PANCONTINENTAL OIL & GA
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Level One, 10 Ord Street
West Perth WA 6005
Telephone: +61 8 6363 7090
Facsimile: +61 8 6363 7099
Corporate Information
ABN 95 003 029 543
Directors
Henry David Kennedy
Roy Barry Rushworth
Ernest Anthony Myers
Anthony Robert Frederick Maslin
Company Secretary
Vesna Petrovic
Registered Office
Level One, 10 Ord Street
West Perth WA 6005
Telephone: +61 8 6363 7090
+61 8 6363 7099
Fax:
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
Chairman’s Review
Review of Operations
Review of Operations
Directors' Report
Directors' Report
Corporate Governance Statement
Corporate Governance Statement
Statement of Comprehensive Income
Statement of Comprehensive Income
Statement of Financial Position
Statement of Financial Position
Statement of Changes in Equity
Statement of Changes in Equity
Statement of Cash Flows
Statement of Cash Flows
Notes to the Financial Statements
Notes to the Financial Statements
Directors' Declaration
Directors' Declaration
Independent Audit Report
Independent Audit Report
ASX Additional Information
(Non-Executive Chairman)
(Executive Director & Chief Executive Officer)
(Executive Finance Director)
(Non-Executive Director)
PANCONTINENTAL LOGO
The Pancontinental logo is in keeping
with the Pancontinental name and
technical ethic. The logo represents a
mapped view of the globe seen from
above the polar region. The green
sectors represent the continents and the
blue sectors represent the oceans.
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Chairman’s Review
Despite a challenging financial year for junior oil and
gas companies, Pancontinental maintains a strong
free carried asset portfolio and looks forward to near
term exploration success.
Dear Shareholder,
On behalf of the Board of Directors, I take pleasure in presenting the 2015 Annual Report for
Pancontinental Oil and Gas NL.
The past financial year has been characterised by a declining oil price, economic uncertainty, loss of
broader confidence and an overall decrease in the level of activity in the oil and gas industry worldwide.
To align with evolving market conditions, the Board has evaluated the assets and expenditures of the
Company so as to focus on core activities and dramatically reduce overheads. The Australian and
Kenyan L10 blocks were released during this process.
Pancontinental continues to hold a portfolio of prospective assets in both East and West Africa.
Importantly, interests in both areas are free carried, with no expenditure caps for the next phase of
exploration. In Namibia, the Company is reaping the rewards of the 2013 farmout to Tullow Kudu
Limited, a subsidiary of international explorer Tullow Oil. To date, a successful seismic programme,
including processing, interpretation and mapping, and worth in excess of US $30 million, has been
completed, demonstrating considerable potential. In Kenya, neighbouring permit holder Milio
International recognised the prospectivity of Block L6 and farmed in for 2D seismic, and an onshore
well, planning for which is ongoing.
Since last raising capital from equity markets in 2012, the Company has funded exploration and
corporate expenditure without having to seek additional external funding. Prudent management of
funds and resources has helped to maintain cash reserves. Going forward Pancontinental is considering
a number of alternatives to maintain sufficient cash reserves whilst preserving a meaningful equity in
the Company’s projects.
Your Company is respected amongst its peers as an insightful explorer that has the proven capability
to identify and secure high quality projects and to leverage these within the industry by successful
farmouts. Pancontinental will continue to seek out high quality new projects in the anticipation of an
inevitable industry revival. Timing is important here and we closely watch worldwide oil and macro-
economic trends.
The coming financial year promises to be exciting even if current market conditions persist. The
Company is eagerly awaiting proposals from Tullow for ongoing exploration in EL 0037, which may
see an exploration drilling programme committed in March 2016 with the potential for drilling that
year or in 2017. The Company also looks forward to progress in its Kenyan Block L6, where Milio
International has proposed seismic acquisition.
Pancontinental’s small team has continued to work its way through this challenging period and I thank
all members for their efforts. As always, I also thank you, the Company’s Shareholders for your
continuing support.
HD Kennedy
Chairman
Pancontinental Oil & Gas NL
1
Permit Schedule
Review of Operations
Pancontinental has a history of forming geological theories and
acquiring acreage in frontier basins to test those theories. Once
initial exploration programmes are underway, the Company has
successfully sought well respected international companies to
join in its exploration efforts; bringing their expertise and
resources to the permits to maximise the possibility of
exploration success
Namibia EL 0037
Kenya L6
LOCATION:
LOCATION:
Walvis Basin, Offshore Namibia
Lamu Basin, Onshore /Offshore Kenya
PROJECT SIZE:
17,295 square kilometres
PROJECT SIZE:
5,010 square kilometres
JOINT VENTURE PARTNERS:
JOINT VENTURE PARTNERS:
Namibia
Pancontinental’s West African acreage
is
proving to be highly prospective based on the
results of the current work programme by
operator Tullow Oil. With the possibility of
near term drilling, the Company is excited to
properly test the potential of the region.
Pancontinental has been a long term participant in exploration for oil and gas in Namibia. Initial award
of licences dates back to 2007 after the Company assessed the geological basics of the region. Since
that time, Pancontinental has established strong working relationships with the Government as well
as joint venture partners and peer organisations in-country. Political and economic stability as well as
transparent business practices have enabled Pancontinental to successfully conduct business in
Namibia for many years.
Tullow Kudu Limited (Operator)
65.00%
Pancontinental Oil & Gas Group
30.00%
Paragon Oil & Gas (Pty) Ltd
5.00%
GEOLOGY:
The central part of an oil – mature
“Fairway” has been interpreted to extend
through EL 0037. Pancontinental believes
that EL 0037 covers one of the few areas
where an oil generating “sweet spot” of
oil prone source rocks are sufficiently
buried to generate oil.
fans,
forming very
A number of slope and basin floor
turbidite
large
Prospects and Leads, have been identified
and mapped within the Fairway. The
Prospects
closely
and
interpreted oil-
associated with
generating source rocks.
Leads
the
are
Offshore
FAR Limited (Operator)
60.00%
Pancontinental Oil & Gas Group
40.00%
Onshore
Milio International Group (Operator)*
60.00%
Pancontinental Oil & Gas Group
16.00%
FAR Limited
24.00%
*after earn in
GEOLOGY:
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
adjacent to the area.
The Kifaru Prospect and Kifaru West
Prospect are interpreted to be large
stacked Miocene reefs, with interpreted
good lateral and top seals and close
proximity to mature Eocene source rocks.
The Tembo Prospect is a large tilted fault
block trap, with interpreted sandstone
reservoirs at a number of levels.
2
Offshore Namibia is home to four basins; Namibe to the
north, and the Walvis, Luderitz and Orange Basins further
to the south. The basins are little-tested frontier basins.
In the 1970’s exploration was mostly driven by large
multinational companies with Chevron experiencing
success with the first hydrocarbon discovery – the Kudu
Gas Field in 1974.
Close to 40 years later in 2013, HRT Participações em
Petróleo S.A. (now PetroRio) drilled the Wingat-1 well in
the licence immediately to the south of Pancontinental’s EL
0037, with positive results. The well produced the first
evidence of oil offshore Namibia. Although commercial
volumes were not encountered the oil that was recovered
was of a good quality, being
light with minimal
contamination. Two well developed source rocks rich in
organic carbon were identified within the oil-generating
window. The discovery opened up a new exploration play
in the region.
Major international companies are now making their way
back to Namibia as the basins have been de-risked to the
extent that there is evidence of oil and a working
hydrocarbon system. In addition, enthusiasm for oil
exploration offshore Namibia has been enhanced due to
the theory that the West African country once joined with
Brazil. Namibia’s basins are likely to be similar to the
Santos and Campos Basins offshore Brazil; these basins
have proven to be enormously rich in hydrocarbon
resources.
Namibia’s Offshore Sedimentary Basins
Permit Schedule
Review of Operations
Pancontinental has a history of forming geological theories and
acquiring acreage in frontier basins to test those theories. Once
initial exploration programmes are underway, the Company has
successfully sought well respected international companies to
join in its exploration efforts; bringing their expertise and
resources to the permits to maximise the possibility of
exploration success
Namibia EL 0037
Kenya L6
LOCATION:
LOCATION:
Walvis Basin, Offshore Namibia
Lamu Basin, Onshore /Offshore Kenya
PROJECT SIZE:
17,295 square kilometres
PROJECT SIZE:
5,010 square kilometres
JOINT VENTURE PARTNERS:
JOINT VENTURE PARTNERS:
Tullow Kudu Limited (Operator)
Offshore
65.00%
30.00%
5.00%
Pancontinental Oil & Gas Group
60.00%
Paragon Oil & Gas (Pty) Ltd
FAR Limited (Operator)
Pancontinental Oil & Gas Group
Milio International Group (Operator)*
Pancontinental Oil & Gas Group
FAR Limited
40.00%
Onshore
60.00%
16.00%
24.00%
*after earn in
GEOLOGY:
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
adjacent to the area.
The Kifaru Prospect and Kifaru West
Prospect are interpreted to be large
stacked Miocene reefs, with interpreted
good lateral and top seals and close
proximity to mature Eocene source rocks.
The Tembo Prospect is a large tilted fault
block trap, with interpreted sandstone
reservoirs at a number of levels.
GEOLOGY:
The central part of an oil – mature
“Fairway” has been interpreted to extend
through EL 0037. Pancontinental believes
that EL 0037 covers one of the few areas
where an oil generating “sweet spot” of
oil prone source rocks are sufficiently
buried to generate oil.
A number of slope and basin floor
turbidite
fans,
forming very
large
Prospects and Leads, have been identified
and mapped within the Fairway. The
Prospects
and
Leads
are
closely
associated with
the
interpreted oil-
generating source rocks.
Namibia
Pancontinental’s West African acreage
is
proving to be highly prospective based on the
results of the current work programme by
operator Tullow Oil. With the possibility of
near term drilling, the Company is excited to
properly test the potential of the region.
Pancontinental has been a long term participant in exploration for oil and gas in Namibia. Initial award
of licences dates back to 2007 after the Company assessed the geological basics of the region. Since
that time, Pancontinental has established strong working relationships with the Government as well
as joint venture partners and peer organisations in-country. Political and economic stability as well as
transparent business practices have enabled Pancontinental to successfully conduct business in
Namibia for many years.
Offshore Namibia is home to four basins; Namibe to the
north, and the Walvis, Luderitz and Orange Basins further
to the south. The basins are little-tested frontier basins.
In the 1970’s exploration was mostly driven by large
multinational companies with Chevron experiencing
success with the first hydrocarbon discovery – the Kudu
Gas Field in 1974.
Close to 40 years later in 2013, HRT Participações em
Petróleo S.A. (now PetroRio) drilled the Wingat-1 well in
the licence immediately to the south of Pancontinental’s EL
0037, with positive results. The well produced the first
evidence of oil offshore Namibia. Although commercial
volumes were not encountered the oil that was recovered
was of a good quality, being
light with minimal
contamination. Two well developed source rocks rich in
organic carbon were identified within the oil-generating
window. The discovery opened up a new exploration play
in the region.
Major international companies are now making their way
back to Namibia as the basins have been de-risked to the
extent that there is evidence of oil and a working
hydrocarbon system. In addition, enthusiasm for oil
exploration offshore Namibia has been enhanced due to
the theory that the West African country once joined with
Brazil. Namibia’s basins are likely to be similar to the
Santos and Campos Basins offshore Brazil; these basins
have proven to be enormously rich in hydrocarbon
resources.
Namibia’s Offshore Sedimentary Basins
3
Review of Operations
Review of Operations
Namibia Offshore EL 0037
Location:
Walvis Basin
Project Size:
17,295 square kilometres
JV Partners:
Tullow Kudu Limited (Operator)
Pancontinental
Paragon Oil & Gas (Pty) Ltd
65.00%
30.00%
5.00%
Pancontinental holds three blocks offshore Namibia; 2012B, 2112A and 2113B. All three blocks are
governed by Petroleum Exploration Licence 0037 (“EL 0037”). Commencing in 2011, the original
participants in the EL 0037 joint venture were Pancontinental with 85% and local partner Paragon Oil
and Gas (Pty) Ltd with 15%. Pancontinental then conducted further in-house evaluation of the blocks,
with positive results, and acquired an additional 10% from its local partner.
In 2013, armed with a strong 95% interest and an initial exploration programme underway, the
Company was in a good position to negotiate a farmout of its Namibian acreage. Tullow Kudu Limited,
a subsidiary of successful international Tullow Oil was conducting its own analysis and assessment of
offshore Namibia and following agreement to an attractive farmin deal in exchange for a 65% interest,
continued exploration work with Pancontinental and Paragon in EL 0037 as project Operator.
Under farmin and at a cost in excess of US $34 million, Tullow has free carried Pancontinental and
Paragon for:
3,000 km2 of 3D seismic which covered some 17% of the entire licence;
1,000km of 2D seismic;
Processing of the seismic acquisition data; and
Interpretation and mapping.
March 2016 will signal a significant point in the joint venture when Tullow must make a decision
whether to drill within the licence. If drilling goes ahead, it is expected to occur in 2016 or early 2017
depending on rig availability and other external factors. If drilling proceeds, no costs for the exploration
programme will revert to Pancontinental even in the case of cost overruns or other unforeseen
expenditures.
Namibia Licence
0037
Offshore Area
17,295 km2
Pancontinental’s Offshore Namibian Exploration Licence 0037
4
Pancontinental’s long held theories on Namibian geology include the interpretation of an Oil Mature
Fairway. It is the Company’s interpretation that EL 0037 covers the central zone of the Fairway, over
an oil generating “sweet spot” where oil prone source rocks are sufficiently buried to generate oil.
Tullow’s exploration findings to date have uncovered four prospects:
Albatross;
Seagull & Gannet North;
Seagull & Gannet South; and
Cormorant
and three leads:
Upper Fan 2;
Upper Fan 3; and
Upper Fan 4.
All Prospects and Leads are located within the fairway predicted by Pancontinental. The extremity of
the fairway extends to the adjacent area to the south of EL 0037 where HRT drilled the Wingat-1 well,
validating oil generation theories formed by Pancontinental in previous years.
Prime locations for future potential drilling will be assessed upon the imminent completion of ongoing
analysis of data acquired to date. Since its entry into the joint venture, Tullow has carried out the
agreed work programme under farmin and Pancontinental is confident that conclusive exploration
findings will lead to drilling on the licence.
3D Seismic
Albatross
Lower Fan 4
Seagull &
Gannet
North
Seagull &
Gannet
South
EL 0037
Seismic
Location
shown in
detail to
the right
Wingat‐1
Well
Upper Fan 2
Cormorant
Lower Fan 3
Oil‐ Mature Aptian
Source Fairway
‐‐‐‐‐‐‐‐‐‐
10 Km
Pancontinental’s Offshore Namibian Exploration Licence 0037
on Permit Map to the left and Seismic Area showing Prospects
and Leads to the right.
Review of Operations
Review of Operations
Namibia Offshore EL 0037
Location:
Walvis Basin
Project Size:
17,295 square kilometres
JV Partners:
Tullow Kudu Limited (Operator)
Pancontinental
Paragon Oil & Gas (Pty) Ltd
65.00%
30.00%
5.00%
Pancontinental holds three blocks offshore Namibia; 2012B, 2112A and 2113B. All three blocks are
governed by Petroleum Exploration Licence 0037 (“EL 0037”). Commencing in 2011, the original
participants in the EL 0037 joint venture were Pancontinental with 85% and local partner Paragon Oil
and Gas (Pty) Ltd with 15%. Pancontinental then conducted further in-house evaluation of the blocks,
with positive results, and acquired an additional 10% from its local partner.
In 2013, armed with a strong 95% interest and an initial exploration programme underway, the
Company was in a good position to negotiate a farmout of its Namibian acreage. Tullow Kudu Limited,
a subsidiary of successful international Tullow Oil was conducting its own analysis and assessment of
offshore Namibia and following agreement to an attractive farmin deal in exchange for a 65% interest,
continued exploration work with Pancontinental and Paragon in EL 0037 as project Operator.
Under farmin and at a cost in excess of US $34 million, Tullow has free carried Pancontinental and
Paragon for:
3,000 km2 of 3D seismic which covered some 17% of the entire licence;
1,000km of 2D seismic;
Processing of the seismic acquisition data; and
Interpretation and mapping.
March 2016 will signal a significant point in the joint venture when Tullow must make a decision
whether to drill within the licence. If drilling goes ahead, it is expected to occur in 2016 or early 2017
depending on rig availability and other external factors. If drilling proceeds, no costs for the exploration
programme will revert to Pancontinental even in the case of cost overruns or other unforeseen
expenditures.
Namibia Licence
0037
Offshore Area
17,295 km2
Pancontinental’s Offshore Namibian Exploration Licence 0037
Pancontinental’s long held theories on Namibian geology include the interpretation of an Oil Mature
Fairway. It is the Company’s interpretation that EL 0037 covers the central zone of the Fairway, over
an oil generating “sweet spot” where oil prone source rocks are sufficiently buried to generate oil.
Tullow’s exploration findings to date have uncovered four prospects:
Albatross;
Seagull & Gannet North;
Seagull & Gannet South; and
Cormorant
and three leads:
Upper Fan 2;
Upper Fan 3; and
Upper Fan 4.
All Prospects and Leads are located within the fairway predicted by Pancontinental. The extremity of
the fairway extends to the adjacent area to the south of EL 0037 where HRT drilled the Wingat-1 well,
validating oil generation theories formed by Pancontinental in previous years.
Prime locations for future potential drilling will be assessed upon the imminent completion of ongoing
analysis of data acquired to date. Since its entry into the joint venture, Tullow has carried out the
agreed work programme under farmin and Pancontinental is confident that conclusive exploration
findings will lead to drilling on the licence.
EL 0037
Seismic
Location
shown in
detail to
the right
Wingat‐1
Well
3D Seismic
Albatross
Lower Fan 4
Seagull &
Gannet
North
Seagull &
Gannet
South
Oil‐ Mature Aptian
Source Fairway
‐‐‐‐‐‐‐‐‐‐
10 Km
Upper Fan 2
Cormorant
Lower Fan 3
Pancontinental’s Offshore Namibian Exploration Licence 0037
on Permit Map to the left and Seismic Area showing Prospects
and Leads to the right.
5
Review of Operations
Review of Operations
Pancontinental has estimated the Prospective Resource potential of the Prospects mapped to date using
factors including estimates of the area of the Prospects, of to what level the Prospects may be oil filled,
the thickness, geometry, porosity and net to gross factors of the potential reservoirs, oil saturations and
commercial recovery factors. The estimates have been made on a deterministic basis and no probabilistic
estimates or chances of drilling success have therefore been made in this case. Details of the Prospects
and Leads mapped to date are as follows: (see Cautionary Statement below and Disclaimers on the last
pages of the Review of Operations)
PROSPECT / LEAD
STATUS
AREA
(Sq Km)
PROSPECTIVE
RESOURCE 100%
(MmBbls)*
NET TO
NET
JOINT VENTURE
(MmBbls)
PANCONTINENTAL
SHARE (MmBbls)
Albatross
Prospect
Seagull & Gannet S
Prospect
Seagull & Gannet N
Prospect
Cormorant
Upper Fan 2
Lower Fan 3
Lower Fan 4
Prospect
Lead
Lead
Lead
293
273
90
120
85
352
170
349
338
104
124
331.6
321.1
98.8
117.8
99.5
96.3
29.6
35.3
TOTAL (Prospects Only)
915*
869.3
260.7
Table of EL 0037 Prospects and Leads areas and Prospective Resource Volumes evaluated as at 28 September 2015
Cautionary Statement - The estimated quantities of petroleum that may potentially be recovered by the application
of a future development project(s) relate to undiscovered accumulations. These estimates have both an associated
risk of discovery and a risk of development. Further exploration appraisal and evaluation is required to determine
the existence of a significant quantity of potentially moveable hydrocarbons.
* Prospective Resources – Best Estimate, 100% Basis – See Disclaimers for further information
Kenya
Pancontinental’s extensive history in Kenya
has brought notable success in recent years
with the first and second-ever offshore
hydrocarbon discoveries. The Company is
looking to achieve the same high level of
success with its current licence, Block L6.
In the early 2000’s Pancontinental conducted an early stage new venture assessment of Kenya’s
offshore acreage. During the process the Company recognised the oil potential in the Lamu Basin and
Tana River Delta and began piecing together its theory on oil generation in the area. The Tana River
Delta carried sediments and nutrients into the deep trough inboard of the Davie Walu Ridge and
Pancontinental believes this route is the prime area to develop and mature good oil source rocks for
oil generation.
Tana River Delta
and Troughs
Offshore Kenya
The theories were supported with the Company participating in two historic discoveries in Kenya -
2012
Mbawa-1, Kenya L8
The first ever gas discovery offshore Kenya; and
2014
Sunbird-1, Kenya L10A
The first ever oil discovery offshore Kenya.
The Company now hopes to bring similar success achieved in its former exploration properties to its
current onshore /offshore block Kenya L6.
6
Review of Operations
Review of Operations
Pancontinental has estimated the Prospective Resource potential of the Prospects mapped to date using
factors including estimates of the area of the Prospects, of to what level the Prospects may be oil filled,
the thickness, geometry, porosity and net to gross factors of the potential reservoirs, oil saturations and
commercial recovery factors. The estimates have been made on a deterministic basis and no probabilistic
estimates or chances of drilling success have therefore been made in this case. Details of the Prospects
and Leads mapped to date are as follows: (see Cautionary Statement below and Disclaimers on the last
pages of the Review of Operations)
PROSPECT / LEAD
STATUS
AREA
RESOURCE 100%
(Sq Km)
(MmBbls)*
PROSPECTIVE
NET TO
NET
JOINT VENTURE
PANCONTINENTAL
(MmBbls)
SHARE (MmBbls)
Albatross
Prospect
Seagull & Gannet S
Prospect
Seagull & Gannet N
Prospect
Cormorant
Upper Fan 2
Lower Fan 3
Lower Fan 4
Prospect
Lead
Lead
Lead
293
273
90
120
85
352
170
349
338
104
124
331.6
321.1
98.8
117.8
99.5
96.3
29.6
35.3
Kenya
Pancontinental’s extensive history in Kenya
has brought notable success in recent years
with the first and second-ever offshore
hydrocarbon discoveries. The Company is
looking to achieve the same high level of
success with its current licence, Block L6.
In the early 2000’s Pancontinental conducted an early stage new venture assessment of Kenya’s
offshore acreage. During the process the Company recognised the oil potential in the Lamu Basin and
Tana River Delta and began piecing together its theory on oil generation in the area. The Tana River
Delta carried sediments and nutrients into the deep trough inboard of the Davie Walu Ridge and
Pancontinental believes this route is the prime area to develop and mature good oil source rocks for
oil generation.
TOTAL (Prospects Only)
915*
869.3
260.7
Table of EL 0037 Prospects and Leads areas and Prospective Resource Volumes evaluated as at 28 September 2015
Tana River Delta
and Troughs
Offshore Kenya
Cautionary Statement - The estimated quantities of petroleum that may potentially be recovered by the application
of a future development project(s) relate to undiscovered accumulations. These estimates have both an associated
risk of discovery and a risk of development. Further exploration appraisal and evaluation is required to determine
the existence of a significant quantity of potentially moveable hydrocarbons.
