”) covers 17,295 sq km (4.2 million acres) in
water depths extending to 1,800m in the Walvis Basin offshore northern Namibia. Before farmout
to Tullow in September 2013 the licence was held by Pancontinental (95%) and Paragon Oil &
Gas (Pty) Ltd (“Paragon”) (5%).
Pancontinental and co-venturer Paragon were awarded the 0037 Exploration Licence on 28 June
2011 and a corresponding Production Agreement was signed on 4 July 2011 (also effective 28
June 2011).
Offshore Namibia (cid:177) Pancontinental Areas
Large Exploration Area
(cid:135)
(cid:135)
(cid:135)
EL 0037 covers 17,295 sq km (4,273,687
acres) over 3 blocks
Pancontinental 30% Free Carried
Tullow 65% and Operator under farmin
(September 2013)
EL 0037 Prospective Resource* estimated at-
(cid:135)
(cid:135)
8.7 billion barrels of oil or
11 primary Leads
High Level of Activity
(cid:135)
(cid:135)
Up to 5 wells drilled by others 2013/14
Neighbour HRT drilled first oil recovery
with Wingat -1 in May 2013
Multiple Potential
(cid:135)
(cid:135)
(cid:135)
(cid:49)(cid:88)(cid:80)(cid:72)(cid:85)(cid:82)(cid:88)(cid:86)(cid:3)(cid:48)(cid:68)(cid:77)(cid:82)(cid:85)(cid:3)(cid:179)(cid:47)(cid:72)(cid:68)(cid:71)(cid:86)(cid:180)(cid:3)
Multiple Play types
Good 2D coverage
Exploration
(cid:135)
Mapping, 3D and 2D planned before
drilling
* Pmean estimated by DeGolyer and MacNaughton
Figure 11 – Offshore Namibia Licence Map
16
Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
Pancontinental increased its interest from 85% to 95% through a purchase of 10% from co-
venturer Paragon in July 2012.
Pancontinental farmed out to Tullow in September 2013, thereby reducing its interest to 30% and
under conditions that will see it free carried through extensive 3D and 2D seismic programmes
and a possible exploration well.
Regional Activities
Offshore Namibia is part of the plate tectonic “conjugate” of offshore Brazil, where world-scale oil
and gas discoveries have been made in recent years and it lies on the West African continental
margin adjacent to Angola, where there have also been many major oil discoveries.
Offshore Namibia is an extension of the West African continental margin and in Pancontinental’s
opinion offshore Namibia has the potential to hold very large oil and gas reserves and it is
significantly under-explored.
On 20 May 2013 it was announced that the Wingat-1 well adjacent to EL 0037 proved well-
developed mature marine source rocks and a recovery of 1.8 litres of light oil from poorly-developed
reservoir rocks. For the first time, the reported oil recovery and source rocks verified a working oil
system in the Walvis Basin.
Pancontinental’s EL 0037 licence area and HRT’s PEL 23 area are contiguous over the “Inner
Graben” that is interpreted by Pancontinental to be a main regional oil generating zone and one
of the most critical factors to finding commercial oil offshore Namibia.
The Wingat-1 is located in Petroleum Exploration Licence 23 (“PEL-23”), in the Walvis Basin,
immediately south of Pancontinental’s EL 0037 area.
On 20 May 2013, HRT announced –
(cid:118)(cid:0)
The Wingat-1 well, spudded on March 25, was drilled in a water depth of approximately
1,005 meters and reached a final depth of 5,000 meters;
Oil was found, although not in commercial volumes; 4 samples of oil of 450cc each were
recovered;
The recovered oil is Light Oil (38
Two well-developed source rocks, rich in organic carbon, have been penetrated and both
are within the oil-generating window;
Several thin-bedded sandy reservoirs that are saturated by oil were encountered and no
water saturated zones were encountered in the drilled section; and
The well commenced encountering increasing concentrations of hydrocarbon shows below
1,500m.
o to 42o API), with minimal contamination;
(cid:118)(cid:0)
(cid:118)(cid:0)
(cid:118)(cid:0)
(cid:118)(cid:0)
(cid:118)(cid:0)
Two other wells, Murombe-1 and Moosehaed-1, were later completed by HRT. Both wells were
reported to have hydrocarbon shows and to have verified mature marine source rocks, however
they are not classified as discoveries.
17
Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
Pancontinental has mapped a number of large “leads” of which some are interpreted to be at
approximately the same stratigraphic level as the oil found in Wingat-1, as well as close vertically
to the interpreted oil source rocks.
In addition Tower Resources plc (“Tower”) announced that the drilling of the Welwitschia-1 well in
its EL 0010 by the operator, Repsol, is planned to commence in mid-February 2014 and a rig has
been fully secured.
Farmout to Tullow Oil
On 6 September 2013 Pancontinental announce a farmout agreement (the “Farmout Agreement”)
with Tullow Kudu Limited (“Tullow”), a wholly owned subsidiary of Tullow Oil plc, regarding licence
EL 0037 offshore Namibia.
Subject to certain conditions, including Ministerial approval, which Pancontinental and Tullow
anticipate to be satisfied, Tullow will be assigned a 65% interest in EL 0037 and Pancontinental will
retain a free-carried 30% interest out of its current 95% interest. Pursuant to the Farmout Agreement
Tullow will become operator and earn and maintain its 65% by fully carrying Pancontinental
through extensive programmes of 2D seismic and 3D seismic and, subject to identifying a drillable
prospect, fully carry Pancontinental through an exploration well. Pancontinental estimates that
Tullow’s total farmin expenditure may be in the range of US$110 million to US$130 million (100%
basis).
Paragon Oil & Gas (Pty) Ltd’s 5% free-carried interest will be included in the Tullow farmin
expenditure.
The Farmout Agreement provides for Tullow-
(cid:118)(cid:0)
(cid:118)(cid:0)
Taking over as Operator of Licence EL 0037 from Pancontinental;
Funding 100% of the costs of a 3D seismic survey of not less than 3,000 km
before 31 December 2014;
Funding 100% of the costs of a 2D seismic survey of not less than 1,000 km (either coincident
or possibly later than the 3D seismic survey);
Subject to identifying a drillable prospect, fully funding 100% of the costs of one exploration
well (with no expenditure ‘cap’) to not less than 3,500 metres below the sea surface;
Reimbursing Pancontinental for 65% of past expenditures incurred;
Purchasing, interpreting and mapping existing seismic data; and
Paying 100% of any other costs and expenses during the farmin period.
2 commencing
(cid:118)(cid:0)
(cid:118)(cid:0)
(cid:118)(cid:0)
(cid:118)(cid:0)
(cid:118)(cid:0)
The farmin programme is not subject to expenditure “caps”.
Under the terms of the Farmout Agreement, Tullow will pay 65% of back costs and 100% of forward
costs during the farmin period and complete the 2D and 3D seismic surveys outlined above. Should
the 2D and 3D seismic not deliver a suitable drilling target, Tullow shall be entitled to withdraw
from its commitment to drill the well outlined above by giving written notice to Pancontinental
not later than 16 months after the date of the completion of the acquisition of the 3D seismic or
13 months prior to the expiry of the First Renewal Exploration Period, whichever is the earlier.
Commencement of the acquisition phase of the 3D seismic is required by 31 December 2014,
and may possibly occur as soon as early-2014 depending on seismic vessel availability and other
factors. If Tullow withdraws after fulfilling its 2D and 3D seismic commitments it must re-assign its
65% interest back to Pancontinental, at no cost to Pancontinental.
18
Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
This EL 0037 farmout agreement brings a highly successful operator for exploration and drilling,
and an extensive high-tech 3D seismic programme. In addition it covers the free-carried 5%
interest held by Paragon, the third partner in the licence.
While Tullow has a commitment to commence the extensive 3D seismic programme before 31
December 2014 it is expected that the 3D acquisition will commence as soon as the required
EIA’s are approved and a selected seismic contractor can commence acquisition.
Following completion of the farmout the Namibia EL 0037 consortium will consist of -
Tullow Kudu Limited 1 (Operator)
65%
Pancontinental Namibia (Pty) Ltd 2
30%
Paragon Oil & Gas (Pty) Ltd 3
5%
1 Tullow Kudu Limited is a wholly owned subsidiary of Tullow Oil plc
2 Pancontinental Namibia (Pty) Ltd is a wholly owned subsidiary of Pancontinental Oil & Gas NL
3 Paragon Oil & Gas (Pty) Ltd is a wholly owned subsidiary of Paragon Investment Holding’s (Pty) Ltd
Independent Resource Estimate Overview
On 24 May 2013 Pancontinental announced that leading independent consulting firm DeGolyer
and MacNaughton (“D&M”) had carried out an assessment of the oil and gas potential of the EL
0037 area.
D&M provided estimates for 11 oil leads in the EL 0037 licence area of total mean prospective
resources of 8.7 billion barrels of oil – 8.2 billion barrels net to Pancontinental’s 95% interest
(these volumes are not adjusted for geologic and/or economic risk). D&M are recognised as
the leader in resource estimation for the petroleum industry and have extensive international
experience with a diverse range of clients in a diverse range of regions, including onshore and
offshore East and West Africa.
D&M’s resource estimates recognise large stratigraphic leads in potential clastic turbidite targets.
These targets appear to be in the oil window. These potential accumulations are categorised as
“leads” based on the available seismic and geologic data. The potential accumulations are not
yet classified as “prospects” that are available for drilling.
The summary potential volumetric findings of the report are reproduced in Table 2 below; the
details of each lead are given in Table 3.
D&M has prepared the assessment of licence area EL 0037 offshore Namibia in accordance with
the Petroleum Resources Management System (PRMS) approved by the Society of Petroleum
Engineers, the World Petroleum Council, the American Association of Petroleum Geologists, and
the Society of Petroleum Evaluation Engineers.
D&M’s Mean Estimate for the total 11 Leads is 8.7 Billion Barrels of Gross Prospective (recoverable)
Oil Resources.
19
Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
Table 2-Estimate of Gross Prospective Oil Resources
Low
Estimate
(103bbl)
Best
Estimate
(103bbl)
High
Estimate
(103bbl)
Mean
Estimate
(103bbl)
Probability
Of Geological
Success (Pg)
Pg-Adjusted
Mean Estimate
(103bbl)
Statistical
Aggregate
4,591,213
7,817,133
13,913,089
8,706,734
0.050
435,337
1.
2.
3.
4.
5.
6.
7.
90, P50, P10, and mean respectively.
Low, best, high, and mean estimates follow the PRMS guidelines for prospective resources.
Low, best, high, and mean estimates in this table are P
g is defined as the probability of discovering reservoirs which flow petroleum at a measurable rate.
P
Application of any geological and economic chance factor does not equate prospective resources to contingent
resources or reserves.
Recovery efficiency is applied to prospective resources in this table.
There is no certainty that any portion of the prospective resources estimated herein will be discovered. If
discovered, there is no certainty that it will be commercially viable to produce any portion of the prospective
resources evaluated.
Leads are features that are not sufficiently well defined to be drillable, and need further work and/or data. In
general, Leads are significantly more risky than Prospects and therefore volumetrics estimates for Leads are only
indicative of relative size.
Table 3 –Details of leads assessed by DeGolyer & MacNaughton in Namibia EL 0037
(Prospective Gross Ultimate Recovery, Million Barrels, Rounded to two decimal places)
LEAD
Potential Target
P90
P50
P10
Mean
A/B
Barremian
100.75
471.46
1,767.86
782.83
C
D
E
F
G
H
K
M
N
O
Cretaceous Slope Channel
Cretaceous Basin Floor Fan
77.92
49.37
364.15
1,398.65
610.19
231.20
900.07
388.19
Cretaceous Basin Floor Fan
221.14
1,057.91
4,171.05
1,770.03
Barremian
36.40
167.86
Turonian Turbidite
Synrift Pinchout
8.87
5.63
38.36
26.07
653.54
146.14
99.83
280.45
63.78
43.07
Cretaceous Basin Floor Fan
22.68
102.99
408.14
174.24
Cretaceous Slope Channel
143.60
702.89
2,700.27
1,165.19
Santonian Channel
239.96
1,097.33
4,345.22
1,875.90
Cretaceous Channel
200.23
942.68
3,560.95
1,552.85
20
Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
Namibia EL 0037 Exploration
Pancontinental believes that a critical factor for oil exploration offshore Namibia is oil maturity-
where source rocks are sufficiently buried and heated to generate oil - within the “Oil Window”.
Pancontinental has interpreted an “Oil Mature Fairway” that extends through EL 0037.
Pancontinental believes that EL 0037 is one of the few areas covering an oil generating “sweet
spot” where oil prone source rocks are sufficiently buried to generate oil; similar to its four projects
offshore Kenya.
