WHITEBARK ENERGY LIMITED (ASX:WBE)
Annual Report
30 June 2020
ABN 68 079 432 796
WHITEBARK ENERGY LTD - Annual Financial Report 30 June 2019
Table of Contents
Corporate Directory
Chairman’s Letter
Review of Operations
Reserves and Resource Statement
Directors’ Report
Auditors Independence Declaration
Independent Audit Report
Statement of Profit or Loss and Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Shareholder Information
Permits
2
3
4
12
16
26
27
32
33
34
35
36
70
71
73
2020 ANNUAL REPORT
Page | 1
WHITEBARK ENERGY LTD
Corporate Directory
Directors
Charles Morgan (Non-executive Chairman)
David Messina (Managing Director)
Stephen Keenihan (Executive Director)
Company Secretary
Kevin Hart
Principal registered office in Australia
Auditors
Solicitors to the Company
Share Registry
Banker
Stock exchange
Level 2
6 Thelma Street
West Perth WA 6005
Tel: +61 8 6555 6000
KPMG
235 St Georges Terrace
Perth WA 6000
Steinepreis Paganin
Level 4, The Read Buildings
16 Milligan Street, Perth WA 6000
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth WA 6000
Tel: +61 3 9415 5000
ANZ
Whitebark Energy Limited shares and options are listed
on the Australian Securities Exchange (ASX: WBE)
Company website
www.whitebarkenergy.com
2020 ANNUAL REPORT
Page | 2
WHITEBARK ENERGY LTD
Chairman’s Letter
Dear Fellow Shareholders,
In 2019/2020 Whitebark has consolidated and increased its ownership of the Wizard Lake Oilfield in Alberta, Canada.
It has drilled two additional wells, Rex-2 and Rex-3 at Wizard Lake and invested substantial capital in the Wizard Lake
Facilities to deal with the greater than expected volumes of oil and gas from the Rex wells.
There have been challenges in bringing on and maintaining the production at Wizard Lake due to the combination of
high gas rates and relatively heavy oil – an unusual combination.
Like many businesses and all oil and gas production companies around the world, Whitebark was hit badly by the COVID-
19 pandemic. Plummeting demand and a disagreement between Russia and Saudi Arabia on OPEC production led to
negative oil prices in April 2020.
Subsequently Whitebark acted quickly to reduce costs with all directors, executives and staff taking cuts in remuneration
for the remainder of the financial year.
Whitebark has raised circa $9 million during the year and invested $12 million in wells and facilities. It completed the
year with $1.1 million in cash. As a result of the capital works program Whitebark has a number of creditors with whom
we have reached extended payment terms beyond normal contracted payment dates. Whitebark thanks these service
companies for their continued support.
Whitebark continues to learn about the characteristics of the Rex reservoir at Wizard Lake and has, since the end of the
financial year, worked over and cleaned out tonnes of proppant from two of the wells which was having a negative
effect on the production. Whitebark will bring on future wells much more slowly in order to minimise downtime and
optimise the production curves of the wells.
During the year Whitebark transferred its non-Wizard Lake interests back to its JV partner, Point Loma, and through a
variety of transactions increased its ownership of the Wizard Lake Oilfield to an average of 84% working interest across
the field.
Whitebark is working hard to ensure that it gets stronger and continues to grow.
I would like to thank everyone involved for a great year and we look forward to more success to come.
Yours sincerely,
Charles W Morgan
Chairman
2020 ANNUAL REPORT
Page | 3
WHITEBARK ENERGY LTD
Review of Operations
1 Review of Operations
2019/2020 – A Year of Contrasts
The significant progress and positive momentum the Company achieved at its Wizard Lake oil project in Canada in the
first half of the 2020 financial year stand in marked contrast to the forced curtailment of development and production
in the closing months due to the effects of COVID-19 and an aggressive OPEC price war. These combined to significantly
negatively impact the global demand and price for oil. The Company navigated its path through these unusual times
and can look forward to a return to full operational development as the industry continues to recover.
COVID-19 and Oil Price Shock
During the second half, the global COVID-19 Pandemic disrupted economic activity around the world and significantly
depressed energy demand, while at the same time tension within OPEC led to major supply increases. The combined
effect was a substantial negative shock to oil prices from which they are still recovering
The Company responded quickly to protect its staff and the Company’s financial standing with substantial cuts to its
overheads, including reducing directors’ fees and salaries by 50 per cent for the remainder of the financial year. The
Board resolved that while oil prices were anomalously low, the company would not commit to any non-essential capital
expenditure. The Company also reduced production rates to preserve the long-term value of its Wizard Lake assets. All
these measures were implemented while ensuring operational safety, well integrity and the retention of requisite
corporate and operational knowledge to allow the company to react quickly when oil market conditions allow.
Whitebark, through its wholly owned subsidiary Salt Bush Energy Limited (SBE), terminated the Definitive Agreement
to acquire the residual 40% interest in the Wizard Lake Oilfield. Under the Farm-In and Joint Operating Agreements,
there will be no material changes to WBE cashflow from the field as a result of not completing the Agreement while the
wells pay out their development capital expenditure. SBE remains operator of the Wizard Lake Oilfield and retains a first
right of refusal over the balance of interests in the Wizard Lake Oilfield.
Canadian Operations
During the first half of the financial year, the Company successfully completed the first stage of its development program
at the Wizard Lake Oil Field with the success of Rex-2 and Rex-3. This included the completion of the two horizontal
wells (each longer than its predecessor), increases in facility capacity, construction of a second pipeline and acquisition
of a third, and four land acquisitions. This placed the company in a strong position to grow production, cashflow and
reserves. Unfortunately, progress was curtailed during the second half of the year as a result of COVID-19 and low oil
prices.
Wizard Lake Rex Oil Field
(WBE 84% WI AT 30 JUNE 2020)
Production Rates
During the first half of February and following extremely difficult weather related operating conditions in January, the
production of the Wizard Lake Oilfield reached a gross rate peak of 1,220 bopd and 3.5 mmcfd gas, which equates to
~1800 boepd when all wells were online1.
On 12 March 2020 the Company announced that in response to the significant reduction in the oil price, the Company
had taken immediate steps to optimise the long term returns from its Wizard Lake oil field in Alberta, Canada.
To mitigate the volatility in oil prices, Whitebark reduced the well pump output rate on Rex-1 and Rex-2, while allowing
Rex-3 to continue to flow freely2. These measures were taken to maintain well integrity and preserve future production
potential and cash flow while maintaining a low operating cost of less than CDN$10 per barrel. The Company also
negotiated favourable commercial terms for the net back oil price received from production in May resulting in positive
operational cashflows during that month. Whitebark will increase production rates as the oil price improves and remains
committed to continuing to develop the Wizard Lake Oilfield. The Company is currently undertaking a review to
determine the appropriate timeframe to recommence drilling.
1 ASX Release 17 February 2020
2 ASX Release 21 May 2020
2020 ANNUAL REPORT
Page | 4
WHITEBARK ENERGY LTD
Review of Operations
Wizard Lake Ownership
Whitebark, through wholly owned subsidiary Salt Bush Energy Ltd (SBE), executed a Definitive Agreement in December
2019 to acquire the remaining 50% interest in the Wizard Lake Oilfield via a staged payment to Point Loma Resources
(PLX) of cash, shares and swapped assets. At the completion of the transaction Whitebark would own 100% of Wizard
Lake, and PLX would own 100% of the non-Wizard assets previously held within the PLX Joint Venture.
Step 1 (Completed 24 December 2019) increased Whitebark’s interest in the Wizard Lake Oilfield to 60% after a cash
payment to PLX of C$1,200,000 and assignment of Whitebark’s interest in the other non-core PLXJV assets, in which the
company held minority interests, to PLX.
On 30 March 2020, Whitebark terminated the
residual interest acquisition agreement due to the
rapid decline
in global economic conditions,
in oil prices, making
particularly the decline
financing difficult to achieve. SBE served notice to
terminate the Definitive Agreement after Stage 1
and remained at 60% working interest.
PLX announced the sale of 97.5% of its circa 40%
interest in the WLOP on 21 April 2020 for C$2.9m.
SBE did not exercise it ROFR on these interests.
During May PLX announced that it “no longer had
the financial capability to carry on its operations”
and ceased all operations effective May 21, 2020.
The transfer of interests later collapsed and an
administrator was appointed for PLX. That PLX is in
administration, does not impact on SBE’s ability to
carry on its business activities at Wizard Lake.
for a
(split
On 9 June 2020, Whitebark successfully renewed
leases over three sections (713 ha) of its Wizard
total consideration of
Lake Oilfield
CDN$238,085
two payments, one
in
immediately and one at end of initial term in 18
months). The leases over these sections give the
operating company and fully owned subsidiary Salt
Bush Energy, an average of 84% working interest
across the field. Through SBE, Whitebark continues
to hold 100% working interest in all facilities,
pipelines and infrastructure.
Figure 1 - Wizard Lake wells, pipeline and land map
The Wizard Lake Oilfield has been significantly de-risked and the 84% ownership offers an excellent opportunity for WBE
to focus on it and optimize development for shareholder value and build a platform for growth and strong cashflows.
Development
Rex-2 – Exceeded Discovery Well Rex-13
Rex-2 was successfully drilled to 3,033m total length in eight drilling days from spud on 27 July 2019. A successful 35
stage fracture stimulation program was completed in August 2019 using sliding frac sleeves to isolate each zone.
Flowback commenced in early September 2019 and initial clean up flows noted significant amounts of oil and gas at
surface. As is the practice by other operators in the area, a high volume, submersible pump was used to assist the
recovery of frac fluids and to optimise the oil recovery rate. However, Rex-2 flowed unassisted at rates higher than those
experienced at Rex-1, exceeding expectations and underlining the excellent quality reservoir the well penetrated.
As Rex-2 continued to clean up, a restricted peak fluid rate of 865 bpd was recorded and comprised 540 bopd
accompanied by 2 mmcfd of gas. Sustained oil and gas production rates (free flow) from Rex-2 during the test period
3 ASX Release 6 September 2019
2020 ANNUAL REPORT
Page | 5
WHITEBARK ENERGY LTD
Review of Operations
enabled the declaration of “commercial production” seven days after testing commenced and seven days earlier than
Rex-1.
The average production rate for the final 24 hours of the Rex-2 test period was approximately 700 boepd (Figure 2),
including 350 barrels of 18.5 API bopd. As expected, the extra length of the horizontal section at Rex-2 resulted in higher
production rates and a larger reserve booking per well than for Rex-1. Rex-2 peak production outperformed Rex-1 by
154%. Following the test period, the well production was constrained by plant limitations and flaring limits.
Figure 2 - Rex-2 test results to 5:00am, 5 September 2019 (Local Perth time)
Rex-3 – Performing Beyond Expectations4
Rex-3 was successfully drilled to 3,673m total length in eight drilling days from spud on 17 November 2019. The planned
Rex-3 horizontal leg of 1,800m (Rex-1 hz = 1237m, Rex-2 hz = 1,500) was extended 298m due to the presence of a
continuous reservoir while drilling to the toe. The well encountered excellent reservoir quality with free oil noted on
the shakers, oil shows (fluorescence and cut) and elevated gas readings when drilled. Elevated porosity levels ranging
up to 23% were also recorded through the sand (Rex-1: 15-18%, Rex-2 – up to 21%).
A successful 46 stage fracture stimulation program was completed
in just over 30 hours during December 2019. The 46 stage frac
programme placed over 1,300 tonnes of proppant into the Rex
formation and used sliding frac sleeves to isolate each zone.
Pump assisted cleanup flows of Rex-3 commenced on 12
December with first measured oil recorded at surface after 30.5
hours compared with 42 hours at Rex-2. At the end of 18 hours
continuous flow, average rates at Rex-3 were 1,084 bopd with
1.16 mmcfd.
As expected, the extra length of the horizontal section at Rex-3 led
to higher oil production rates and likely larger reserve bookings
per well than at Rex-1 and Rex-2.
Figure 3 - Rex-3 during drilling
As announced on 7 January 2020, Rex-3 flowed oil and gas to surface unassisted. At that time, approximately 30% of
the frac fluid had been recovered. The well flowed through an 11.91mm choke to restrain the gas rate to approximately
2 mmcfd and ensure the well could clean up in an optimal manner. Under this heavy choke, the well continued to clean
up strongly, flowing 350 to 450 bopd with a total water cut of approximately 35%.
4 ASX Release 16 December 2019
2020 ANNUAL REPORT
Page | 6
WHITEBARK ENERGY LTD
Review of Operations
After flowing unaided for five months and yielding 35,800 barrels of oil and 251,000 mcf of gas at varying, and COVID-19
reduced production levels, Rex-3 required the assistance of a subsurface pump to increase production5. On 22 July
2020, the Company confirmed a new top hole down subsurface rod driven pump has been placed in the well at approx.
1,192mKB6 to optimise its gas handling capacity. Over H2 20/21, the pump will be run at varying speeds and
configurations to determine the most efficient means to produce the well. Experience from the first two wells has
indicated that each well has unique characteristics which will influence how each is finally optimised.
Rex-1 Workover7
Due to the strong production achieved from
Rex-2, Rex-1 was shut in as the facilities at the
time reached capacity. The company took this
opportunity to carry out a workover of Rex-1
and investigate the performance difference
between the wells.
in
hole
the workover, metal debris was
During
encountered
obstructing
the
approximately two thirds of the lateral. The
debris, identified as the drill bit and downhole
motor of the coil tubing (5m long) was stuck in
the hole just prior to Christmas 2018 when the
Operator at the time pushed this debris to the
toe of the well so that it would not interfere with
production. The reason the debris moved
uphole is unclear, but it was most likely dragged
up the hole during the original recovery
operation.
A successful recovery operation by Whitebark’s
Canadian operating entity, Saltbush Energy, was
followed by connection to the upgraded
facilities.
Facilities and Pipeline
Figure 4 - Rex-1 Workover
A new pipeline, commissioned as a result of the excellent results from Rex-2, commenced construction on 1 November
2019 and was completed in late December 2019. The new pipeline comprises 2.1km, 6” steel line which is buried for its
entire length. Whitebark also acquired a key 4.7km pipeline securing access to a pipeline gathering system and gas
plant operated by Petrus Resources 14km to the north west, to which Wizard gas will be sent for processing and sales
(Figure 1)8.
The new facilities upgrade work commenced 6 November and was completed and commissioned with the new pipeline
in late December 20199. Plant commissioning was carried out using Rex-2 production with Rex-1 added in the following
days. The facilities separate the gas from the liquids for sales via the Petrus gas processing facilities. Gas throughput at
this stage was held at 2 – 2.5 mmcfd as the wells continued to clean-up and stabilise. Oil throughput uses a heated
cascade tank system which uses gravity to separate the oil and water (Figure 6). This system removes up to 99.5% of
the water prior to the oil being trucked to receiving stations10.
The new expanded facilities are capable of handling 5,000 barrels of fluid a day along with 5mmcfd of gas. Oil will
continue to be trucked to market while gas is sent through the newly constructed gas pipeline to the nearby Petrus
operated gas processing facility and then on to market (Figure 6 & Figure 5.).
5 ASX Release 19 June 2020
6 mKB - Maximum depth reached for the well, as measured in metres from the Kelly Bushing.
7 ASX Release 13 November 2019
8 ASX Release 1 November 2019
9 ASX Release 23 December 2019
10 ASX Release 7 January 2020
2020 ANNUAL REPORT
Page | 7
WHITEBARK ENERGY LTD
Review of Operations
Figure 6 - Tank Cascade Separation System
Wizard Lake Land Position Increases11
Figure 5 - Installed and commissioned upgraded Wizard Lake Facilities
During FY20, Whitebark increased its land position at Wizard Lake adding 2,160 acres in four different areas Error!
Reference source not found.. The first area acquired in a successful land bid added 320 acres to the Wizard Lake land
position and provides additional potential drilling opportunities. The second area was acquired in September 2019
adding four potential drilling locations in the core channel.
The third area was acquired in October 2019 and is to the northwest of the current field location and contains a well
which intercepted a high-quality pay section approximately 10m thick in the Lower Mannville. This vertical well
historically produced over 108,000 boe before it was suspended in 2008 due to very low commodity prices.
Surrounding well control indicate the subject reservoir section is widespread and the discovered pool extends over the
entire section. Importantly, the new section is within 2.5km of the Wizard Lake facilities and the section is traversed
by the gas export line which will be transporting Wizard gas to market. Both these features greatly enhance the value
of this undeveloped pool. A description of the pool and an estimate of the Contingent Resources held in the land
acquired in October are found in Table 1.