* Prospective Resources – Best Estimate, 100% Basis – See Disclaimers for further information
The theories were supported with the Company participating in two historic discoveries in Kenya -
2012
Mbawa-1, Kenya L8
The first ever gas discovery offshore Kenya; and
2014
Sunbird-1, Kenya L10A
The first ever oil discovery offshore Kenya.
The Company now hopes to bring similar success achieved in its former exploration properties to its
current onshore /offshore block Kenya L6.
7
Review of Operations
Review of Operations
Kenya Onshore/Offshore Block L6
Kenya Block L6 Onshore
Location:
Lamu Basin
Project Size:
5,010 square kilometres
JV Partners
Offshore:
FAR Limited (Operator)
Pancontinental
JV Partners
Onshore:
Milio International (Operator)
Pancontinental
FAR Limited
60.00%
40.00%
60.00%
16.00%
24.00%
Pancontinental has been a participant in the Kenya L6 licence since its initial award. The licence covers
both onshore and offshore areas and is located in the Lamu Basin which forms part of the Kenyan
passive continental margin. Much of the exploration activity conducted on Kenyan land and offshore
waters has occurred in the Lamu Basin which at 261,000km2 is the largest of the four basins and the
only one to span both offshore and onshore regions.
Exploration work programmes completed on the block to date include 2D and 3D seismic surveys and
their interpretation as well as Falcon airborne gravity and magnetics surveys. These work programmes
have assisted in evaluating the prospectivity of the area which is on-trend to the play opening Sunbird-
1 oil discovery.
With proven working oil and gas systems, future exploration in the region has great upside potential.
Operators of the offshore area are FAR Limited (“FAR”) and Milio International (“Milio”) operators of
the onshore area. With experienced operators and a stake in a highly prospective exploration area,
the Company looks forward to forthcoming exploration campaigns.
Dubai-based Milio International are party to Block L20 which is adjacent to that of the Company’s
Block L6. During exploration work programmes conducted on the L20 Block, Milio discovered the
potential of the onshore region within Block L6 and as such sought to commence negotiations with
Pancontinental and FAR for a 60% interest to be earned by funding a 2D seismic work programme
and an onshore exploration well with no capping of expenditure for unexpected costs. After the farmin
of Milio, Pancontinental still maintains a meaningful interest with 16%.
Although there have been a number of delays faced by Milio which have been beyond their control, it
is still expected that the planned 2D seismic acquisition will go ahead. As shown in the image below,
the seismic will cover a portion of Block L20, coming into L6 to include the three main prospects;
Kudu;
Mamba; and
Boundary Anticline.
The prospects are a combination of Eocene and Cretaceous clastics (sandstones). Data from the
seismic acquisition may then be integrated with known data from a historic well drilled to the south of
the Kudu /Mamba area prior to a drilling decision being made.
Milio International’s proposed seismic programme
[Source: Milio International]
Milio have been working with the Kenyan Ministry of Energy and Petroleum and other local bodies to
assist in addressing the issues faced by the Company in its efforts to conduct 2D seismic operations
in the area. Measures have been put into place to mitigate risk and it is hoped that the programme
will commence in the near future.
Pancontinental’s Onshore and Offshore L6 Areas in Kenya
8
Review of Operations
Review of Operations
Kenya Onshore/Offshore Block L6
Kenya Block L6 Onshore
Location:
Lamu Basin
Project Size:
5,010 square kilometres
JV Partners
Offshore:
FAR Limited (Operator)
Pancontinental
JV Partners
Milio International (Operator)
Onshore:
Pancontinental
FAR Limited
60.00%
40.00%
60.00%
16.00%
24.00%
Pancontinental has been a participant in the Kenya L6 licence since its initial award. The licence covers
both onshore and offshore areas and is located in the Lamu Basin which forms part of the Kenyan
passive continental margin. Much of the exploration activity conducted on Kenyan land and offshore
waters has occurred in the Lamu Basin which at 261,000km2 is the largest of the four basins and the
only one to span both offshore and onshore regions.
Exploration work programmes completed on the block to date include 2D and 3D seismic surveys and
their interpretation as well as Falcon airborne gravity and magnetics surveys. These work programmes
have assisted in evaluating the prospectivity of the area which is on-trend to the play opening Sunbird-
1 oil discovery.
With proven working oil and gas systems, future exploration in the region has great upside potential.
Operators of the offshore area are FAR Limited (“FAR”) and Milio International (“Milio”) operators of
the onshore area. With experienced operators and a stake in a highly prospective exploration area,
the Company looks forward to forthcoming exploration campaigns.
Dubai-based Milio International are party to Block L20 which is adjacent to that of the Company’s
Block L6. During exploration work programmes conducted on the L20 Block, Milio discovered the
potential of the onshore region within Block L6 and as such sought to commence negotiations with
Pancontinental and FAR for a 60% interest to be earned by funding a 2D seismic work programme
and an onshore exploration well with no capping of expenditure for unexpected costs. After the farmin
of Milio, Pancontinental still maintains a meaningful interest with 16%.
Although there have been a number of delays faced by Milio which have been beyond their control, it
is still expected that the planned 2D seismic acquisition will go ahead. As shown in the image below,
the seismic will cover a portion of Block L20, coming into L6 to include the three main prospects;
Kudu;
Mamba; and
Boundary Anticline.
The prospects are a combination of Eocene and Cretaceous clastics (sandstones). Data from the
seismic acquisition may then be integrated with known data from a historic well drilled to the south of
the Kudu /Mamba area prior to a drilling decision being made.
Milio International’s proposed seismic programme
[Source: Milio International]
Milio have been working with the Kenyan Ministry of Energy and Petroleum and other local bodies to
assist in addressing the issues faced by the Company in its efforts to conduct 2D seismic operations
in the area. Measures have been put into place to mitigate risk and it is hoped that the programme
will commence in the near future.
Pancontinental’s Onshore and Offshore L6 Areas in Kenya
9
Review of Operations
Kenya Block L6 Offshore
While the next phase of exploration on the onshore portion of Kenya Block L6 is expected to occur
under farmout, the offshore portion operated by FAR Limited also has great potential for further
exploration and farmout possibilities.
The following surveys conducted in the offshore region have highlighted a number of drill ready
prospects:
2D seismic acquisition 308km;
2D seismic acquisition 1,235km; and
3D seismic acquisition 778km2.
Kifaru and Kifaru West are closer onshore and are reef prospects whereas Tembo is further outboard
and is described as an Eocene sand play. Images and prospective resources are shown below.
Review of Operations
Prospective Resource Estimates Cautionary Statement
DISCLAIMERS & NOTES - NAMIBIA
Kifaru & Kifaru West Prospects
Tembo Prospect
Competent Person Statement Information
The estimated quantities of petroleum in this report that may potentially be recovered by the application
of a future development project(s) relate to undiscovered accumulations. These estimates have both an
associated risk of discovery and a risk of development. Further exploration appraisal and evaluation is
required to determine the existence of a significant quantity of potentially moveable hydrocarbons.
Prospective Resources
All Prospective Resource estimates in this report with regard to Namibian operations are prepared as of
28 September 2015. The estimates have been prepared in accordance with the definitions and guidelines
set forth in the Petroleum Resource Management System 2007 approved by the Society of Petroleum
Engineers and have been prepared using deterministic methods. Unless otherwise stated the estimates
provided in this report are Best Estimates. The estimates are unrisked and have not been adjusted for an
associated risk of discovery and risk of development. The 100% basis refers to the total resource while
the Net to Pancontinental basis is adjusted for the Government Royalty of 5% under Production Sharing
Contracts and Pancontinental’s percentage entitlement under Joint Venture contracts.
Prospective Resources estimates in this report have been made by Pancontinental Oil & Gas NL and may
be subject to revision if amendments to mapping or other factors necessitate such revision.
Prospects and Leads
The meanings of “Prospects” and “Leads” in this report are in accordance with the Petroleum Resource
Management System 2007 approved by the Society of Petroleum Engineers. A Prospect is a project that
is sufficiently well defined to represent a viable drilling target. A Lead is a project associated with a
potential accumulation that is currently poorly defined and requires more data acquisition and / or
evaluation to be classified as a Prospect.
The hydrocarbon resource estimates in this report have been prepared by Mr Roy Barry Rushworth the
Chief Executive Officer and Executive Director of Pancontinental Oil & Gas NL. Mr Rushworth has more
than 30 years’ experience in practising petroleum geology and exploration management.
Mr Rushworth consents to the inclusion in this report of information relating to the hydrocarbon
Prospective Resources in the form and context in which it appears.
Forward Looking Statements
This document may include forward looking statements. Forward looking statements include, are not
necessarily limited to, statements concerning Pancontinental Oil & Gas NL’s planned operation programme
and other statements that are not historic facts. When used in this document, the words such as “could”,
“plan”, “estimate”, “expect”, “intend”, “may”, “potential”, “should” and similar expressions are forward
looking statements. Although Pancontinental believes its expectations reflected in these are reasonable,
such statements involve risks and uncertainties, and no assurance can be given that actual results will be
consistent with these forward looking statements.
Cautionary Statement - The estimated quantities of petroleum that may potentially be recovered by the application
of a future development project(s) relate to undiscovered accumulations. These estimates have both an associated
risk of discovery and a risk of development. Further exploration appraisal and evaluation is required to determine
the existence of a significant quantity of potentially moveable hydrocarbons. See Disclaimers and Notes for further
details.
10
Review of Operations
Kenya Block L6 Offshore
While the next phase of exploration on the onshore portion of Kenya Block L6 is expected to occur
under farmout, the offshore portion operated by FAR Limited also has great potential for further
exploration and farmout possibilities.
The following surveys conducted in the offshore region have highlighted a number of drill ready
prospects:
2D seismic acquisition 308km;
2D seismic acquisition 1,235km; and
3D seismic acquisition 778km2.
Kifaru and Kifaru West are closer onshore and are reef prospects whereas Tembo is further outboard
and is described as an Eocene sand play. Images and prospective resources are shown below.
Review of Operations
Prospective Resource Estimates Cautionary Statement
DISCLAIMERS & NOTES - NAMIBIA
The estimated quantities of petroleum in this report that may potentially be recovered by the application
of a future development project(s) relate to undiscovered accumulations. These estimates have both an
associated risk of discovery and a risk of development. Further exploration appraisal and evaluation is
required to determine the existence of a significant quantity of potentially moveable hydrocarbons.
Prospective Resources
All Prospective Resource estimates in this report with regard to Namibian operations are prepared as of
28 September 2015. The estimates have been prepared in accordance with the definitions and guidelines
set forth in the Petroleum Resource Management System 2007 approved by the Society of Petroleum
Engineers and have been prepared using deterministic methods. Unless otherwise stated the estimates
provided in this report are Best Estimates. The estimates are unrisked and have not been adjusted for an
associated risk of discovery and risk of development. The 100% basis refers to the total resource while
the Net to Pancontinental basis is adjusted for the Government Royalty of 5% under Production Sharing
Contracts and Pancontinental’s percentage entitlement under Joint Venture contracts.
Prospective Resources estimates in this report have been made by Pancontinental Oil & Gas NL and may
be subject to revision if amendments to mapping or other factors necessitate such revision.
Prospects and Leads
The meanings of “Prospects” and “Leads” in this report are in accordance with the Petroleum Resource
Management System 2007 approved by the Society of Petroleum Engineers. A Prospect is a project that
is sufficiently well defined to represent a viable drilling target. A Lead is a project associated with a
potential accumulation that is currently poorly defined and requires more data acquisition and / or
evaluation to be classified as a Prospect.
Kifaru & Kifaru West Prospects
Tembo Prospect
Competent Person Statement Information
The hydrocarbon resource estimates in this report have been prepared by Mr Roy Barry Rushworth the
Chief Executive Officer and Executive Director of Pancontinental Oil & Gas NL. Mr Rushworth has more
than 30 years’ experience in practising petroleum geology and exploration management.
Mr Rushworth consents to the inclusion in this report of information relating to the hydrocarbon
Prospective Resources in the form and context in which it appears.
Forward Looking Statements
This document may include forward looking statements. Forward looking statements include, are not
necessarily limited to, statements concerning Pancontinental Oil & Gas NL’s planned operation programme
and other statements that are not historic facts. When used in this document, the words such as “could”,
“plan”, “estimate”, “expect”, “intend”, “may”, “potential”, “should” and similar expressions are forward
looking statements. Although Pancontinental believes its expectations reflected in these are reasonable,
such statements involve risks and uncertainties, and no assurance can be given that actual results will be
consistent with these forward looking statements.
Cautionary Statement - The estimated quantities of petroleum that may potentially be recovered by the application
of a future development project(s) relate to undiscovered accumulations. These estimates have both an associated
risk of discovery and a risk of development. Further exploration appraisal and evaluation is required to determine
the existence of a significant quantity of potentially moveable hydrocarbons. See Disclaimers and Notes for further
details.
11
Review of Operations
Review of Operations
DISCLAIMERS & NOTES - KENYA
In respect of the Competent Persons Statement regarding the information contained in preceding pages
with regard to Kenya L6 resources, the reader is directed to the announcement of 27 February 2013 by FAR
Limited.
Notes to the table
1. The recoverable hydrocarbon volume estimates prepared by FAR Limited and stated in the table above
have been prepared in accordance with the definitions and guidelines set forth in the Petroleum Resources
Management System, 2007 approved by the Society of Petroleum Engineers.
Corporate
During the year under review, Pancontinental continued its examination of corporate expenditures and
sought cost reductions and improved terms where possible.
2. The prospective resource estimates have been estimated using probabilistic methods and are dependent
upon a hydrocarbon discovery being made.
The Company’s head office was relocated during the year to:
Head Office
3. The Low Estimates, Best Estimates and High Estimates represent respectively that there is a 90%, 50%
and 10% probability that the actual resource volume will be in excess of these amounts.
Office Address:
Level 1, 10 Ord Street, West Perth WA 6005
4. The estimates for unrisked prospective resources have not been adjusted for both an associated chance
of discovery and a chance of development.
5. The Gross (100% working interest) prospective resource estimates include Government share of
production applicable under the Production Sharing Contract.
6. The estimates for unrisked Prospective Resources for Kenya Block L6 are reported in oil or gas. There is
insufficient geological and engineering data to make an assessment as to the likely ratio of oil or gas in a
given discovery in Kenya Block L6, hence the estimates provided are for either all oil or all gas. The oil and
gas estimates reported should not be added together.
7. Prospective resources means those quantities of petroleum which are estimated, as of a given date to
be potentially recoverable from undiscovered accumulations by application of future development projects.
Prospective resources have both an associated chance of discovery and a chance of development.
8. bcf means Billion Cubic Feet of gas at standard temperature and pressure conditions.
9. mmbbls means Million Standard barrels of oil or condensate.
Mailing Address:
PO Box 1154, West Perth WA 6872
Telephone Number:
(08) 6363 7090
Facsimile Number:
(08) 6363 7099
where management was able to source lower rent and overheads than were previously charged.
Conferences
During the financial year company representatives attended conferences which presented them with
the opportunity to liaise with industry peers as well as present Pancontinental and its portfolio of
exploration assets to an audience where joint venture and other opportunities may arise.
Ger Kegge, Pancontinental’s representative in
Africa Oil Week
Namibia at Africa Oil Week
12
Review of Operations
Review of Operations
DISCLAIMERS & NOTES - KENYA
In respect of the Competent Persons Statement regarding the information contained in preceding pages
with regard to Kenya L6 resources, the reader is directed to the announcement of 27 February 2013 by FAR
Corporate
Limited.
Notes to the table
1. The recoverable hydrocarbon volume estimates prepared by FAR Limited and stated in the table above
have been prepared in accordance with the definitions and guidelines set forth in the Petroleum Resources
Management System, 2007 approved by the Society of Petroleum Engineers.
During the year under review, Pancontinental continued its examination of corporate expenditures and
sought cost reductions and improved terms where possible.
2. The prospective resource estimates have been estimated using probabilistic methods and are dependent
upon a hydrocarbon discovery being made.
The Company’s head office was relocated during the year to:
Head Office
3. The Low Estimates, Best Estimates and High Estimates represent respectively that there is a 90%, 50%
and 10% probability that the actual resource volume will be in excess of these amounts.
Office Address:
Level 1, 10 Ord Street, West Perth WA 6005
4. The estimates for unrisked prospective resources have not been adjusted for both an associated chance
of discovery and a chance of development.
5. The Gross (100% working interest) prospective resource estimates include Government share of
production applicable under the Production Sharing Contract.
6. The estimates for unrisked Prospective Resources for Kenya Block L6 are reported in oil or gas. There is
insufficient geological and engineering data to make an assessment as to the likely ratio of oil or gas in a
given discovery in Kenya Block L6, hence the estimates provided are for either all oil or all gas. The oil and
gas estimates reported should not be added together.
7. Prospective resources means those quantities of petroleum which are estimated, as of a given date to
be potentially recoverable from undiscovered accumulations by application of future development projects.
Prospective resources have both an associated chance of discovery and a chance of development.
8. bcf means Billion Cubic Feet of gas at standard temperature and pressure conditions.
9. mmbbls means Million Standard barrels of oil or condensate.
Mailing Address:
PO Box 1154, West Perth WA 6872
Telephone Number:
(08) 6363 7090
Facsimile Number:
(08) 6363 7099
where management was able to source lower rent and overheads than were previously charged.
Conferences
During the financial year company representatives attended conferences which presented them with
the opportunity to liaise with industry peers as well as present Pancontinental and its portfolio of
exploration assets to an audience where joint venture and other opportunities may arise.
Ger Kegge, Pancontinental’s representative in
Namibia at Africa Oil Week
Africa Oil Week
13
Directors’ Report
Directors’ Report
COMPANY SECRETARY
Vesna Petrovic, BComm, CPA
Your Directors submit their report for the year ended 30 June 2015.
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 is a Geologist with an extensive history in the Australian and New Zealand oil and gas industries. As
Technical Director, Mr Kennedy led the establishment and development of a number of successful companies who
were involved in numerous discoveries in Western Australia and New Zealand. Mr Kennedy has been a Director
of Pancontinental since August 1999, with the Company benefiting from Mr Kennedy’s broad knowledge base
through ongoing support in achieving the Company’s strategic goals.
Henry David Kennedy
Roy Barry Rushworth
Ernest Anthony Myers
Anthony Robert Frederick Maslin
Mr Kennedy is currently a Non-Executive Director of Norwest Energy NL (since April 1997) and was an East Africa
Resources Limited Non-Executive Director (since March 2013) but resigned from the position in April 2015.
DIRECTORS' MEETINGS
Roy Barry Rushworth, BSc (Executive Director, Chief Executive Officer)
Mr Rushworth is a Geologist with vast experience in petroleum exploration. Commencing with positions in
exploration operations, Mr Rushworth then accepted the role as Chief Geologist and Exploration Manager for an
Australian listed company. The Company discovered a number of oil and gas finds during Mr Rushworth’s
leadership.
More recently for Pancontinental, Mr Rushworth has been responsible for identifying, negotiating and acquiring
international new venture opportunities in Kenya, Namibia and elsewhere in Europe and Africa. In addition, he
has a track record of working closely with international government bodies and attracting blue chip joint venture
partners to Pancontinental’s projects. Mr Rushworth has been a Director of Pancontinental since August 2005 and
Chief Executive Officer since November 2008.
Ernest Anthony Myers CPA (Executive Finance Director)
Mr Myers, an Accountant by profession, experienced many years in ASX listed companies from positions in senior
management and executive capacities to board participation roles. During his career he has been instrumental in
the capital raisings and financial management of these companies. With skills and knowledge gained from vast
experiences in corporate, exploration and operational areas, Mr Myers has played a key role in maintaining the
Company’s financial stability. Mr Myers joined Pancontinental in March 2004 as Company Secretary and was
appointed Finance Director in January 2009.
Mr Myers has been an alternate Director of East Africa Resources Limited since June 2010, although he resigned
from the position during the financial year (April 2015).
Anthony Robert Frederick Maslin BBus (Independent Non-Executive Director)
Mr Maslin is an ex-Stockbroker with a broad knowledge base of financial markets. Prior experience has included
capital raising and the promotion of several development companies as well as consulting to a number of ASX
listed companies on corporate matters. Mr Maslin has had the responsibility of managing people as well as projects
which has provided him with an understanding of the exploration industry in addition to his corporate background.
Mr Maslin has been a Director of Pancontinental since December 2010.
Mr Maslin is also a Non-Executive Director of Buxton Resources Ltd (Executive and Non-Executive roles since
November 2010).
Mrs Petrovic is an Accountant who holds a Bachelor of Commerce, Major in Accounting and Business Law and has
completed the Graduate Diploma in Applied Corporate Governance from the Governance Institute of Australia.
Public listed company involvement, particularly those involved in the African continent, have provided Mrs Petrovic
a base from which to contribute to the accounting and governance functions at Pancontinental. Mrs Petrovic was
appointed Company Secretary in April 2010.
DIRECTORS' INTERESTS
The relevant interest of each Director in the shares and options of the Company as at 30 June 2015 is as follows:
Ordinary Shares
Ordinary Shares
Options over
141,351,602
36,835,610
400,715
14,583
500,000
1,000,000
750,000
500,000
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
Notes
The Directors discussed and agreed various matters throughout the financial year which were resolved by circular
resolution; 7 matters were dealt with in such a manner during the year.
Directors'
Meetings
4
4
4
4
0
14
2
3
Directors’ Report
COMPANY SECRETARY
Vesna Petrovic, BComm, CPA
Mrs Petrovic is an Accountant who holds a Bachelor of Commerce, Major in Accounting and Business Law and has
completed the Graduate Diploma in Applied Corporate Governance from the Governance Institute of Australia.
Public listed company involvement, particularly those involved in the African continent, have provided Mrs Petrovic
a base from which to contribute to the accounting and governance functions at Pancontinental. Mrs Petrovic was
appointed Company Secretary in April 2010.
DIRECTORS' INTERESTS
The relevant interest of each Director in the shares and options of the Company as at 30 June 2015 is as follows:
Mr Kennedy is a Geologist with an extensive history in the Australian and New Zealand oil and gas industries. As
Technical Director, Mr Kennedy led the establishment and development of a number of successful companies who
were involved in numerous discoveries in Western Australia and New Zealand. Mr Kennedy has been a Director
of Pancontinental since August 1999, with the Company benefiting from Mr Kennedy’s broad knowledge base
through ongoing support in achieving the Company’s strategic goals.
Henry David Kennedy
Roy Barry Rushworth
Ernest Anthony Myers
Anthony Robert Frederick Maslin
Mr Kennedy is currently a Non-Executive Director of Norwest Energy NL (since April 1997) and was an East Africa
Resources Limited Non-Executive Director (since March 2013) but resigned from the position in April 2015.
DIRECTORS' MEETINGS
Ordinary Shares
Options over
Ordinary Shares
141,351,602
36,835,610
400,715
14,583
500,000
1,000,000
750,000
500,000
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
4
4
4
4
0
Notes
The Directors discussed and agreed various matters throughout the financial year which were resolved by circular
resolution; 7 matters were dealt with in such a manner during the year.
Directors’ Report
Your Directors submit their report for the year ended 30 June 2015.
