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Level 2, 30 Richardson Street
West Perth WA 6005
Telephone: +61 8 6363 7090
+61 8 6363 7099
Facsimile:
Corporate Information
ABN 95 003 029 543
Directors
Ernest Anthony Myers
Roy Barry Rushworth
Vesna Petrovic
Company Secretary
Vesna Petrovic
Board Advisor
Iain Peter Smith
Registered Office
Level 2, 30 Richardson Street
West Perth WA 6005
Telephone:
Fax:
+61 8 6363 7090
+61 8 6363 7099
Share Registry
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
Permit Schedule
Review of Operations
Directors' Report
Corporate Governance Statement
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors' Declaration
Independent Audit Report
Executive Chairman
Executive Director
Executive Director
6
7
8
15
36
49
50
51
52
53
71
76
Corporate Information
Who we are
▪ Pancontinental Energy NL
is an Australian based
international energy exploration company with interests in
Africa and Australia.
▪ The Company’s headquarters are in West Perth, Western
Australia.
▪ The Company is listed on the Australian Securities Exchange
under code PCL.
▪ Pancontinental is managed by a team of experienced
financial
from corporate,
technical and
individuals
backgrounds.
4
Corporate Information
Strategy & Business
Model
Identify energy
basins with
overlooked potential
and seek funding for
PCL's original ideas
Create value for
Shareholders
Secure acreage at
low entry cost and
complete initial work
programmes
Attract highly
reputable companies
to partner in projects
5
Chairman’s Review
Dear Shareholder,
I am pleased to present to you Pancontinental’s 2023 Annual Report on what
has been a transformational year for PCL.
In March 2023, PCL and Woodside entered into an option agreement for a 3D
seismic program over Petroleum Exploration Licence (PEL) 87 in the Orange
Basin, offshore Namibia. The option agreement provides Woodside an
exclusive right to acquire a 56% Participating Interest in PEL 87, in
consideration for Woodside paying for a 3D seismic survey covering an area of at least 5,000 square
kilometres within PEL 87 at an estimated cost of US$ 35 million and also paying Pancontinental US$1.5
million. Woodside exceeded expectations and carried out a survey covering 6,593 km2 of which 5,952
km2 is in the PEL 87 block. The survey was completed in May 2023.
The Orange Basin has hosted major oil discoveries by Shell and TotalEnergies, both to the south of
PCL’s block. It has been reported that Chevron and GALP (also to the immediate south of PCL) will
also be drilling wells in the near future.
PCL also took the opportunity to strengthen the balance sheet with a $5 million capital raising which
was carried out in May 2023. This provides us with sufficient funding to support future operational
activities. We have also added to the team with the appointment of Iain Smith as an advisor to the
Board. Iain was previously Managing Director of successful Perth basin explorer Norwest Energy NL,
a company acquired by Mineral Resources Limited. His input and experience will be of immense value
as we progress our Namibian project.
The results achieved in 2023 would not have been possible without the efforts of my fellow directors
Barry Rushworth and Vesna Petrovic. We are also indebted to our office administrator Linda
Underwood for her support and commitment. We have been fortunate to have had the services of
consulting geophysicist Gary Powis who has played a pivotal role during the year. I must also make
special mention of our former Chairman David Kennedy who stepped down at last year’s AGM. He has
been a mentor over many years and his guidance has enabled PCL to be positioned where it is today.
I thank shareholders for their support over the journey. We have worked hard over a long period to
bring to fruition the project in Namibia and we trust shareholders will now reap the rewards in the
near future.
EA Myers
Chairman
6
Permit Schedule
Pancontinental is a junior energy exploration company
with a portfolio of high quality assets in prospective
hydrocarbon provinces
Namibia
PEL 87
Australia
ATP 920 + 924
(Ace Area)
LOCATION:
Orange Basin,
Offshore Namibia
LOCATION:
Cooper Eromanga Basin,
Queensland, Australia
PROJECT SIZE:
PROJECT SIZE:
10,947 square kilometres
ATP 920 - 2,337 square kilometres
ATP 924 - 2,220 square kilometres
JOINT VENTURE PARTNERS:
JOINT VENTURE PARTNERS:
Pancontinental Orange Pty Ltd
75.00%
Custos Investments (Pty) Ltd
15.00%
National Petroleum Corporation of
Namibia (NAMCOR) 10.00%
GEOLOGY:
Pancontinental believes that PEL 87
is highly prospective for oil, with
high quality mature oil source rocks
and the potential for very large oil
traps.
Water depths are between 500m
and 3,200 m.
Pancontinental has a large interest
in this area.
ATP 920
Key Petroleum Limited
80.00%
Pancontinental Energy NL
20.00%**
ATP 924 [Ace Area]
Key Petroleum Limited
75.00%
Pancontinental Energy NL
25.00%**
**earning
GEOLOGY:
The farmin acreage acquired by
Pancontinental
contains
conventional trends prospective for
both oil and gas.
large
volume
Potentially
prospectivity
for unconventional
gas is present within the acreage
but has yet to be fully evaluated
and documented.
7
Review of Operations
Namibia
Namibia Offshore PEL 87
Location:
Orange Basin
Project Size:
10,947 square kilometres
JV Partners:
Pancontinental
Custos Investments (Pty) Ltd 15%
NAMCOR
10%
Woodside Energy holds an option to acquire a 56% interest
75% (Operator)
Pancontinental has been active within Namibia for over ten years as a partner in various joint ventures
that have completed significant exploration programmes, including the drilling of the Cormorant-1
well in recent years. The Company’s technical team has maintained its strong belief in the prospectivity
of the region with each successive Namibian venture, and dealings with the Ministry of Mines & Energy
(MME) and local partners have consistently been positive.
Pancontinental originated the Petroleum Exploration Licence 87 (PEL 87) joint venture in 2017 with
its local Namibian partners NAMCOR (National Petroleum Corporation of Namibia) and Custos
Investments (Pty) Ltd. PEL 87 is located within the Orange Basin, offshore Namibia; an emerging
petroleum province that is attracting considerable interest from major, global E&P companies due to
a number of very significant oil discoveries since early 2022.
In early 2022, two major oil discoveries within the Namibian Orange Basin, TotalEnergies Venus-1X
discovery and Shell's Graff-1 discovery. The Venus discovery has been successfully appraised by the
Venus-1A well, and the original discovery well has been production tested with positive results that
suggest excellent reservoir deliverability. Venus is reported to potentially host some 3 Billion Barrels
of oil recoverable, and as a result TotalEnergies are directing half of the company's global exploration
PEL 878
Review of Operations
and appraisal budget to its PEL 56 permit. Meanwhile Shell have followed up its Graff discovery with
"four out of five" successful oil wells, with discoveries at Jonker, La Rona and Lesidi. Both TotalEnergies
and Shell's discoveries have received worldwide recognition as some of the most significant oil
exploration results in recent times.
Importantly for Pancontinental, these discoveries are situated on trend to PEL 87, sharing the same
oil source formation and analogous depositional environments. PEL 87 covers an area of 10,970 km2,
surrounding the vast Aptian-aged Saturn Turbidite Complex (STC, or Saturn), a feature that extends
across some 4,000 km2 with a core area of approximately 2,400 km2. The STC and adjacent strata
play host to multiple exploration leads across a variety of hydrocarbon play types. Saturn is of
comparable age and of comparable depositional environment to the multi-billion barrel discoveries to
the south. Water depths across PEL 87 range from approximately 500m to over 3,200m.
Technical work completed since the commencement of PEL 87 includes numerous geological and
geophysical studies, largely based upon the 2,800 line kilometres of legacy 2D seismic data. The STC
was defined during these technical assessments. Saturn is thought to be up to 300 metres thick and
encased by thick, competent shale units - including the Kudu oil shale source which lies directly
beneath.
SaturnMoosehead-1VenusKudu Gas FieldPEL 87PEL 56PEL 39PEL 90PEL 83TotalEnergiesShellGALPChevronPCLGraff9
Review of Operations
During the reporting period Pancontinental announced that the MME had granted a second, one-year
extension to the current (initial) four-year period of PEL 87, exempting the typical 50% area
relinquishment. As such, the current Exploration Period ends on 22 January 2024.
Also during the reporting period, Pancontinental entered into an Option Deed (Deed) with a wholly
owned subsidiary of Woodside Energy Group Ltd (Woodside). Under the terms of the Deed, Woodside
has earned an exclusive option to acquire a 56% participating interest in PEL 87 in return for fully
funding an extensive 3D seismic survey and paying Pancontinental US$1.5 million. Shortly after
execution of the Deed, seismic contractor PGS commenced 3D seismic acquisition, completing the
survey in late May 2023. The survey was originally intended to cover an area of approximately 5,000
km2 at an estimated cost of US$35 million, however during the survey the area was increased at
Woodside's election to 6,593 km2 (with no modification to the commercial terms of the Deed). The
completed 3D seismic survey fully covers the STC and its periphery.
The acquired seismic "field data" is presently being processed by primary processing contractor CGG,
with the final Pre-stack Depth Migration (PSDM) volume due to be received late 2023. As preliminary,
interim seismic volumes are received Pancontinental is updating its interpretation of the data utilising
a specialist independent consultant, and in close collaboration with Joint Venture partners.
Upon receipt of the final processed PSDM data, Woodside will have up to 180 days to exercise its
option, at which time Pancontinental and Woodside will enter into a Farmout Agreement which will see
Pancontinental fully carried for the drilling of an exploration well within PEL 87. In the meantime,
Pancontinental will remain Operator of PEL 87 and will receive all interim and final 3D seismic products
and interpretations from the seismic contractors and Woodside as they become available.
Upon execution of the Farmout Agreement Pancontinental will retain a 20% interest in PEL 87, having
entered into an option agreement with its existing joint venture partner Custos Investments (Pty) Ltd
(Custos) to acquire a 1% interest at an upfront cost of US$1.5 million and an exercise fee of US$1.0
million. Both the US$1.5 million receivable from Woodside and the US$1.5 million payable to Custos
have been settled during the reporting period.
After completion of the first exploration well, if the joint venture elects to drill a second well then
under the terms of the Deed Pancontinental has various options, as presented in Figure 1 below.
*Exercisable at any time up to 60 days after the approval of any Development Plan
Figure 1: Pancontinental options under Woodside Option Deed
Pancontinental is delighted to have successfully positioned itself with a significant working interest in
a large licence area in this prime exploration hot spot, and looks forward to further exploring the PEL
87 permit in collaboration with its Joint Venture partners.
10
Review of Operations
Namibia Offshore PEL 37
During the reporting period Pancontinental Energy advised of its intention to withdraw from the
process of seeking regulatory approval of an extension to the original PEL 37 Licence offshore Namibia,
thereby withdrawing from the permit.
Queensland, Australia
Onshore, Cooper Basin, ATP 920, 924 (Ace Area)
Location:
Cooper Eromanga Basin
Project Size:
ATP 920 - 2,337 km2 ATP 924 - 2,220 km2
JV Partners:
ATP 920 Key Petroleum Limited (Operator)
ATP 920 Pancontinental Energy NL
ATP 924* Key Petroleum Limited (Operator)
ATP 924* Pancontinental Energy NL
* Ace Area
**earning
80.00%
20.00%**
75.00%
25.00%**
Pancontinental farmed into the Meeba Project, Cooper Basin, Onshore Queensland during 2019.
COVID-19 as well as a number of natural disasters in the Eastern States have set back the planned
activities on the Authorities to Prospect for operator Key Petroleum Limited (“Key”) and the joint
venture.
Project status has been approved by the regulator DNRME, enabling the joint venture to transfer
commitments between the Authorities to Prospect, thereby focusing its efforts only on the most
prospective areas. A detailed review of the projects is being conducted to determine the focus areas
for future exploration.
New Ventures
The Company continually evaluates new venture opportunities that might be pursued to complement
the Company’s existing portfolio of exploration assets. The Company is mindful that any new venture
must be the right fit and offer compelling value for Shareholders. Many factors are considered when
assessing any new project. Not only does the Company assess the prospectivity of the area and how
it may bring returns for its Shareholders, it also considers the risks involved in the project.
Environmental, social and governance risks play an important role in the assessment of each new
venture. The impact of the project on climate change is an important factor and with this in mind,
Pancontinental is carefully assessing projects to select only the most appropriate.
Corporate
Chairman
HD Kennedy
After 23 years as a Director of Pancontinental, David Kennedy retired during the financial year. Mr
Kennedy has always been a major supporter of the Company and participated in many capital raisings
during his tenure. He leaves the Company in a good position with the Namibian PEL 87 Project being
part of the renewed interest in the Orange Basin due to the nearby major discoveries by Shell and
Total.
11
Review of Operations
EA Myers
Ernie Myers stepped up to fulfil the role of Chairman after 13 years on the Board of Pancontinental.
Placements
In July 2022, the Company undertook a Placement to raise $2 million before costs through a placement
of up to 400 million shares at an issue price of $0.005 per share to sophisticated and professional
investors. Investors in the placement were issued one free attaching listed option for every two
placement shares issued (with the listed options exercisable at $0.012 each and expiring 8 August
2025). In addition, the Lead Manager received 100 million broker options.
In May 2023, Pancontinental raised $5 million through a placement to sophisticated and professional
investors of 500 million shares at an issue price of $0.01 per share, together with one free listed
option for every two shares issued. The listed options are exercisable at $0.012 each and expire 8
August 2025. The Placement received strong support from existing and new sophisticated and
professional investors, including directors and advisers of the Company.