11 ASX Releases 18 July, 1 October, 28 October & 11 December 2019
2020 ANNUAL REPORT
Page | 8
Table 1 - October Acquisition Contingent Resources
WHITEBARK ENERGY LTD
Review of Operations
Parameter
Depth
Age
Formation
Reservoir type
Type of Lease
Company Interest
Area
Description
1525m TVD
Cretaceous
Mannville
Sandstone
Crown Lease
100%
256 Ha
Boe conversion
Assessment Approach
Contingent Resource Estimate
Recoverable million boe
1boe = 6000cft gas
Monte Carlo
P90
1.15
P50
2.36
P10
4.83
Future Work
Drilling of long reach well once nearby Wizard Lake development activity is completed
The land acquired in December is 1km from the upgraded Wizard Lake facilities and ~400m from the toe of Rex-1. This
section closed the gap of land over the pool and contains 12 old wells that were drilled to exploit oil and gas reserves
from deeper Devonian Leduc reservoirs. These wells provide invaluable information on the nature and extend of the
Rex sands and confirm to be oil bearing. The continued application of horizontal, stimulated well technology successfully
used in Rex-1, 2 and 3 is expected to result in commercial flows from these sands in the new land.
Contingent Resources held in the land acquired in December are found in Table 2.
Parameter
Depth
Age
Formation
Reservoir type
Type of Lease
Company Interest
Area
Table 2 - December Acquisition Contingent Resources
Description
1525m TVD
Cretaceous
Mannville
Sandstone
Freehold
100%
224Ha
Boe conversion
1boe = 6000cft gas
Assessment Approach
Monte Carlo
Contingent Resource Estimate
Recoverable million boe
P90
0.5
P50
0.8
P10
1.4
Future Work
Drilling of long reach well once nearby Wizard Lake development activity is completed
2020 ANNUAL REPORT
Page | 9
WHITEBARK ENERGY LTD
Review of Operations
Figure 7 – Four Land Acquisitions During Reporting Period
Reserves & Resources Upgrade
The Reserves update at 30 June 202012 demonstrated over a 300% increase in 1P oil Reserves (305Mbbls to 1342Mbbls)
after the production of over 83,000 barrels of oil during the period. The 2P oil reserves have increased over 400% from
520Mbbls to 2,687Mbbls. Gas Reserves and associated liquids have also increased by approximately 2-fold during the
same period. These increases were achieved even though the company sold its other non-core producing assets during
the period and are substantially a result of:
•
•
•
the success of the appraisal drilling programme
the acquisition of new leases over the oilfield area
an increase in average ownership percentage in the oilfield
In addition to the Proven reserves the Wizard Lake Oilfield, the 1C and 2C oil Contingent Resources categories add a
further 748 Mbbls and 1,944 Mbbls respectively to total resources.
Western Australian Operations – Warro Gas Project (WBE 100% WI)
The Company commenced a formal divestment process for its Warro Gas Project during September 202013. The decision
to divest is a culmination of a strategic review of the asset over the previous 12 months together with increased interest
in the project in the current WA gas market environment.
Whitebark has appointed Adelaide Equity Partners to facilitate the sales process. The Company may consider outright
sale, farm-in or an alternative transaction structure.
The Warro project continues to be in care and maintenance, awaiting Government guidance on the regulatory changes
to be made to implement the recommendations of the Fracking Inquiry.
12 ASX Release 12 August 2020
13 ASX Release 2 September 2020
2020 ANNUAL REPORT
Page | 10
WHITEBARK ENERGY LTD
Review of Operations
Climate Change
The Company recognises climate-related risks and the need for these to be managed effectively particularly across the
energy industry.
Key climate-related risks and opportunities relevant to the Company’s operations include:
•
•
•
The transition to a low carbon economy through technological improvements and innovations that support a
lower carbon energy efficient system with decreased demand and changing community sentiment for fossil
fuels. In addition increased uncertainty time and cost associated with regulatory bodies granting approvals or
licences on fossil fuel intensive projects. Transition to lower carbon economy also gives rise to opportunity for
the Company’s gas production assets. Natural gas is viewed as a key element to supporting a sustainable energy
transition.
Physical changes caused by climate change include increased severe weather events and chronic changes to
weather patterns which may impact demand for energy and the Company’s production assets and production
capability. These events could have a financial impact on the Company through increased operating costs,
maintenance costs, revenue generation and sustainability of its production assets.
Policy changes by governments which may result in increasing regulation and costs which could have a material
impact on the Company’s operations.
The Company is committed to continually improve climate change related disclosures as processes and understanding
of climate change related matters improve alongside the Company's activities and operations.
Corporate
Capital Raisings
The Company completed three capital raisings during the 2020 financial year.
The completion of a successful capital raising in September 2019 through a placement to institutional, sophisticated and
professional investors (Placement) to raise $3.8m via the issue of 475m fully paid ordinary shares in the capital of
Whitebark (Shares). These new funds allowed the Company to accelerate the development of the Wizard Lake Project
after the success of the Rex-2 well. In addition to this Placement, the Company undertook a Share Purchase Plan (SPP).
Under the SPP, Eligible Shareholders had the opportunity to purchase Shares at the same price as the Placement. The
SPP raised $855,000.
In December 2019, The Company raised $5.0 million via a heavily bid Placement. The Placement received strong
demand from new and existing institutional, sophisticated and professional investors and was supported by Board,
Management and staff for $0.315m.
On 30 June 2020, the Company announced a 1 for 3 non-renounceable entitlement offer at 0.3 cents per share. The
offer was partially underwritten to c.$1.7m by Baker Young Limited and successfully raised $3.04m14. The funds raised
are targeted for working capital, (comprising operational and capital costs accrued and pending), acquisition of land
mineral leases, Wizard Lake Field maintenance and workovers. The entitlement offer was fully subscribed after
placement of the shortfall.
14 ASX Releases 30 June, 30 July, 18 August 2020
15 ASX Release 12 August 2020
2020 ANNUAL REPORT
Page | 11
WHITEBARK ENERGY LTD
Reserve & Resource Statement
2 Reserves and Resources Statement
The following summarises Whitebark Energy Limited’s (WBE) Proved Reserves (1P), Proved plus Probable Reserves (2P)
and contingent and prospective resources as of the evaluation date of 30 June 2020. Unless otherwise stated, all
estimates are quoted as net WBE share 15.
Reserves at 30 June 202015
Alberta, Canada
Reserves at 30 June 2020
Crude Oil
Proved Crude Oil (1P)
Mbbl
Proved and Probable Crude
Oil (2P)
Developed
Undeveloped
Total
350
992
1342
418
2269
2687
Reserves Reconciliation (Mbbl)
Proved Crude Oil (1P)
Mbbl
Proved and Probable Crude
Oil (2P)
Reserves at 30 June 2019
Revisions, reclassifications and
working interest changes
Disposals
Production
Reserves at 30 June 2020
304.5
1277.5
-170.6
-69.4
1342
519.5
2533.8
-296.9
-69.4
2687
Reserves at 30 June 2020
Natural Gas
Proved Natural Gas(1P)
MMcf
Proved and Probable
Natural Gas (2P) MMcf
Developed
Undeveloped
Total
1817
5948
7766
2170
13263
15433
Reserves Reconciliation (MMcf)
Proved Natural Gas(1P)
MMcf
Proved and Probable Natura
Gas (2P) MMcf
Reserves at 30 June 2019
Revisions, reclassifications and
working interest changes
Disposals
Production
Reserves at 30 June 2020
2593.7
7833.4
-2124.1
-537.1
7766
4723.7
15278.7
-4032.4
-537.1
15433
15 ASX Release 12 August 2020
2020 ANNUAL REPORT
Page | 12
WHITEBARK ENERGY LTD
Reserve & Resource Statement
Reserves at 30 June 2020
Natural Gas Liquids
Proved Natural Gas
Liquids (1P)
Mbbl
Proved and Probable
Natural Gas Liquids (2P)
Mbbl
Developed
Undeveloped
Total
36
118
154
43
264
307
Reserves Reconciliation (MMcf)
Proved Natural Gas
Liquids (1P)
Mbbl
Proved and Probable
Natural Gas Liquids (2P)
Mbbl
Reserves at 30 June 2019
Revisions, reclassifications and
working interest changes
Disposals
Production
Reserves at 30 June 2020
50.3
144.5
-37.8
-3.0
154.0
91.3
291.0
-72.3
-3.0
307.0
The revisions and reclassifications to the 1P and 2P reserves is comprised primarily of revisions in forecast
performance as a result of well recompletions, drilling of new wells and pipeline construction to add stranded
production to the network and resulting changes to working interests in the field.
Changes in forward price estimates, production costs and recovery rates will also dictate the need for revision and
reclassification of reserves
Contingent
1C
2C
Wizard Lake Alberta Canada,
Summary (average WI 84%) – 30 June 202016
Natural Gas
Crude Oil
MMcf
Mbbl
3819
748
9929
1944
Natural gas
Liquids MMbl
76
198
Total MBOE
1461
3797
Contingent Resources Reconciliation, Wizard Lake Alberta Canada
1C Resources at 30 June 2019
Revisions, reclassifications and working interest
changes
1C Resources at 30 June 2020
2C Resources at 30 June 2019
Revisions, reclassifications and working interest
changes
2C Resources at 30 June 2020
Crude Oil
Mbbl
550
Natural Gas
MMcf
1202
Natural gas
Liquids MMbl
-
198
748
1015
929
1944
2617
3819
1595
8334
9929
76
76
-
198
198
Total MBOE
750
711
1461
1281
2516
3797
16 ASX Release 12 August 2020
2020 ANNUAL REPORT
Page | 13
WHITEBARK ENERGY LTD
Reserve & Resource Statement
The revisions and reclassifications to the 1C and 2C reserves is comprised primarily of revisions in forecast performance
as a result of well recompletions, drilling of new wells and pipeline construction and resulting changes to working
interests in the field.
Contingent and Prospective Resources at 30 June 2020 – Gas Initially in Place (Tcf)
Contingent (status unclarified and on hold)
Warro Field, Western Australia17
1C
Prospective
2.4
Low
2.0
4.4
2C
3.2
Medium
4.1
7.3
3C
4.5
High
7.3
11.6
Prospective Resource Estimates Cautionary Statement
The estimated quantities of petroleum that may potentially be recovered by the application of a future development
project(s) relate to undiscovered accumulations. These estimates have both an associated risk of discovery, as well as a
risk of development. Further exploration, appraisal and evaluation is required to determine the existence of a significant
quantity of potentially moveable hydrocarbons.
Conversion of gas to BOE is done on the basis of 6Mcf = 1 BOE
Reserves and Contingent Resource Estimates – Governance
The Company maintains strong governance and internal controls in respect of its estimates of petroleum reserve and
resource and the estimation process which is undertaken in accordance with the SPEE Petroleum Resources
Management Guidelines. Oil and gas reserves are compiled by an independent Canadian petroleum consulting firm and
overseen by an in-house qualified petroleum reserves and resources evaluator.
Qualified Petroleum Reserves and Resources Evaluator Statement
The reserve, contingent and prospective resource estimates in this annual report (Reserves and Resources Statement)
is based on, and fairly represents, information and supporting documentation prepared by a qualified petroleum
reserves and resources evaluator. The Reserves and Resources Statement as a whole has been approved by Mr Stephen
Keenihan. Mr Keenihan is a holder of shares and options in and is Executive Director of the Company. Mr Keenihan has
sufficient experience that is relevant to the style and nature of hydrocarbon resources and to the activities discussed in
this report and is a member of the following professional organisations; Society of Petroleum Engineers, Petroleum
Exploration Society of Australia, American Association of Petroleum Geologists. Mr Keenihan has consented to the
inclusion of information in this annual report in the form and context in which it appears.
The Company confirms that it is not aware of any new information or data that materially affects the information
included in the original market announcement and, in the case of estimates of oil and gas reserves and resources that
all material assumptions and technical parameters underpinning the estimates in the relevant market announcement
continue to apply and have not materially changed.
The Reserves and Resources Statement is based on, and fairly represents, information and supporting documentation
prepared by the respective Competent Persons below.
Alberta, Canada
The 30 June 2020 1P and 2P Reserves evaluation was prepared by KDAngus Corp, a private geotechnical consulting
company. Its principal, Mr. K Angus has over 30 years of industry geotechnical experience in both Western Canada and
International areas. He has wide-ranging project experience across numerous theatres of operation and reservoir types
and has worked extensively on tight oil and gas plays in clastic sequences. Mr. Angus has been involved as a cofounder
of 4 public oil and gas companies and was the founding director of Painted Pony Petroleum where he has chaired and
been a member of the reserve committee since 2012. He has over 15 years of experience as a director on publicly
traded oil and gas companies
16 Refer to ASX announcement 19 November 2015
2020 ANNUAL REPORT
Page | 14
WHITEBARK ENERGY LTD
Reserve & Resource Statement
Mr. Angus, P. Geoph., has an ICD.D designation from the Institute of Corporate Directors. He holds a Bachelor of Science
in Geology from the University of Calgary and is registered as a Professional Geoscientist with the Alberta Professional
Engineers and Gecientists of Alberta (APEGA).
The reserve evaluation is based on information provided by Saltbush Energy. These data and interpretations were
independently verified and validated and confirmed to provide a true representation of the field configuration and
characteristics. The evaluation was initiated in July 2020 and is based upon the reserves as of June 30th, 2020.
The evaluation was carried out under the standards contained in the Petroleum Resource Management System (PRMS)
revised June 2018 version. Note: The reserve definitions do vary from the Canadian COGE standard but are the
recognized standard for the Australian Securities Exchange that Whitebark is listed under. The reserve Classification are
shown below. Note only P1, P2, C1 and C2 reserve types were considered in this evaluation as P3 and C3 reserve
classification volumes largely lie outside the lands owned by Saltbush Energy.
Mr Angus has consented to the inclusion of information in this annual report in the form and context in which it appears.
Warro Field, Western Australia
The information is based on and fairly represents the information and supporting documentation prepared by Mr
Stephen Keenihan, a Director of Whitebark Energy Ltd, who has consented to its inclusion in the form and context as it
is presented. Mr Keenihan has sufficient experience that is relevant to the style and nature of hydrocarbon resources
and to the activities discussed in this document and is a member of the following professional organisations; Society of
Petroleum Engineers, Petroleum Exploration Society of Australia and American Association of Petroleum Geologists.
2020 ANNUAL REPORT
Page | 15
WHITEBARK ENERGY LTD Directors’ Report
3 Directors’ Report
3.1 Directors’ Meetings
Board meetings held during the year and the number of meetings attended by each Director was as follows:
Director
Charles Morgan
David Messina
Stephen Keenihan
Board of Directors
Present
8
8
8
Held
8
8
8
Board and Management Committees
In view of the current composition of the Board (which comprises a non-executive chairman and two executive
directors) and the nature and scale of the Company’s activities, the Board has considered that establishing formally
constituted committees for audit, board nominations, remuneration and general management functions would
contribute little to its effective management.
3.2 Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Whitebark
Energy Limited support the principles of sound corporate governance. The Board recognises the recommendations of
the Australian Securities Exchange Corporate Governance Council and considers that the Company is in compliance with
those guidelines which are of importance to the commercial operation of a junior listed resource Company. During the
financial year, shareholders continued to receive the benefit of an efficient and cost-effective corporate governance
policy for the Company.
3.3 Directors’ Information
Charles Morgan| Non-executive Chairman
Appointed 9 October 2015
Experience and expertise:
Mr Morgan has extensive experience in equity capital markets and has been involved with numerous projects over a 30
year period. The bulk of these were in the resources/oil & gas industries and in the technology sector. Mr Morgan is a
former director of Grand Gulf Energy Limited having resigned on 5 March 2019. Mr Morgan did not hold any other
Director positions in the last three years.
David Messina | Managing Director
Appointed 20 April 2016
Experience and expertise:
Experienced international executive with proven entrepreneurial skills and solid track record in developing and
managing a diverse range of businesses, raising finance, stakeholder engagement and delivering results to shareholders.
Mr Messina has over twenty years’ multi-sector experience in the Energy and Agricultural industries, holding senior
positions at the board and executive management level. Having lived and worked in numerous countries he has acquired
global management experience with both start-up and mature businesses.