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)
Roy Barry Rushworth, BSc (Executive Director, Chief Executive Officer)
Mr Rushworth is a Geologist with vast experience in petroleum exploration. Commencing with positions in
exploration operations, Mr Rushworth then accepted the role as Chief Geologist and Exploration Manager for an
Australian listed company. The Company discovered a number of oil and gas finds during Mr Rushworth’s
leadership.
More recently for Pancontinental, Mr Rushworth has been responsible for identifying, negotiating and acquiring
international new venture opportunities in Kenya, Namibia and elsewhere in Europe and Africa. In addition, he
has a track record of working closely with international government bodies and attracting blue chip joint venture
partners to Pancontinental’s projects. Mr Rushworth has been a Director of Pancontinental since August 2005 and
Chief Executive Officer since November 2008.
Ernest Anthony Myers CPA (Executive Finance Director)
Mr Myers, an Accountant by profession, experienced many years in ASX listed companies from positions in senior
management and executive capacities to board participation roles. During his career he has been instrumental in
the capital raisings and financial management of these companies. With skills and knowledge gained from vast
experiences in corporate, exploration and operational areas, Mr Myers has played a key role in maintaining the
Company’s financial stability. Mr Myers joined Pancontinental in March 2004 as Company Secretary and was
appointed Finance Director in January 2009.
Mr Myers has been an alternate Director of East Africa Resources Limited since June 2010, although he resigned
from the position during the financial year (April 2015).
Anthony Robert Frederick Maslin BBus (Independent Non-Executive Director)
Mr Maslin is an ex-Stockbroker with a broad knowledge base of financial markets. Prior experience has included
capital raising and the promotion of several development companies as well as consulting to a number of ASX
listed companies on corporate matters. Mr Maslin has had the responsibility of managing people as well as projects
which has provided him with an understanding of the exploration industry in addition to his corporate background.
Mr Maslin has been a Director of Pancontinental since December 2010.
Mr Maslin is also a Non-Executive Director of Buxton Resources Ltd (Executive and Non-Executive roles since
November 2010).
2
3
15
Directors’ Report
CORPORATE INFORMATION
Corporate structure
Pancontinental Oil & Gas NL is a no liability company incorporated and domiciled in Australia. The Company’s ACN
is 003 029 543.
Nature of operations and principal activities
The principal activity during the year of entities within the consolidated entity was exploration for oil and gas.
Directors’ Report
OPERATING AND FINANCIAL REVIEW
Review of Operations
Kenya L6 [40% offshore, 16% onshore]
There have been no significant changes in the nature of those activities during the year.
Kenya L10A [18.75%] & Kenya L10B [25%]
Objectives
Objectives of the group include:
Continued exploration on the company’s current portfolio of permits;
Seek new ventures suitable for inclusion in the group’s asset structure;
Manage risks involved in the exploration industry; and
Maintain liquidity.
The group’s targets and strategies for meeting the above objectives include:
Approve work programmes best suited for exploration success which are within the Company’s financial
capacity;
Consider strategic alliances through joint ventures to minimise risks to the group;
Review appropriate fundraising proposals.
Focus on cost cutting in all non-essential areas; and
Operator so far.
Group Overview
Cents
Dynamics of the Business
Earnings (loss) per share
Basic earnings (loss) per share
Diluted earnings (loss) per share
The main contributing factor to the Earnings per Share result this financial year was the write off of exploration
licences Kenya L10A, Kenya L10B and the Company’s former non-core Australian assets.
(3.64)
(3.64)
Employees
The consolidated entity had five employees as at 30 June 2015, (2014: no employees). Pancontinental
previously employed the services of a management company for its administration and accounting services
whereas during the 2015 financial year, individuals were employed in place of the management services
company. In addition, the consolidated entity employs the services of specialised consultants where and when
needed.
Under the farmout secured with Milio International in recent years, Pancontinental is to be fully carried with no
cap for; 2D seismic, interpretation, mapping and an onshore well. The work programme would satisfy the work
commitments on the permit. Although a number of delays have been experienced, Operator Milio International is
continuing with planning for the seismic acquisition proposed as part of the farmout agreement.
Due to current market conditions, the Company conducted internal evaluation of its exploration portfolio and as
a result withdrew from the L10A and L10B blocks during the year. The Company is still of the belief that the area
is prospective and is looking forward to the planned exploration programme in its Kenya L6 area.
Namibia EL 0037 [30%]
Pancontinental was successful in securing Tullow Oil as a joint venture partner in its EL 0037 licence, Namibia,
with a planned exploration programme worth in excess of US$100 million. Seismic operations to date worth over
US $30 million have been carried out with no cost to Pancontinental. The initial exploration programme has
revealed four main prospects which will be further analysed before a drilling site can be chosen. The forward
exploration programme is also free carried, with the Company encouraged by the results received from the
Pancontinental Oil and Gas NL was incorporated in 1985 and listed on the Australian Securities Exchange in 1986.
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.
Performance Indicators
as well as the company’s share price.
The Board closely monitors and discusses the group’s operating plans, financial budget and overall performance
The underlying drivers which contribute to the company’s performance and can be managed internally include a
disciplined approach to reducing the group’s non-essential costs and allocating funds to those areas which will
add shareholder value. The company’s share price is often influenced by factors outside the control of
Management and the Board, such as market conditions; however through effective communication between the
company and all of its Stakeholders the company can provide assurance that there are regular reviews in place
to determine actions which should be implemented to mitigate risk and increase performance.
Operating Results for the Year
Summarised operating results are as follows:
2015
Revenues
Results
$
$
328,058
(41,878,638)
328,058
(41,878,638)
Non-segment and unallocated revenues and results
Consolidated entity revenues and results from
ordinary activities before income tax expense
The main contributing factor to the Earnings per Share result this financial year was the write off of exploration
licences Kenya L10A, Kenya L10B and the Company’s former non-core Australian assets.
Shareholder Returns
growth.
The group is in the exploration phase and so returns to Shareholders are primarily measured through capital
Basic earnings per share (cents)
2015
2014
2013
2012
2011
2010
(3.64)
(1.66)
(0.06)
(0.23)
(0.16)
(0.32)
16
4
5
Directors’ Report
CORPORATE INFORMATION
Corporate structure
is 003 029 543.
Pancontinental Oil & Gas NL is a no liability company incorporated and domiciled in Australia. The Company’s ACN
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.
Objectives
Objectives of the group include:
Continued exploration on the company’s current portfolio of permits;
Seek new ventures suitable for inclusion in the group’s asset structure;
Manage risks involved in the exploration industry; and
Maintain liquidity.
The group’s targets and strategies for meeting the above objectives include:
Approve work programmes best suited for exploration success which are within the Company’s financial
capacity;
Consider strategic alliances through joint ventures to minimise risks to the group;
Focus on cost cutting in all non-essential areas; and
Review appropriate fundraising proposals.
Earnings (loss) per share
Basic earnings (loss) per share
Diluted earnings (loss) per share
The main contributing factor to the Earnings per Share result this financial year was the write off of exploration
licences Kenya L10A, Kenya L10B and the Company’s former non-core Australian assets.
Employees
needed.
The consolidated entity had five employees as at 30 June 2015, (2014: no employees). Pancontinental
previously employed the services of a management company for its administration and accounting services
whereas during the 2015 financial year, individuals were employed in place of the management services
company. In addition, the consolidated entity employs the services of specialised consultants where and when
Cents
(3.64)
(3.64)
Directors’ Report
OPERATING AND FINANCIAL REVIEW
Review of Operations
Kenya L6 [40% offshore, 16% onshore]
Under the farmout secured with Milio International in recent years, Pancontinental is to be fully carried with no
cap for; 2D seismic, interpretation, mapping and an onshore well. The work programme would satisfy the work
commitments on the permit. Although a number of delays have been experienced, Operator Milio International is
continuing with planning for the seismic acquisition proposed as part of the farmout agreement.
Kenya L10A [18.75%] & Kenya L10B [25%]
Due to current market conditions, the Company conducted internal evaluation of its exploration portfolio and as
a result withdrew from the L10A and L10B blocks during the year. The Company is still of the belief that the area
is prospective and is looking forward to the planned exploration programme in its Kenya L6 area.
Namibia EL 0037 [30%]
Pancontinental was successful in securing Tullow Oil as a joint venture partner in its EL 0037 licence, Namibia,
with a planned exploration programme worth in excess of US$100 million. Seismic operations to date worth over
US $30 million have been carried out with no cost to Pancontinental. The initial exploration programme has
revealed four main prospects which will be further analysed before a drilling site can be chosen. The forward
exploration programme is also free carried, with the Company encouraged by the results received from the
Operator so far.
Group Overview
Pancontinental Oil and Gas NL was incorporated in 1985 and listed on the Australian Securities Exchange in 1986.
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.
Performance Indicators
The Board closely monitors and discusses the group’s operating plans, financial budget and overall performance
as well as the company’s share price.
The underlying drivers which contribute to the company’s performance and can be managed internally include a
disciplined approach to reducing the group’s non-essential costs and allocating funds to those areas which will
add shareholder value. The company’s share price is often influenced by factors outside the control of
Management and the Board, such as market conditions; however through effective communication between the
company and all of its Stakeholders the company can provide assurance that there are regular reviews in place
to determine actions which should be implemented to mitigate risk and increase performance.
Operating Results for the Year
Summarised operating results are as follows:
2015
Revenues
$
Results
$
Non-segment and unallocated revenues and results
Consolidated entity revenues and results from
ordinary activities before income tax expense
The main contributing factor to the Earnings per Share result this financial year was the write off of exploration
licences Kenya L10A, Kenya L10B and the Company’s former non-core Australian assets.
(41,878,638)
(41,878,638)
328,058
328,058
Shareholder Returns
The group is in the exploration phase and so returns to Shareholders are primarily measured through capital
growth.
Basic earnings per share (cents)
2015
2014
2013
2012
2011
2010
(3.64)
(1.66)
(0.06)
(0.23)
(0.16)
(0.32)
4
5
17
Directors’ Report
Risk Management
Risk management is the process by which an organisation identifies, analyses, responds, gathers information
about and monitors strategic risks that could actually or potentially impact the organisation’s ability to achieve
its mission and objectives. The Board and Management assess risk as part of the ordinary course of business
activities such as strategic planning, promotion, budgets, mergers and acquisitions, strategic partnerships,
legislative changes and conducting business abroad.
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:
•
•
•
•
Implementation of operating plans and cash flow budgets by Management and Board monitoring of progress
against these budgets.
Ongoing analysis of business risks specific to the exploration industry.
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.
The risk assessment process takes into account the following steps:
•
•
•
•
•
Condition – What is the particular problem that has been identified?;
Criteria – What is the standard that was not met? This may be an internal benchmark or industry standard;
Cause – Why did the problem occur?;
Consequence – What is the risk, negative outcome or opportunity foregone due to the finding?; and
Corrective action – What should Management and the Board do to correct the finding and implement
procedures for the continued monitoring of the risk?.
The continued monitoring of risk within the group is directed at evaluating:
•
•
•
The effectiveness and efficiency of operations;
The reliability of financial and management internal processes and reporting; and
Compliance with laws and regulations
to enable that the group to safeguard its assets.
18
6
Directors’ Report
Review of Financial Condition
Capital Structure
activities.
Share Capital
Beginning of the financial year
Issued during the year:
End of the financial year
Option Reserve
Balance at beginning of year
expired
Balance at end of year
Treasury policy
of the group's activities.
Liquidity and Funding
progress operations into the future.
Statement of Compliance
of Operations and Financial Condition.
SHARE OPTIONS
Unissued shares
further details on the options outstanding.
During the year, 2,250,000 options expired.
The group has a sound capital structure from which to continue its development programmes. During the year,
the company maintained sufficient cash reserves and as such there was no requirement for any fundraising
All options currently on issue were granted in previous financial years. No options have been granted since the
end of the previous financial year.
2,250,000 options of the company expired during the year:
Number of
shares
$
1,150,994,096 99,411,998
-
-
1,150,994,096 99,411,998
Number
of
Weighted
average
options
exercise price
5,000,000
(2,250,000)
0.12
0.13
2,750,000
0.12
The Board has not considered it necessary to establish a separate treasury function because of the size and scope
The Company conducted its last significant fundraising in 2012. Since then, the Group has maintained adequate
cash reserves to fund ongoing operations including paying its own way through a drilling programme. Going
forward the Board recognises that there will be a need for the Company to review fundraising options in order to
The above report is based on the guidelines in The Group of 100 Incorporated publication Guide to the Review
At the date of this report there were 2,750,000 unissued ordinary shares under options. Refer to the notes for
Shares issued as a result of the exercise of Options
There were no shares issued as a result of the exercise of options during the financial year.
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
There were no significant events after balance date.
Directors’ Report
Risk Management
Risk management is the process by which an organisation identifies, analyses, responds, gathers information
about and monitors strategic risks that could actually or potentially impact the organisation’s ability to achieve
its mission and objectives. The Board and Management assess risk as part of the ordinary course of business
activities such as strategic planning, promotion, budgets, mergers and acquisitions, strategic partnerships,
legislative changes and conducting business abroad.
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:
Implementation of operating plans and cash flow budgets by Management and Board monitoring of progress
against these budgets.
Ongoing analysis of business risks specific to the exploration industry.
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.
The risk assessment process takes into account the following steps:
Condition – What is the particular problem that has been identified?;
Criteria – What is the standard that was not met? This may be an internal benchmark or industry standard;
Cause – Why did the problem occur?;
Consequence – What is the risk, negative outcome or opportunity foregone due to the finding?; and
Corrective action – What should Management and the Board do to correct the finding and implement
procedures for the continued monitoring of the risk?.
The continued monitoring of risk within the group is directed at evaluating:
The effectiveness and efficiency of operations;
The reliability of financial and management internal processes and reporting; and
Compliance with laws and regulations
to enable that the group to safeguard its assets.
•
•
•
•
•
•
•
•
•
•
•
•
Directors’ Report
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 maintained sufficient cash reserves and as such there was no requirement for any fundraising
activities.
Share Capital
Beginning of the financial year
Issued during the year:
End of the financial year
Number of
shares
$
1,150,994,096 99,411,998
-
-
1,150,994,096 99,411,998
All options currently on issue were granted in previous financial years. No options have been granted since the
end of the previous financial year.
2,250,000 options of the company expired during the year:
Option Reserve
Balance at beginning of year
expired
Balance at end of year
Number
of
options
5,000,000
(2,250,000)
Weighted
average
exercise price
0.12
0.13
2,750,000
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
The Company conducted its last significant fundraising in 2012. Since then, the Group has maintained adequate
cash reserves to fund ongoing operations including paying its own way through a drilling programme. Going
forward the Board recognises that there will be a need for the Company to review fundraising options in order to
progress operations into the future.
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.
SHARE OPTIONS
Unissued shares
At the date of this report there were 2,750,000 unissued ordinary shares under options. Refer to the notes for
further details on the options outstanding.
During the year, 2,250,000 options expired.
Shares issued as a result of the exercise of Options
There were no shares issued as a result of the exercise of options during the financial year.
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
There were no significant events after balance date.
6
19
Directors’ Report
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
Pancontinental is committed to complying with any requirement for environmental management in any
jurisdiction and country that it operates.
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:
Directors’ Report
REMUNERATION REPORT (Audited)
& Gas NL (“the company”).
Remuneration philosophy
HD Kennedy, RB Rushworth, EA Myers, ARF Maslin and V Petrovic.
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.
This report outlines the remuneration arrangements in place for Directors and Executives of Pancontinental Oil
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
remuneration is separate and distinct.
Non-Executive Director remuneration
In accordance with best practice corporate governance, the structure of Non-Executive and Executive
Objective
Structure
Objective
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 2015 is detailed in Table 1 of this report.
Senior Management and Executive Director remuneration
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.
In determining the level and make up of Executive remuneration, the Board may take independent advice from
external sources when necessary. Details of the CEO’s contract are as follows:
Basic Sum:
Capacity:
$750,000 (actual payments reduced to $375,000)
Chief Executive Officer
Commencement
1 July 2012
Termination Period: 6-12 months
The Board regularly reviews compensation levels to take into account market-related factors such as cost of
living changes, any change to the scope of the role performed and any other relevant factors of influence. As
such Executive Director remuneration was reduced by $435,000pa during the year.
Fixed remuneration
Objective
and is competitive in the market.
Structure
the company.
The level of fixed Directors’ fees is set so as to provide a base level which is both appropriate to the position
Fixed primary remuneration is paid on a cash basis and there are no fringe benefits or other costs incurred by
20
8
9
Directors’ Report
Directors’ Report
REMUNERATION REPORT (Audited)
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
Pancontinental is committed to complying with any requirement for environmental management in any
jurisdiction and country that it operates.
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.
This report outlines the remuneration arrangements in place for Directors and Executives of Pancontinental Oil
& Gas NL (“the company”).
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 2015 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 may take independent advice from
external sources when necessary. Details of the CEO’s contract are as follows:
Basic Sum:
Capacity:
Commencement
Termination Period: 6-12 months
$750,000 (actual payments reduced to $375,000)
Chief Executive Officer
1 July 2012
The Board regularly reviews compensation levels to take into account market-related factors such as cost of
living changes, any change to the scope of the role performed and any other relevant factors of influence. As
such Executive Director remuneration was reduced by $435,000pa during the year.
Fixed remuneration
Objective
The level of fixed Directors’ 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.
8
9
21
Directors’ Report
Directors’ Report
Table 1: Director remuneration for the year ended 30 June 2015
Primary benefits
Post
Employment
Equity
Total
Salary &
Fees
Cash STI
Super-
annuation
Options
(Issued)
Value of
options as
proportion
of Revenue
Henry David Kennedy
(Non-Executive Chairman)
2015
2014
Roy Barry Rushworth
(Executive Director,
Chief Executive Officer)
2015
2014
Ernest Anthony Myers1
(Executive Finance Director)
2015
2014
50,000
50,000
643,750
750,000
245,000
48,000
Anthony Robert Frederick Maslin
(Non-Executive Director)
2015
2014
Total Current Year
Remuneration
48,000
48,000
986,750
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
50,000
50,000
0.0%
0.0%
643,750
750,000
0.0%
0.0%
245,000
48,000
0.0%
0.0%
48,000
48,000
0.0%
0.0%
986,750
-
Note 1 – During the 2014 financial year, Mr Myers held a 50% interest in a consulting company which provided
staff, accounting and administrative services to listed companies, including Pancontinental. Mr Myers was paid a
salary from that company. The same company also paid the staff who provided company secretarial, accounting
and administrative services to Pancontinental. In the 2015 financial year, the contract for services came to an
end and Pancontinental sought the employment of individuals to fulfil the roles previously carried out by the
consulting company.
Table 2: Options granted as part of remuneration for the year ended 30 June 2015
(as approved by Shareholders)
There were no options granted as part of remuneration for the year ended 30 June 2015 (30 June 2014: Nil).
Over the past five years 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.
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
2015
2014
2013
2012
2011
2010
-
-
-
-
-
-
110%
2.74%
4 years
120%
3.57%
3 years
-
-
-
-
-
-
Total number of options:
Number of options
Grant date
Vesting date
Weighted average fair
value
2,750,000
30 Nov 12
30 Nov 12
0.06
Company Performance
Company performance can be 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’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 quality projects and has also built strategic alliances with
other companies to further develop its project portfolio.
Consequences of Performance on Shareholder Wealth
Return on Equity
Share price at 30 June
Average equity
Net Profit /(Loss)
2015
$0.006
2014
$0.023
2013
$0.050
2012
$0.175
2011
$0.110
34,563,322
65,037,139
72,686,103
43,124,939
13,566,697
(41,878,638)
(19,068,997)
(662,822)
(1,805,773)
(967,031)
Return on Equity in %
(121.16)%
(29.32)%
(0.91)%
(4.19)%
(7.13)%
END OF REMUNERATION REPORT
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.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor independence declaration is set out on the following page and reviews part of the Directors’ Report
for the year ended 30 June 2015.
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 30 September 2015
22
10
11
Directors’ Report
Directors’ Report
Table 1: Director remuneration for the year ended 30 June 2015
Primary benefits
Employment
Equity
Total
Salary &
Cash STI
Super-
annuation
Options
(Issued)
Fees
Value of
options as
proportion
of Revenue
Post
Henry David Kennedy
(Non-Executive Chairman)
Roy Barry Rushworth
(Executive Director,
Chief Executive Officer)
Ernest Anthony Myers1
(Executive Finance Director)
2015
2014
2015
2014
2015
2014
2015
2014
Anthony Robert Frederick Maslin
(Non-Executive Director)
50,000
50,000
643,750
750,000
245,000
48,000
48,000
48,000
986,750
Total Current Year
Remuneration
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
50,000
50,000
0.0%
0.0%
643,750
750,000
0.0%
0.0%
245,000
48,000
0.0%
0.0%
48,000
48,000
0.0%
0.0%
986,750
-
Note 1 – During the 2014 financial year, Mr Myers held a 50% interest in a consulting company which provided
staff, accounting and administrative services to listed companies, including Pancontinental. Mr Myers was paid a
salary from that company. The same company also paid the staff who provided company secretarial, accounting
and administrative services to Pancontinental. In the 2015 financial year, the contract for services came to an
end and Pancontinental sought the employment of individuals to fulfil the roles previously carried out by the
consulting company.
Table 2: Options granted as part of remuneration for the year ended 30 June 2015
(as approved by Shareholders)
There were no options granted as part of remuneration for the year ended 30 June 2015 (30 June 2014: Nil).
table for further details.
Fair values of options:
Expected volatility
Risk-free interest rate
Expected life of option
Total number of options:
The fair value of each option is estimated on the date of grant using an appropriate option pricing model.
2015
2014
2013
2012
2011
2010
-
-
-
-
-
-
110%
120%
2.74%
3.57%
4 years
3 years
-
-
-
-
-
-
Number of options
Grant date
Vesting date
Weighted average fair
2,750,000
30 Nov 12
30 Nov 12
value
0.06
10
Company Performance
Company performance can be 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’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 quality projects and has also built strategic alliances with
other companies to further develop its project portfolio.
Consequences of Performance on Shareholder Wealth
Return on Equity
Share price at 30 June
Average equity
Net Profit /(Loss)
Return on Equity in %
2015
$0.006
34,563,322
(41,878,638)
(121.16)%
2014
$0.023
65,037,139
(19,068,997)
(29.32)%
2013
$0.050
72,686,103
(662,822)
(0.91)%
2012
$0.175
43,124,939
(1,805,773)
(4.19)%
2011
$0.110
13,566,697
(967,031)
(7.13)%
END OF REMUNERATION REPORT
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.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor independence declaration is set out on the following page and reviews part of the Directors’ Report
for the year ended 30 June 2015.
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.
Over the past five years 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
Ernest Anthony Myers
Director
Perth 30 September 2015
23
11
Corporate Governance Statement
The Company’s 2015 Corporate Governance Statement is presented below and can also be accessed at
http://pancon.com.au/about-us/corporate-governance/. The Statement has been approved by the Board of
Pancontinental Oil & Gas NL and is current as at 30 September 2015.
Pancontinental’s Corporate Governance Statement outlines the Company’s governance practices throughout
the financial year and the extent of the Company’s compliance, as at 30 June 2015 with the ASX Corporate
Governance Council’s third edition of Corporate Governance Principles and Recommendations.
The Company will regularly review its current practices to ensure they evolve with good practice methods
recommended by regulatory bodies while taking into account factors such as the size, nature and activities of
the Company.
