Cover scelta_copertina +dorso 5mm 02/04/15 15:19 Pagina 1
Po Valley energy limited
aBn 33 087 741 571
registered office
Suite 8, 7 the esplanade
mt Pleasant Wa 6153
australia
tel: (08) 9278 2533
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Highlights
Chairman’s & acting Ceo’s letter to Shareholders
Corporate governance Statement
10
directors’ report
27
lead auditor’s independence declaration
28
Statement of Financial Position
29
Statement of Profit or loss and other Comprehensive income
30
Statement of Changes in equity
31
Statements of Cash Flow
32
notes to the Financial Statements
67
directors’ declaration
68
independent auditor’s report
70
Shareholder information 2014-2015
72
technical Summary
Corporate Directory
Directors
graham Bradley, Chairman
michael masterman, non executive director
Byron Pirola, non executive director
gregory Short, non executive director
Kevin eley, non executive director
acting Chief executive officer
Sara edmonson
Company Secretary lisa Jones
Registered Office
Suite 8, 7 the esplanade
mt Pleasant Wa 6153
australia
tel: +61 8 92782533
Rome Office
Via ludovisi, 16
00187 rome, italy
tel: +39 06 42014968
Share Registry
link market Services limited
178 St george’s tce
Perth, Wa australia 6000
tel: +61 8 92116679
Solicitors
Steinepreis Paganin
level 4, 16 milligan St
Perth, Wa australia 6000
Ughi e Nunziante
Studio legale
Via Venti Settembre, 1
00187 roma, italy
Auditor
ernst & young
11, mounts Bay road
Perth, Wa 6000 australia
Banks
Bankwest
108 St george’s tce
Perth, Wa australia 6000
nedbank limited
old mutual Place
2 lambeth Hill
london, uk, eC4V 4gg
Stock exchange listing
Po Valley energy limited shares are listed on
the australian Stock exchange
under the code PVe.
the Company is limited by shares,
incorporated and domiciled in australia.
Highlights
Gas production 0.66 bcf (18.56 million standard cubic metres)
€ 5.03 million (AUD 7.41 million) revenue
€ 1.95 million (AUD 2.90 million) net cash flow from operating activities
€ 1.16 million (AUD 1.7 million) reduction in G&A expenses through an
extensive cost savings initiative
€1.54 million (AUD 2.2 million) EBITDA
Received the production concession for the Bezzecca field through the
enlargement of the existing Cascina Castello Production Concession
Awarded the preliminary production concession for the Sant’Alberto gas field
Awarded the preliminary production concession for the Gradizza gas field
Completed the production concession application for the off-shore
development Teodorico (formerly Carola-Irma)
Executed a farm-out agreement with Petrorep Italiana S.p.A for a 10% interest
in Bezzecca
A n n u a l R e p o r t 2 0 1 4 | 1
Chairman and Acting CEO’s letter to Shareholders
Dear Shareholder,
On behalf of the Board of Directors, we are pleased to present the Company’s Annual
Report.
During 2014, the Company’s sixth year of gas production, the combined production from the
Castello and Sillaro gas fields was 18.56 million standard cubic metres (scm) (0.66 bcf). This
brings the total gas production from both fields since inauguration to 124.4 million scm (4.40
bcf) equating to €36.2 million (AUD 50.0 million) in revenue.
The Company’s operating revenue for the year was €5.0 million (AUD 7.4 million) compared
to €6.7 million (AUD 9.2 million) in 2013 whilst EBITDA in 2014 was € 1.5 million (AUD 2.3
million) in comparison to €2.2 million (AUD 3.0 million) in 2013. In the face of falling revenue
during the year we made significant reductions in our underlying cost base; overhead and
administrative expenses were reduced by 33% (€1.2 million, AUD 1.8 million) compared to
2013. The Board and management will continue to carefully monitor spending going forward.
On the operational front, the Sillaro field produced steadily at 56,000 scm/day (1.98 mcf/day)
during 2014 until late October when water breakthrough and associated sand production in
some zones, and the depletion of others, led to a fall in production to circa 21,000 scm/day
(0.74 mcf/day). At the time of writing, the Company and its external experts were close to
completing an in depth evaluation and redevelopment plan of the Silaro field. The technical
details of the expected work-over of the field will be announced to the market in due course.1
The Company reached three major regulatory milestones for key new development projects
throughout the year. The Company received the final production concession for the
Bezzecca field through the enlargement of the existing Cascina Castello Production
Concession in July, along with the preliminary production concession awards for both the
Sant’Alberto and Gradizza gas fields in June and November 2014 respectively. These
permitting awards further strengthen our asset portfolio. Importantly, with the granting of the
preliminary production concessions, our certainty in the commerciality and timing of
development of these three gas fields is now at a stage where we are prepared to classify
them as reserves. As a result our Undeveloped 2P reserves at 31 December 2014
increased by 140% to 10.00 bcf.
The Company also made tangible progress in developing its other core assets, most
particularly the offshore development project Teodorico (formerly Carola-Irma) which lies in
the Northern Adriatic; Italy’s main gas producing area accounting for roughly 80% of total
domestic gas production. Approximately €700,000 has been invested to date in the project’s
production concession application which includes a detailed front-end engineering and
design (FEED) study and the results of reprocessing and reinterpretation of 120km² of 3D
seismic data surrounding the main target area.
1 On 9 January 2015, the Company released an announcement regarding the Sillaro field and its related reserves revision and production
forecast on the ASX and on the Company’s website (as per listing rule 5.30). For further information on Sillaro please refer to this release.
2 | A n n u a l R e p o r t 2 0 1 4
Chairman and Acting CEO’s letter to Shareholders
The production concession application was completed in 1Q2015 and filed with the Italian
Ministry of Economic Development. With certified 2C Contingent Resources of 47.3 bcf2,
once the production concession is granted for this asset these resources will quadruple the
Company’s reserve base and production capability.
In addition to Teodorico, the Company focused on advancing the geological, exploration and
appraisal review of the large onshore Selva field. The Selva field is a previously producing,
now relinquished, Eni field with remaining high prospectivity. This license holds two targets; a
low risk gas volume up-dip of a former producing reservoir (Selva Stratigraphic) and a
second exploration target on the pinch-out edge to the east. Approximately 70 km² of 2D
seismic lines were purchased for this license and are being reprocessed.
Health, Safety and Environment continue to be a high priority to the Company and this was
demonstrated throughout the year with no accidents or incidents reported.
On a personal note, we would like to express gratitude to the committed team based in
Rome, the Board for their continued dedication and also our shareholders for their continued
support throughout 2014.
The Board and management are very cognisant of the current low share price of the
Company which, in the view of the Directors, does not fully reflect the value of the
Company’s extensive portfolio of prospects. The Board remains committed to remedying this
situation notwithstanding a number of challenges including the prospect of lower gas
production from our major producing field (Sillaro), and the resultant challenge of funding our
future development plans. Meanwhile we will continue to manage our spending prudently
and to work towards realising the value of our significant licence position in Italy which sets
us apart from our peers.
Graham Bradley
Sara Edmonson
Chairman
Acting CEO
2 For further information on the offshore license AR94PY and the development project Teodorico, refer to the Technical Summary Section of
this Annual Report.
A n n u a l R e p o r t 2 0 1 4 | 3
Corporate Governance Statement
The Board is committed to implementing the standards of best corporate governance for listed
companies as set out in the Corporate Governance Principles and Recommendations of the ASX
Corporate Governance Council (ASX Corporate Governance Recommendations) as appropriate for a
company of PVE’s nature and size. This Corporate Governance Statement summarises the corporate
governance practices that have been adopted by the Company and, as required by the ASX Listing
Rules, provides details of the extent to which the Company has followed the ASX Corporate
Governance Recommendations during the reporting period.
ASX Principle 1 – Lay solid foundations for management and oversight
Role of the Board
The primary responsibility of the Board and management is to preserve and increase the value of the
Company for its shareholders, while respecting the legitimate interests and expectations of
employees, customers, creditors, the communities in which PVE operates and other stakeholders. The
Board is responsible for establishing a company culture of high ethical, environmental, health and
safety standards.
The Board has general responsibility for the oversight, management and performance of the
Company. Its specific responsibilities include the following:
Set the strategic direction for the Company and monitor implementation of those strategies;
Monitor performance of the Company, the Board and management;
Appoint and manage performance of the CEO, approve the Company’s overall remuneration
policy and oversee the senior management team in terms of performance evaluation,
succession planning and remuneration;
Approve and monitor the business plan, annual exploration and development work programs
and budgets in accordance with the approved strategy and monitor the Company’s overall
financial position and capital requirements;
Authorise and monitor significant investment and strategic commitments;
Approve and monitor financial and other reporting to shareholders;
Review and ratify the Company’s policies and systems for health, safety and environmental
management, risk management and internal control; codes of conduct and regulatory
compliance;
Appoint and remove the external auditors;
Evaluate the performance of the Board and identify and appoint new directors to the Board;
Take responsibility for corporate governance.
Delegation to Senior Management
Other than the matters specifically reserved for the Board, responsibility for the operation and
administration of the Company has been delegated to the Chief Executive Officer. Internal control
processes are in place to allow management to operate within board approved limits and the Chief
Executive Officer cannot commit the Company to additional obligations or expenditure outside of those
delegated authorities without Board approval.
4 | A n n u a l R e p o r t 2 0 1 4
Corporate Governance Statement (Continued)
ASX Principle 2 – Structure the Board to Add Value
Composition of the Board
There are currently five Non-Executive Directors on the Board. The Board has been structured to
include directors with a versatile set of skills, expertise and experience to enable the Board to execute
its duties and responsibilities for the proper and effective management of the Company. The Board
seeks to ensure that its members together have the following combination of skills and experience:
Technical expertise and experience in oil and gas exploration, development and production;
Finance and accounting;
Company strategy and business planning and business and corporate development;
Local and international experience; and
Public company affairs and corporate governance.
The Directors Report contains further details of the experience of each Director and their term of
office.
Retirement and Rotation
Retirement and rotation of the directors is governed by the Corporations Act 2001 and the Company’s
Constitution. In accordance with the Constitution, one-third of the Board is required to retire at each
annual general meeting with retiring directors being eligible for re-election.
Independence
The Board is currently composed of five Non-Executive Directors, three of whom are independent
including the Chairman. The independence of Directors is regularly assessed by the Board and in
doing so it has careful regard to the guidelines set out in the ASX Corporate Governance
Recommendations for the evaluation of director independence. Based on the application of those
guidelines, the Board currently considers that it has three independent Directors being Graham
Bradley (the Chairman), Kevin Eley and Gregory Short. Byron Pirola and Michael Masterman are not
considered to be independent as they each have substantial shareholdings of more than 5% of the
Company’s shares.
Independent Advice
In connection with their duties and responsibilities, Directors have the right to seek independent
professional advice at the Company’s reasonable expense. Prior approval of the Chairman is required
which will not be unreasonably withheld.
Board Committees
Remuneration & Nominations Committee
The Company has a Remuneration & Nominations Committee which provides recommendations to the
Board on matters including:
The appointment and evaluation of the CEO and the process for evaluation of senior
executives;
The Company’s remuneration policies and practices and the remuneration of the CEO, senior
executives and Non-Executive Directors;
The composition of the Board and competencies of Board members;
Succession planning for Directors and senior management;
A n n u a l R e p o r t 2 0 1 4 | 5
Corporate Governance Statement (Continued)
Processes for the evaluation of the performance of the Directors.
Graham Bradley (Chairman), Byron Pirola and Michael Masterman are the current members of the
committee.
Attendance details of the committee meetings held during 2014 can be found in the Directors Report.
The committee is structured in accordance with the ASX Corporate Governance Recommendations in
so far as it is chaired by an independent chair and has three members, however, it does not consist of
a majority of independent Directors given that two of its members, Mr Masterman and Dr Pirola are not
considered independent due to their substantial shareholdings.
Board performance is reviewed annually by the committee. The last review was conducted in March
2015. The Board has not formalised the procedures for selection and appointment of new Directors or
re-election of incumbent Directors, however, the Board regularly reviews its composition to determine
whether it has the right mix of skills and experience.
The Remuneration & Nominations Committee is also responsible for ensuring an appropriate process
is followed for the review of the performance of the CEO and senior executives.
At the beginning of each year, the committee approves company and individual performance
objectives for the CEO and senior executives. Performance is evaluated and any performance based
remuneration for the CEO, senior executives and management is approved following the end of each
year.
In March 2015 the Remuneration & Nominations Committee conducted a performance evaluation of
the senior executives against their performance objectives. The committee made recommendations to
the Board regarding performance based remuneration for those executives.
Audit & Risk Committee
The Company has established an Audit & Risk Committee which provides advice and assistance to
the Board in fulfilling its corporate governance and oversight responsibilities in relation to internal and
external audit, risk management systems, financial and market reporting, internal accounting, financial
control systems and other items as requested by the Board.
The committee has adopted a formal charter. In fulfilling its obligations, the committee has direct
access to employees, the auditors or any other independent experts and advisers it considers
appropriate to carry out its duties. Kevin Eley (who chairs the committee), Byron Pirola and Gregory
Short are the current members of the committee. The committee has been structured to comply with
the ASX Corporate Governance Recommendations so that it:
Has three members;
Consists only of Non-Executive Directors;
Has a majority of independent Directors;
Is chaired by an independent chair, who is not the chair of the Board; and
Comprises members with the appropriate financial and business expertise to act effectively as
a member of the committee.
The number of Audit & Risk Committee meetings held in 2014 and director attendance is set out in the
Directors Report on page 12. Committee member qualifications are set out on page 10 and 11.
6 | A n n u a l R e p o r t 2 0 1 4
Corporate Governance Statement (Continued)
ASX Principle 3 – Promote Ethical and Responsible Decision-Making
Code of Conduct
All executives and employees are required to abide by laws and regulations, to respect confidentiality
and the proper handling of information and act with the highest standards of honesty, integrity,
objectivity and ethics in all dealings with each other, the Company, customers, suppliers and the
community. The Company has adopted a code of conduct.
Diversity
The Company's policy is to ensure that hiring, employment and board selection policies avoid gender
bias and encourage diversity to the extent possible for a small organisation.
Po Valley currently employs 14 full time employees, of whom, 7 are men and 7 are women. The
Company’s senior executives include women in the roles of Acting CEO, Chief Financial Officer and
Company Secretary. Women also hold key roles in the areas of accounting, corporate and public
relations. The Company's employees are drawn from a variety of nationalities, age, ethnic and cultural
backgrounds. The Company currently has no female directors.
The Board believes that, given the highly specialised nature of the Company’s most senior positions
which are of a technical nature, it is unrealistic to set gender diversity targets at this time in the
Company's evolution.
The Board is committed to maintaining a corporate culture which supports workplace diversity.
Securities Trading Policy
The Company has adopted a Securities Trading Policy which complies with ASX Listing Rule 12.2.
This policy provides guidance to Directors and employees on the laws relating to insider trading and
provides them with practical guidance to avoid unlawful transactions in Company securities. Directors
and employees are prohibited from trading the Company’s securities at any time while in possession
of price sensitive information and are also prohibited from trading securities during “blackout” periods
around the announcement of the Company’s half yearly and yearly results. Directors and employees
must not engage in short term trading of the Company’s securities and are also prohibited from
dealing in any derivative products issued in respect of the Company’s shares. In any event, any
trading in securities by Directors or employees is subject to the prior approval of the Chairman (in the
case of Directors), the Chairman of the Audit & Risk Committee (in the case of the Chairman) or the
CEO or Company Secretary (in the case of other employees).
ASX Principle 4 – Safeguard Integrity in Financial Reporting
The Board is committed to ensuring that the Company’s financial reports present a true and fair view
of the Company’s financial position and comply with relevant accounting standards. The Audit & Risk
Committee assists the Board in discharging its responsibilities for financial reporting and to ensure that
appropriate internal controls are in place.
Please refer to the commentary on ASX Principle 2 above for further details in relation to the Audit &
Risk Committee and to the Directors’ Report for details of the names and qualifications of the
members of the committee and attendance at meetings in 2014.
ASX Principle 5 – Make Timely and Balanced Disclosure
The Board is committed to ensuring that investors can readily access sufficient information to ascribe
a fair value to the Company’s securities, understand the Company’s objectives and strategies and
A n n u a l R e p o r t 2 0 1 4 | 7
Corporate Governance Statement (Continued)
evaluate the Company’s financial position and growth prospects. The Company has adopted policies
and procedures, including a Continuous Disclosure Policy, designed to ensure compliance with ASX
Listing Rules disclosure requirements and to ensure accountability at a senior executive level for that
compliance.
ASX Principle 6 – Respect the Rights of Shareholders
Shareholder Communications
The Company has implemented a Shareholder Communications Policy to ensure that shareholders,
on behalf of whom they act, and the financial market have timely access to material information
concerning the Company.
The Company website is used to complement the official ASX release of material information and
periodic reports to the market. The website ensures that all press releases, ASX announcements,
notices and presentations from the past three years are easily accessible to the public.
The Company is committed to ensuring that all shareholders have the opportunity to participate in the
Company’s annual general meetings. In order to facilitate this, from 2010 the Company has provided
shareholders the opportunity to submit written questions for consideration by the Board at the annual
general meeting.
ASX Principle 7 – Recognise and Manage Risk
Risk Management
Risk recognition and management are considered critical in creating and maintaining shareholder
value and the successful execution of the Company’s strategies in gas exploration and development.
The Board has oversight of the processes by which risk is considered for both ongoing operations and
prospective actions. In specific areas, it is assisted by the Audit & Risk Committee.
The Board requires management to design and implement a risk management and internal control
system for the management of material business risk and, during the year, management reported to
the Board on the on the effectiveness of this system.
The CEO and CFO have confirmed in writing to the Board for each reporting period confirming that the
declaration provided in accordance with section 295A of the Corporations Act is founded on a sound
system of risk management and internal control and that the system is operating effectively in all
material respects in relation to financial reporting risks.