Stephen Keenihan BSc (Hons)| Executive Director
Appointed 23 March 2011 as Managing Director; Appointed 20 August 2013 as Executive Director; Appointed 9
October 2015 as Managing Director; Appointed 20 April 2016 as Executive Director
Experience and expertise:
Mr Keenihan has more than 45 years’ experience in the energy industry, within and outside Australia. He has primarily
been involved with oil and gas activities but also a broad range of experience in other energy and electricity projects
including coal, gas, wind, biofuels and geothermal. He has previously held management roles with Apache Energy, Griffin
Energy, Novus Petroleum, WMC Petroleum and LASMO. Mr Keenihan was a former Non-Executive Director of Grand
Gulf Energy Limited having resigned 5 March 2019. Mr Keenihan has not held any other Director positions in the last
three years.
2020 ANNUAL REPORT
Page | 16
WHITEBARK ENERGY LTD Directors’ Report
Kevin Hart FCA, BComm|Company Secretary
Appointed 30 November 2016
Experience and expertise:
Mr Hart was appointed to the position of Company Secretary on 30 November 2016.
He is a Chartered Accountant and holds a Bachelor of Commerce degree from the University of Western Australia. He
has over 30 years’ experience in accounting and the management and administration of public listed entities in the
mining and exploration industry.
Mr Hart is currently a partner in an advisory firm, Endeavour Corporate, which specialises in the provision of Company
secretarial and accounting services to ASX listed entities.
4 Remuneration Report (Audited)
This Remuneration Report outlines the remuneration arrangements which were in place during the period and remain
in place as at the date of this report, for the key management personnel of Whitebark Energy Limited. For the purposes
of this report, “key management personnel” is defined as persons having authority and responsibility for planning,
directing and controlling the activities of the Company, directly or indirectly, including any Director (whether executive
or otherwise) of the Company.
4.1 Remuneration Policy
Key management personnel remuneration is based on commercial rates and the existing level of activities in the Group
at this point of time. Should the extent of those activities change, the remuneration of key management personnel
would be amended to reflect that change.
4.2 Principles of Compensation
Remuneration is referred to as compensation throughout this report.
Under overall authority of the Board, key management personnel and other executives have authority and responsibility
for planning, directing and controlling the activities of the Company and the consolidated entity. Key management
personnel include the most highly remunerated executives for the Company and the consolidated entity.
Compensation levels for key management personnel of the Company and relevant key management personnel of the
consolidated entity are competitively set to attract and retain appropriately qualified and experienced key management
personnel. The Company from time to time obtains independent advice on the appropriateness of compensation
packages of both the Company and consolidated entity given trends in comparative companies both locally and
internationally and the objectives of the Company’s compensation strategy. For the year ended 30 June 2020 no
independent advice has been obtained in relation to compensation packages.
The compensation structures explained below are designed to attract suitably qualified candidates, reward the
achievement of strategic objectives, and achieve the broader outcome of creation of value for shareholders. The
compensation structures take into account:
•
•
•
The capability and experience of the key management personnel;
The key management personnel’s ability to control the relevant assets’ performance;
The amount of incentives within each key management person’s compensation.
Compensation packages may include a mix of fixed and variable compensation and short and long-term performance-
based incentives.
In addition to their salaries, the consolidated entity has also provided non-cash benefits to its key management
personnel in the form of share-based payments.
4.2.1.1 Fixed Compensation
Fixed compensation consists of base compensation, which is calculated on a total cost basis and includes any Fringe
Benefit Tax charges related to employee benefits.
4.2.1.2 Performance-linked Compensation
The Company currently has no performance-based remuneration built into key management personnel remuneration
packages.
2020 ANNUAL REPORT
Page | 17
WHITEBARK ENERGY LTD Directors’ Report
4.2.1.3 Long-term Incentive
Incentive options issued to key management personnel and other employees of the Company. The ability to exercise
the options is conditional upon the key management personnel and other employees achieving certain vesting
conditions. These vesting conditions are set for each key management personnel and employee and are based primarily
on the length of time spent providing their services to the Company.
For the 80,000,000 related party options issued on 2 January 2020, 40,000,000 vested immediately and 40,000,000 vest
one year from date of issue. For the 100,000,000 related party options issued 3 July 2017, 41,333,333 vested
immediately, 41,333,333 vested one year from date of issue and the balance of 17,333,334 vested two years from the
date of issue.
4.2.1.4 Service Contracts
On appointment to the Board, all non-executive directors enter into a service agreement with the Company in the form
of a letter of appointment. The letter summarises the terms, including compensation, relevant to the office of the
director.
Remuneration and other terms of employment for the executive directors and other non-director key management
personnel are also formalised in service agreements. Each of these agreements provide for the provision of bonuses,
other benefits including health and superannuation, and participation in the issuance of options. Other major provisions
of the agreement relating to remuneration are set out below.
Directors and Key Personnel
Term of agreement
Base fee or salary
including
superannuation
Termination
benefit
Directors
Stephen Keenihan
Executive Director
Charles Morgan
Non-Executive Chairman
David Messina
Managing Director
On-going commencing 1 January 2017
$36,000pa
On-going commencing 9 October 2015
$75,000pa
$430,000pa
On-going commencing 1 July 2017
Termination terms:
Three-month notice period by employee which
the Company may elect to waive.
Company may terminate upon 6 months’ notice or
by making payment in lieu of whole or part of the
notice period, or a combination of both.
Nil
Nil
Nil
Non-Executive Directors
Total compensation for all non-executive Directors is to be approved by the Company in general meeting as detailed in
the Company’s Constitution.
The Directors, including Managing Director David Messina, agreed to an initial 50% reduction in remuneration with
effect from 15th April 2020 for the remainder of the financial year as part of the Company’s response to the slump in oil
prices and Covid-19 pandemic. Subsequent to the year end, the fee reduction has been reviewed to 25% reduction in
remuneration
2020 ANNUAL REPORT
Page | 18
WHITEBARK ENERGY LTD Directors’ Report
5 Directors and Executive Officers’ Remuneration (Consolidated Entity)
The following table sets out remuneration paid to Directors and key executive personnel of the Company and the consolidated entity during the reporting period:
30 June 2020
Executive directors
Stephen Keenihan*
David Messina
Non-Executive directors
Charles Morgan**
Total
Salary and
Fees
AUD
154,533
365,538
71,068
591,139
Cash Bonus
Non-cash
Bonus
Superannuation
Share based
payments
Total
Value of share-
based
payments as a
proportion of
remuneration
Performance
related
payments as a
proportion of
remuneration
-
-
-
41,436
44,000
25,000
-
-
-
41,436
44,000
25,000
109,683
219,367
109,683
438,733
264,216
695,341
43%
32%
-
12%
180,751
61%
-
1,140,308
*Consists of $36,000 directors fees and $118,533 consultancy fees
**Consists of $67,068 directors fees and $4,000 consultancy fees
Salary and Fees
AUD
Cash Bonus
Non-cash Bonus Superannuation
Share based
payments
Total
Value of share-
based
payments as a
proportion of
remuneration
Performance
related
payments as a
proportion of
remuneration
179,200
441,860
83,000
704,060
-
-
-
-
-
-
-
-
-
25,000
-
25,000
5,827
67,076
4,162
72,065
185,027
528,936
3%
12%
87,162
5%
801,125
-
-
-
30 June 2019
Executive directors
Stephen Keenihan*
David Messina
Non-Executive directors
Charles Morgan**
Total
*Consists of $36,000 directors fees and $143,200 consultancy fees
**Consists of $75,000 directors fees and $8,000 consultancy fees
2020 ANNUAL REPORT
Page | 19
WHITEBARK ENERGY LTD Directors’ Report
6 Analysis of bonuses included in remuneration
Details of the vesting profile of bonuses awarded as remuneration are detailed below:
Executive Directors
Cash Bonus
Non-cash Bonus
% vested in
year
30-Jun-20
30-Jun-19
David Messina
41,436
44,000
100%
-
Amounts included in remuneration for the financial year represent the amount that vested in the year. The bonus
awarded to Mr. Messina was in connection with his engagement as Managing Director at the discretion of the Board as
an annual performance bonus under his executive services contract. The Bonus was not related to any specified
performance criteria. The non-cash bonus was awarded as a share-based payment of 4,000,000 ordinary shares. The
valuation of the shares granted as bonus is determined at the prevailing market price of the shares at grant date, being
$0.011 per share.
7 Equity Instruments
7.1 Options Granted as Compensation
There were 80,000,000 options granted as compensation to key management personnel during the year ended 30 June
2020 (30 June 2019: Nil).
Grant Date
02-Jan-20
02-Jan-20
Vesting date
02-Jan-20
02-Jan-21
Expiry Date
02-Jan-23
02-Jan-23
Exercise price
$0.016
$0.016
Value of Share
Based
Payments
AUD
238,942
238,942
Number of
options
40,000,000
40,000,000
The fair value of options issued as remuneration is allocated to the relevant vesting period of the options.
Fair value of options granted
The fair value of unlisted options at grant date is determined using the binomial method of valuing options that takes
into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected
volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The table below summarises the variables used in determining the value of options granted as remuneration to key
management personnel:
Number of options granted
Grant date
Expiry date
Vesting period
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected life
Exercise price
Grant date share price
40,000,000
02-Jan-20
02-Jan-23
2 years
Nil
125%
0.78%
3 years
$0.016
$0.011
40,000,000
02-Jan-20
02-Jan-23
2 years
Nil
125%
0.78%
3 years
$0.016
$0.011
An expense of $438,733 has been recognised in the consolidated statement of profit or loss and other comprehensive
income in respect of options granted as remuneration to key management personnel that vested during the year.
2020 ANNUAL REPORT
Page | 20
WHITEBARK ENERGY LTD Directors’ Report
7.2 Option Holdings of Key Management Personnel (Consolidated Entity)
Details of options and rights held directly, indirectly or beneficially by key management personnel and their related
parties are as follows:
Balance at
01-Jul-19
Granted as
Remuneration
Net other
changes
Balance at
30-Jun-20
Not Exercisable
28,000,000
20,000,000
52,000,000
40,000,000
Charles Morgan
20,000,000
20,000,000
Total
100,000,000
80,000,000
Unlisted Options
Executive directors
Stephen Keenihan
David Messina
Non-Executive directors
Listed Options
Executive directors
Stephen Keenihan
David Messina
Non-Executive directors
Balance at
01-Jul-19
Granted as
Remuneration
Net other
changes
10,052,665
25,000,000
-
-
-
-
-
-
-
-
-
-
-
48,000,000
10,000,000
92,000,000
20,000,000
40,000,000
10,000,000
180,000,000
40,000,000
Balance at
30-Jun-20
Not Exercisable
10,052,665
25,000,000
31,050,147
66,102,812
-
-
-
-
Charles Morgan
31,050,147
Total
Listed options expired on 31 August 2020 unexercised.
66,102,812
7.3 Other Transactions of Key Management Personnel
Details of equity instruments (other than options and rights) held directly, indirectly or beneficially by key management
personnel and their related parties are as follows:
Shares held in Whitebark Energy Ltd
Ordinary Shares
Executive directors
Stephen Keenihan
David Messina
Non-Executive directors
Charles Morgan
Total
Balance at
01-Jul-19
Granted as
Remuneration
Net other
changes
Balance at
30-Jun-20
82,999,999
-
8,750,000
91,749,999
35,362,000
4,000,000
6,250,000
45,612,000
169,450,679
-
2,500,000
171,950,679
287,812,678
4,000,000
17,500,000
309,312,678
Stephen Keenihan shares held in the name of Mr Stephen Leslie Keenihan & Mrs Sheridan Jay Keenihan
David Messina shares held in the name of Mtani Pty Ltd
The 4,000,000 ordinary shares granted as remuneration relate to a discretionary performance bonus awarded to Mr.
Messina (refer to section 6 of the directors’ report), valued at $44,000 ($0.011 per share).
2020 ANNUAL REPORT
Page | 21
The aggregate amounts recognised during the year relating to directors’ related parties (included in table at 5) were as
follows:
WHITEBARK ENERGY LTD Directors’ Report
TB&S Consulting Pty Ltd (i)
Loan - Charles Morgan(ii)
Transactions during the year
30-Jun-19
30-Jun-20
179,200
154,533
-
100,000
179,200
254,533
Balance outstanding as at:
30-Jun-20
126,000
100,000
226,000
30-Jun-19
95,200
-
95,200
i.
ii.
TB & S Consulting Pty Ltd is a Company associated with Mr Stephen Keenihan. The charges from TB & S Consulting are for director’s fees and
consulting fees.
Mr Charles Morgan provided a short term loan of $100,000. The loan was unsecured with interest payable at 10%. The loan was repaid
subsequent to the year end following the completion of the non-renounceable entitlement offer in July 2020.
The terms and conditions of the transactions were no more favourable than those available, or which might be
reasonably available, on similar transactions to non-director related entities on an arms-length basis.
8
Company Performance, Shareholder Wealth and Director and Executive
Remuneration
The remuneration policy has been tailored to increase goal congruence between the shareholders, key management
personnel, and other employees. However, the Company continues to investigate alternative means for achieving this
goal to the benefit of all stakeholders. There is no direct relationship between the remuneration policy and Company
performance.
9
Voting and Comments Made at the Company’s 2019 Annual General Meeting
Whitebark Energy Ltd received 90% of “yes” votes on its remuneration report for the 2019 financial year. The Company
did not receive any specific feedback at the AGM on its remuneration report.
10 Use of Remuneration Consultants
During the financial year ended 30 June 2020, the Company did not engage remuneration consultants to review its
existing remuneration policies and provide recommendations on how to improve both the short-term incentives (‘STI’)
program and long-term incentives (‘LTI’) program.
End of Audited Remuneration Report
11 Principal Activities
The principal activity of the consolidated entity during the course of the financial period was the evaluation of oil and
gas exploration projects in Western Australia and production of oil and gas in Alberta, Canada.
12 Results and Dividends
The consolidated entity’s loss after tax attributable to members of the Company for the financial year ending 30 June
2020 was $4,147,411 (30 June 2019 loss: $4,075,448). No dividends have been paid or declared by the Company during
the period ended 30 June 2020.
13 Financial Position
The net assets of the consolidated entity at 30 June 2020 were $8,803,247 (30 June 2019: $3,867,856) of which
$1,115,951 (30 June 2019: $2,923,228) represents cash and cash equivalents.
During the financial year the company raised an amount of $8,839,309 (after costs) (2019: $3,986,493) from the issue
of 1,073,050,000 ordinary fully paid shares (2019: 972,735,367).
14 Earnings / (Loss) Per Share
The basic earnings/(loss) per share for continuing operations of the consolidated entity for the financial year ending 30
June 2020 was (0.16) cents per share (30 June 2019: 0.27 cents loss per share).
2020 ANNUAL REPORT
Page | 22
WHITEBARK ENERGY LTD Directors’ Report
15 Events Subsequent to Reporting Date
The Company launched a 1 for 3 non-renounceable partially underwritten entitlement offer on 30 June 2020. The offer
closed on 30 July 2020 and was fully subscribed raising a total of $3,040,216 (before costs).
On 2 September 2020, the Company announced that it has commenced a formal process to evaluate opportunities to
maximise the full potential, and value for shareholders, of its 100% owned Warro gas field in Western Australia. The
Company may consider outright sale, farm-in or an alternative transaction structure.
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has during the second half of the year
significantly depressed energy demand and put pressure on commodity prices, the Company continues to safeguard its
staff and business operations while maintaining production from the Wizard Lake oilfield at reduced levels. In this period
of heightened uncertainty, it is not practicable to estimate the full extent of the potential impact and recovery from
COVID-19 for the period after the reporting date. The Company will continue to monitor any future consequences due
to the potential uncertainty in the medium to long term.
Other than the above, no material matters or circumstances have arisen since the end of the financial year which have
significantly affected or may significantly affect the operations, results or state of affairs of the consolidated entity.
16 Likely Developments and Expected Results
There are no likely developments of which the directors are aware which could be expected to significantly affect the
results of the Group’s operations in subsequent financial years not otherwise disclosed in the Principal Activities and
Operating and Financial Review or the Significant Events after the Balance Date sections of the Directors’ Report.
The Company continues to look for acquisition opportunities as they arise.
17 Environmental Regulations
The operations of the Group are subject to environmental regulation from two government bodies.
The Australian assets are monitored under the laws of the State of Western Australia. The Group holds various
environmental licenses issued under these laws, to regulate its exploration activities in Australia. These licenses include
conditions and regulations in relation to specifying limits on discharges into the air, surface water and groundwater,
rehabilitation of areas disturbed during the course of exploration activities and the storage of hazardous substances. All
environmental performance obligations are monitored by the board of directors and subjected from time to time to
Government agency audits and site inspections. There have been no material breaches of the Group’s licenses and all
mining and exploration activities have been undertaken in compliance with the relevant environmental regulations.