Pancontinental is exploring ponded basin floor turbidites, slope fans and channels seen under the
company’s earlier Reconnaissance Licence. These targets are associated with a restricted graben
trough interpreted to hold the rich and mature oil source rocks identified in regional wells.
Pancontinental has identified and mapped a number of ponded turbidite, slope turbidite, basin
floor turbidite fans and channels forming major very large “leads” closely associated with, and
within, the Inner Graben in EL 0037.
Offshore Namibia (cid:177) Exploration Concepts
Basin Floor Axis
(Transition Zone)
EL 0037
Slope / Shelf
Boundary
OIL MATURE
FAIRWAY
- Top Transition
Zone
Oil Generated and
(cid:410)(cid:396)(cid:258)(cid:393)(cid:393)(cid:286)(cid:282)(cid:3)(cid:3)(cid:349)(cid:374)(cid:3)(cid:862)(cid:47)(cid:374)(cid:374)(cid:286)(cid:396)(cid:3)
(cid:39)(cid:396)(cid:258)(cid:271)(cid:286)(cid:374)(cid:863)
OIL SYSTEM
(cid:135) Good Oil Prone Source Rocks seen regionally
(cid:135) Oil recovery form Wingat-1 (380 (cid:177) 400 API), 2013
(cid:135) Source Rocks regionally are not always deeply
buried enough (cid:11)(cid:179)Mature(cid:180)(cid:12)(cid:3)(cid:87)(cid:82)(cid:3)(cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:82)(cid:76)(cid:79)(cid:3)(cid:3)(cid:69)(cid:88)(cid:87)-
(cid:135) Oil-(cid:80)(cid:68)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3)(cid:41)(cid:68)(cid:76)(cid:85)(cid:90)(cid:68)(cid:92)(cid:3)(cid:179)(cid:46)(cid:76)(cid:87)(cid:70)(cid:75)(cid:72)(cid:81)(cid:180)(cid:3)(cid:76)(cid:81)(cid:3)(cid:44)(cid:81)(cid:81)(cid:72)(cid:85)(cid:3)(cid:42)(cid:85)(cid:68)(cid:69)(cid:72)(cid:81)(cid:3)(cid:76)(cid:81)(cid:3)
EL 0037 ------ (cid:50)(cid:76)(cid:79)(cid:3)(cid:179)(cid:54)(cid:90)(cid:72)(cid:72)(cid:87)(cid:3)(cid:54)(cid:83)(cid:82)(cid:87)(cid:180)
(cid:135) (cid:51)(cid:82)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:55)(cid:88)(cid:85)(cid:69)(cid:76)(cid:71)(cid:76)(cid:87)(cid:72)(cid:3)(cid:179)(cid:41)(cid:68)(cid:81)(cid:86)(cid:180)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:86)(cid:79)(cid:82)(cid:83)(cid:72)(cid:3)(cid:38)(cid:75)(cid:68)(cid:81)(cid:81)(cid:72)(cid:79)(cid:86)(cid:3)(cid:3)
identified in Oil Mature Fairway
Wingat 1
Light Oil Recovery
SW
Murombe 1
Oil generating zone modeled in
Oil Mature Fairway
Basin Floor Fans-
Basin Floor Fans-
Primary Objectives
Primary Objectives
Slope Incised Channels-
Slope Incised Channels-
Primary Objectives
Primary Objective
Slope Pinchouts-
Primary Objectives
NE
Schematic Cross-
Section NE to SW
OUTER
HIGH
INNER
GRABEN
Basin Floor Axis-
(Transition Zone)
OIL MATURE
FAIRWAY
EL 0037
Slope / Shelf
Boundary
15
Figure 12 – EL 0037 Interpreted Oil Mature Fairway
21
Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
A number of the leads exceed several hundred square kilometers in area based on current
mapping, and detailed mapping will be undertaken to define the full extent of the structural and
stratigraphic closures and potential oil-bearing traps.
Offshore Namibia is continuing to attract significant international interest as an emerging oil and
gas province in southwest Africa.
The reservoirs interpreted by Tullow and Pancontinental in EL 0037; while they are interpreted to
be closely associated with the interpreted source rocks, are also interpreted to be different and
better developed than those drilled by HRT.
The Oil Mature Fairway and Inner Graben are asymmetric, with considerably larger “fetch” for oil
generation and migration on the Eastern side of the Graben, covered by EL 0037.
Crucially, the Oil Mature Fairway lies to the Eastern side of the axis of the Basin Floor and within
the Eastern part of the Basin Floor and the Eastern Slope area (See Figure 13 below). Oil migration
is therefore interpreted to be predominantly to the East.
Figure 13 – Interpreted Leads and Plays and Depositional Environments Maps
Pancontinental therefore believes that the Eastern Flank is the environment that is most likely to
contain volumes of trapped oil, and this is where EL 0037 is situated.
22
Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
Namibia EL 0037 (cid:177) Numerous Leads
Transition Zone
?Detached Basin-
Floor Fan
Dalia Field Angola
Flat
Event
Transition
Zone Reef
(?)
Turonian
Flexure
Transition
Zone
Channel
A
B
D
Santonian
Channel incised
into Turonian
Flat
Event
Transition Zone
Basin (cid:884)Floor
Antiform
N
E
NAMIBIA EL 0037
Numerous large Leads
in slope and basin setting
Interpreted Source Horizon
Transition
Zone
Channel
Syn-Rift
Channel
Basal Transition
Zone Channel
O
M
C
Figure 14 – Seismic Cross Sections through selected Leads
Forward Work Programme
The EL 0037 Joint Venture now led by operator Tullow is planning an exploration programme
consisting of-
(cid:118)(cid:0)
(cid:118)(cid:0)
(cid:118)(cid:0)
3,000 sq km of 3D Seismic acquisition, processing and interpretation
2,000 linear km of 2D Seismic
Depending on the outcome of the seismic programmes, one exploration well.
While Tullow has a commitment to commence the extensive 3D seismic programme before 31
December 2014 it is expected that the 3D acquisition will commence as soon as the required
EIA’s are approved and a selected seismic contractor can commence acquisition.
23
Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
AUSTRALIA
EP 104 / R1 ONSHORE CANNING BASIN
Pancontinental 11.11%
The RL1 area has been excised from the EP 104 exploration area to allow retention of the Point
Torment gas discovery and the Stokes Bay 1 area. RL1 was renewed by the Minister of Mines and
Petroleum of Western Australia for a period of five years from 8 November 2010.
The joint venture is undertaking an examination of the prospectivity of the licence areas to plan a
revised forward programme.
L15 ONSHORE CANNING BASIN
Pancontinental 12%
Pancontinental and its co-venturers have been granted Petroleum Production Licence L15 over
the West Kora-1 oil discovery well in the Canning Basin of Western Australia. The licence is for 21
years commencing 1 April 2010.
The L15 Joint Venture is considering upgrading the existing production facility and restore oil
production from West Kora -1.
The Company is examining the future potential and value of this project.
EP 424 OFFSHORE CARNARVON BASIN
Pancontinental 38.462%
EP 110 is operated in conjunction with EP- 424. The parties in EP-110 have identical equities to
those in permit EP-424.
Following a technical review of the Baniyas potential and due to the absence of success in
extending Joint Venture access over all of the Baniyas Prospect, it was decided to consider
selling or farming out the licences.
EP 110 ONSHORE CARNARVON BASIN
Pancontinental 38.462%
This permit is operated in conjunction with EP- 424. The parties in EP-110 have identical equities
to those in permit EP-424.
The Joint Venture is considering a further review aimed at outlining possible onshore leads and
prospects in EP 110.
24
Pancontinental Oil & Gas NL - Annual Report 2013
Review of Operations
NEW VENTURES
Pancontinental continuously reviews new opportunities in Australia and internationally. During the
year a number of new opportunities were assessed and one was completed, being the acquisition
of an additional 10% interest in Namibian EL 0037.
PANCONTINENTAL TEAM
Pancontinental is fortunate to have a small and dedicated team who have contributed immensely
to the Company’s success.
The accounting and administration team, led by Company Secretary Vesna Petrovic, and
comprising Linda Underwood, Margaret Johnson and Roberta Gowans have been invaluable in
their contribution to the Company.
In Namibia, Pancontinental has been fortunate to gain the services of experienced oil & gas
veteran, Mr Ger Kegge. Ger has had a long and successful career, firstly with Shell, and latterly
with Tullow and he is Pancontinental’s Namibia in-country manager.
Pancontinental employs, on a part time basis, a number. of experienced and highly respected
consultants for activities including prospective resource assessments and new venture
opportunities.
25
Pancontinental Oil & Gas NL - Annual Report 2013
Directors’ Report
Your directors submit their report for the year ended 30 June 2013.
DIRECTORS
The names and details of the company’s directors in office during the financial year and until the date of this report are as follows.
Directors were in office for this entire period unless otherwise stated.
Names, qualifications, experience and special responsibilities
Henry David Kennedy MA (Geology), SEG (Non-Executive Chairman)
Mr Kennedy has had a long association with Australian and New Zealand resource companies and as a
technical director has been instrumental in the formation and/or development of a number of successful
listed companies. During his term as executive director, these companies were involved in discovery of the
Tubridgi gas field, South Pepper, North Herald and Chervil oil fields in Western Australia and the Kupe South
and Rua oil/gas condensate fields in New Zealand. Mr Kennedy is currently a non-executive director of
Norwest Energy NL (since April 1997) and East Africa Resources Limited (since March 2013).
Roy Barry Rushworth, BSc (Executive Director, Chief Executive Officer)
Mr Rushworth has more than twenty five years experience in petroleum exploration. He is a graduate of
Sydney University, with a Bachelor of Science Degree in Geology and Marine Sciences. Commencing
with positions in exploration operations, his career then extended to a period as Chief Geologist and
subsequently Exploration Manager for an Australian listed company. A number of oil and gas discoveries
were made by the company during that time. More recently, as the General Manager and Director of Afrex
Limited, he was responsible for acquiring international new venture opportunities for Afrex Limited and its
then co-venturer Pancontinental Oil & Gas NL. In this position he identified and negotiated projects in Malta,
Kenya and Morocco. Following the merger of Afrex Limited with Pancontinental in August 2005, he accepted
the position of Director - New Ventures for Pancontinental and is now the Chief Executive Officer of the
company.
Ernest Anthony Myers CPA (Executive Finance Director)
Mr Myers has over 30 years experience in the resources industry. Mr Myers is an accountant (CPA) who
has held senior management and executive roles within a number of ASX listed companies. Mr Myers
joined Pancontinental in March 2004 as Company Secretary and was appointed Finance Director in January
2009. He brings corporate and operational experience in a variety of fields including project development,
feasibility studies and both equity and debt financing. Mr Myers has extensive experience in exploration and
operational issues, particularly in Africa. Mr Myers has been an alternate director of East Africa Resources
Limited since June 2010.
Anthony Robert Frederick Maslin BBus (Independent Non-Executive Director)
Mr Maslin is an ex-stockbroker with corporate experience in both management and promotion, along with
an extensive understanding of financial markets. Mr Maslin has been instrumental in the capital raisings and
promotion of several resource development companies. Mr Maslin is also a director of Buxton Resources
Ltd (since November 2010).
COMPANY SECRETARY
Vesna Petrovic, BComm, CPA
Mrs Petrovic is a Certified Practicing Accountant with over 10 years experience in the resources sector and
has previously held positions with numerous publicly listed entities. In particular, Mrs Petrovic has significant
experience with companies involved in Africa. Mrs Petrovic holds a Bachelor of Commerce, Major in Accounting
and Business Law and has completed the Graduate Diploma in Applied Corporate Governance from Chartered
Secretaries Australia Ltd.
26
Pancontinental Oil & Gas NL - Annual Report 2013
Directors’ Report
The relevant interest of each director in the shares and options of the company as at 30 June 2013 is as follows:
(cid:39)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:182)(cid:3)(cid:44)(cid:81)(cid:87)(cid:72)(cid:85)(cid:72)(cid:86)(cid:87)(cid:86)
Henry David Kennedy
Roy Barry Rushworth
Ernest Anthony Myers
Anthony Robert Frederick Maslin
EARNINGS PER SHARE
Basic earnings (loss) per share
Diluted earnings (loss) per share
CORPORATE INFORMATION
Ordinary Shares
Options over
Ordinary Shares
134,051,602
36,335,609
400,714
14,583
1,250,000
2,500,000
750,000
500,000
Cents
(0.06)
(0.06)
Corporate structure
Pancontinental Oil & Gas NL is a no liability company incorporated and domiciled in Australia.
Nature of operations and principal activities
The principal activity during the year of entities within the consolidated entity was exploration for oil and gas.
There have been no significant changes in the nature of those activities during the year.
Employees
The consolidated entity had no employees as at 30 June 2013, (2012: no employees). The consolidated entity employs the
services of specialised consultants where and when needed.