Reserves Reporting
The progression of the Company’s discovered hydrocarbon reserves from appraisal studies through to
development and production is core to the Company’s purpose and market value. The Company has
adopted a Hydrocarbon Reserves Policy in order to assist in the implementation of processes,
standard and controls to ensure reliable hydrocarbon reserves estimates, consistent with industry best
practice to facilitate effective business management decision-making and accurate reporting of the
Company’s reserves. The CEO is responsible for the implementation of the policy while the Board
oversees and approves the policy and monitors its implementation.
8 | A n n u a l R e p o r t 2 0 1 4
Corporate Governance Statement (Continued)
Health, Safety and Environment
Po Valley Energy is dedicated to pursuing the highest Health and Safety standards in the workplace.
We regard Environmental awareness and Sustainability as key strengths in planning and carrying out
our business activities. PVE’s daily operations are conducted in a way that adheres to these principles
and we are committed to their continuous improvement.
Environmental sustainability and Health and Safety in the workplace are recognised as an integral part
of our business strategy and corporate citizenship.
In every instance, we aim to employ the most advanced technology and know-how and to apply the
most suitable precautionary measures to each situation while adhering to the highest safety.
Appropriate protection policies are an important selection criteria for contractors, whose activities are
monitored for compliance.
The Company has adopted an HSE Management System which provides for a series of procedures
and routine checks (including periodical audits) to ensure the Company’s compliance with all legal and
regulatory requirements and best practices in this area.
ASX Principle 8 – Remuneration Fairly and Responsibly
The Board seeks to ensure that the Company adopts remuneration practices which will enable it to
attract and retain high calibre and qualified employees, executives and directors whose interests are
aligned with those of shareholders.
The Remuneration & Nominations Committee is responsible for reviewing and recommending
compensation arrangements for the Directors, the CEO and senior management. For full details
regarding the Company’s remuneration practices and the composition and responsibilities of the
Remuneration & Nominations Committee please refer to the commentary in relation to ASX Principle 2
above and to the Remuneration Report.
Corporate Governance Policies and Charters
Further information regarding PVE’s corporate governance practices and policies is available on the
Company’s web site, www.povalley.com. In particular, copies of the following documents are available
under the ‘About Us’ / ‘Corporate Governance’ link.
• Constitution;
• Corporate Governance Statement;
• Code of Conduct;
• Hydrocarbons Reserve Policy;
• Continuous Disclosure Policy;
• Securities Trading Policy;
• Shareholder Communications Policy;
• Audit & Risk Committee Charter;
• Remuneration & Nominations Committee Charter;
• Risk Management Policy.
A n n u a l R e p o r t 2 0 1 4 | 9
Directors’ Report
The directors present their report together with the financial report of Po Valley Energy Limited (‘the
Company” or “PVE”) and of the Group, being the Company and its controlled entities, for the year
ended 31 December 2014.
1. Directors
The Directors of the Company at any time during or since the end of the financial year are:
Directors
M Masterman
B Pirola
G Bradley
G Short
K Eley
Date of Appointment/Resignation
22 June 1999 (Managing Director)
11 October 2010 (Non-Executive Director)
10 May 2002
30 September 2004
5 July 2010
19 June 2012
Information on Directors
The Board is composed of Non-Executive Directors, including the Chairman. The Chairman of the
Board is elected by the Board and is an independent director.
Graham Bradley — Chairman BA, LLB (Hons), LLM, FAICD, Age 66
Graham joined PVE as a director and Chairman in September 2004 and is based in Sydney. He is an
experienced Chief Executive Officer and listed public company director. Graham previously served as
Chief Executive Officer of one of Australia’s major listed funds management and financial services
groups, Perpetual Limited. He was formerly Managing Partner of a national law firm, Blake Dawson
Waldron and was a senior Partner of McKinsey & Company. Graham is currently Chairman of
Stockland Corporation Limited, HSBC Bank Australia Limited, Energy Australia Holdings Limited and
Infrastructure NSW and a director of GI Dynamics Inc. Graham is Chairman of the Remuneration and
Nomination Committee and was a member of the Audit and Risk Committee until December 2010.
Michael Masterman — Non-Executive Director, BEcHons, Age 52
Michael is a co-founder of PVE. Michael took up the position of Executive Chairman and CEO of PVE
and Northsun Italia S.p.A. in 2002 and resigned in October 2010 to take up an executive position at
Fortescue Metal Group where he is currently CEO of FMG Iron Bridge iron ore company and recently
completed the US$1.15bn sale of a 31% interest in the project to Formosa Plastics Group. Prior to
joining PVE, Michael was CFO and Executive Director of Anaconda Nickel (now Minara Resources),
and he spent 8 years at McKinsey & Company serving major international resource companies
principally in the area of strategy and development. He is also Chairman of W Resources Plc, an AIM
listed company with tungsten and gold assets in Spain and Portugal. Michael became a member of
the Remuneration & Nomination Committee from 1 January 2011.
Byron Pirola — Non-Executive Director, BSc, PhD, Age 54
Byron is a co-founder of PVE and is based in Sydney. He is currently a Director of Port Jackson
Partners Limited, a Sydney based strategic management consulting firm. Prior to joining Port Jackson
Partners in 1992, Byron spent six years with McKinsey & Company working out of the Sydney, New
York and London Offices and across the Asian Region. He has extensive experience in advising
CEOs and boards of both large public and small developing companies across a wide range of
industries and geographies. Byron is a member of the Audit and Risk Committee and member of the
Remuneration and Nomination Committee.
10 | A n n u a l R e p o r t 2 0 1 4
Directors’ Report (Continued)
Gregory Short — Non-Executive Director, BSc, Age 64
Greg Short was appointed Non-Executive Director in July 2010. Greg is a geologist who worked with
Exxon in exploration, development and production geosciences and management for 33 years in
Australia, Malaysia, USA, Europe and Angola. During his time in Europe, Greg was actively involved
in Exxon's activities in the Netherlands and Germany. Greg was Geoscience Director of Exxon's
successful development of its Angola offshore operations. Greg retired from Exxon in 2006 and is a
Non-Executive director of ASX listed MEO Australia, Metgasco Limited and Pryme Oil and Gas
Limited. Greg became a member of the Audit and Risk Committee from 1 January 2011.
Kevin Eley — Non-Executive Director, CA, F FIN, Age 65
Kevin Eley was appointed Non-Executive Director in June 2012. Kevin is based in Sydney and was
the Chief Executive of HGL Limited for 25 years until his retirement in 2011. He has management and
investment experience in a broad range of industries including, manufacturing, mining, retail and
financial services with experience in the direction of early stage companies and public company
governance. Kevin joined the PVE Audit & Risk Committee as Chairman and is currently a Non-
Executive director of HGL Ltd, Milton Corporation Limited and Equity Trustees Limited.
2. Company Secretary
Lisa Jones – Company Secretary, LLB
Lisa was appointed to the position of Company Secretary in October 2009. She is a corporate lawyer
with over 17 years experience in commercial law and corporate affairs, working with large public
companies and emerging companies in Australia and in Europe. She was a senior associate in the
corporate & commercial practice of Allen Allen & Hemsley and spent several years working in Italy,
including as international legal counsel at Pirelli Cavi and as an associate in the Rome office of a
national Italian firm.
A n n u a l R e p o r t 2 0 1 4 | 11
Directors’ Report (Continued)
3. Directors Meetings
The number of formal meetings of the Board of Directors held during the financial year and the
number of meetings attended by each director is provided below:
G Bradley
M Masterman
B Pirola
G Short
K Eley
10
10
2
2
1
10
10
2
2
-
10
10
2
2
-
1
1*
1*
No. of board
meetings held
No. of board
meetings
attended
No. of Audit &
Risk
Committee
meetings held
No. of Audit &
Risk
Committee
meetings
attended
No. of
Remuneration
& Nomination
Committee
meetings held
No. of
Remuneration
& Nomination
Committee
meetings
attended
10
10
10
10
-
-
2*
2*
1
1
1
1
* attended meeting as an observer
12 | A n n u a l R e p o r t 2 0 1 4
Directors’ Report (Continued)
4. Principal Activities
The principal continuing activities of the Group in the course of the year were:
The exploration for gas and oil in the Po Valley region in Italy;
Appraisal and development of gas and oil fields;
Production and sale of gas from the Group’s production wells.
5. Earnings per share
The basic and diluted loss per share for the Company was 1.03 € cents (2013: loss 4.76 € cents).
6. Operating and financial review
The Italian gas market is dominated by gas imports. According to the 2014 Annual Report prepared by
the Italian Ministry of Economic Development, the domestic exploration and production industry
represents approximately 11% of total gas consumption in Italy the majority of which is produced by
industry majors including Eni Spa and Edison Spa. Consequently, the Company has few comparable
peers to contrast its operations.
Strategy
PVE strategy is to create value for shareholders and stakeholders using its existing and growing
Italian oil and gas resource base. PVE’s strategy focuses on optimising near term production to
maximise profitability and expanding the Company’s resources through exploration and development
activities.
The Company’s core portfolio includes 11 onshore assets and the first offshore asset – a game
changer in the Company’s resource potential. The Company’s operations are located in Italy and are
run by a local management team which PVE believe represents a significant competitive advantage
not enjoyed by newer entrants seeking to find success in the Italian market. Italy remains an attractive
market with gas and oil being of high quality, an accessible and low cost transportation network and a
pricing environment that has been stable and higher than other comparable European countries.
This year has been a continuation of a longer period of organisational change as the Company has
sought to refocus the leadership team and strengthen its strategic position, having made substantial
progress on multiple fronts.
Operations
During the year, the Company produced from both its Castello and Sillaro fields with a total combined
production of 18.6 million cubic metres of gas (0.66 billion cubic feet).
In October, the Company reported the reduction of Sillaro production from 50,000 to around 25,000
cubic metres per day. The production reduction was caused by depletion of several reservoirs and
water arrival and associated sand production from some completions. Subsequently, PVE completed
a re-evaluation of the residual potential of the field and a medium term plan is currently being
developed to redrill Sillaro-1 and re-complete Sillaro-2 in order to maximize recovery of residual
reserves and provide a new depletion point for the Pliocene reservoirs. Please refer to the ASX
announcement “Sillaro Field Reserves Revision and Production Forecast” released on 9 January 2015
which contains further details. Total production for the period from the Sillaro field amounted to 17.6
million cubic metres of gas (0.62 billion cubic feet).
The Castello gas field produced steadily at approximately 2,700 Scm/day throughout 2014. Total
production for the period from the Castello field amounted to 0.98 million cubic metres of gas (0.03
billion cubic feet).
A n n u a l R e p o r t 2 0 1 4 | 13
Directors’ Report (Continued)
Exploration
The Company made further investments in 2014 in exploration and development assets that we
believe are the most material value drivers. Namely, the production concession application for the
offshore development named Teodorico (formerly Carola-Irma) was completed. An integral part of this
application is the preliminary front-end engineering and design (FEED) study and the 3D seismic data
which was reprocessed and interpreted in-house.
Furthermore in February 2015, the Company was awarded the western block of the AR94PY license,
specifically the residual 328.3 km² of offshore licenses which had been pending following the 12
nautical mile moratorium enacted by Environmental Decree 128 of June 2010. The Company now
intends to file the production concession application with the Ministry of Economic Development with
the aim to to fast-track the development of Teodorico.
Following the successful drilling of the Gradizza-1 exploration well (La Prospera licence) in 2013 with
Joint Venture (“JV”) partners AleAnna Resources LLC (10% equity) and Petrorep Italiana S.p.a. (15%
equity) the Company applied for a Production Concession in February 2014. Please refer to the ASX
announcement “Gradizza-1 Contingent Resource Assessment” released on 3 February 2014 which
contains further details including information required by Chapter 5 of the ASX Listing Rules in relation
to the reporting of Oil & Gas activities and contingent resources. In November 2014 the Company was
awarded a preliminary production concession for the Gradizza development and an environmental
impact study is underway.
A revised Environmental Impact Assessment (“EIA”) for the Selva drilling application (Podere Maiar-
1dir, identified within the Podere Gallina licence) was submitted to the Emilia-Romagna Region in April
2014 following minor variation requests. The Company purchased and reprocessed 70 km² of 2D
seismic lines purchased in 2013 for the Selva prospect during the year and reinterpretation
commenced in January 2015.
Development
Following, the award of the Bezzecca EIA Decree from the Lombardy Region in early 2014, the
Ministry awarded the production concession through the enlargement of the existing Cascina Castello
Production Concession in July. The formal Development Plan was granted by the Italian Ministry of
Economic Development in 4Q 2014. The Ministry approved a joint venture with Petrorep in December
2014, for the Bezzecca Project. Petrorep will earn a 10% interest in the Cascina Castello production
concession including the existing Vitalba plant but excluding the Vitalba-1 well. For its 10% interest,
Petrorep will commit to a promoted share of future costs relating to the 7km pipeline installation, the
Vitalba plant facilities upgrade to connect the Bezzecca-1 well, drilling expenditures for the
development well Bezzecca-2 and reimbursement on past costs. PVE will retain the residual interest
and operatorship.
The Ministry of Economic Development awarded the preliminarily production concession for the
Sant’Alberto gas field (north of Bologna) in June 2014 and subsequently the EIA (including the Santa
Maddalena-1dir well) was submitted to the Italian Ministry of Environment for the final production
concession in December 2014. The planned development for the Sant’Alberto field envisions a small
modular plant and a simple connection to the national grid, circa 200 meters away.
Financial performance
Total revenue from the full year of gas production was €5,033,833, a year on year decline of
€1,628,944 or 24%. This decrease in revenue is attributable to lower production volumes from the
Sillaro field in 4Q 2014. Earnings before interest, tax, impairment, depreciation and amortisation
(EBITDA) for the year was €1,539,512 and decreased €215,624 if compared to the previous year. This
decrease is mainly driven by the decrease in revenue of €1,628,944 which was partially offset by (i) a
14 | A n n u a l R e p o r t 2 0 1 4
Directors’ Report (Continued)
decrease in operating expenses of €257,148 and (ii) savings in employee expenses and corporate
overheads of €1,156,172. As previously communicated to shareholders, the Company undertook a
review of its cost structure and organisation with the aim to reduce fixed overhead costs which
continued throughout 2014. In addition, the Company executed an off-take agreement with a global oil
and gas major which secures the gas price until September 2015 with the option to extend to
September 2016.
Net loss before impairment expense is reconciled to comprehensive loss for the period as follows:
Comprehensive profit reconciliation table ( in Euro )
2014
2013
Net loss before impairment expense (unaudited)
(1,242,182)
(700,259)
Impairment on resource property costs for the Castello field
-
(5,021,112)
Exploration costs expensed
(20,180)
(74,895)
Comprehensive profit / (loss) for the year
(1,262,362)
5,796,266
Earnings before interest, tax, impairment, depreciation and amortisation (EBITDA) amounted to
€1,539,512 for the year.
EBITDA (unaudited) is reconciled to statutory results from operating activities as follows:
EBITDA reconciliation table ( in Euro )
2014
2013
EBITDA
1,539,512
1,755,136
Depreciation and amortisation expense
(2,264,401)
(2,325,656)
Depreciation expense
Impairment losses
Other miscellaneous income
(13,791)
(18,406)
(20,180)
(5,096,007)
251,380
437,056
Results from operating activities
(507,480)
5,247,877
Board believes EBITDA, however not reviewed or audited, is a good measure of the operating results
of the Company.
Financial position
PVE currently has in place a €20 million Reserve Based Lending (RBL) facility with the London branch
of Nedbank Group Limited, one of the four largest banking groups in South Africa. The maximum
borrowing base ceiling limit is set by Nedbank six monthly. The Company’s drawings on the Nedbank
facility amounted to €3,406,590 at 31 December 2014. One repayment totalling €93,410 was made
during the year. No share issues were made during the 2014 year. Cash and cash equivalents at year
end 2014 amounted to €1,579,585.
Nedbank has not finalised a redetermination in December 2014 due to the ongoing discussions
regarding financing options. Based on June 2014 borrowing base redetermination the borrowing limit
would be €3,051,000 for the first half of 2015. The Company has hence transferred €355,590 from the
cash balance to the Debt Service Reserve Account (”DSRA”) during January 2015. At the date of this
report this amount remained in the DSRA account pending finalization of the borrowing base
redetermination.
A n n u a l R e p o r t 2 0 1 4 | 15
Directors’ Report (Continued)
Health and safety
Paramount to PVE’s ability to pursue its strategic priorities is a safe workplace and a culture of safety
first. The Company regards Environmental awareness and Sustainability as key strengths in planning
and carrying out business activities. PVE’s daily operations are conducted in a way that adheres to
these principles and management are committed to their continuous improvement. Whilst growing
from exploration roots, the Company has strived to continually improve underlying safety performance.
The Company has adopted an HSE Management System which provides for a series of procedures
and routine checks (including periodical audits) to ensure compliance with all legal and regulatory
requirements and best practices in this area. In 2014, PVE maintained its outstanding occupational
health safety and environmental track record with no incidents or near misses to report during the
33,998 man-hours worked at the well sites and in the administrative offices.
In addition to health and safety, Management and the Board use a number of operating and financial
indicators to measure performance overtime against our overall strategy. Refer to note 11 of the
Directors report for details of selected performance indicators.
Information required by ASX Listing Rule 5.43
The Company confirms that it is not aware of any new information or data that materially affects the
information included in the two market announcements referred to above (“Gradizza-1 Contingent
Resource Assessment” lodged with the ASX on 3 February 2014 and “Sillaro Field Reserves Revision
and Production Forecast” lodged with the ASX on 9 January 2015) and that all material assumptions
and technical parameters underpinning the estimates in those announcements continue to apply and
have not materially changed.
Principle risks and uncertainties
Oil and gas exploration and appraisal involves significant risk. The future profitability of the Company
and the value of its shares are directly related to the results of exploration and appraisal activities.
There are inherent risks in these activities. No assurances can be given that funds spent on
exploration and appraisal will result in discoveries that will be commercially viable. Future exploration
and appraisal activities, including drilling and seismic acquisition may result in changes to current
perceptions of individual prospects, leads and permits.