The Canadian assets are subject to regulation by the Alberta Energy Regulator (AER). The AER ensures companies are
prepared to meet their obligations at the end of a project’s life including environmental obligations.
18 Directors and Executives Interests
The interests of the Directors and Executives 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 and including transactions
since 30 June 2020 are as follows:
Ordinary Shares
Unlisted Options
Executive directors
Stephen Keenihan*
David Messina**
Non-Executive directors
100,083,332
53,945,333
Charles Morgan
255,284,012
* Held in the name of Stephen Leslie Keenihan & Sheridan Jay Keenihan .
**Held in the name of Mtani Pty Ltd
48,000,000
92,000,000
40,000,000
Listed options held by Directors and Executives at 30 June 2020 shown in the table at 7.2 expired on 31st August 2020.
2020 ANNUAL REPORT
Page | 23
WHITEBARK ENERGY LTD Directors’ Report
19 Share Options
19.1 Options Granted to Officers of the Company
80,000,000 options were granted to officers of the company during the year (2019: Nil).
No options have been granted to officers of the Company since the end of the financial year to the date of this Directors’
report.
19.2 Unissued shares under options
As at the date of the report, there were 248,800,000 unlisted options on issue detailed as follows:
Grant Date
28-Apr-17
24-Jul-17
20-Jun-19
13-Nov-19
15-Nov-19
02-Jan-20
Exercisable
Expiry Date
28-Apr-17 to 1-Apr-21
24-Jul-17 to 31-May-21
20-Jun-19 to 20-Jun-21
13-Nov-20 to 13-Nov-22
15-Nov-19 to 15-Nov-22
02-Jan-20 to 02-Jan-23
1-Apr-21
31-May-21
20-Jun-21
13-Nov-22
13-Nov-22
02-Jan-23
Exercise price
$0.015
$0.015
$0.008
$0.012
$0.012
$0.016
Number of
options
11,000,000
100,000,000
10,000,000
25,000,000
22,800,000
80,000,000
Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company.
19.3 Shares Issued on Exercise of Options
During the financial year there were 375,000 shares issued as a result of the exercise of listed options. Subsequent to
the year end, 909,937 shares were issued as a result of the exercise of listed options. 601,410,430 listed options expired
on 31 August 2020.
No shares were issued on the exercise of unlisted options during or subsequent to the financial year.
20 Indemnification and Insurance of Officers and Auditors
20.1 Indemnification
An indemnity agreement has been entered into with each of the Directors and Company Secretary of the Company
named earlier in this report. Under the agreement, the Company has agreed to indemnify those officers against any
claim or for any expenses or costs which may arise as a result of work performed in their respective capacities to the
extent permitted by law. There is no monetary limit to the extent of this indemnity.
20.2 Insurance Premiums
During the financial year the Company has paid insurance premiums in respect of Directors’ and Officers’ liability and
legal expenses’ insurance contracts, for current Directors and Officers. The insurance premiums relate to costs and
expenses incurred by the relevant officers in defending proceedings, whether civil or criminal and whatever their
outcome and other liabilities that may arise from their position, with the exception of conduct involving a wilful breach
of duty or improper use of information or position to gain a personal advantage.
The premiums were paid in respect of the following Directors and Officers: Stephen Keenihan, Charles Morgan, David
Messina and Kevin Hart.
There were no legal proceedings entered into on behalf of the Company or the consolidated entity by any of the
Directors or Executive Officers of the Company.
Details of the amount of the premium paid in respect of the insurance policies are not disclosed as such disclosure is
prohibited under the terms of the contract.
The Group has not otherwise, during or since the end of the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify any current or former officer or auditor of the Group against a liability incurred as
such by an officer or auditor.
2020 ANNUAL REPORT
Page | 24
WHITEBARK ENERGY LTD Directors’ Report
21 Corporate Structure
Whitebark Energy Limited is a Company limited by shares that is incorporated and domiciled in Australia. The Company
is listed on the Australian Securities Exchange under code WBE.
22 Non-Audit Services
During the year KPMG, the Company’s auditor, performed certain other services in addition to their statutory duties.
The Board has considered the non-audit services provided during the year by the auditor and is satisfied that the
provision of those non-audit services during the year is compatible with, and did not compromise, the auditor
independence requirements of the Corporations Act 2001 for the following reasons:
All non-audit services were subject to the corporate governance procedures adopted by the Company and have been
reviewed by the Directors to ensure they do not impact upon the impartiality and objectivity of the auditor; and
The non-audit services do not undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting
in a management or decision-making capacity for the Company, acting as an advocate for the Company or jointly sharing
risks and rewards.
23 Auditor’s Independence Declaration
The Auditor’s Independence Declaration is set out on page 26 and forms part of the Directors’ report for the financial
year ended 30 June 2020.
Signed in accordance with a resolution of the Directors.
Perth, 25 September 2020
David Messina
Managing Director
2020 ANNUAL REPORT
Page | 25
WHITEBARK ENERGY LTD
Independent Audit Report
2020 ANNUAL REPORT
Page | 26
WHITEBARK ENERGY LTD
Independent Audit Report
2020 ANNUAL REPORT
Page | 27
WHITEBARK ENERGY LTD
Independent Audit Report
2020 ANNUAL REPORT
Page | 28
WHITEBARK ENERGY LTD
Independent Audit Report
2020 ANNUAL REPORT
Page | 29
WHITEBARK ENERGY LTD
Independent Audit Report
2020 ANNUAL REPORT
Page | 30
WHITEBARK ENERGY LTD
Independent Audit Report
2020 ANNUAL REPORT
Page | 31
WHITEBARK ENERGY LTD
Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30 June 2020
Revenue
Royalties
Cost of goods sold
Gross Profit/(Loss)
Other income
Finance income
Profit on disposal of assets
Change in fair value of financial assets
Expenses
Administrative expenses
Finance costs
Impairment expense
Share based payments expense
Depletion, depreciation and amortisation
Other operating expenses
Loss before income tax expense from continuing operations
Income tax benefit
Note
5
5
6
7
8
9
10
11
31
12
14
30-Jun-20
AUD
3,378,369
(502,225)
(2,418,231)
457,913
75,846
61,566
1,324,833
(350,493)
(2,811,768)
(58,329)
-
(504,960)
(1,670,396)
(671,623)
(4,147,411)
30-Jun-19
AUD
2,107,573
(230,383)
(1,856,141)
21,049
-
88,692
1,379,736
33,573
(2,271,761)
(170,986)
(1,552,431)
(81,745)
(1,041,412)
(480,163)
(4,075,448)
-
-
Loss after income tax expense for the period
(4,147,411)
(4,075,448)
Other comprehensive income/(loss), net of tax
Items reclassified through profit and loss:
Foreign currency translation
(387,094)
175,333
Total comprehensive loss for the period
(4,534,505)
(3,900,115)
Loss per share
Basic and diluted loss per share (cents per share)
15
(0.16)
(0.27)
The accompanying notes form part of these financial statements.
2020 ANNUAL REPORT
Page | 32
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Other investments
Total current assets
Non-current assets
Property, plant and equipment
Exploration and evaluation assets
Other receivables
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Borrowings
Provisions
Total current liabilities
Non-current liabilities
Provisions
Decommissioning liabilities
Total non-current liabilities
Total liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
WHITEBARK ENERGY LTD
Statement of Financial Position
as at 30 June 2020
Note
16
17
18
22
20
21
17
23
25
24
24
26
27
28
30-Jun-20
AUD
1,115,951
867,652
83,210
269,849
2,336,662
14,735,267
22,232
581,345
15,338,844
17,675,506
6,100,250
200,000
147,832
6,448,082
13,773
2,410,404
2,424,177
8,872,259
30-Jun-19
AUD
2,923,228
1,289,755
155,744
839,329
5,208,056
8,041,123
919,584
-
8,960,707
14,168,763
1,621,848
-
100,391
1,722,239
9,927
8,568,740
8,578,667
10,300,906
8,803,247
3,867,856
67,208,459
1,257,497
(59,662,709)
58,369,150
1,014,004
(55,515,298)
8,803,247
3,867,856
The accompanying notes form part of these financial statements.
2020 ANNUAL REPORT
Page | 33
WHITEBARK ENERGY LTD
Statement of Changes in Equity
for the year ended 30 June 2020
Foreign
currency
translation
reserve
AUD
Share
based
payment
reserve
AUD
Share
capital
AUD
Accumulated
losses
AUD
Total
AUD
For the year ended 30 June 2020
Balance at 1 July 2019
58,369,150
247,035
766,969
(55,515,298)
3,867,856
Loss for the period
Other comprehensive
period net of income tax
Total comprehensive
period
loss for the
loss
for the
-
-
-
(4,147,411)
(4,147,411)
(387,094)
(387,094)
(387,094)
(4,147,411)
(4,534,505)
Net proceeds from share issue, net of
cost
Share option expense
8,839,309
630,587
8,839,309
630,587
Balance at 30 June 2020
67,208,459
(140,059)
1,397,556
(59,662,709)
8,803,247
For the year ended 30 June 2019
Balance at 1 July 2018
Loss for the period
Other comprehensive income for the
period net of income tax
Total comprehensive
period
for the
loss
Foreign
currency
translation
reserve
AUD
71,702
Share based
payment
reserve
AUD
685,224
Share
capital
AUD
54,382,657
Accumulated
losses
AUD
(51,439,850)
Total
AUD
3,699,733
-
-
-
-
175,333
175,333
-
-
-
(4,075,448)
(4,075,448)
-
175,333
(4,075,448)
(3,900,115)
Net proceeds from share issue
Share option expense
3,986,493
-
-
-
-
81,745
-
-
3,986,493
81,745
Balance at 30 June 2019
58,369,150
247,035
766,969
(55,515,298)
3,867,856
The accompanying notes form part of these financial statements.
2020 ANNUAL REPORT
Page | 34
Cash flows from operating activities
Receipts from customers
Payments for royalties on production revenue
Interest received
Interest paid
Payment for production, suppliers and employees
WHITEBARK ENERGY LTD
Statement of Cash Flows
for the year ended 30 June 2020
Note
30-Jun-20
AUD
30-Jun-19
AUD
3,693,221
(543,843)
9,561
(6,034)
(5,054,034)
1,568,843
(173,445)
28,792
-
(3,800,110)
Net cash flows (used in)/provided by operating activities
29
(1,901,129)
(2,375,920)
Cash flows from investing activities
Proceeds from sale of tenements
Proceeds from sale of securities
Payment for purchase of securities
Payment for plant and equipment
Payment for 10% interest in Wizard Lake
Payment for tenements
Payment for development
Payments for exploration assets
-
235,124
(1,626)
(6,878)
(1,278,365)
(258,845)
(7,739,623)
(29,245)
2,194,038
-
-
(53,218)
-
-
(1,644,705)
(256,028)
Net cash flows used in investing activities
(9,079,458)
240,087
Cash flows from financing activities
Proceeds from share placement
Proceeds from loans
8,920,935
200,000
3,906,493
-
Net cash flows from financing activities
9,120,935
3,906,493
Net increase/(decrease) in cash and cash equivalents
(1,859,652)
1,770,660
Cash at the beginning of the financial period
Effect of movement in exchange rates on cash held
2,923,228
52,375
1,090,415
62,153
Cash and cash equivalents at 30 June 2020
16
1,115,951
2,923,228
The accompanying notes form part of these financial statements.
2020 ANNUAL REPORT
Page | 35
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
1 Reporting entity
Whitebark Energy Limited (the ‘Company’) is domiciled and incorporated in Australia. The address of the Company’s
registered office is Level 2, 6 Thelma Street, West Perth WA 6005. The consolidated financial report of the consolidated
entity for the period ended 30 June 2020 comprises the Company and its subsidiaries. The consolidated entity is involved
in oil and gas exploration in Western Australia and oil and gas exploration and production in Alberta, Canada.
The financial report was authorised for issue by the directors on 25 September 2020.
2 Basis of preparation
(a) Statement of Compliance
The financial report is a general purpose financial report which has been prepared in accordance with Australian
Accounting Standards (‘AASBs’) (including Australian Accounting Interpretations), other authoritative pronouncements
of the Australian Accounting Standards Board (‘AASB’) and the Corporations Act 2001. Australian Accounting Standards
set out accounting policies that the AASB has concluded would result in a financial report containing relevant and
reliable information about transactions, events and conditions to which they apply.
Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with the
International Financial Reporting Standards (IFRS).
Whitebark Energy Limited is a for-profit entity for the purpose of preparing the financial statements.
(b) Going concern
The financial report has been prepared on a going concern basis, which contemplates the continuity of normal business
activities and the realisation of assets and settlement of liabilities in the ordinary course of business.
The Consolidated Entity incurred a loss after tax of $4,147,411 for the year ended 30 June 2020 (2019: loss $4,075,448),
including a net gain on disposal of assets of $1,324,833 (2019: $1,379,736). The net cash outflows from operations and
investing activities were $1,901,129 and $9,079,458, respectively. As at 30 June 2020 the Consolidated Entity’s current
liabilities exceeded current assets by $4,111,420 (30 June 2019: surplus of $3,485,817). As at 30 June 2020, the
Consolidated Entity’s cash balance was $1,115,951 and the creditor balance was $6,100,250 (of which approximately
85% was aged 90 days or longer). The accumulation of creditor balances was primarily related to the capital costs
expended on the development of the Wizard Lake pipeline, facilities and the Rex-2 and Rex-3 drilling program, which
were completed in December 2019. As part of a prior agreement with PLX to increase the Consolidated Entity’s interest
in the Wizard Lake operation, the Consolidated Entity was required to fund PLX’s share of the pipeline, initial facilities
and drilling program cost of Rex-2 and Rex-3 during the year, contributing to the accumulation of creditor balances and
an increased outflow of cash.
The Company undertook a successful capital raising of $3,040,216 (before costs) in July 2020 and as at 31 August 2020
had a cash balance of $2,452,634 and approximate creditor balances of $5,200,000. Whilst the capital cost expenditure
has not continued substantially beyond the completion of the Rex-2 and Rex-3 drilling program in December 2019, the
Consolidated Entity continues to operate with a net working capital deficit, which has been exacerbated by the COVID-
19 pandemic and the associated impacts on the global oil and gas market, negatively affecting oil and gas prices with
the Company actively reducing oil and gas production as a result.
Subsequent to the reporting date the Consolidated Entity has communicated with a number of its significant creditors
(amounting to approximately $2,401,641) regarding extending payment terms beyond their contracted payment dates,
which the company is forecasting to repay through proceeds from Wizard Lake operations. The Directors’ view is that
whilst no formally binding deeds are in place with these creditors, correspondence with them suggests that their
cooperation is forthcoming.
The Consolidated Entity has prepared a cash flow forecast for the next twelve months from the date of signing the
financial report which demonstrates that the Consolidated Entity will have sufficient cash to continue as a going concern,
with the following key assumptions:
• The profitable and cash flow positive operation of its interest in the Wizard Lake operation. The cash flow
forecast assumes the continued optimisation of Wizard Lake oil and gas operations without any expansion or
substantial capital cost. Critical to the forecast cash flows is the Consolidated Entity’s ability to achieve
2020 ANNUAL REPORT
Page | 36
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
forecast levels of oil and gas production based on the production decline curve at current forecast market
prices and discounts, and forecast gross profit margins;
• The continued cooperation of all overdue creditors, including those noted above; and
• No further material deterioration occurs in the global oil and gas market, nor the price adjustments the
Consolidated Entity receives for its sales.
Should the Consolidated Entity not achieve its cashflow forecasts as planned, they would be dependent on successful
equity and/or debt fund raisings over the next 12 months.
The Directors have a reasonable expectation that the Wizard Lake operation will achieve its forecast positive cash flows.
Should operations not perform as expected, or further deterioration in the global oil and gas market materialise, or
creditor deferment of payments over an extended period not be achieved as forecast, the Directors are confident that
the Consolidated Entity will be able to secure sufficient funding through equity and/or debt to continue as a going
concern based on demonstrated past successes in raising equity.
For these reasons, the Directors have reasonable grounds to believe that the Consolidated Entity will be able to pay its
debts as and when they become due and payable and the Directors consider that the going concern basis of preparation
to be appropriate for these financial statements. Should the Wizard Lake operation not generate cash flow as forecast
or existing creditors with extended payment terms demand payment ahead of forecast, and/or the Directors are
unsuccessful in raising equity or debt funding as required, there is a material uncertainty as to the ability of the
Consolidated Entity to continue as a going concern and to realise its assets and extinguish its liabilities in the ordinary
course of business and at the amounts set out in the financial report.