Corporate Governance Council Recommendation followed by Pancontinental Oil & Gas NL
Corporate Governance Comments
PRINCIPLE 1 – LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
1.1 A listed entity should disclose:
(a) the respective roles and responsibilities of its board and management; and
(b) those matters expressly reserved to the board and those delegated to management.
Adopted - Pancontinental has adopted a Board Charter which can be found on the Company’s
website at http://pancon.com.au/about-us/corporate-governance/ The Charter outlines the roles
and responsibilities of Board and Management including the responsibilities for not only the Board
as a whole but also the Chairman, Chief Executive Officer and Non-Executive / Independent
Directors.
The Charter contains a list of responsibilities for the Board which cannot be directly delegated to
Senior Management, however day-to-day activities required to fulfil those responsibilities may be
assigned to Senior Management.
1.2 A listed entity should:
(a) undertake appropriate checks before appointing a person, or putting forward to security
holders a candidate for election, as a director; and
(b) provide security holders with all material information in its possession relevant to a decision
on whether or not to elect or re-elect a director.
Adopted – The Company’s Nomination Committee Charter which has been disclosed on the
Pancontinental website http://pancon.com.au/about-us/corporate-governance/ outlines the role
of the Nomination Committee including the oversight of the Company’s selection and appointment
practices for Directors.
As part of its Corporate Governance Manual the Company has also adopted a Policy and Procedure
for
Selection
and
(Re)Appointment
of Directors which
can
be
found
at
http://pancon.com.au/about-us/corporate-governance/ The Policy and Procedure outlines the
process for the evaluation and appointment of new Board members, as well as listing information
that is required to be provided to Shareholders so that they may make an informed decision
regarding the election of a proposed candidate.
The Nomination Committee Charter empowers the Directors to engage external consultants such
as Employment Screening Australia who are a CrimTrac accredited information agent that adheres
to the Australian Standard AS 4811-2006 Employment Screening.
1.3 A listed entity should have a written agreement with each director and senior executive setting
out the terms of their appointment.
Adopted – Each Director is in possession of a written agreement setting out the terms of their
appointment including their right to independent professional advice if required to fulfil their
capacity as Director.
Material terms of any employment, service or consultancy agreement are disclosed.
1.4 The company secretary of a listed entity should be accountable directly to the board, through the
chair, on all matters to do with the proper functioning of the board.
Adopted – The Company Secretary is accountable to the Board through the Chairman on matters
relating to the proper functioning of the Board.
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24
Corporate Governance Statement
The Company’s 2015 Corporate Governance Statement is presented below and can also be accessed at
http://pancon.com.au/about-us/corporate-governance/. The Statement has been approved by the Board of
Pancontinental Oil & Gas NL and is current as at 30 September 2015.
Pancontinental’s Corporate Governance Statement outlines the Company’s governance practices throughout
the financial year and the extent of the Company’s compliance, as at 30 June 2015 with the ASX Corporate
Governance Council’s third edition of Corporate Governance Principles and Recommendations.
The Company will regularly review its current practices to ensure they evolve with good practice methods
recommended by regulatory bodies while taking into account factors such as the size, nature and activities of
the Company.
Corporate Governance Council Recommendation followed by Pancontinental Oil & Gas NL
Corporate Governance Comments
PRINCIPLE 1 – LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
1.1 A listed entity should disclose:
(a) the respective roles and responsibilities of its board and management; and
(b) those matters expressly reserved to the board and those delegated to management.
Adopted - Pancontinental has adopted a Board Charter which can be found on the Company’s
website at http://pancon.com.au/about-us/corporate-governance/ The Charter outlines the roles
and responsibilities of Board and Management including the responsibilities for not only the Board
as a whole but also the Chairman, Chief Executive Officer and Non-Executive / Independent
Directors.
The Charter contains a list of responsibilities for the Board which cannot be directly delegated to
Senior Management, however day-to-day activities required to fulfil those responsibilities may be
assigned to Senior Management.
1.2 A listed entity should:
(a) undertake appropriate checks before appointing a person, or putting forward to security
holders a candidate for election, as a director; and
(b) provide security holders with all material information in its possession relevant to a decision
on whether or not to elect or re-elect a director.
Adopted – The Company’s Nomination Committee Charter which has been disclosed on the
Pancontinental website http://pancon.com.au/about-us/corporate-governance/ outlines the role
of the Nomination Committee including the oversight of the Company’s selection and appointment
practices for Directors.
and
Selection
As part of its Corporate Governance Manual the Company has also adopted a Policy and Procedure
at
for
http://pancon.com.au/about-us/corporate-governance/ The Policy and Procedure outlines the
process for the evaluation and appointment of new Board members, as well as listing information
that is required to be provided to Shareholders so that they may make an informed decision
regarding the election of a proposed candidate.
of Directors which
(Re)Appointment
found
can
be
The Nomination Committee Charter empowers the Directors to engage external consultants such
as Employment Screening Australia who are a CrimTrac accredited information agent that adheres
to the Australian Standard AS 4811-2006 Employment Screening.
1.3 A listed entity should have a written agreement with each director and senior executive setting
out the terms of their appointment.
Adopted – Each Director is in possession of a written agreement setting out the terms of their
appointment including their right to independent professional advice if required to fulfil their
capacity as Director.
Material terms of any employment, service or consultancy agreement are disclosed.
1.4 The company secretary of a listed entity should be accountable directly to the board, through the
chair, on all matters to do with the proper functioning of the board.
Adopted – The Company Secretary is accountable to the Board through the Chairman on matters
relating to the proper functioning of the Board.
25
13
Corporate Governance Statement
Corporate Governance Statement
The Company Secretary completes and circulates board papers, records minutes of the business
discussed at Board Meetings and communicates with the Board on: governance matters,
application of the Company’s Constitution, the ASX Listing Rules and other relevant laws. They are
a point of reference between the Board and Management.
1.5 A listed entity should:
(a) have a diversity policy which includes requirements for the board or a relevant committee of
the board to set measurable objectives for achieving gender diversity and to assess annually
both the objectives and the entity’s progress in achieving them;
(b) disclose that policy or a summary of it; and
(c) disclose as at the end of each reporting period the measurable objectives for achieving gender
diversity set by the board or a relevant committee of the board in accordance with the entity’s
diversity policy and its progress towards achieving them and either:
1. the respective proportions of men and women on the board, in senior executive positions
and across the whole organisation (including how the entity has defined “senior executive”
for these purposes); or
2.
if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s
most recent “Gender Equality Indicators”, as defined in and published under that Act.
Adopted – Pancontinental has formally adopted a Diversity Policy which can be found at
http://pancon.com.au/about-us/corporate-governance/
Diversity – 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 practical given the size and scope of the Company’s operations.
In considering new member appointments, the Board evaluates the candidate’s ability to actively
participate in Board matters by exercising sensible business judgement and committing the time
required to fulfil the role effectively so that the Company can move towards achieving its strategic
goals.
Diversity – Measurable Objectives
The main objectives with regard to diversity include:
•
•
•
The Company’s composition of Board, Executive, Management and Employees to be as
diverse as practicable;
To provide equal opportunities for all positions within the Group and continue the Group’s
commitment to employment based on merit;
Periodic review of the Group’s workforce structure and assessment of where and how
improvements can be implemented incorporating greater diversity.
The above objectives set by the Company with regard to diversity have been met, as described
below:
• Blend of skills – wide range of backgrounds; geology, petroleum exploration, finance and
corporate experience;
• Cultural backgrounds – Australian, American, English and European;
• Gender – both male and female; and
• Age – the age range spans over 40 years.
Diversity – Annual Reporting
Board & Company Secretary
Employees
Total Workforce
2015
20%
67%
37%
2014
20%
N/A [no employees]
20%
The Australian Government’s Workplace Gender Equality Agency periodically releases statistics
with regard to the gender composition of the Australian workforce by industry. With reference to
the latest publication in April 2015, Pancontinental far exceeds the industry average of 16.1% of
women.
26
1.6 A listed entity should:
a) have and disclose a process for periodically evaluating the performance of the board, its
committees and individual directors; and
b) disclose, in relation to each reporting period, whether a performance evaluation was
undertaken in the reporting period in accordance with that process.
Adopted – The Company’s website includes a policy with regard to the Process for Performance
Evaluation which can be found at http://pancon.com.au/about-us/corporate-governance/
During the reporting period a formal evaluation of the Board and its members was not carried out
however the composition of the Board, its suitability to carry out the Company’s objectives and
remuneration levels are reviewed on an as required basis. For example, during the financial year
market conditions dictated the oil and gas environment prompting companies to review
expenditures in order to preserve cash balances. As such, Pancontinental reduced Executive
Director salaries by $435,000 per annum to adapt to market circumstances. Although the
instability in the oil and gas industry is not attributable to the Directors it does show the willingness
of the Board to put requisite measures in place when industry settings change.
1.7 A listed entity should:
executives; and
a) have and disclose a process for periodically evaluating the performance of its senior
b) disclose, in relation to each reporting period, whether a performance evaluation was
undertaken in the reporting period in accordance with that process.
Adopted – The Company’s website includes a policy with regard to the process for performance
evaluation which can be found at http://pancon.com.au/about-us/corporate-governance/
With regard to the current financial reporting period, a formal evaluation of the performance of
Senior Executives was not carried out as the suitability and size of the Company’s workforce is
reviewed by the Board on an as required basis.
14
15
Corporate Governance Statement
Corporate Governance Statement
1.6 A listed entity should:
a) have and disclose a process for periodically evaluating the performance of the board, its
committees and individual directors; and
b) disclose, in relation to each reporting period, whether a performance evaluation was
undertaken in the reporting period in accordance with that process.
Adopted – The Company’s website includes a policy with regard to the Process for Performance
Evaluation which can be found at http://pancon.com.au/about-us/corporate-governance/
During the reporting period a formal evaluation of the Board and its members was not carried out
however the composition of the Board, its suitability to carry out the Company’s objectives and
remuneration levels are reviewed on an as required basis. For example, during the financial year
market conditions dictated the oil and gas environment prompting companies to review
expenditures in order to preserve cash balances. As such, Pancontinental reduced Executive
Director salaries by $435,000 per annum to adapt to market circumstances. Although the
instability in the oil and gas industry is not attributable to the Directors it does show the willingness
of the Board to put requisite measures in place when industry settings change.
1.7 A listed entity should:
a) have and disclose a process for periodically evaluating the performance of its senior
Adopted – Pancontinental has formally adopted a Diversity Policy which can be found at
executives; and
b) disclose, in relation to each reporting period, whether a performance evaluation was
undertaken in the reporting period in accordance with that process.
Adopted – The Company’s website includes a policy with regard to the process for performance
evaluation which can be found at http://pancon.com.au/about-us/corporate-governance/
With regard to the current financial reporting period, a formal evaluation of the performance of
Senior Executives was not carried out as the suitability and size of the Company’s workforce is
reviewed by the Board on an as required basis.
The Company Secretary completes and circulates board papers, records minutes of the business
discussed at Board Meetings and communicates with the Board on: governance matters,
application of the Company’s Constitution, the ASX Listing Rules and other relevant laws. They are
a point of reference between the Board and Management.
1.5 A listed entity should:
(a) have a diversity policy which includes requirements for the board or a relevant committee of
the board to set measurable objectives for achieving gender diversity and to assess annually
both the objectives and the entity’s progress in achieving them;
(b) disclose that policy or a summary of it; and
(c) disclose as at the end of each reporting period the measurable objectives for achieving gender
diversity set by the board or a relevant committee of the board in accordance with the entity’s
diversity policy and its progress towards achieving them and either:
1. the respective proportions of men and women on the board, in senior executive positions
and across the whole organisation (including how the entity has defined “senior executive”
for these purposes); or
2.
if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s
most recent “Gender Equality Indicators”, as defined in and published under that Act.
http://pancon.com.au/about-us/corporate-governance/
Diversity – 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 practical given the size and scope of the Company’s operations.
In considering new member appointments, the Board evaluates the candidate’s ability to actively
participate in Board matters by exercising sensible business judgement and committing the time
required to fulfil the role effectively so that the Company can move towards achieving its strategic
goals.
•
•
•
below:
Diversity – Measurable Objectives
The main objectives with regard to diversity include:
The Company’s composition of Board, Executive, Management and Employees to be as
diverse as practicable;
To provide equal opportunities for all positions within the Group and continue the Group’s
commitment to employment based on merit;
Periodic review of the Group’s workforce structure and assessment of where and how
improvements can be implemented incorporating greater diversity.
The above objectives set by the Company with regard to diversity have been met, as described
• Blend of skills – wide range of backgrounds; geology, petroleum exploration, finance and
corporate experience;
• Cultural backgrounds – Australian, American, English and European;
• Gender – both male and female; and
• Age – the age range spans over 40 years.
Diversity – Annual Reporting
Board & Company Secretary
Employees
Total Workforce
2015
20%
67%
37%
2014
20%
20%
N/A [no employees]
The Australian Government’s Workplace Gender Equality Agency periodically releases statistics
with regard to the gender composition of the Australian workforce by industry. With reference to
the latest publication in April 2015, Pancontinental far exceeds the industry average of 16.1% of
women.
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15
27
Corporate Governance Statement
Corporate Governance Statement
PRINCIPLE 2 - STRUCTURE THE BOARD TO ADD VALUE
2.1 The board of a listed entity should:
(a) have a nomination committee which:
(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director,
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee met throughout
the period and the individual attendances of the members at those meetings; or
(b) if it does not have a nomination committee, disclose that fact and the processes it employs
to address board succession issues and to ensure that the board has the appropriate balance
of skills, knowledge, experience, independence and diversity to enable it to discharge its
duties and responsibilities effectively.
Not Adopted – The full Board fulfils the role of the Nomination Committee.
The Board considers those matters that would ordinarily be the responsibility of a Nomination
Committee and no separate meetings were held as the Nomination Committee during the year.
The Board has adopted a Nomination Committee Charter which is disclosed on the Company’s
website at http://pancon.com.au/about-us/corporate-governance/ The Charter as well as the
Company’s Policy and Procedure
for Selection and (Re) Appointment of Directors
http://pancon.com.au/about-us/corporate-governance/ and Succession Plan Policy are applied
when convening to discuss Nomination Committee matters.
In assessing the Company’s diversity objectives, the composition of the Board is considered with
regard to blend of skills, experience, independence and diversity. The Directors consider that the
current Board has the appropriate balance to successfully carry out the duties required of them as
Officers of the Company.
2.2 A listed entity should have and disclose a board skills matrix setting out the mix of skills and
Company’s website.
diversity that the board currently has or is looking to achieve in its membership.
Adopted – The Board is seeking Directors who collectively have the skills, knowledge and
experience to govern and direct the Company effectively. The below table shows the key skills and
experience the Board as a whole possess.
Board Expertise
Board Experience
Commercial
Compliance
Corporate
Ethics
Exploration
Finance
Geology
Governance
Risk
Strategy
●
●
●
●
●
●
●
●
●
●
Capital Raisings
Company Promotion
Financial Management
Former Board Experience
International Business
Listed Company Management
Mergers & Acquisitions
Mineral Exploration
Mineral Production
Oil & Gas Exploration
●
●
●
●
●
●
●
●
●
●
Details of each of the Director’s qualifications are set out in the Directors’ Report. All of the
Directors have substantial industry experience and consider themselves to be financially literate.
Mr Myers, is a Certified Practicing Accountant and therefore meets the tests of financial expertise.
Pancontinental acknowledges that the skills, knowledge and experience required on the Board will
change as the Organisation evolves however under the current circumstances, the mix of expertise
and experience identified above is beneficial in meeting the current challenges faced by the Group.
2.3 A listed entity should disclose:
(a) the names of the directors considered by the board to be independent directors;
(b) if a director has an interest, position, association or relationship of the type described in
Box 2.3 but the board is of the opinion that it does not compromise the independence of the
director, the nature of the interest, position, association or relationship in question and an
explanation of why the board is of that opinion; and
(c) the length of service of each director.
Adopted – see table below.
Director
Position
Tenure
Independent
HD Kennedy
Non-Executive Chairman
16 years
No
-
Substantial
Shareholder
RB Rushworth Executive Director, Chief Executive
10 years
No - Executive Director
Officer
EA Myers
Executive Finance Director
6 years
No - Executive Director
ARF Maslin
Independent Non-Executive Director 4 years
Yes
In considering the independence of Directors, the Board refers to the criteria for independence as
set out in Box 2.3 of the ASX Corporate Governance Council’s third edition of Corporate
Governance Principles and Recommendations. 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 on the
Box 2.3’s independence criteria has been applied in the above table and although the only Director
considered to be independent is Mr Maslin, the Board believes its current composition is in line
with the long term interests of Shareholders. The Board also acknowledges the need for
independent judgement on all Board decisions, irrespective of each individual Director’s
independence and as such has implemented a Policy on Independent Professional Advice.
2.4 A majority of the board of a listed entity should be independent directors.
Not Adopted – Currently the only Director considered independent is Mr Maslin.
The Board acknowledges Recommendation 2.4 in that the majority of the Board of a listed entity
should be independent Directors, however the Board is of the belief that each area of expertise
required for a Company of Pancontinental’s size is well represented and that there are long term
benefits to be gained from the current combination of Directors’ skills, experience and expertise.
Although the Board of Directors are able to exercise objective business judgement, a Policy on
Independent Professional Advice has been implemented to assist if required. If a Director considers
it necessary to obtain professional advice to properly discharge the responsibility for their office
as a Director, then the Company will pay reasonable expenses associated with obtaining such
advice.
2.5 The chair of the board of a listed entity should be an independent director and, in particular,
should not be the same person as the CEO of the entity.
Not Adopted – As recommended, the Chairman and the CEO are not the same person, however
the Chairman of the Board is Mr Kennedy, who is not independent by virtue of this substantial
shareholding in the Company.
Leadership of the Board rests with the Chairman who oversees its operation ensuring that it is run
effectively. The Board believes Mr Kennedy’s interests are aligned with the long term interests of
Shareholders and given his extensive experience and qualifications, believes Mr Kennedy is the
most appropriate Director to carry out the role of the Chairman.
28
16
17
Corporate Governance Statement
Corporate Governance Statement
PRINCIPLE 2 - STRUCTURE THE BOARD TO ADD VALUE
2.1 The board of a listed entity should:
(a) have a nomination committee which:
(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director,
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee met throughout
the period and the individual attendances of the members at those meetings; or
(b) if it does not have a nomination committee, disclose that fact and the processes it employs
to address board succession issues and to ensure that the board has the appropriate balance
of skills, knowledge, experience, independence and diversity to enable it to discharge its
duties and responsibilities effectively.
Not Adopted – The full Board fulfils the role of the Nomination Committee.
The Board considers those matters that would ordinarily be the responsibility of a Nomination
Committee and no separate meetings were held as the Nomination Committee during the year.
The Board has adopted a Nomination Committee Charter which is disclosed on the Company’s
website at http://pancon.com.au/about-us/corporate-governance/ The Charter as well as the
Company’s Policy and Procedure
for Selection and (Re) Appointment of Directors
http://pancon.com.au/about-us/corporate-governance/ and Succession Plan Policy are applied
when convening to discuss Nomination Committee matters.
In assessing the Company’s diversity objectives, the composition of the Board is considered with
regard to blend of skills, experience, independence and diversity. The Directors consider that the
current Board has the appropriate balance to successfully carry out the duties required of them as
Officers of the Company.
2.2 A listed entity should have and disclose a board skills matrix setting out the mix of skills and
diversity that the board currently has or is looking to achieve in its membership.
Adopted – The Board is seeking Directors who collectively have the skills, knowledge and
experience to govern and direct the Company effectively. The below table shows the key skills and
experience the Board as a whole possess.
Commercial
Compliance
Corporate
Ethics
Exploration
Finance
Geology
Governance
Risk
Strategy
●
●
●
●
●
●
●
●
●
●
Capital Raisings
Company Promotion
Financial Management
Former Board Experience
International Business
Listed Company Management
Mergers & Acquisitions
Mineral Exploration
Mineral Production
Oil & Gas Exploration
●
●
●
●
●
●
●
●
●
●
Details of each of the Director’s qualifications are set out in the Directors’ Report. All of the
Directors have substantial industry experience and consider themselves to be financially literate.
Mr Myers, is a Certified Practicing Accountant and therefore meets the tests of financial expertise.
Pancontinental acknowledges that the skills, knowledge and experience required on the Board will
change as the Organisation evolves however under the current circumstances, the mix of expertise
and experience identified above is beneficial in meeting the current challenges faced by the Group.
2.3 A listed entity should disclose:
(a) the names of the directors considered by the board to be independent directors;
(b) if a director has an interest, position, association or relationship of the type described in
Box 2.3 but the board is of the opinion that it does not compromise the independence of the
director, the nature of the interest, position, association or relationship in question and an
explanation of why the board is of that opinion; and
(c) the length of service of each director.
Adopted – see table below.
Director
Position
Tenure
Independent
HD Kennedy
Non-Executive Chairman
16 years
No
Shareholder
-
Substantial
RB Rushworth Executive Director, Chief Executive
10 years
No - Executive Director
Officer
EA Myers
Executive Finance Director
6 years
No - Executive Director
ARF Maslin
Independent Non-Executive Director 4 years
Yes
In considering the independence of Directors, the Board refers to the criteria for independence as
set out in Box 2.3 of the ASX Corporate Governance Council’s third edition of Corporate
Governance Principles and Recommendations. 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 on the
Company’s website.
Box 2.3’s independence criteria has been applied in the above table and although the only Director
considered to be independent is Mr Maslin, the Board believes its current composition is in line
with the long term interests of Shareholders. The Board also acknowledges the need for
independent judgement on all Board decisions, irrespective of each individual Director’s
independence and as such has implemented a Policy on Independent Professional Advice.
Board Expertise
Board Experience
2.4 A majority of the board of a listed entity should be independent directors.
Not Adopted – Currently the only Director considered independent is Mr Maslin.
The Board acknowledges Recommendation 2.4 in that the majority of the Board of a listed entity
should be independent Directors, however the Board is of the belief that each area of expertise
required for a Company of Pancontinental’s size is well represented and that there are long term
benefits to be gained from the current combination of Directors’ skills, experience and expertise.
Although the Board of Directors are able to exercise objective business judgement, a Policy on
Independent Professional Advice has been implemented to assist if required. If a Director considers
it necessary to obtain professional advice to properly discharge the responsibility for their office
as a Director, then the Company will pay reasonable expenses associated with obtaining such
advice.
2.5 The chair of the board of a listed entity should be an independent director and, in particular,
should not be the same person as the CEO of the entity.
Not Adopted – As recommended, the Chairman and the CEO are not the same person, however
the Chairman of the Board is Mr Kennedy, who is not independent by virtue of this substantial
shareholding in the Company.
Leadership of the Board rests with the Chairman who oversees its operation ensuring that it is run
effectively. The Board believes Mr Kennedy’s interests are aligned with the long term interests of
Shareholders and given his extensive experience and qualifications, believes Mr Kennedy is the
most appropriate Director to carry out the role of the Chairman.
16
17
29
Corporate Governance Statement
Corporate Governance Statement
2.6 A listed entity should have a program for inducting new directors and provide appropriate
professional development opportunities for directors to develop and maintain the skills and
knowledge needed to perform their role as directors effectively.