Issue of Securities
During the reporting period, the Company issued 230 million unlisted options under the Company’s
Incentive Awards Plan. The issues to Directors were approved by Shareholders at the Annual General
Meeting.
Annual General Meeting
Pancontinental’s Annual General Meeting of shareholders was held on 30 November 2022. All
resolutions put to the meeting; the remuneration report, re-election of director, approval of placement
facility, ratification of securities, approval of issue of securities, renewal of proportional takeover
provisions in the constitution and confirmation of auditor appointment were passed on a poll.
Results can be found following the link below:
https://clients2.weblink.com.au/news/pdf_2%5C02606356.pdf
Annual Report
The Company’s annual report was lodged during the December 2022 quarter.
A copy of the report can be found following the below link:
https://clients2.weblink.com.au/news/pdf_2%5C02589568.pdf
Half Year Report
The Company’s half year report was lodged during the March 2023 quarter.
A copy of the report can be found by following the link below:
https://clients2.weblink.com.au/news/pdf_2%5C02643014.pdf
12
Review of Operations
Change of Auditor
In accordance with section 329(5) of the Corporations Act 2001, the Company received the resignation
of the audit firm that traded as Rothsay Auditing and ASIC’s consent to that resignation. Rothsay Audit
& Assurance Pty Ltd has been appointed auditor of the Company and this appointment continued until
the annual general meeting where it was proposed that Rothsay Audit & Assurance Pty Ltd be
appointed as auditors of the Company. The Shareholders voted in favour of the resolution.
Appointment of Iain Smith
As announced on 15 May 2023, Iain Smith has been engaged as an adviser to the Board of
Pancontinental in a part-time role. Iain was until recently the Managing Director of Perth Basin explorer
Norwest Energy NL, a company acquired by Mineral Resources Limited.
Notice of Meeting
A Notice of Meeting was lodged with ASX during the June 2023 quarter for a General Meeting which
was held on 25 July 2023. The resolutions covered ratification of shares and options, Director
participation in the placement and issue of incentive options to Directors. All resolutions put to the
meeting were passed on a poll.
Climate Change
Pancontinental is mindful of the developing and continued interest of stakeholders in climate change
issues. Climate risk has evolved to become an important consideration in investment and corporate
strategic decisions. It is now widely recognised as a critical risk to business, industry and capital
markets. So much so, that the guidance recommends that listed companies consider disclosing climate
change risk separately to other general risk categories, which is what Pancontinental has adopted
(please see Directors’ Report for detailed discussion on risk and climate change).
The G20 Financial Stability Board established the Task Force on Climate-related Financial Disclosures
(“TCFD”) which is an industry-led task force that has published recommendations for financial report
preparers to assist in providing investors the most relevant climate change disclosures. The Company
has utilised the publication as well as other recommended publications as a guide in providing our
stakeholders with the appropriate information in this regard which can be found in the Directors’
Report.
13
Review of Operations
Prospective Resource Estimates Cautionary Statement
DISCLAIMERS & NOTES
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
Prospective Resource estimates in this report have been prepared as at the date disclosed under the
prospective resource numbers. 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 and probabilistic methods
depending on the project and this is disclosed under the prospective resource numbers. 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 Pancontinental’s percentage
entitlement under Joint Venture contracts and adjusted for applicable royalties.
Prospective Resources estimates in this report have been made by Pancontinental Energy 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.
Competent Person Statement Information
The hydrocarbon resource estimates in this report have been compiled by Mr Brian Diamond (PEL 87) and
Key Petroleum Limited (ATP 920-924 (Ace Area)) and reviewed to the satisfaction of Mr Roy Barry
Rushworth, the Technical Director of Pancontinental Energy 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 Energy 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.
14
Directors’ Report
The Directors of Pancontinental Energy NL (“Pancontinental” or the “Company”) submit their report for the year
ended 30 June 2023.
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
Ernest Anthony Myers CPA (Mr Myers held the positions of CEO and Executive
Director until December 2022 when he was appointed Executive Chairman)
Mr Myers, an Accountant by profession, has held senior management and executive
roles within a number of ASX listed companies. During his career he has been
instrumental in the capital raisings and financial management of these companies. He
has played a key role in managing the Group’s African portfolio. Mr Myers joined
Pancontinental in March 2004, was appointed Executive Director in January 2009 and
Chief Executive Officer in November 2018.
Mr Myers was also Non-Executive Chairman of Norwest Energy NL from November
2018 until its takeover by Mineral Resources Limited during the 2023 financial year.
Roy Barry Rushworth, BSc (Executive Director - Technical)
Mr Rushworth is a Geologist who brings extensive experience in petroleum exploration
to the Company. Commencing with positions in exploration operations, his career then
extended to the role of Chief Geologist and Exploration Manager for an Australian
listed company. A number of oil and gas discoveries were made by the Company
during that time. More recently, Mr Rushworth has been responsible for identifying,
negotiating and acquiring international new venture opportunities in Malta, Kenya,
Morocco and Namibia and the farm out of the projects to major companies.
Mr Rushworth has been a Director of Pancontinental since August 2005.
Vesna Petrovic, BComm, CPA (Executive Director & Company Secretary)
Ms 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.
Roles in accounting and finance of numerous publicly listed entities, particularly those
involved in Africa have provided Ms Petrovic a base from which to contribute to the
accounting and governance functions at Pancontinental.
Ms Petrovic was appointed Company Secretary in April 2010, Executive Director in
December 2016, Alternate for Mr Kennedy in July 2017 and reappointed Executive
Director in September 2018.
FORMER DIRECTOR
Henry David Kennedy MA (Geology), SEG (Non-Executive Chairman)
Mr Kennedy was appointed to the Board of Pancontinental over 20 years ago. He retired from his position as Non-
Executive Chairman in December 2022.
15
Directors’ Report
DIRECTORS' INTERESTS
The relevant interest of each Director in the shares and options of the Company as at 30 June 2023 is as follows:
Ordinary Shares
Options over
Ordinary Shares
20,000,000
Henry David Kennedy (retired December 2022)
-
Ernest Anthony Myers
100,000,000
Roy Barry Rushworth
Vesna Petrovic
40,000,000
Note: See the Significant Events after Balance Date section for details of ordinary shares and options issued
post year end.
658,824,491
2,900,715
144,335,610
-
DIRECTORS' MEETINGS
The numbers of meetings 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 (retired December 2022)
Ernest Anthony Myers
Roy Barry Rushworth
Vesna Petrovic
Directors'
Meetings
4
4
4
4
4
Notes
Due to the size of the Board, communications between the members are very open with discussions regarding
the Company’s affairs discussed weekly either by email or phone so that all members of the Board are aware
of the current state of affairs. The Directors discussed and agreed various matters throughout the financial year
which were resolved by circular resolution. All of the Company’s Committees are carried out by the full Board.
16
Directors’ Report
CORPORATE INFORMATION
Corporate structure
Pancontinental Energy NL (ACN 003 029 543) is a no liability Company incorporated and domiciled in Australia.
The Company’s registered office is Level 2, 30 Richardson Street, West Perth WA 6005.
Nature of operations and principal activities
The principal activity during the year of Entities within the Consolidated Entity was exploration for energy
sources.
Business drivers are the key inputs and activities that drive the operational and financial results of a business.
For a Company in the exploration stage, business drivers include the management of working capital and
sensible capital investment decisions as well as technical excellence in sourcing, assessing and providing
guidance for projects which will create value for the Entity and its Shareholders.
There have been no significant changes in the nature of those activities during the year.
Objectives
Objectives of the Group include:
Continue exploration on the Company’s current portfolio of permits;
Extract value from the Company’s asset base;
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
Cents
Earnings (loss) per share
Basic earnings (loss) per share
Diluted earnings (loss) per share
The result from the financial year ended 30 June 2022 was a loss of $823,179. The current financial year also
produced a loss, at $1,870,559. While the Company has always operated on a low cost and overhead model,
the recent situation internationally has affected businesses across every industry albeit some more than others.
The Company has responded by working carefully to decrease each and every discretionary and non-essential
expenditure item as well as seeking reductions for essential expenditure.
(0.02)
(0.02)
Employees
The Consolidated Entity had two (2) Employees as at 30 June 2023, (2022: three (3)). The Consolidated Entity
employs the services of specialised consultants where and when needed.
OPERATING AND FINANCIAL REVIEW
Projects
Namibia PEL 87 – Offshore [75% interest]
Pancontinental originated the PEL 87 joint venture in 2017 with its local Namibian partners NAMCOR (10%) and
Custos Investments (Pty) Ltd (15%). The Company is Operator of the project and holds a substantial 75%
interest. The PEL 87 licence covers Block 2713 offshore Namibia and is 10,970 square kilometres in size. A
Turbidite Fan complex of Aptian Age named Saturn, has been uncovered in exploration carried out to date. The
structure holds a number of leads that, based on Pancontinental’s interpretation are encased in sealing shales.
The Saturn Turbidite Fan complex covers a core area of more than 2,400 square kilometres with an overall area
of about 4,000 square kilometres and holds significant oil potential.
17
Directors’ Report
Pancontinental has had a long relationship with Namibia and has been present in country for over a decade.
The Company believes strongly in the prospectivity of the region and has completed numerous exploration
programmes in recent years. Offshore Namibia has become a focus of oil industry attention after two major oil
discoveries, by Total and Shell, in the Orange Basin in February 2022.
On 5 December 2022, Pancontinental announced that the Honourable Tom K. Alweendo, the Minister of Mines
and Energy in Namibia, had granted to Pancontinental and its joint venture partners Custos and Namcor, a
second one-year extension to the current, first, four-year period of the offshore Petroleum Exploration Licence
87. The current Initial Exploration Period now ends on 23 January 2024.
After the current period, two additional periods totalling four years are available, with possible additional
extensions if granted. The current Petroleum Exploration Licence (PEL) can be converted to a Production Licence
under pre-agreed terms.
In addition to the requested extension, the Minister has exempted an otherwise obligatory 50% relinquishment
of the licence area of PEL 87, leaving the area at 10,970 sq km, until the expiry of the extended term.
During the reporting period, Pancontinental entered into an Option Deed (Deed) with a wholly owned subsidiary
of Woodside Energy Group Ltd (Woodside). Under the terms of the Deed, Pancontinental has granted to
Woodside an exclusive option to acquire a 56% participating interest in Petroleum Exploration Licence 87 (PEL
87), in return for Woodside fully funding a 3D seismic survey and paying Pancontinental US$1.5 million. The 3D
seismic survey was originally intended to cover an area of at least 5,000 km2, at an estimated cost of US$35
million, however the area has subsequently been increased by Woodside to approximately 6,872 km2, with no
modification to the commercial terms of the Deed.
In the event that Woodside elects to exercise its option under the Deed, Pancontinental and Woodside will enter
into a Farmout Agreement which will see Pancontinental fully carried for the drilling of an exploration well within
PEL 87. Pancontinental will retain a 20% interest in the project, having entered into an option agreement with
its existing joint venture partner Custos Investments (Pty) Ltd (Custos) to acquire a 1% interest at an upfront
cost of US$1.5 million and an exercise fee of US$1.0 million. Both the US$1.5 million receivable from Woodside
and the US$1.5 million payable to Custos have been settled during the reporting period.
After completion of the first exploration well, if the joint venture elects to drill a second well then under the
terms of the Deed Pancontinental has various options, as presented in Figure 1 below.
*Exercisable at any time up to 60 days after the approval of any Development Plan
Figure 1: Pancontinental options under Woodside Option Deed
Shortly after Pancontinental executed an Option Deed with a subsidiary of Woodside (announced 1 March 2023),
seismic contractor PGS commenced 3D seismic acquisition and completed the survey on 23 May 2023, utilising
its specialist vessel, the Ramform Titan.
The final survey area of 6,593 km2 covers the core, and peripheral areas of the highly prospective Saturn
Turbidite Complex. The survey took 83 days to complete, utilising the Ramform Titan, two supporting vessels
and a total crew of 90 specialists, plus shore support staff.
The final field data set has been delivered to processing contractor CGG. Pancontinental will conduct its own
interpretation of the data utilising a specialist independent consultant. Pancontinental will provide a high-level
overview of the seismic results as soon as the Company's substantive initial interpretation has been completed.
Receipt of a final processed dataset will require a further few months, from which time Woodside will have up
to 180 days to exercise its option to enter into a Farmout Agreement with Pancontinental to fully carry the
Company through drilling of an exploration well. In the meantime, Pancontinental will remain Operator of PEL
87 and will receive all interim and final 3D seismic products and interpretations from the seismic contractors
and Woodside as they become available.
18
Directors’ Report
Namibia PEL 37 – Offshore
Pancontinental Energy’s 66.67% owned subsidiary, Pancontinental Namibia Pty Ltd, has decided to withdraw
from the process of seeking an extension to the original PEL 37 Licence offshore Namibia. Pancontinental has
held the licence since 28 March 2011.
Since the withdrawal of farminee Tullow on 21 March 2021, Pancontinental Namibia had been endeavouring to
reach agreement with its remaining joint venture partner but could not reach agreement and consequently
withdrew from the process.
Queensland Australia ATP 920 & 924 [20-25% earning interest]
While the Company’s focus has mostly been in Africa, in recent years it was decided that the exploration portfolio
should be broadened to include shorter term projects with near term activity which would complement the
Company’s longer term assets in Namibia. As such, the Company signed agreements to acquire two large
exploration permits, ATP 920 and ATP 924 (Ace area) in the Cooper Basin, Queensland. The agreement was
executed with the Operator of the permits Key Petroleum Cooper Basin Pty Ltd, a wholly owned subsidiary of
ASX listed Key Petroleum Limited.