(c) Basis of measurement
The financial report is prepared on the historical costs basis except for the following assets and liabilities that are stated
at their fair value: financial instruments classified at fair value through profit and loss (FVTPL).
(d) Functional and presentation currency
These consolidated financial statements are presented in Australian dollars, which is the functional currency of the
Company. The functional currency of the Company’s United States of American subsidiary is USD and CAD for the
Canadian subsidiary.
The functional currency of each of the Group’s entities is measured using the currency of the primary economic
environment in which that entity operates.
(e) Critical accounting estimates and judgements
The preparation of a financial report in conformity with Australian Accounting Standards requires management to make
judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and
liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of
making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates. These accounting policies have been consistently applied by each entity
in the consolidated group.
The Company’s accounting policy for the recognition of rehabilitation provisions requires significant estimates including
the magnitude of possible works for removal or treatment of waste materials and the extent of work required and the
associated costs of rehabilitation work. These uncertainties may result in future actual expenditure, different from the
amounts currently provided.
The provision recognised for each production well is periodically reviewed and updated based on the facts and
circumstances available at the time. Changes to the estimated future costs for operating sites are recognised in the
balance sheet by adjusting the rehabilitation asset and provision.
The 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 if the revision affects only that period or in the period of the
revision and future periods if the revision affects both current and future periods. In particular, information about
significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most
significant effect on the amount recognised in the financial statements are described in the following notes:
Note 11 and 20 – Impairment expense (see note 3(k)) and depletion and depreciation (see note 3(o))
2020 ANNUAL REPORT
Page | 37
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
Note 24 – Provisions (see note 3(r))
Note 31 – Share-based payment (see note 3(q)(iii))
Note 21 – Exploration and evaluation expenditure (see note 3(d))
(f) New and revised standards that are effective for these financial statements
A number of new and revised standards were effective for the annual period beginning on or after 1 July 2019.
AASB 16 Leases:
The Consolidated Entity has adopted AASB 16 Leases with effect from 1 July 2019. The standard replaces AASB 117
'Leases' and for lessees eliminates the classifications of operating leases and finance leases. Except for short-term leases
and leases of low-value assets, right-of-use assets and corresponding lease liabilities are recognised in the statement of
financial position. Straight-line operating lease expense recognition is replaced with a depreciation charge for the right-
of-use assets (included in operating costs) and an interest expense on the recognised lease liabilities (included in finance
costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when
compared to lease expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation and
Amortisation) results improve as the operating expense is now replaced by interest expense and depreciation in profit
or loss. For classification within the statement of cash flows, the interest portion is disclosed in operating activities and
the principal portion of the lease payments is separately disclosed in financing activities. For lessor accounting, the
standard does not substantially change how a lessor accounts for leases.
During the reporting period, the Consolidated Entity had short term operating leases in place and has elected not to
recognise a right-of-use asset and corresponding lease liability as the lease term for these leases is less than 12 months.
The Consolidated Entity’s accounting policy for leases is disclosed in Note 3 (y).
The Consolidated Entity has adopted AASB 16 Leases from 1 July 2019, but has not restated comparatives for the
reporting periods prior to adoption, as permitted under the specific transitional provisions in the standard applying the
Modified Retrospective Approach. The Consolidated Entity’s retained earnings and net assets were unaffected by the
transition at 1 July 2019.
3 Summary of accounting policies
(a) Basis of consolidation
The Group financial statements consolidate those of the Parent Company and all of its subsidiaries as of 30 June 2020.
The Parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary
and has the ability to affect those returns through its power over the subsidiary.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains
and losses on transactions between Group companies. Where unrealised losses on intra-group asset sales are reversed
on consolidation, the underlying asset is also tested for impairment from a group perspective. Amounts reported in the
financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting
policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised
from the effective date of acquisition, or up to the effective date of disposal, as applicable.
(b) Business combination
The Group applies the acquisition method in accounting for business combinations in accordance with AASB 3. The
consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date
fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair
value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as
incurred.
The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of
whether they have been previously recognised in the acquiree’s financial statements prior to the acquisition. Assets
acquired and liabilities assumed are generally measured at their acquisition-date fair values.
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum
of (a) fair value of consideration transferred, (b) the recognised amount of any non-controlling interest in the acquiree,
and (c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of
2020 ANNUAL REPORT
Page | 38
identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount
(i.e. gain on a bargain purchase) is recognised in profit or loss immediately.
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
(c) Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to Australian
dollars at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are
recognised in profit and loss. Non-monetary assets and liabilities that are measured in terms of historical cost in a
foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and
liabilities denominated in foreign currencies that are stated at fair value are translated to Australian dollars at foreign
exchange rates ruling at the dates the fair value was determined.
(ii) Financial statements of foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation,
are translated to Australian dollars at foreign exchange rates ruling at the balance sheet date. The revenues and
expenses of foreign operations are translated to Australian dollars at rates approximating to the foreign exchange rates
ruling at the dates of the transactions. Foreign exchange differences arising on retranslation are recognised in other
comprehensive income in the foreign currency translation reserve of equity.
(d) Exploration and evaluation expenditure
Exploration and evaluation costs, including the costs of acquiring licences and the costs of acquiring the rights to explore,
are capitalised as exploration and evaluation assets on an area of interest basis.
Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either:
•
•
the expenditures are expected to be recouped through successful development and exploitation of the area of
interest; or
activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable
assessment of the existence or otherwise 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 (i) sufficient data exists to determine technical
feasibility and commercial viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the
recoverable amount (see impairment of non-financial assets note 3(k)). For the purposes of impairment testing,
exploration and evaluation assets are allocated to cash-generating units to which the exploration activity relates. The
cash generating unit shall not be larger than the area of interest.
Once the technical feasibility and commercial viability of the extraction of petroleum resources in an area of interest
are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment
and then reclassified from exploration and evaluation expenditure to property plant and equipment assets.
(e) Determination of recoverability of asset carrying values
The recoverability of development and production asset carrying values are assessed at a cash-generating unit (“CGU”)
level. Determination of what constitutes a CGU is subject to management judgements. The asset composition of a CGU
can directly impact the recoverability of the assets included therein. The key estimates used in the determination of
cash flows from oil and natural gas reserves include the following:
• Reserves – Assumptions that are valid at the time of reserve estimation may change significantly when new
information becomes available. Changes in forward price estimates, production costs or recovery rates may change
the economic status of reserves and may ultimately result in reserves being restated.
• Oil and natural gas prices – Forward price estimates are used in the cash flow model. Commodity prices can
fluctuate for a variety of reasons including supply and demand fundamentals, inventory levels, exchange rates,
weather, and economic and geopolitical factors.
• Discount rate – The discount rate used to calculate the net present value of cash flows is based on estimates of an
approximate industry peer group weighted average cost of capital. Changes in the general economic environment
could result in significant changes to this estimate.
2020 ANNUAL REPORT
Page | 39
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
(f)
Reserve estimates
Proved plus probable reserves are defined as the “best estimate” of quantities of oil, natural gas and related substances
estimated to be commercially recoverable from known accumulations, from a given date forward based on drilling,
geological, geophysical and engineering data, the use of established technology and specified economic conditions. It
is equally likely that the actual remaining quantities recovered will be greater than or less than the sum of the estimated
proved plus probable reserves. The estimates are made using all available geological and reservoir data as well as
historical production data. Estimates are reviewed as appropriate. Revisions occur as a result of changes in prices,
costs, fiscal regimes and reservoir performance or changes in the Company’s plans with respect to future development
or operating practices.
(g) Restoration, rehabilitation and environmental costs and decommissioning obligations
Restoration, rehabilitation and environmental costs necessitated by exploration and evaluation activities are accrued at
the time of those activities and treated as exploration and evaluation expenditure.
Restoration, rehabilitation and environmental obligations recognised include the costs of reclamation and subsequent
monitoring of the environment.
Costs are estimated on the basis of future assessed costs, current legal requirements and current technology, which are
discounted to their present value. The present value of the costs is included as part of the cost of the exploration and
evaluation asset or the property plant and equipment asset. Estimates are reassessed at least annually. Changes in
estimates are dealt with prospectively, with any amounts that would have been written off or provided against under
accounting policy for exploration and evaluation immediately written off.
Amounts recorded for decommissioning obligations and the related accretion expense requires the use of estimates
with respect to the amount and timing of decommissioning expenditures. Actual costs and cash outflows can differ
from estimates because of changes in laws and regulations, public expectations, market conditions, discovery and
analysis of site conditions and changes in technology. Other provisions are recognized in the period when it becomes
probable that there will be future cash outflow.
(h) Development expenditure
Development expenditure represents the accumulated exploration, evaluation, land and development expenditure
incurred by or on behalf of the Group in relation to areas of interest in which mining of hydrocarbon resource has
commenced.
When further development expenditure is incurred in respect of an asset after commencement of production, such
expenditure is carried forward as part of the asset only when substantial future economic benefits are thereby
established, otherwise such expenditure is classified as part of the cost of production.
Amortisation of costs is provided on the unit-of-production method with separate calculations being made for each
hydrocarbon resource. The unit-of-production basis results in an amortisation charge proportional to the depletion of
the estimated recoverable reserves. In some circumstances, where conversion of resources into reserves is expected,
some elements of resources may be included. Development and land expenditure still to be incurred in relation to the
current reserves are included in the amortisation calculation. Where the life of the assets are shorter than the reserves
life their costs are amortised based on the useful life of the assets.
The estimated recoverable reserves and life of the development and the remaining useful life of each class of asset are
reassessed at least annually. Where there is a change in the reserves/resources amortisation rates are correspondingly
adjusted.
(i) Trade and other receivables
Other receivables are recorded at amounts due less any allowance for doubtful debts.
(j)
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, short term bills and call deposits. Cash equivalents include deposits
and other highly liquid investments with original maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts that are repayable
on demand and form an integral part of the consolidated entity’s cash management are included as a component of
cash and cash equivalents for the purpose of the statement of cash flow.
2020 ANNUAL REPORT
Page | 40
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
(k) Impairment of non-financial assets
The carrying amounts of the consolidated entity’s non-financial assets, other than deferred tax assets, are reviewed at each
balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s
recoverable amount is estimated.
An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its
recoverable amount. Impairment losses are recognised in the profit and loss.
Impairment losses recognised in respect of cash-generating units are allocated to reduce the carrying amount of the
assets in the unit (group of units) on a pro rata basis.
Reversals of impairment
Impairment losses are reversed when there is an indication that the impairment loss may no longer exist and there has
been a change in the estimate used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
(l)
Share capital
(i) Dividends
Dividends are recognised as a liability in the period in which they are declared.
(ii) Transaction costs
Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax
benefit.
(m) Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit/(loss) attributable to equity holders of the Company,
excluding any costs of servicing equity other than ordinary shares, by weighted average number of ordinary shares
outstanding during the financial year, adjusted for the bonus elements in ordinary shares issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and
the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive
potential ordinary shares.
(n) Property, plant and equipment
Buildings, IT equipment and other equipment (comprising fittings and furniture) are initially recognised at acquisition
cost or manufacturing cost, including any costs directly attributable to bringing the assets to the location and condition
necessary for it to be capable of operating in the manner intended by the Group’s management. Buildings and IT
equipment also include leasehold property held under a finance lease (see note 36). Buildings, IT equipment and other
equipment are subsequently measured using the cost model, cost less subsequent depreciation and impairment losses.
Developed and producing assets are measured at cost less accumulated depreciation and accumulated impairment
losses. Costs incurred subsequent to the determination of technical feasibility and commercial viability and the costs
of replacing parts of property, plant and equipment are recognized as oil and natural gas interests when it is probable
that future economic benefits associated with the item will flow to the group and the cost of the item can be measured
reliably. All other costs are recognised in expenses as incurred. Such capitalised oil and gas interests generally represent
costs incurred in developing proven and/or probable reserves and bringing on or enhancing production from such
reserves. The carrying amount of any replaced or sold component is derecognised. The costs of periodic servicing of
property plant and equipment is recognised as an expense.
(o) Depletion and depreciation
The net carrying value of developed and producing assets are depleted using the unit of production method by reference
to the ratio of production in the period to the related proven developed and undeveloped reserves, taking into account
2020 ANNUAL REPORT
Page | 41
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
estimated future development costs necessary to bring those undeveloped reserves into production. Future
development costs are estimated taking into account the level of development required to produce the reserves. These
estimates are reviewed by independent reserve engineers on an annual basis.
Proven and probable reserves are estimated using independent reserve engineer reports and represent the estimated
quantities of oil, natural gas and natural gas liquids which geological, geophysical and engineering data demonstrate
with a specified degree of certainty to be recoverable in future years from known reservoirs and which are considered
commercially producible.
In determining reserves for use in the depletion and impairment calculations, a BOE conversion ratio of six thousand
cubic feet of natural gas (“Mcf”) to one barrel of oil (“bbl”) is used as an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value equivalency at the wellhead. All BOE conversions in the
reserve reports are derived by converting natural gas to oil in the ratio of six Mcf of gas to one barrel of oil.
For other assets, depreciation is recognized on a straight-line basis to write down the cost less estimated residual value
of buildings, IT equipment and other equipment. The following useful lives are applied:
•
IT equipment: 4 years
• Other equipment: 4-5 years
In the case of leasehold property, expected useful lives are determined by reference to the lesser of comparable owned
assets useful lives and the lease term.
Material residual value estimates and estimates of useful life are updated as required, but at least annually.
Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the
disposal proceeds and the carrying amount of the assets and are recognised in profit and loss.
(p) Fair value measurement
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending
on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly
(i.e. unforced) transaction between independent, knowledgeable and willing market participants at the measurement
date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used to
determine fair value. Adjustments to market values may be made having regard to the characteristics of the specific
asset or liability. The fair values of assets and liabilities that are not traded in an active market are determined using one
or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable
market data.
To the extent possible, market information is extracted from either the principal market for the asset or liability (i.e. the
market with the greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the
most advantageous market available to the entity at the end of the reporting period (i.e. the market that maximises the
receipts from the sale of the asset or minimises the payments made to transfer the liability, after taking into account
transaction costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant’s ability to use the
asset in its highest and best use or to sell it to another market participant that would use the asset in its highest and
best use
The fair value of liabilities and the entity’s own equity instruments (excluding those related to share-based payment
arrangements) may be valued, where there is no observable market price in relation to the transfer of such financial
instruments, by reference to observable market information where such instruments are held as assets. Where this
information is not available, other valuation techniques are adopted and, where significant, are detailed in the
respective note to the financial statements.
AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which categorises fair value
measurements into one of three possible levels based on the lowest level that an input that is significant to the
measurement can be categorised into as follows:
2020 ANNUAL REPORT
Page | 42
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
Level 1 – Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the
entity can access at the measurement date.
Level 2 – Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset
or liability, either directly or indirectly.
Level 3 – Measurements based on unobservable inputs for the asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more
valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market data.
If all significant inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one
or more significant inputs are not based on observable market date, the asset or liability is included in Level 3.
The Group would change the categorisation within the fair value hierarchy only in the following circumstances:
If a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3) or vice versa; or
(i)
(ii) If significant inputs that were previously unobservable (Level 3) became observable (Level 2) or vice versa.
When a change in the categorisation occurs, the Group recognises transfers between levels of the fair value hierarchy
(i.e. transfers into and out of each level of the fair value hierarchy) on the date the event or change in circumstances
occurred.
(q) Employee benefits
(i) Long term employee benefits
The Company’s liabilities for long service leave are included in both short term employee benefits and other long-term
benefits as they are not expected to be settled wholly within twelve (12) months after the end of the period in which
the employees render the related services. They are measured at the present value of the expected future payments to
be made to employees. The expected future payments incorporate anticipated future wage and salary levels,
experience of employee departures and periods of service, and are discounted at rates determined by reference to
market yields at the end of the reporting period on high quality corporate bonds that have maturity dates that
approximate the timing of the estimated future cash outflows. Any re-measurements arising from experience
adjustments and changes in assumptions are recognised in profit or loss in the periods in which the changes occur.
The Company presents employee benefit obligations as current liabilities in the statement of financial position if the
Company does not have an unconditional right to defer settlement for at least twelve (12) months after the reporting
period, irrespective of when the actual settlement is expected to take place.