Adopted – The Company has devised an Induction Programme for new Directors, Executives and
Employees.
The goal of the Induction Programme is to assist new Directors in participating fully and actively
in Board decision making at the earliest opportunity by providing them with the necessary
Company knowledge as well as information pertaining to the industry within which it operates. A
Directors’ Pack is made available which includes key information on Board Members, Board
Charters, Duties Imposed on Directors of Public Companies, Directors’ Disclosure Obligations,
Declaration of Interest Forms and Overall Responsibility amongst other Policies and Procedures
implemented by the Company.
New Directors are given the opportunity to review the Company’s operations and meet with key
Executives in the Exploration, Geology, Finance and Corporate areas.
Professional development opportunities arise when there are new corporate, legal, tax, accounting
or geological developments within Australia or in overseas countries where the Company operates.
The Board is briefed by Management on any new standards or matters of interest that are relevant
in the Company continuing its business effectively. In addition, a number of professional bodies
with which the Company is associated run regular seminars or conferences at which attendance is
encouraged.
PRINCIPLE 3 – ACT ETHICALLY AND RESPONSIBLY
3.1 A listed entity should:
(a) have a code of conduct for its directors, senior executives and employees; and
(b) disclose that code or a summary of it.
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18
PRINCIPLE 3 – ACT ETHICALLY AND RESPONSIBLY3.1A listed entity should: (a) have a code of conduct for its directors, senior executives and employees; and (b) disclose that code or a summary of it.Adopted – A summary of the Company’s Code of Conduct can be found at http://pancon.com.au/about-us/corporate-governance/ The Company’s Code of Conduct sets out the principles and standards which the Board, Management and employees of the Company are encouraged to strive towards when dealing with each other, Shareholders, Stakeholders and the broader community. The Code of Conduct covers the Company’s core values and beliefs including the following: •Integrity and Honesty •Responsibility to Shareholders •Respect for the Law •Conflicts of Interest •Protection of Assets •Confidential Information •Employment Practices •Responsibility to the Community •Responsibility to the Individual •Obligations Relative to Fair Trading and Dealing •Financial and other Inducements •Compliance with the Code of Conduct In addition, a Whistleblower Policy forms part of the Company’s Corporate Governance Manual. The Policy covers the following: •Reporting and Investigating Officers •Reporting Responsibility •No Retaliation •Reporting Violations •Accounting and Auditing Matters •Acting in Good Faith •Confidentiality •Handling of Reported Violations The Policy was adopted so that any concerns regarding contraventions of the Code of Conduct could be addressed in a safe and formal manner without fear of reprisal.
Corporate Governance Statement
Corporate Governance Statement
2.6 A listed entity should have a program for inducting new directors and provide appropriate
professional development opportunities for directors to develop and maintain the skills and
knowledge needed to perform their role as directors effectively.
Adopted – The Company has devised an Induction Programme for new Directors, Executives and
Employees.
The goal of the Induction Programme is to assist new Directors in participating fully and actively
in Board decision making at the earliest opportunity by providing them with the necessary
Company knowledge as well as information pertaining to the industry within which it operates. A
Directors’ Pack is made available which includes key information on Board Members, Board
Charters, Duties Imposed on Directors of Public Companies, Directors’ Disclosure Obligations,
Declaration of Interest Forms and Overall Responsibility amongst other Policies and Procedures
implemented by the Company.
New Directors are given the opportunity to review the Company’s operations and meet with key
Executives in the Exploration, Geology, Finance and Corporate areas.
Professional development opportunities arise when there are new corporate, legal, tax, accounting
or geological developments within Australia or in overseas countries where the Company operates.
The Board is briefed by Management on any new standards or matters of interest that are relevant
in the Company continuing its business effectively. In addition, a number of professional bodies
with which the Company is associated run regular seminars or conferences at which attendance is
encouraged.
PRINCIPLE 3 – ACT ETHICALLY AND RESPONSIBLY
3.1 A listed entity should:
(a) have a code of conduct for its directors, senior executives and employees; and
(b) disclose that code or a summary of it.
18
31
PRINCIPLE 3 – ACT ETHICALLY AND RESPONSIBLY3.1A listed entity should: (a) have a code of conduct for its directors, senior executives and employees; and (b) disclose that code or a summary of it.Adopted – A summary of the Company’s Code of Conduct can be found at http://pancon.com.au/about-us/corporate-governance/ The Company’s Code of Conduct sets out the principles and standards which the Board, Management and employees of the Company are encouraged to strive towards when dealing with each other, Shareholders, Stakeholders and the broader community. The Code of Conduct covers the Company’s core values and beliefs including the following: •Integrity and Honesty •Responsibility to Shareholders •Respect for the Law •Conflicts of Interest •Protection of Assets •Confidential Information •Employment Practices •Responsibility to the Community •Responsibility to the Individual •Obligations Relative to Fair Trading and Dealing •Financial and other Inducements •Compliance with the Code of Conduct In addition, a Whistleblower Policy forms part of the Company’s Corporate Governance Manual. The Policy covers the following: •Reporting and Investigating Officers •Reporting Responsibility •No Retaliation •Reporting Violations •Accounting and Auditing Matters •Acting in Good Faith •Confidentiality •Handling of Reported Violations The Policy was adopted so that any concerns regarding contraventions of the Code of Conduct could be addressed in a safe and formal manner without fear of reprisal.
Corporate Governance Statement
Corporate Governance Statement
PRINCIPLE 4 – SAFEGUARD INTEGRITY IN CORPORATE REPORTING
4.1
The board of a listed entity should:
(a) have an audit committee which:
(1) has at least three members, all of whom are non-executive directors and a majority of
whom are independent directors; and
(2) is chaired by an independent director, who is not the chair of the board,
and disclose:
(3) the charter of the committee;
(4) the relevant qualifications and experience of the members of the committee; and
(5) in relation to each reporting period, the number of times the committee met throughout
the period and the individual attendances of the members at those meetings; or
(b) if it does not have an audit committee, disclose that fact and the processes it employs that
independently verify and safeguard the integrity of its corporate reporting, including the
processes for the appointment and removal of the external auditor and the rotation of the
audit engagement partner.
Not Adopted – The full Board fulfils the role of the Audit Committee.
The Board considers those matters that would ordinarily be the responsibility of an Audit
Committee and no separate meetings were held as the Audit Committee during the year. The
Board has adopted an Audit Committee Charter which is disclosed on the Company’s website at
http://pancon.com.au/about-us/corporate-governance/ The Charter as well as the Company’s
External Auditor
Procedure
http://pancon.com.au/about-us/corporate-governance/ is applied when convening to discuss
Audit Committee matters.
the Selection, Appointment
and Rotation
for
of
An External Auditor is appointed to independently verify and safeguard the integrity of the
Company’ corporate reporting, in addition when discussing Audit Committee matters, the Board
reviews annual action points such as:
Review of financial statements
Assess Management’s selection of accounting policies and principles
Consider the external audit report and whether it is consistent with the Board’s information
and knowledge
Consider the Company’s internal controls
Assess if the external audit report is adequate for Shareholder needs
Discuss any significant findings with the External Auditor
Confirm the independence of the External Auditor
Ensure that the External Auditor is requested to attend the Annual General Meeting
The Board in conjunction Management’s input, review the suitability of existing audit arrangements
and the scope of the audit on a periodic basis. The Board is responsible for the appointment of a
new external auditor should a vacancy arise, however the appointment must be ratified by
Shareholders at the next Annual General Meeting.
The Board of Directors also review the current circumstances in light of Section 324D(1) and (2)
of the Corporations Act 2001 which stipulates that an individual may not play a significant role in
the audit of a listed entity for more than five out of seven successive financial years.
4.2
The board of a listed entity should, before it approves the entity’s financial statements for a
financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial
records of the entity have been properly maintained and that the financial statements comply with
the appropriate accounting standards and give a true and fair view of the financial position and
performance of the entity and that the opinion has been formed on the basis of a sound system of
risk management and internal control which is operating effectively.
Adopted – A Directors’ Declaration under Subsection 295(4) of the Corporations Act 2001 is only
made after each person who performs:
website.
6.1 A listed entity should provide information about itself and its governance to investors via its
a) A Chief Executive Officer function; or
b) A Chief Financial Officer function
in relation to the Company, has given the Directors a declaration whether, in their opinion:
a) The financial records of the Company for the financial year have been properly maintained
in accordance with Section 286 of the Corporations Act 2001;
Adopted – The Company’s website includes a Corporate Governance landing page which can be
found at http://pancon.com.au/about-us/corporate-governance/
The Corporate Governance page shows an introduction to the Corporate Governance of the
Company by referring to the Corporate Governance Manual adopted, in addition, Investors can
find Board Charters as well as an extract of Policies and Procedures included in the manual.
32
b) The financial statements and notes for the financial year comply with the accounting
standards;
c) The financial statements and notes for the financial year give a true and fair view;
d) Any other matters that are prescribed by the regulations in relation to the financial
statements and notes for the financial year are satisfied.
In addition, that the opinion has been formed on the basis of a sound system of risk management
and internal controls which is operating effectively.
The declaration is made:
a) In writing;
b) Specifying the date the declaration is made;
c) Specifying the capacity in which the person is making the declaration; and
d) Signed by the person making the declaration.
4.3 A listed entity that has an AGM should ensure that its external auditor attends its AGM and is
available to answer questions from security holders relevant to the audit.
Adopted – During Annual General Meeting planning, the External Auditors are consulted to ensure
that they are available to attend the meeting and answer questions from Shareholders with regard
to the conduct of the audit and the Auditor’s Report.
PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
5.1 A listed entity should:
(a) have a written policy for complying with its continuous disclosure obligations under the Listing
Rules; and
(b) disclose that policy or a summary of it.
Adopted – A summary of the Company’s Policy on ASX Listing Rule Compliance can be found at
http://pancon.com.au/about-us/corporate-governance/
As a Company listed on the Australian Securities Exchange, Pancontinental is obliged to disclose
certain information under a continuous disclosure regime to keep the market informed of events
and developments as they occur. The Company promotes timely and balanced disclosure of all
material matters concerning the Company. All Investors should have equal and timely access to
material information. The Company has adopted certain procedures to ensure that it complies with
its continuous disclosure obligations and has appointed a Responsible Officer for ensuring the
procedures are complied with.
The Policy sets out details with regards to:
The Responsible Officer
Types of information that needs to be disclosed
The concept of timely announcements
Board Notification – informing the Board and ongoing monitoring
Safeguarding confidentiality of corporate information to avoid premature disclosure
External communications such as analyst briefings and responses to Shareholder
Avoiding a false market
Media contact and comment
questions
Reporting
Required actions in the case of non-compliance
Updating compliance procedures
Guide to drafting company announcements
PRINCIPLE 6 – RESPECT THE RIGHTS OF SECURITY HOLDERS
Corporate Governance Statement
Corporate Governance Statement
b) The financial statements and notes for the financial year comply with the accounting
standards;
c) The financial statements and notes for the financial year give a true and fair view;
d) Any other matters that are prescribed by the regulations in relation to the financial
statements and notes for the financial year are satisfied.
In addition, that the opinion has been formed on the basis of a sound system of risk management
and internal controls which is operating effectively.
The declaration is made:
a) In writing;
b) Specifying the date the declaration is made;
c) Specifying the capacity in which the person is making the declaration; and
d) Signed by the person making the declaration.
4.3 A listed entity that has an AGM should ensure that its external auditor attends its AGM and is
available to answer questions from security holders relevant to the audit.
Adopted – During Annual General Meeting planning, the External Auditors are consulted to ensure
that they are available to attend the meeting and answer questions from Shareholders with regard
to the conduct of the audit and the Auditor’s Report.
PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
5.1 A listed entity should:
(a) have a written policy for complying with its continuous disclosure obligations under the Listing
Rules; and
(b) disclose that policy or a summary of it.
Adopted – A summary of the Company’s Policy on ASX Listing Rule Compliance can be found at
http://pancon.com.au/about-us/corporate-governance/
As a Company listed on the Australian Securities Exchange, Pancontinental is obliged to disclose
certain information under a continuous disclosure regime to keep the market informed of events
and developments as they occur. The Company promotes timely and balanced disclosure of all
material matters concerning the Company. All Investors should have equal and timely access to
material information. The Company has adopted certain procedures to ensure that it complies with
its continuous disclosure obligations and has appointed a Responsible Officer for ensuring the
procedures are complied with.
The Policy sets out details with regards to:
PRINCIPLE 4 – SAFEGUARD INTEGRITY IN CORPORATE REPORTING
4.1
The board of a listed entity should:
(a) have an audit committee which:
(1) has at least three members, all of whom are non-executive directors and a majority of
whom are independent directors; and
(2) is chaired by an independent director, who is not the chair of the board,
and disclose:
(3) the charter of the committee;
(4) the relevant qualifications and experience of the members of the committee; and
(5) in relation to each reporting period, the number of times the committee met throughout
the period and the individual attendances of the members at those meetings; or
(b) if it does not have an audit committee, disclose that fact and the processes it employs that
independently verify and safeguard the integrity of its corporate reporting, including the
processes for the appointment and removal of the external auditor and the rotation of the
audit engagement partner.
Not Adopted – The full Board fulfils the role of the Audit Committee.
The Board considers those matters that would ordinarily be the responsibility of an Audit
Committee and no separate meetings were held as the Audit Committee during the year. The
Board has adopted an Audit Committee Charter which is disclosed on the Company’s website at
http://pancon.com.au/about-us/corporate-governance/ The Charter as well as the Company’s
Procedure
for
the Selection, Appointment
and Rotation
of
External Auditor
http://pancon.com.au/about-us/corporate-governance/ is applied when convening to discuss
Audit Committee matters.
An External Auditor is appointed to independently verify and safeguard the integrity of the
Company’ corporate reporting, in addition when discussing Audit Committee matters, the Board
reviews annual action points such as:
Review of financial statements
Assess Management’s selection of accounting policies and principles
Consider the external audit report and whether it is consistent with the Board’s information
and knowledge
Consider the Company’s internal controls
Assess if the external audit report is adequate for Shareholder needs
Discuss any significant findings with the External Auditor
Confirm the independence of the External Auditor
Ensure that the External Auditor is requested to attend the Annual General Meeting
The Board in conjunction Management’s input, review the suitability of existing audit arrangements
and the scope of the audit on a periodic basis. The Board is responsible for the appointment of a
new external auditor should a vacancy arise, however the appointment must be ratified by
Shareholders at the next Annual General Meeting.
The Board of Directors also review the current circumstances in light of Section 324D(1) and (2)
of the Corporations Act 2001 which stipulates that an individual may not play a significant role in
the audit of a listed entity for more than five out of seven successive financial years.
4.2
The board of a listed entity should, before it approves the entity’s financial statements for a
financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial
records of the entity have been properly maintained and that the financial statements comply with
the appropriate accounting standards and give a true and fair view of the financial position and
performance of the entity and that the opinion has been formed on the basis of a sound system of
risk management and internal control which is operating effectively.
made after each person who performs:
a) A Chief Executive Officer function; or
b) A Chief Financial Officer function
in relation to the Company, has given the Directors a declaration whether, in their opinion:
a) The financial records of the Company for the financial year have been properly maintained
in accordance with Section 286 of the Corporations Act 2001;
Adopted – A Directors’ Declaration under Subsection 295(4) of the Corporations Act 2001 is only
6.1 A listed entity should provide information about itself and its governance to investors via its
questions
Reporting
Required actions in the case of non-compliance
Updating compliance procedures
Guide to drafting company announcements
PRINCIPLE 6 – RESPECT THE RIGHTS OF SECURITY HOLDERS
website.
Adopted – The Company’s website includes a Corporate Governance landing page which can be
found at http://pancon.com.au/about-us/corporate-governance/
The Corporate Governance page shows an introduction to the Corporate Governance of the
Company by referring to the Corporate Governance Manual adopted, in addition, Investors can
find Board Charters as well as an extract of Policies and Procedures included in the manual.
33
Board Notification – informing the Board and ongoing monitoring
Avoiding a false market
Safeguarding confidentiality of corporate information to avoid premature disclosure
Media contact and comment
External communications such as analyst briefings and responses to Shareholder
Types of information that needs to be disclosed
The concept of timely announcements
The Responsible Officer
Corporate Governance Statement
Corporate Governance Statement
Corporate Governance Statement
Links to the Investor Centre can also be opened from the Corporate Governance page where ASX
Links to the Investor Centre can also be opened from the Corporate Governance page where ASX
releases, the Company’s share price, financial reports, broker reports, media coverage and
releases, the Company’s share price, financial reports, broker reports, media coverage and
company presentations can be accessed. Subscriptions to the Company’s mailing list can also be
company presentations can be accessed. Subscriptions to the Company’s mailing list can also be
submitted from this page.
submitted from this page.
Furthermore, general and detailed project information is available for the Investor’s perusal from
Furthermore, general and detailed project information is available for the Investor’s perusal from
the Corporate Governance page.
the Corporate Governance page.
6.2 A listed entity should design and implement an investor relations program to facilitate effective
6.2 A listed entity should design and implement an investor relations program to facilitate effective
two-way communication with investors.
two-way communication with investors.
Adopted – The Company has adopted a Shareholder Communication Policy which can be found on
Adopted – The Company has adopted a Shareholder Communication Policy which can be found on
the Company’s website at http://pancon.com.au/about-us/corporate-governance/
the Company’s website at http://pancon.com.au/about-us/corporate-governance/
The Policy aims to ensure that Shareholders are informed of all major developments affecting the
The Policy aims to ensure that Shareholders are informed of all major developments affecting the
Company and that there are means available to facilitate two-way communication. If Investors
Company and that there are means available to facilitate two-way communication. If Investors
have a greater understanding of the business they are able to make informed investment
have a greater understanding of the business they are able to make informed investment
decisions.
decisions.
Information is communicated to Investors by:
Information is communicated to Investors by:
Company announcements
• Company announcements
•
Information briefings to media and analysts
Information briefings to media and analysts
Notices of Meeting and explanatory material
• Notices of Meeting and explanatory material
•
Financial information including annual reports
Financial information including annual reports
Website updates
• Website updates
Board and Management addresses and presentations at meetings
• Board and Management addresses and presentations at meetings
Investors can express their views or present queries to the Company by:
Investors can express their views or present queries to the Company by:
Utilising the Contact Us section of the website http://pancon.com.au/contact-us to send
• Utilising the Contact Us section of the website http://pancon.com.au/contact-us to send
•
•
direct communications to the Company
direct communications to the Company
The Contact Us section http://pancon.com.au/contact-us as well as any ASX or media
The Contact Us section http://pancon.com.au/contact-us as well as any ASX or media
updates include the contact details of the Company such as address and telephone
updates include the contact details of the Company such as address and telephone
number. These details can be used to initiate written or verbal contact with the Company
number. These details can be used to initiate written or verbal contact with the Company
The Company provides Shareholders with a Notice of Meeting detailing matters such as
The Company provides Shareholders with a Notice of Meeting detailing matters such as
the agenda, location and time of the meeting so that Shareholders can make arrangements
the agenda, location and time of the meeting so that Shareholders can make arrangements
to attend and speak to Company representatives. Notices of Meeting are available on the
to attend and speak to Company representatives. Notices of Meeting are available on the
ASX platform under the code PCL or the Company website so that Investors who are not
ASX platform under the code PCL or the Company website so that Investors who are not
currently Shareholders can also attend the meeting
currently Shareholders can also attend the meeting
6.3 A listed entity should disclose the policies and processes it has in place to facilitate and encourage
6.3 A listed entity should disclose the policies and processes it has in place to facilitate and encourage
participation at meetings of security holders.
participation at meetings of security holders.
Adopted – The Company has adopted a Shareholder Communication Policy which can be found on
Adopted – The Company has adopted a Shareholder Communication Policy which can be found on
the Company’s website at http://pancon.com.au/about-us/corporate-governance/
the Company’s website at http://pancon.com.au/about-us/corporate-governance/
The Policy covers the Company’s belief that general meetings are an effective means of
The Policy covers the Company’s belief that general meetings are an effective means of
communicating with Shareholders. The Company provides information in the Notice of Meeting
communicating with Shareholders. The Company provides information in the Notice of Meeting
that is presented in a clear, concise and effective manner. Meetings are held during business hours,
that is presented in a clear, concise and effective manner. Meetings are held during business hours,
at a central location convenient for the largest number of Investors to attend. Shareholders are
at a central location convenient for the largest number of Investors to attend. Shareholders are
encouraged to attend and take note of the Chairman’s address as well as vote on the resolutions
encouraged to attend and take note of the Chairman’s address as well as vote on the resolutions
presented to the meeting. Upon completion of formal matters, the Chief Executive Officer provides
presented to the meeting. Upon completion of formal matters, the Chief Executive Officer provides
attendees with an update of activities via a company presentation. This provides Investors with an
attendees with an update of activities via a company presentation. This provides Investors with an
opportunity to ask questions, express their views or just meet the Company representatives.
opportunity to ask questions, express their views or just meet the Company representatives.
6.4 A listed entity should give security holders the option to receive communications from, and send
6.4 A listed entity should give security holders the option to receive communications from, and send
communications to, the entity and its security registry electronically.
communications to, the entity and its security registry electronically.
Adopted – Security holders have the option of receiving communications from the Company and
Adopted – Security holders have the option of receiving communications from the Company and
its Share Registry electronically. The Contact Us section of the Company’s website
its Share Registry electronically. The Contact Us section of the Company’s website
http://pancon.com.au/contact-us provides an opportunity
for security holders to send
for security holders to send
http://pancon.com.au/contact-us provides an opportunity
communications to the Company electronically. The website has been specifically designed so that
communications to the Company electronically. The website has been specifically designed so that
it is user friendly on all devices from laptops to phones.
it is user friendly on all devices from laptops to phones.
Electronic communication is not only cost effective, it provides Investors with real time updates
Electronic communication is not only cost effective, it provides Investors with real time updates
on the activities of the Company.
on the activities of the Company.
The Company’s website provides a tab where Stakeholders can join the Company’s mailing list
The Company’s website provides a tab where Stakeholders can join the Company’s mailing list
which will enable them to receive electronic communication each time the Company lodges an
which will enable them to receive electronic communication each time the Company lodges an
announcement on the ASX or provides a media update.
announcement on the ASX or provides a media update.
34
Advanced Share Registry and the Company review and monitor opportunities to increase the use
of electronic communication with its Shareholders.
PRINCIPLE 7 – RECOGNISE AND MANAGE RISK
7.1
The board of a listed entity should:
(a) have a committee or committees to oversee risk, each of which:
(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director,
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee met throughout
the period and the individual attendances of the members at those meetings; or
(b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact
and the processes it employs for overseeing the entity’s risk management framework.
Not Adopted - The full Board fulfils the role of the Risk Committee.
The Board considers those matters that would ordinarily be the responsibility of a Risk Committee
and no separate meetings were held as the Risk Committee during the year. The Company’s Risk
Management Policy (a summary of which can be found at http://pancon.com.au/about-
us/corporate-governance/) is applied when reviewing and discussing risk management matters.
In managing risk, it is the Company’s practice to take advantage of potential opportunities while
managing potential adverse effects. The Company’s Risk Management Policy sets out the
Company’s risk management system and processes as well as the Company’s Risk Profile.