The Company identifies and assesses the potential consequences of strategic, safety, environmental,
operational, legal, reputational and financial risks in accordance with the Company’s risk management
policy. PVE management continually monitors the effectiveness of the Company’s risk management,
internal compliance and control systems which includes insurance coverage over major operational
activities, and reports to the Audit and Risk Committee on areas where there is scope for
improvement. The Charter for the Audit and Risk Committee is available on the Company’s website.
The principal risks and uncertainties that could materially affect PVE future performance are described
on the following page.
16 | A n n u a l R e p o r t 2 0 1 4
Directors’ Report (Continued)
External risks
Exposure to gas
pricing
Volatile oil and gas prices make it difficult to predict future price movements with
any certainty. Decline in oil or gas prices could have an adverse effect on PVE. The
Company does not currently hedge its exposures to gas price movements long
term. The profitability of the Company’s prospective gas assets will be determined
by the future market for domestic gas. Gas prices can vary significantly depending
on other European gas markets, oil and refined oil product prices, worldwide supply
and the terms under which long term take or pay arrangements are agreed.
Changes to law,
regulations or
Government
policy
Changes in law and regulations or government policy may adversely affect PVE’s
business. Examples include changes to land access or the introduction of legislation
that restricts or inhibits exploration and production.
Similarly changes to direct or indirect tax legislation may have an adverse impact on
the Company’s profitability, net assets and cash flow.
Uncertainty of
timing of
regulatory
approvals
Operating risks
Exploration and
development
Delays in the regulatory process could hinder the Company’s ability to pursue
including drilling exploration and
operational activities
development wells, to install infrastructure, and to produce oil or gas. In particular,
oil and gas operations in Italy are subject to both Regional and Federal approvals.
timely manner
in a
The future value of PVE will depend on its ability to find, develop, and produce oil
and gas that is economically recoverable. The ultimate success or otherwise of such
ventures requires successful exploration, establishment of commercial reserves,
establishment and successful effective production and processing facilities, transport
and marketing of the end product. Through this process, the business is exposed to
a wide variety of risks, including failure to locate hydrocarbons, changes to reserve
estimates or production volumes, variable quality of hydrocarbons, weather impacts,
facility malfunctions, lack of access to appropriate skills or equipment and cost
overruns.
Estimation of
reserves
The estimation of oil and natural gas reserves involves subjective judgments and
determinations based on geological,
technical, contractual and economic
information. It is not an exact calculation. The estimate may change because of new
information from production or drilling activities.
Tenure security
Health, safety and
environmental
matters
Exploration licences held by PVE are subject to the granting and approval by
relevant government bodies. Government regulatory authorities generally require the
holder of the licences to undertake certain proposed exploration commitments and
failure to meet these obligations could result in forfeiture. Exploration licences are
also subject to partial or full relinquishments after the stipulated period of tenure if no
alternative licence application (e.g. production concession application) is made,
resulting in a potential reduction in the Company’s overall tenure position. In order
for production to commence in relation to any successful oil or gas well, it is
necessary for a production concession to be granted.
Exploration, development and production of oil and gas involves risks which may
impact the health and safety of personnel, the community and the environment.
Industry operating risks include fire, explosions, blow outs, pipe failures, abnormally
pressured formations and environmental hazards such as accidental spills or
leakage of petroleum liquids, gas leaks, ruptures, or discharge of toxic gases.
Failure to manage these risks could result in injury or loss of life, damage or
destruction of property and damage to the environment. Losses or liabilities arising
from such incidents could significantly impact the Company’s financial results.
A n n u a l R e p o r t 2 0 1 4 | 17
Directors’ Report (Continued)
In addition to the external and operating risks described above, the Company’s ability to successfully
develop future projects including their infrastructure is contingent on the Company’s ability to fund
those projects through operating cash flows and affordable debt and equity raisings.
7. Dividends
No dividends have been paid or declared by the Company during the year ended 31 December 2014.
8. Events subsequent to reporting date
Other than matters already disclosed in this report, there were no other events between the end of the
financial year and the date of this report that, in the opinion of the Directors, affect significantly the
operations of the Group, the results of those operations, or the state of affairs of the Group.
9. Likely Developments
The Company plans to seek a suitable farm-out partner for selected assets. The Company also plans
to continue to invest in its current exploration portfolio through geological and geophysical studies and,
subject to available finances, in its planned drilling program for high potential gas prospects.
10. Environmental Regulation
The Company’s operations are subject to environmental regulations under both national and local
municipality legislation in relation to its mining exploration and development activities in Italy.
Company management monitor compliance with the relevant environmental legislation. The Directors
are not aware of any breaches of legislation during the period covered by this report.
11. Remuneration Report - audited
The Remuneration Report outlines the remuneration arrangements which were in place during the
year, and remain in place as at the date of this report, for the Directors and executives of the
Company.
Remuneration Policy
The Remuneration & Nomination Committee (Committee)
for reviewing and
recommending compensation arrangements for the Directors, the Chief Executive Officer and the
senior executive team. The Committee assesses the appropriateness of the size and structure of
remuneration of those officers on a periodic basis, with reference to relevant employment market
conditions, with the overall objective of ensuring maximum stakeholder benefit from the retention of a
high quality board and executive team.
is responsible
The Company aims to ensure that the level and composition of remuneration of its directors and
executives is sufficient and reasonable in the context of the internationally competitive industry in
which the Company operates.
All senior executives except the company secretary are based in Rome and when setting their
remuneration the Board must have regard to remuneration levels and benefit arrangements that
prevail in the European oil and gas industry which remains highly competitive.
18 | A n n u a l R e p o r t 2 0 1 4
Directors’ Report (Continued)
Consequences of performance on shareholder wealth
In considering the Group’s performance and benefits for shareholders wealth the Board has regard to
the following indices in respect of the current financial year and the previous financial period.
Indices
2014
2013
2012
2011
2010
2009
Production (scm’000)
18,560
23,983
24,673 28,995 26,793
Average realised gas price (€ cents per cubic metre)
27
28
33
31
27
638
n/a
EBITDA (€'000s)
1,540
1,755
4,473
4,411
2,219 (6,935)
Profit / (loss) attributable to owners of the Company
(€'000s)
(1,262)
(5,796)
2,373 (5,071)
(2,324)
(7,203)
Earnings / (loss) per share (€ cents per share)
(1.03)
(4.76)
2.12
(4.57)
(2.11)
(6.99)
Share Price at year end - AU$
0.10
0.12
0.12
0.16
0.21
1.68
In establishing performance measures and benchmarks to ensure incentive plans are appropriately
structured to align corporate behaviour with the long term creation of shareholder wealth, the Board
has regard for the stage of development of the Company’s business and gives consideration to each
of the indices outlined above and other operational and business development achievements of future
benefit to the Company which are not reflected in the aforementioned financial measures.
Senior Executives and Executive Directors
The remuneration of PVE senior executives is based on a combination of fixed salary, a short term
incentive bonus which is based on performance and in some cases a long term incentive payable in
cash or shares.
include employment
Other benefits
insurances, accommodation and other benefits, and
superannuation contributions. In relation to the payment of annual bonuses, the board assesses the
performance and contribution of executives against a series of objectives defined at the beginning of
the year. These objectives are a combination of strategic and operational company targets which are
considered critical to shareholder value creation and objectives which are specific to the individual
executive.
More specifically, objectives mainly refer to operating performance from both a financial and technical
standpoint and growth and development of the Company’s asset base.
The Board exercises its discretion when determining awards and exercises discretion having regard to
the overall performance and achievements of the Company and of the relevant executive during the
year. No remuneration consultants were used during the current or previous year.
The table below represents the target remuneration mix for Key Management Personnel in the current
year. The short-term incentive is provided at target levels.
Fixed remuneration
Short-term incentive
Long-term incentive
At risk
Acting Chief
Executive Officer
79%
21%
-
A n n u a l R e p o r t 2 0 1 4 | 19
Directors’ Report (Continued)
Non-Executive Directors
The remuneration of PVE Non-Executive Directors comprises cash fees. There is no current scheme
to provide performance based bonuses or retirement benefits to Non-Executive Directors. The Board
of Directors and shareholders approved the maximum agreed remuneration pool for Non-Executive
Directors at the annual general meeting in May 2011 at €250,000 per annum.
The total fees paid in 2014 to Non-Executive Directors was €220,000 (2013: €220,000). No increase
in board fees was made in 2014 and none are proposed in 2015.
Service contracts
The major provisions of the service contracts held with the specified directors and executives, in
addition to any performance related bonuses and/or options are as follows:
Directors:
Graham Bradley, Chairman
Commencement Date: 30 September 2004 (re-elected 28 May 2014)
Fixed remuneration for the year ended 31 December 2014: €60,000
No termination benefits
Byron Pirola, Non-Executive Director
Commencement Date: 10 May 2002 (re-elected 24 May 2013)
Fixed remuneration for the year ended 31 December 2014: €40,000
No termination benefits
Gregory Short, Non-Executive Director
Commencement Date: 5 July 2010 (re-elected 24 May 2013)
Fixed remuneration for the year ended 31 December 2014: €40,000
No termination benefits
Michael Masterman, Non-Executive Director
Commencement Date: 22 June 1999 (re-elected 28 May 2014)
Fixed remuneration for the year ended 31 December 2014: €40,000
No termination benefits
Kevin Eley, Non-Executive Director
Commencement Date: 19 June 2012 (re-elected 24 May 2013)
Fixed remuneration for the year ended 31 December 2014: €40,000
No termination benefits
The Non-Executive Directors are not appointed for any fixed term but rather are required to retire and
stand for re-election in accordance with the Company’s constitution and the ASX Listing Rules.
20 | A n n u a l R e p o r t 2 0 1 4
Directors’ Report (Continued)
Executives:
Sara Edmonson, Acting Chief Executive Officer
Commencement Date: 26 July 2010 as Finance Manager and 1 September 2012 as Chief
Financial Officer
Term of Agreement: Indefinite but terminable by either party on three month’s notice
Fixed salary of €120,000 per annum
Annual performance based fee of up to 40% of her contracted salary subject to the
achievement of performance criteria agreed with the Board
Payment of termination benefit on termination by the Company (other than for gross
misconduct) equal to one year salary in accordance with the Italian National Collective Labour
Agreement for executives
Key Management Personnel remuneration outcomes (including link to performance)
The remuneration details of each Director and other key management personnel (KMP) during the
year is presented in the table next page.
A n n u a l R e p o r t 2 0 1 4 | 21
Directors’ Report (Continued)
Directors
G Bradley Chairman
Non-Executive
B Pirola
Non-Executive
G Short,
Non-Executive
M Masterman Non-
Executive
K Eley
Non-Executive
G Catalano
M D/ CEO
Res. 12/8/13
Total for Directors
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
Salary & fees
Accommodation
Car
Other
Termination
payments
€
60,000
60,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
-
€
-
-
-
-
-
-
-
-
-
-
-
€
€
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
€
-
-
-
-
-
-
-
-
-
-
-
Total
€
60,000
60,000
40,000
40,000
40,000
40,000
40,000
40,000
40,000
40, 000
-
124,344
21,832
4,600
2,533
51,552
204,861
220,000
-
-
-
-
220,000
344,344
21,832
4,600
2,533
51,552
424,861
22 | A n n u a l R e p o r t 2 0 1 4
Directors’ Report (Continued)
Key Management Personnel Remuneration - Consolidated (Continued)
Short term
Salary
& fees
Accommo
-dation
Car
Other
Total
Base
STI
Cash
Total short
term
Termination
payments
€
€
€
€
€
€
€
Defined
contribu
tion
plan
€
Total
€
Proportion of
remuneration
performance
related
%
KMP
Sara
Edmonson
Acting CEO
2014
120,000
2013
120,000
Total for KMP
2014
120,000
2013
120,000
-
-
-
-
1,500
- 121,500
34,500
156,000
-
- 120,000
33,260
153,600
1,500
- 121,500
34,500
156,000
-
- 120,000
33,260
153,600
Total Directors
and KMP
2014
340,000
-
1,500
- 341,500
34,500
376,000
21%
21%
-
-
-
-
-
9,742
165,742
8,106
161,366
9,742
165,742
8,106
161,366
9,742
385,742
2013
464,344
21,832
4,600
2,533 493,309
33,260
526,569
51,552
8,106
586,227
A n n u a l R e p o r t 2 0 1 4 | 23
Directors’ Report (Continued)
Analysis of bonuses included in remuneration
Details of the vesting profile of the short-term incentive bonus awarded as remuneration are detailed
below. Bonuses paid by issue of shares are included in share based payments to each Director and
Executive.
2014
2013
Directors and
specified
executives
Cash Bonus Bonus paid
by issue of
shares
% vested in
year
Cash Bonus
Bonus paid
by issue of
shares
% vested in
year
€
S Edmonson
34,500
€
Nil
€
€
100%
33,260
€
Nil
€
100%
Amounts included in remuneration for the financial year represent the amount that vested in the
financial year based on achievement of personal goals and satisfaction of specified performance
criteria. No amounts vest in future financial years in respect of the bonus.
The cash bonus for 2014 was awarded to Ms. Edmonson based on performances, and specifically for
having reached the agreed strategic objectives.
Options over equity instruments granted as compensation
No options were granted as compensation to Directors or key management personnel during the
reporting period (2013: Nil). No options vested during 2014. (2013: Nil)
Modification of terms of equity-settled share-based payment transactions
No terms of equity-settled share-based payment transactions (including options and rights granted as
compensation to a key management person) have been altered or modified by the issuing entity
during the reporting period or the prior period.
Exercise and lapse of options granted as compensation
No options granted as compensation were exercised during 2014.
There were no options outstanding during 2014.
No options were exercised by directors or key management personnel.
No options over ordinary shares in the Company were held by any key management personnel during
2014.
Equity holdings and transactions
The movement during the reporting period in the number of ordinary shares of the Company, held
directly and indirectly by key management personnel, including their personally-related entities is as
follows:
24 | A n n u a l R e p o r t 2 0 1 4
Directors’ Report (Continued)
Directors
G Bradley
M Masterman (i)
B Pirola
G Short
K Eley
Executives
S. Edmonson
Held at
31 Dec 2013
Purchased
Share
based
payments
Options
Exercised Sold / Other
Held at
31 Dec 2014
1,373,880
33,177,327
7,112,782
200,000
800,000
42,663,989
28,064
28,064
30,000
448,895
-
-
-
478,895
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,403,880
33,626,222
7,112,782
200,000
800,000
43,142,884
28,064
28,064
(i)
Does not include shares held by family members which amount to 1,040,000 shares
Directors
G Bradley
M Masterman (i)
B Pirola
G Short
K Eley
G Catalano
Executives
S. Edmonson
Held at
31 Dec 2012
Purchase
d
Share
based
payments
Options
Exercised
Sold /
Other(iii)
Held at
31 Dec 2013
1,123,880
29,845,302
7,112,782
-
400,000
528,141
39,010,105
28,064
28,064
250,000
3,332,025
-
200,000
400,000
-
4,182,025
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(528,141)
(528,141)
1,373,880
33,177,327
7,112,782
200,000
800,000
-
42,663,989
-
-
28,064
28,064
(i)
Does not include shares held by related parties which amount to 1,040,000 shares
Other transactions and balances with KMP and their related parties
No key management personnel have entered into a material contract, other than disclosed above, with
the Group or the Company since the year end of the previous financial year end and there were no
material contracts involving key management personnel interests existing at year-end.
12. Directors’ interests
At the date of this report, the direct and indirect interests of the Directors in the shares and options of
the Company, as notified by the directors to the ASX in accordance with S205G (1) of the
Corporations Act 2001, at the date of this report is as follows:
G Bradley
M Masterman
B Pirola
G Short
K Eley
13. Share Options
Ordinary Shares
1,403,880
33,626,222
7,112,782
200,000
800,000
Options granted to directors and executives of the Company
The Company has not granted any options over unissued ordinary shares in the Company to any
directors or specified executive during or since the end of the financial year.
A n n u a l R e p o r t 2 0 1 4 | 25
Directors’ Report (Continued)
Unissued shares under option
At the date of this report there are no unissued ordinary shares of the Company under option.
Shares issued on exercise of options
The Company has not issued any shares as a result of the exercise of options during or since the end
of the financial year end.
14. Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the
Directors of PVE support and have adhered to the principles of sound corporate governance. The
Board recognises the recommendations of the ASX Corporate Governance Council and considers that
PVE is in compliance with those guidelines which are of importance to the commercial operation of a
junior listed gas exploration and production company.
The Company’s Corporate Governance Statement and disclosures are contained elsewhere in the
annual report and are also available on the Company’s website at www.povalley.com.
15. Indemnification and insurance of officers
The Company has agreed to indemnify current Directors against any liability or legal costs incurred by
a Director as an officer of the Company or entities within the Group or in connection with any legal
proceeding involving the Company or entities within the Group which is brought against the director as
a result of his capacity as an officer.
During the financial year the Company paid premiums to insure the Directors against certain liabilities
arising out of the conduct while acting on behalf of the Company. Under the terms and conditions of
the insurance contract, the nature of liabilities insured against and the premium paid cannot be
disclosed.
16. Non audit services
During the year Ernst & Young, the Group’s auditor, did not perform other services in addition to their
statutory duties. Refer to note 6 of the financial report for details of auditor’s remuneration.
17. Proceedings on behalf of the Company
No person has applied for leave of Court, pursuant to section 237 of the Corporations Act 2001, to
bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is
a party for the purpose of taking responsibility on behalf of the Company for all or any part of those
proceedings.
18. Lead Auditor’s independence declaration
The lead auditor’s independence declaration is set out on page 27 and forms part of the Directors’
report for the financial year ended 31 December 2014.
This report has been made in accordance with a resolution of Directors.