(ii) Short term employee benefits
Short-term employee benefits are benefits, other than termination benefits, that are expected to be settled wholly
within twelve (12) months after the end of the period in which the employees render the related service. Examples of
such benefits include wages and salaries, non-monetary benefits and accumulating sick leave. Short-term employee
benefits are measured at the undiscounted amounts expected to be paid when the liabilities are settled.
(iii) Share-based payment transactions
The share option program allows the consolidated entity’s employees and consultants to acquire shares of the
Company. The fair value of options granted is recognised as an employee benefit or consultant expense with a
corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the
employees become unconditionally entitled to the options. The fair value of the options granted is measured using the
Binomial and Black Scholes option-pricing models, taking into account the terms and conditions upon which the options
were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest
except where forfeiture is only due to share prices not achieving the threshold for vesting.
(r) Provisions
A provision is recognised in the statement of financial position when the consolidated entity has a present, legal or
constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required
to settle the obligation. If the effect is material, provisions are 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, when appropriate, the risks
specific to the liability.
2020 ANNUAL REPORT
Page | 43
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
(s) Trade and other payables
Trade and other payables are non-interest bearing liabilities stated at cost and settled within 30 days.
(t) Revenue recognition
Revenue is recognised when the control of the goods or services is transferred to the customer. Determining the timing
of the transfer of control requires judgement. Revenue is measured at the fair value of the consideration received or
receivable, net of returns, trade allowances and duties and taxes paid.
(i) Net financial income
Net financial income comprises interest on borrowings calculated using the effective interest method, interest
receivable on funds invested and dividend income.
Interest income is recognised in the profit and loss as it accrues, using the effective interest method. Dividend income
is recognised in the profit and loss on the date the entity’s right to receive payments is established which in the case of
quoted securities is the ex-dividend date.
(ii) Sales revenue
Revenue from the sale of oil and natural gas will be recorded when control of the goods or services transfer to the
customer. The transfer of control of oil, natural gas, natural gas liquids usually occurs at a point in time and coincides
with title passing to the customer and the customer taking physical possession.
Royalty income is recognised in petroleum and natural gas revenues as it accrues in accordance with the terms of the
overriding royalty agreements.
(u) Income tax
The Company and its wholly-owned Australian resident entities are part of a tax-consolidated group. As a consequence,
all members of the tax-consolidated group are taxed as a single entity. The head entity within the tax-consolidated
group is Whitebark Energy Ltd.
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable
income tax rates enacted, or substantially enacted, as at the end of the reporting period. Included in the income tax
benefit are research and development grants provided during the year.
Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the
relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the
year as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss
when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where
amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised
from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on
accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset
is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of the reporting
period. Their measurement also reflects the manner in which management expects to recover or settle the carrying
amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures,
deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can
be controlled and it is not probable that the reversal will occur in the foreseeable future.
2020 ANNUAL REPORT
Page | 44
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets
and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate
to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities
where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability
will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered
or settled.
Amounts receivable from the Australian Tax Office in respect of research and development tax concession claims are
recognised in the income statement at the time the claim is lodged and received with the Australian Tax Office.
(v) Segment reporting
An operating segment is a component of the consolidated entity 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
consolidated entity’s other components. Based on the information used for internal reporting purposes by the chief
operating decision maker, being the executive management that makes strategic decisions, at 30 June 2019 the group’s
assets are in two reportable geographical segments being Australia and Canada.
(w) Goods and services tax
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the
amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST 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 included. The net amount of GST recoverable from, or
payable to, the ATO is included as a current asset or liability in the statement of financial position.
Cash flows are included in the statement of cash flow on a gross basis. The GST components of cash flows arising from
investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash
flows.
(x) Financial instruments
Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets
and financial liabilities are initially recognised when the Group becomes a party to the contractual provisions of the
instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially
measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or
issue. A trade receivable without a significant financing component is initially measured at the transaction price.
Financial Assets
On initial recognition, a financial asset is classified as measured at: amortised cost; FVOCI – debt investment; FVOCI –
equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Group
changes its business model for managing financial assets, in which case all affected financial assets are reclassified on
the first day of the first reporting period following the change in the business model.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at
FVTPL: – it is held within a business model whose objective is to hold assets to collect contractual cash flows; and – its
contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
– it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling
financial assets; and – its contractual terms give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present
subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL.
This includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset
2020 ANNUAL REPORT
Page | 45
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates
or significantly reduces an accounting mismatch that would otherwise arise.
Financial assets – Business model assessment:
The Group makes an assessment of the objective of the business model in which a financial asset is held at a portfolio
level because this best reflects the way the business is managed and information is provided to management. The
information considered includes:
•
•
•
•
•
the stated policies and objectives for the portfolio and the operation of those policies in practice. These include
whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest
rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash
outflows or realising cash flows through the sale of the assets;
how the performance of the portfolio is evaluated and reported to the Group’s management;
the risks that affect the performance of the business model (and the financial assets held within that business
model) and how those risks are managed;
how managers of the business are compensated – e.g. whether compensation is based on the fair value of the
assets managed or the contractual cash flows collected; and
the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and
expectations about future sales activity.
Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales
for this purpose, consistent with the Group’s continuing recognition of the asset.
Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are
measured at FVTPL.
Financial assets – Assessment whether contractual cash flows are solely payments of principal and interest.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the
contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that
could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this
assessment, the Group considers:
•
•
•
•
contingent events that would change the amount or timing of cash flows;
terms that may adjust the contractual coupon rate, including variable-rate features;
prepayment and extension features; and
terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse features).
A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment
amount substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which
may include reasonable additional compensation for early termination of the contract. Additionally, for a financial asset
acquired at a discount or premium to its contractual par amount, a feature that permits or requires prepayment at an
amount that substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which
may also include reasonable additional compensation for early termination) is treated as consistent with this criterion
if the fair value of the prepayment feature is insignificant at initial recognition.
Financial assets – Subsequent measurement and gains and losses:
Financial assets at FVTPL - These assets are subsequently measured at fair value. Net gains and losses, including any
interest or dividend income, are recognised in profit or loss.
Financial assets at amortised cost - These assets are subsequently measured at amortised cost using the effective
interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and
losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
Debt investments at FVOCI - These assets are subsequently measured at fair value. Interest income calculated using the
effective interest method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net
gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit
or loss.
2020 ANNUAL REPORT
Page | 46
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
Equity investments at FVOCI - These assets are subsequently measured at fair value. Dividends are recognised as income
in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains
and losses are recognised in OCI and are never reclassified to profit or loss.
(y) Leases
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost,
which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or
before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where
included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the
underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated
useful life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at
the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment
or adjusted for any remeasurement of lease liabilities.
The Consolidated Entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term
leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to
profit or loss as incurred.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the
present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit
in the lease or, if that rate cannot be readily determined, the Consolidated Entity’s incremental borrowing rate. Lease
payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an
index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when
the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease
payments that do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate used;
residual guarantee; lease term; certainty of a purchase option or lease term extension and termination penalties. When
a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the
carrying amount of the right-of-use asset is fully written down.
(z)
Interest in other entities
Under AASB 11 Joint Arrangements, investments in joint arrangements are classified as either joint operations or joint
ventures. The classification depends on the contractual rights and obligations of each investor, rather than the legal
structure of the joint arrangement. A joint operation is a joint arrangement in which the parties with joint control have
rights to the assets and obligations for the liabilities relating to that arrangement.
The Group recognises its direct right to the assets, liabilities, revenues and expenses of joint operations and its share of
any jointly held or incurred assets, liabilities, revenues and expenses. These have been incorporated in the financial
statements under the appropriate headings.
(aa) Adoption of new and revised accounting standards
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
2020 ANNUAL REPORT
Page | 47
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
4 Segment reporting
During the period the group operated in two business segments (two geographical areas) – exploration, development
and production of oil and gas – Australia and Canada.
The group has identified its operating segment based on the internal report that is reviewed and used by the Board of
Directors (chief operating decision maker) in assessing performance and determining the allocation of resources.
30 June 2020
Total sales revenue (net of royalties)
Financial income
Other income
Total revenue
Australia
AUD
Canada
AUD
-
61,304
75,846
137,150
2,876,144
262
-
2,876,406
Total
Segment
AUD
2,876,144
61,566
75,846
3,013,556
Unallocated
AUD
Consolidated
AUD
Segment result
Depletion, depreciation & amortisation
Loss before income tax expense
(2,774,093)
(3,285)
(2,777,378)
300,901
(1,667,111)
(1,366,210)
(2,473,192)
(1,670,396)
(4,143,588)
(3,823)
-
(3,823)
Assets
Total current assets
Total non-current assets
Total assets
Liabilities
Total current liabilities
Total non-current liabilities
Total liabilities
30 June 2019
Total sales revenue
Financial income
Total revenue
Segment result
Depletion, depreciation & amortisation
Impairment of assets
Loss before income tax expense
Assets
Total current assets
Total non-current assets
Total assets
Liabilities
Total current liabilities
Total non-current liabilities
Total liabilities
1,265,914
10,396
1,276,310
1,070,748
15,328,448
16,399,196
2,336,662
15,338,844
17,675,506
(938,414)
(1,355,230)
(2,293,644)
(5,509,668)
(1,068,947)
(6,578,615)
(6,448,082)
(2,424,177)
(8,872,259)
Australia
AUD
11,547
29,178
40,725
(612,921)
(11,693)
-
(624,614)
Canada
AUD
1,865,643
59,514
1,925,157
Total
Segment
AUD
1,877,190
88,692
1,965,882
(865,378)
(1,029,719)
(1,552,431)
(3,447,528)
(1,478,299)
(1,041,412)
(1,552,431)
(4,072,142)
3,566,680
(997,262)
2,569,418
1,641,376
9,957,969
11,599,345
5,208,056
8,960,707
14,168,763
(345,891)
(1,460,329)
(1,806,220)
(1,376,348)
(7,118,338)
(8,494,686)
(1,722,239)
(8,578,667)
(10,300,906)
-
-
-
-
-
-
-
-
-
-
2,876,144
61,566
75,846
3,013,556
(2,477,015)
(1,670,396)
(4,147,411)
2,336,662
15,338,844
17,675,506
(6,448,082)
(2,424,177)
(8,872,259)
Unallocated
AUD
Consolidated
AUD
-
-
-
(3,306)
-
-
(3,306)
-
-
-
-
-
-
1,877,190
88,692
1,965,882
(1,481,605)
(1,041,412)
(1,552,431)
(4,075,448)
5,208,056
8,960,707
14,168,763
(1,722,239)
(8,578,667)
(10,300,906)
The Canada column discloses the company’s proportionate share of all assets and liabilities held in the unincorporated PLJV.
2020 ANNUAL REPORT
Page | 48
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
5 Revenue from continuing operations
Product sales
Other sales
Total sales from production
Royalties on production
Net revenue from continuing operations
6 Cost of goods and services sold
Production expenditure (excluding depletion, depreciation,
amortisation and workover expenses)
7 Finance income
Interest income
Foreign currency gain
8 Profit/ (loss) on disposal of assets
Gain on disposal of TP/15
Gain on disposal of developed and producing land – Canada
Gain on disposal of financial assets – Triangle Energy Limited
9 Administration expenses
Director’s fees
Administration and finance support
General and administration
10 Finance costs
Interest expense
Decommissioning liabilities – accretion
11 Impairment expenses
Impairment – Canadian assets
30-Jun-20
AUD
3,207,657
170,712
3,378,369
(502,225)
2,876,144
30-Jun-19
AUD
2,096,027
11,546
2,107,573
(230,383)
1,877,190
30-Jun-20
AUD
30-Jun-19
AUD
(2,418,231)
(1,856,141)
30-Jun-20
AUD
9,562
52,004
30-Jun-19
AUD
29,491
59,201
61,566
88,692
30-Jun-20
AUD
-
1,310,322
14,511
1,324,833
30-Jun-20
AUD
(103,068)
(901,403)
(1,807,297)
(2,811,768)
30-Jun-20
AUD
(6,732)
(51,597)
(58,329)
30-Jun-19
AUD
1,289,734
90,002
-
1,379,736
30-Jun-19
AUD
(111,000)
(831,448)
(1,329,313)
(2,271,761)
30-Jun-19
AUD
(608)
(170,378)
(170,986)
30-Jun-20
AUD
30-Jun-19
AUD
-
(1,552,431)
2020 ANNUAL REPORT
Page | 49
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
In determining our impairment position of the Canadian assets for the year ended 30 June 2020 the Company evaluated
its developed and producing CGUs and its exploration and evaluation assets for indicators of impairment. The
developed and producing CGUs consist of production facilities, wells, land and associated reserves. The recoverable
amount of the CGU’s has been established by reference to an independently prepared Reserve Report (refer note 20)
as an input into the Company developed fair value model (FVLCS). Based on the assessment as detailed in note 20, there
is no impairment made on the carrying value of developed and producing assets for the year ended 30 June 2020.
The exploration and evaluation assets recoverability is dependent on the successful development and commercial
exploitation or sale of the respective areas of interest. There were no indicators for impairment for exploration and
evaluation assets in the year to 30 June 2020 and therefore not impairment has been made to the carrying value of
these assets.
In determining our impairment position of the Canadian assets for the year ended 30 June 2019 the Company evaluated
its developed and producing CGUs and its exploration and evaluation assets for indicators of impairment. The
developed and producing CGUs consist of production facilities, wells, land and associated reserves. The recoverable
amount of the CGU’s had been established by reference to an independently evaluated Reserve Report. An impairment
amount of $1,325,210 was recognised in 2019 in relation to the developed and producing assets. The exploration and
evaluation assets recoverability is dependent on the successful development and commercial exploitation or sale of the
respective areas of interest. An impairment amount of $227,221 was recognised in 2019 in relation to exploration and
evaluation assets being the capital costs associated with leases that expired or were relinquished up to 30 June 2019
where no future exploration or development was anticipated (Refer notes 20 and 21).
12 Other expenses
Project costs
Legal fees
Tax advisory services
Consultancy fees
Revision of Rehab and Abandonment provision
Workover expense
13 Auditor remuneration
Audit and review of financial statements
30-Jun-20
AUD
(176,414)
(12,325)
(20,332)
(199,345)
(34,035)
(229,172)
(671,623)
30-Jun-19
AUD
(228,774)
(21,742)
(13,450)
(83,368)
(13,963)
(118,866)
(480,163)
30-Jun-20
AUD
30-Jun-19
AUD
-
Auditors of Whitebark Energy Limited KPMG
(89,231)
(97,322)
2020 ANNUAL REPORT
Page | 50
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
14 Income tax benefit
Current income tax expense / (benefit)
Aggregate income tax expense / (benefit)
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax from continuing operations
Tax at statutory rate of 27.5%
Adjustment for tax rate difference (Canada 26.5%)
Tax effect amounts which are not deductible / (taxable) in calculating
taxable income:
Share-based payments
Sundry items
Deferred tax asset on losses/(recouped) not recognised
Deferred tax asset on temporary differences not recognised
Income tax benefit
30-Jun-20
AUD
-
-
(4,147,411)
(1,140,538)
33,993
(1,106,545)
138,864
43,094
(924,587)
1,319,609
(395,022)
-
30-Jun-19
AUD
-
-
(4,075,448)
(1,120,748)
86,188
(1,034,560)
22,480
2,365
(1,009,715)
971,097
(38,618)
-
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. It is in the opinion of management of the Company that there will be no taxable profits
generated in the near future and the deferred tax asset is not to be recognised.
Closing balance of unrecognised Deferred Tax Assets on tax losses carried forward and temporary differences:
Australian Operations:
Deferred tax assets – temporary differences
Deferred tax assets – tax losses
Deferred tax assets – capital losses
Deferred tax liabilities – temporary differences
471,608
7,171,066
3,642
71,620
548,470
7,130,527
3,642
(37,980)
Net deferred tax asset – not recognised
Overseas Operations:
Deferred tax assets – temporary differences
Deferred tax assets – tax losses
Deferred tax liabilities – temporary differences
Net deferred tax asset – not recognised
7,717,936
7,644,659
267,237
1,931,263
103,608
2,302,108
1,815,330
1,562,678
(866,433)
2,511,575
2020 ANNUAL REPORT
Page | 51
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
15 Earnings/(loss) per share
The calculation of basic loss per share at 30 June 2020 of 0.1607 cents per share (30 June 2019 basic loss: 0..2672 cents
per share) was based on the loss attributable to the ordinary shareholders of $4,147,411 (30 June 2019 loss: $4,075,448)
and a weighted average number of ordinary shares outstanding during the year ended 30 June 2020 of 2,634,610,019
(30 June 2019: 1,525,021,337 shares) being calculated as follows:
Earnings per share
Loss attributable to ordinary shareholders
Profit / (loss) for the period
Attributed to:
Members of the parent entity
Non-controlling interests
Weighted average number of ordinary shares
Opening balance
Movement during the year
Earnings / (Loss) – cents per share
Continuing operations
Discontinued operations
30-Jun-20
AUD
30-Jun-19
AUD
(4,147,411)
(4,075,448)
(4,147,411)
(4,075,448)
-
1,963,166,371
671,443,648
2,634,610,019
990,431,004
534,590,333
1,525,021,337
(0.1574)
(0.1574)
-
(0.1574)
(0.2672)
(0.2672)
-
(0.2672)
851,120,367 options (refer Note 31) are not included in calculating diluted EPS because the effect is anti-dilutive.