The Eastern States of Australia were then affected by natural disasters including record temperatures, severe
flooding and bushfires. This occurred prior to the COVID-19 pandemic. This has made proceeding with planned
activities difficult.
A detailed review of the projects is ongoing to determine the way forward.
Corporate
Chairman
HD Kennedy
After 23 years as a Director of Pancontinental, David Kennedy retired during the financial year. Mr Kennedy has
always been a major supporter of the Company and participated in many capital raisings during his tenure. He
leaves the Company in a good position with the Namibian PEL 87 Project being part of the renewed interest in
the Orange Basin due to the nearby major discoveries by Shell and Total.
EA Myers
Ernie Myers stepped up to fulfil the role of Chairman after 13 years on the Board of Pancontinental.
Placements
In July 2022, the Company undertook a Placement to raise $2 million before costs through a placement of up
to 400 million shares at an issue price of $0.005 per share to sophisticated and professional investors. Investors
in the placement were issued one free attaching listed option for every two placement shares issued (with the
listed options exercisable at $0.012 each and expiring 8 August 2025). In addition, the Lead Manager received
100 million broker options.
In May 2023, Pancontinental raised $5 million through a placement to sophisticated and professional investors
of 500 million shares at an issue price of $0.01 per share, together with one free listed option for every two
shares issued. The listed options are exercisable at $0.012 each and expire 8 August 2025. The Placement
received strong support from existing and new sophisticated and professional investors, including directors and
advisers of the Company.
Issue of Securities
During the reporting period, the Company issued 230 million unlisted options under the Company’s Incentive
Awards Plan. The issues to Directors were approved by Shareholders at the Annual General Meeting.
19
Directors’ Report
Annual General Meeting
Pancontinental’s Annual General Meeting of shareholders was held on 30 November 2022. All resolutions put to
the meeting; the remuneration report, re-election of director, approval of placement facility, ratification of
securities, approval of issue of securities, renewal of proportional takeover provisions in the constitution and
confirmation of auditor appointment were passed on a poll.
Results can be found following the link below:
https://clients2.weblink.com.au/news/pdf_2%5C02606356.pdf
Annual Report
The Company’s annual report was lodged during the December 2022 quarter.
A copy of the report can be found following the below link:
https://clients2.weblink.com.au/news/pdf_2%5C02589568.pdf
Half Year Report
The Company’s half year report was lodged during the March 2023 quarter.
A copy of the report can be found by following the link below:
https://clients2.weblink.com.au/news/pdf_2%5C02643014.pdf
Change of Auditor
In accordance with section 329(5) of the Corporations Act 2001, the Company received the resignation of the
audit firm that traded as Rothsay Auditing and ASIC’s consent to that resignation. Rothsay Audit & Assurance
Pty Ltd has been appointed auditor of the Company and this appointment continued until the annual general
meeting where it was proposed that Rothsay Audit & Assurance Pty Ltd be appointed as auditors of the Company.
The Shareholders voted in favour of the resolution.
Appointment of Iain Smith
As announced on 15 May 2023, Iain Smith has been engaged as an adviser to the Board of Pancontinental in a
part-time role. Iain was until recently the Managing Director of Perth Basin explorer Norwest Energy NL, a
company acquired by Mineral Resources Limited.
Notice of Meeting
A Notice of Meeting was lodged with ASX during the June 2023 quarter for a General Meeting which was held
on 25 July 2023. The resolutions covered ratification of shares and options, Director participation in the
placement and issue of incentive options to Directors. All resolutions put to the meeting were passed on a poll.
New Ventures
The Company is continually searching for, and evaluating new ventures that could be pursued to complement
the Company’s existing portfolio of exploration assets.
20
Directors’ Report
Group Overview
Pancontinental Energy NL was incorporated in 1985 and listed on the Australian Securities Exchange in 1986.
The Pancontinental Group is comprised of the Parent Company along with three subsidiary companies.
Dynamics of the Business
The Company is continually working on development of its existing projects and evaluates emerging
opportunities as they become available. While the Company’s main focus has been in Africa, the technical team
is open to jurisdictions outside of Africa if they are compatible with the strengths of the team at Pancontinental.
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 on a regular basis.
The underlying drivers which contribute to the Company’s performance and that 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 used as a performance indicator however, the
share price is not entirely indicative of a Company’s performance and can be influenced by factors outside the
control of Management and the Board such as market conditions.
Operating Results for the Year
Summarised operating results are as follows:
Non-segment and unallocated revenues and results
Consolidated Entity revenues and results from ordinary activities before
income tax expense
2023
Revenues
$
Results
$
72,429
(1,870,559)
72,429
(1,870,559)
This financial years’ result is a loss of $1,870,559. Management has worked carefully to reduce all costs where
possible. For essential items crucial to running the business, reductions have been sought. Non-essential and
discretionary expenditure has been reduced as much as possible. There are 3 Directors and 1 Employee who
carry out the day-to-day operations of the Company. Specialist consultants are engaged when required.
Shareholder Returns
The Group is in the exploration phase and so returns to Shareholders are primarily measured through capital
growth.
Profit /(Loss) attributable to
owners of the Company
Basic earnings per share
(cents)
Share price
2023
(1,870,559)
2022
2021
2020
2019
(823,179)
(788,165)
(4,463,850)
(1,633,481)
(0.02)
(0.01)
(0.01)
(0.08)
(0.03)
$0.012
$0.001
$0.001
$0.001
$0.002
Net Loss amounts have been calculated in accordance with Australian Accounting Standards.
21
Directors’ Report
Risk Management
Risk management at Pancontinental begins with the Board who delegate authority throughout the organisation.
The Board monitors, identifies, analyses and responds to any risks that will impact the Company in realising its
strategic direction as well as potential risks that are perhaps not expected, but could cause a disruption.
Risk management is a day-to-day part of the business which is considered in all decision making. Project
management, financial planning, corporate actions, strategic partnerships, conducting business abroad and the
like. The process of identifying and analysing risk factors includes both quantitative and qualitative factors. 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 able to continue without disturbance.
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 identified business risks specific to
Pancontinental and the industry it operates in. These include:
Operating Risks
Health and Safety – The safety and health of the people at Pancontinental is paramount. The physical
and mental wellbeing of its Directors and Employees is crucial to the Company achieving success. For
example, during the COVID-19 pandemic, the Company protected its workers while continuing business
operations by adhering to recommended guidelines to prevent the spread of the virus including
restricted travel, alternative office access options, provision of hygiene consumables and social
distancing.
Joint Venture Operators - Currently some of Pancontinental’s assets are managed by Joint Venture
Operators who are responsible for the day-to-day operation of the permits. As such, regular review of
Joint Venture activities is crucial in safeguarding the assets of the Company. Attendance at joint venture
meetings is important to keep abreast of any emerging risks that could impact the Company due to its
joint venture activities.
Foreign Jurisdictions - Conducting business in foreign jurisdictions carries with it a risk of change in
business, legal, tax, accounting, political, environmental and technical practices which may have a
material effect on the Company.
Loss of Key Data – Pancontinental has a tried and tested backup system of all its data. The Company is
confident that no unauthorised access could compromise key data. However, there is still a level of risk
involved due to cyber-attacks or outages. If there was a violation it could cause serious business
interruption such as loss of data, damage to the data system and privacy breaches. In recent years, the
Company moved to a cloud-based system which provides for ease of remote access for Staff and faster
recovery in the event of an attack or outage.
Financial Risks
Access to Funding – In the past, Pancontinental has funded its operations by several means; funds
received from the divestment of project areas, investment partner expenditure on the Company’s behalf
(carried expenditure) and equity markets. Volatility in capital markets or the exploration industry could
limit the Company’s access to future funding. Pancontinental has successfully reached out to the equity
market this year, with broker support and without issue. The Company has maintained a long and
successful relationship with the broking house who has supported the majority of funds raised this year.
The Company continues to seek partnering opportunities such as those negotiated in the past which
have allowed the Company to participate in multi-million-dollar exploration programs such as drilling
exploration wells in Kenya and Namibia.
Market Prices - Oil and gas price volatility as well as currency fluctuations in Australian and United States
dollars. Commodity prices and foreign exchange rates are subject to global economic forces. 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 exploration budgets and overall activity in the exploration sector.
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Directors’ Report
Strategic Risks
Climate Change Risk - Certain research has shown that the global climate is changing and may continue
to change. Extreme weather events such as flooding and drought are thought to be increasing in severity
and frequency. As such, this affects the planning and day to day running of businesses and industry.
Pancontinental will consider climate change risk in its everyday business decisions and how it can adapt
to changing conditions believed to be caused by climate change. Governments, regulators, lenders and
investors are becoming more and more interested in how companies are managing the impacts of
climate change. Pancontinental may be impacted by increased regulation and costs associated with
climate change. Climate change risk is discussed in detail in the following section.
Extraordinary Events - Extraordinary events such as the COVID-19 pandemic. The Company may be
affected by future events similar to those experienced during the COVID-19 pandemic which affected
lives and businesses worldwide. The Company must be prepared to again act quickly should a similar
situation arise.
Regulatory Change – Pancontinental’s operations and finances may be affected by a changes to
government policy, regulations or legislation. Unexpected changes may impact longer term projects and
their viability to provide returns for shareholders.
Social Risks – Social exposures may include; diversity and inclusion and health and safety.
Pancontinental has consistently exceeded the industry average for diversity.
The Group has advised each Director, Employee 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 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 Annual General Meeting and Shareholders are requested to vote on
Board and Executive remuneration aggregates as well as Employee Incentive Schemes. All resolutions put to a
meeting are voted on by a poll.
The Company’s Board prevents the occurrence of risks by undertaking regular reviews of the Group’s business
practices to identify potential risks. Techniques used for identifying risks include:
Evaluating each function of the business and identifying anything that could have a negative impact on
the Group’s operations;
Reviewing records to identify previous issues that could have a current impact;
Considering any external risks that could affect the Group; and
Consulting with Employees and independent contractors as well as auditors to identify risks and in turn
implementing risk prevention measures.
Once potential risks have been identified, managing risks involves developing cost effective options on how to
best to deal with the risks. Risks can be:
Avoided – by changing business processes or equipment to achieve a similar outcome with less risk;
Reduced - if a risk can’t be avoided the Group can reduce its likelihood and consequence. This could
include Staff training, documenting procedures and policies, complying with legislation, maintaining
equipment, practicing emergency procedures, keeping records safely secured and contingency planning;
Transferred - transfer some or all of the risk to another party through contracting, insurance,
partnerships or joint ventures; and
Accepted – this may be the only option.
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 the Group to safeguard its assets.
23
Directors’ Report
Climate Change
Pancontinental is mindful of the developing and continued interest of stakeholders in climate change issues.
Climate risk has evolved to become an important consideration in investment and corporate strategic decisions.
It is now widely recognised as a critical risk to business, industry and capital markets. So much so, that the
guidance recommends that listed companies consider disclosing climate change risk separately to other general
risk categories, which is what Pancontinental has adopted.
The G20 Financial Stability Board established the Task Force on Climate-related Financial Disclosures (“TCFD”)
which is an industry-led task force that has published recommendations for financial report preparers to assist
in providing investors the most relevant climate change disclosures. The Company has utilised the publication
as a guide in providing our stakeholders with the appropriate information in this regard.
The TCFD structured its recommendations around four thematic areas that represent core elements of how
organisations operate: governance, strategy, risk management and metrics and targets. The four
recommendations are supported by recommended disclosures that build out the framework that will help
investors and others understand how the reporting organisation has assessed climate-related risks and
opportunities.
The voluntary disclosure recommendations issued by the TCFD are specifically designed to help companies
produce information that is useful for investors (among others).
Climate change risk, as defined by the TCFD falls into two main categories; risks related to the transition to a
lower-carbon economy and risks related to the physical impacts of climate change:
1. Transition risks – transitioning to a lower-carbon economy may entail extensive policy, legal, technology
and market changes to address mitigation and adaption requirements related to climate change.
2. Physical risks – physical risks resulting from climate change can be acute or chronic. Acute physical risks
refer to those that are event-driven, including increased severity of extreme weather events, such as cyclones
or floods. Chronic physical risks refer to longer-term shifts in climate patterns.
In addition to risks, climate change can also bring about opportunities. Companies will need to consider that
with any change, opportunities can arise.
Pancontinental will continue to use the recommendations of the TCFD as a reference for climate change related
disclosures which we expect to continue to evolve over the coming years.
Recommended Disclosures
Pancontinental Commentary
Governance
The organisation’s governance around climate-related risks and opportunities.
a) Describe the Board’s oversight of
climate-related risks and opportunities.
The Board considers those matters that would ordinarily be the
responsibility of a Risk Committee as they believe it is crucial
for all Board members to be a part of this process. The Board
assess risks (including climate-related risks) 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 material risk profile,
including climate risk.
As above. Due to the size of the Company and cost reduction
reasons, the Executive Board members manage the day to day
activities and there is no separate management function.
b) Describe Management’s role in
assessing and managing climate-related
risks and opportunities.
Strategy
The actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses,
strategy and financial planning, where such information is material.
a) Describe the climate-related risks and
opportunities the organisation has
identified over the short, medium, and
long term.