Graham Bradley
Chairman
Sydney, NSW Australia
26 March 2015
26 | A n n u a l R e p o r t 2 0 1 4
A n n u a l R e p o r t 2 0 1 4 | 27
Statement of Financial Position
As at 31 December 2014
Current Assets
Cash and cash equivalents
Trade and other receivables
Total Current Assets
Non-Current Assets
Inventory
Other assets
Deferred tax assets
Property, plant & equipment
Resource property costs
Total Non-Current Assets
Total Assets
Liability and equity
Current Liabilities
Trade and other payables
Provisions
Interest bearing loans
Total Current Liabilities
Non-Current Liabilities
Provisions
Interest bearing loans
Total Non-Current Liabilities
Total Liabilities
Equity
Issued capital
Reserve
Accumulated losses
Total Equity
Total Equity and liabilities
NOTES
10 (a)
12
11
15
13
14
16
17
18
17
18
19
19
CONSOLIDATED
2014
€
2013
€
1,579,585
1,086,118
2,665,703
1,528,633
2,675,764
4,204,397
783,669
30,378
2,316,267
3,033,821
19,781,635
25,945,770
634,694
27,716
2,370,139
3,572,165
19,872,250
26,476,964
28,611,473
30,681,361
1,698,845
179,714
2,968,858
2,762,654
138,392
-
4,847,417
2,901,046
4,168,104
-
4,168,104
3,988,825
2,933,176
6,922,001
9,015,521
9,823,047
45,819,924
1,192,269
(27,416,241)
45,819,924
1,192,269
(26,153,879)
19,595,952
20,858,314
28,611,473
30,681,361
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes to the financial statements.
28 | A n n u a l R e p o r t 2 0 1 4
Statement of Profit or Loss and Other Comprehensive Income
For the year ended 31 December 2014
CONSOLIDATED
NOTES
2014
€
2013
€
3
4
5
14
7
8
Continuing Operations
Revenue
Operating costs
Depreciation and amortisation expense
Gross Profit
Other income
Employee benefit expenses
Depreciation expense
Corporate overheads
Impairment losses
Operating loss
Finance income
Finance expenses
Net finance expenses
Loss before tax
Income tax benefit / (expense)
Loss for the year
Other comprehensive income
Total comprehensive loss for the year, net of
tax
Loss attributable to:
Owners of the Company
Total comprehensive loss attributable to:
Owners of the Company
5,033,833
6,662,777
(1,028,427)
(1,285,575)
(2,264,401)
(2,325,656)
1,741,005
3,051,546
251,380
437,056
(1,285,895)
(13,791)
(1,179,999)
(20,180)
(507,480)
526
(612,403)
(611,877)
(2,031,184)
(18,406)
(1,590,882)
(5,096,007)
(5,247,877)
22,333
(638,206)
(615,873)
(1,119,356)
(5,863,750)
(143,006)
67,484
(1,262,362)
(5,796,266)
-
-
(1,262,362)
(5,796,266)
(1,262,362)
(5,796,266)
(1,262,362)
(5,796,266)
(1,262,362)
(5,796,266)
(1,262,362)
(5,796,266)
Basic and diluted loss per share
9
(1.03) cents
(4.76) cents
The above consolidated statement of comprehensive income / loss should be read in conjunction with the
accompanying notes to the financial statements.
A n n u a l R e p o r t 2 0 1 4 | 29
Statement of Changes in Equity
For the year ended 31 December 2014
Consolidated
Attributable to equity holders of the Company
Issued
Capital
Translation
Reserve
Accumulated
Losses
€
€
€
Total
€
Balance at 1 January 2013
45,460,097
1,192,269
(20,357,613)
26,294,753
Total comprehensive
income:
Loss for the year
Other comprehensive
income
Total comprehensive
loss
Transactions with owners
recorded directly in
equity:
Contributions by and
distributions to owners –
Issue of shares
Balance at 31 December
2013
-
-
-
359,827
-
-
-
-
(5,796,266)
(5,796,266)
-
-
(5,796,266)
(5,796,266)
-
359,827
45,819,924
1,192,269
(26,153,879)
20,858,314
Balance at 1 January 2014
45,819,924
1,192,269
(26,153,879)
20,858,314
Total comprehensive
income:
Loss for the year
Other comprehensive
income
Total comprehensive loss
Transactions with owners
recorded directly in
equity:
Contributions by and
distributions to owners –
Issue of shares
Balance at 31 December
2014
-
-
-
-
-
-
-
(1,262,362)
(1,262,362)
-
-
(1,262,362)
(1,262,362)
-
-
-
45,819,924
1,192,269
(27,416,241)
19,595,952
The above consolidated statement of changes in equity should be read in conjunction with the accompanying
notes to the financial statements
30 | A n n u a l R e p o r t 2 0 1 4
Statement of Cash Flow
For the year ended 31 December 2014
Operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Income tax paid
NOTES
CONSOLIDATED
2014
€
2013
€
6,495,675
7,192,510
(4,200,332)
(3,460,747)
526
(296,392)
(54,406)
22,333
(364,353)
(107,810)
Net cash flows from operating activities
10 (b)
1,945,071
3,281,933
Investing activities
Payments for non-current assets
Payments on security deposits
Receipts for resource property costs from joint
operations partners
Payments for resource property costs
Net cash flows used in investing activities
Financing activities
Proceeds from the issues of shares
Proceeds from borrowings
Repayments of borrowings
Payment of borrowing costs
Net cash flows used in financing activities
Net increase in cash and cash equivalents
18
18
(3,540)
(2,920)
-
-
200,569
671,959
(1,997,738)
(2,863,055)
(1,800,709)
(2,194,016)
-
-
359,827
5,000,000
(93,410)
(5,500,000)
-
(93,410)
50,952
(645,459)
(785,632)
302,285
Cash and cash equivalents at 1 January
1,528,633
1,226,348
Cash and cash equivalents at 31 December
10 (a)
1,579,585
1,528,633
w
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes to
the financial statements
A n n u a l R e p o r t 2 0 1 4 | 31
Notes to the Financial Statements
For the year ended 31 December 2014
NOTE 1:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1.1
REPORTING ENTITY
Po Valley Energy Limited (“the Company” or “PVE”) is a company domiciled in Australia. The address
of the Company’s registered office is Suite 8, 7 The Esplanade Mt Pleasant WA 6153.
The Consolidated Financial Statements of the Company for the year ended 31 December 2014
comprises the Company and its subsidiaries (together referred to as the “Group” and individually as
“Group entities”) and the Group’s interest in associates and jointly controlled entities and operations.
The financial statements were approved by the Board of Directors on 26 March 2015.
The Group primarily is involved in the exploration, appraisal, development and production of gas
properties in the Po Valley region in Italy and is a for profit entity.
1.2
(a)
BASIS OF PREPARATION
STATEMENT OF COMPLIANCE
The financial report is a general purpose financial report which has been prepared in accordance with
Australian Accounting Standards (AASB’s) (including Australian Interpretations) adopted by the
Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated
financial report of the Group complies with International Financial Reporting Standards (IFRS) and
interpretations adopted by the International Accounting Standards Board (IASB).
(b)
BASIS OF MEASUREMENT
These consolidated financial statements have been prepared on the basis of historical cost.
(c) GOING CONCERN
The financial report has been prepared on a going concern basis. In arriving at this position, the
Directors have had regard to the fact that the Group will have access to sufficient working capital to
fund administrative and other committed expenditure for a period of not less than 12 months from the
date of this report. For the year ended 31 December 2014, the Group has recorded a loss of
€1,262,362, it has a cash balance of €1,579,585, net current liabilities of €2,181,714 and had net cash
inflows from operations of €1,945,071.
The Group’s forecast cashflow requirements for the 15 months ending 31 March 2016 reflects
outflows from operating and investing activities in excess of its available cash resources at 31
December 2014. These requirements reflect a combination of committed and uncommitted but current
planned expenditure in relation to the fields of Sillaro, Castello and Bezzecca. The Directors are
currently reviewing a range of financing options which may include the further issue of new equity,
reserve based debt, convertible debt, sale of operating or non-operating interests in assets or a
combination of these and other funding instruments and options. Furthermore the Company is
currently waiting for the redetermination of the borrowing base under the company’s reservoir lending
facility with NedBank Limited pending the finalisation of financing options. While financing is expected
to be finalised within the short term there is no certainty that financing will be completed as
anticipated. The Directors are confident of being able to raise the required capital, but note that
financing has not been secured and the redetermination of the borrowing facility has not been finalised
at the date of this report. Should the Group not achieve the matters set out above, there is uncertainty
whether the Group would continue as a going concern and therefore whether it would realise its
assets and extinguish its liabilities in the normal course of business and at the amounts stated in the
financial report. The financial report does not include adjustments relating to the recoverability or
classification of the recorded assets amounts nor to the amounts or classification of liabilities that
might be necessary should the Group not be able to continue as a going concern.
32 | A n n u a l R e p o r t 2 0 1 4
Notes to the Financial Statements (Continued)
NOTE 1:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1.2
(d)
BASIS OF PREPARATION (continued)
FUNCTIONAL AND PRESENTATION CURRENCY
The consolidated financial statements are presented in Euro, which is the Company’s and each of the
Group entity’s functional currency.
(e)
USE OF ESTIMATES AND JUDGEMENTS
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised and in any future periods
affected.
The estimates and judgements that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are discussed below.
Impairment of non-current assets
The ultimate recoupment of the value of resource property costs and property plant and equipment is
dependent on successful development and commercial exploitation, or alternatively, sale, of the
underlying properties. The Group undertakes at least on an annual basis, a comprehensive review for
indicators of impairment of these assets. Should an impairment indicator exist, the area of interest is
tested for impairment. There is significant estimation involved in determining the inputs and
assumptions used in determining the recoverability amounts.
The key areas of estimation involved in determining recoverable amounts include:
Recent drilling results and reserves and resources estimates
Environmental issues that may impact the underlying licences
The estimated market value of assets at the review date
Fundamental economic factors such as the gas price and current and anticipated
operating costs in the industry
Future production rates
The discount rate used for impairment purposes is 11% and inflation rate used is 2% per annum.
Rehabilitation provisions
The value of these provisions represents the discounted value of the present obligations to restore,
dismantle and rehabilitate each well site. Significant estimation is required in determining the
provisions for rehabilitation and closure as there are many transactions and other factors that will
affect ultimate costs necessary to rehabilitate the sites. The discounted value reflects a combination of
management’s best estimate of the cost of performing the work required, the timing of the cash flows
and the discount rate.
A change in any, or a combination of, the key assumptions used to determine the provisions could
have a material impact on the carrying value of the provisions. The provision recognised for each site
is reviewed at each reporting date and updated based on the facts and circumstances available at that
time. Changes to the estimated future costs for operating sites are recognised in the balance sheet by
adjusting both the restoration and rehabilitation asset and provision.
A n n u a l R e p o r t 2 0 1 4 | 33
Notes to the Financial Statements (Continued)
NOTE 1:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1.2
BASIS OF PREPARATION (continued)
Reserve estimates
Estimation of reported recoverable quantities of Proven and Probable reserves include estimates
regarding commodity prices, exchange rates, discount rates, and production and transportation costs
for future cash flows. It also requires interpretation of complex geological and geophysical models in
order to make an assessment of the size, shape, depth and quality of reservoirs, and their anticipated
recoveries. The economic, geological and technical factors used to estimate reserves may change
from period to period.
A change in any, or a combination of, the key assumptions used to determine the reserve estimates
could have a material impact on the carrying value of the project via depreciation rates or impairment
assessments. The reserve estimates are reviewed at each reporting date and any changes to the
estimated reserves are recognized prospectively to depreciation and amortisation. Any impact of the
change in the reserves is considered on asset carrying values and impairment losses, if any, are
immediately recognized in the profit or loss.
Recognition of deferred tax assets
The recoupment of deferred tax assets is dependent on the availability of profits in future years. The
Group undertakes a forecasting exercise at each reporting date to assess its expected utilisation of
these losses.
The key areas of estimation involved in determining the forecasts include:
Future production rates
Economic factors such as the gas price and current and anticipated operating costs in the
industry
Capital expenditure expected to be incurred in the future
A change in any, or a combination of, the key assumptions used to determine the estimates could
have a material impact on the carrying value of the deferred tax asset. Changes to estimates are
recognised in the period in which they arise.
1.3
SIGNIFICANT ACCOUNTING POLICIES
Except for the changes noted below, the Group has consistently applied the accounting policies set
out in notes 1.3 (a) to 1.3 (q) to all periods presented in the consolidated financial statements.
CHANGES IN ACCOUNTING POLICIES ACCOUNTING STANDARDS AND INTERPRETATIONS
The Company has adopted the following new standards and amendments to standards, including any
consequential amendments to other standards, with a date of initial application of 1 January 2014.
Materiality –AASB1031
The revised AASB 1031 is an interim standard that cross-references to other Standards and the
Framework (issued December 2013) that contain guidance on materiality.
AASB 1031 will be withdrawn when references to AASB 1031 in all Standards and Interpretations
have been removed.
AASB 2014-1 Part C issued in June 2014 makes amendments to eight Australian Accounting
Standards to delete their references to AASB 1031. The amendments are effective from 1 July 2014.
34 | A n n u a l R e p o r t 2 0 1 4
Notes to the Financial Statements (Continued)
NOTE 1:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1.3
SIGNIFICANT ACCOUNTING POLICIES (continued)
Investment Entities – Amendments to AASB10, AASB12 and AASB127
These amendments provide an exception to the consolidation requirement for entities that meet the
definition of an investment entity under AASB 10 Consolidated Financial Statements and must be
applied retrospectively, subject to certain transition relief. The exception to consolidation requires
investment entities to account for subsidiaries at fair value through profit or loss. These amendments
have not impact on the Group, since none of the entities in the Group qualifies to be an investment
entity under AASB10.
Remove Individual Key Management Personnel Disclosure Requirements – Amendments to
AASB124
This amendment removes from AASB124 individual key management personnel (KMP) disclosure
requirements from disclosing entities that are not companies. It also removes the individual KMP
disclosure requirements for all disclosing entities in relation to equity holdings, loans and other related
party transactions. This amendment has resulted in reduced disclosure in the Group’s financial
statements.
(a)
PRINCIPLES OF CONSOLIDATION
(i)
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to,
or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences until the date that control
ceases. The accounting policies of subsidiaries have been changed when necessary to align them
with the policies adopted by the Group. Investments in subsidiaries are carried at cost less any
impairment losses.
In the Company’s separate financial statements, investments in subsidiaries are carried at cost less
any impairment losses.
(ii)
Joint arrangements
The Group classifies its interests in joint arrangements as either joint operations or joint ventures (see
below) depending on the Group’s rights to the assets and obligation for the liabilities of the
arrangements. When making this assessment, the Group considers the structure of the arrangements,
the legal form of any separate vehicles, the contractual terms of the arrangements and other facts and
circumstances.
Joint operation - when the Group has rights to the assets, and obligations for the liabilities, relating to
an arrangement, it accounts for each of its assets, liabilities and transactions, including its share of
those held or incurred jointly, in relation to the joint operation.
Joint venture – when the Group has rights only to the net assets of the arrangement, it accounts for its
interest using the equity method adopted for associates as noted in (a) (ii) above.
(iii)
Transactions eliminated on consolidation
Intra-group balances, and any unrealised income and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements.
A n n u a l R e p o r t 2 0 1 4 | 35
Notes to the Financial Statements (Continued)
NOTE 1:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1.3
(b)
SIGNIFICANT ACCOUNTING POLICIES (continued)
TAXATION
Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit
or loss except to the extent that it relates to items recognised directly in equity, in which case it is
recognised in equity or in comprehensive income. Current tax is the expected tax payable on the
taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet
date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences
between the carrying amounts of assets and liabilities for financial reporting purposes and the
amounts used for taxation purposes. The following temporary differences are not provided for: the
initial recognition of assets or liabilities that affect neither accounting nor taxable profit; and differences
relating to investments in subsidiaries to the extent that the Group is able to control the timing of the
reversal of the temporary difference and it is probable that they will not reverse in the foreseeable
future. The amount of deferred tax provided is based on the expected manner of realisation or
settlement of the carrying amount of assets and liabilities using tax rates enacted at the balance sheet
date. 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. Deferred tax assets are reduced to the extent
that it is no longer probable that the related tax benefit will be realised.
Judgement is required to determine which arrangements are considered to be a tax on income as
opposed to an operating cost. Judgement is also required to determine whether deferred tax assets
are recognised in the statement of financial position. Deferred tax assets, including those arising from
unutilised tax losses, require management to assess the likelihood that the Company will generate
sufficient taxable earnings in future periods, in order to utilise recognised deferred tax assets.
Assumptions about the generation of future taxable profits depend on management’s estimates of
future cash flows. These estimates of future taxable income are based on forecast cash flows from
operations (which are impacted by production and sales volumes, oil and natural gas prices, reserves,
operating costs, decommissioning costs, capital expenditure, dividends and other capital management
transactions) and judgement about the application of existing tax laws in each jurisdiction. To the
extent that future cash flows and taxable income differ significantly from estimates, the ability of the
Company to realise the net deferred tax assets recorded at the reporting date could be impacted.
In addition, future changes in tax laws in the jurisdictions in which the Company operates could limit
the ability of the Company to obtain tax deductions in future periods.
(c)
IMPAIRMENT
(i)
Financial assets (including receivables)
A financial asset is assessed at each reporting date to determine whether there is any objective
evidence that it is impaired. A financial asset is considered to be impaired if objective evidence
indicates that one or more events have had a negative effect on the estimated future cash flows of that
asset.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the
difference between its carrying amount, and the present value of the estimated future cash flows
discounted at the original effective interest rate.
.
36 | A n n u a l R e p o r t 2 0 1 4
Notes to the Financial Statements (Continued)
NOTE 1:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1.3
SIGNIFICANT ACCOUNTING POLICIES (continued)
Individually significant financial assets are tested for impairment on an individual basis. The remaining
financial assets are assessed in groups that share similar credit risk characteristics.
All impairment losses are recognised in profit or loss. Any cumulative loss in respect of an available-
for-sale financial asset recognised previously in equity is transferred to profit or loss.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the
impairment loss was recognised. For financial assets measured at amortised cost and available-for-
sale financial assets that are debt securities, the reversal is recognised in profit or loss. For available-
for-sale financial assets that are equity securities, the reversal is recognised in equity.