OPERATING AND FINANCIAL REVIEW
Review of Operations
Kenya L8 [15%]
The Mbawa 1 exploration well in block L8 was drilled during the year. Mbawa 1 is the first natural gas discovery and the first ever
hydrocarbon discovery offshore Kenya. The joint venture is considering a second well on deeper oil play.
Kenya L6 [40%]
During the year, a 3D seismic survey was completed over the Kifaru and Tembo prospects. The joint venture also secured
additional acreage by regaining a previously relinquished area. Going forward, the joint venture is seeking a farminee for drilling.
Kenya L10A & L10B [15%]
In blocks L10A and L10B new 3D seismic surveys were completed with major prospects mapped. The joint ventures are
considering a two well drilling programme commencing late 2013.
Namibia EL 0037 [95%, post year end 30%]
Activity in Namibia EL 0037 continued with multiple leads identified on the exploration permits as well as farmout efforts during the
year. Post year end, the joint venture secured Tullow Oil as a farminee and new operator of the permit.
27
Pancontinental Oil & Gas NL - Annual Report 2013
Directors’ Report
Group Overview
Pancontinental Oil and Gas NL was incorporated in 1985 and listed on the Australian Securities Exchange in 1986.
Performance Indicators
The board closely monitors the g(cid:85)(cid:82)(cid:88)(cid:83)(cid:182)(cid:86)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:86)(cid:15)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:69)(cid:88)(cid:71)(cid:74)(cid:72)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:68)(cid:79)(cid:79)(cid:3)(cid:83)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)e.
Dynamics of the Business
The company continues to look for new opportunities, particularly in Africa. Whilst the company is committed to further
developing existing projects, emerging opportunities are reviewed on a timely basis.
Risk Management
The group takes a proactive approach to risk management. The board is responsible for ensuring that risks and opportunities are
identified on a timely basis and that the group's objectives and activities are aligned with the risks and opportunities identified by
the board.
The group believes that it is crucial for all board members to be a part of this process and as such the board has not established
a separate risk management committee. The board has a number of mechanisms in place to ensure that its objectives and
activities are aligned with the risks identified. These include the following:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
Implementation of operating plans and cash flow budgets by management and board monitoring of progress against these
budgets.
Analysis of specific business risks, including such matters as exchange rate movements, environmental issues and
security matters.
The group has advised each director, manager and consultant that they must comply with a set of ethical standards
maintaining appropriate core company values and objectives. Such standards ensure shareholder value is delivered and
maintained. Standards cover legal compliance, conflict resolution, privileged information and fair dealing.
The board provides shareholders with information using a comprehensive Continuous Disclosure Policy which includes
identifying matters which have a material effect on the underlying security price. ASX announcements, the web page of the
company and other media resources are used to convey such information. The board encourages full participation by
shareholders at the AGM and shareholders are requested to vote on board and executive remuneration aggregates as well
as Employee Incentive Schemes.
28
Pancontinental Oil & Gas NL - Annual Report 2013
Directors’ Report
Operating Results for the Year
Summarised operating results are as follows:
Non-segment and unallocated revenues and results
Consolidated entity revenues and results from ordinary activities before income tax
expense
2013
Revenues
$
1,295,429
Results
$
(662,822)
1,295,429
(662,822)
Shareholder Returns
The group is in the exploration phase and so returns to shareholders are primarily measured through capital growth.
Basic earning per share (cents)
2013
(0.06)
2012
(0.23)
2011
(0.16)
2010
(0.32)
2009
(1.26)
2008
(0.36)
Investments for Future Performance
The group continues to evaluate opportunities utilising in-house commercial expertise as well as corporate advice.
Review of Financial Condition
Capital Structure
The group has a sound capital structure from which to continue its development programmes.
During the year, the company successfully raised approximately $4.3 million dollars (net of costs) by way of a shortfall placement
(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:85)(cid:72)(cid:89)(cid:76)(cid:82)(cid:88)(cid:86)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:182) share purchase plan and exercise of options as detailed below:
Share Capital
Beginning of the financial year
Issued during the year:
(cid:16) Shortfall from Share Purchase Plan (net of costs)
(cid:16) Exercise of Options (net of costs)
End of the financial year
Movements in the options of the company during the year are as per below:
Option Reserve
Balance at beginning of year
(cid:16) exercised
(cid:16) issued
Balance at end of year
Number of shares
1,123,444,094
$
95,132,106
25,300,002
2,250,000
1,150,994,096
4,148,781
131,111
99,411,998
Number of options
4,500,000
(2,250,000)
2,750,000
5,000,000
Weighted
average exercise
price
0.09
0.59
0.12
0.12
Treasury policy
The board has not considered it necessary to establish a separate treasury function because of the size and scope of the group's
activities.
Liquidity and Funding
(cid:120)
(cid:120)
The group has sufficient liquidity and funding to continue operations into the foreseeable future.
All operating plans and budgets are approved and progress is reviewed continuously.
Statement of Compliance
The above report is based on the guidelines in The Group of 100 Incorporated publication Guide to the Review of Operations and
Financial Condition.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
No significant changes in the state of affairs of the company occurred during the financial year.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
Significant events after balance date include:
29
Pancontinental Oil & Gas NL - Annual Report 2013
Directors’ Report
Tullow Oil farm-in to Namibia EL 0037
In September 2013, Pancontinental announced that Tullow Oil had farmed in to licence EL 0037. Tullow were assigned a 65%
interest as well as operatorship, with Pancontinental retaining a 30% free carried interest.
Kenya L8
At an Operating Committee Meeting held on 10th October, Apache indicated their intention to withdraw from the block.
Apart from the above, no matters or circumstances have arisen since the end of the financial year which significantly affected or
may significantly affect the operations of the company, the results of those operations, or the state of affairs of the company in
future financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The economic entity expects to maintain the present status and level of operations and hence there are no likely developments
in the entity's operations.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The company's operations are not regulated by a particular environmental regulation under a law of the Commonwealth or of a
State or Territory.
SHARE OPTIONS
Unissued shares
At the date of this report there were 5,000,000 unissued ordinary shares under options. Refer to the notes for further details on
the options outstanding.
During the year, 2,250,000 options were exercised (as per below) and 2,750,000 new options issued.
Shares issued as a result of the exercise of Options
2,250,000 options were exercised with shares issued as a result, during the financial year.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
Since the end of the previous financial year the company has paid insurance premiums in respect of directors' and officers'
liability and legal expenses insurance contracts. The directors have not included details of the nature of the liabilities covered or
the amount of the premium paid in respect of the directors and officers and legal expenses insurance contracts as such
disclosure is prohibited under the terms of the contract. The premiums were paid in respect of the following officers of the
company and its controlled entities:
HD Kennedy, RB Rushworth, EA Myers, ARF Maslin and V Petrovic.
30
Pancontinental Oil & Gas NL - Annual Report 2013
Directors’ Report
REMUNERATION REPORT (Audited)
This report outlines the remuneration arrangements in place for directors and executives of Pa(cid:81)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:72)(cid:81)(cid:87)(cid:68)(cid:79)(cid:3)(cid:50)(cid:76)(cid:79)(cid:3)(cid:9)(cid:3)(cid:42)(cid:68)(cid:86)(cid:3)(cid:49)(cid:47)(cid:3)(cid:11)(cid:179)(cid:87)(cid:75)(cid:72)(cid:3)
company(cid:180)).
Remuneration philosophy
A description of the remuneration structures in place is as follows: The non-executive directors received a fixed fee for their
services. They do not receive performance based remuneration. The chief executive officer received a fixed fee for his
respective executive services (with no bonus or other performance-based remuneration). Directors do not receive any
termination or retirement benefits.
Remuneration committee
The full board carries out the role of the remuneration committee.
Remuneration structure
In accordance with best practice corporate governance, the structure of non-executive and executive remuneration is separate
and distinct.
Non-executive director remuneration
Objective
The board seeks to set aggregate remuneration at a level which provides the company with the ability to attract and retain
directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
Structure
The Constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive directors shall be
determined from time to time by a general meeting. An amount not exceeding the amount determined is then divided between
the directors as agreed. The latest determination was at the Annual General Meeting held on 29 November 2007 when
shareholders approved an aggregate remuneration of $400,000 per year. The amount of aggregate remuneration sought to be
approved by shareholders and the manner in which it is apportioned amongst directors is reviewed annually. The board
considers advice from external sources as well as the fees paid to non-executive directors of comparable companies when
undertaking reviews. The non-executive directors of the company can participate in Employee Option Incentive Schemes with
shareholder approval. The remuneration of executive and non-executive directors for the period ending 30 June 2013 is detailed
in Table 1 of this report.
Senior management and executive director remuneration
Objective
The board seeks to set aggregate remuneration at a level which provides the company with the ability to attract and retain
executives of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
Structure
In determining the level and make up of executive remuneration, the board takes independent advice from external sources
when necessary. It is the board's policy that employment contracts are only entered into with the chief executive officer and with
(cid:78)(cid:72)(cid:92)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:86)(cid:17)(cid:3)(cid:39)(cid:72)(cid:87)(cid:68)(cid:76)(cid:79)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:40)(cid:50)(cid:182)(cid:86)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:68)(cid:70)(cid:87)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:68)(cid:86)(cid:3)(cid:73)(cid:82)(cid:79)(cid:79)(cid:82)(cid:90)(cid:86)(cid:29)
Basic Sum:
Capacity:
Commencement Date:
Termination Period:
$650,000
Chief Executive Officer
1 July 2012
6-12 months
Fixed remuneration
Objective
The level of fixed directors(cid:182) fees is set so as to provide a base level which is both appropriate to the position and is competitive in
the market.
Structure
Fixed primary remuneration is paid on a cash basis and there are no fringe benefits or other costs incurred by the company.
Company performance
Company performance is reflected in the movement of the company's share price over time. As the company is in an exploration
phase, returns to shareholders will primarily come through share price appreciation. The board(cid:182)s strategy in achieving this aim is
to acquire early stage projects which can attract quality joint venture partners.
The company has developed skills in the acquisition of projects and also built strategic alliances with other companies to further
develop its project portfolio.
31
Pancontinental Oil & Gas NL - Annual Report 2013
Directors’ Report
Table 1: Director remuneration for the year ended 30 June 2013
Primary benefits
Post Employment
Salary & Fees Cash STI Superannuation
Equity
Options
(Issued)
Value of options
as proportion of
Revenue
Total
Henry David Kennedy
(Non-Executive Chairman)
2013
2012
Roy Barry Rushworth
(Executive Director,
Chief Executive Officer)
2013
2012
Ernest Anthony Myers1
(Executive Finance Director)
2013
2012
Anthony Robert Frederick Maslin
(Non-Executive Director)
2013
2012
Total Current Year
Remuneration
50,000
50,000
650,000
550,000
48,000
48,000
48,000
48,000
796,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
28,000
63,726
78,000
113,726
2.2%
14.6%
56,000
127,453
706,000
677,453
4.3%
29.2%
42,000
-
90,000
48,000
3.2%
-
28,000
-
76,000
48,000
2.2%
-
154,000
950,000
-
Note 1.
Mr Myers has a 50% interest in a consulting company which provides staff, accounting and administrative services to listed
companies, including Pancontinental. Mr Myers is paid a salary from that company. The same company also pays the staff who
provide company secretarial, accounting and administrative services to Pancontinental. The total fees paid for these services and
functions was $305,400 (2012: $289,500).
Table 2: Options granted as part of remuneration for the year ended 30 June 2013
(as approved by Shareholders)
Henry David Kennedy
Roy Barry Rushworth
Ernest Anthony Myers
Anthony Robert Frederick Maslin
Total Options Issued
Issued
500,000
1,000,000
750,000
500,000
2,750,000
Options granted as part of director and management remuneration have been valued using an appropriate option pricing model,
in which the option exercise price, the current level and volatility of the underlying share price, the risk-free interest rate, expected
dividends on the underlying shares, the current market price of the underlying shares and the expected life of the options are
taken into account. See following table for further details. 2,750,000 options were granted to directors during the year.
Fair values of options:
The fair value of each option is estimated on the date of grant using an appropriate option pricing model.
Expected volatility
Risk-free interest rate
Expected life of option
2013
2012
2011
2010
2009
2008
110%
2.74%
4 years
120%
3.57%
3 years
-
-
-
-
-
-
-
-
-
113%
6.42%
5 years
Number of options
Grant date
Vesting date
2,250,000
2,750,000
29 Nov 11
30 Nov 12
28 May 12
30 Nov 12
Weighted average fair
value
0.08
0.06
END OF REMUNERATION REPORT
32
Pancontinental Oil & Gas NL - Annual Report 2013
Directors’ Report
DIRECTORS' MEETINGS
The numbers of meetings of directors (including meetings of committees of directors) held during the year and the number of
meetings attended by each director were as follows:
Number of meetings held:
Number of meetings attended:
Henry David Kennedy
Roy Barry Rushworth
Ernest Anthony Myers
Anthony Robert Frederick Maslin
Directors'
Meetings
2
2
2
2
1
Notes
The directors are of the opinion that it is often more efficient to deal with matters by circular resolutions than by board meetings,
and 7 matters were dealt with in such a manner during the year.