16 Cash and cash equivalents
Cash at bank
Term deposits
Effective interest rates were 0.8% - 2.35% and average maturity was 14days.
17 Trade and other receivables
Current
Trade and other receivables
Non-Current
Trade and other receivables
30-Jun-20
AUD
1,075,951
40,000
1,115,951
30-Jun-19
AUD
2,162,938
760,290
2,923,228
30-Jun-20
AUD
30-Jun-19
AUD
867,652
1,289,755
581,345
1,448,997
1,289,755
The net carrying value of trade receivables is considered a reasonable approximation of fair value. Other receivables
include $491,162 (current) and $581,345 (non-current) to be received from future operational receipts from the Wizard
Lake joint venture.
18 Other current assets
Prepayments
30-Jun-20
AUD
30-Jun-19
AUD
83,210
155,744
2020 ANNUAL REPORT
Page | 52
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
19 Acquisition of additional interest in Wizard Lake Oilfield
As announced on 18 December 2019, the Company entered into a Definitive Agreement for the acquisition of the Wizard
Lake assets which was structured as a staged process. Step 1 was completed on 23 December 2019 with Company’s
100% owned subsidiary, Salt Bush Energy Ltd (SBE), inceasing ownership to 60%. The Company had the right to acquire
the remaining 40% interest for C$2.8m and C$2m (Step 2 and Step 3).
Under the agreement, closing of Step 2 was subject to the Company arranging appropriate finance in 2020 and
shareholder approval for the issue of shares, with a close date of 31 March 2020. Shareholders approved the issue of
shares in February 2020 but due to the rapid decline in global economic conditions, the impact of the decline in oil
prices and financing not achieved and not viable under then market condition by close date, the Company terminated
the Definitive Agreement and did not proceed with Step 2 and Step 3.
Under step 1 the Company acquired an additional 10% interest in the Wizard Lake Oilfield from PLX for a cash payment
of C$1,200,000 taking the Company’s interest to 60% and the Company to assign its 20-30% ownership in the Point
Loma Joint Venture assets.
The estimated fair value of the asset acquired at exchange rates applicable on the effective date is as follows:
Fair value of the additional 10% in Wizard Lake
Consideration paid by Whitebark Energy Limited
Fair Value C$
Fair Value AUD
2,339,297
2,339,297
2,599,218
2,599,218
The Australian dollar amount of the 10% interest is shown above at the prevailing exchange rate on the effective
acquisition date and differs from the balance shown at note 20 of $2,492,061 which is translated at the prevailing
exchange rate at 30 June 2020.
The above amounts of identifiable assets acquired have been determined from information currently available to
management of the Company and incorporates estimates, which may be subject to adjustment.
Consideration for the acquisition of Stage 1, at exchange rates applicable on the effective date (1 December 2019)
comprised of:
Details
Cash
Assets – Fair value of Point Loma Joint Venture assets
Fair Value C$
1,200,000
1,139,297
2,339,297
Fair Value AUD
1,333,333
1,265,885
2,599,218
The fair value of the Point Loma Joint Venture assets was calculated using a weighted average cost of capital of 10% to
determine the present value of the asset, net of any costs for rehabilitation.
2020 ANNUAL REPORT
Page | 53
20 Property, plant and equipment
Plant and equipment at cost
Accumulated depletion and depreciation
Accumulated impairment
Reconciliation of carrying amounts
Developed and Producing
Opening balance
Acquisition of additional 10% Wizard Lake interest 1
Revaluation of Point Loma Joint Venture assets 2
Increase in asset retirement obligation asset
Additions
Transfer from exploration and evaluation assets
Foreign exchange
Disposals 2
Impairment
Depletion
Furniture and fixtures
Opening balance
Depreciation expense
Office equipment
Opening balance
Additions
Depreciation expense
Software assets
Opening balance
Depreciation expense
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
30-Jun-20
AUD
20,946,967
(1,326,685)
(4,885,015)
14,735,267
8,034,267
2,492,061
1,213,697
991,104
10,831,319
258,845
(171,178)
(7,325,028)
-
(1,601,099)
14,723,988
1,295
(260)
1,035
5,562
7,708
(3,026)
10,244
8,176
(8,176)
-
30-Jun-19
AUD
14,867,799
(1,941,661)
(4,885,015)
8,041,123
8,135,466
-
-
652,267
1,365,573
517,143
(258,708)
(1,331,785)
(1,045,689)
8,034,267
1,618
(323)
1,295
7,060
1,681
(3,180)
5,561
8,176
(8,176)
-
14,735,267
8,041,123
1 During the period the Company increased its interest in the Wizard Lake Oilfield asset from 50% to 60%. The amount
of $2,492,061 represents the fair value of the extra 10% interest acquired translated at the prevailing exchange rate on
30 June 2020. Refer note 19.
2 Part consideration for the additional 10% interest in the Wizard Lake Oilfield was an asset swap where the Company’s
interest in the Point Loma Joint Venture assets were transferred to Point Loma Resources Limited. Prior to disposal,
these assets were revalued to fair value. In accordance with accounting standards, consideration in the form of the
Company’s assets should be measured at the fair value of the assets given up. The profit recognised on disposal of these
assets was $1,310,322.
Impairment test of property, plant and equipment
The recoverable amount of property, plant and equipment is determined as the higher of fair value less costs of disposal
using a discounted cash flow method or value-in-use and is assessed at the CGU level. Key input estimates used in the
determination of cash flows from oil and gas reserves include estimates regarding recoverable reserves, forward price
estimates of crude oil and natural gas prices, royalties forward price estimates of production costs and required capital
expenditures and discount rate.
2020 ANNUAL REPORT
Page | 54
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
In determining the fair value less costs of disposal, the company used a discount rate of 12% for the Wizard Lake CGU’s.
The following table outlines the forecast benchmark commodity prices used in the impairment calculation of property,
plant and equipment at 30 June 2020. Forecast benchmark commodity price assumptions tend to be stable because
short-term increases or decreases in prices are not considered indicative of long-term price levels, but are nonetheless
subject to change.
WTI Crude Oil ($US/bbl)
Edmonton Light Crude Oil ($Cdn/bbl)
Western Canadian Select ($Cdn/bbl)
Natural Gas Alberta AECO Spot ($Cdn/MMBtu)
2020 (6 months)
30.00
29.72
20.12
1.78
2021
41.18
47.20
34.77
2.22
2022
49.88
59.66
45.91
2.42
2023
55.87
67.00
52.70
2.54
2024
57.98
71.33
55.26
2.61
The impairment test of property, plant and equipment at 30 June 2020 concluded that the estimated recoverable
amount was higher than the carrying amount of the Wizard Lake CGU and therefore no impairment required on these
assets.
The fair value less costs of disposal values used to determine the recoverable amounts of the property, plant and
equipment assets are categorized as Level 3 on the fair value hierarchy as the key assumptions are not based on
observable market data.
The impairment tests completed during the year ended 30 June 2020 are sensitive to changes in any of the key
judgements such as a revision in reserves, a change in forecast benchmark commodity prices, changes in expected
royalties, change in operating costs, which could increase or decrease the recoverable amount of the assets and result
in additional impairment expense or recovery of the impairment expense.
Had the discount rate used have changed by 1%, or there was a price decrease of $1.00/bbl and $0.10/Mcf in the price
deck for WTI and AECO respectively, the impairment assessment would not have changed.
21 Exploration and evaluation expenditure
Exploration and evaluation assets
Movement in exploration and evaluation assets
Opening balance
Additions – Canada
Additions – TP15
Impairment of exploration and evaluation assets
Disposals 1
Transfer to property, plant and equipment
Foreign currency movement
30-Jun-20
AUD
22,232
919,584
288,091
-
-
(907,003)
(258,845)
(19,595)
22,232
30-Jun-19
AUD
919,584
2,556,696
83,966
18,325
(237,233)
(1,534,111)
(34,229)
66,170
919,584
1 The disposal of exploration and evaluation expenditure related to the assets transferred to Point Loma Resources
Limited to close Step 1 of the Asset Exchange Agreement as part consideration for the acquisition of 10% of Wizard
Lake. Refer to note 19.
The ultimate recoverability of the value of exploration and evaluation assets is dependent on successful development
and commercial exploitation, or alternatively, sale, of the underlying areas of interest.
The Group undertakes at each reporting date, a review for indicators of impairment of these assets. Should an indicator
of impairment exist, there is significant estimation and judgments in determining the inputs and assumptions used in
determining the recoverable amounts.
The key areas of estimation and judgement that are considered in this review included:
• Recent drilling results and reserves/resource estimates;
•
•
•
Environmental issues that may impact the underlying tenements;
The estimated market value of assets at the review date;
Independent valuations of underlying assets that may be available;
2020 ANNUAL REPORT
Page | 55
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
•
•
Fundamental economic factors such as prices, exchange rates and current and anticipated operating cost in the
industry; and
The group’s market capitalisation compared to its net assets.
Information used in the review process is rigorously tested to externally available information as appropriate.
Changes in these estimates and assumptions as new information about the presence or recoverability of a reserve
becomes available, may impact the assessment of the recoverable amount of exploration and evaluation assets. If, after
having capitalised the expenditure a judgement is made that recovery of the expenditure is unlikely, an impairment loss
is recorded in the profit or loss in accordance with accounting policy 3(d).
22 Other investments
Available-for-sale financial assets:
Listed equity securities
23 Trade and other payables
Current:
Trade creditors
Other payables
30-Jun-20
AUD
269,849
269,849
30-Jun-20
AUD
5,873,527
226,723
30-Jun-19
AUD
839,329
839,329
30-Jun-19
AUD
1,278,461
343,387
6,100,250
1,621,848
All amounts are short-term. The carrying value of trade payables and other payables are considered to be a reasonable
approximation of fair value.
24 Provisions
Current:
Annual leave
Long service leave
Non-Current:
Long service leave
25 Borrowings
Current:
Loans
30-Jun-20
AUD
30-Jun-19
AUD
94,376
53,456
147,832
52,895
47,496
100,391
13,773
9,927
161,605
110,318
30-Jun-20
AUD
200,000
30-Jun-19
AUD
-
The above loans are unsecured and repayable on or before 31 December 2020 with interest payable at 10%
p.a. Following the completion of the non-renounceable entitlement offer after the year end, these loans were
repaid in full.
2020 ANNUAL REPORT
Page | 56
26 Decommissioning liabilities
Balance at the beginning of the period
Liabilities acquired – Canada 1
Change in inflation rate of liabilities
Movement in Warro Project liability
Change in discount rate of liabilities
Revision of estimates
Disposal of assets 2
Accretion expense
Expenditure
Foreign currency movement
Balance at the end of the period
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
30-Jun-20
AUD
8,568,740
849,086
(14,946)
34,035
65,344
91,621
(7,077,877)
51,987
(2,875)
(154,711)
2,410,404
30-Jun-19
AUD
7,558,403
27,501
128,690
13,963
336,185
278,236
(259,632)
170,378
(83,234)
398,251
8,568,740
1 Liabilities acquired in Canada comprise of the decommissioning liability on the additional 10% interest in Wizard Lake,
together with decommissioning liabilities on two new wells drilled during the reporting period.
2 During the period the Company increased its interest in the Wizard Lake Oilfield asset from 50% to 60%. Part
consideration for the additional 10% interest was an asset exchange where the Company’s interest in the Point Loma
Joint Venture assets were transferred to Point Loma Resources Limited. The amount of $7,077,877 represents the
Company’s decommissioning obligations in relation to the Point Loma Joint Venture assets disposed.
The Company’s decommissioning obligations result from its ownership interest in oil and natural gas well sites and
facilities. The total decommissioning obligation is estimated based on the estimated costs to reclaim and abandon these
wells and facilities and the estimated timing of costs to be incurred in future years. The Company has estimated the net
present value of the decommissioning obligations to be $2,410,404 as at 30 June 2020 (2019: $8,568,740) based on an
undiscounted total future liability of $2,150,440 (2019: $10,417,809). Subsequent to the initial measurement, the
obligation is adjusted at the end of each period to reflect the passage of time and changes in the estimated future cash
flows underlying the obligation. The increase in the provision due to the passage of time is recognized as a finance cost
whereas increases/decreases due to changes in the estimated future cash flows are capitalized where there is a future
economic benefit associated with the asset. Actual costs incurred upon settlement of the decommissioning liabilities
are charged against the provision to the extent the provision had been established. The weighted average time in which
these payments are expected to be made is approximately 36 years. The discount factor, being the risk free interest
rate of 1.09% for the Canadian obligation (2019: 1.6%) and 0.4% for the Australian obligation (2019: 3%) and the inflation
rate is 2% for Canadian and 0.3% for Australian obligations (2019: 2.1% for Canada and 1.9% for Australia) per annum.
27 Issued capital
Ordinary Shares
30-Jun-20
AUD
30-Jun-19
AUD
67,208,459
58,369,150
The Company does not have authorised capital or par value in respect of its issued shares. The holders of ordinary
shares are entitled to one vote per share at meetings of the Company.
2020 ANNUAL REPORT
Page | 57
Reconciliation of movement in issued capital
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
Issued capital – Shares
30 June 2020
30 June 2019
30 June 2020
30 June 2019
Number
Number
AUD
AUD
Share capital
Issued ordinary shares
Movements in issued capital
Issued capital
3,040,216,371
1,963,166,371
67,208,459
58,369,150
Opening balance
1,963,166,371
990,431,004
59,900,550
55,619,488
Issue of shares for cash
1,072,675,000
972,715,367
9,563,000
4,280,862
Shares issued on exercise of Options
375,000
20,000
Share based payments
4,000,000
Less share issue costs
Opening balance
Current period costs
Closing balance share issue costs
-
-
-
-
-
-
-
3,750
44,000
200
-
69,511,300
59,900,550
(1,531,400)
(1,236,831)
(771,441)
(294,569)
(2,302,841)
(1,531,400)
28 Reserves
3,040,216,371
1,963,166,371
67,208,459
58,369,150
Share based payment reserve
Foreign currency translation reserve
Movement in reserves
Share based payment reserve
Opening balance 1 July 2019
Fair value of options expense during the period
Advisor options issued during the period
Closing balance 30 June 2020
Foreign currency translation reserve
Opening balance 1 July 2019
Exchange gains/(losses) for the period
Closing balance 30 June 2020
30-Jun-20
30-Jun-19
AUD
AUD
1,397,556
(140,059)
766,969
247,035
1,257,497
1,014,004
766,969
504,960
125,627
685,224
81,745
-
1,397,556
766,969
247,035
(387,094)
(140,059)
71,702
175,333
247,035
2020 ANNUAL REPORT
Page | 58
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
Share based payments reserve
The reserve represents the value of options issued under the compensation arrangement that the consolidated entity
is required to include in the consolidated financial statements.
This reserve will be reversed against share capital when the underlying options are exercised by the employee or
consultant or expire. No gain or loss is recognised in the profit or loss on the purchase, sale, issue or cancellation of the
consolidated entity’s own equity instruments.
Foreign currency translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial
statements of foreign operations where their functional currency is different to the presentation currency of the
reporting entity.
29 Reconciliation of cash flow from operating activities
Cash flows used in operating activities
Profit/(loss) for the period
Adjustments for:
Depreciation, depletion and amortisation expense
Accretion expense
Profit on disposal of assets
Gain on fair value of financial assets
Impairment expense
Revision of provision for rehabilitation and abandonment -
Warro
Foreign exchange differences
Equity settled share-based payment expenses
Operating profit before changes in working capital and
provisions
(Increase)/Decrease in other receivables and prepayments
Increase in trade and other payables
Net cash used in operating activities
30-Jun-20
AUD
30-Jun-19
AUD
(4,147,411)
(4,075,448)
1,670,396
51,987
(1,324,833)
350,493
-
34,035
(128,369)
548,960
1,041,412
170,378
(1,379,736)
(33,573)
1,552,431
13,963
(59,201)
81,745
(2,944,742)
(2,688,029)
241,718
801,895
(435,365)
747,474
(1,901,129)
(2,375,920)
2020 ANNUAL REPORT
Page | 59
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
30 Related Party Transactions
Detailed disclosures relating to Directors and Key Management Personnel are set out in the Directors’ Report under the
section entitled Remuneration Report.