The Policy covers the following risk related points and is used as a means to assess the Company’s
risk management structure:
The role of the Board and delegated responsibility – ultimate responsibility rests with the
Board, however day to day management of risk is the responsibility of the CEO with the
•
•
•
•
assistance of Senior Management
The role of the CEO and accountabilities
• Authority of the CEO
• Risk Profile
• Audit Committee Charter
• Regular budgeting and financial reporting
• Clear limits and authorities for expenditure levels
and disclosure requirements
• Responsibility to Stakeholders
• Continuous improvement
7.2
The board or a committee of the board should:
Procedures for compliance with continuous disclosure obligations under the Listing Rules
Procedures to assist with establishing and administering corporate governance systems
(a) review the entity’s risk management framework at least annually to satisfy itself that it
continues to be sound; and
(b) disclose, in relation to each reporting period, whether such a review has taken place.
Adopted – The Board and Management assess risk as part of the ordinary course of business
activities such as strategic planning, promotion, budgets, mergers and acquisitions, strategic
partnerships, legislative changes and conducting business abroad. Each Board Meeting is used as
a platform for the review and assessment of the Company’s risk profile.
7.3 A listed entity should disclose:
(a) if it has an internal audit function, how the function is structured and what role it performs;
(b) if it does not have an internal audit function, that fact and the processes it employs for
evaluating and continually improving the effectiveness of its risk management and internal
or
control processes.
22
23
Corporate Governance Statement
Corporate Governance Statement
Corporate Governance Statement
Links to the Investor Centre can also be opened from the Corporate Governance page where ASX
Links to the Investor Centre can also be opened from the Corporate Governance page where ASX
releases, the Company’s share price, financial reports, broker reports, media coverage and
releases, the Company’s share price, financial reports, broker reports, media coverage and
company presentations can be accessed. Subscriptions to the Company’s mailing list can also be
company presentations can be accessed. Subscriptions to the Company’s mailing list can also be
Advanced Share Registry and the Company review and monitor opportunities to increase the use
of electronic communication with its Shareholders.
PRINCIPLE 7 – RECOGNISE AND MANAGE RISK
Furthermore, general and detailed project information is available for the Investor’s perusal from
Furthermore, general and detailed project information is available for the Investor’s perusal from
7.1
The board of a listed entity should:
(a) have a committee or committees to oversee risk, each of which:
(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director,
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee met throughout
the period and the individual attendances of the members at those meetings; or
(b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact
and the processes it employs for overseeing the entity’s risk management framework.
Not Adopted - The full Board fulfils the role of the Risk Committee.
The Board considers those matters that would ordinarily be the responsibility of a Risk Committee
and no separate meetings were held as the Risk Committee during the year. The Company’s Risk
Management Policy (a summary of which can be found at http://pancon.com.au/about-
us/corporate-governance/) is applied when reviewing and discussing risk management matters.
In managing risk, it is the Company’s practice to take advantage of potential opportunities while
managing potential adverse effects. The Company’s Risk Management Policy sets out the
Company’s risk management system and processes as well as the Company’s Risk Profile.
The Policy covers the following risk related points and is used as a means to assess the Company’s
risk management structure:
•
The role of the Board and delegated responsibility – ultimate responsibility rests with the
Board, however day to day management of risk is the responsibility of the CEO with the
assistance of Senior Management
The role of the CEO and accountabilities
•
• Authority of the CEO
• Risk Profile
• Audit Committee Charter
• Regular budgeting and financial reporting
• Clear limits and authorities for expenditure levels
•
•
Procedures for compliance with continuous disclosure obligations under the Listing Rules
Procedures to assist with establishing and administering corporate governance systems
and disclosure requirements
• Responsibility to Stakeholders
• Continuous improvement
7.2
The board or a committee of the board should:
(a) review the entity’s risk management framework at least annually to satisfy itself that it
continues to be sound; and
(b) disclose, in relation to each reporting period, whether such a review has taken place.
Adopted – The Board and Management assess risk as part of the ordinary course of business
activities such as strategic planning, promotion, budgets, mergers and acquisitions, strategic
partnerships, legislative changes and conducting business abroad. Each Board Meeting is used as
a platform for the review and assessment of the Company’s risk profile.
7.3 A listed entity should disclose:
(a) if it has an internal audit function, how the function is structured and what role it performs;
or
(b) if it does not have an internal audit function, that fact and the processes it employs for
evaluating and continually improving the effectiveness of its risk management and internal
control processes.
22
23
35
submitted from this page.
submitted from this page.
the Corporate Governance page.
the Corporate Governance page.
6.2 A listed entity should design and implement an investor relations program to facilitate effective
6.2 A listed entity should design and implement an investor relations program to facilitate effective
two-way communication with investors.
two-way communication with investors.
Adopted – The Company has adopted a Shareholder Communication Policy which can be found on
Adopted – The Company has adopted a Shareholder Communication Policy which can be found on
the Company’s website at http://pancon.com.au/about-us/corporate-governance/
the Company’s website at http://pancon.com.au/about-us/corporate-governance/
The Policy aims to ensure that Shareholders are informed of all major developments affecting the
The Policy aims to ensure that Shareholders are informed of all major developments affecting the
Company and that there are means available to facilitate two-way communication. If Investors
Company and that there are means available to facilitate two-way communication. If Investors
have a greater understanding of the business they are able to make informed investment
have a greater understanding of the business they are able to make informed investment
•
•
•
•
decisions.
decisions.
Information is communicated to Investors by:
Information is communicated to Investors by:
Company announcements
• Company announcements
Information briefings to media and analysts
Information briefings to media and analysts
Notices of Meeting and explanatory material
• Notices of Meeting and explanatory material
Financial information including annual reports
Financial information including annual reports
Website updates
• Website updates
Board and Management addresses and presentations at meetings
• Board and Management addresses and presentations at meetings
Investors can express their views or present queries to the Company by:
Investors can express their views or present queries to the Company by:
Utilising the Contact Us section of the website http://pancon.com.au/contact-us to send
• Utilising the Contact Us section of the website http://pancon.com.au/contact-us to send
direct communications to the Company
direct communications to the Company
The Contact Us section http://pancon.com.au/contact-us as well as any ASX or media
The Contact Us section http://pancon.com.au/contact-us as well as any ASX or media
updates include the contact details of the Company such as address and telephone
updates include the contact details of the Company such as address and telephone
number. These details can be used to initiate written or verbal contact with the Company
number. These details can be used to initiate written or verbal contact with the Company
The Company provides Shareholders with a Notice of Meeting detailing matters such as
The Company provides Shareholders with a Notice of Meeting detailing matters such as
the agenda, location and time of the meeting so that Shareholders can make arrangements
the agenda, location and time of the meeting so that Shareholders can make arrangements
to attend and speak to Company representatives. Notices of Meeting are available on the
to attend and speak to Company representatives. Notices of Meeting are available on the
ASX platform under the code PCL or the Company website so that Investors who are not
ASX platform under the code PCL or the Company website so that Investors who are not
currently Shareholders can also attend the meeting
currently Shareholders can also attend the meeting
6.3 A listed entity should disclose the policies and processes it has in place to facilitate and encourage
6.3 A listed entity should disclose the policies and processes it has in place to facilitate and encourage
participation at meetings of security holders.
participation at meetings of security holders.
Adopted – The Company has adopted a Shareholder Communication Policy which can be found on
Adopted – The Company has adopted a Shareholder Communication Policy which can be found on
the Company’s website at http://pancon.com.au/about-us/corporate-governance/
the Company’s website at http://pancon.com.au/about-us/corporate-governance/
The Policy covers the Company’s belief that general meetings are an effective means of
The Policy covers the Company’s belief that general meetings are an effective means of
communicating with Shareholders. The Company provides information in the Notice of Meeting
communicating with Shareholders. The Company provides information in the Notice of Meeting
that is presented in a clear, concise and effective manner. Meetings are held during business hours,
that is presented in a clear, concise and effective manner. Meetings are held during business hours,
at a central location convenient for the largest number of Investors to attend. Shareholders are
at a central location convenient for the largest number of Investors to attend. Shareholders are
encouraged to attend and take note of the Chairman’s address as well as vote on the resolutions
encouraged to attend and take note of the Chairman’s address as well as vote on the resolutions
presented to the meeting. Upon completion of formal matters, the Chief Executive Officer provides
presented to the meeting. Upon completion of formal matters, the Chief Executive Officer provides
attendees with an update of activities via a company presentation. This provides Investors with an
attendees with an update of activities via a company presentation. This provides Investors with an
opportunity to ask questions, express their views or just meet the Company representatives.
opportunity to ask questions, express their views or just meet the Company representatives.
6.4 A listed entity should give security holders the option to receive communications from, and send
6.4 A listed entity should give security holders the option to receive communications from, and send
communications to, the entity and its security registry electronically.
communications to, the entity and its security registry electronically.
Adopted – Security holders have the option of receiving communications from the Company and
Adopted – Security holders have the option of receiving communications from the Company and
its Share Registry electronically. The Contact Us section of the Company’s website
its Share Registry electronically. The Contact Us section of the Company’s website
http://pancon.com.au/contact-us provides an opportunity
http://pancon.com.au/contact-us provides an opportunity
for security holders to send
for security holders to send
communications to the Company electronically. The website has been specifically designed so that
communications to the Company electronically. The website has been specifically designed so that
it is user friendly on all devices from laptops to phones.
it is user friendly on all devices from laptops to phones.
Electronic communication is not only cost effective, it provides Investors with real time updates
Electronic communication is not only cost effective, it provides Investors with real time updates
on the activities of the Company.
on the activities of the Company.
The Company’s website provides a tab where Stakeholders can join the Company’s mailing list
The Company’s website provides a tab where Stakeholders can join the Company’s mailing list
which will enable them to receive electronic communication each time the Company lodges an
which will enable them to receive electronic communication each time the Company lodges an
announcement on the ASX or provides a media update.
announcement on the ASX or provides a media update.
Corporate Governance Statement
Corporate Governance Statement
Adopted – The Company discloses that it does not have an internal audit function.
PRINCIPLE 8 – REMUNERATE FAIRLY AND RESPONSIBLY
The Company’s risk management system is overseen by Management who ensure that the
identification, monitoring and response of business risks.
The Board reviews Management’s assessment of the efficiency of the system and according to the
Risk Management Policy is required to satisfy itself that Management has developed and
implemented a sound system of risk management and internal control.
7.4 A listed entity should disclose whether it has any material exposure to economic, environmental
and social sustainability risks and, if it does, how it manages or intends to manage those risks.
Adopted – The Company values economic, environmental and social sustainability in areas within
which it operates.
The Company has adopted a Corporate Governance Manual which sets outs the policies and
procedures in place which apply to the Board, Management, Employees and the entire business.
The policies and procedures are designed to assist in identifying relevant risks and having
processes in place to mitigate if not eliminate the risk.
• Economic sustainability refers to the ability of a listed entity to continue operating at a
particular level of economic production over the long term.
• Environmental sustainability refers to the ability of a listed entity to continue operating in
a manner that does not compromise the health of the ecosystems in which it operates
over the long term.
• Social sustainability is the ability of a listed entity to continue operating in a manner that
meets accepted social norms and needs over the long term.
Risks identified that may have a material effect on the Company include:
• Oil price volatility as well as currency fluctuations in the Australian and United States
dollars. The state of the oil and gas industry has been affected by the uncertainty in the
oil price. Although the Company is not in production and there is not a material business
risk in that regard, the Company’s operations are affected due to reduced exploration
budgets and reduced overall activity in the exploration sector;
• Currently all of Pancontinental’s assets are managed by Joint Venture Operators who are
responsible for the day to day operations of the permits. As such, regular review of the
Joint Venture activities is crucial in safeguarding the assets of the Company. Technical and
financial Executives review the work programmes and budgets in place to ensure
compliance with approved documents. Updates on operational activities are provided by
the Joint Venture partners on a regular basis and will include any environmental
operational issues if applicable;
• Conducting business in foreign jurisdictions carries with it a risk of change in business,
legal, tax, accounting, political, environmental and technical practices for example, which
may have a material effect on the Company. Pancontinental monitors joint venture
partners working in those jurisdictions as well as local news developments to ensure that
if a risk presents itself the Company is well equipped with sufficient time to decide on a
course of action;
The Company is committed to providing all Employees, Executives and Directors with a
safe and productive work environment. There are environmental and location risks that
the Company may face, however the Corporate Governance Manual and the procedures
and policies within it should assist in assessing the best course of action to mitigate or
eliminate the risk;
For expenditure that the Company has control of, it will endeavour to use sustainable and
ethically sourced products that have little or no impact on the environment.
•
•
8.1
The board of a listed entity should:
(a) have a remuneration committee which:
(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director,
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee met throughout
the period and the individual attendances of the members at those meetings; or
(b) if it does not have a remuneration committee, disclose that fact and the processes it employs
for setting the level and composition of remuneration for directors and senior executives and
ensuring that such remuneration is appropriate and not excessive.
Not Adopted – The full Board fulfils the role of the Remuneration Committee.
The Board considers those matters that would ordinarily be the responsibility of a Remuneration
Committee and no separate meetings were held as the Remuneration Committee during the year.
The Board has adopted a Remuneration Committee Charter which is disclosed on the Company’s
website at http://pancon.com.au/about-us/corporate-governance/ The Charter as well as the
Company’s Remuneration Policy is applied when convening to discuss Remuneration Committee
matters.
Emoluments of Directors and Senior Executives are set by reference to payments made by other
companies of a similar size and industry, and by reference to the skills and experience of the
Directors and Executives. Details of the nature and amount of emoluments of each Director of the
Company are disclosed annually in the Company’s annual report.
Should circumstances arise where the Board needs assistance on a remuneration matter, the Board
after requisite approval may engage a remuneration consultant to ensure the level of remuneration
in the Company is appropriate for its size, level of activity and industry.
8.2 A listed entity should separately disclose its policies and practices regarding the remuneration of
non-executive directors and the remuneration of executive directors and other senior executives.
Adopted - The Company has adopted a Remuneration Committee Charter which can be found on
the Company’s website at http://pancon.com.au/about-us/corporate-governance/ The Charter
separately discloses the processes regarding the remuneration of Non-Executive Directors and the
remuneration of Executive Directors and other Senior Executives.
Executive Remuneration
include:
In considering the level of remuneration for Executives, the matters that are taken into account
Remuneration which motivates Executives to pursue the long term growth and success of
the Company within an appropriate control framework;
A clear correlation between performance and remuneration;
Align the interests of key leadership with the long term interests of the Company’s
Shareholder; and
Prohibit Executives from entering into transactions which limit the economic risk of
participating in unvested entitlement.
Non-Executive Remuneration
Matters of consideration include:
Fees paid to Non-Executive Directors are within the aggregate amount approved by
Non-Executive Directors to be remunerated by way of fees;
Non-Executive Directors are not provided with retirement benefits other than statutory
Shareholders;
superannuation; and
Non-Executive Directors are not entitled to participate in equity-based remuneration
schemes designed for Executives without due consideration and appropriate disclosure to
the Company Shareholders.
36
24
Corporate Governance Statement
Corporate Governance Statement
Adopted – The Company discloses that it does not have an internal audit function.
PRINCIPLE 8 – REMUNERATE FAIRLY AND RESPONSIBLY
The Company’s risk management system is overseen by Management who ensure that the
identification, monitoring and response of business risks.
The Board reviews Management’s assessment of the efficiency of the system and according to the
Risk Management Policy is required to satisfy itself that Management has developed and
implemented a sound system of risk management and internal control.
7.4 A listed entity should disclose whether it has any material exposure to economic, environmental
and social sustainability risks and, if it does, how it manages or intends to manage those risks.
Adopted – The Company values economic, environmental and social sustainability in areas within
which it operates.
The Company has adopted a Corporate Governance Manual which sets outs the policies and
procedures in place which apply to the Board, Management, Employees and the entire business.
The policies and procedures are designed to assist in identifying relevant risks and having
processes in place to mitigate if not eliminate the risk.
• Economic sustainability refers to the ability of a listed entity to continue operating at a
particular level of economic production over the long term.
• Environmental sustainability refers to the ability of a listed entity to continue operating in
a manner that does not compromise the health of the ecosystems in which it operates
over the long term.
• Social sustainability is the ability of a listed entity to continue operating in a manner that
meets accepted social norms and needs over the long term.
Risks identified that may have a material effect on the Company include:
• Oil price volatility as well as currency fluctuations in the Australian and United States
dollars. The state of the oil and gas industry has been affected by the uncertainty in the
oil price. Although the Company is not in production and there is not a material business
risk in that regard, the Company’s operations are affected due to reduced exploration
budgets and reduced overall activity in the exploration sector;
• Currently all of Pancontinental’s assets are managed by Joint Venture Operators who are
responsible for the day to day operations of the permits. As such, regular review of the
Joint Venture activities is crucial in safeguarding the assets of the Company. Technical and
financial Executives review the work programmes and budgets in place to ensure
compliance with approved documents. Updates on operational activities are provided by
the Joint Venture partners on a regular basis and will include any environmental
operational issues if applicable;
• Conducting business in foreign jurisdictions carries with it a risk of change in business,
legal, tax, accounting, political, environmental and technical practices for example, which
may have a material effect on the Company. Pancontinental monitors joint venture
partners working in those jurisdictions as well as local news developments to ensure that
if a risk presents itself the Company is well equipped with sufficient time to decide on a
course of action;
•
The Company is committed to providing all Employees, Executives and Directors with a
safe and productive work environment. There are environmental and location risks that
the Company may face, however the Corporate Governance Manual and the procedures
and policies within it should assist in assessing the best course of action to mitigate or
eliminate the risk;
•
For expenditure that the Company has control of, it will endeavour to use sustainable and
ethically sourced products that have little or no impact on the environment.
8.1
The board of a listed entity should:
(a) have a remuneration committee which:
(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director,
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee met throughout
the period and the individual attendances of the members at those meetings; or
(b) if it does not have a remuneration committee, disclose that fact and the processes it employs
for setting the level and composition of remuneration for directors and senior executives and
ensuring that such remuneration is appropriate and not excessive.
Not Adopted – The full Board fulfils the role of the Remuneration Committee.
The Board considers those matters that would ordinarily be the responsibility of a Remuneration
Committee and no separate meetings were held as the Remuneration Committee during the year.
The Board has adopted a Remuneration Committee Charter which is disclosed on the Company’s
website at http://pancon.com.au/about-us/corporate-governance/ The Charter as well as the
Company’s Remuneration Policy is applied when convening to discuss Remuneration Committee
matters.
Emoluments of Directors and Senior Executives are set by reference to payments made by other
companies of a similar size and industry, and by reference to the skills and experience of the
Directors and Executives. Details of the nature and amount of emoluments of each Director of the
Company are disclosed annually in the Company’s annual report.
Should circumstances arise where the Board needs assistance on a remuneration matter, the Board
after requisite approval may engage a remuneration consultant to ensure the level of remuneration
in the Company is appropriate for its size, level of activity and industry.
8.2 A listed entity should separately disclose its policies and practices regarding the remuneration of
non-executive directors and the remuneration of executive directors and other senior executives.
Adopted - The Company has adopted a Remuneration Committee Charter which can be found on
the Company’s website at http://pancon.com.au/about-us/corporate-governance/ The Charter
separately discloses the processes regarding the remuneration of Non-Executive Directors and the
remuneration of Executive Directors and other Senior Executives.
Executive Remuneration
In considering the level of remuneration for Executives, the matters that are taken into account
include:
Remuneration which motivates Executives to pursue the long term growth and success of
the Company within an appropriate control framework;
A clear correlation between performance and remuneration;
Align the interests of key leadership with the long term interests of the Company’s
Shareholder; and
Prohibit Executives from entering into transactions which limit the economic risk of
participating in unvested entitlement.
Non-Executive Remuneration
Matters of consideration include:
Fees paid to Non-Executive Directors are within the aggregate amount approved by
Shareholders;
Non-Executive Directors to be remunerated by way of fees;
Non-Executive Directors are not provided with retirement benefits other than statutory
superannuation; and
Non-Executive Directors are not entitled to participate in equity-based remuneration
schemes designed for Executives without due consideration and appropriate disclosure to
the Company Shareholders.
24
37
Corporate Governance Statement
Statement of Comprehensive Income
8.3 A listed entity which has an equity-based remuneration scheme should:
(a) have a policy on whether participants are permitted to enter into transactions (whether
through the use of derivatives or otherwise) which limit the economic risk of participating in
the scheme; and
(b) disclose that policy or a summary of it.
Adopted - The Company has adopted a Policy for Trading in Company Securities which can be
found on the Company’s website at http://pancon.com.au/about-us/corporate-governance/
Directors, Officers and Employees who wish to trade in Company securities must first have regard
to the statutory provisions of the Corporations Act 2001 dealing with insider trading, in conjunction
with the Company’s Policy for Trading in Company Securities. The policy has been developed so
that all Company employees and representatives are clear as to their obligations with regard to
trading while in possession of insider information.
YEAR ENDED 30 JUNE 2015
Notes
CONSOLIDATED
Depreciation and amortisation expenses
2, 6
OPERATING ACTIVITIES
Salaries, fees and benefits
Audit fees
Generative exploration expenditure and write off
2
(40,492,415) (17,846,392)
Administration, accounting and secretarial fees
Annual report costs
ASX 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)
3
10
15
2015
$
(8,354)
(1,021,183)
(81,337)
(7,454)
(36,144)
(3,108)
(31,502)
(10,023)
(31,873)
(194,908)
(61,579)
(226,261)
2014
$
(1,416)
(724,368)
(23,582)
(7,770)
(43,751)
(2,432)
(40,885)
(49,073)
(29,067)
(119,661)
(91,182)
(267,367)
(42,206,141) (19,246,946)
328,058
(555)
327,503
1,090,608
(912,659)
177,949
(41,878,638) (19,068,997)
(41,878,638) (19,068,997)
-
-
-
-
-
-
(41,878,638) (19,068,997)
(3.64)
(3.64)
(1.66)
(1.66)
The Statement of Comprehensive Income is to be read in conjunction with the Notes to the Financial Statements.
38
27
Corporate Governance Statement
Statement of Comprehensive Income
8.3 A listed entity which has an equity-based remuneration scheme should:
(a) have a policy on whether participants are permitted to enter into transactions (whether
through the use of derivatives or otherwise) which limit the economic risk of participating in
the scheme; and
(b) disclose that policy or a summary of it.
Adopted - The Company has adopted a Policy for Trading in Company Securities which can be
found on the Company’s website at http://pancon.com.au/about-us/corporate-governance/
Directors, Officers and Employees who wish to trade in Company securities must first have regard
to the statutory provisions of the Corporations Act 2001 dealing with insider trading, in conjunction
with the Company’s Policy for Trading in Company Securities. The policy has been developed so
that all Company employees and representatives are clear as to their obligations with regard to
trading while in possession of insider information.
YEAR ENDED 30 JUNE 2015
Notes
OPERATING ACTIVITIES
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
2015
$
2014
$
(8,354)
(1,021,183)
(81,337)
(1,416)
(724,368)
(23,582)
(40,492,415) (17,846,392)
(7,770)
(43,751)
(2,432)
(40,885)
(49,073)
(29,067)
(119,661)
(91,182)
(267,367)
(42,206,141) (19,246,946)
(7,454)
(36,144)
(3,108)
(31,502)
(10,023)
(31,873)
(194,908)
(61,579)
(226,261)
328,058
(555)
327,503
1,090,608
(912,659)
177,949
(41,878,638) (19,068,997)
-
(41,878,638) (19,068,997)
-
-
-
-
-
(41,878,638) (19,068,997)
(3.64)
(3.64)
(1.66)
(1.66)
The Statement of Comprehensive Income is to be read in conjunction with the Notes to the Financial Statements.