ROUNDING
The amounts contained in this report and in the financial report have been rounded to the nearest $1 (where rounding is
applicable) under the option available to the company under ASIC Class Order 98/0100. The company is an entity to which the
Class Order applies.
(cid:36)(cid:56)(cid:39)(cid:44)(cid:55)(cid:50)(cid:53)(cid:182)(cid:54)(cid:3)(cid:44)(cid:49)(cid:39)(cid:40)(cid:51)(cid:40)(cid:49)(cid:39)(cid:40)(cid:49)CE DECLARATION
(cid:55)(cid:75)(cid:72)(cid:3)(cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:82)(cid:85)(cid:3)(cid:76)(cid:81)(cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:71)(cid:72)(cid:70)(cid:79)(cid:68)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:76)(cid:86)(cid:3)(cid:86)(cid:72)(cid:87)(cid:3)(cid:82)(cid:88)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:82)(cid:79)(cid:79)(cid:82)(cid:90)(cid:76)(cid:81)(cid:74)(cid:3)(cid:83)(cid:68)(cid:74)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:72)(cid:89)(cid:76)(cid:72)(cid:90)(cid:86)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:39)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:182)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)
ended 30 June 2013.
NON-AUDIT SERVICES
Rothsay did not receive any payment for non-audit services during the year.
Signed in accordance with a resolution of the Directors.
Ernest Anthony Myers
Director
Perth 26 September 2013
33
Pancontinental Oil & Gas NL - Annual Report 2013
Auditor’s Independence Declaration
AUDITOR INDEPENDENCE
The directors received the following declaration from the auditor of Pancontinental Oil & Gas NL:
Auditor's Independence Declaration to the Directors of Pancontinental Oil & Gas NL
(cid:44)(cid:81)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:22)(cid:19)(cid:26)(cid:38)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:36)(cid:70)(cid:87)(cid:3)(cid:21)(cid:19)(cid:19)(cid:20)(cid:3)(cid:11)(cid:87)(cid:75)(cid:72)(cid:3)(cid:179)(cid:36)(cid:70)(cid:87)(cid:180)(cid:12)(cid:3)(cid:44)(cid:3)(cid:75)(cid:72)(cid:85)(cid:72)(cid:69)(cid:92)(cid:3)(cid:71)(cid:72)(cid:70)(cid:79)(cid:68)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:69)(cid:72)(cid:86)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:80)(cid:92)(cid:3)(cid:78)(cid:81)(cid:82)(cid:90)(cid:79)(cid:72)(cid:71)(cid:74)(cid:72)(cid:3)
and belief there have been:
i)
ii)
no contraventions of the auditor independence requirements of the Act in relation to the audit of the 30 June 2013
annual financial statements; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Mr Graham Swan
Lead Auditor
26 September 2013
34
Pancontinental Oil & Gas NL - Annual Report 2013
Corporate Governance Statement
In accordance with the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations ("ASX
Principles and Recommendations")1, Pancontinental Oil & Gas NL ("the company") has made it a priority to adopt systems of
control and accountability as the basis for the administration of corporate governance. Some of these policies and procedures
are summarised in this statement. Commensurate with the spirit of the ASX Principles and Recommendations, the company has
followed each recommendation where the board has considered the recommendation to be an appropriate benchmark for
corporate governance practices, taking into account factors such as the size of the company and the board, resources available
and activities of the company. Where, after due consideration, the company's corporate governance practices depart from the
ASX Principles and Recommendations, the board has offered full disclosure of the nature of and reason for the adoption of its
own practice.
Further information about the company's corporate governance practices is set out on the company's website at
www.pancon.com.au. In accordance with the ASX Principles and Recommendations, information published on the company's
website includes charters (for the board and its committees), the company's code of conduct and other policies and procedures
relating to the board and its responsibilities.
EXPLANATIONS FOR DEPARTURES FROM BEST PRACTICE RECOMMENDATIONS
During the company's 2012/2013 financial year ("reporting period") the company has followed each of the ASX Principles and
Recommendations, other than in relation to the matters specified below.
Principle 2
Recommendation 2.1: A majority of the board should be independent directors
Notification of Departure:
Currently only one of the four directors is considered to be independent (cid:177) Mr Maslin.
Messrs Rushworth and Myers are executives and Mr Kennedy, a substantial shareholder.
Explanation for Departure:
Given the size and scope of the company's operations the board considers that it is appropriately structured to discharge its
duties in a manner that is in the best interests of the company. The board believes its current composition is in line with the long
term interests of shareholders. Furthermore, mechanisms are in place so that if a director considers it necessary, they may
obtain independent professional advice. The board considers independence, amongst other things, when recommending new
directors to the board.
Principle 2
Recommendation 2.2: The chair should be an independent director
Notification of Departure
The chair is not considered to be independent.
Explanation for Departure
Mr Kennedy is not independent by virtue of his substantial shareholding in the company. However, the board considers that Mr
Kennedy's interests are aligned with the long term interests of shareholders. Given Mr Kennedy's extensive experience and
qualifications, the board believes Mr Kennedy is the most appropriate director to carry out the role of chair.
1 A copy of the ASX Principles and Recommendations is set (cid:82)(cid:88)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)(cid:90)(cid:72)(cid:69)(cid:86)(cid:76)(cid:87)(cid:72)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:72)(cid:81)(cid:87)(cid:76)(cid:87)(cid:79)(cid:72)(cid:71)(cid:3)(cid:5)(cid:38)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:42)(cid:82)(cid:89)(cid:72)(cid:85)(cid:81)(cid:68)(cid:81)(cid:70)(cid:72)(cid:5)(cid:17)
35
Pancontinental Oil & Gas NL - Annual Report 2013
Corporate Governance Statement
Principle 2
Recommendation 2.4: The board should establish a nomination committee
Notification of Departure:
The full board fulfils the role of a nomination committee.
Explanation for Departure:
The full board considers those matters that would usually be the responsibility of a nomination committee. The board considers
that no efficiencies or other benefits would be gained by establishing a separate nomination committee. The board has adopted
a nomination committee charter, which it applies when convening as the nomination committee.
Principle 4
Recommendation 4.1: The board should establish an audit committee
Recommendation 4.2: Structure of the audit committee
Notification of Departure:
The full board fulfils the role of an audit committee.
Explanation for Departure:
The composition of the board is not suitable for the formation of a separate audit committee in accordance with the
recommendation. Further, the independent director does not possess the requisite financial expertise recommended in an audit
committee. The board has adopted an audit committee charter to assist with its function as an audit committee. The audit
committee charter provides that independent directors may meet with the external auditor.
Principle 7
Recommendation 7.2: Implement, manage and report on risk management system
Notification of Departure:
The board has not received a formal documented report from management on the effectiveness of their management of the
(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)(cid:80)(cid:68)(cid:87)(cid:72)(cid:85)(cid:76)(cid:68)(cid:79)(cid:3)(cid:69)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:85)(cid:76)(cid:86)(cid:78)(cid:86)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:89)erbal updates.
Explanation for Departure:
Although a formal risk management system has not been implemented, the board has continued focus on risk management
during the year. Frequent discussions and reviews of the various risks that the Pancontinental group may be exposed to are
(cid:85)(cid:72)(cid:74)(cid:88)(cid:79)(cid:68)(cid:85)(cid:79)(cid:92)(cid:3) (cid:70)(cid:68)(cid:85)(cid:85)(cid:76)(cid:72)(cid:71)(cid:3) (cid:82)(cid:88)(cid:87)(cid:17)(cid:3) (cid:55)(cid:75)(cid:72)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3) (cid:76)(cid:86)(cid:3) (cid:70)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:87)(cid:72)(cid:71)(cid:3) (cid:87)(cid:82)(cid:3) (cid:73)(cid:88)(cid:85)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3) (cid:71)(cid:72)(cid:89)(cid:72)(cid:79)(cid:82)(cid:83)(cid:76)(cid:81)(cid:74)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:86)(cid:87)(cid:85)(cid:72)(cid:81)(cid:74)(cid:87)(cid:75)(cid:72)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3) (cid:85)(cid:76)(cid:86)(cid:78)(cid:3) (cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)
policies.
Principle 8
Recommendation 8.1: The board should establish a remuneration committee
Recommendation 8.2: Structure of the remuneration committee
Notification of Departure:
The board fulfils the function of a remuneration committee.
Explanation for Departure:
Given the size and composition of the board, it is not practicable that a separate committee be formed. To assist it to carry out its
function in relation to remuneration matters, the board has adopted a remuneration committee charter.
36
Pancontinental Oil & Gas NL - Annual Report 2013
Corporate Governance Statement
COMMITTEE MEETINGS
Due to the size of the current board, the functions of the Nomination, Audit and Remuneration Committees were carried out by
the full board during the financial year. As such, no separate meetings were held for the Nomination and Remuneration
Committees. The board agenda may incorporate these items and appropriate discussions held at the board meetings.
Details of each of the director's qualifications are set out in the (cid:39)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:182)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:17)(cid:3)(cid:36)(cid:79)(cid:79)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)directors have substantial industry
experience and consider themselves to be financially literate. Mr Myers is a Certified Practising Accountant and therefore meets
the tests of financial expertise.
OTHER
Skills, Experience, Expertise and term of office of each Director
A profile of each director containing the skills, experience, expertise and term of office of each director is set out in the Directors'
Report.
Identification of Independent Directors
In considering the independence of directors, the board refers to the criteria for independence as set out in Box 2.1 of the ASX
Principles and Recommendations ("Independence Criteria"). To the extent that it is necessary for the board to consider issues of
materiality, the board refers to the thresholds for qualitative and quantitative materiality as adopted by the board and contained in
the board charter, which is disclosed in full on the c(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)(cid:90)(cid:72)(cid:69)(cid:86)(cid:76)(cid:87)(cid:72)(cid:17)
Applying the Independence Criteria, the independent director of the company for the current financial year was Mr Maslin.
Corporate Reporting
ASX Principle 7.3 requires the board to disclose whether it has received assurance from the Chief Executive Officer (or
equivalent) and the Chief Financial Officer (or equivalent) that the declaration provided in accordance with section 295A of the
Corporations Act is founded on a sound system of risk management and internal control and that the system is operating
effectively in all material respects in relation to financial reporting risks. The board confirms that such assurance has been
received.
Statement concerning availability of Independent Professional Advice
If a director considers it necessary to obtain independent professional advice to properly discharge the responsibility of his/her
office as a director, then, provided the director first obtains approval for incurring such expense from the chair, the company will
pay the reasonable expenses associated with obtaining such advice.
Confirmation of whether performance Evaluation of the Board and its members has taken place and how it was
conducted
During the reporting period a formal evaluation of the board and its members was not carried out as it was not considered to be
a beneficial procedure given the size and composition of the board and the nature of the company's operations. However, the
composition of the board and its suitability to carry out the company's objectives is discussed on an as-required basis.
Existence and Terms of any Schemes for Retirement Benefits for Executive and Non-Executive Directors
There are no termination or retirement benefits for non-executive directors.
(cid:39)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:182)(cid:3)(cid:55)(cid:72)(cid:85)(cid:80)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:50)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)
Name
Henry David Kennedy
Roy Barry Rushworth
Ernest Anthony Myers
Anthony Robert Frederick Maslin
Term in office
14 years
8 years
4 years
2 years
For additional details regarding board appointments, please refer to the Pancontinental website.
37
Pancontinental Oil & Gas NL - Annual Report 2013
Corporate Governance Statement
Diversity (cid:177) Board Composition
The mix of skills and diversity for which the company is looking to achieve in membership of the board is one that is as diverse as
(cid:83)(cid:85)(cid:68)(cid:70)(cid:87)(cid:76)(cid:70)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3) (cid:74)(cid:76)(cid:89)(cid:72)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:86)(cid:76)(cid:93)(cid:72)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:86)(cid:70)(cid:82)(cid:83)(cid:72)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3) (cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)(cid:3) (cid:55)(cid:75)(cid:72)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3) (cid:75)(cid:68)(cid:86)(cid:3) (cid:68)(cid:71)(cid:82)(cid:83)(cid:87)(cid:72)(cid:71)(cid:3) (cid:68) Diversity Policy which is
available (cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)(cid:90)(cid:72)(cid:69)(cid:86)(cid:76)(cid:87)(cid:72)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)he Corporate Governance section.