(ii)
Non-financial assets
The Company assesses at each reporting date whether there is an indication that an asset (or CGU)
may be impaired. Management has assessed its CGUs as being an individual field, which is the
lowest level for which cash inflows are largely independent of those of other assets. If any indication
exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s or
CGU’s recoverable amount. The recoverable amount is the higher of an asset’s or CGU’s fair value
less costs of disposal (FVLCD) and value in use (VIU). The recoverable amount is determined for an
individual asset, unless the asset does not generate cash inflows that are largely independent of those
from other assets or groups of assets, in which case the asset is tested as part of a larger CGU to
which it belongs. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the
asset/CGU is considered impaired and is written down to its recoverable amount.
In calculating VIU, the estimated future cash flows are discounted to their present value using a pre-
tax discount rate (11%) that reflects current market assessments of the time value of money and the
risks specific to the asset/CGU.
The Company bases its impairment calculation on detailed budgets and forecasts, which are prepared
separately for each of the Company’s CGUs to which the individual assets are allocated. These
budgets and forecasts generally cover the forecasted life of the CGUs. VIU does not reflect future
cash flows associated with improving or enhancing an asset’s performance.
Impairment losses of continuing operations, including impairment of inventories, are recognised in the
statement of profit or loss and other comprehensive income in those expense categories consistent
with the function of the impaired asset.
For assets/CGUs, an assessment is made at each reporting date to determine whether there is an
indication that previously recognised impairment losses may no longer exist or may have decreased. If
such indication exists, the Group estimates the asset’s or CGU’s recoverable amount. A previously
recognised impairment loss is reversed only if there has been a change in the assumptions used to
determine the asset’s/CGU’s recoverable amount since the last impairment loss was recognised. The
reversal is limited so that the carrying amount of the asset/CGU does not exceed either its recoverable
amount, or the carrying amount that would have been determined, net of depreciation/amortisation,
had no impairment loss been recognised for the asset/CGU in prior years. Such a reversal is
recognised in the statement of profit or loss and other comprehensive income.
A n n u a l R e p o r t 2 0 1 4 | 37
Notes to the Financial Statements (Continued)
NOTE 1:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1.3
(d)
SIGNIFICANT ACCOUNTING POLICIES (continued)
PROPERTY, PLANT AND EQUIPMENT
(i)
Recognition and measurement
Items of property, plant and equipment are recorded at cost less accumulated depreciation,
accumulated impairment losses and pre-commissioning revenue and expenses.
The cost of plant and equipment used in the process of gas extraction are accounted for separately
and are stated at cost less accumulated depreciation and impairment costs.
Cost includes expenditure that is directly attributable to acquisition of the asset.
Gains and losses on disposal of an item of property, plant and equipment are determined by
comparing the proceeds from disposal with the carrying amount of property, plant and equipment and
are recognised within “other income” in profit or loss.
(ii)
Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that the future economic benefits
associated with expenditure will flow to the Group.
(iii)
Depreciation
Gas producing assets
When the gas plant and equipment is installed ready for use, cost carried forward will be depreciated
on a unit-of -production basis over the life of the economically recoverable reserve.
The depreciation rate of gas plant and equipment incurred in the period for each project in production
phase is as follows:
Castello
Sillaro
2014
13.16%
17.66%
2013
12.70%
12.10%
Oil and gas properties are depreciated using the UOP method over total proved developed and
undeveloped hydrocarbon reserves. This results in a depreciation/amortisation charge proportional to
the depletion of the anticipated remaining production from the field.
The life of each item, which is assessed at least annually, has regard to both its physical life limitations
and present assessments of economically recoverable reserves of the field at which the asset is
located. These calculations require the use of estimates and assumptions, including the amount of
recoverable reserves and estimates of future capital expenditure. The calculation of the UOP rate of
depreciation/amortisation will be impacted to the extent that actual production in the future is different
from current forecast production based on total proved reserves, or future capital expenditure
estimates change.
Changes to proved reserves could arise due to changes in the factors or assumptions used in
estimating reserves, including:
The effect on proved reserves of differences between actual commodity prices and
commodity price assumptions
Unforeseen operational issues
38 | A n n u a l R e p o r t 2 0 1 4
Notes to the Financial Statements (Continued)
NOTE 1:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1.3
SIGNIFICANT ACCOUNTING POLICIES (continued)
Other property, plant and equipment
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of
each part of an item of property, plant and equipment. The depreciation will commence when the
asset is installed ready for use.
The estimated useful lives of each class of asset fall within the following ranges:
Office furniture & equipment
3 – 5 years
3 – 5 years
2014
2013
The residual value, the useful life and the depreciation method applied to an asset are reviewed at
each reporting date.
(e)
FINANCIAL INSTRUMENTS
(i)
Non-derivative financial instruments
Non-derivative financial instruments comprise investments in equity and debt securities, trade and
other receivables, cash and cash equivalents, loans and borrowings and trade and other payables.
Non-derivative financial instruments are recognised initially as fair value plus, for instruments not at
fair value through profit and loss, any directly attributable transaction costs. Subsequent to initial
recognition non-derivative financial instruments are measured as described below.
A financial instrument is recognised if the Group becomes a party to the contractual provisions of the
instrument. Financial assets are derecognised if the Group’s contractual rights to the cash flows from
the financial assets expire or if the Group transfers the financial asset to another party without
retaining control or substantially all risks and rewards of the asset. Regular way purchases and sales
of financial assets are accounted for at trade date, i.e. the date the Group commits itself to purchase
or sell the asset. Financial liabilities are derecognised if the Group’s obligation specified in the contract
expire or are discharged or cancelled.
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are
repayable on demand and form an integral part of the Group’s cash management are included as a
component of cash and cash equivalents for the purpose of the statement of cash flows.
Accounting for finance income and expense is discussed in note (i).
Held-to-maturity investments
If the Group has the positive intent and ability to hold debt securities to maturity, then they are
classified as held-to-maturity. Held-to-maturity investments are measured at amortised cost using the
effective interest method, less any impairment losses.
Available-for-sale financial assets
The Group’s investments in equity securities and certain debt securities are classified as available-for-
sale financial assets. Subsequent to initial recognition, they are measured at fair value and changes
therein, other than impairment losses, and foreign exchange gains and losses on available-for-sale
monetary items, are recognised directly in a separate component of equity. When an investment is
derecognised, the cumulative gain or loss in equity is transferred to profit or loss as finance income or
expense.
A n n u a l R e p o r t 2 0 1 4 | 39
Notes to the Financial Statements (Continued)
NOTE 1:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1.3
SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial assets at fair value through profit and loss
An instrument is classified as at fair value through profit or loss if it is held for trading or is designated
as such upon initial recognition. Financial instruments are designated at fair value through profit or
loss if the Group manages such investments and makes purchase and sale decisions based on their
fair value in accordance with the Group’s documented risk management or investment strategy. Upon
initial recognition attributable transaction costs are recognised in profit or loss when incurred.
Financial instruments at fair value through profit or loss are measured at fair value, and changes
therein are recognised in profit and loss as finance income or expense.
Other
Other non-derivative financial instruments are measured at amortised cost using the effective interest
method, less any impairment losses.
(ii) Derivative financial instruments
Derivatives are initially recognised at fair value; attributable costs are recognised in profit or loss when
incurred. Subsequent to initial recognition, derivatives are measured at fair value and changes therein
are accounted for in the profit and loss as finance income or expense.
(iii) Share capital
Ordinary Shares
Ordinary shares are classified as equity. Incremental costs directly attributable to issue of ordinary
shares are recognised as a deduction from equity, net of any tax effects.
Dividends
Dividends are recognised as a liability in the period in which they are declared.
(f)
INVENTORIES
Inventories are measured at the lower of cost and net realisable value and includes expenditure
incurred in acquiring the inventories and other costs incurred in bringing them to their existing location
and condition. Net realisable value is the estimated selling price less selling expenses.
(g)
RESOURCE PROPERTIES
Resource property costs are accumulated in respect of each separate area of interest.
Exploration properties
Exploration properties are carried at balance sheet date at cost less accumulated impairment losses.
Exploration properties include the cost of acquiring resource properties, mineral rights and exploration,
evaluation expenditure incurred subsequent to acquisition of an area of interest.
Exploration properties are carried forward where right of tenure of the area of interest is current and
they are expected to be recouped through sale or successful development and exploitation of the area
of interest, or, where exploration and evaluation activities in the area of interest have not yet reached a
stage that permits reasonable assessment of the existence of economically recoverable reserves and
active and significant operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine
technically feasibility and commercial viability or facts and circumstances suggest that the carrying
value amount exceeds the recoverable amount.
40 | A n n u a l R e p o r t 2 0 1 4
Notes to the Financial Statements (Continued)
NOTE 1:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1.3
SIGNIFICANT ACCOUNTING POLICIES (continued)
Exploration and evaluation assets are tested for impairment when any of the following facts and
circumstances exist
The term of the exploration license in the specific area of interest has expired during the
reporting period or will expire in the near future, and is not expected to be renewed;
Substantive expenditure on further exploration for an evaluation of mineral resources in the
specific area are not budgeted nor planned;
Exploration for and evaluation of mineral resources in the specific area have not led to the
discovery of commercially viable quantities of mineral resources and the decision was made
to discontinue such activities in the specific area; or
Sufficient data exists to indicate that, although a development in the specific area is likely to
proceed, the carrying amount of the exploration and evaluation asset is unlikely to be
recovered in full from successful development or by sale.
Areas of interest which no longer satisfy the above policy are considered to be impaired and are
measured at their recoverable amount, with any subsequent impairment loss recognised in the profit
and loss.
Development properties
Development properties are carried at balance sheet date at cost less accumulated impairment
losses. Development properties represent the accumulation of all exploration, evaluation and
acquisition costs in relation to areas where the technical feasibility and commercial viability of the
extraction of gas resources in the area of interest are demonstrable and all key project permits,
approvals and financing are in place. When there is low likelihood of the development property being
exploited, or the value of the exploitable development property has diminished below cost, the asset is
written down to its recoverable amount.
Production properties
Production properties are carried at balance sheet date at cost less accumulated amortisation and
accumulated impairment losses. Production properties represent the accumulation of all exploration,
evaluation and development and acquisition costs in relation to areas of interest in which production
licences have been granted and the related project has moved to the production phase.
Amortisation of costs is provided on the unit-of-production basis, separate calculations being
performed for each area of interest. The unit-of-production base results in an amortisation charge
proportional to the depletion of economically recoverable reserves. The amortisation rate incurred in
the period for each project in production phase is as follows:
2014
Castello
13.16%
Sillaro
17.66%
2013
12.70%
12.10%
Amortisation of resource properties commences from the date when commercial production
commences. When the value of the exploitable production property has diminished below cost, the
asset is written down to its recoverable amount. The Group reviews the recoverable amount of
resource property costs at each reporting date to determine whether there is any indication of
impairment. If any such indication exists then the asset’s recoverable amount is estimated (refer Note
1.3 (c) (ii))
A n n u a l R e p o r t 2 0 1 4 | 41
Notes to the Financial Statements (Continued)
NOTE 1:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1.3
(h)
SIGNIFICANT ACCOUNTING POLICIES (continued)
PROVISIONS
Rehabilitation costs
Long term environmental obligations are based on the Group’s environmental and rehabilitation plans,
in compliance with current environmental and regulatory requirements.
Full provision is made based on the net present value of the estimated cost of restoring the
environmental disturbances that have occurred up to the balance sheet date and abandonment of well
sites and production fields. Increases due to additional environmental disturbances, relating to the
development of an asset, are capitalised and recorded in resource property costs, and amortised over
the remaining useful lives of the areas of interest. The net present value is determined by discounting
the expected future cash flows at a pre-tax rate that reflects current market assessments of the time
value of money and risks specific to the liability.
Annual increases in the provision relating to the unwind of the discount rate are accounted for in the
income statement as finance expense.
The estimated costs of rehabilitation are reviewed annually and adjusted against the relevant
rehabilitation asset, as appropriate for changes in legislation, technology or other circumstances
including drilling activity and are accounted for on a prospective basis. Cost estimates are not reduced
by potential proceeds from the sale of assets.
(i)
FINANCE INCOME AND EXPENSES
Finance income comprises interest income on funds invested and foreign currency gains. Interest
income is recognised as it accrues in profit or loss, using the effective interest method.
Finance expenses comprise interest expense on borrowings or other payables and unwinding of the
discount of provisions and changes in the fair value of financial assets through profit and loss.
Borrowing costs that are not directly attributable to the acquisition, construction or production of
qualifying assets are recognised in profit or loss using the effective interest method.
Foreign currency gains and losses are reported as net amounts.
(j)
EMPLOYEE BENEFITS
(i)
Long-term service benefits
The Group’s net obligation in respect of long-term service benefits is the amount of future benefit that
employees have earned in return for their service in the current and prior periods. The obligation is
calculated using expected future increases in wage and salary rates including on-costs and expected
settlement dates, and is discounted using the rates attached to the Government bonds at the balance
sheet date which have maturity dates approximating to the terms of the Group’s obligations.
(ii)
Wages, salaries, annual leave, sick leave and non-monetary benefits
Liabilities for employee benefits for wages, salaries, annual leave and sick leave that are expected to
be settled within 12 months of the reporting date represent present obligations resulting from
employees services provided to reporting date, are calculated at undiscounted amounts based on
remuneration wage and salary rates that the Group expects to pay as at reporting date including
related on-costs, such as workers compensation insurance and payroll tax.
(iii)
Superannuation
The Group contributes to defined contribution superannuation plans. Contributions are recognised as
an expense as they are due.
42 | A n n u a l R e p o r t 2 0 1 4
Notes to the Financial Statements (Continued)
NOTE 1:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1.3
(k)
SIGNIFICANT ACCOUNTING POLICIES (continued)
FOREIGN CURRENCY
(i)
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (“the functional currency”).
The consolidated financial statements are presented in Euro, which is PVE functional and presentation
currency (refer note 1.2 (d)).
(ii)
Foreign currency transactions
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in profit or loss as finance
income or expense.
Non-monetary assets and liabilities denominated in foreign currencies are translated at the date of
transaction or the date fair value was determined, if these assets and liabilities are measured at fair
value. Foreign currency differences arising on retranslation are recognised in profit and loss, except
for differences arising on the retranslation of available-for-sale equity instruments, a financial liability
designated as a hedge of the net investment in a foreign operation, or qualifying cash flow hedges,
which are recognised directly in equity.
(iii)
Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
consolidation are translated to Euro at foreign exchange rates ruling at the balance sheet date. The
revenues and expenses of foreign operations are translated to Euro at rates approximating the foreign
exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on
retranslation are recognised directly in a separate component of equity.
Foreign exchange gains and losses arising from monetary items receivable from or payables to a
foreign operation, the settlement of which is neither planned nor likely in the foreseeable future, are
considered to form part of a net investment in a foreign operation and are recognised directly in equity
in the foreign currency translation reserve.
A n n u a l R e p o r t 2 0 1 4 | 43
Notes to the Financial Statements (Continued)
NOTE 1:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1.3
(l)
SIGNIFICANT ACCOUNTING POLICIES (continued)
EARNINGS/LOSS PER SHARE
Basic earnings per share (“EPS”) is calculated by dividing the net profit attributable to members of the
parent entity for the reporting period, after excluding any costs of servicing equity (other than ordinary
shares and converting preference shares classified as ordinary shares for EPS calculation purposes),
by the weighted average number of ordinary shares of the Company, adjusted for any bonus issue.
Diluted EPS is calculated by dividing the net profit attributable to members of the parent entity,
adjusted by the after tax effect of financing costs associated with dilutive potential ordinary shares and
the effect on revenues and expenses of conversion to ordinary shares associated with dilutive
potential ordinary shares, by the weighted average number of ordinary shares and dilutive potential
ordinary shares adjusted for any bonus issue.
(m)
OTHER INDIRECT TAXES
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST)
and value added tax (VAT) except where the amount of GST or VAT incurred is not recoverable from
the taxation authority. In these circumstances, the GST or VAT is recognised as part of the cost of
acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST or VAT included. The net amount of
GST or VAT recoverable from, or payable to, the relevant taxation authority is included as a current
asset or liability in the balance sheet.
Cash flows are included in the statement of cash flows on a net basis. The GST and VAT components
of cash flows arising from investing and financing activities which are recoverable from, or payable to,
the relevant taxation authority are classified as operating cash flows.
(n)
SEGMENT REPORTING
Determination and presentation of operating statements
The Group determines and presents operating segments based on the information that internally is
provided to the CEO, who is the Group’s chief operating decision maker.
An operating segment is a component of the Group that engages in business activities from which it
may earn revenues and incur expenses, including revenues and expenses that relate to transactions
with any of the Group’s other components. An operating segment’s operating results are reviewed
regularly by the CEO to make decisions about resources to be allocated to the segment and assess its
performance, and for which discrete financial information is available.
Segment results that are reported to the CEO include items directly attributable to a segment as well
as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate
assets and income tax assets and liabilities. Segment capital expenditure is the total cost incurred
during the period to acquire property, plant and equipment and resource property costs.
(o)
REVENUE
Revenues is measured at fair value of the consideration received or receivable, net of the amount of
value added tax (“VAT”) payable to the taxation authority. Revenue is recognised when the significant
risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is
probable, the associated costs can be estimated reliably, there is no continuing management involved
with the goods, and the amount of revenue can be measured reliably.
44 | A n n u a l R e p o r t 2 0 1 4
Notes to the Financial Statements (Continued)
NOTE 1:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1.3
SIGNIFICANT ACCOUNTING POLICIES (continued)
Sale of gas
Gas sales revenue is recognised when control of the gas passes at the delivery point. Proceeds
received in advance of control passing are recognised as unearned revenue.
(p)
LEASED ASSETS
Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are
classified as finance leases. Upon initial recognition the leased asset is measured at an amount equal
to the lower of its fair value and the present value of the minimum lease payments. Subsequent to
initial recognition, the asset is accounted for in accordance with the property, plant and equipment
accounting policy.