1. Transition risks:
• Transition changes may affect regulatory bodies in the
countries Pancontinental holds exploration properties, which
may delay approval of documents, in turn delaying planned
work programmes [Short, medium and long term risk];
24
Directors’ Report
b) Describe the impact of climate-related
risks and opportunities on the
organisation’s businesses, strategy and
financial planning.
c) Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-related
scenarios, including a 2°C or lower
scenario.
• Transitioning to a low carbon economy may bring with it costs
for new technology, training, property, plant and equipment,
additional insurance and general operating costs [Short,
medium and long term risk];
• During the transition phase companies in the industry may
also utilise their capital reserves to invest in low carbon
alternatives, leaving less of a budget for farmins and other asset
deals within the industry [Short, medium and long term risk];
and
• Increased shareholder activism which may divert Company
funds or delay planned project activity. [Short and medium
risk];
2. Physical risks:
• Extreme weather events may affect exploration activities on
the ground with delays having the potential to have a financial
impact on the Company and its operations [Short, medium and
long term risk];
• Damage to property caused by floods or the like may lead to
the early write off of certain assets [Short, medium and long
term risk]; and
• Physical climate change events may have an impact on
staffing levels, both at corporate and operational levels [Short,
medium and long term risk].
3. Opportunities
• Revenue opportunities for the Company may result from the
increased demand for low emissions products and processes
should the Company be able to acquire new technology.
[Medium and long term opportunity];
• A low emissions environment may bring about new and
emerging markets where the Company may be able to source
capital. [Short, medium and long term opportunity].
Described in (a) above.
The organisation’s strategy
is
appropriate as the Company is in the exploration stage and does
not have any material greenhouse gas emissions and the
climate change risks it has are based on future events that may
or may not occur.
towards climate change
The Company consumes the following limited energy sources:
Electricity in the shared office - the Company does not
have control of the electricity source and whether it can
be replaced with 100% renewable energy due to its sub-
tenant status;
Waste disposal – the shared office produces minimal
waste to be disposed of and with a move towards a
paperless office this form of energy consumption will
decrease even further. The Company does not have
control over the waste recycling due to its sub-tenant
status;
Travel – Since the COVID-19 pandemic the Company
utilises the use of video conferencing more frequently,
reducing the need for travel and associated emissions.
25
Directors’ Report
Should the circumstances of the Company change, so too would
the organisation’s strategy. If the Company were to produce
material greenhouse gases it would then be appropriate for the
Company to implement an annual target for the reduction of
such emissions and report against those annually.
are
into
As climate change is an emerging area the Directors as always
have the option of engaging external specialists to assist with
an understanding of definitions, impacts and materiality of the
climate risk issue, should the need arise.
Refer to the Risk Management section preceding this Climate
Change section of the annual report for a detailed description of
how the Company identifies risk (including climate risk) and the
processes for dealing with the risk.
Risk Management
The processes used by the organisation to identify, assess, and manage climate-related risks.
a) Describe the organisation’s processes
for identifying and assessing climate-
related risks.
b) Describe the organisation’s processes
for managing climate-related risks.
c) Describe how processes for identifying,
assessing, and managing climate-related
risks
the
integrated
organisation’s overall risk management.
Metrics and Targets
The metrics and targets used to assess and manage relevant climate-related risks and opportunities.
a) Disclose the metrics used by the
organisation to assess climate-related
risks and opportunities in line with its
strategy and risk management process.
b) Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 greenhouse gas
(GHG) emissions, and the related risks.
c) Describe the targets used by the
organisation to manage climate-related
risks and opportunities and performance
against targets.
As the Company is in the exploration stage, the calculation of
emissions data is not relevant.
Refer to Strategy part (c).
Refer to Strategy part (c).
26
Directors’ Report
Investments for Future Performance
The Board is continually assessing the Company’s assets and considering how it could position itself to execute
its growth strategy which is aimed at enhancing shareholder value while utilising the expertise and experience
of its Board and personnel.
During the financial year, Pancontinental announced that its wholly owned subsidiary Pancontinental Orange Pty
Ltd had entered into an Option Deed with Woodside Energy (GOM), Inc, a wholly owned subsidiary of Woodside
Energy Group Ltd whereby Pancontinental granted Woodside an exclusive option to acquire a 56% Participating
Interest in PEL 87, in consideration for Woodside paying for a 3D seismic survey covering an area of at least
5,000 square kilometres within the area the subject of PEL 87 at an estimated cost of US$ 35 million and also
paying Pancontinental US$1.5 million.
Woodside has a period of at least 180 days after the delivery of the seismic survey data to exercise that option.
If Woodside exercises the option then Woodside and Pancontinental have agreed to enter into a farmout
agreement whereby Woodside will carry the existing joint venture during the drilling of the first exploration well
to be drilled on the licence area after the completion of the seismic survey.
To ensure Pancontinental retains at least a 20% interest in the project if Woodside exercises its option,
Pancontinental has, for a consideration of US$1.5 million, entered into an option agreement with Custos
Investments (Pty) Ltd to acquire a 1% interest from Custos by paying Custos a further US$1million. This option
is exercisable by Pancontinental within a similar time period as Woodside’s option. Pancontinental will retain a
20% interest during the drilling of the well.
If the joint venture decides to drill a second well then Pancontinental may:
(i)
retain its 20% interest but must pay its share of well costs;
(ii)
cost of the second well; or
reduce its interest to a 10% Participating Interest and have Woodside carry Pancontinental through the
(iii)
gross overriding revenue royalty interest.
at any time up to 60 days after the approval of any Development Plan, convert its interest to a 1.5%
Upon Woodside’s election to exercise its option, Woodside will pay Pancontinental approximately US$ 2.5 million,
of which approximately US$1.5 million is reimbursement of a portion of Pancontinental’s past costs.
The Company sees the Option Deed with Woodside as a valuable investment for the future performance of the
Company.
Review of Financial Condition
Capital Structure
The Company’s current capital structure is as follows:
Share Capital
Balance at end of financial year
Option Reserve
Balance at end of financial year
Number of shares
$
8,054,222,823 118,645,569
Number of options
230,000,000
$
1,130,000
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.
27
Directors’ Report
Liquidity and Funding
During the financial year, the Company issued 900,000,000 ordinary shares; 400,000,000 at $0.005 and
500,000,000 at $0.01, grossing a total of $7,000,000.
Post year end, Pancontinental raised $40,000 from the issue of 4,000,000 ordinary shares to Directors upon
approval by Shareholders in General Meeting. In addition, the Company received $24,000 from the conversion
of 2,000,000 listed options at $0.012 to ordinary shares.
As detailed in the Investments for Future Performance section above, after signing the Option Deed with
Woodside in March 2023, Pancontinental received US$1.5 million during the financial year. Pancontinental also
entered into an Option Deed with Custos Investments (Pty) Ltd for a consideration of US$1.5 million, to acquire
a 1% interest from Custos by paying Custos a further US$1million. This payment was also made in the current
financial year.
SHARE OPTIONS
Unissued shares
As at 30 June 2022, there were 78,926,830 ordinary shares under options exercisable at $0.006. These options
expired during the year. 230,000,000 unlisted options were issued to Directors, Employees, Consultants and
Advisors during the current financial year. 160,000,000 were issued with an exercise price of $0.007 and expiry
30 December 2026 and 70,000,000 with an exercise price of $0.016 and expiry 29 May 2027. See the Significant
Events after Balance Date section for details of options issued post year end.
549,999,998 listed options exercisable at $0.012 each and with an expiry date of 8 August 2025 were issued
during the financial year. The options were free attaching options issued under a prospectus to participants in
the two placements which were concluded during the financial year. Included in the total are also 100,000,000
broker options which were also issued under the same conditions.
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. Post year end, the
Company raised $24,000 by the conversion of 2,000,000 listed options at $0.012 to ordinary shares.
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
25 July 2023
The Company held a General Meeting on 25 July 2023. The seven (7) resolutions put to the General Meeting
were voted on by a poll and all seven (7) resolutions passed.
28 July 2023
Pancontinental issued unlisted options to eligible participants of the Company’s Incentives Awards Plan:
Key terms of the unlisted options include:
Type of Security
Type of Award
Number of Awards Granted
Exercise Price
Vesting Condition
Expiry of Options
Unquoted options
Each option is exercisable, before its expiry date, into one
fully paid, ordinary share in the Company
Director Ernest Anthony Myers – 40,000,000
Director Vesna Petrovic – 20,000,000
(approval for the issue of options to directors was granted
at the General Meeting held 25 July 2023)
$0.0145 per option
Remain a director for 3 months from date of grant
28 July 2027
28
Directors’ Report
8 August 2023
The Company issued 1,000,000 ordinary shares together with one (1) free attaching listed option for every
two (2) ordinary shares subscribed for totaling 500,000 listed options to Pinegold Enterprises Pty Ltd (nominee
of Director EA Myers). The shares were subscribed for at $0.01 per share and raised $10,000 for the Company.
The listed options have an exercise price of $0.012 and expire 8 August 2025. The issues were approved by
shareholders at the General Meeting held 25 July 2023 and issued on the same terms as unrelated participants
of the placement announced 15 May 2023.
22 August 2023
The Company raised $24,000 by the conversion of 2,000,000 listed options at $0.012 to ordinary shares.
24 August 2023
The Company issued 2,000,000 ordinary shares together with one (1) free attaching listed option for every
two (2) ordinary shares subscribed for totaling 1,000,000 listed options to RB Rushworth and 1,000,000
ordinary shares together with one (1) free attaching listed option for every two (2) ordinary shares subscribed
for totaling 500,000 listed options to Vesna Petrovic. The shares were subscribed for at $0.01 per share and
raised $30,000 for the Company. The listed options have an exercise price of $0.012 and expire 8 August 2025.
The issues were approved by shareholders at the General Meeting held 25 July 2023 and issued on the same
terms as unrelated participants of the placement announced 15 May 2023.
Other than the matters discussed above, there has not arisen in the interval between the end of the financial
year and the date of this report any item, transaction or event of a material and unusual nature likely, in the
opinion of Directors of the Company, to affect significantly the operations of the Group, the results of those
operations, or the state of affairs of the Group, in future financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The economic Entity expects to maintain the present status and level of operations and hence currently there
are no likely developments in the Entity's operations.
As detailed in the Investments for Future Performance section above, if Woodside exercises the option then
Woodside and Pancontinental have agreed to enter into a farmout agreement whereby Woodside will carry the
existing joint venture during the drilling of the first exploration well to be drilled on the licence area after the
completion of the seismic survey.
ENVIRONMENTAL REGULATION AND PERFORMANCE
Pancontinental is committed to complying with any requirement for environmental management in any
jurisdiction and country that it operates.
Currently some 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 that are
provided by the Joint Venture partners are reviewed and will include any environmental operational issues if
applicable.
29
Directors’ Report
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 (retired December 2022), EA Myers, RB Rushworth and V Petrovic.
NON-AUDIT SERVICES
During the year, the Company’s auditors performed certain other services in addition to the audit and review of
the financial statements. The Board has considered the non-audit services provided during the year by the
auditor and is satisfied that the provision of those non-audit services during the year by the auditor is compatible
with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the
following reasons:
All non-audit services were subject to the Corporate Governance procedures adopted by the Group; and
The non-audit services provided do not undermine the general principles relating to auditor
independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve
reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for
the Group, acting as an advocate for the Group or jointly sharing risks and rewards.
Details of the amounts paid to the auditor of the Group is set out below:
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
40,500
41,500
16,900
57,400
25,000
66,500
As recommended by the Parliamentary Joint Committee on Corporations and Financial Services, the Company
provides the following information:
Auditor tenure: 3 years
Lead auditor tenure: 3 years
A public tender process for the position of company auditor has not been undertaken due to the Board’s
belief that the current auditors are the most appropriate to suit the current needs of the Company.
30
Directors’ Report
REMUNERATION REPORT (Audited)
This report outlines the remuneration arrangements in place for Directors and Executives of Pancontinental
Energy NL (“the Company”).
Remuneration philosophy
A description of the remuneration structures in place are as follows:
The Non-Executive Directors receive a fixed fee for their services. If additional duties are performed by the Non-
Executive Directors they are remunerated at market rates. The Chief Executive Officer receives a fixed fee for
his respective executive services. Executive Directors are paid a salary. 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 fees 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 year ended 30 June 2023 is detailed in Table
1 of this report.
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.
The Chief Executive Officer (to December 2022), Mr Myers received a salary of $100,000 per annum during the
year until 1 June 2023 where it was increased to $120,000 (this was reduced from $200,000 during COVID-19)
for his respective executive services. Mr Myers held the positions of CEO and Executive Director until December
2022 when he was appointed Executive Chairman. The Company and Mr Myers do not currently have a contract
between them.
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.
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.