Diversity (cid:177) Measurable Objectives
(cid:55)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)(cid:83)(cid:85)(cid:76)(cid:80)(cid:68)(cid:85)(cid:92)(cid:3)(cid:82)(cid:69)(cid:77)(cid:72)(cid:70)(cid:87)(cid:76)(cid:89)(cid:72)(cid:86)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:85)(cid:72)(cid:74)(cid:68)(cid:85)(cid:71)(cid:3)(cid:87)(cid:82)(cid:3)(cid:71)(cid:76)(cid:89)(cid:72)(cid:85)(cid:86)(cid:76)(cid:87)(cid:92)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:68)(cid:86)(cid:3)(cid:73)(cid:82)(cid:79)(cid:79)(cid:82)(cid:90)(cid:86)(cid:29)
(cid:190)
(cid:190)
(cid:87)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:69)(cid:82)(cid:68)(cid:85)(cid:71)(cid:15)(cid:3)(cid:72)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:15)(cid:3)(cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:69)(cid:72)(cid:3)(cid:68)(cid:86)(cid:3)(cid:71)(cid:76)(cid:89)(cid:72)(cid:85)(cid:86)(cid:72)(cid:3)(cid:68)(cid:86)(cid:3)(cid:83)(cid:85)(cid:68)(cid:70)(cid:87)(cid:76)(cid:70)(cid:68)(cid:69)(cid:79)(cid:72)(cid:30)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)
to provide equal (cid:82)(cid:83)(cid:83)(cid:82)(cid:85)(cid:87)(cid:88)(cid:81)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3) (cid:73)(cid:82)(cid:85)(cid:3) (cid:68)(cid:79)(cid:79)(cid:3) (cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3) (cid:90)(cid:76)(cid:87)(cid:75)(cid:76)(cid:81)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3) (cid:70)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3) (cid:87)(cid:82)(cid:3)
employment based on merit.
Primary objectives set by the company with regard to diversity have been met, as described below:
(cid:190) blend of skills (cid:177) wide range of backgrounds; geology, petroleum exploration, finance and corporate experience;
(cid:190) cultural backgrounds (cid:177) Australian, European and American;
(cid:190) gender (cid:177) both male and female members; and
(cid:190) age (cid:177) the age range spans over 40 years.
The above points relate to the composition of the board, as the company does not have any employees.
Diversity (cid:177) Annual Reporting
(cid:55)(cid:75)(cid:72)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)(cid:68)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:68)(cid:74)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:73)(cid:72)(cid:80)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:82)(cid:85)(cid:74)(cid:68)(cid:81)(cid:76)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:76)(cid:86)(cid:3)(cid:68)(cid:86)(cid:3)(cid:73)(cid:82)(cid:79)(cid:79)(cid:82)(cid:90)(cid:86)(cid:29)
Employees
N/A [no employees]
N/A [no employees]
Executives & Board Members
20%
20%
% Female
2013
2012
38
Pancontinental Oil & Gas NL - Annual Report 2013
Statement of Comprehensive Income
YEAR ENDED 30 JUNE 2013
Notes
OPERATING ACTIVITIES
Other revenue
Depreciation and amortisation expenses
Salaries, fees and benefits
Audit fees
Generative exploration expenditure and write off
Annual report costs
ASX fees
Administration, accounting and secretarial fees
Insurance
Legal fees
Share registry costs
Rent and outgoings
Travel
Other revenues and expenses
TOTAL OPERATING ACTIVITIES
FINANCING ACTIVITIES
Financing income
Financing expense
TOTAL FINANCING ACTIVITIES
PROFIT/(LOSS) BEFORE INCOME TAX
Income tax expense
PROFIT/(LOSS) FOR THE PERIOD
OTHER COMPREHENSIVE INCOME/(LOSS)
Other comprehensive income
TOTAL OTHER COMPREHENSIVE INCOME/(LOSS)
TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE
PERIOD
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
2, 6
2
3
10
15
CONSOLIDATED
2012
2013
$
$
-
(1,587)
(559,094)
(31,500)
(82,210)
(16,591)
(58,242)
(307,686)
(20,842)
(18,142)
(66,319)
(85,675)
(100,555)
(340,980)
(1,689,423)
5,500
(1,651)
(461,773)
(40,500)
(42,035)
(6,828)
(40,944)
(291,764)
(21,561)
(11,699)
(42,878)
(96,937)
(132,841)
(557,246)
(1,743,157)
1,295,429
(268,828)
1,026,601
430,403
(493,019)
(62,616)
(662,822)
-
(662,822)
(1,805,773)
-
(1,805,773)
-
-
-
-
(662,822)
(1,805,773)
(0.06)
(0.06)
(0.23)
(0.23)
The Statement of Comprehensive Income is to be read in conjunction with the Notes to the Financial Statements.
39
Pancontinental Oil & Gas NL - Annual Report 2013
Statement of Financial Position
AT 30 JUNE 2013
Notes
CURRENT ASSETS
Cash assets
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Deferred exploration, evaluation and development
costs
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Parent entity interest
Contributed equity
Reserves
Accumulated losses
Total parent entity interest in equity
TOTAL EQUITY
4
6
7
8
9a
10
10
CONSOLIDATED
2013
$
2012
$
33,821,848
1,930,056
35,751,904
47,722,233
98,582
47,820,815
2,804
3,598
38,938,195
38,940,999
23,211,960
23,215,558
74,692,903
71,036,373
121,266
121,266
235,805
235,805
121,266
235,805
74,571,637
70,800,568
99,411,998
345,179
(25,185,540)
74,571,637
95,132,106
298,956
(24,630,494)
70,800,568
74,571,637
70,800,568
The Statement of Financial Position is to be read in conjunction with the Notes to the Financial Statements.
40
Pancontinental Oil & Gas NL - Annual Report 2013
Statement of Changes in Equity
AT 30 JUNE 2013
Consolidated
Share Capital
Balance at 1 July 2012
Profit or loss
Other comprehensive income/(loss)
Shares issued (net of costs)
Share options
Balance at 30 June 2013
Balance at 1 July 2011
Profit or loss
Other comprehensive income/(loss)
Shares issued (net of costs)
Share options
Balance at 30 June 2012
$
95,132,106
-
-
4,279,892
99,411,998
38,166,253
-
-
56,965,853
95,132,106
Retained
Earnings
$
(24,630,494)
(662,822)
-
-
107,776
(25,185,540)
(23,481,202)
(1,805,773)
-
-
656,481
(24,630,494)
Option
Reserve
$
298,956
-
-
-
46,223
345,179
764,258
-
-
-
(465,302)
298,956
Total
Equity
$
70,800,568
(662,822)
-
4,279,892
153,999
74,571,637
15,449,309
(1,805,773)
-
56,965,853
191,179
70,800,568
The above Statement of Changes in Equity is to be read in conjunction with the Notes to the Financial Statements.
41
Pancontinental Oil & Gas NL - Annual Report 2013
Statement of Cash Flows
YEAR ENDED 30 JUNE 2013
Notes
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Sundry income
Recharges & refunds of exploration expenditure
Expenditure on exploration interests
NET CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
NET CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Interest received
Proceeds from issues of ordinary shares
Share issue costs
NET CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES
NET INCREASE/(DECREASE) IN CASH HELD
Add opening cash brought forward
Effects of exchange rate changes
CLOSING CASH CARRIED FORWARD
11(b)
11(a)
(19,465,068)
(15,394,321)
CONSOLIDATED
2012
2013
$
$
(1,874,229)
-
2,268,613
(19,859,452)
(1,686,512)
5,500
-
(13,713,309)
(794)
(794)
(3,803)
(3,803)
1,295,429
4,560,250
(292,906)
5,562,773
430,256
60,705,250
(3,725,804)
57,409,702
(13,903,089)
47,722,233
2,704
33,821,848
42,011,578
5,710,905
(250)
47,722,233
The above Statement of Cash Flows is to be read in conjunction with the Notes to the Financial Statements.
42
Pancontinental Oil & Gas NL - Annual Report 2013
Notes to the Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This financial report was authorised for issue by the directors on 26 September 2013.
Statement of Compliance
This financial report is a general purpose financial report, which has been prepared in accordance with Australian Accounting
Standards (AASBs), adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001.
International Financial Reporting Standards (IFRSs) form the basis of AASBs adopted by the AASB, and for the purpose of this
report are called Australian equivalents to IRFS (AIFRS) to distinguish from previous Australian GAAP. The financial report
complies with IFRSs and interpretations adopted by the International Accounting Standards Board.
Basis of preparation
The report has been prepared on the basis of historical costs and except where stated does not take into account changing
money values or current valuation of non-current assets. The accounting policies adopted are consistent with those of the
previous year. The following specific accounting policies have been consistently applied, unless otherwise stated.
(a) Income Tax
Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the income
statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, and any adjustment to tax payable in respect of
prior years.
Deferred tax is provided using the balance sheet liability method, providing for temporary difference between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. A deferred tax
asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can
be utilised.
(b) Exploration Expenses
Exploration, evaluation and development costs are accumulated in respect of each separate area of interest. Such costs are
carried forward where they are expected to be recouped through successful development and exploitation of the area of
interest or alternatively, by its sale, or where activities in the area of interest have not yet reached a stage to allow a reasonable
assessment regarding the existence of economically recoverable reserves.
(c) Principles of consolidation
The consolidated financial statements are those of the consolidated entity, comprising Pancontinental Oil & Gas NL (the parent
entity) and all entities which Pancontinental Oil & Gas NL controlled from time to time during the year and at balance date.
Information from the financial statements of subsidiaries is included from the date the parent company obtains control until
such time as control ceases. Where there is loss of control of a subsidiary, the consolidated financial statements include the
results for the part of the reporting period during which the parent company has control.
All intercompany balances and transactions, including unrealised profits arising from intra-group transactions, have been
eliminated in full.
(d) Foreign currencies
Translation of foreign currency transactions
Transactions in foreign currencies of entities within the consolidated entity are converted to local currency at the rate of
exchange ruling at the date of the transaction.
Foreign currency monetary items that are outstanding at the reporting date (other than monetary items arising under foreign
currency contracts where the exchange rate for that monetary item is fixed in the contract) are translated using the spot rate at
the end of the financial year.
A monetary item arising under a foreign currency contract outstanding at the reporting date where the exchange rate for the
monetary item is fixed in the contract is translated at the exchange rate fixed in the contract.
All resulting exchange differences arising on settlement or re-statement are recognised as revenues and expenses for the
financial year. Any gains or costs on entering a hedge are deferred and amortised over the life of the contract.
(e) Cash and cash equivalents
For the purposes of the Statement of Cash Flows, cash includes cash on hand and in banks, and money market investments
readily convertible to cash within two working days, net of outstanding bank overdrafts.
Interest expense is charged as an expense as it accrues.
43
Pancontinental Oil & Gas NL - Annual Report 2013
Notes to the Financial Statements
(f) Receivables
Trade receivables are recognised and carried at original invoice amount less a provision for any uncollectible debts. An
estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written-off as
incurred.
Receivables from related parties are recognised and carried at the nominal amount due. Bills of exchange and promissory
notes are measured at the lower of cost and net realisable value.
(g) Investments
Investments in controlled entities are carried in the company’s financial statements at the lower of cost and recoverable
amount.
(h) Recoverable Amount
The carrying amounts of non-current assets valued on the cost basis, other than exploration and evaluation expenditure
carried forward are reviewed to determine whether they are in excess of their recoverable amount at reporting date. If the
carrying amount of a non-current asset exceeds its recoverable amount, the asset is written down to the lower amount. The
write down is expensed in the reporting period in which it occurs.
(i) Property, plant and equipment
Cost and valuation
Property, plant and equipment is measured at cost.
Depreciation
Depreciation is provided on a diminishing value basis on all property, plant and equipment.
Major depreciation rates are:
Plant and equipment:
2013
30%
2012
30%
(j) Joint ventures
Interests in the joint venture operations are brought to account by including in the respective classifications, the share of
individual assets employed and share of liabilities and expenses incurred.
In the company’s financial statements, investments in joint venture operations were carried at the lower of cost and
recoverable amount.
(k) Going concern
The directors consider that the going concern basis for the consolidated entity is appropriate and recognise that additional
funding is required to ensure the consolidated entity can continue its operations for the twelve month period from the date of
this financial report and to fund the continued development of the consolidated entity’s exploration assets. This basis has been
determined after consideration of the following factors:
(cid:120) The ability to issue additional share capital under the Corporations Act 2001, if required, by a share purchase plan, share
placement or rights issue;
(cid:120) The option of farming out all or part of the consolidated entity’s exploration projects; and
(cid:120) The ability, if required to dispose of interests in exploration and development assets.
Accordingly, the directors believe that the consolidated entity will obtain sufficient cash inflows to enable it to continue as a
going concern and that it is appropriate to adopt that basis of accounting in the preparation of the financial statements.