39
27
Statement of Financial Position
Statement of Changes in Equity
AT 30 JUNE 2015
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
NON-CURRENT LIABILITIES
Provision for employee entitlements
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Parent entity interest
Contributed equity
Reserves
Accumulated losses
Total parent entity interest in equity
4
6
7
8
9a
10
10
CONSOLIDATED
2015
2014
$
$
1,345,837
51,839
1,397,676
9,665,484
45,055
9,710,539
83,257
13,399,620
13,482,877
1,388
45,950,928
45,952,316
14,880,553
55,662,855
1,248,123
1,248,123
160,215
160,215
8,427
8,427
-
-
1,256,550
160,215
13,624,003
55,502,640
AT 30 JUNE 2015
Consolidated
Profit or loss
Other comprehensive
income/(loss)
Shares issued (net of costs)
Share options
Profit or loss
Other comprehensive
income/(loss)
Shares issued (net of costs)
Share options
Share
Capital
Retained
Earnings
$
$
Option
Reserve
$
Total
Equity
$
Balance at 1 July 2014
99,411,998 (44,254,537)
345,179
55,502,640
(41,878,638)
(41,878,638)
Balance at 30 June 2015
99,411,998 (85,941,995)
154,000
13,624,003
191,180
(191,179)
Balance at 1 July 2013
99,411,998
(25,185,540)
345,179
74,571,637
(19,068,997)
(19,068,997)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1
-
-
-
Balance at 30 June 2014
99,411,998
(44,254,537)
345,179
55,502,640
The above Statement of Changes in Equity is to be read in conjunction with the Notes to the Financial Statements.
99,411,998
154,000
99,411,998
345,179
(85,941,995) (44,254,537)
55,502,640
13,624,003
TOTAL EQUITY
13,624,003
55,502,640
The Statement of Financial Position is to be read in conjunction with the Notes to the Financial Statements.
40
28
29
Statement of Financial Position
Statement of Changes in Equity
AT 30 JUNE 2015
Notes
Deferred exploration, evaluation and development costs
TOTAL NON-CURRENT ASSETS
CURRENT ASSETS
Cash assets
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provision for employee entitlements
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Parent entity interest
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
Total parent entity interest in equity
4
6
7
8
9a
10
10
CONSOLIDATED
2015
2014
$
$
1,345,837
9,665,484
51,839
45,055
1,397,676
9,710,539
83,257
1,388
13,399,620
45,950,928
13,482,877
45,952,316
14,880,553
55,662,855
1,248,123
1,248,123
160,215
160,215
8,427
8,427
-
-
1,256,550
160,215
13,624,003
55,502,640
99,411,998
99,411,998
154,000
345,179
(85,941,995) (44,254,537)
13,624,003
55,502,640
13,624,003
55,502,640
The Statement of Financial Position is to be read in conjunction with the Notes to the Financial Statements.
AT 30 JUNE 2015
Consolidated
Share
Capital
Retained
Earnings
$
$
Option
Reserve
$
Total
Equity
$
Balance at 1 July 2014
99,411,998 (44,254,537)
345,179
55,502,640
Profit or loss
Other comprehensive
income/(loss)
Shares issued (net of costs)
Share options
-
-
-
-
(41,878,638)
-
-
-
-
-
191,180
(191,179)
(41,878,638)
-
-
1
Balance at 30 June 2015
99,411,998 (85,941,995)
154,000
13,624,003
Balance at 1 July 2013
99,411,998
(25,185,540)
345,179
74,571,637
Profit or loss
Other comprehensive
income/(loss)
Shares issued (net of costs)
Share options
-
-
-
-
(19,068,997)
-
-
-
-
-
-
-
(19,068,997)
-
-
-
Balance at 30 June 2014
99,411,998
(44,254,537)
345,179
55,502,640
The above Statement of Changes in Equity is to be read in conjunction with the Notes to the Financial Statements.
28
29
41
Statement of Cashflows
Notes to the Financial Statements
YEAR ENDED 30 JUNE 2015
Notes
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
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
CONSOLIDATED
2015
2014
$
$
(1,735,302)
948,392
(1,583,303)
2,266,032
(7,964,324) (25,090,575)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This financial report was authorised for issue by the Directors on 30 September 2015.
Statement of Compliance
The financial report is a general purpose financial report which has been prepared in accordance with Australian
Accounting Standards (“AASBs”), including Australian interpretations adopted by the Australian Accounting
Standards Board (‘AASB’) and the Corporations Act 2001. The consolidated financial report of the consolidated
entity and company also complies with IFRSs and interpretations adopted by the International Accounting
11(a)
(8,751,234) (24,407,846)
Standards Board.
NET INCREASE/(DECREASE) IN CASH HELD
Add opening cash brought forward
Effects of exchange rate changes
CLOSING CASH CARRIED FORWARD
11(b)
(90,509)
(90,509)
-
-
249,959
-
-
1,089,388
-
-
249,959
1,089,388
(8,591,784) (23,318,458)
33,821,848
(837,906)
9,665,484
9,665,484
272,137
1,345,837
Basis of preparation
applied, unless otherwise stated.
(a) Income Tax
it is recognised in equity.
in respect of prior years.
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
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
Current tax is the expected tax payable on the taxable income for the year, and any adjustment to tax payable
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.
The above Statement of Cash Flows is to be read in conjunction with the Notes to the Financial Statements.
42
30
31
A monetary item arising under a foreign currency contract outstanding at the reporting date where the
ACTIVITIES
11(a)
(8,751,234) (24,407,846)
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Recharges & refunds of exploration expenditure
Expenditure on exploration interests
NET CASH FLOWS FROM/(USED IN) OPERATING
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
NET CASH FLOWS FROM/(USED IN) INVESTING
ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issues of ordinary shares
Interest received
Share issue costs
ACTIVITIES
NET CASH FLOWS FROM/(USED IN) FINANCING
NET INCREASE/(DECREASE) IN CASH HELD
Add opening cash brought forward
Effects of exchange rate changes
CLOSING CASH CARRIED FORWARD
11(b)
CONSOLIDATED
2015
2014
$
$
(1,735,302)
(1,583,303)
948,392
2,266,032
(7,964,324) (25,090,575)
-
-
-
-
(90,509)
(90,509)
249,959
1,089,388
-
-
249,959
1,089,388
(8,591,784) (23,318,458)
9,665,484
33,821,848
272,137
1,345,837
(837,906)
9,665,484
The above Statement of Cash Flows is to be read in conjunction with the Notes to the Financial Statements.
Statement of Cashflows
Notes to the Financial Statements
YEAR ENDED 30 JUNE 2015
Notes
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This financial report was authorised for issue by the Directors on 30 September 2015.
Statement of Compliance
The financial report is a general purpose financial report which has been prepared in accordance with Australian
Accounting Standards (“AASBs”), including Australian interpretations adopted by the Australian Accounting
Standards Board (‘AASB’) and the Corporations Act 2001. The consolidated financial report of the consolidated
entity and company also 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.
30
31
A monetary item arising under a foreign currency contract outstanding at the reporting date where the
43
Notes to the Financial Statements
Notes to the Financial Statements
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.
(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:
2015
30%
2014
30%
(p) Taxes
(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:
The ability to issue additional share capital under the Corporations Act 2001, if required, by a share
purchase plan, share placement or rights issue;
The option of farming out all or part of the consolidated entity’s exploration projects; and
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
44
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
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
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
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
the amount of the obligation.
(n) Contributed equity
of the share proceeds received.
(o) Revenue recognition
revenue is recognised:
Rendering of Services
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.
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:
• 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.
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.
33
Notes to the Financial Statements
Notes to the Financial Statements
exchange rate for the monetary item is fixed in the contract is translated at the exchange rate fixed in the
contract.
continue as a going concern and that it is appropriate to adopt that basis of accounting in the preparation of
the financial statements.
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.
(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.
(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.
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.
(n) Contributed equity
Issued and paid up capital is recognised at the fair value of the consideration received by the company.
Investments in controlled entities are carried in the company’s financial statements at the lower of cost and
(g) Investments
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.
2015
30%
2014
30%
Major depreciation rates are:
Plant and equipment:
(j) Joint ventures
cost and recoverable amount.
(k) Going concern
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
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:
The ability to issue additional share capital under the Corporations Act 2001, if required, by a share
purchase plan, share placement or rights issue;
The option of farming out all or part of the consolidated entity’s exploration projects; and
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
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:
• 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.
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.
45
33
Notes to the Financial Statements
Notes to the Financial Statements
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
2. DEPRECIATION AND WRITE OFF
Notes
(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:
• wages and salaries, non-monetary benefits, annual leave, long service leave, sick leave and other leave
benefits; and
• other types of employee benefits
are charged against profits on a net basis in their respective categories.
(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:
• costs of servicing equity (other than dividends);
•
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have
been recognised as expenses; and
• 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
34
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:
activities
Prima facie tax on profit from ordinary
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
CONSOLIDATED
2015
2014
$
$
8,354
1,416
40,492,415
17,846,392
CONSOLIDATED
2015
$
2014
$
(12,563,591)
(5,721,273)
12,563,591
5,721,273
-
-
-
-
(b) Future Income Tax Benefit not taken into account
The potential future income tax benefit calculated at 30% in respect of:
Adjustments to carry forward tax losses
Tax Losses not brought to account
Total
This future income tax benefit will only be obtained if:
-
-
6,706,042
6,245,263
6,706,042
6,245,263
(a) future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be
realised;
(b) the conditions for deductibility imposed by tax legislation continue to be complied with; and
(c) no changes in tax legislation adversely affect the consolidated entity in realising the benefit.
The recognition and utilisation of losses is subject to the loss recoupment rules being satisfied.
4. RECEIVABLES (CURRENT)
Sundry receivables
Total
(a) Terms and conditions
CONSOLIDATED
2015
2014
$
51,839
51,839
$
45,055
45,055
(i) Trade debtors are non-interest bearing and generally on 30 day terms.
(ii) Sundry debtors and other receivables are non-interest bearing and have repayment terms between 30
and 90 days.
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
2014
2015
$
$
8,354
1,416
40,492,415
17,846,392
CONSOLIDATED
2015
$
2014
$
(12,563,591)
(5,721,273)
-
-
12,563,591
5,721,273
-
-
Adjustments to carry forward tax losses
Tax Losses not brought to account
Total
This future income tax benefit will only be obtained if:
(a) future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be
6,706,042
6,706,042
6,245,263
6,245,263
-
-
realised;
(b) the conditions for deductibility imposed by tax legislation continue to be complied with; and
(c) no changes in tax legislation adversely affect the consolidated entity in realising the benefit.
The recognition and utilisation of losses is subject to the loss recoupment rules being satisfied.
4. RECEIVABLES (CURRENT)
Sundry receivables
Total
(a) Terms and conditions
CONSOLIDATED
2015
$
51,839
51,839
2014
$
45,055
45,055
(i) Trade debtors are non-interest bearing and generally on 30 day terms.
(ii) Sundry debtors and other receivables are non-interest bearing and have repayment terms between 30
and 90 days.
47
Notes to the Financial Statements
Notes to the Financial Statements
5. INTERESTS IN SUBSIDIARIES
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
2015
%
2014
%
2015
$
2014
$
Australia
100
100
2
2
Australia
100
100
(2)
(155,180)
(2)
(161,423)
-
1
-
1
(1)
4,511,137
(1)
5,009,288
(47,150)
(12,479)
Saint Lucia
100
100
10,584,107
10,584,107
8. TRADE and OTHER PAYABLES (CURRENT)
British Virgin
Islands
(10,584,107) (10,584,107)
7,263,753
(2,927,448)
6,681,913
(2,955,144)
100
100
380,000
380,000
(380,000)
73,995
(380,000)
66,535
-
8,109,571
-
9,238,226
A portion of the amount shown above relates to a cash call from BG Group, some of which goes back to
2013. Pancontinental disputes the amount claimed and continues to defend its rights in this matter.
*Indicates companies not audited by Rothsay Chartered Accountants.
**Australian entity audited by Rothsay, branch operation by Ernst & Young Namibia.
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
Write offs
Depreciation expense
Total written down amount
48
CONSOLIDATED
2014
2015
$
$
91,364
(8,107)
83,257
29,559
(28,171)
1,388
1,388
90,980
(757)
(8,354)
83,257
2,804
-
-
(1,416)
1,388
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 2014, the credit relates to refunds of past expenditure, for the year ended 30
June 2015 the credit relates to refunds of joint venture contributions and reimbursement of past costs.
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
Exploration expenditure written off – direct to P&L
Disposal of Australian assets
Recovery and refunds of exploration expenditure *
Carrying amount at 30 June
Trade creditors, accruals and provisions
Total
9. CONTRIBUTED EQUITY
(a) Issued and paid up capital
Ordinary shares fully paid
Total
(b) Movements in shares on issue
2015
2014
Number of
shares
$
Number of
shares
$
Beginning of the financial year
1,150,994,096
99,411,998
1,150,994,096
99,411,998
Issued during the year:
− Placement (net of costs)
− Exercise of Options (net of costs)
-
-
-
-
-
-
-
-
End of the financial year
1,150,994,096
99,411,998
1,150,994,096
99,411,998
CONSOLIDATED
2015
$
2014
$
45,950,928
8,661,655
38,938,195
25,080,520
(40,492,415) (17,752,562)
177,868
50,000
-
-
(948,416)
(315,225)
13,399,620
45,950,928
CONSOLIDATED
2015
2014
$
$
1,248,123
1,248,123
160,215
160,215
CONSOLIDATED
2015
$
2014
$
99,411,998
99,411,998
99,411,998
99,411,998
37
45,950,928
8,661,655
177,868
50,000
(948,416)
13,399,620
CONSOLIDATED
2015
$
2014
$
38,938,195
25,080,520
(40,492,415) (17,752,562)
-
-
(315,225)
45,950,928
Notes to the Financial Statements
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
Exploration expenditure written off – direct to P&L
Disposal of Australian assets
Recovery and refunds of exploration expenditure *
Carrying amount at 30 June
5. INTERESTS IN SUBSIDIARIES
Name
Country of
Percentage of
incorporation
equity interest
Investment
held by the
consolidated
entity
2015
2014
2015
%
%
$
2014
$
Australia
100
100
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
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
(155,180)
(161,423)
2
(2)
-
1
(1)
2
(2)
-
1
(1)
4,511,137
5,009,288
(47,150)
(12,479)
(10,584,107) (10,584,107)
6,681,913
7,263,753
(2,955,144)
(2,927,448)
100
100
380,000
380,000
(380,000)
73,995
(380,000)
66,535
-
-
8,109,571
9,238,226
*Indicates companies not audited by Rothsay Chartered Accountants.
**Australian entity audited by Rothsay, branch operation by Ernst & Young Namibia.
Office equipment
At cost
Less: Accumulated depreciation
Total written down amount
Reconciliations
Office equipment
Carrying amount opening balance
Additions
Write offs
Depreciation expense
Total written down amount
Reconciliations of the carrying amounts of property, plant and equipment
CONSOLIDATED
2015
2014
$
$
91,364
(8,107)
83,257
29,559
(28,171)
1,388
1,388
90,980
(757)
(8,354)
83,257
2,804
-
-
(1,416)
1,388
Pancontinental Namibia Pty Ltd**
Australia
100
100
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 2014, the credit relates to refunds of past expenditure, for the year ended 30
June 2015 the credit relates to refunds of joint venture contributions and reimbursement of past costs.
Saint Lucia
100
100
10,584,107
10,584,107
8. TRADE and OTHER PAYABLES (CURRENT)
Trade creditors, accruals and provisions
Total
CONSOLIDATED
2014
2015
$
$
160,215
1,248,123
160,215
1,248,123
British Virgin
Islands
A portion of the amount shown above relates to a cash call from BG Group, some of which goes back to
2013. Pancontinental disputes the amount claimed and continues to defend its rights in this matter.
9. CONTRIBUTED EQUITY
(a) Issued and paid up capital
Ordinary shares fully paid
Total
CONSOLIDATED
2014
2015
$
$
99,411,998
99,411,998
99,411,998
99,411,998
6. PROPERTY, PLANT AND EQUIPMENT
(b) Movements in shares on issue
Beginning of the financial year
Issued during the year:
− Placement (net of costs)
− Exercise of Options (net of costs)
End of the financial year
2015
2014
Number of
shares
$
1,150,994,096
99,411,998
Number of
shares
1,150,994,096
$
99,411,998
-
-
1,150,994,096
-
-
99,411,998
-
-
1,150,994,096
-
-
99,411,998
49
37
Notes to the Financial Statements
Notes to the Financial Statements
10. RESERVES AND ACCUMULATED LOSSES
Reserves
Beginning of the financial year
Options expired
End of the financial year
Accumulated losses
Beginning of the financial year
Net loss attributable to members of Pancontinental Oil &
Gas NL
Share options expired
Total available for appropriation
End of the financial year
CONSOLIDATED
2015
$
2014
$
345,179
(191,179)
154,000
345,179
-
345,179
(44,254,537)
(25,185,540)
(41,878,638)
191,180
(85,941,995)
(85,941,995)
(19,068,997)
-
(44,254,537)
(44,254,537)
11. STATEMENT OF CASH FLOWS
CONSOLIDATED
Information with respect to the number of options under the employee share incentive scheme is as follows:
2015
$
(a) Reconciliation of the net loss after tax to the net cash flows from operations
2014
$
Net loss
Non-Cash Items, Non-Operating Items
Depreciation of non-current assets
Financing expense
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
Net cash flow from operating activities
(b) Reconciliation of cash
Cash balance comprises:
cash assets
Closing cash balance
(41,878,638) (19,068,997)
8,354
555
(328,058)
1,416
912,659
(1,090,608)
(6,784)
(81,869)
1,885,001
1,416
32,551,308
(7,012,733)
-
1,087,908
-
(104,010)
(8,751,234)
-
38,949
-
(74,949)
(24,407,846)
1,345,837
1,345,837
9,665,484
9,665,484
50
Capital expenditure commitments
Estimated capital expenditure contracted for at reporting date, but not provided
12. EXPENDITURE COMMITMENTS
later than one year and not later than five years
for, payable:
not later than one year
other
other
Total
later than five years
13. EMPLOYEE BENEFITS
Employee Share Scheme
CONSOLIDATED
2015
2014
$
$
-
-
-
342,718
14,892,810
15,235,528
Balance at beginning of year
expired
Balance at end of year
2015
2014
Number of
options
5,000,000
(2,250,000)
2,750,000
Weighted
average
exercise
price
0.12
0.13
0.12
Number of
options
5,000,000
-
5,000,000
Weighted
average
exercise
price
0.12
-
0.12
Options held at the end of the reporting period
The following table summarises information about options held as at 30 June 2015. All options outstanding were
issued to Directors.
Number of options
2,750,000
Grant date
30 Nov 12
Expiry date
29 Nov 16
Weighted average
exercise price
0.1230
14. SUBSEQUENT EVENTS
There were no significant events after balance date.
15. EARNINGS PER SHARE
share:
Net profit
Adjustments:
CONSOLIDATED
2015
$
2014
$
(41,878,638)
(19,068,997)
The following reflects the income and share data used in the calculations of basic and diluted earnings per
Earnings used in calculating basic and diluted
earnings per share
(41,878,638)
(19,068,997)
Notes to the Financial Statements
Notes to the Financial Statements
10. RESERVES AND ACCUMULATED LOSSES
12. EXPENDITURE COMMITMENTS
Capital expenditure commitments
Estimated capital expenditure contracted for at reporting date, but not provided
for, payable:
not later than one year
other
later than one year and not later than five years
other
later than five years
Total
13. EMPLOYEE BENEFITS
CONSOLIDATED
2015
$
2014
$
-
-
-
342,718
14,892,810
15,235,528
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
expired
Balance at end of year
2015
2014
Number of
options
5,000,000
(2,250,000)
2,750,000
Weighted
average
exercise
price
0.12
0.13
0.12
Number of
options
5,000,000
-
5,000,000
Weighted
average
exercise
price
0.12
-
0.12
Options held at the end of the reporting period
The following table summarises information about options held as at 30 June 2015. All options outstanding were
issued to Directors.
Number of options
2,750,000
Grant date
30 Nov 12
Expiry date
29 Nov 16
Weighted average
exercise price
0.1230
14. SUBSEQUENT EVENTS
There were no significant events after balance date.
15. EARNINGS PER SHARE
CONSOLIDATED
2015
$
2014
$
Reserves
Beginning of the financial year
Options expired
End of the financial year
Accumulated losses
Beginning of the financial year
Gas NL
Share options expired
Total available for appropriation
End of the financial year
11. STATEMENT OF CASH FLOWS
Net loss attributable to members of Pancontinental Oil &
Net loss
Non-Cash Items, Non-Operating Items
Depreciation of non-current assets
Financing expense
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
Net cash flow from operating activities
(b) Reconciliation of cash
Cash balance comprises:
cash assets
Closing cash balance
CONSOLIDATED
2015
$
2014
$
345,179
(191,179)
154,000
345,179
345,179
-
-
-
-
(44,254,537)
(25,185,540)
(41,878,638)
(19,068,997)
191,180
(85,941,995)
(44,254,537)
(85,941,995)
(44,254,537)
CONSOLIDATED
2015
$
2014
$
(41,878,638) (19,068,997)
8,354
555
1,416
912,659
(328,058)
(1,090,608)
(6,784)
(81,869)
1,885,001
1,416
32,551,308
(7,012,733)
-
-
1,087,908
38,949
(104,010)
(74,949)
(8,751,234)
(24,407,846)
1,345,837
1,345,837
9,665,484
9,665,484
(a) Reconciliation of the net loss after tax to the net cash flows from operations
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
(41,878,638)
(41,878,638)
(19,068,997)
(19,068,997)
51
Notes to the Financial Statements
Notes to the Financial Statements
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
17. DIRECTOR AND EXECUTIVE DISCLOSURES
(a) Details of Specified Directors and Specified Executives
1,150,994,096
1,150,994,096
-
-
1,150,994,096
1,150,994,096
16. AUDITORS' REMUNERATION
Amounts received or due and receivable by
Rothsay for:
− an audit or review of the financial report of the
entity and any other entity in the consolidated
entity
− other services in relation to the entity and any
other entity in the consolidated entity
Amounts received or due and receivable by Ernst
and Young Namibia for:
− an audit or review of the financial report of
Pancontinental Namibia Pty Ltd
− other services in relation to the entity
1 $19,000 of the current year audit fee relates to the 2014 financial year.
2 $15,198 of the current year audit fee relates to previous financial years.
CONSOLIDATED
2015
2014
$
$
55,5001
18,500
-
-
25,8372
5,082
81,337
23,582
(i) Specified Directors
Henry David Kennedy
Roy Barry Rushworth
Ernest Anthony Myers
Anthony Robert Frederick
Maslin
(ii) Specified Executives
Vesna Petrovic
comparable companies.