31
Directors’ Report
Table 1: Director remuneration for the year ended 30 June 2023
Primary benefits
Equity
Salary &
Fees
Consult-
ing
Options
(Issued)
Super-
annuation
Total
Value of
options as
proportion
of Revenue
Henry David Kennedy
(Non-Executive Chairman – retired December 2022)
2023
2022
10,417
25,000
Ernest Anthony Myers
(Executive Chairman – from December 2022)
(Executive Director, CEO – to December 2022)
2023
2022
101,669
100,002
Roy Barry Rushworth
(Executive Director, Technical)
2023
2022
Vesna Petrovic
(Executive Director, Company Secretary)
183,332
89,081
2023
2022
150,833
134,375
-
-
-
-
-
-
-
-
Marie Michele Malaxos
(Non-Executive Director – resigned February 2022)
2023
2022
Total Current Year
Remuneration
-
13,333
446,251
-
-
-
80,000
-
-
-
90,417 110.4%
25,000
0.0%
-
-
10,675
10,000
112,344
110,002
0.0%
0.0%
400,000
-
-
-
583,332 552.3%
89,081
0.0%
160,000 15,838
13,438
-
326,671 220.9%
147,813
0.0%
-
-
-
-
-
13,333
0.0%
0.0%
640,000 26,513
1,112,764
Table 2: Options granted as part of Director remuneration for the year ended 30 June 2023
(as approved by Shareholders)
Granted
Number
Grant
Date
Specified Directors
Henry David Kennedy1
Roy Barry Rushworth
Vesna Petrovic
Total
1. HD Kennedy retired in December 2022.
160,000,000
20,000,000 30 Dec 22
100,000,000 30 Dec 22
40,000,000 30 Dec 22
Terms & Conditions for
Each Grant
Value per
option at
grant
date ($)
Exercise
Price
per
share ($)
First
Exercise
Date
Last
Exercise
Date
0.004
0.004
0.004
0.007
0.007
0.007
30 Mar 22
30 Mar 22
30 Mar 22
29 Dec 26
29 Dec 26
29 Dec 26
There were no options granted as part of Director remuneration for the year ended 30 June 2022.
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.
32
Directors’ Report
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
2023
2022
2021
2020
2019
120%
3.63%
4 years
-
-
-
-
-
-
-
-
-
-
-
-
Total number of unlisted options at 30 June 2023:
Number of options
Grant
Date
Vesting
Date
Expiry
Date
Exercise
Price
PCLAD 160,000,0001
PCLAE 70,000,000
30 Dec 22
30 May 23
30 Mar 23
30 Aug 23
29 Dec 26
29 May 27
$0.007
$0.016
1. Director options
Weighted
Average Fair
Value
$0.004
$0.007
Table 3 : Shareholdings of Specified Directors and Specified Executives
2023
Ordinary Shares held in
Pancontinental Energy NL
Specified Directors
Henry David Kennedy
Ernest Anthony Myers
Roy Barry Rushworth
Balance
1 July 2022
Acquisitions
(Disposals)
Balance
30 June 2023
643,824,491
2,900,715
144,335,610
15,000,000
-
-
658,824,491
2,900,715
144,335,610
Total
791,060,816
15,000,000
806,060,816
2022
Ordinary Shares held in
Pancontinental Energy NL
Specified Directors
Henry David Kennedy
Ernest Anthony Myers
Roy Barry Rushworth
Marie Michele Malaxos (resigned February 2022)
Balance
1 July 2021
Acquisitions
(Disposals)
Balance
30 June 2022
411,768,269
2,900,715
134,335,610
39,000,000
232,056,222
-
10,000,000
20,000,000
643,824,491
2,900,715
144,335,610
59,000,000
Total
588,004,594
262,056,222
850,060,816
Table 4 : Movement in Option holdings of specified Directors
2023
Balance at
beginning of
period
1 July 2022
Granted as
Remuneration
Options
(Exercised)/
(Expired)
Net Change
Other
Balance at
end of period
Specified Directors
Henry David Kennedy
Roy Barry Rushworth
Vesna Petrovic
Total
-
-
-
-
20,000,000
100,000,000
40,000,000
160,000,000
-
-
-
-
30 June 2023
-
-
-
-
20,000,000
100,000,000
40,000,000
160,000,000
33
Directors’ Report
2022
Specified Directors
Henry David Kennedy
Ernest Anthony Myers
Vesna Petrovic
Roy Barry Rushworth
Marie Michele Malaxos
(resigned February 2022)
Total
Balance at
beginning of
period
1 July 2021
-
20,000,000
20,000,000
20,000,000
39,463,415
99,463,415
Granted as
Remuneration
Options
(Exercised)/
(Expired)
Net Change
Other
Balance at
end of period
30 June 2022
-
-
-
-
-
-
-
(20,000,000)
(20,000,000)
(20,000,000)
(39,463,415)
(99,463,415)
-
-
-
-
-
-
-
-
-
-
-
-
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
In considering the Group’s performance and benefits for shareholder wealth, the Remuneration Committee have
regard to the following indices in respect of the current financial year and the previous four financial years.
Return on Equity
Share price at 30 June
Average equity
Net Profit /(Loss)
Return on Equity in %
2023
$0.012
5,804,849
(1,870,559)
(32.22)%
2022
$0.001
2,810,771
(823,179)
(29.29)%
2021
$0.001
2,849,192
(788,165)
(27.66)%
2020
$0.001
5,140,416
(4,463,850)
(86.84)%
2019
$0.002
7,500,025
(1,633,481)
(21.78)%
END OF REMUNERATION REPORT
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 2023.
Signed in accordance with a resolution of the Directors.
EA Myers
Director
Perth 29 September 2023
34
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001
As lead auditor of the audit of Pancontinental Energy NL for the year ended 30 June 2023, I declare
that, to the best of my knowledge and belief, there have been:
• no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
• no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Pancontinental Energy NL and the entities it controlled during the
year.
Rothsay Audit & Assurance Pty Ltd
Daniel Dalla
Director
29 September 2023
35
Corporate Governance Statement
The Company’s 2023 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 Energy NL and is current as at 29 September 2023. The Board does not view the Corporate
Governance Statement as a compliance document but rather as an opportunity to demonstrate that they are
cognisant of the importance of having proper and effective corporate governance arrangements and to
communicate to stakeholders and the broader investment community Pancontinental’s approach to corporate
governance.
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 2023 with the ASX Corporate
Governance Council’s fourth 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 Energy NL Corporate Governance Comments
PRINCIPLE 1 – LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
1.1
A listed Entity should have and disclose a Board charter setting out:
(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 of not only the
Board as a whole but also the Chairman, Chief Executive Officer and Non-Executive / Independent
Directors.
1.2
A listed Entity should:
(a) undertake appropriate checks before appointing a Director or Senior Executive or putting
someone forward 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
found at
for Selection and (Re)Appointment of Directors which can be
Procedure
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 for
background checks on Directors and Executive Staff such as Employment Screening Australia
who are a CrimTrac accredited information agent that adheres to the Australian Standard AS
4811-2006 Employment Screening.
The Company has not had to conduct any background checks during the reporting period but if
a new appointment were to be required in the future, the Company would complete background
checks on the candidate’s work experience, education, criminal history, character references and
bankruptcy history.
1.3
A listed Entity should have a written agreement with each Director and Senior Executive setting
out the terms of their appointment.
Not Adopted – Mr Myers, Mr Rushworth and Ms Petrovic do not currently have written contract
agreements.
36
Corporate Governance Statement
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.
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.
1.5
A listed Entity should:
(a) have and disclose a Diversity Policy;
(b) through its Board or a Committee of the Board set measurable objectives for achieving
gender diversity in the composition of its Board, Senior Executives and workforce generally;
and
(c) disclose in relation to each reporting period:
1. the measurable objectives set for that period to achieve gender diversity;
2. the Entity’s progress towards achieving those objectives; and
3. either:
A. the respective proportions of men and women on the Board, in Senior Executive
positions and across the whole workforce (including how the Entity has defined
“Senior Executive” for these purposes); or
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.
B.
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 workforce composition to be as diverse as practicable with an aim to
always achieve higher percentages that the industry average calculated by the Australian
Government’s Workplace Gender Equality Agency;
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 and European;
Gender – both male and female, with the female percentage exceeding industry average
for most of the year; and
Age – the age range spans over 40 years.
Diversity – Annual Reporting
Board & Company Secretary – to Feb 2022
Board & Company Secretary – to Jun 2022
2023
-
-
2022
40%
25%
37
Corporate Governance Statement
Board & Company Secretary – to Dec 2022
Board & Company Secretary – to Jun 2023
Employees
Total Workforce – to Feb 2022
Total Workforce – to Jun 2022
Total Workforce – to Dec 2022
Total Workforce – to Jun 2023
25%
33%
100%
-
-
40%
50%
-
-
100%
50%
40%
-
-
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
its latest data, Pancontinental far exceeds the industry average of 20% of women. The Company
believes that there are benefits to addressing diversity, equity and inclusion.
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, for each reporting period whether a performance evaluation has been
undertaken in accordance with that process during or in respect of that period.
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.
1.7
A listed Entity should:
a) have and disclose a process for evaluating the performance of its Senior Executives at
least once every reporting period; and
b) disclose for each reporting period whether a performance evaluation has been undertaken
in accordance with that process during or in respect of that period.
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, there were no Senior Executives only Board
Members and Employees.
PRINCIPLE 2 - STRUCTURE THE BOARD TO BE EFFECTIVE AND 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
for Selection and (Re) Appointment of Directors
Company’s Policy and Procedure
38
Corporate Governance Statement
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.
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
Energy 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 and Ms Petrovic are qualified accountants and therefore meet 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 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 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 to Dec
2022
24 years
No - Substantial
Shareholder
EA Myers
CEO and Executive Director to Dec
2022
Executive Chairman from Dec 2022
V Petrovic
Executive Director and Company
Secretary
14 years
No – Executive Director
5 years
No - Executive Director
39
Corporate Governance Statement
RB Rushworth Non-Executive Director
18 years
No – Executive Director
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 fourth 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 no Directors
are considered to be independent, 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 – No Director is considered to be independent.
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.
Mr Kennedy did not provide executive services during the year.
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 – Leadership of the Board rests with the Chairman who oversees its operation
ensuring that it is run effectively. The Board believes Mr Myers’ (and during the year, Mr
Kennedy’s) interests are aligned with the long term interests of Shareholders. Given his extensive
experience and qualifications, the Board is of the opinion that Mr Myers is the most appropriate
Director to carry out the role of the Chairman.
2.6
A listed Entity should have a program for inducting new Directors and for periodically reviewing
whether there is a need for existing Directors to undertake professional development to 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.
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. 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 – INSTIL A CULTURE OF ACTING LAWFULLY, ETHICALLY AND RESPONSIBLY
3.1
A listed Entity should articulate and disclose its values.
Adopted – Pancontinental’s values form part of the Code of Conduct which can be found at
http://pancon.com.au/about-us/corporate-governance/
40
Corporate Governance Statement
3.2
A listed Entity should:
(a) have and disclose a code of conduct for its Directors, Senior Executives and Employees; and
(b) ensure that the Board or a Committee of the Board is informed of any material breaches of
that code.
Adopted – 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, values 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
3.3
A listed Entity should:
(a) have and disclose a Whistleblower Policy; and
(b) ensure that the Board or a Committee of the Board is informed of any material incidents
reported under that policy.
Adopted - 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. There were no
material incidents reported under that policy during the reporting period.
3.4
A listed Entity should:
(a) have and disclose an Anti-Bribery and Corruption policy; and
(b) ensure that the Board or a Committee of the Board is informed of any material breaches
of that policy.
Adopted – Pancontinental’s Anti-Bribery and Corruption policy forms part of the Code of Conduct
which can be found at http://pancon.com.au/about-us/corporate-governance/
There were no material incidents reported under that policy during the reporting period.
41
Corporate Governance Statement
PRINCIPLE 4 – SAFEGUARD THE INTEGRITY OF CORPORATE REPORTS
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
of External Auditor
http://pancon.com.au/about-us/corporate-governance/ is applied when convening to discuss
Audit Committee matters.
the Selection, Appointment
and Rotation
for
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
Examine 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:
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;
42
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 should disclose its process to verify the integrity of any periodic corporate report
it releases to the market that is not audited or reviewed by an external auditor.
Adopted – The Company verifies the integrity of any periodic corporate report it releases to the
market that is not audited or reviewed by an external auditor using the following process:
The report is prepared by a qualified Employee with sufficient expertise in providing
accurate information to the market;
The report is then reviewed by an Executive Staff Member who creates an auditable
supporting document which provides the source of each calculation;
The Company Secretary will also review the documents for accuracy with the ASX Listing
Rules;
Both the report and supporting documentation is forwarded to the entire Board for their
approval;
Once the Board approves the documents, they are lodged with ASX Online.
PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
5.1
A listed Entity should have and disclose a written policy for complying with its continuous
disclosure obligations under Listing Rule 3.1.
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
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
questions
Reporting
Required actions in the case of non-compliance
Updating compliance procedures
Guide to drafting Company announcements
5.2
A listed Entity should ensure that its Board receives copies of all material market announcements
promptly after they have been made.
43
Corporate Governance Statement
Adopted – The Board receives all announcements, regardless of materiality, before they are
announced to the market. The Board is also notified of the timing of release of all announcements.
5.3
A listed Entity that gives a new and substantive investor or analyst presentation should release
a copy of the presentation materials on the ASX Market Announcements Platform ahead of the
presentation.
Adopted – Pancontinental has always had this recommendation in place even prior to it becoming
part of the Corporate Governance Principles and Recommendations.
PRINCIPLE 6 – RESPECT THE RIGHTS OF SECURITY HOLDERS
6.1
A listed Entity should provide information about itself and its governance to investors via its
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.
Links to the Investor Centre can also be opened from the Corporate Governance page where ASX
releases, the Company’s share price, financial reports and Company presentations can be
accessed. Subscriptions to the Company’s mailing list can also be submitted from this page.
Furthermore, general and detailed project information is available for the Investor’s perusal from
the Corporate Governance page.
6.2
A listed Entity should have an investor relations program that facilitates effective two-way
communication with investors.
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 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
have a greater understanding of the business they are able to make informed investment
decisions.