(l) Payables
Liabilities for trade creditors and other amounts are carried at cost which is the fair value of the consideration to be paid in the
future for goods and services received, whether or not billed to the consolidated entity.
Payables to related parties are carried at the principal amount.
Deferred cash settlements are recognised at the present value of the outstanding consideration payable on the acquisition of
an asset discounted at prevailing commercial borrowing rates.
(m) Provisions
Provisions are recognised when the economic entity has a legal, equitable or constructive obligation to make a future sacrifice
of economic benefits to other entities as a result of past transactions or other past events, it is probable that a future sacrifice of
economic benefits will be required and a reliable estimate can be made of the amount of the obligation.
44
Pancontinental Oil & Gas NL - Annual Report 2013
Notes to the Financial Statements
(n) Contributed equity
Issued and paid up capital is recognised at the fair value of the consideration received by the company.
Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share
proceeds received.
(o) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be
reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
Rendering of Services
Where the contract outcome can be reliably measured, control of the right to be compensated for the services and the stage of
completion can be reliably measured. Stage of completion is measured by reference to the labour hours incurred to date as a
percentage of total estimated labour hours for each contract.
Where the contract outcome cannot be reliably measured, revenue is recognised only to the extent that costs have been
incurred.
Interest Revenue
Control of the right to receive the interest payment. Interest revenue is recognised as it accrues, taking into account the
effective yield on the financial asset.
(p) Taxes
Tax-effect accounting is applied using the income statement liability method whereby income tax is regarded as an expense
and is calculated on the accounting profit after allowing for permanent differences. To the extent timing differences occur
between the time items are recognised in the financial statements and when items are taken into account in determining
taxable income, the net related taxation benefit or liability, calculated at current rates, is disclosed as a future income tax
benefit or a provision for deferred income tax. The net future income tax benefit relating to tax losses and timing differences is
not carried forward as an asset unless the benefit is virtually certain of being realised.
Where assets are revalued no provision for potential capital gains tax has been made.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
(cid:120) where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case
the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
receivables and payables are stated with the amount of GST included.
(cid:120)
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in
the Statement of Financial Position.
Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows arising from
investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified as operating
cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
(q) Employee benefits
Provision is made for employee benefits accumulated as a result of employees rendering services up to the reporting date.
These benefits include wages and salaries, annual leave, sick leave and long service leave.
Liabilities arising in respect of wages and salaries, annual leave, sick leave and any other employee benefits expected to be
settled within twelve months of the reporting date are measured at their nominal amounts based on remuneration rates which
are expected to be paid when the liability is settled.
Employee benefit expenses and revenues arising in respect of the following categories:
(cid:120) wages and salaries, non-monetary benefits, annual leave, long service leave, sick leave and other leave benefits; and
(cid:120) other types of employee benefits
are charged against profits on a net basis in their respective categories.
45
Pancontinental Oil & Gas NL - Annual Report 2013
Notes to the Financial Statements
(r) Earnings per share
Basic EPS is calculated as net profit attributable to members, adjusted to exclude costs of servicing equity (other than
dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any
bonus element.
Diluted EPS is calculated as net profit attributable to members, adjusted for:
(cid:120) costs of servicing equity (other than dividends);
(cid:120)
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as
expenses; and
(cid:120) other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential
ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus
element.
(s) Comparatives
Where necessary, comparatives have been reclassified and repositioned for consistency with current year disclosures.
(t) Financial Instruments
See financial instruments note for compliance notes with AASB 7, financial instruments: disclosures.
(u) New accounting standards and interpretations
The financial report is presented in Australian dollars which is the company’s functional currency. A number of new standards,
amendments to standards and interpretations are effective for the current annual report period; however, none have been
applied in preparing these consolidated financial statements. The standards are not expected to have a material impact on the
accounting policies or consolidated financial statements of the group.
46
Pancontinental Oil & Gas NL - Annual Report 2013
Notes to the Financial Statements
2. DEPRECIATION AND WRITE OFF
Notes
Expenses
Depreciation of non-current assets:
Office furniture and equipment
Generative exploration and write off:
Exploration, evaluation and development costs
3.
INCOME TAX
(a) Income Tax (Benefit)/Expense
The prima facie tax, using tax rates applicable in the
country of operation, on profit and extraordinary
items differs from the income tax provided in the
financial statements as follows:
Prima facie tax on profit from ordinary activities
Tax effect of permanent differences:
Other items (net)
Amount not brought to account as a carried forward
future income tax benefit
Income tax expense attributable to ordinary
activities
(b) Future Income Tax Benefit not taken into account
The potential future income tax benefit calculated at 30% in respect of :
CONSOLIDATED
2012
2013
$
$
1,587
1,651
82,210
42,035
CONSOLIDATED
2012
2013
$
$
(198,104)
(541,732)
46,200
-
151,904
541,732
-
-
Adjustments to carry forward tax losses
Tax Losses not brought to account
Total
This future income tax benefit will only be obtained if:
future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised;
(a)
the conditions for deductibility imposed by tax legislation continue to be complied with; and
(b)
(c) no changes in tax legislation adversely affect the consolidated entity in realising the benefit.
-
6,122,404
6,122,404
-
5,965,816
5,965,816
4. RECEIVABLES (CURRENT)
Sundry receivables
Total
CONSOLIDATED
2012
2013
$
$
98,582
1,930,056
98,582
1,930,056
(a) Terms and conditions
(i)
(ii) Sundry debtors and other receivables are non-interest bearing and have repayment terms between 30 and 90 days.
Trade debtors are non-interest bearing and generally on 30 day terms.
47
Pancontinental Oil & Gas NL - Annual Report 2013
Notes to the Financial Statements
INTERESTS IN SUBSIDIARIES
5.
Name
Euro Pacific Energy Pty Ltd
Provision for diminution in value of investment
Loan to Euro Pacific Energy Pty Ltd
Provision for loss on loan to Euro Pacific Energy Pty Ltd
Pancontinental Namibia Pty Ltd
Provision for diminution in value of investment
Loan to Pancontinental Namibia Pty Ltd
Provision for loss on loan to Pancontinental Namibia
P/L
Afrex Ltd *
Provision for diminution in value of investment
Loan to Afrex Ltd
Provision for loss on loan to Afrex Ltd
Starstrike Resources Ltd *
Provision for diminution in value of investment
Loan to Starstrike Resources Ltd
Provision for loss on loan to Starstrike Resources Ltd
Total
Country of
incorporation
Percentage of equity
interest
held by the
consolidated entity
Investment
2013
%
2012
%
2013
$
Australia
100
100
Australia
100
100
2
(2)
(162,659)
-
1
(1)
4,839,699
2012
$
2
(2)
(162,889)
-
1
(1)
6,351
Saint Lucia
100
100
British Virgin
Islands
100
100
*Indicates companies not audited by Rothsay Chartered Accountants.
6. PROPERTY, PLANT AND EQUIPMENT
Office equipment
At cost
Less: Accumulated depreciation
Total written down amount
Reconciliations
Reconciliations of the carrying amounts of property, plant and equipment
Office equipment
Carrying amount opening balance
Additions
Depreciation expense
Total written down amount
48
Pancontinental Oil & Gas NL - Annual Report 2013
(4,328)
(1,207)
10,584,107 10,584,107
(4,514,920)
(4,541,703)
4,682,033
7,561,202
-
-
380,000
380,000
(380,000)
(380,000)
54,760
60,315
-
-
18,336,633 10,648,235
CONSOLIDATED
2012
2013
$
$
54,375
(51,571)
2,804
53,582
(49,984)
3,598
3,598
793
(1,587)
2,804
2,404
2,845
(1,651)
3,598
Notes to the Financial Statements
7. DEFERRED EXPLORATION, EVALUATION AND
DEVELOPMENT COSTS
Exploration, evaluation and development costs carried forward
Pre-production:
exploration and evaluation phases:
Carrying amount at 1 July
Expenditure & acquisitions during the year
Exploration expenditure written off
Recovery and refunds of exploration expenditure *
Carrying amount at 30 June
CONSOLIDATED
2013
$
2012
$
23,211,960
19,723,183
(18,250)
(3,978,698)
38,938,195
9,879,712
13,410,027
(21,187)
(56,592)
23,211,960
The ultimate recoupment of costs carried forward for exploration and evaluation phases is dependent on the successful
development and commercial exploitation or sale of the respective mining areas.
* For the year ended 30 June 2012, the recoveries relate to ordinary joint venture recharges; for the 30 June 2013 financial year
the recoveries relate to refunds of exploration expenditure previously cash called.
8. TRADE and OTHER PAYABLES (CURRENT)
Trade creditors
Total
9. CONTRIBUTED EQUITY
(a) Issued and paid up capital
Ordinary shares fully paid
Total
(b) Movements in shares on issue
CONSOLIDATED
2012
2013
$
$
235,805
235,805
121,266
121,266
CONSOLIDATED
2012
2013
$
$
99,411,998 95,132,106
99,411,998 95,132,106
Beginning of the financial year
Issued during the year:
(cid:16) Placement (net of costs)
(cid:16) Shortfall from Share Purchase Plan (net of costs)
(cid:16) Exercise of Options (net of costs)
End of the financial year
2013
2012
Number of
shares
1,123,444,094
$
Number of
shares
$
95,132,106
660,779,809 38,166,253
-
25,300,002
2,250,000
1,150,994,096
-
4,148,781
131,111
99,411,998
457,142,858 56,323,935
512,168
129,750
1,123,444,094 95,132,106
3,271,427
2,250,000
49
Pancontinental Oil & Gas NL - Annual Report 2013
Notes to the Financial Statements
10. RESERVES AND ACCUMULATED LOSSES
Reserves
Beginning of the financial year
Directors and employee options issued
Options exercised
End of the financial year
Accumulated losses
Beginning of the financial year
Net loss attributable to members of Pancontinental Oil & Gas NL
Share options exercised
Total available for appropriation
End of the financial year
11. STATEMENT OF CASH FLOWS
(a) Reconciliation of the net loss after tax to the net cash flows from operations
Net loss
Non-Cash Items, Non-Operating Items
Depreciation of non-current assets
Options
Financing income
Changes in assets and liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in property, plant & equipment
(Increase)/decrease in exploration, evaluation &
development
(Increase)/decrease in interests in subsidiaries
(Decrease)/increase in trade and other payables
(Decrease)/increase in employee entitlements
Other non-cash
Effect of exchange rate changes
Net cash flow from operating activities
(b) Reconciliation of cash
Cash balance comprises:
(cid:16) cash assets
Closing cash balance
CONSOLIDATED
2013
$
2012
$
298,956
153,999
(107,776)
345,179
764,258
191,179
(656,481)
298,956
(24,630,494)
(23,481,202)
(662,822)
107,776
(25,185,540)
(25,185,540)
(1,805,773)
656,481
(24,630,494)
(24,630,494)
CONSOLIDATED
2013
$
2012
$
(662,822)
(1,805,773)
1,587
153,999
(1,295,429)
1,651
191,179
(430,256)
(1,831,474)
794
(54,554)
(1,194)
(15,726,235)
(13,332,248)
-
(114,539)
-
9,051
-
(19,465,068)
-
48,065
-
(11,191)
-
(15,394,321)
33,821,848
33,821,848
47,722,233
47,722,233
50
Pancontinental Oil & Gas NL - Annual Report 2013
Notes to the Financial Statements
12. EXPENDITURE COMMITMENTS
Capital expenditure commitments
Estimated capital expenditure contracted for at reporting date, but not provided for, payable:
not later than one year
(cid:16) other
later than one year and not later than five years
(cid:16) other
later than five years
Total
CONSOLIDATED
2013
$
2012
$
21,607,950
1,432,795
31,584,412
2,874,288
53,192,362
4,307,083
13. EMPLOYEE BENEFITS
Employee Share Scheme
Information with respect to the number of options under the employee share incentive scheme is as follows:
Balance at beginning of year
(cid:16) expired
(cid:16) exercised
(cid:16) issued
Balance at end of year
2013
2012
Number of
options
4,500,000
-
(2,250,000)
2,750,000
5,000,000
Weighted
average
exercise
price
0.09
-
0.59
0.12
0.12
Weighted
average
exercise
price
0.08
0.10
0.59
0.13
0.09
Number of
options
13,750,000
(9,250,000)
(2,250,000)
2,250,000
4,500,000
Options held at the end of the reporting period
The following table summarises information about options held by directors and employees as at 30 June 2013:
Number of options
2,250,000
2,750,000
Grant date
29 Nov 11
30 Nov 12
Expiry date
28 Nov 14
29 Nov 16
Weighted average exercise
price
0.1275
0.1230
14. SUBSEQUENT EVENTS
Significant events after balance date include:
Tullow Oil farm-in to Namibia EL 0037
In September 2013, Pancontinental announced that Tullow Oil had farmed in to licence EL 0037. Tullow were assigned a 65%
interest as well as operatorship, with Pancontinental retaining a 30% free carried interest.