Non-Executive Chairman
Executive Director, Chief Executive Officer
Executive Finance Director
Non-Executive Director
Company Secretary
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
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
Primary
Post Employment
Equity Other
Total
Cash
Non
Super-
Retirement
Options Bonus
Bonus
Monetary
annuation
benefits
benefits
Salary
& Fees
50,000
50,000
643,750
750,000
245,000
48,000
48,000
48,000
Specified
Directors/Officers
Henry David Kennedy
Roy Barry Rushworth
Ernest Anthony Myers
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
Anthony Robert Frederick Maslin
Vesna Petrovic
-
-
-
-
-
-
-
-
-
-
-
-
- -
-
-
-
-
- -
-
-
- -
50,000
50,000
-
-
- -
- -
- -
643,750
750,000
-
-
- -
- -
- -
245,000
48,000
-
-
- -
- -
48,000
- -
48,000
150,000
-
-
-
-
-
-
-
- -
150,000
- -
-
-
-
Total Remuneration: Specified Directors /Officers
1,136,750
896,000
-
-
- -
-
-
- - 1,136,750
- -
-
-
896,000
During the 2014 financial year, Mr Myers held a 50% interest in a consulting company which provided staff,
accounting and administrative services to listed companies, including Pancontinental. Mr Myers was paid a
salary from that company. The same company also paid the staff who provided company secretarial, accounting
and administrative services to Pancontinental. In the 2015 financial year, the contract for services came to an
end and Pancontinental sought the employment of individuals to fulfil the roles previously carried out by the
consulting company.
52
40
Notes to the Financial Statements
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
(ii) Specified Executives
Vesna Petrovic
Non-Executive Chairman
Executive Director, Chief Executive Officer
Executive Finance Director
Non-Executive Director
Company Secretary
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-
annuation
Retirement
benefits
Equity Other
Options Bonus
Total
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
1,150,994,096
1,150,994,096
-
-
1,150,994,096
1,150,994,096
16. AUDITORS' REMUNERATION
Amounts received or due and receivable by
Rothsay for:
− an audit or review of the financial report of the
entity and any other entity in the consolidated
entity
− other services in relation to the entity and any
other entity in the consolidated entity
Amounts received or due and receivable by Ernst
and Young Namibia for:
− an audit or review of the financial report of
Pancontinental Namibia Pty Ltd
− other services in relation to the entity
1 $19,000 of the current year audit fee relates to the 2014 financial year.
2 $15,198 of the current year audit fee relates to previous financial years.
CONSOLIDATED
2015
2014
$
$
55,5001
18,500
-
-
25,8372
5,082
81,337
23,582
Specified
Directors/Officers
Henry David Kennedy
2015
2014
Roy Barry Rushworth
2015
2014
Ernest Anthony Myers
50,000
50,000
643,750
750,000
2015
2014
245,000
48,000
Anthony Robert Frederick Maslin
48,000
48,000
2015
2014
Vesna Petrovic
2015
2014
-
-
-
-
-
-
-
-
-
-
-
-
- -
-
-
-
-
- -
-
-
- -
50,000
50,000
-
-
- -
- -
- -
643,750
750,000
-
-
- -
- -
- -
245,000
48,000
-
-
- -
- -
- -
48,000
48,000
150,000
-
-
-
-
-
-
-
- -
- -
-
-
150,000
-
Total Remuneration: Specified Directors /Officers
1,136,750
896,000
-
-
- -
2015
2014
-
-
- -
- - 1,136,750
896,000
-
-
During the 2014 financial year, Mr Myers held a 50% interest in a consulting company which provided staff,
accounting and administrative services to listed companies, including Pancontinental. Mr Myers was paid a
salary from that company. The same company also paid the staff who provided company secretarial, accounting
and administrative services to Pancontinental. In the 2015 financial year, the contract for services came to an
end and Pancontinental sought the employment of individuals to fulfil the roles previously carried out by the
consulting company.
40
53
Notes to the Financial Statements
Notes to the Financial Statements
(c) Remuneration options: Granted and vested during the year
There were no grants of remuneration options during the year.
(d) Option holdings of specified Directors and specified Executives
2015
Specified Directors
Henry David Kennedy
Roy Barry Rushworth
Ernest Anthony Myers
Anthony Robert Frederick
Maslin
Total
2014
Specified Directors
Henry David Kennedy
Roy Barry Rushworth
Ernest Anthony Myers
Anthony Robert Frederick
Maslin
Total
Balance at
beginning of
period
1 July 2014
1,250,000
2,500,000
750,000
500,000
5,000,000
Balance at
beginning of
period
1 July 2013
1,250,000
2,500,000
750,000
500,000
5,000,000
Granted as
Remuneration
Options
Exercised/
(Expired)
Net Change
Other
Balance at
end of period
-
-
-
-
-
(750,000)
(1,500,000)
-
-
-
30 June 2015
-
-
-
-
-
500,000
1,000,000
750,000
500,000
2,750,000
Granted as
Remuneration
Options
Exercised/
(Expired)
Net Change
Other
Balance at
end of period
-
-
-
-
-
-
-
-
-
-
30 June 2014
-
-
-
-
-
1,250,000
2,500,000
750,000
500,000
5,000,000
(e) Shareholdings of Specified Directors and Specified Executives
2015
Ordinary Shares held in
Pancontinental Oil & Gas NL
Specified Directors
Henry David Kennedy
Roy Barry Rushworth
Ernest Anthony Myers
Anthony Robert Frederick Maslin
Total
2014
Ordinary Shares held in
Pancontinental Oil & Gas NL
Specified Directors
Henry David Kennedy
Roy Barry Rushworth
Ernest Anthony Myers
Anthony Robert Frederick Maslin
Balance
1 July 2014
Acquisitions
(Disposals)
Balance
30 June 2015
141,351,602
36,835,610
400,715
14,583
178,602,510
-
-
-
-
-
141,351,602
36,835,610
400,715
14,583
178,602,510
Balance
1 July 2013
Acquisitions
(Disposals)
Balance
30 June 2014
134,051,602
36,835,610
400,715
14,583
7,300,000
-
-
-
141,351,602
36,835,610
400,715
14,583
Total
171,302,510
7,300,000
178,602,510
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.
The company and group have exposure to the following risks from their use of financial instruments:
19. FINANCIAL INSTRUMENTS
Financial risk management
Overview:
(a) credit risk
(b) liquidity risk
(c) market risk
through regular reviews of the risks.
(a) Credit risk:
charges to joint venture partners.
(i) Trade and other receivables:
characteristics of each joint venture.
(ii) Loans to subsidiaries:
This note presents information about the company’s and group’s exposure to each of the above risks, their
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
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-
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 company’s and group’s exposure to credit risk is influenced directly and indirectly by the individual
The company has provided funding to its subsidiaries by way of loans. Based on Management’s review of the
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.
54
42
43
Notes to the Financial Statements
Notes to the Financial Statements
(c) Remuneration options: Granted and vested during the year
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:
Balance at
Granted as
Options
Net Change
Balance at
beginning of
Remuneration
Exercised/
Other
end of period
(Expired)
(a) credit risk
(b) liquidity risk
(c) market risk
(e) Shareholdings of Specified Directors and Specified Executives
(a) Credit risk:
This note presents information about the company’s and group’s exposure to each of the above risks, their
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.
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 company’s and group’s exposure to credit risk is influenced directly and indirectly by the individual
characteristics of each joint venture.
(ii) Loans to subsidiaries:
The company has provided funding to its subsidiaries by way of loans. Based on Management’s review of the
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
43
Balance at
Granted as
Options
Net Change
Balance at
beginning of
Remuneration
Exercised/
Other
end of period
There were no grants of remuneration options during the year.
(d) Option holdings of specified Directors and specified Executives
Specified Directors
Henry David Kennedy
Roy Barry Rushworth
Ernest Anthony Myers
Anthony Robert Frederick
2015
Maslin
Total
2014
Specified Directors
Henry David Kennedy
Roy Barry Rushworth
Ernest Anthony Myers
Anthony Robert Frederick
Maslin
Total
period
1 July 2014
1,250,000
2,500,000
750,000
500,000
5,000,000
period
1 July 2013
1,250,000
2,500,000
750,000
500,000
5,000,000
-
-
-
-
-
-
-
-
-
-
(Expired)
(750,000)
(1,500,000)
-
-
-
-
-
-
-
-
2015
Ordinary Shares held in
Pancontinental Oil & Gas NL
Specified Directors
Henry David Kennedy
Roy Barry Rushworth
Ernest Anthony Myers
Anthony Robert Frederick Maslin
Total
2014
Ordinary Shares held in
Pancontinental Oil & Gas NL
Specified Directors
Henry David Kennedy
Roy Barry Rushworth
Ernest Anthony Myers
Anthony Robert Frederick Maslin
Balance
1 July 2014
Acquisitions
(Disposals)
Balance
30 June 2015
141,351,602
36,835,610
400,715
14,583
178,602,510
Balance
1 July 2013
Acquisitions
(Disposals)
Balance
30 June 2014
7,300,000
134,051,602
36,835,610
400,715
14,583
Total
171,302,510
7,300,000
178,602,510
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30 June 2015
500,000
1,000,000
750,000
500,000
2,750,000
30 June 2014
1,250,000
2,500,000
750,000
500,000
5,000,000
141,351,602
36,835,610
400,715
14,583
178,602,510
141,351,602
36,835,610
400,715
14,583
42
Notes to the Financial Statements
Notes to the Financial Statements
Exposure to credit risk
Exposure to currency risk:
The carrying amount of the company’s and group’s financial assets represents the maximum credit exposure.
The maximum exposure to credit risk at the reporting date was:
Consolidated
Trade and other receivables
Cash and cash equivalents
Total
Impairment losses:
Note
4
Carrying amount
2015
$
2014
$
51,839
1,345,837
1,397,676
45,055
9,665,484
9,710,539
None of the company’s or group’s receivables are past due at 30 June 2015, (2014: 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
$62,367 (2014: $8,978,003).
Whilst the loans were not payable at 30 June 2015 a provision for impairment based 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
group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the group’s reputation.
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 group’s income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within acceptable parameters, while
optimising the return.
(i) Currency risk:
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.
AUD to USD rate.
Interest rate risk:
financial institution.
Variable rate
instruments
Cash and cash equivalents
44
56
The group’s exposure to foreign currency risk at balance date was as follows, based on notional amounts:
30 June 2015
30 June 2014
AUD
USD
Total
AUD
USD
Total
1,052,933 292,904
1,345,837
7,036,895
2,628,589
9,665,484
51,839
51,839
45,055
45,055
-
-
-
-
Trade and other
(1,256,550)
(1,256,550)
(160,215)
(160,215)
Net balance
(151,778) 292,904
141,126
6,921,735
2,628,589
9,550,324
AUD
Cash & cash
equivalents
Trade & other
receivables
payables
sheet
exposure
The following significant exchange rates applied during the year:
Average rate
Reporting date spot rate
2015
0.837
2014
0.918
2015
0.765
2014
0.942
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
AUD : USD
Sensitivity analysis:
2014.
Effect in AUD
30 June 2015
10% strengthening
30 June 2014
10% strengthening
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 USD bank account 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
At balance date the group had exposure to interest rate risk, through its cash and equivalents held within
Consolidated
Equity
Profit or
loss
32,545
32,545
64,610
64,610
Consolidated Carrying
Amount
30 June
2015
30 June
2014
1,345,837
9,665,484
Notes to the Financial Statements
Notes to the Financial Statements
The carrying amount of the company’s and group’s financial assets represents the maximum credit exposure.
The maximum exposure to credit risk at the reporting date was:
Note
4
Carrying amount
2015
$
51,839
1,345,837
1,397,676
2014
$
45,055
9,665,484
9,710,539
Exposure to credit risk
Consolidated
Trade and other receivables
Cash and cash equivalents
Total
Impairment losses:
None of the company’s or group’s receivables are past due at 30 June 2015, (2014: 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
$62,367 (2014: $8,978,003).
Whilst the loans were not payable at 30 June 2015 a provision for impairment based 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
group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the group’s reputation.
The group manages liquidity risk by maintaining adequate cash reserves through continuously monitoring
forecast and actual cash flows.
(c) Market risk:
optimising the return.
(i) Currency risk:
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity
prices will affect the group’s income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within acceptable parameters, while
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.
Exposure to currency risk:
The group’s exposure to foreign currency risk at balance date was as follows, based on notional amounts:
30 June 2015
30 June 2014
AUD
USD
Total
AUD
USD
Total
1,052,933 292,904
1,345,837
7,036,895
2,628,589
9,665,484
51,839
(1,256,550)
-
-
51,839
45,055
(1,256,550)
(160,215)
-
-
45,055
(160,215)
(151,778) 292,904
141,126
6,921,735
2,628,589
9,550,324
AUD
Cash & cash
equivalents
Trade & other
receivables
Trade and other
payables
Net balance
sheet
exposure
The following significant exchange rates applied during the year:
AUD : USD
Average rate
Reporting date spot rate
2015
0.837
2014
0.918
2015
0.765
2014
0.942
Sensitivity analysis:
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
2014.
Effect in AUD
30 June 2015
10% strengthening
30 June 2014
10% strengthening
Consolidated
Equity
Profit or
loss
32,545
32,545
64,610
64,610
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 USD bank account 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
44
Consolidated Carrying
Amount
30 June
2015
30 June
2014
1,345,837
9,665,484
57
Notes to the Financial Statements
Notes to the Financial Statements
Fair value sensitivity analysis for fixed rate instruments:
21. PARENT INFORMATION
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.
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.
Fair values:
AT 30 JUNE 2015
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
2015
$
2014
$
(41,865,729)
(19,062,522)
(41,865,729)
(19,062,522)
2015
$
2014
$
1,389,518
8,884,363
14,784,486
55,567,964
1,232,154
1,240,581
158,330
158,330
99,411,998
99,411,998
154,000
345,179
(86,022,093)
(44,347,543)
13,543,905
55,409,634
The fair values of financial assets and liabilities, together with the carrying amounts shown in the balance
sheet, are as follows:
Consolidated
30 June 2015
30 June 2014
Carrying
amount
Fair value
Trade and other receivables
Cash and cash equivalents
Trade and other payables
51,839
1,345,837
(1,256,550)
51,839
1,345,837
(1,256,550)
Carrying
amount
45,055
9,665,484
(160,215)
Fair value
45,055
9,665,484
(160,215)
141,126
141,126
9,550,324
9,550,324
The basis for determining fair values is disclosed in note [1].
Capital Management:
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business. The Board of Directors monitors the return on
capital, which the group defines as net operating income divided by total Shareholders’ equity, 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 %
2015
2014
-
13,624,003
14,880,553
91.56%
34,563,322
(41,878,638)
(121.16)%
-
55,502,640
55,662,855
99.71%
65,037,139
(19,068,997)
(29.32)%
There were no changes in the group’s approach to capital management during the year.
Neither the company nor any of its subsidiaries are subject to externally imposed capital requirements.
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 (2014:
$50,000). Refer note 17.
(b) The company has effected Directors and Officers Liability Insurance.
58
46
47
Notes to the Financial Statements
Notes to the Financial Statements
Fair value sensitivity analysis for fixed rate instruments:
21. PARENT INFORMATION
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.
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 2015
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
2015
$
2014
$
(41,865,729)
(19,062,522)
(41,865,729)
(19,062,522)
2015
$
2014
$
1,389,518
8,884,363
14,784,486
55,567,964
1,232,154
1,240,581
158,330
158,330
99,411,998
154,000
(86,022,093)
13,543,905
99,411,998
345,179
(44,347,543)
55,409,634
Fair values:
sheet, are as follows:
The fair values of financial assets and liabilities, together with the carrying amounts shown in the balance
Consolidated
30 June 2015
30 June 2014
Trade and other receivables
51,839
45,055
45,055
Cash and cash equivalents
1,345,837
1,345,837
9,665,484
9,665,484
Trade and other payables
(1,256,550)
(1,256,550)
(160,215)
(160,215)
Carrying
amount
51,839
Fair value
Fair value
Carrying
amount
141,126
141,126
9,550,324
9,550,324
The basis for determining fair values is disclosed in note [1].
Capital Management:
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business. The Board of Directors monitors the return on
capital, which the group defines as net operating income divided by total Shareholders’ equity, 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 %
2015
2014
-
-
13,624,003
55,502,640
14,880,553
91.56%
34,563,322
(41,878,638)
(121.16)%
55,662,855
99.71%
65,037,139
(19,068,997)
(29.32)%
There were no changes in the group’s approach to capital management during the year.
Neither the company nor any of its subsidiaries are subject to externally imposed capital requirements.
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 (2014:
$50,000). Refer note 17.
(b) The company has effected Directors and Officers Liability Insurance.
46
47
59
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 2015 and of their performance for the year ended on that date; and
(ii) complying with Accounting Standards including International Financial Reporting 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 2015.
On behalf of the Board
Ernest Anthony Myers
Director
Perth 30 September 2015
60
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 2015 and of their performance for the year ended on that date; and
(ii) complying with Accounting Standards including International Financial Reporting 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 2015.
On behalf of the Board
Ernest Anthony Myers
Director
Perth 30 September 2015
61
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 2015.
(a) Distribution of equity securities
The number of shareholders, by size of holding, in each class of share are:
1
- 1,000
1,001
- 5,000
5,001
- 10,000
10,001 - 100,000
100,001
and over
parcel of shares are:
Ordinary shares
Number of holders Number of shares
425
315
405
1,707
1,030
92,036
1,094,692
3,440,967
74,046,810
1,072,319,591
3,882
1,150,994,096
Listed ordinary shares
Number of
Percentage of
ordinary
shares
11.49
The number of shareholders holding less than a marketable
2,960
9,777,270
(b) Twenty largest shareholders
The names of the twenty largest holders of quoted shares are:
SUNDOWNER INTERNATIONAL LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
CM SKYE TRUSTEES LIMITED
FLOTECK CONSULTANTS LIMITED
COMSEC NOMINEES PTY LIMITED
FARJOY PTY LTD
RACT SUPER PTY LTD
JUSTIN NUFF PTY LTD
NATIONAL NOMINEES LIMITED
ROY BARRY RUSHWORTH
BNP PARIBAS NOMS PTY LTD
CRESCENT NOMINEES LIMITED
MRS JULIE ANNE HOUSTON
MR ROBERT ALBERT BOAS
EXOIL PTY LTD
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
BECK INVESTMENTS (QLD) PTY LTD
shares
132,256,827
111,810,335
63,971,635
31,312,181
26,277,940
20,000,000
17,882,279
12,500,000
10,000,000
10,000,000
9,720,241
9,057,670
9,054,127
8,821,169
8,000,000
7,826,045
7,525,000
7,500,000
7,151,202
6,904,329
ABN AMRO CLEARING SYDNEY NOMINEES PTY LTD
MRS STEPHANIE ELIZABETH BECK
517,570,980
44.97
9.71
5.56
2.72
2.28
1.74
1.55
1.09
0.87
0.87
0.84
0.79
0.79
0.77
0.7
0.68
0.65
0.65
0.62
0.6
6262
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 2015.
(a) Distribution of equity securities
The number of shareholders, by size of holding, in each class of share are:
1
- 1,000
1,001
- 5,000
5,001
- 10,000
10,001 - 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:
Ordinary shares
Number of holders Number of shares
92,036
425
315
405
1,707
1,030
1,094,692
3,440,967
74,046,810
1,072,319,591
3,882
1,150,994,096
2,960
9,777,270
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
SUNDOWNER INTERNATIONAL LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
CM SKYE TRUSTEES LIMITED
FLOTECK CONSULTANTS LIMITED
COMSEC NOMINEES PTY LIMITED
FARJOY PTY LTD
RACT SUPER PTY LTD
JUSTIN NUFF PTY LTD
NATIONAL NOMINEES LIMITED
ROY BARRY RUSHWORTH
BNP PARIBAS NOMS PTY LTD
BECK INVESTMENTS (QLD) PTY LTD
CRESCENT NOMINEES LIMITED
MRS JULIE ANNE HOUSTON
MR ROBERT ALBERT BOAS
EXOIL PTY LTD
ABN AMRO CLEARING SYDNEY NOMINEES PTY LTD
MRS STEPHANIE ELIZABETH BECK
Listed ordinary shares
Number of
shares
132,256,827
111,810,335
63,971,635
31,312,181
26,277,940
20,000,000
17,882,279
12,500,000
10,000,000
10,000,000
9,720,241
9,057,670
9,054,127
8,821,169
8,000,000
7,826,045
7,525,000
7,500,000
7,151,202
6,904,329
Percentage of
ordinary
shares
11.49
9.71
5.56
2.72
2.28
1.74
1.55
1.09
0.87
0.87
0.84
0.79
0.79
0.77
0.7
0.68
0.65
0.65
0.62
0.6
517,570,980
44.97
63
ASX Additional Information
Notes to the Financial Statements
Additional information required by the ASX Ltd and not shown elsewhere in this report is as follows.
(c) Voting rights
The information is current as at 30 September 2015.
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
(a) Distribution of equity securities
The number of shareholders, by size of holding, in each class of share are:
(d) Substantial Shareholders
1
- 1,000
The details of substantial shareholders are set out below:
Ordinary shares
Number of holders Number of shares
92,036
Number of
Shares
425
1,001
- 5,000
5,001
Sundowner International Limited
- 10,000
10,001 - 100,000
100,001
(e) Permit Schedule
and over
Licence
The number of shareholders holding less than a marketable
parcel of shares are:
Permits
Interests
and
Permit reference
315
405
1,707
1,030
1,094,692
132,256,827
3,440,967
74,046,810
1,072,319,591
3,882
1,150,994,096
2,960
Interest
9,777,270
Petroleum prospects
Kenya
(b) Twenty largest shareholders
Namibia
L6
EL 0037
40% offshore, 16% onshore
30%
The names of the twenty largest holders of quoted shares are:
Listed ordinary shares
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
SUNDOWNER INTERNATIONAL LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
CM SKYE TRUSTEES LIMITED
FLOTECK CONSULTANTS LIMITED
COMSEC NOMINEES PTY LIMITED
FARJOY PTY LTD
RACT SUPER PTY LTD
JUSTIN NUFF PTY LTD
NATIONAL NOMINEES LIMITED
ROY BARRY RUSHWORTH
BNP PARIBAS NOMS PTY LTD
BECK INVESTMENTS (QLD) PTY LTD
CRESCENT NOMINEES LIMITED
MRS JULIE ANNE HOUSTON
MR ROBERT ALBERT BOAS
EXOIL PTY LTD
ABN AMRO CLEARING SYDNEY NOMINEES PTY LTD
MRS STEPHANIE ELIZABETH BECK
Number of
shares
132,256,827
111,810,335
63,971,635
31,312,181
26,277,940
20,000,000
17,882,279
12,500,000
10,000,000
10,000,000
9,720,241
9,057,670
9,054,127
8,821,169
8,000,000
7,826,045
7,525,000
7,500,000
7,151,202
6,904,329
Percentage of
ordinary
shares
11.49
9.71
5.56
2.72
2.28
1.74
1.55
1.09
0.87
0.87
0.84
0.79
0.79
0.77
0.7
0.68
0.65
0.65
0.62
0.6
517,570,980
44.97
64
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Level One, 10 Ord Street
West Perth WA 6005
Telephone: +61 8 6363 7090
Facsimile: +61 8 6363 7099