Information is communicated to Investors by:
Company announcements
Information briefings to media and analysts
Notices of Meeting and explanatory material
Website updates
Board addresses and presentations at meetings
Financial information including annual reports
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
direct communications to the Company
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
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 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 ASX platform under the code PCL or the Company website so that
Investors who are not currently Shareholders can also attend the meeting
44
Corporate Governance Statement
6.3
A listed Entity should disclose how it facilitates and encourages participation at meetings of
security holders.
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 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
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 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 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.
6.4
A listed Entity should ensure that all substantive resolutions at a meeting of security holders are
decided by a poll rather than by a show of hands.
Adopted – Pancontinental has had this recommendation in place for some time, prior to it
becoming part of the Corporate Governance Principles and Recommendations.
6.5
A listed Entity should give security holders the option to receive communications from, and send
communications to, the Entity and its security registry electronically.
Adopted – Pancontinental has had this recommendation in place for some time, prior to it
becoming part of the Corporate Governance Principles and Recommendations.
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 Board is of the
view that this is an important part of the business which all Directors should be involved in. The
Company’s Risk Management Policy 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
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
45
Corporate Governance Statement
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 that the Entity is operating with due regard to the risk appetite
set by the Board; 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 as well as
general Board discussions are used as a platform for the review and assessment of the Company’s
risk profile. The Board believes consideration of risk isn’t an exercise that should be considered
on an annual or periodic basis but rather it be considered in every decision and action the Board
makes.
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 governance, risk management
and internal control processes.
Adopted – The Company discloses that it does not have an internal audit function.
The Company’s risk management system is overseen by Executive Staff who ensure the
identification, monitoring and response of business risks.
The Board reviews the assessment of the efficiency of the system and according to the Risk
Management Policy is required to satisfy itself that the Executive team 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 environmental or social
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, Executives, 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 are discussed in detail in the
Directors’ Report section of the Annual Report titled Risk Management.
46
Corporate Governance Statement
PRINCIPLE 8 – REMUNERATE FAIRLY AND RESPONSIBLY
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;
Align the interests of key leadership with the long term interests of the Company’s
Shareholder; and
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.
47
Corporate Governance Statement
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.
48
Statement of Comprehensive Income
YEAR ENDED 30 JUNE 2023
Notes
2, 6
2
OPERATING ACTIVITIES
Depreciation expenses
Salaries, fees and benefits
Audit fees
Generative exploration expenditure and write off
Annual report costs
ASX fees
Insurance
Legal fees
Share registry costs
Rent and outgoings
Office expenses
Travel
Corporate advisory
Other 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
3
OTHER COMPREHENSIVE INCOME/(LOSS)
Other comprehensive income /(loss)
TOTAL OTHER COMPREHENSIVE
INCOME/(LOSS)
TOTAL COMPREHENSIVE INCOME/(LOSS)
FOR THE PERIOD
Comprehensive income / (loss) attributable to:
Owners of the Company
Non-controlling interest
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
5(b)
15
CONSOLIDATED
2023
$
2022
$
(2,179)
(398,591)
(32,500)
63,963
(2,423)
(59,323)
(79,939)
(5,126)
(31,794)
(27,077)
(56,984)
(12,386)
(72,000)
(94,707)
(811,066)
(3,010)
(405,643)
(41,500)
(750)
(5,334)
(42,858)
(79,136)
(22,575)
(27,369)
(33,579)
(41,506)
(105)
(50,000)
(70,409)
(823,774)
72,429
(1,131,922)
(1,059,493)
595
-
595
(1,870,559)
-
(1,870,559)
(823,179)
-
(823,179)
-
-
-
-
(1,870,559)
(823,179)
(1,837,337)
(33,222)
(1,870,559)
(821,681)
(1,498)
(823,179)
(0.02)
(0.02)
(0.01)
(0.01)
The Statement of Comprehensive Income is to be read in conjunction with the Notes to the Financial Statements.
49
Statement of Financial Position
AT 30 JUNE 2023
Notes
CONSOLIDATED
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
Non-controlling interest loan in subsidiary
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
Capital and reserves attributable to owners of PCL
Non-controlling interest
2023
$
2022
$
11(b)
4
5,300,909
73,641
5,374,550
274,051
67,715
341,766
6
7
8
5(b)
9(a)
10
10
5(b)
5,712
4,066,860
4,072,572
7,891
3,303,679
3,311,570
9,447,122
3,653,336
252,089
252,089
196,149
196,149
50,425
476,560
526,985
38,978
476,560
515,538
779,074
711,687
8,668,048
2,941,649
118,645,569
1,130,000
112,178,611
149,962
(111,107,521) (109,386,924)
2,941,649
8,668,048
10,141,913
(1,473,865)
8,668,048
4,448,729
(1,507,080)
2,941,649
The Statement of Financial Position is to be read in conjunction with the Notes to the Financial Statements.
50
Statement of Changes in Equity
AT YEAR ENDED 30 JUNE 2023
Consolidated
Share
Capital
$
Retained
Earnings
$
Option
Reserve
$
Total
Equity
$
Balance at 1 July 2022
Profit or loss
Other comprehensive income/(loss)
Shares issued (net of costs)
Share option & reserve movements
112,178,611 (109,386,924)
149,962
2,941,649
-
(1,870,559)
-
6,466,958
-
-
-
-
-
(1,870,559)
-
6,466,958
-
149,962
980,038
1,130,000
Balance at 30 June 2023
118,645,569 (111,107,521)
1,130,000
8,668,048
Balance at 1 July 2021
Profit or loss
Other comprehensive income/(loss)
Shares issued (net of costs)
Share option & reserve movements
Balance at 30 June 2022
111,093,675
(109,006,185)
-
(823,179)
-
1,084,936
-
-
592,402
-
-
-
2,679,892
(823,179)
-
1,084,936
-
442,440
(442,440)
-
112,178,611
(109,386,924)
149,962
2,941,649
The above Statement of Changes in Equity is to be read in conjunction with the Notes to the Financial Statements.
51
Statement of Cashflows
YEAR ENDED 30 JUNE 2023
Notes
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Expenditure on exploration interests
NET CASH FLOWS FROM/(USED IN) OPERATING
ACTIVITIES
CONSOLIDATED
2023
2022
$
$
(906,702)
(647,402)
(799,280)
(305,050)
11(a)
(1,554,104)
(1,104,330)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
Reimbursement of past costs - Woodside*
Option agreement for 1% of PEL 87 – Custos Investments*
NET CASH FLOWS FROM/(USED IN) INVESTING
ACTIVITIES
5(c)
5(c)
CASH FLOWS FROM FINANCING ACTIVITIES
Interest received
Proceeds from issues of ordinary shares (net of share issue costs)
NET CASH FLOWS FROM/(USED IN) FINANCING
ACTIVITIES
NET INCREASE/(DECREASE) IN CASH HELD
Add opening cash brought forward
Effects of exchange rate changes
CLOSING CASH CARRIED FORWARD
11(b)
-
2,217,842
(2,273,120)
(55,278)
-
-
-
-
19,455
6,563,307
115
976,243
6,582,762
976,358
4,973,380
274,051
53,478
5,300,909
(127,972)
394,408
7,615
274,051
The above Statement of Cash Flows is to be read in conjunction with the Notes to the Financial Statements.
52
Notes to the Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This Financial Report was authorised for issue by the Directors on 29 September 2023.
Statement of Compliance
The Financial Report is a General Purpose Financial Report which has been prepared in accordance with
Australian Accounting Standards, 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 and evaluation expenditure incurred is accumulated in respect of each identifiable area of
interest. These costs are only carried forward to the extent that the costs are expected to be recouped
through the successful development of the area or where activities in the area have not yet reached a stage
which permits reasonable assessment of the economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against operating results in the
year in which the decision to abandon the area is made. When production commences the accumulated
costs for the relevant area of interest are classified as development costs and amortised over the life of the
project area according to the rate of depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to
carry forward costs in relation to that area of interest.
As at the end of the financial year, the Directors considered that the carrying value of the exploration interests
of the Consolidated Entity was as shown in the Statement of Financial Position and no further impairments
arises other than that already recognised.
(c) Principles of consolidation
The Consolidated Financial Statements are those of the Consolidated Entity, comprising Pancontinental
Energy NL (the Parent Entity) and all Entities which Pancontinental Energy 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.
53
Notes to the Financial Statements
(d) Foreign currencies
Translation of foreign currency transactions
Transactions in foreign currencies of Entities within the Consolidated Entity are converted to local currency
at the rate of exchange ruling at the date of the transaction.
Foreign currency monetary items that are outstanding at the reporting date (other than monetary items
arising under foreign currency contracts where the exchange rate for that monetary item is fixed in the
contract) are translated using the spot rate at the end of the financial year.
A monetary item arising under a foreign currency contract outstanding at the reporting date where the
exchange rate for the monetary item is fixed in the contract is translated at the exchange rate fixed in the
contract.
All resulting exchange differences arising on settlement or re-statement are recognised as revenues and
expenses for the financial year. Any gains or costs on entering a hedge are deferred and amortised over the
life of the contract.
(e) Cash and cash equivalents
For the purposes of the Statement of Cash Flows, cash includes cash on hand and in banks, and money
market investments readily convertible to cash within two working days, net of outstanding bank overdrafts.
Interest expense is charged as an expense as it accrues.
(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:
2023
30%
2022
30%
(j) Joint ventures
Interests in the joint venture operations are brought to account by including in the respective classifications,
the share of individual assets employed and share of liabilities and expenses incurred.
In the Company’s Financial Statements, investments in joint venture operations were carried at the lower of
cost and recoverable amount.
54
Notes to the Financial Statements
(k) Going concern
The Directors consider that the going concern basis for the Consolidated Entity is appropriate. 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 assets.
Accordingly, the Directors believe that the Consolidated Entity will obtain sufficient cash inflows to enable it
to
continue as a going concern and that it is appropriate to adopt that basis of accounting in the preparation of
the Financial Statements.
(l) Payables
Liabilities for trade creditors and other amounts are carried at cost which is the fair value of the consideration
to be paid in the future for goods and services received, whether or not billed to the Consolidated Entity.
Payables to related parties are carried at the principal amount.
Deferred cash settlements are recognised at the present value of the outstanding consideration payable on
the acquisition of an asset discounted at prevailing commercial borrowing rates.
(m) Provisions
Provisions are recognised when the economic Entity has a legal, equitable or constructive obligation to make
a future sacrifice of economic benefits to other entities as a result of past transactions or other past events,
it is probable that a future sacrifice of economic benefits will be required and a reliable estimate can be made
of the amount of the obligation.
(n) Contributed equity
Issued and paid up capital is recognised at the fair value of the consideration received by the Company.
Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction
of the share proceeds received.
(o) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Entity and
the revenue can be reliably measured. The following specific recognition criteria must also be met before
revenue is recognised:
Rendering of Services
Where the contract outcome can be reliably measured, control of the right to be compensated for the services
and the stage of completion can be reliably measured. Stage of completion is measured by reference to the
labour hours incurred to date as a percentage of total estimated labour hours for each contract.
Where the contract outcome cannot be reliably measured, revenue is recognised only to the extent that costs
have been incurred.
Interest Revenue
Control of the right to receive the interest payment. Interest revenue is recognised as it accrues, taking into
account the effective yield on the financial asset.
(p) Taxes
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.
55
Notes to the Financial Statements
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the Statement of Financial Position. Cash flows are included in the Statement of
Cash Flows on a gross basis and the GST component of cash flows arising from investing and financing
activities, which is recoverable from, or payable to, the taxation authority, are classified as operating cash
flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to,
the taxation authority.
(q) Employee benefits
Provision is made for Employee benefits accumulated as a result of Employees rendering services up to the
reporting date. These benefits include wages and salaries, annual leave, sick leave and long service leave.
Liabilities arising in respect of wages and salaries, annual leave, sick leave and any other Employee benefits
expected to be settled within twelve months of the reporting date are measured at their nominal amounts
based on remuneration rates which are expected to be paid when the liability is settled.
Employee benefit expenses and revenues arising in respect of the following categories:
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
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.
56
Notes to the Financial Statements
2. DEPRECIATION AND WRITE OFF
Expenses
Depreciation of non-current assets:
Office furniture and equipment
Generative exploration and write off:
Exploration and evaluation 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
2023
2022
$
$
2,179
3,010
(63,963)
750
CONSOLIDATED
2023
$
2022
$
(561,168)
(246,954)
-
-
561,168
246,954
-
-
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
7,701,205
* 7,701,205
7,140,037
7,140,037
-
-
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.
*The potential future income tax benefit was calculated by multiplying the current tax rate of 30% by the
Group’s carry forward losses at 30 June 2023 of $25,670,682.
57
Notes to the Financial Statements
4. RECEIVABLES (CURRENT)
Trade receivables & prepayments
Total
(a) Terms and conditions
CONSOLIDATED
2023
$
73,641
73,641
2022
$
67,715
67,715
(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.
5.