Kenya L8
At an Operating Committee Meeting held on 10th October, Apache indicated their intention to withdraw from the block.
Apart from the above, no matters or circumstances have arisen since the end of the financial year which significantly affected
or may significantly affect the operations of the company, the results of those operations, or the state of affairs of the company
in future financial years.
51
Pancontinental Oil & Gas NL - Annual Report 2013
Notes to the Financial Statements
15. EARNINGS PER SHARE
CONSOLIDATED
2013
$
2012
$
The following reflects the income and share data used in the calculations of basic and diluted earnings per share:
Net profit
Adjustments:
Earnings used in calculating basic and diluted earnings per
share
(662,822)
(662,822)
(1,805,773)
(1,805,773)
Weighted average number of ordinary shares used in
calculating basic earnings per share
Effect of dilutive securities:
Share options
Adjusted weighted average number of ordinary shares used
in calculating diluted earnings per share
Number of shares
Number of shares
1,147,339,986
795,045,367
-
4,500,000
1,147,339,986
799,545,367
16. AUDITORS' REMUNERATION
Amounts received or due and receivable by Rothsay for:
(cid:16) an audit or review of the financial report of the entity
and any other entity in the consolidated entity
(cid:16) other services in relation to the entity and any other
entity in the consolidated entity
CONSOLIDATED
2012
2013
$
$
31,500
40,500
-
31,500
4,000
44,500
52
Pancontinental Oil & Gas NL - Annual Report 2013
Notes to the Financial Statements
17. DIRECTOR AND EXECUTIVE DISCLOSURES
(a) Details of Specified Directors and Specified Executives
(i) Specified Directors
Henry David Kennedy
Roy Barry Rushworth
Ernest Anthony Myers
Anthony Robert Frederick Maslin Non-Executive Director
(ii) Specified Executives
Vesna Petrovic
Company Secretary
Non-Executive Chairman
Executive Director, Chief Executive Officer
Executive Finance Director
Total remuneration for all non-executive directors, last voted upon by shareholders at the 2007 AGM, is not to exceed $400,000
per annum and is set with reference to fees paid to other non-executive directors of comparable companies.
Non-executive and executive directors do not receive performance related remuneration but they are eligible to participate in
Employee Option Schemes approved by shareholders.
Directors do not receive any termination or retirement benefits.
(b) Remuneration of Specified Directors /Officers
Salary
& Fees
Primary
Cash
Bonus
Non
Monetary
benefits
Post Employment
Super-annua
tion
Retirement
benefits
Equity
Options Bonuses
Other
Total
Specified
Directors/Officers
Henry David Kennedy
2013
2012
Roy Barry Rushworth
2013
2012
Ernest Anthony Myers
2013
2012
50,000
50,000
650,000
550,000
48,000
48,000
Anthony Robert Frederick Maslin
2013
2012
Vesna Petrovic
2013
2012
48,000
48,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total Remuneration: Specified Directors /Officers
2013
2012
796,000
696,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
28,000
63,726
-
78,000
- 113,726
-
56,000
- 127,453
-
706,000
- 677,453
-
- -
42,000
-
-
90,000
48,000
-
- -
28,000
-
-
76,000
48,000
- - -
-
- -
-
-
-
-
154,000 -
191,179 -
950,000
887,179
Mr Myers has a 50% interest in a consulting company which provides staff, accounting and administrative services to listed
companies, including Pancontinental. Mr Myers is paid a salary from that company. The same company also pays the staff
who provide company secretarial, accounting and administrative services to Pancontinental. The total fees paid for these
services and functions was $305,400 (2012: $289,500).
Mrs Petrovic received no direct remuneration from the company for her services as company secretary however during the
year the company paid fees to Resource Services International (Aust) Pty Limited totalling $305,400 (2012: $289,500) for the
provision of corporate, accounting and administration services. Mrs Petrovic is employed by Resource Services International
(Aust) Pty Limited. See Note 20 for further information.
53
Pancontinental Oil & Gas NL - Annual Report 2013
Notes to the Financial Statements
17.
DIRECTOR AND EXECUTIVE DISCLOSURES (cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:182)(cid:71)(cid:12)
(c) Remuneration options: Granted and vested during the year
Terms & Conditions for Each
Grant
Granted
Number
Grant
Date
Value per
option at
grant
date ($)
Exercise Price
per share ($)
First Exercise
Date
Last Exercise
Date
Specified Directors
Henry David Kennedy
Roy Barry Rushworth
Ernest Anthony Myers
Anthony Robert Frederick Maslin
Total
500,000 30 Nov 12
1,000,000 30 Nov 12
750,000 30 Nov 12
500,000 30 Nov 12
2,750,000
0.06
0.06
0.06
0.06
0.123
0.123
0.123
0.123
30 Nov 12
30 Nov 12
30 Nov 12
30 Nov 12
29 Nov 16
29 Nov 16
29 Nov 16
29 Nov 16
(d) Option holdings of specified directors and specified executives
Specified Directors
Henry David Kennedy
Roy Barry Rushworth
Ernest Anthony Myers
Anthony Robert Frederick
Maslin
Total
Balance at
beginning of
period
1 July 2012
1,500,000
3,000,000
-
-
4,500,000
Granted as
Remuneration
Options Exercised/
(Expired)
Net Change
Other
Balance at end
of period
500,000
1,000,000
750,000
500,000
2,750,000
(750,000)
(1,500,000)
-
-
(2,250,000)
-
-
-
-
-
30 June 2013
1,250,000
2,500,000
750,000
500,000
5,000,000
(e) Shareholdings of Specified Directors and Specified Executives
Ordinary Shares held in
Pancontinental Oil & Gas NL
Specified Directors
Henry David Kennedy
Roy Barry Rushworth
Ernest Anthony Myers
Anthony Robert Frederick Maslin
133,301,602
35,335,610
285,715
14,583
Balance
1 July 2012
Acquisitions
(Disposals)
Balance
30 June 2013
750,000
999,999
114,999
-
134,051,602
36,335,609
400,714
14,583
170,802,508
Total
168,937,510
1,864,998
54
Pancontinental Oil & Gas NL - Annual Report 2013
Notes to the Financial Statements
18. SEGMENT INFORMATION
Segment accounting policies
The group has adopted AASB 8 Operating Segments which requires operating segments to be identified on the basis
of internal reports about components of the group that are reviewed by the chief operating decision-maker in order to
allocate resources to the segment and to assess its performance.
The board of Pancontinental reviews internal reports prepared as consolidated financial statements and strategic
decisions of the group are determined upon analysis of these internal reports. During the period the group operated
predominately in one business segment, being the oil and gas sector. Accordingly, under the management approach
outlined only one operating sector has been identified and no further disclosures are required in the notes to the
consolidated financial statements.
19. FINANCIAL INSTRUMENTS
Financial risk management
Overview:
The company and group have exposure to the following risks from their use of financial instruments:
(a) credit risk
(b) liquidity risk
(c) market risk
This note presents information about the c(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) g(cid:85)(cid:82)(cid:88)(cid:83)(cid:182)(cid:86)(cid:3) (cid:72)(cid:91)(cid:83)(cid:82)(cid:86)(cid:88)(cid:85)(cid:72)(cid:3) (cid:87)(cid:82)(cid:3) (cid:72)(cid:68)(cid:70)(cid:75)(cid:3) (cid:82)(cid:73)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:68)(cid:69)(cid:82)(cid:89)(cid:72)(cid:3) (cid:85)(cid:76)(cid:86)(cid:78)(cid:86)(cid:15)(cid:3) (cid:87)(cid:75)(cid:72)(cid:76)(cid:85)(cid:3)
objectives, policies and processes for measuring and managing risk, and the management of capital.
The board of directors has overall responsibility for the establishment and oversight of the risk management
framework. Management monitors and manages the financial risks relating to the operations of the group through
regular reviews of the risks.
(a) 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. In this industry, it arises principally from the receivables of joint venture re-charges
and recuperations of cost. For the group, it arises from receivables due from subsidiaries and re-charges to joint
venture partners.
(i) Trade and other receivables:
The group operates predominantly in the oil and gas exploration sector; it does not ordinarily have material trade
receivables and is therefore not ordinarily exposed to credit risk in relation to trade receivables.
The c(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) g(cid:85)(cid:82)(cid:88)(cid:83)(cid:182)(cid:86)(cid:3) (cid:72)(cid:91)(cid:83)(cid:82)(cid:86)(cid:88)(cid:85)(cid:72)(cid:3) (cid:87)(cid:82)(cid:3) (cid:70)(cid:85)(cid:72)(cid:71)(cid:76)(cid:87)(cid:3) (cid:85)(cid:76)(cid:86)(cid:78)(cid:3) (cid:76)(cid:86)(cid:3) (cid:76)(cid:81)(cid:73)(cid:79)(cid:88)(cid:72)(cid:81)(cid:70)(cid:72)(cid:71)(cid:3) (cid:71)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:79)(cid:92)(cid:3) and indirectly by the individual
characteristics of each joint venture. The balance of any outstanding amounts is monitored and payments are
received promptly from joint venture partners.
(ii) Loans to subsidiaries:
The company has provided funding to it(cid:86)(cid:3)(cid:86)(cid:88)(cid:69)(cid:86)(cid:76)(cid:71)(cid:76)(cid:68)(cid:85)(cid:76)(cid:72)(cid:86)(cid:3)(cid:69)(cid:92)(cid:3)(cid:90)(cid:68)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:79)(cid:82)(cid:68)(cid:81)(cid:86)(cid:17)(cid:3)(cid:37)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:85)(cid:72)(cid:89)(cid:76)(cid:72)(cid:90)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)
subsidiaries net tangible asset position and cash flow projections, the current carrying value of the loans have
been assessed to be fully recoverable. Repayment of these loans will occur through future business activities of
each respective entity.
55
Pancontinental Oil & Gas NL - Annual Report 2013
Notes to the Financial Statements
(cid:20)(cid:28)(cid:17)(cid:3)(cid:3)(cid:3)(cid:3)(cid:41)(cid:44)(cid:49)(cid:36)(cid:49)(cid:38)(cid:44)(cid:36)(cid:47)(cid:3)(cid:44)(cid:49)(cid:54)(cid:55)(cid:53)(cid:56)(cid:48)(cid:40)(cid:49)(cid:55)(cid:54)(cid:3)(cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:182)(cid:71)(cid:12)
Exposure to credit risk
The carrying amount of the c(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) g(cid:85)(cid:82)(cid:88)(cid:83)(cid:182)(cid:86)(cid:3) (cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3) (cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3) (cid:85)(cid:72)(cid:83)(cid:85)(cid:72)(cid:86)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3) (cid:87)(cid:75)(cid:72)(cid:3) (cid:80)(cid:68)(cid:91)(cid:76)(cid:80)(cid:88)(cid:80)(cid:3) (cid:70)(cid:85)(cid:72)(cid:71)(cid:76)(cid:87)(cid:3) (cid:72)(cid:91)(cid:83)(cid:82)(cid:86)(cid:88)(cid:85)(cid:72)(cid:17)(cid:3) (cid:55)(cid:75)(cid:72)(cid:3)
maximum exposure to credit risk at the reporting date was:
Consolidated
Trade and other receivables
Cash and cash equivalents
Total
Note
4
Carrying amount
2013
$
2012
$
98,582
47,722,233
1,930,056
33,821,848
35,751,904
47,820,815
*Note, the above trade receivable for 2013 mostly relates to the expected refund of joint venture contributions.
Impairment losses:
None of the c(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)(cid:182)(cid:86)(cid:3)(cid:82)(cid:85)(cid:3)g(cid:85)(cid:82)(cid:88)(cid:83)(cid:182)(cid:86)(cid:3)(cid:85)(cid:72)(cid:70)(cid:72)(cid:76)(cid:89)(cid:68)(cid:69)(cid:79)(cid:72)(cid:86)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:83)ast due at 30 June 2013, (2012: nil).
An impairment write down in respect of inter-group loans and shares was recognised during the current year from an analysis of
the subsidiaries respective financial positions. The total impairment write down recognised through impairment of loans to
subsidiaries and shares held in subsidiaries during the current period was $29,904 (2012: $27,114).
Whilst the loans were not payable at 30 June 2013 a provision for impairment based/reversed on the subsidiaries financial
position was carried forward from previous periods. The balance of this provision may vary due to performance of a subsidiary in
a given year.