Other leases are operating leases and the leased assets are not recognised on the Group’s balance
sheet. Payments made under operating leases are recognized in profit or loss on a straight line basis
over the term of the lease.
(q)
NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED
The following standards, amendments to standards and interpretations have been identified as those
which may impact the entity in the period of initial application. They are available for early adoption at
31 December 2014, but have not been applied in preparing this financial report.
AASB 9 (December 2014) is a new Principal standard which replaces AASB 139. This new Principal
version supersedes AASB 9 issued in December 2009 (as amended) and AASB 9 (issued in
December 2010) and includes a model for classification and measurement, a single, forward-looking
‘expected loss’ impairment model and a substantially-reformed approach to hedge accounting. AASB 9
is effective for annual periods beginning on or after 1 January 2018. However, the Standard is
available for early application. The own credit changes can be early applied in isolation without
otherwise changing the accounting for financial instruments.
The final version of AASB 9 introduces a new expected-loss impairment model that will require more
timely recognition of expected credit losses. Specifically, the new Standard requires entities to account
for expected credit losses from when financial instruments are first recognised and to recognise full
lifetime expected losses on a more timely basis.
Amendments to AASB 9 (December 2009 & 2010 editions )(AASB 2013-9) issued in December 2013
included the new hedge accounting requirements, including changes to hedge effectiveness testing,
treatment of hedging costs, risk components that can be hedged and disclosures.
AASB 9 includes requirements for a simpler approach for classification and measurement of financial
assets compared with the requirements of AASB 139.
The main changes are described below.
a. Financial assets that are debt instruments will be classified based on (1) the objective of the
entity's business model for managing the financial assets; (2) the characteristics of the
contractual cash flows.
b. Allows an irrevocable election on initial recognition to present gains and losses on investments
in equity instruments that are not held for trading in other comprehensive income. Dividends in
respect of these investments that are a return on investment can be recognised in profit or loss
and there is no impairment or recycling on disposal of the instrument.
A n n u a l R e p o r t 2 0 1 4 | 45
Notes to the Financial Statements (Continued)
c. Financial assets can be designated and measured at fair value through profit or loss at initial
recognition if doing so eliminates or significantly reduces a measurement or recognition
inconsistency that would arise from measuring assets or liabilities, or recognising the gains
and losses on them, on different bases.
d. Where the fair value option is used for financial liabilities the change in fair value is to be
accounted for as follows:
The change attributable to changes in credit risk are presented in other
comprehensive income (OCI)
The remaining change is presented in profit or loss
AASB 9 also removes the volatility in profit or loss that was caused by changes in the credit risk of
liabilities elected to be measured at fair value. This change in accounting means that gains caused by
the deterioration of an entity’s own credit risk on such liabilities are no longer recognised in profit or
loss.
Consequential amendments were also made to other standards as a result of AASB 9, introduced by
AASB 2009-11 and superseded by AASB 2010-7, AASB 2010-10 and AASB 2014-1 – Part E.
AASB 2014-7 incorporates the consequential amendments arising from the issuance of AASB 9 in
December 2014.
Management has not yet assessed the impact of the AASB 9 adoption.
AASB 2014-8 limits the application of the existing versions of AASB 9 (AASB 9 (December 2009) and
AASB 9 (December 2010)) from 1 February 2015 and applies to annual reporting periods beginning on
after 1 January 2015.
In May 2014, the AASB issued AASB 15 Revenue from Contracts with Customers.
The core principle of AASB 15 is that an entity recognises revenue to depict the transfer of promised
goods or services to customers in an amount that reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services. An entity recognises revenue in accordance
with that core principle by applying the following steps:
(a) Step 1: Identify the contract(s) with a customer
(b) Step 2: Identify the performance obligations in the contract
(c) Step 3: Determine the transaction price
(d) Step 4: Allocate the transaction price to the performance obligations in the contract
(e) Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation
Early application of this standard is permitted.
AASB 2014-5 incorporates the consequential amendments to a number Australian Accounting
Standards (including Interpretations) arising from the issuance of AASB 15.
AASB 2014-3 amends AASB 11 to provide guidance on the accounting for acquisitions of interests in
joint operations in which the activity constitutes a business. The amendments require:
(a) the acquirer of an interest in a joint operation in which the activity constitutes a business, as defined
in AASB 3 Business Combinations, to apply all of the principles on business combinations accounting
in AASB 3 and other Australian Accounting Standards except for those principles that conflict with the
guidance in AASB 11; and
(b) the acquirer to disclose the information required by AASB 3 and other Australian Accounting
Standards for business combinations.
This Standard also makes an editorial correction to AASB 11.
46 | A n n u a l R e p o r t 2 0 1 4
Notes to the Financial Statements (Continued)
NOTE 2:
FINANCIAL RISK MANAGEMENT
Exposure to credit, market and liquidity risks arise in the normal course of the Group’s business.
This note presents information about the Group’s exposure to each of the above risks, their objectives,
policies and processes for measuring and managing risk, and the management of capital. Further
quantitative disclosures are included throughout this financial report.
Risk recognition and management are viewed as integral to the Group's objectives of creating and
maintaining shareholder value, and the successful execution of the Group's strategies in gas
exploration and development. The Board as a whole is responsible for oversight of the processes by
which risk is considered for both ongoing operations and prospective actions. In specific areas, it is
assisted by the Audit and Risk Committee. Management is responsible for establishing procedures
which provide assurance that major business risks are identified, consistently assessed and
appropriately addressed.
(i)
Credit risk
The Group invests in short term deposits and trades with recognised, creditworthy third parties. There
is a concentration of credit risk in relation to receivables due to indirect tax from the Italian tax
authorities (see note 12).
Cash and short term deposits are made with institutions that have a credit rating of at least A1 from
Standard & Poors and A from Moody's.
Management has a credit policy in place whereby credit evaluations are performed on all customers
and parties the Company and its subsidiaries deal with. The exposure to credit risk is monitored on an
ongoing basis.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset.
(ii)
Market Risk
Interest rate risk
The Group is primarily exposed to interest rate risk arising from its cash and cash equivalents and
borrowings. The Group does not hedge its exposure to movements in market interest rates. The
Group adopts a policy of ensuring that as far as possible it maintains excess cash and cash
equivalents in bank accounts earning interest.
Currency risk
The Group is exposed to foreign currency risk on purchases that are denominated in a currency other
than the respective functional currencies of consolidated entities. The currency giving rise to this risk is
primarily Australian dollars.
In respect to monetary assets held in currencies other than Euro, the Group ensures that the net
exposure is kept to an acceptable level by minimising their holdings in the foreign currency where
possible by buying or selling foreign currencies at spot rates where necessary to address short term
imbalances.
(iii)
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. Capital consists of issued share capital
plus accumulated losses/earnings. The Board monitors accumulated losses/earnings.
The Board seeks to encourage all employees of the Group to hold ordinary shares.
A n n u a l R e p o r t 2 0 1 4 | 47
Notes to the Financial Statements (Continued)
NOTE 2:
FINANCIAL RISK MANAGEMENT (continued)
The Board seeks to maintain a balance between the higher returns that might be possible with higher
levels of borrowings and the advantages and security afforded by a sound capital position from
shareholders.
The Group does not have a defined share buy-back plan and there were no changes in the Group’s
approach to capital management during the year.
There are no externally imposed restrictions on capital management.
(iv)
Liquidity Risk
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. Management prepares monthly cash flow forecasts
taking into consideration debt facility obligations. Capital expenditures are planned around cash flow
availability.
.
NOTE 3:
REVENUE
Gas sales
NOTE 4:
EMPLOYEE BENEFIT EXPENSES
Wages and salaries
Contributions to defined contribution plans
NOTE 5:
CORPORATE OVERHEADS
Corporate overheads comprises:
Company administration and compliance
Professional fees
Office costs
Travel and entertainment
Other expenses
CONSOLIDATED
2014
€
2013
€
5,033,833
6,662,777
1,071,316
1,978,148
214,579
53,036
1,285,895
2,031,184
193,344
395,017
243,100
95,620
252,918
263,215
678,247
288,695
137,730
222,995
1,179,999
1,590,882
48 | A n n u a l R e p o r t 2 0 1 4
Notes to the Financial Statements (Continued)
NOTE 6:
AUDITORS’ REMUNERATION
Auditors of the Company
Audit and review of the Group financial statements
Audit of subsidiary financial statements
NOTE 7:
FINANCE INCOME AND EXPENSE
Recognised in profit and loss:
Interest income
Finance income
Interest expense
Amortisation of borrowing costs
Unwind of discount on site restoration provision
Foreign exchange losses (net)
Finance expense
Net finance expense
CONSOLIDATED
2014
€
47,780
-
2013
€
57,180
6,157
47,780
63,337
526
526
22,333
22,333
296,392
314,955
129,092
93,739
179,280
163,287
7,639
66,225
612,403
638,206
(611,877)
(615,873)
A n n u a l R e p o r t 2 0 1 4 | 49
Notes to the Financial Statements (Continued)
NOTE 8:
INCOME TAX EXPENSE
Current tax
Current year
Deferred tax
Origination and reversal of temporary differences
Deferred tax benefit
Total income tax (benefit) / expense
CONSOLIDATED
2014
€
2013
€
89,134
74,560
53,872
(142,044)
53,872
(142,044)
143,006
(67,484)
Numerical reconciliation between tax expense and pre-tax accounting profit / (loss)
Loss for the year before tax
(1,119,356)
(5,863,750)
Income tax (benefit) / expense using the Company’s domestic tax rate
of 30 per cent (2013: 30%)
(335,807)
(1,759,125)
Non-deductible expenses:
Borrowing costs
IFRS adjustments
Other
Effect of tax rates in foreign jurisdictions
Current year losses and temporary differences for which no deferred
tax asset was recognised
Changes in temporary differences
Utilisation of tax losses
Tax effect of regional taxes in Italy – current
Income tax (benefit) / expense
3,027
72,533
238,037
132,265
43,133
17,740
(13,284)
9,796
208,857
1,384,748
56,029
(146,119)
-
-
89,134
74,560
143,006
(67,484)
50 | A n n u a l R e p o r t 2 0 1 4
Notes to the Financial Statements (Continued)
NOTE 9:
EARNINGS PER SHARE
Basic earnings / (loss) per share (€ cents)
CONSOLIDATED
2014
€
2013
€
(1.03)
(4.76)
The calculation of earnings per share was based on the loss attributable to shareholders of
€1,262,362 (2013: €5,796,266) and a weighted average number of ordinary shares outstanding during
the year of 122,414,063 (2013: 121,728,447).
Diluted earnings / (loss) per share is the same as basic earnings / (loss) per share.
The number of weighted average shares is calculated as
follows:
Number of shares on issue at beginning of the year
3,850,000 issued on 7 March 2013
No. of
days
365
300
2014
Weighted
average no.
2013
Weighted
average no.
122,414,063 118,564,063
-
3,164,384
122,414,063 121,728,447
NOTE 10:
CASH AND CASH EQUIVALENTS
(a) Cash and cash equivalents
(b) Reconciliation of cash flows from operating activities
Loss
Adjustment for non-cash items:
Unrealised net foreign exchange loss
Depreciation and amortisation
Resource property costs impairments
Unwind of discount on site restoration provision
Amortisation of borrowing costs
Change in operating assets and liabilities:
Increase in receivables
Increase / (decrease) in trade and other payables
Increase in provisions
Increase in deferred tax assets
Net cash inflow from operating activities
1,579,585
1,528,633
(1,262,362)
(5,796,266)
-
2,257,850
20,180
179,280
129,092
1,589,646
(1,063,809)
41,322
53,872
1,945,071
66,225
2,344,062
5,096,007
163,287
93,739
1,206,575
225,781
24,567
(142,044)
3,281,933
A n n u a l R e p o r t 2 0 1 4 | 51
Notes to the Financial Statements (Continued)
NOTE 11:
INVENTORY
Non - Current
Well equipment – at cost
CONSOLIDATED
2014
€
2013
€
783,669
634,694
Well equipment represents inventory expected to be utilised in future development of known
wells with specific characteristics.
NOTE 12:
TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Accrued gas sales revenue
Sundry debtors
Deposit (b)
Indirect taxes receivable (a)
443,211
-
131,423
202,485
308,999
587,255
648,695
298,645
202,238
938,931
1,086,118
2,675,764
The Group’s exposure to credit and currency risks and impairment losses related to trade and other
receivables are disclosed in Note 21.
(a) Included in receivables are Italian indirect taxes recoverable as follows:
Current
Non-current
169,718
799,650
-
-
The indirect taxes relate to Italian Value Added Tax (“VAT”), which is typically 22% of
invoiced amounts (with certain exceptions). The extent of VAT that has not been recovered
from the Italian authorities is recognised on the balance sheet as a receivable. PVE expects
to recover this receivable through reducing VAT remitted on sales, reducing the Group’s
obligation to pay employee taxes to the authorities and/or applying for an annual refund
(capped at the lowest amount of VAT credits generated in any of the past 3 years). The
current portion receivable is estimated to be recoverable in the next twelve months. VAT
remitted on oil and gas sales in Italy is 10%. A significant VAT refund was received during
the year.
(b) The deposit with Nedbank Group Ltd earned interest at 0.15% during the period.
52 | A n n u a l R e p o r t 2 0 1 4
Notes to the Financial Statements (Continued)
NOTE 13:
PROPERTY PLANT & EQUIPMENT
Office Furniture & Equipment:
At cost
Accumulated depreciation
Gas producing plant and equipment
At cost
Accumulated depreciation
Reconciliations:
Reconciliation of the carrying amounts for each class of
Plant & equipment are set out below:
Office Furniture & Equipment:
Carrying amount at beginning of year
Additions/Reclassification
Disposals
Depreciation expense
Carrying amount at end of year
Gas Producing plant and equipment:
Carrying amount at beginning of period
Additions / Reclassification
Depreciation expense
Impairment (refer note 14)
Carrying amount at end of period
CONSOLIDATED
2014
€
2013
€
200,672
(170,825)
200,132
(157,034)
29,847
43,098
8,483,197
(5,479,223)
3,003,974
3,033,821
8,402,751
(4,873,684)
3,529,067
3,572,165
43,098
540
-
(13,791)
55,584
5,920
-
(18,406)
29,847
43,098
3,529,067
80,446
(605,539)
-
5,581,184
733,784
(621,688)
(2,164,213)
3,003,974
3,529,067
3,003,821
3,572,165
A n n u a l R e p o r t 2 0 1 4 | 53
Notes to the Financial Statements (Continued)
NOTE 14:
RESOURCE PROPERTY COSTS
Resource Property costs
Exploration Phase
Development Phase
Production Phase
CONSOLIDATED
2014
€
2013
€
11,624,796
10,060,661
-
-
8,156,839
9,811,589
19,781,635
19,872,250
Reconciliation of carrying amount of resource properties
Exploration Phase
Carrying amount at beginning of period
10,060,661
7,272,641
Exploration expenditure
1,584,315
2,518,277
Change in estimate of rehabilitation assets
-
344,638
Impairment losses
Carrying amount at end of period
(20,180)
(74,895)
11,624,796
10,060,661
Resource property costs in the exploration and evaluation phase have not yet reached a stage which
permits a reasonable assessment of the existence of or otherwise of economically recoverable
reserves. The ultimate recoupment of resource property costs in the exploration phase is dependent
upon the successful development and exploitation, or alternatively sale, of the respective areas of
interest at an amount greater than or equal to the carrying value.
Production Phase
Carrying amount at beginning of period
9,811,589
14,744,969
Additions / Reclass to property plant & equipment
4,112
(244,992)
Change in estimate of rehabilitation assets
-
(127,521)
Amortisation of producing assets
(1,658,862)
(1,703,968)
Impairment loss
-
(2,856,899)
Carrying amount at end of period
8,156,839
9,811,589
Increases in the discount rates or changes in other key assumptions, such as gas pricing, operating
costs or production rates, may cause the values of cash generating units to exceed their recoverable
amounts. The directors believe that no reasonably possible change in any of the above key
assumptions would cause the carrying value of the cash generating unit to materially exceed its
recoverable amount due to the low carrying value.
54 | A n n u a l R e p o r t 2 0 1 4
Notes to the Financial Statements (Continued)
NOTE 14:
RESOURCE PROPERTY COSTS (continued)
Impairment losses are reconciled as follows:
Impairment expense
Castello gas field
Exploration costs
Total impairment loss
CONSOLIDATED
2014
€
2013
€
-
(20,180)
(5,021,112)
(74,895)
(20,180)
(5,096,007)
NOTE 15:
DEFERRED TAX ASSETS AND LIABILITIES
Recognised deferred tax assets
Deferred tax assets have been recognised in respect of the following items:
Tax losses
Accrued expenses and liabilities
Recognised deferred tax assets
1,884,192
2,030,650
432,075
339,489
2,316,267
2,370,139
The tax losses in both Italy and Australia do not expire. The deductible temporary differences do not
expire under current tax legislation. Deferred tax assets have been recognised in respect of these
items because it is probable that future taxable profit will be available against which the Group can
utilise the benefits therefrom.
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
Tax losses
Deductible temporary differences
Unrecognised deferred tax assets
2,308,116
2,042,760
2,016,301
2,069,569
4,324,417
4,112,329
Deferred tax benefit will only be obtained if:
(i)
(ii)
(iii)
the relevant company derives future assessable income of a nature and of an amount
sufficient to enable the benefit from the deductions for the losses to be realised;
the relevant company continues to comply with the conditions for deductibility imposed by tax
legislation; and
No changes in tax legislation adversely affect the relevant company in realising the benefit
from the deductions for the losses.
A n n u a l R e p o r t 2 0 1 4 | 55
Notes to the Financial Statements (Continued)
NOTE 15:
DEFERRED TAX ASSETS AND LIABILITIES (continued)
Movement in recognised temporary differences during the year
Balance 1
Jan 2013
Profit and
loss
Equity
Balance 31
December
2013
Profit and
loss
Equity
Consolidated
Tax losses
Accrued
expenses and
liabilities
Total
recognised
deferred tax
asset
1,962,535
68,115
265,560
73,929
2,228,095
142,044
-
-
-
2,030,650
(146,458)
339,489
92,586
2,370,139
(53,872)
-
-
-
Balance
31 Dec
2014
1,884,192
432,075
2,316,267
NOTE 16:
TRADE AND OTHER PAYABLES
Trade payables and accruals
Other payables
CONSOLIDATED
2014
€
1,391,960
306,885
2013
€
2,473,179
289,475
1,698,845
2,762,654
The Group’s exposure to currency and liquidity risks related to trade and other payables are disclosed
in note 21.