INTERESTS IN SUBSIDIARIES & INVESTMENTS
(a) Interests in Subsidiaries
Name
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 Pty Ltd
Pancontinental Orange Pty Ltd*
Provision for diminution in value of
investment
Loan to Pancontinental Orange Pty Ltd
Provision for loss on loan to
Pancontinental Orange Pty Ltd
Pancontinental Cooper Pty Ltd
Provision for diminution in value of
investment
Loan to Pancontinental Cooper Pty Ltd
Provision for loss on loan to
Pancontinental Cooper Pty Ltd
Total
Country of
incorporation
Percentage of
equity interest
held by the
Consolidated
Entity
Investment
(Recorded in
Parent Entity)
2023
%
2022
%
2023
$
2022
$
Australia
66.67
66.67
20
20
(20)
3,951,221
(20)
3,944,221
(3,945,477)
(3,944,221)
Australia
100
100
20
20
(20)
4,157,622
(20)
3,438,849
(250,788)
(244,784)
Australia
100
100
1
1
(1)
166,204
(1)
161,204
(6,789)
4,071,993
(1,359)
3,353,910
*Australian Entities audited by Rothsay Audit & Assurance Pty Ltd, branch operation audited by local in country auditors.
(b) Part Disposal of Subsidiary & Non-Controlling Interest– Pancontinental Namibia Pty Ltd
In September 2017, the Group disposed of 33.33% of the ownership interest in Pancontinental Namibia Pty
Ltd to Africa Energy Corp. Following the disposal, the Group still controls the subsidiary and retains 66.67%
of the ownership interest. The transaction has been accounted for as an equity transaction with a non-
controlling interest (“NCI”) resulting in the balances as shown in the Financial Statements.
(c) Option Deeds with Woodside Energy and Custos Investments
During the financial year, Pancontinental announced that its wholly owned subsidiary Pancontinental Orange
Pty Ltd had entered into an Option Deed with Woodside Energy (GOM), Inc, a wholly owned subsidiary of
Woodside Energy Group Ltd whereby Pancontinental granted Woodside an exclusive option to acquire a 56%
Participating Interest in PEL 87, in consideration for Woodside paying for a 3D seismic survey covering an
area of at least 5,000 square kilometres within the area the subject of PEL 87 at an estimated cost of US$
35 million and also paying Pancontinental US$1.5 million.
58
Notes to the Financial Statements
Woodside has a period of at least 180 days after the delivery of the seismic survey data to exercise that
option.
If Woodside exercises the option then Woodside and Pancontinental have agreed to enter into a farmout
agreement whereby Woodside will carry the existing joint venture during the drilling of the first exploration
well to be drilled on the licence area after the completion of the seismic survey.
To ensure Pancontinental retains at least a 20% interest in the project if Woodside exercises its option,
Pancontinental has, for a consideration of US$1.5 million, entered into an option agreement with Custos
Investments (Pty) Ltd to acquire a 1% interest from Custos by paying Custos a further US$1million. This
option is exercisable by Pancontinental within a similar time period as Woodside’s option. Pancontinental will
retain a 20% interest during the drilling of the well.
If the joint venture decides to drill a second well then Pancontinental may:
(i)
retain its 20% interest but must pay its share of well costs;
(ii)
the cost of the second well; or
reduce its interest to a 10% Participating Interest and have Woodside carry Pancontinental through
(iii)
gross overriding revenue royalty interest.
at any time up to 60 days after the approval of any Development Plan, convert its interest to a 1.5%
Upon Woodside’s election to exercise its option, Woodside will pay Pancontinental approximately US$ 2.5
million, of which approximately US$1.5 million is reimbursement of a portion of Pancontinental’s past costs.
6. PROPERTY, PLANT AND EQUIPMENT
Office equipment
At cost
Less: Accumulated depreciation
Total written down value of Office equipment
Reconciliations
Reconciliations of the carrying amounts of property, plant and equipment
Office equipment
Carrying amount opening balance
Additions
Disposals
Depreciation expense
Total written down amount
CONSOLIDATED
2022
2023
$
$
25,024
(19,312)
5,712
25,024
(17,133)
7,891
7,891
-
-
(2,179)
5,712
10,901
-
-
(3,010)
7,891
59
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
3D Seismic costs*
3D Seismic costs paid by Woodside per Option Deed*
Option Deed payment – Custos Investments*
Option Deed payment – Woodside Energy*
Exploration expenditure written off (refunded)
Carrying amount at 30 June
* See note 5(c) for further explanation.
CONSOLIDATED
2023
$
2022
$
3,303,679
643,940
28,224,311
(28,224,311)
2,273,120
(2,217,842)
63,963
4,066,860
2,993,035
311,394
-
-
-
-
(750)
3,303,679
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 petroleum areas.
8. TRADE and OTHER PAYABLES
Current
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
ASX: PCL
Beginning of the financial year
Issued during the year:
Placement share issue (net of costs)
End of the financial year
CONSOLIDATED
2022
2023
$
$
196,149
252,089
196,149
252,089
CONSOLIDATED
2023
$
2022
$
118,645,569 112,178,611
118,645,569 112,178,611
2023
2022
Number of
shares
$
Number of
shares
$
7,154,222,823 112,178,611 6,006,715,498 111,093,675
900,000,000
1,084,936
8,054,222,823 118,645,569 7,154,222,823 112,178,611
6,466,958 1,147,507,325
(c) Movements in listed options on issue
ASX: PCLO
2023
2022
Number of
listed options
-
$
Number of
listed options
$
Beginning of the financial year
Issued during the year:
549,999,998
Listed options
End of the financial year
549,999,998
The 549,999,998 listed options do not have a value in the general ledger due to the listed options being free
attaching options to shares (1 free option for every 2 shares subscribed for) issued in the placements during
the financial year. In addition 100,000,000 listed options were issued to the lead manager in the placements.
-
-
-
-
-
-
-
-
-
60
Notes to the Financial Statements
10. RESERVES AND ACCUMULATED LOSSES
Reserves
Beginning of the financial year
Options issued
Options expired
End of the financial year
Accumulated losses
Beginning of the financial year
Net loss
Options expired
Total available for appropriation
End of the financial year
11. STATEMENT OF CASH FLOWS
CONSOLIDATED
2023
$
2022
$
149,962
1,130,000
(149,962)
1,130,000
592,402
-
(442,440)
149,962
(109,386,924)
(1,870,559)
149,962
(111,107,521)
(111,107,521)
(109,006,185)
(823,179)
442,440
(109,386,924)
(109,386,924)
CONSOLIDATED
2023
$
2022
$
(a) Reconciliation of the net loss after tax to the net cash flows from operations
Net loss
Non-Cash Items, Non-Operating Items
Depreciation of non-current assets
Financing income
Financing expense
Changes in assets and liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in exploration, evaluation & development
(Decrease)/increase in trade and other payables
(Decrease)/increase in non-current liabilities
Other non-cash
Net cash flow from operating activities
(b) Reconciliation of cash
Cash balance comprises:
cash assets
Closing cash balance
12. EXPENDITURE COMMITMENTS
(1,870,559)
(823,179)
2,179
(72,429)
1,131,922
3,010
(595)
-
(5,926)
(763,181)
55,940
11,447
(43,497)
(1,554,104)
(294)
(310,644)
25,050
(99,236)
101,558
(1,104,330)
5,300,909
5,300,909
274,051
274,051
CONSOLIDATED
2023
$
2022
$
Capital expenditure commitments
Estimated capital expenditure contracted for at reporting date, but not provided for, payable:
not later than one year
-
-
7,255,557
-
later than one year and not later than five years
later than five years
-
-
Total
7,255,557
-
The Company does not have any current commitments. The Group has had certain obligations to perform
minimum exploration work and to expend minimum amounts of money on such work its exploration licences.
These obligations may be varied from time to time subject to approval and are expected to be fulfilled in the
normal course of the operations of the Group. At balance date the Company had an interest in one core
exploration block of which the work commitments have been met up to the balance date.
61
Notes to the Financial Statements
EMPLOYEE BENEFITS
13.
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
issued
expired
Balance at end of year
2023
2022
Number of
options
-
230,000,000
-
230,000,000
Weighted
average
exercise
price
-
0.01
-
0.01
Number of
options
72,500,000
-
(72,500,000)
-
Weighted
average
exercise
price
0.006
-
0.006
Options held at the end of the reporting period
There were an additional 78,926,830 options held by the Company as at 30 June 2022, these options were not
issued under the Employee Share Scheme and expired during the 2023 financial year.
14. SUBSEQUENT EVENTS
25 July 2023
The Company held a General Meeting on 25 July 2023. The seven (7) resolutions put to the General Meeting
were voted on by a poll and all seven (7) resolutions passed.
28 July 2023
Pancontinental issued unlisted options to eligible participants of the Company’s Incentives Awards Plan:
Key terms of the unlisted options include:
Type of Security
Type of Award
Number of Awards Granted
Exercise Price
Vesting Condition
Expiry of Options
Unquoted options
Each option is exercisable, before its expiry date, into one
fully paid, ordinary share in the Company
Director Ernest Anthony Myers – 40,000,000
Director Vesna Petrovic – 20,000,000
(approval for the issue of options to directors was granted
at the General Meeting held 25 July 2023)
$0.0145 per option
Remain a director for 3 months from date of grant
28 July 2027
8 August 2023
The Company issued 1,000,000 ordinary shares together with one (1) free attaching listed option for every
two (2) ordinary shares subscribed for totaling 500,000 listed options to Pinegold Enterprises Pty Ltd
(nominee of Director EA Myers). The shares were subscribed for at $0.01 per share and raised $10,000 for
the Company. The listed options have an exercise price of $0.012 and expire 8 August 2025. The issues
were approved by shareholders at the General Meeting held 25 July 2023 and issued on the same terms as
unrelated participants of the placement announced 15 May 2023.
22 August 2023
The Company raised $24,000 by the conversion of 2,000,000 listed options at $0.012 to ordinary shares.
24 August 2023
The Company issued 2,000,000 ordinary shares together with one (1) free attaching listed option for every
two (2) ordinary shares subscribed for totaling 1,000,000 listed options to RB Rushworth and 1,000,000
ordinary shares together with one (1) free attaching listed option for every two (2) ordinary shares
subscribed for totaling 500,000 listed options to Vesna Petrovic. The shares were subscribed for at $0.01
per share and raised $30,000 for the Company. The listed options have an exercise price of $0.012 and
expire 8 August 2025. The issues were approved by shareholders at the General Meeting held 25 July 2023
and issued on the same terms as unrelated participants of the placement announced 15 May 2023.
62
Notes to the Financial Statements
Other than the matters discussed above, there has not arisen in the interval between the end of the financial
year and the date of this report any item, transaction or event of a material and unusual nature likely, in the
opinion of Directors of the Company, to affect significantly the operations of the Group, the results of those
operations, or the state of affairs of the Group, in future financial years.
15. EARNINGS PER SHARE
CONSOLIDATED
2023
$
2022
$
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
(1,870,559)
(1,870,559)
(823,179)
(823,179)
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
7,586,551,590
6,992,201,131
-
-
7,554,003,643
6,992,201,131
16. AUDITORS' REMUNERATION
Amounts received or due and receivable by Rothsay
Audit & Assurance Pty Ltd 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 Entity1
CONSOLIDATED
2023
2022
$
$
40,500
41,500
25,000
66,500
The remuneration disclosed above does not include amounts paid or payable to overseas subsidiary company auditors.
16,900
57,400
1. During the year, the Company’s auditors performed certain other services in addition to the audit and
review of the financial statements. The Board has considered the non-audit services provided during the year
by the auditor and is satisfied that the provision of those non-audit services during the year by the auditor
is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act
2001 for the following reasons:
All non-audit services were subject to the Corporate Governance procedures adopted by the Group; and
The non-audit services provided do not undermine the general principles relating to auditor
independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve
reviewing or auditing the auditor’s own work, acting in a management or decision making capacity for
the Group, acting as an advocate for the Group or jointly sharing risks and rewards.
As recommended by the Parliamentary Joint Committee on Corporations and Financial Services, the Company
provides the following information:
Lead auditor tenure: 3 years
Auditor tenure: 3 years
A public tender process for the position of company auditor has not been undertaken due to the Board’s
belief that the current auditors are the most appropriate to suit the current needs of the Company.
63
Notes to the Financial Statements
17. DIRECTOR AND EXECUTIVE DISCLOSURES
(a) Details of Specified Directors and Specified Executives as at 30 June 2023
(i) Specified Directors for the current financial year
Henry David Kennedy
Ernest Anthony Myers
Non-Executive Chairman (retired December 2022)
Executive Chairman (appointed December 2022)
Executive Director, CEO (to 1 December 2022)
Executive Director, Technical
Executive Director, Company Secretary
Non-Executive Director (resigned February 2022)
Roy Barry Rushworth
Vesna Petrovic
Marie Michele Malaxos
(ii) Specified Executives for the current financial year
N/A
Fees paid for Non-Executive Directors, last voted upon by Shareholders at the 2007 AGM, is not to exceed
$400,000 per annum and is set with reference to fees paid to other Non-Executive Directors of comparable
companies.
Non-Executive and Executive Directors do not receive performance related remuneration but they are eligible
to participate in Employee Option Schemes approved by Shareholders.
Directors do not receive any termination or retirement benefits.