(b) Liquidity risk:
Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due. The g(cid:85)(cid:82)(cid:88)(cid:83)(cid:182)(cid:86)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:68)(cid:70)(cid:75)(cid:3)(cid:87)(cid:82)(cid:3)
managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under
both normal and stressed conditions, without incurring unacceptable losses or risking damage to the g(cid:85)(cid:82)(cid:88)(cid:83)(cid:182)(cid:86)(cid:3)(cid:85)(cid:72)(cid:83)(cid:88)(cid:87)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:17)
The group manages liquidity risk by maintaining adequate cash reserves through continuously monitoring forecast and actual
cash flows.
(c) 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 g(cid:85)(cid:82)(cid:88)(cid:83)(cid:182)(cid:86)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)(cid:82)(cid:85)(cid:3)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:
The group is from time to time exposed to currency risk on investments, and foreign currency denominated purchases in a
currency other than the respective functional currencies of group entities, primarily the Australian dollar (AUD). The other
material currency that these transactions are denominated in is the (USD).
The group has not entered into any derivative financial instruments to hedge such transactions and anticipated future receipts or
payments that are denominated in a foreign currency.
56
Pancontinental Oil & Gas NL - Annual Report 2013
Notes to the Financial Statements
19. (cid:41)(cid:44)(cid:49)(cid:36)(cid:49)(cid:38)(cid:44)(cid:36)(cid:47)(cid:3)(cid:44)(cid:49)(cid:54)(cid:55)(cid:53)(cid:56)(cid:48)(cid:40)(cid:49)(cid:55)(cid:54)(cid:3)(cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:182)(cid:71)(cid:12)
Exposure to currency risk:
The g(cid:85)(cid:82)(cid:88)(cid:83)(cid:182)(cid:86)(cid:3)(cid:72)(cid:91)(cid:83)(cid:82)(cid:86)(cid:88)(cid:85)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:73)(cid:82)(cid:85)(cid:72)(cid:76)(cid:74)(cid:81)(cid:3)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:70)(cid:92)(cid:3)(cid:85)(cid:76)(cid:86)(cid:78)(cid:3)(cid:68)(cid:87)(cid:3)(cid:69)(cid:68)(cid:79)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:71)(cid:68)(cid:87)(cid:72)(cid:3)(cid:90)(cid:68)(cid:86)(cid:3)(cid:68)(cid:86)(cid:3)(cid:73)(cid:82)(cid:79)(cid:79)(cid:82)(cid:90)(cid:86)(cid:15)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:81)(cid:82)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:86)(cid:29)(cid:3)
AUD
AUD
USD
Total
AUD
30 June 2013
30 June 2012
USD
Cash & cash equivalents
Trade & other receivables
Trade and other payables
31,766,074
69,180
(121,266)
2,055,774
1,860,876
-
33,821,848
1,930,056
(121,266)
45,675,133
98,582
(235,805)
2,047,100
-
-
Total
47,722,233
98,582
(235,805)
Net balance sheet
exposure
31,713,988
3,916,650
35,630,638
45,537,910
2,047,100
45,537,910
The following significant exchange rates applied during the year:
AUD : USD
Sensitivity analysis:
Average rate
Reporting date spot rate
2013
1.027
2012
1.032
2013
0.913
2012
1.016
A 10 percent strengthening of the Australian dollar against the USD at 30 June would have increased (decreased) equity and
profit or 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 2012.
Effect in AUD
30 June 2013
10% strengthening
30 June 2012
10% strengthening
Consolidated
Equity
Profit or loss
206,764
206,764
-
-
A 10 percent weakening of the Australian dollar against the USD at 30 June would have had the equal but opposite effect on the
above currencies to the amounts shown above, on the basis that all other variables remain constant.
The sensitivity analysis only had an effect on the equity or profit and loss of the company in relation to the trade receivables as
the other bank transactions in foreign currencies are predominately guarantees for exploration expenditure and would not have
an effect on the financial position of the company until their maturity date and only then, if the guarantee is to be extended and
that extension is at a different AUD to USD rate.
Interest rate risk:
At balance date the group had exposure to interest rate risk, through its cash and equivalents held within financial institution.
Variable rate instruments
Cash and cash equivalents
Fair value sensitivity analysis for fixed rate instruments:
Consolidated Carrying Amount
30 June 2012
30 June 2013
33,821,848
47,722,233
The company and group do not account for any fixed rate financial assets at fair value through profit or loss. Therefore, a
change in interest rates at reporting date would not affect profit or loss or equity.
57
Pancontinental Oil & Gas NL - Annual Report 2013
Notes to the Financial Statements
19.
(cid:41)(cid:44)(cid:49)(cid:36)(cid:49)(cid:38)(cid:44)(cid:36)(cid:47)(cid:3)(cid:44)(cid:49)(cid:54)(cid:55)(cid:53)(cid:56)(cid:48)(cid:40)(cid:49)(cid:55)(cid:54)(cid:3)(cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:182)(cid:71)(cid:12)
Fair values:
The fair values of financial assets and liabilities, together with the carrying amounts shown in the balance sheet, are as follows:
Consolidated
30 June 2013
30 June 2012
Carrying amount
Fair value
Trade and other receivables
Cash and cash equivalents
Trade and other payables
1,930,056
33,821,848
(121,266)
1,930,056
33,821,848
(121,266)
Carrying
amount
98,582
47,722,233
(235,805)
Fair value
98,582
47,722,233
(235,805)
35,630,638
35,630,638
47,585,010
47,585,010
The basis for determining fair values is disclosed in note [1].
Capital Management:
The b(cid:82)(cid:68)(cid:85)(cid:71)(cid:182)(cid:86)(cid:3)(cid:83)(cid:82)(cid:79)(cid:76)(cid:70)(cid:92)(cid:3)(cid:76)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:80)(cid:68)(cid:76)(cid:81)(cid:87)(cid:68)(cid:76)(cid:81)(cid:3)(cid:68)(cid:3)(cid:86)(cid:87)(cid:85)(cid:82)(cid:81)(cid:74)(cid:3)(cid:70)(cid:68)(cid:83)(cid:76)tal base so as to maintain investor, creditor and market confidence and
to sustain future development of the business. The board of directors monitors the return on capital, which the group
(cid:71)(cid:72)(cid:73)(cid:76)(cid:81)(cid:72)(cid:86)(cid:3)(cid:68)(cid:86)(cid:3)(cid:81)(cid:72)(cid:87)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)(cid:71)(cid:76)(cid:89)(cid:76)(cid:71)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:87)(cid:82)(cid:87)(cid:68)(cid:79)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:86)(cid:182)(cid:3)(cid:72)(cid:84)(cid:88)ity, excluding non-redeemable preference shares
and minority interests.
Equity attributable to shareholders of the Company
Minorities
Equity
Total assets
Equity ratio in %
Average equity
Net Profit
Return on Equity in %
2013
2012
-
74,571,637
74,692,903
99.84%
72,686,103
(662,822)
(0.91)%
-
70,800,568
71,036,373
99.67%
43,124,939
(1,805,773)
(4.19)%
There were no changes in the g(cid:85)(cid:82)(cid:88)(cid:83)(cid:182)(cid:86)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:68)(cid:70)(cid:75)(cid:3)(cid:87)(cid:82)(cid:3)(cid:70)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)(cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:71)(cid:88)(cid:85)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:17)
Neither the company nor any of its subsidiaries are subject to externally imposed capital requirements.
58
Pancontinental Oil & Gas NL - Annual Report 2013
Notes to the Financial Statements
20. RELATED PARTY
(a) During the year the company paid fees to Resource Services International Limited, a company in which Mr Kennedy has a
financial interest, for consulting services. The amount paid to was $50,000 (2012: $50,000). Refer note 17.
(b) During the year the company paid fees to Resource Services International (Aust) Pty Limited, a company of which Mr Myers
is a director, to cover the provision of corporate, accounting and administration services. The amount paid to Resource
Services International (Aust) Pty Limited was $305,400 (2012: $289,500). Amounts were billed based on normal market
rates for such services and were due and payable under normal payment terms.
(c) The company has effected Directors and Officers Liability Insurance.
21. PARENT INFORMATION
The Group has applied amendments to the Corporations Act (2001) which remove the requirement for the Group to lodge parent
entity financial statements. Parent entity financial statements have been replaced by the specific parent entity disclosures
below.
AT 30 JUNE 2013
STATEMENT OF COMPREHENSIVE INCOME
Profit/(Loss) for the period
TOTAL COMPREHENSIVE INCOME/(LOSS)
STATEMENT OF FINANCIAL POSITION
Assets
Current assets
TOTAL ASSETS
Liabilities
Current liabilities
TOTAL LIABILITIES
Equity
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
2013
2012
$
$
(653,500)
(1,799,775)
(653,500)
(1,799,775)
2013
2012
$
$
34,315,253
47,017,877
74,590,496
70,923,805
118,341
118,341
232,041
232,041
99,411,998
345,179
(25,285,022)
74,472,155
95,132,106
298,956
(24,739,298)
70,691,764
59
Pancontinental Oil & Gas NL - Annual Report 2013
Directors’ Declaration
In accordance with a resolution of the directors of Pancontinental Oil & Gas NL, I state that:
(1)
In the opinion of the directors:
(a)
the financial statements and notes of the company and of the consolidated entity are in accordance with the
Corporations Act 2001, including:
(i)
giving a true and fair view of the company's and consolidated entity's financial position as at 30 June 2013 and
of their performance for the year ended on that date; and
(ii) complying with Accounting Standards and Corporations Regulations 2001; and
(b)
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable.
(2) This declaration has been made after receiving the declarations required to be made to the directors in accordance with
section 295A of the Corporations Act 2001 for the financial period ending 30 June 2013.
On behalf of the Board
Ernest Anthony Myers
Director
Perth 26 September 2013
60
Pancontinental Oil & Gas NL - Annual Report 2013
Independent Audit Report
61
Pancontinental Oil & Gas NL - Annual Report 2013
Independent Audit Report
62
Pancontinental Oil & Gas NL - Annual Report 2013
ASX Additional Information
Additional information required by the ASX Ltd and not shown elsewhere in this report is as follows.
The information is current as at 30 September 2013.
(a) Distribution of equity securities
The number of shareholders, by size of holding, in each class of share are:
1
1,001
5,001
10,001
-
-
-
-
1,000
5,000
10,000
100,000
100,001
and over
The number of shareholders holding less than a marketable parcel of shares are:
(b) Twenty largest shareholders
The names of the twenty largest holders of quoted shares are:
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
SUNDOWNER INTERNATIONAL LTD
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
JP MORGAN NOMINEES AUSTRALIA LIMITED
CM SKYE TRUSTEES LIMITED
DESERTFOX PTY LTD
NATIONAL NOMINEES LIMITED
BLUE CAPITAL LIMITED
ROY BARRY RUSHWORTH
BLUE CAPITAL LIMITED
BRISPOT NOMINEES PTY LTD
MR PETER JOHN BRUNTON
MR ROBERT ALBERT BOAS
NATIONS NATURAL GAS PTY LTD
P & L CAPITAL INVESTMENTS PTY LTD
MR TIMOTHY ARTHUR KESTELL
OLD BLOOD AND GUTS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA
QUICKSILVER ASSET PTY LTD
Ordinary shares
Number of holders
Number of shares
421
365
504
90,775
1,302,053
4,268,423
2,007
88,090,277
923
1,057,242,568
4,220
925
1,150,994,096
2,235,039
Listed ordinary shares
Number of shares
Percentage of
ordinary shares
146,632,990
132,256,827
88,151,252
86,229,690
28,818,705
26,277,940
17,210,485
17,107,626
14,553,334
9,057,670
9,000,000
7,834,921
7,816,825
7,525,000
7,500,000
6,751,094
6,711,104
6,600,000
6,333,222
6,107,523
12.74
11.49
7.66
7.49
2.5
2.28
1.5
1.49
1.26
0.79
0.78
0.68
0.68
0.65
0.65
0.59
0.58
0.57
0.55
0.53
638,476,208
55.47
63
Pancontinental Oil & Gas NL - Annual Report 2013
ASX Additional Information
(c) Voting rights
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
(d) Substantial Shareholders
The details of substantial shareholders as disclosed in substantial shareholder notices received by the
Company are set out below:
Sundowner International Limited, Indago Resources Limited and HSBC Custody Nominees
Roy Barry Rushworth and CM Skye Trustees Limited as trustee for the Mulberry Trust
118,499,351
34,764,181
Number of Shares
(e) Permit Schedule
Permits and Licence Interests
Permit reference
Petroleum prospects
Western Australia
Kenya
Namibia
* 30% post year end
L15
EP 104 (R1)
EP 110
EP 424
L6
L8
L10A
L10B
EL 0037
Interest
12 %
10 %
38.462%
38.462%
40%
15%
15%
15%
95% *
64
Pancontinental Oil & Gas NL - Annual Report 2013
288 Stirling Street
Perth WA 6000
Telephone: +61 8 9227 3220
Fax: +61 8 9227 3211