NOTE 17:
PROVISIONS
Current:
Employee leave entitlements
Other provisions
Non Current:
Restoration provision
Reconciliation of restoration provision:
Opening balance
Increase in provision due to revised estimates
Increase in provision from unwind of discount rate
Closing balance
119,714
60,000
179,714
138,392
-
138,392
4,168,104
3,988,825
3,988,825
-
179,279
3,608,421
217,117
163,287
4,168,104
3,988,825
Provision has been made based on the net present value of the estimated cost of restoring the
environmental disturbances that have occurred up to the balance sheet date and abandonment of the
well site and production fields.
56 | A n n u a l R e p o r t 2 0 1 4
Notes to the Financial Statements (Continued)
NOTE 18:
INTEREST BEARING LOANS
This note provides information about the contractual terms of the Group’s interest-bearing loans and
borrowings, which are measured at amortised cost. For more information about the Group’s exposure
to interest rate, foreign currency and liquidity risk, see note 21.
Current liabilities
Finance facility
Non-current liabilities
Finance facility
CONSOLIDATED
2014
€
2013
€
2,968,858
-
-
2,933,176
Terms and debt repayment schedule
Terms and conditions of outstanding loans were as follows:
Currency Nominal
Interest
rate
Year of
Maturity
31 December 2014
Carrying
Face
Amount
Value
$
$
31 December 2013
Carrying
Face
Amount
Value
$
$
Current
liabilities
Secured bank
loan
Non-Current
liabilities
Secured bank
loan
Euro
Euribor +
3.75%
Euro
Euribor +
3.75%%
2018
3,406,590 2,968,858
-
-
2018
-
- 3,500,000 2,933,176
The amount presented is disclosed net of borrowing costs of €437,732 (2013: €566,824).
The company has a finance facility with Nedbank Group Ltd. The facility is a Senior Secured Revolving
Reducing Borrowing Base Facility of €20 million and matures on 3 May 2018; and is secured over the
assets of Northsun Italia SpA and Po Valley Operations Pty Ltd. The facility became available on 16 May
2013 and the Company drew €5,000,000 of the facility in order primarily to settle the facility previously held
with Lloyds and pay transaction costs. The facility Borrowing Base is determined semi-annually by
Nedbank. During the month of December 2014 Nedbank did not finalise the redetermination due to the
ongoing conversations between the Company and the bank regarding financing options. At the date of this
report the Bank has not finalised a redetermination exercise and therefore all the outstanding debt was
reclassified as a current liability pending a formal redetermination regarding the Borrowing Base amount
for 2015.
The latest redetermination, incurred in June 2014, set the Borrowing Base limit for the six months to 30
June 2015 to €3,050,000 at closing date. During the month of February 2015 the Company accounted for
€355,000 (difference between outstanding debt at December 31, 2014 and June 2015 Borrowing Base) in
the DSRA account. At December 31, 2014 PVE was compliant with all the covenants related to the
Nedbank’s facility.
Interest is currently payable at Euribor plus 375 basis points. Principal repayments of €93,410 have been
made during the year to December 2014 in regards to the Nedbank facility.
A n n u a l R e p o r t 2 0 1 4 | 57
Notes to the Financial Statements (Continued)
NOTE 19:
CAPITAL AND RESERVES
Share Capital
Opening balance - 1 January
Ordinary Shares
2014
Number
2013
Number
122,414,063
118,564,063
Shares issued during the year:
Shares issued at €0.093 ($0.12) each on 7 March 2013
-
3,850,000
Closing balance – 31 December
122,414,063
122,414,063
All ordinary shares are fully paid and carry one vote per share and the right to dividends. In the event
of winding up the Company, ordinary shareholders rank after creditors. Ordinary shares have no par
value.
No shares were issued to employees pursuant to the employees share purchase plan (2013: Nil)
Translation Reserve
The translation reserve comprises all foreign currency differences arising from the translation of the
financial statements of foreign operations. The historical balance comprises of translation differences
prior to change in functional currency of a foreign operation.
Dividends
No dividends were paid or declared during the current year (2013: Nil).
NOTE 20:
FINANCIAL REPORTING BY SEGMENTS
The Group reportable segments as described in the table next page are the Group’s strategic
business units. The strategic business units are classified according to field licence areas which are
managed separately. All strategic business units are in Italy. For each strategic business unit, the
CEO reviews internal management reports on a monthly basis. Exploration, Development and
Production gas and oil are the operating segments identified for the Group. The individual exploration,
development and production operation sites have been aggregated.
58 | A n n u a l R e p o r t 2 0 1 4
Notes to the Financial Statements (Continued)
NOTE 20:
FINANCIAL REPORTING BY SEGMENTS (continued)
In euro
Exploration
Development and
Production
Total
2014
€
2013
€
2014
€
2013
€
2014
€
2013
€
External revenues
-
-
5,033,833
6,662,777
5,033,833
6,662,777
Segment (loss) /
profit before tax
Depreciation and
amortisation
Impairment on
resource property
costs
Reportable
segment assets:
Resource
property costs
Plant &
Equipment
Receivables
Inventory
Capital
expenditure
Movement in
rehabilitation
assets
Reportable
segment liabilities
(20,180)
(74,895)
1,741,005 (1,969,566)
1,720,825
(2,044,461)
-
-
(2,264,401)
(2,325,656)
(2,264,401)
(2,325, 656)
(20,180)
(74,895)
-
(5,021,112)
(20,180)
(5,096,007)
11,624,796 10,060,661
8,156,839
9,811,589
19,781,635
19,872,250
-
-
-
-
-
-
3,003,974
3,529,067
3,003,974
3,529,067
443,211
1,356,160
443,221
1,356,160
783,669
634,694
783,669
634,694
1,568,715
2,518,277
84,589
488,792
1,653,304
3,007,069
-
344,638
-
(127,521)
-
217,117
(2,510,250)
(3,123,266)
(2,807,091)
(2,986,395)
(5,317,341)
(6,109,661)
A n n u a l R e p o r t 2 0 1 4 | 59
Notes to the Financial Statements (Continued)
NOTE 20:
FINANCIAL REPORTING BY SEGMENTS (continued)
Reconciliation of reportable segment profit or loss, assets and
liabilities
Profit or loss:
2014
€
2013
€
Total profit / (loss) for reportable segments
1,720,825
(2,044,461)
Unallocated amounts:
Net finance expense
Other corporate expenses
Consolidated profit / (loss) before income tax
Assets:
Total assets for reportable segments
Other assets
Consolidated total assets
Liabilities:
Total liabilities for reportable segments
Other liabilities
Consolidated total liabilities
Other Segment Information
(611,876)
(615,873)
(2,228,305)
(3,203,416)
(1,119,356)
(5,863,750)
23,986,577
25,392,171
4,624,896
5,289,190
28,611,473
30,681,361
(5,317,341)
(6,109,661)
(3,698,180)
(3,713,386)
(9,015,521)
(9,823,047)
All of the Group’s revenue is currently attributed to gas sales in Italy through an off-take agreement
with Shell Italia. For the current year, the Group’s only customer contributed the entire revenue.
60 | A n n u a l R e p o r t 2 0 1 4
Notes to the Financial Statements (Continued)
NOTE 21:
FINANCIAL INSTRUMENTS
(a)
Interest Rate Risk Exposures
Profile:
At the reporting date the interest rate profile of the Group’s interest-bearing financial
instruments was:
Variable rate instruments
Financial assets
Financial liabilities
CONSOLIDATED
2014
€
2013
€
1,579,585
(2,968,858)
(1,389,273)
1,528,633
(2,933,176)
(1,404,543)
Cash flow sensitivity analysis for variable rate instruments:
A strengthening of 50 basis points in interest rates at the reporting date would have increased
/ (decreased) equity and profit and loss by the amounts shown below. This analysis assumes
that all other variables, in particular foreign currency rates, remain constant. The analysis is
performed on the same basis for 2013.
Effect in €’s
31 December
Profit or loss
Equity
2014
2013
2014
2013
Variable rate instruments
(17,500)
(19,714)
-
-
(b) Credit Risk
Exposure to credit risk
The Group is not exposed to significant credit risk. Credit risk with respect to cash is held with
recognised financial intermediaries with acceptable credit ratings.
The Group has limited its credit risk in relation to its gas sales in that all sales transactions fall
under an off-take agreement with Shell Italia which expires in October 2015. Shell currently has
an option to extend the contract a second Gas Year from October 2015 to September 2016.
The Group has a concentration of credit risk exposure to its one customer (Shell Italia). Payment
terms are 35 days and the customer has an investment grade credit rating.
A n n u a l R e p o r t 2 0 1 4 | 61
Notes to the Financial Statements (Continued)
NOTE 21:
FINANCIAL INSTRUMENTS (continued)
The carrying amount of the Group’s financial assets represents the maximum credit exposure and
is shown in the table below. No receivables are considered past due nor were any impairment
losses recognised during the period.
Cash and cash equivalents
Receivables – Current
Other assets
Note
10
12
CONSOLIDATED
Carrying Amount
2014
€
1,579,585
1,086,118
30,378
2013
€
1,528,633
2,675,764
27,716
2,696,081
4,232,113
(c)
Liquidity risk
The following are the contractual maturities of financial liabilities, including estimated interest
payments:
Consolidated
31 December 2014
In €
Carrying
amount
Contractual
cash flows
6 months
or less
6 to 12
months
1 – 2
Years
2 – 5
Years
Trade and other
payables
Secured bank
loan
(1,698,845)
(1,698,845)
(1,698,845)
-
(2,968,858)
(4,667,703)
(3,841,384)
(5,540,229)
(355,000)
(2,053,845)
(3,486,384)
(3,486,384)
-
-
-
-
-
-
Consolidated
31 December 2013
In €
Carrying
amount
Contractual
cash flows
6 months
or less
6 to 12
months
1 – 2
Years
2 – 5
Years
Trade and other
payables
Secured bank
loan
(2,762,654)
(2,762,654)
(2,762,654)
-
-
-
(2,933,176)
(5,695,830)
(4,088,316)
(6,850,970)
(67,883)
(2,830,537)
(67,883)
(67,883)
(135,766)
(135,766)
(3,816,784)
(3,816,784)
(d)
Net Fair Values of financial assets and liabilities
The carrying amounts of financial assets and liabilities (excluding borrowing costs) as
disclosed in the balance sheet equate to their estimated net fair value.
62 | A n n u a l R e p o r t 2 0 1 4
Notes to the Financial Statements (Continued)
NOTE 21: FINANCIAL INSTRUMENTS (continued)
(e)
Foreign Currency Risk
The Group is exposed to foreign currency risk on purchases and borrowings that are
denominated in a currency other than Euro. The currency giving rise to this risk is primarily
Australian Dollars.
Amounts receivable/(payable) in foreign currency other than
functional currency:
Cash
Current – Payables
Net Exposure
CONSOLIDATED
2014
€
17,652
(39,479)
(21,827)
2013
€
10,549
(19,341)
(8,792)
The following significant exchange rates applied during the year:
Australian Dollar ($)
Sensitivity Analysis
Average rate
2014
0.6792
2013
0.7293
Reporting date spot
rate
2014
0.6710
2013
0.6445
A 10 percent strengthening of the Australian dollar against the Euro (€) at 31 December would have
increased (decreased) equity and profit and loss by the amounts shown below. This analysis assumes
that all other variables, in particular interest rates, remain constant. The analysis is performed on the
same basis for 2012.
31 December 2014
Australian Dollar to Euro (€)
31 December 2013
Australian Dollar to Euro (€)
CONSOLIDATED
Profit or loss
€
1,373
Equity
€
-
375
-
A 10 percent weakening of the Australian dollar against the Euro (€) at 31 December would have the
equal but opposite effect on the above currencies to the amounts shown above, on the basis that all
other variables remain constant.
A n n u a l R e p o r t 2 0 1 4 | 63
Notes to the Financial Statements (Continued)
NOTE 22:
COMMITMENTS AND CONTINGENCIES
Contractual Commitments and contingencies
There are no material commitments or contingent liabilities not provided for in the financial statements
of the Company or the Group as at 31 December 2014.
NOTE 23:
RELATED PARTIES
KEY MANAGEMENT PERSONNEL COMPENSATION
The key management personnel compensation included in employee benefit expenses (see note 4) is
as follows:
Short-term employee benefits
Termination benefits
Other long term benefits
Post-employment benefits
Share-based payments
Consolidated
2014
€
376,000
-
-
9,742
-
385,742
2013
€
526,569
51,552
-
8,106
-
586,227
64 | A n n u a l R e p o r t 2 0 1 4
Notes to the Financial Statements (Continued)
NOTE 24:
PARENT ENTITY DISCLOSURES
Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
Equity
Issued capital
Accumulated losses
Total equity
Financial Performance
Loss
Other comprehensive loss
Total Comprehensive loss
2014
€
2013
€
1,232,577
21,504,730
22,737,307
1,494,044
32,375,760
33,869,804
3,141,355
-
3,141,355
170,050
2,933,176
3,103,226
19,595,952
30,766,578
45,819,924
(26,223,972)
19,595,952
45,819,924
(15,053,346)
30,766,578
(11,170,626)
-
(11,170,626)
(6,523,242)
-
(6,523,242)
NOTE 25:
INTERESTS IN OTHER ENTITIES
Subsidiaries
The parent and ultimate controlling party of the Group is Po Valley Energy Limited. The investments
held in controlled entities are included in the financial statements of the parent at cost less any
impairment loss. Set out below is a list of the significant subsidiaries of the Group:
Name:
Country of
Incorporation
Class of
Shares
2014
Investment
€
2013
Investment
€
Holding
%
Northsun Italia S.p.A (“NSI”)
Po Valley Operations Pty
Limited (“PVO”)
Italy
Ordinary
21,083,268
21,083,268
100
Australia
Ordinary
631,056
21,714,324
631,056
21,714,324
100
A n n u a l R e p o r t 2 0 1 4 | 65
Notes to the Financial Statements (Continued)
NOTE 26:
INTEREST IN JOINT ARRANGEMENTS
The Group’s interests in joint arrangements at 31 December 2014 is as follows:
Joint Operation
Manager
Group’s Interest
La Prospera
Northsun Italian S.p.A
75% (2013: 75% )
Cascina Castello
Northsun Italian S.p.A
90% (2013:100%)
Principal Activity
(Exploration)
Gas
Gas
The Group’s interest in assets employed in the above joint venture includes capitalised exploration
phase expenditure totalling €2,937,104 (2013: €2,773,303). These amounts are included under
resource property costs (note 14).
NOTE 27:
SUBSEQUENT EVENT
Nedbank debt facility redetermination: based on June 2014 redetermination, in January 2015 the
preliminary non formalized assessment of the Borrowing Base redetermination resulted in a borrowing
limit of €3,051,000 for the first half of 2015. The Company thus transferred €355,590 on the DSRA
account during the month of January 2015. At the date of closing of the Financial Statements this sum
is still sitting in the DSRA account while the bank is in the process of finalizing the Borrowing Base
redetermination.
Other than matters already disclosed in this report, there were no other events between the end of the
financial year and the date of this report that, in the opinion of the Directors, affect significantly the
operations of the Group, the results of those operations, or the state of affairs of the Group
66 | A n n u a l R e p o r t 2 0 1 4
DIRECTOR’S DECLARATION
1. In the opinion of the Directors of Po Valley Energy Ltd (“the Company”):
i)
the financial statements and notes, as set out on pages 30 to 66, and the remuneration
disclosures that are contained in the Remuneration report in the Directors’ report, are in
accordance with the Corporations Act 2001, including:
a.
b.
giving a true and fair view of the Group’s financial position as at 31 December 2014
and of its performance, for the financial year ended on that date; and
complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001;
ii)
subject to the matters disclosed in Note 1.2(c), 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. The Directors have been given the declarations required by 295A of the Corporations Act 2001 by
the acting chief executive officer and chief financial officer for the financial year ended 31
December 2014.
3. The Directors draw attention to Note 1.2 to the Financial Statements which include a statement of
compliance with International Financial Reporting Standards.
Dated at Sydney this 26th day of March 2015.
Signed in accordance with a resolution of the Directors:
Graham Bradley
Chairman
Kevin Eley
Non-Executive Director
A n n u a l R e p o r t 2 0 1 4 | 67
68 | A n n u a l R e p o r t 2 0 1 4
A n n u a l R e p o r t 2 0 1 4 | 69
Shareholders Information 2014-2015
Additional information required by the Australian Stock Exchange Limited Listing Rules and not
disclosed elsewhere in this report is set out below. The information was prepared based on the share
registry information processed up to 19 March 2015.