(b) Remuneration of Specified Directors /Officers
Salary
& Fees
Primary
Consult-
ing
Post
Employment
Retire-
ment
benefits
Super-
annuati
on
Non
Mone-
tary
benefits
Super-
annuation
Total
Equity
Options
Specified Directors/Officers
Henry David Kennedy (retired December 2022)
2023
2022
10,417
25,000
Ernest Anthony Myers
2023
2022
101,669
100,002
Roy Barry Rushworth
183,332
89,081
2023
2022
Vesna Petrovic
2023
2022
150,833
134,375
Marie Michele Malaxos (resigned February 2022)
-
-
2023
2022
-
13,333
-
-
Total Remuneration: Specified Directors /Officers
2023
2022
446,251
361,791
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
80,000
-
-
-
90,417
25,000
-
-
10,675
10,000
112,344
110,002
400,000
-
-
-
583,332
89,081
160,000
-
15,838
13,438
326,671
147,813
-
-
-
-
-
13,333
640,000
-
26,513 1,112,764
385,229
23,438
64
Notes to the Financial Statements
(c) Directors’ remuneration options: Granted and vested during the year
Granted
Number
Grant
Date
Specified Directors
Henry David Kennedy1
Roy Barry Rushworth
Vesna Petrovic
Total
1. HD Kennedy retired in December 2022.
160,000,000
20,000,000 30 Dec 22
100,000,000 30 Dec 22
40,000,000 30 Dec 22
Terms & Conditions for
Each Grant
Value per
option at
grant
date ($)
Exercise
Price
per
share ($)
First
Exercise
Date
Last
Exercise
Date
0.004
0.004
0.004
0.007
0.007
0.007
30 Mar 22
30 Mar 22
30 Mar 22
29 Dec 26
29 Dec 26
29 Dec 26
There were no options granted as part of Director remuneration for the year ended 30 June 2022.
(d) Option holdings of specified Directors and specified Executives
2023
Balance at
beginning of
period
1 July 2022
Granted as
Remuneration
Options
(Exercised)/
(Expired)
Net Change
Other
Balance at
end of
period
Specified Directors
Henry David Kennedy1
-
-
Roy Barry Rushworth
-
Vesna Petrovic
-
Total
1. HD Kennedy retired in December 2022.
20,000,000
100,000,000
40,000,000
160,000,000
-
-
-
-
30 June 2023
-
-
-
-
20,000,000
100,000,000
40,000,000
160,000,000
2022
Specified Directors
Ernest Anthony Myers
Roy Barry Rushworth
Vesna Petrovic
Marie Michele Malaxos
(resigned February 2022)
Total
Balance at
beginning of
period
1 July 2021
20,000,000
20,000,000
20,000,000
39,463,415
99,463,415
Granted as
Remuneration
Options
(Exercised)/
(Expired)
Net Change
Other
Balance at
end of
period
30 June 2022
-
-
-
-
-
(20,000,000)
(20,000,000)
(20,000,000)
(39,463,415)
(99,463,415)
-
-
-
-
-
-
-
-
-
-
(e) Shareholdings of Specified Directors and Specified Executives
2023
Ordinary Shares held in
Pancontinental Energy NL
Specified Directors
Henry David Kennedy1
Ernest Anthony Myers
Roy Barry Rushworth
Total
1. HD Kennedy retired in December 2022.
Balance
1 July 2022
Acquisitions
(Disposals)
Balance
30 June 2023
643,824,491
2,900,715
144,335,610
791,060,816
15,000,000
-
-
15,000,000
658,824,491
2,900,715
144,335,610
806,060,816
65
Notes to the Financial Statements
2022
Ordinary Shares held in
Pancontinental Energy NL
Specified Directors
Henry David Kennedy1
Ernest Anthony Myers
Roy Barry Rushworth
Marie Michele Malaxos (resigned February 2022)
Total
1. HD Kennedy retired in December 2022.
18. SEGMENT INFORMATION
Balance
1 July 2021
Acquisitions
(Disposals)
Balance
30 June 2022
411,768,269
2,900,715
134,335,610
39,000,000
232,056,222
-
10,000,000
20,000,000
643,824,491
2,900,715
144,335,610
59,000,000
588,004,594
262,056,222
850,060,816
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 energy sector. Accordingly, under the
management approach outlined only one operating sector has been identified and no further disclosures are
required in the notes to the Consolidated Financial Statements.
19. FINANCIAL INSTRUMENTS
Financial risk management
Overview:
The Company and Group have exposure to the following risks from their use of financial instruments:
(a) credit risk
(b) liquidity risk
(c) market risk
This note presents information about the 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.
(a) Credit risk:
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails
to meet its contractual obligations. In this industry, it arises principally from the receivables of joint venture
re-charges and recuperations of cost. For the Group in this financial year, it arises primarily from receivables
due from subsidiaries, GST and VAT refunds, prepayments and bonds.
(i) Trade and other receivables:
The Group operates predominantly in the energy exploration sector; it does not ordinarily have material trade
receivables and is therefore not ordinarily exposed to credit risk in relation to trade receivables.
66
Notes to the Financial Statements
(ii) Loans to subsidiaries:
The Company has provided funding to its subsidiaries by way of loans. Repayment of these loans will occur
through future business activities of each respective Entity.
Exposure to credit 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
Carrying amount
Note
4
2023
$
73,641
5,300,909
5,374,550
2022
$
67,715
274,051
341,766
The Group considers that its cash and cash equivalents have low credit risk based on the external credit
ratings of the counterparties.
Impairment losses:
There are no material receivables past due for the Company or Group as at 30 June 2023, (2022: 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
$12,689 (2022: $5,524).
Whilst the loans were not payable at 30 June 2023 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 monitoring forecasts and
actual cash flows.
Consolidated
< 1 year
Contractual cashflows
1-5 years
Trade and other payables - Current
Provisions - Non Current
Other payables – Non Current
Total
$
(252,089)
-
-
(252,089)
$
-
-
-
-
> 5 years
$
-
(50,425)
(476,560)
(526,985)
67
Notes to the Financial Statements
(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.
Exposure to currency risk:
The Group’s exposure to foreign currency risk at balance date was as follows, based on notional amounts:
30 June 2023
30 June 2022
AUD
5,060,0711
USD
Total
240,838
5,300,909
AUD
266,8622
USD
7,189
Total
274,051
73,641
(779,074)
-
-
73,641
67,715
(779,074)
(711,687)
-
-
67,715
(711,687)
4,354,638
240,838
4,595,476
(377,110)
7,189
(369,921)
AUD
Cash & cash
equivalents
Trade & other
receivables
Trade and other
payables
Net balance
sheet
exposure
1. 4,124.63 Namibian dollars which is the equivalent of $329.99 is included in the AUD balance as it is
immaterial to the currency risk.
2. 1,840.84 Namibian dollars which is the equivalent of $164.05 is included in the AUD balance as it is
immaterial to the currency risk.
The following significant exchange rates applied during the year:
AUD : USD
Average rate
Reporting date spot rate
2023
0.673
2022
0.723
2023
0.664
2022
0.689
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
2022.
Effect in AUD
30 June 2023
10% strengthening
30 June 2022
10% strengthening
Consolidated
Equity
Profit or
loss
26,760
26,760
799
799
68
Notes to the Financial Statements
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.
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
Consolidated Carrying
Amount
30 June
2023
30 June
2022
5,300,909
274,051
Fair value sensitivity analysis for fixed rate instruments:
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.
Fair values:
The fair values of financial assets and liabilities, together with the carrying amounts shown in the balance
sheet, are as follows:
Consolidated
30 June 2023
30 June 2022
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Carrying
amount
73,641
5,300,909
(779,074)
Fair value
73,641
5,300,909
(779,074)
Carrying
amount
67,715
274,051
(711,687)
4,595,476
4,595,476
(369,921)
Fair value
67,715
274,051
(711,687)
(369,921)
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 /(Loss)
Return on Equity in %
2023
2022
(1,473,865)
10,141,913
(1,507,080)
4,448,729
9,447,122
107.35%
7,295,321
(1,870,559)
(25.64)%
3,653,336
121.77%
2,810,771
(823,179)
(29.29)%
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.
69
Notes to the Financial Statements
20. RELATED PARTY
(a) During the year the Company paid fees to Resource Services International Limited, a company in which
Mr Kennedy has a financial interest, for his role as Non-Executive Chairman. The amount paid was
$10,417 (2022: $25,000). Refer note 17.
(b) During the 2022 financial year the Company paid fees to GM Woodmont Pty Ltd, a company in which Ms
Malaxos (resigned February 2022) has a financial interest, for Non-Executive Director fees. The amount
paid was $13,333. No payments were made in the 2023 financial year. Refer note 17.
(c) The Company has effected Directors and Officers Liability Insurance.
21. PARENT INFORMATION
The Group has applied amendments to the Corporations Act (2001) which remove the requirement for the
Group to lodge Parent Entity Financial Statements. Parent Entity Financial Statements have been replaced
by the specific Parent Entity disclosures below.
AT 30 JUNE 2023
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
2023
$
2022
$
(1,971,470)
(819,684)
(1,971,470)
(819,684)
2023
$
2022
$
5,352,836
9,430,541
327,066
3,720,475
235,509
285,934
162,376
201,354
115,835,863
1,130,000
109,368,906
149,961
(107,821,256) (105,999,746)
3,519,121
9,144,607
70
Directors’ Declaration
In accordance with a resolution of the Directors of Pancontinental Energy 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 2023 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 2023.
On behalf of the Board
EA Myers
Director
Perth, Western Australia
29 September 2023
71
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
PANCONTINENTAL ENERGY NL
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Pancontinental Energy NL (“the Company”) and its controlled
entities (“the Group”) which comprises the consolidated statement of financial position as at 30 June 2023,
the consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended on that date and
notes to the financial statements, including a summary of significant accounting policies and the directors’
declaration of the Company.
In our opinion the financial report of the Group is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its financial
performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under these
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report
section of this report. We are independent of the Group in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and
Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (Including Independence
Standards) (the “Code”) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given
to the directors of the Company, would be in the same terms if given to the directors as at the time of this
auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
72
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
PANCONTINENTAL ENERGY NL (continued)
Key Audit Matter – Deferred Exploration,
Evaluation and Development Costs
How our Audit Addressed the Key Audit Matter
As disclosed in Note 7 to the financial statements,
exploration
the Group’s
expenditure of $4,066,860.
capitalised
has
that assessment
exploration
We note
impairment
evaluation
capitalised
expenditure is subject to a significant level of
judgement.
for
and
Our procedures in assessing exploration expenditure
included but were not limited to the following:
• We reviewed the ownership rights to the
tenements, against which the expenditure is
capitalised, their expiry dates and if required
commitments were met;
• We
the
assessed
reasonableness
of
capitalising exploration and evaluation
expenditure in accordance with AASB 6
Exploration for and Evaluation of Mineral
Resources;
• We tested a sample of exploration and
evaluation
supporting
expenditure
documentation to ensure they were bona
fide payments;
to
• We
the
assessed
of
management’s assessment for the existence
impairment indicators; and
reasonableness
• We reviewed the appropriateness of the
related disclosures in Note 7.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2023 but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
73
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
PANCONTINENTAL ENERGY NL (continued)
Directors’ Responsibility for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with the Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or cease operations,
or have no realistic alternative but to do so.
Auditor’s Responsibility for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with Australian Auditing Standards will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at: www.auasb.gov.au/Home.aspx.
We communicate with the directors regarding, amongst other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit matters.
We describe those matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communications.
74
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
PANCONTINENTAL ENERGY NL (continued)
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the remuneration report included in the directors’ report for the year ended 30 June 2023.
In our opinion the remuneration report of Pancontinental Energy NL for the year ended 30 June 2023
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
Rothsay Audit & Assurance Pty Ltd
Daniel Dalla
Director
Dated 29 September 2023
75
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 2023.
(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
454
257
284
1,658
2,894
5,547
1,437
96,910
856,704
2,389,608
86,065,622
7,970,813,979
8,060,222,823
11,467,387
1 MR HENRY DAVID KENNEDY
2 PERTH SELECT SEAFOODS PTY LTD
3 SOUDURE S/F PTY LTD
4 CITICORP NOMINEES PTY LIMITED
5 BNP PARIBAS NOMINEES PTY LTD
6 ROY BARRY RUSHWORTH
7 CRESCENT NOMINEES LIMITED
8 BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
9 MSI 888 PTY LTD
10 MR ROBERT ALBERT BOAS
11 MS FENGMEI SHEN
12 MR VICTOR LORUSSO
13 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
14 MR SCOTT ROBERT WEIR
15 BT PORTFOLIO SERVICES LIMITED
16 BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
17 BUDWORTH CAPITAL PTY LTD
18 CORD INVESTMENTS PTY LTD
19 CORD INVESTMENTS PTY LTD
20 GREENSEA INVESTMENTS PTY LTD
Listed ordinary
shares
Number of
shares
658,824,491
462,000,000
357,000,000
332,515,679
168,440,262
146,335,610
130,021,311
118,798,591
116,000,000
110,000,000
100,650,000
100,000,000
85,199,146
80,985,715
80,000,000
66,318,392
59,500,000
50,000,000
45,475,000
44,000,000
Percentage of
ordinary
shares
8.17
5.73
4.43
4.13
2.09
1.82
1.61
1.47
1.44
1.36
1.25
1.24
1.06
1.00
0.99
0.82
0.74
0.62
0.56
0.55
3,312,064,197
41.00
76
ASX Additional Information
(c) Voting rights
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
(d) Substantial Shareholders
The details of Substantial Shareholders are set out below:
Henry David Kennedy
Crescent Nominees Limited
Perth Select Seafoods Pty Ltd
(e) Permit Schedule
Number of
Shares
658,824,491
462,000,000
130,021,311
Permits and Licence Interests
Permit reference
Interest
Petroleum prospects
Namibia
Australia
Australia
PEL 87
ATP 920
ATP 924
75%
earning 20%
earning 25%
77
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Level 2, 30 Richardson Street
West Perth WA 6005
Telephone: +61 8 6363 7090
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