SHAREHOLDING
SUBSTANTIAL SHAREHOLDERS
Name
Michael Masterman
Hunter Hall Investment Management Pty Ltd
Kevin Bailey *
Beronia Investments Pty Ltd*
* includes related party interests
DISTRIBUTION OF SHARES
Number of
Percentage of
Ordinary Shares Held
Capital Held %
33,626,222
21,365,804
7,538,707
7,112,782
27.47
17.45
6.16
5.81
Size of Holdings
Number of Holders
Number of Shares Percentage of Capital Held %
1 - 1000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - over
Unmarketable Parcels
176
178
101
270
88
813
399
50,015
530,714
816,881
9,193,897
111,822,556
122,414,063
864,839
0.04
0.43
0.67
7.51
91.35
100
0.71
VOTING RIGHTS OF SHARES AND OPTION
Refer to Note 19
ON-MARKET BUY-BACK
There is no current market buy-back
70 | A n n u a l R e p o r t 2 0 1 4
Shareholders Information 2014-2015
TWENTY LARGEST SHAREHOLDERS
Name
Number of Ordinary
Percentage of
Share Held
Capital Held %
1
J P Morgan Nominees Australia Limited
24,333,349
19.88
2 Michael Masterman
3 Mr Michael George Masterman
4 Kevin Bailey Corporation Pty Ltd
5
Joan Masterman
6 Mr Laurie Mark Macri
7 Greenvale Asia Limited
8 Symmall Pty Ltd
24,163,632
19.74
6,654,758
5,038,707
4,788,444
5.44
4.12
3.91
4,000,000
3.27
2,938,977
2,807,832
2.40
2.29
9 Beronia Investments Pty Ltd
2,776,202
2.27
10 Mr Kevin Bailey and Mrs Grace Bailey < Bailey
family A/C>
11 Beronia FS Pty Ltd
12 Beronia FS Pty Ltd
13 Mr John Fyfe & Mrs Evelyn Fyfe < Fyfe family
A/C>
2,300,000
1,680,000
1.88
1.37
1,600,240
1.31
1,400,000
1,14
14 Tucabia Investments Pty Ltd
1,347,070
1.10
15 Tangar Boring & Excavations Pty Ltd
16 Beronia Investments Pty Ltd
17 Mr Chris Carr & Mrs Betsy Carr
17 Mr Cary Wesley Christian
18 McIndoe Superannuation Fund Pty Ltd
19 Mr Stephen Lloyd Jones
1,288,653
1.05
1,171,721
0.96
1,000,000
0.82
1,000,000
0.82
978,592
0.80
910,000
0.74
20 Equitas Nominee Pty Ltd
873,880
0.71
92,978,307
75.95%
A n n u a l R e p o r t 2 0 1 4 | 71
Technical Summary
In December 2013 the ASX introduced new reporting requirements for oil and gas activities through
amendments to Chapter 5 of the Listing Rules. The new reporting requirements include general
requirements applicable to the public reporting of petroleum resources and also require specific
information to be included in the oil and gas exploration entity’s Annual Report. The following
information is provided in order to comply with Chapter 5 of the Listing Rules:
1) TENEMENTS
The Company’s operations are located entirely in the north of Italy, in the Lombardy and Emilia
Romagna regions. The Company’s core portfolio includes a total of 14 onshore assets and 1 offshore
license. Total acreage position of the Company is circa 2,000 km2. For an illustration of each asset’s
location please refer to the map and table below. As at 31 December 2014 all tenements are 100%
owned with exception of Cascina Castello Bezzecca (90%), Cadelbosco (85%), La Prospera (75%)
and Zanza (75%).
Zanza can be considered the possible extension towards the south of the same play discovered in
Gradizza. For this reason the Company and its joint ventures partners Petrorep Italiana Spa and
AleAnna Resources LLC submitted a new exploration licence application in the same equity
percentages as La Prospera. The application is still under review at Ministry level. The Farmin
agreement for La Prospera was completed in May 2013 with AleAnna Resources LLC and Petrorep
Italiana Spa for disproportionate funding by the new partners for the drilling cost of the Gradizza-1
well, leaving the Company with 75% equity in the La Prospera licence post promote; Petrorep at 15%
and AleAnna at 10%. Additionally in 1Q 2014 the Company submitted the application for the Gradizza
production concession which resulted in a preliminary production concession granted in November
2014. The Farmin Agreement for Cadelbosco was completed in June 2012 with Petrorep Italiana Spa
for its 15% interest; Petrorep committed to a promoted share of future drilling expenditures and
reimbursement on past costs. In 4Q 2014, the Company successfully concluded a third farm-in with
Petrorep Italiana Spa for a 10% interest in the Cascina Castello Bezzecca production concession.
Petrorep committed to a promoted share of future development expenditures.
72 | A n n u a l R e p o r t 2 0 1 4
Technical Summary
Tenement
Location
Interest held
for 2014
Sillaro
(derived from Crocetta Expl. Licence)
Italy, Emilia Romagna,
Bologna
GRANTED
Cascina Castello
(derived from C.S. Pietro Expl. Licence)
Italy, Lombardia
Cremona
I
N
O
S
S
E
C
N
O
C
.
D
O
R
P
I
S
T
M
R
E
P
N
O
T
A
R
O
L
P
X
E
I
PREL.
AWARDED
GRANTED
PREL.
AWARDED
IN
APPLICATION
Cascina Castello extension
(derived from C.S. Pietro Expl. Licence)
Italy, Lombardia
Lodi
Sant'Alberto
(derived from San Vincenzo Expl. Licence)
Italy, Emilia Romagna,
Bologna
Gradizza
(derived from La Prospera Expl. Licence)
Italy, Emilia Romagna,
Ferrara
AR94PY
Cadelbosco di Sopra
Grattasasso
Podere Gallina
La Prospera
Opera
Crocetta
Tozzona
La Risorta
Italy, Adriatic Offshore
Italy, Emilia Romagna
Italy, Emilia Romagna
Italy, Emilia Romagna
Italy, Emilia Romagna
Italy, Lombardia
Italy, Emilia Romagna
Italy, Emilia Romagna
Italy, Emilia Romagna
& Veneto
Torre del Moro
Italy, Emilia Romagna.
Zanza
Italy, Emilia Romagna
75%
100%
100%
90%
100%
75%
100%
85%
100%
100%
75%
100%
100%
100%
100%
100%
2) RESERVES & RESOURCES
The following table summarises the status of the Company’s Reserves & Resources as at
31 December 2014.
With the exception of Gradizza and Vitalba, these figures were independently evaluated by the
geological and petroleum reservoir consultancy UK firm Robertson CGG during 2013 and as regards
Sillaro and Bezzecca in 2014 and are based upon independent evaluations in accordance with
SPE/WPC/AAPG/SPEE Petroleum Resource Management System. We note that the Contingent
Resource assessment for the Gradizza-1 well (drilled in August 2013) reported in the 2013 Annual
Report and unchanged in 2014 was internally evaluated under the supervision of the qualified
petroleum reserves and resources evaluator, Mr. Greg Short.
A n n u a l R e p o r t 2 0 1 4 | 73
Technical Summary
Licence
Project
Reserves
Contingent Resources
Prospective Resources
Gas Bcf
2P
3P
1C
2C
3C
Low
Best
High
4.7
5.5
0.5
1.5
1P
2.2
0.5
1.4
1.6
2.2
2.4
3.1
3.2
7.9
15.9
25.0
1.2
3.3
14.6
34.8
9.5
7.0
16.6
8.8
18.3
4.7
20.5
40.6
15.6
10.8
24.7
11.3
24.4
5.0
7.3
47.0
73.0
2.1
10.2
29.1
5.3
4.1
10.6
7.0
13.8
3.3
29.0
UNDER REVIEW
UNDER REVIEW
Sillaro
Sillaro
Vitalba
West Vitalba
Quaternary
West Vitalba
Pliocene
Cascina
Castello
Cascina
Castello ext
Bezzecca [Net]
2.7
3.8
5.2
Sant’Alberto
Santa Maddalena
Gradizza
Gradizza [Net]
1.8
1.2
2.1
2.7
2.8
6.6
AR94PY
Teodorico
PL3-C
Crocetta
Fantuzza
Zini (Qu-B) [Net]
Cadelbosco
Canolo (Qu-A) [Net]
di Sopra
Canolo (Plioc) [Net]
Zini(Qu-A) [Net]
34.6
47.3
62.2
0.4
0.9
0.6
0.3
4.3
2.3
0.9
3.1
6.9
3.9
1.4
8.9
Selva Strat. (Podere Maiar-1)
11.4
17.0
23.0
Podere
Gallina
La Prospera
Cembalina
Fondo Perino
East Selva
Pioppette [Net]
Capitello [Net]
Ariano
La Risorta
Corcrevà
D. delle Anime
Barona Lead
Opera Lead
Opera
T. del Moro
Tozzona
Licence
Project
Cadelbosco
Bagnolo in Piano
Grattasasso Ravizza
74 | A n n u a l R e p o r t 2 0 1 4
Contingent Resources
Oil, MMbbls
1C
3.7
2.2
2C
4.3
5.7
3C
5.1
10.7
Technical Summary
Qualified Petroleum Reserves and Resources Evaluator:
Statements in this Annual Report regarding estimates of petroleum Reserves and Contingent and Prospective
Resources and the Reserves statement are based on and fairly represent information and supporting
documentation prepared under the supervision of Mr Gregory Short, a non-executive director of Po Valley Energy
Limited. Mr Short is a geologist with over 40 years of oil and gas industry experience and a member of AAPG.
Mr Short has approved the Reserves statement as a whole and has consented to: (a) the inclusion of the
estimated petroleum Reserves and Contingent and Prospective Resources and supporting information in this
Annual Report in the form and context in which they are presented; and (b) the inclusion of the Reserves
statement in this Annual Report in the form and context in which it appears.
RESERVES are those quantities of hydrocarbon anticipated to be commercially recoverable by application of
development projects to known accumulations from a given date forward under defined conditions.
Proved Reserves are those quantities of hydrocarbon, which, by analysis of geoscience and engineering data,
can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from
known reservoirs and under defined economic conditions, operating methods, and government regulations (1P).
Probable Reserves are those additional reserves which analysis of geoscience and engineering data indicate
are less likely to be recovered than proved reserves but more certain to be recovered than possible reserves. It is
equally likely that actual remaining quantities recovered will be greater than or less than the sum of the estimated
Proved plus Probable Reserves (2P).
Possible Reserves are those additional reserves which analysis of geoscience and engineering data suggest are
less likely to be recoverable than probable reserves. The total quantities ultimately recovered from the project
have a low probability to exceed the sum of proved plus probable plus possible (3P) Reserves, which is
equivalent to the high estimate scenario.
CONTINGENT RESOURCES are those quantities of hydrocarbon estimated, as of a given date, to be potentially
recoverable from known accumulations, but the applied project(s) are not yet considered mature enough for
commercial development due to one or more contingencies.
PROSPECTIVE RESOURCES are those quantities of hydrocarbon 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.
For Contingent Resources, the general cumulative terms low/best/high estimates are denoted as 1C/2C/3C
respectively. For Prospective Resources, the general cumulative terms low/best/high estimates still apply. No
specific terms are defined for incremental quantities within contingent and Prospective Resources.
Company Reserves
Gas, Italy (bcf)
Developed
(Sillaro Pliocene + Vitalba)
Undeveloped
(Sillaro Miocene + Bezzecca [net]+ Sant’Alberto +
Gradizza [net])
Total Reserves
Reserves as at
31 December 2014*
2P
1P
Reserves as at
31 December 2013
2P
1P
2.7
5.7
8.4
3.8
10.0
13.8
5.4
3.0
6.9
4.2
8.4
11.1
*The Reserves calculated above include the reclassification of a portion of the Miocene target (formerly the western
accumulation of the Fantuzza structure) to Sillaro undeveloped probable Reserves (P2).
A n n u a l R e p o r t 2 0 1 4 | 75
Technical Summary
The variation in developed Reserves (1P and 2P) reflects, in part, production from the fields (Sillaro
0.62 bcf and Vitalba 0.11 bcf) achieved during 2014 and to a larger degree the downgrade of reserve
estimates for both fields as a result of water arrival and associated sand production from some
completions at the Sillaro field and increased water production at Vitalba.
More specifically, the water cuts at the Sillaro field on the main producing level in late October 2014
led to a reduction of approximately 2 bcf of 1P Reserves whilst 2P Reserves for this field remained
relatively unchanged decreasing by 0.21 bcf. This is largely due to the fact that 1.45 bcf of Fantuzza
2C Resources have been moved to Sillaro P2 Reserves following a reclassification of a portion of the
Miocene target (formerly the western accumulation of the Fantuzza structure) which lies directly below
the Sillaro field. Please refer to the announcement released to the ASX on 9 January 2015 titled
“Sillaro Field Reserves Revision & Production Forecast” for further details.
As regards Vitalba, a recent acceleration in water production compared to previous estimates has led
to the conclusion that a shale barrier lies between the existing perforated area and the lower reservoir
level (which is not perforated). The P2 Reserve estimates for this field were reduced accordingly from
approximately 0.8 bcf to zero.
The increase in the Company’s 1P and 2P undeveloped Reserves reflects the reclassification of 1C
and 2C Resources related to gas fields Sant’Alberto and Gradizza following the preliminary production
concession awarded from the Ministry of Economic Development in June and November 2014
respectively and the Sillaro Miocene reserves described above. Importantly, the increase in 1P and 2P
undeveloped Reserves was slightly offset by the decrease in Bezzecca Reserves following the farm in
by Petrorep Italiana Spa in 4Q 2014. Specifically, the 1P and 2P Reserves for the Bezzecca field are
now shown net of the 10% participating interest.
In regards to the future development of the undeveloped Reserves the Company states that Sillaro
Miocene, Bezzecca, Sant’Alberto and Gradizza Reserves have been classified undeveloped under the
SPE-PRMS definition as they are expected to be recovered through future investments. The Company
is currently in the process of securing the funding to commence the installation of the infrastructure to
bring the Bezzecca gas field into production, including a 7km pipeline. As previously stated, 1P and 2P
Reserves for Bezzecca represented in the table are net of the 10% equity interest that was farmed out
to Petrorep Italiana Spa in 4Q 2014.
As regards Sant’Alberto, the Environmental Impact Assessment (EIA) of the project’s development
plan is currently under review by the Ministry of Environment. Once the EIA process is complete, the
Company intends to develop this field using a small modular gas treatment plant which will be installed
at the existing well site. The Environmental Impact Study for Gradizza is under preparation and will be
filed with the Ministry of Environment shortly.
The reference point for gas flow from Vitalba & Sillaro is measured through a turbine, located on the
wells site, using non standard cubic metres. The figure is standardised using a Fiorentini Fiomec
Calculator (FFC) which is a conversion consisting of gas temperature and pressure with gas quality
parameters. The outcome of this conversion is the actual gas volume in standard cubic meters
injected in the SNAM gridline. (SNAM is an Italian natural gas infrastructure company and manages
the national gas transportation network). The SNAM entry points for Sillaro & Vitalba are located 200
metres and 50 metres respectively from site perimeters. The FFC prints a production report which is
authenticated by the Ministry of Economic Development and this official data is then accepted by
SNAM, our customers and the Taxation Authority.
76 | A n n u a l R e p o r t 2 0 1 4
Technical Summary
The Company does not have unconventional petroleum Resources in its portfolio. The Company does
not have any material concentration of undeveloped Reserves in Oil & Gas projects that remained
undeveloped for more than 5 years from the date they were initially reported.
In reference to the Reserves & Resources estimation process, the Company commits to a regular
independent audit in order to obtain a certified update of its Reserves & Resources portfolio. The
latest review took place in December 2014 for Sillaro and Bezzecca. For the remaining projects, with
the exception of Gradizza, the last review was carried out in April 2013. As there were no material
changes or developments in 2014 or to the date of this report which could impact the Reserve and
Resource estimates, an independent audit refresh was not deemed necessary.
Company Contingent Resources
Contingent Resources as at 31
December 2014*
Contingent Resources as at
31 December 2013
1C
48.2
5.9
2C
74.9
10.0
1C
52.7
5.9
2C
81.1
10.0
Gas (bcf)
Oil (MMbbls)
*The Contingent Resources calculated above reflect the reclassification of a portion of the Miocene target
(formerly the western accumulation of the Fantuzza structure) to Sillaro Probable Reserves (P2).
The decrease in Contingent Gas Resources, both 1C and 2C, resulted from the reclassification of a
portion of the Miocene target (formerly the western accumulation of the Fantuzza structure) to Sillaro
Probable Reserves (P2) and the reclassification of Sant’Alberto and Gradizza’s 1C and 2C Resources
following the preliminary production concession awarded from the Ministry of Economic Development
in June and November 2014 respectively. As regards Fantuzza, 41 MMscm (1.45 bcf) of Fantuzza
Resources were moved to Sillaro P2 Reserves.
All figures have been determined using a probabilistic method except Sillaro, Vitalba, Bezzecca, Santa
Maddalena and Fantuzza, which were determined using a deterministic method.
A n n u a l R e p o r t 2 0 1 4 | 77
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1
2
4
Highlights
Chairman’s & acting Ceo’s letter to Shareholders
Corporate governance Statement
10
directors’ report
27
lead auditor’s independence declaration
28
Statement of Financial Position
29
Statement of Profit or loss and other Comprehensive income
30
Statement of Changes in equity
31
Statements of Cash Flow
32
notes to the Financial Statements
67
directors’ declaration
68
independent auditor’s report
70
Shareholder information 2014-2015
72
technical Summary
Corporate Directory
Directors
graham Bradley, Chairman
michael masterman, non executive director
Byron Pirola, non executive director
gregory Short, non executive director
Kevin eley, non executive director
acting Chief executive officer
Sara edmonson
Company Secretary lisa Jones
Registered Office
Suite 8, 7 the esplanade
mt Pleasant Wa 6153
australia
tel: +61 8 92782533
Rome Office
Via ludovisi, 16
00187 rome, italy
tel: +39 06 42014968
Share Registry
link market Services limited
178 St george’s tce
Perth, Wa australia 6000
tel: +61 8 92116679
Solicitors
Steinepreis Paganin
level 4, 16 milligan St
Perth, Wa australia 6000
Ughi e Nunziante
Studio legale
Via Venti Settembre, 1
00187 roma, italy
Auditor
ernst & young
11, mounts Bay road
Perth, Wa 6000 australia
Banks
Bankwest
108 St george’s tce
Perth, Wa australia 6000
nedbank limited
old mutual Place
2 lambeth Hill
london, uk, eC4V 4gg
Stock exchange listing
Po Valley energy limited shares are listed on
the australian Stock exchange
under the code PVe.
the Company is limited by shares,
incorporated and domiciled in australia.
Cover scelta_copertina +dorso 5mm 02/04/15 15:19 Pagina 1
Po Valley energy limited
aBn 33 087 741 571
registered office
Suite 8, 7 the esplanade
mt Pleasant Wa 6153
australia
tel: (08) 9278 2533
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