The totals of remunerations paid to Key Management Personnel of the Company and the consolidated entity during the
year are as follows:
Short-term employee benefits
Post-employment benefits
Share based payments
30-Jun-20
AUD
(632,575)
(25,000)
(438,733)
(1,096,308)
30-Jun-19
AUD
(702,059)
(25,000)
(72,065)
(799,124)
The aggregate amounts recognised during the year relating to directors’ related parties and other related parties were
as follows:
TB & S Consulting Pty Ltd (i)
Loan – Charles Morgan (ii)
Transactions value year end
30-Jun-20
154,533
100,000
30-Jun-19
179,200
-
Balance outstanding at
30-Jun-20
126,000
100,000
30-Jun-19
70,933
-
i.
ii.
TB & S Consulting Pty Ltd is a Company associated with Mr Stephen Keenihan. The charges from TB & S Consulting were for directors’ fees and
consultancy fees.
Loan – Mr Charles Morgan provided a short term loan during the year, the loan is unsecured with interest at 10% and repayable on or before
31 December 2020. Following the completion of the non-renounceable entitlement offer subsequent to the year end, the amount
outstanding was repaid in full.
2020 ANNUAL REPORT
Page | 60
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
31 Share –based payments and options issued
Options are granted and approved by the directors and shareholders.
Options are granted to directors, employees, consultants and others. Entitlements to the options are exercisable as
soon as they have vested and performance conditions have been met. There are no cash settlement alternatives.
Options granted carry no dividend or voting rights.
The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of any movements in
share options issued during the year:
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
No. 2020
723,695,367
127,800,000
-
(375,000)
-
851,120,367
WAEP 2020
0.012
0.015
0.01
0.012
No. 2019
112,675,000
612,715,367
-
(20,000)
(1,675,000)
723,695,367
WAEP 2019
0.016
0.01
-
-
-
0.012
The number of options vested and exercisable as at 30 June 2020 was 763,320,367 (2019: 706,362,033).
There were 127,800,000 unlisted options granted during the year ended 30 June 2020; 25,000,000 were issued under
the employee incentive plan as part of remuneration; 80,000,000 issued to directors as part of remuneration and
22,800,000 were issued in consideration of corporate advisory and lead manager services by an advisor to the company.
The exercise price, expiry dates and vesting periods are detailed in the table below.
The outstanding balance of unlisted options over ordinary shares as at 30 June 2020 represented by:
Unlisted Options
Grant Date
28-Apr-17
24-Jul-17
20-Jun-19
13-Nov-193
13-Nov-193
15-Nov-192
02-Jan-201
02-Jan-201
Vesting Date
28-Apr-17
24-Jul-17
20-Jun-19
13-Nov-20
13-Nov-21
15-Nov-19
02-Jan-20
02-Jan-21
Expiry Date
1-Apr-21
31-May-21
20-Jun-21
13-Nov-22
13-Nov-22
13-Nov-22
02-Jan-23
02-Jan-23
Exercise price
$0.015
$0.015
$0.008
$0.012
$0.012
$0.012
$0.016
$0.016
Value of Share
Based
Payments
AUD
70,191
633,019
25,688
66,551
66,551
99,938
294,371
294,371
Number of
options
11,000,000
100,000,000
10,000,000
12,500,000
12,500,000
22,800,000
40,000,000
40,000,000
1. Options were granted as remuneration to key management personnel as detailed in the remuneration report.
2. Options granted during the year to advisors
3. Options granted during the year to employees under employee incentive plan
The outstanding balance of unlisted options over ordinary shares as at 30 June 2019 represented by:
Grant Date
28-Apr-17
24-Jul-17
20-Jun-19
Vesting Date
28-Apr-17
24-Jul-17
20-Jun-19
Expiry Date
1-Apr-21
31-May-21
20-Jun-21
Exercise price
$0.0015
$0.0015
$0.008
Value of Share
Based
Payments
AUD
70,191
633,019
25,688
Number of
options
11,000,000
100,000,000
10,000,000
The weighted average remaining contractual life for the unlisted share options outstanding as at 30 June 2020 is 10
months. The exercise price for options outstanding at the end of the year is 80,000,000 at A$0.016, 47,800,000 at
A$0.012, 111,000,000 at A$0.015 and 10,000,000 at A$0.008 (2019: 111,000,000 at A$0.015 and 10,000,000 at
A$0.008).
There were 127,800,000 unlisted options granted during the year ended 30 June 2020.
No unlisted options were exercised or cancelled during the period.
2020 ANNUAL REPORT
Page | 61
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
Subsequent to the end of the reporting period, there were no movements in unlisted options.
Fair value of options granted
The fair value of unlisted options at grant date is determined using the binomial method of valuing options that takes
into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected
volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The table below summarises the variables used in determining the value of options
Number of options granted
Grant date
Expiry date
Vesting period
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected life
Exercise price
Grant date share price
25,000,000
13-Nov-19
13-Nov -22
2 years
Nil
125%
0.78%
3 years
$0.012
$0.008
22,800,000
15- Nov-19
15-Nov-21
1 year
Nil
125%
0.78%
2 years
$0.012
$0.008
40,000,000
02-Jan-20
02-Jan-23
2 years
Nil
125%
0.78%
3 years
$0.016
$0.011
40,000,000
02-Jan-20
02-Jan-23
2 years
Nil
125%
0.78%
3 years
$0.016
$0.011
An expense of $504,960 has been recognised in the consolidated statement of profit or loss and other comprehensive
income in respect of options vesting during the year (2019: $81,745). An amount of $125,627, in relation to advisor
options, has been recognised as a capital raising cost in the statement of financial position at 30 June 2020.
Listed Options
Options on issue at balance date
Options issued at start of the year
30-Jun-20
30-Jun-19
602,320,367
602,695,367
602,695,367
-
Options issued pursuant to non-renounceable entitlement offer
-
602,715,367
Options exercised during the year
(375,000)
(20,000)
602,320,367
602,695,367
Listed Options are exercisable at 1 cent each and expiring on 31 August 2020. Subsequent to the year end, 909,937
listed options were exercised. The remaining 601,410,430 listed options lapsed unexercised on 31 August 2020.
2020 ANNUAL REPORT
Page | 62
32 Parent Company disclosures
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
Current Assets
Non-Current Assets
Total Assets
Current Liabilities
Non-Current Liabilities
Total Liabilities
Net Assets
Contributed Equity
Share based payments reserve
Accumulated losses
Total Equity
Results of Parent Entity for the year
Profit / (loss) for the year
Other Comprehensive income
Total Comprehensive income
30-Jun-20
1,136,219
8,243,120
9,379,339
30-Jun-19
3,447,917
630,774
4,078,691
576,094
210,835
-
-
576,094
210,835
8,803,245
3,867,856
67,208,459
58,369,150
1,397,555
766,969
(59,802,769)
(55,268,264)
8,803,245
3,867,855
(4,534,505)
(3,900,115)
-
-
(4,534,505)
(3,900,115)
The Company has no contingent liabilities or commitments and no guarantees due to subsidiaries at 30 June 2020
33 Financial risk management and financial instruments
Financial Risk Management
Overview
The consolidated entity has exposure to the following risks from its use of financial instruments:
•
credit risk;
•
commodity risk;
•
currency risk;
•
liquidity risk;
• market risk; and
•
climate change risk.
The consolidated entity’s management of financial risk is aimed at ensuring net cash flows are sufficient to:
• Meet all its financial commitments; and
• Maintain the capacity to fund the consolidated entity’s operating activities.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.
Management monitors and manages the financial risks relating to the operations of the consolidated entity through
regular reviews of the risks.
Market, liquidity and credit risk (including foreign exchange, commodity price and interest rate risk) arise in the normal
course of business. These risks are managed under Board approved directives which underpin treasury practices and
processes.
2020 ANNUAL REPORT
Page | 63
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
This note presents information about the Company’s and consolidated entity’s exposure to each of the above risks, their
objectives, policies and processes for measuring and managing risk, and the management of capital.
Credit risk
Credit risk is the risk of financial loss to the consolidated entity if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the consolidated entity’s receivables from customers
and deposits with banks.
Trade and other receivables
As at 30 June 2020 there were no significant concentrations of credit risk on the statement of financial position.
$491,162 of current trade receivables and $581,345 of non-current trade receivables at 30 June 2020 relate to amounts
to be received from future operational receipts from the Wizard Lake joint venture.
The consolidated entity monitors receivable balances on an ongoing basis and as a result believes its exposure to bad
debts is not significant.
Impairment losses
None of the Company’s other receivables are past due (2019: nil). As at 30 June 2020 there is no allowance for
impairment in respect to other receivables for the consolidated entity (2019: nil).
Exposure to credit risk
The carrying amount of the consolidated entity’s financial assets represents the maximum credit exposure. The
consolidated entity’s maximum exposure to credit risk at the reporting date was:
Financial Instruments
Trade and other receivables
Cash and cash equivalents
30-Jun-20
1,448,997
1,115,951
2,564,948
30-Jun-19
1,289,755
2,923,228
4,212,983
The consolidated entity limits credit risk on its cash deposits by only transaction with high credit-rated financial
institutions.
Current assets
Other
investments
(including
derivatives)
Trade and
other
receivables
-
269,849
1,448,997
-
-
-
30 June 2020
Financial assets measured
at fair value
Assets held for sale
Financial assets not
measured at fair value
Trade and other
receivables
Cash and cash equivalents
Cash and cash
equivalents
Total
Level 1
-
-
269,849
268,849
1,448,997
-
1,115,951
1,115,951
1,448,997
268,849
1,115,951
2,834,797
2020 ANNUAL REPORT
Page | 64
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
Current assets
Other
investments
(including
derivatives)
Trade and
other
receivables
-
839,329
1,289,755
-
-
-
Cash and cash
equivalents
Total
Level 1
839,329
839,329
-
-
1,289,755
2,923,228
2,923,228
-
-
1,289,755
839,329
2,923,228
5,052,312
839,329
30 June 2019
Financial assets measured
at fair value
Assets held for sale
Financial assets not
measured at fair value
Trade and other
receivables
Cash and cash equivalents
Commodity Risk
The consolidated entity is exposed to commodity price risk through its revenue from the sale of hydrocarbons – gas,
crude oil, condensate and LPG – which are priced against world benchmark commodity prices.
The following table details the impact on revenue a 10% and 20% increase and decrease in oil price would have on
current year revenue, using the entities average oil price over this year. The below table shows the increase in profit
and equity given and increase in oil price, there would be a negative impact to both profit and equity to the same degree
is average oil price decreased by the same percentage.
Profit or loss: 10%
Profit or loss: 20%
Currency risk
Oil Price Impact
2020
287,614
575,229
2019
167,083
334,166
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to foreign
currency risk through foreign exchange rate fluctuations.
The consolidated entity is exposed to United States dollars (USD) and Canadian dollars (CAD) in its Canadian operations.
The following table details the Consolidated Entity’s sensitivity to a 10% and 20% increase and decrease in the USD and
CAD against the Australian dollar. The sensitivity analysis is based on 30 June 2020 year end foreign currency
denominated monetary items and adjusts their translation at year end for a 10% and 20% strengthening in foreign
currency rates. For a 10% and 20% decrease in foreign currency rates, there would be a comparable impact on the
profit and equity, and the balances below would be negative.
Profit or loss: 10% CAD
Profit or loss: 10% USD
Profit or loss: 20% CAD
Profit or loss: 20% USD
2020
21,782
4,115
25,897
43,563
8,230
51,793
2019
28,244
182,139
210,383
56,489
364,278
420,767
2020 ANNUAL REPORT
Page | 65
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
Liquidity risk
Liquidity risk is the risk that the consolidated entity will not be able to meet its financial obligations as they fall due. The
consolidated entity’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to the consolidated entity’s reputation.
The consolidated entity manages liquidity risks by maintaining adequate reserves by continuously monitoring forecast
and actual cash flows.
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding
the impact of netting agreements:
30- Jun-2020
Financial liabilities
measured at fair
value
Financial liabilities
not measured at fair
value
Trade and other
payables
Other loans
30- Jun-2019
Financial liabilities
measured at fair
value
Financial liabilities
not measured at fair
value
Trade and other
payables
Market Risk
Carrying
amount
Contractual
cash flows
6 months or
less
6 to 12
months
1-2 years
2-5 years
-
-
-
6,100,250
6,100,250
6,100,250
200,000
200,000
200,000
Carrying
amount
Contractual
cash flows
6 months or
less
6 to 12
months
-
-
-
-
1,621,848
1,621,848
-
-
-
-
-
-
-
-
1-2 years
2-5 years
-
-
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will
affect the consolidated entity’s income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
Interest rate risk
At the reporting date the interest rate profile of the Company’s and the consolidated entity’s interest-bearing financial
instruments was:
Variable rate Instruments
Financial assets
30-Jun-20
30-Jun-19
1,115,951
2,923,228
2020 ANNUAL REPORT
Page | 66
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit
or 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 2019.
Profit or loss
Equity
100bp increase
AUD
100bp decrease
AUD
100bp increase
AUD
100bp decrease
AUD
11,160
11,160
29,232
29,232
(11,160)
(11,160)
(29,232)
(29,232)
11,160
11,160
29,232
29,232
(11,160)
(11,160)
(29,232)
(29,232)
30-Jun-2020
Variable rate instruments
Cash flow sensitivity
30-Jun-2019
Variable rate instruments
Cash flow sensitivity
Climate change risk
Key climate-related risks and opportunities relevant to the Company’s operations include:
•
•
•
The transition to a low carbon economy through technological improvements and innovations that support a lower
carbon energy efficient system with decreased demand and changing community sentiment for fossil fuels,
increased uncertainty time and cost associated with regulatory bodies granting approvals or licences on fossil fuel
intensive projects. Transition to lower carbon economy also gives rise to opportunity for the Company’s gas
production assets. Natural gas is viewed as a key element to supporting a sustainable energy transition.
Physical changes caused by climate change include increased severe weather events and chronic changes to
weather patterns which may impact demand for energy and the Company’s production assets and production
capability. These events could have a financial impact on the Company through increased operating costs,
maintenance costs, revenue generation and sustainability of its production assets.
Policy changes by governments which may result in increasing regulation and costs which could have a material
impact on the Company’s operations.
Due to the nature of the uncertainties relating to the above risks, the financial impact has not been quantified for the
financial year.
The Company is committed to continually improve climate change related disclosures as processes and understanding
of climate change related matters improve alongside the Company's activities and operations.
Fair value of financial instruments
The carrying amounts of financial assets and liabilities as disclosed in the statement of financial position equate to their
estimated net fair value.
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into
three levels of a fair value hierarchy.
The three levels are defined based on the observability of significant inputs to the measurement, as follows:
•
•
•
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (derived from prices); and
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Current receivables, current payables and cash & cash equivalents are not measured at fair value. Due to their short-
term nature, the carrying amount of current receivables, current payables and cash and cash equivalents is assumed to
approximate their fair value.
The table below summarises financial assets and liabilities at fair value at each level of measurement
2020 ANNUAL REPORT
Page | 67
At 30 June 2020
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
Level 1
AUD
Level 2
AUD
Level 3
AUD
Total
AUD
Assets held for sale – listed equity securities
269,849
-
-
269,849
Capital Management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and
to sustain future development of the business. The Board of Directors monitors the return on capital, which the
consolidated entity defines as net operating income divided by total shareholders’ equity.
Equity attributable to shareholders of the Company
Equity
Total Assets
Equity ration
30-Jun-20
30-Jun-19
67,208,459
58,369,150
67,208,459
58,369,150
17,675,506
14,168,763
26%
24%
There were no changes in the consolidated entity’s approach to capital management during the year. As at 30 June
2020, neither the Company nor its subsidiaries are subject to externally imposed capital requirements.
34 Consolidated entities
(a) Parent entity
The parent entity of the group is Whitebark Energy Limited, incorporated in Australia.
Registered office: Level 2, 6 Thelma Street, West Perth WA 6005
(b) Subsidiaries
The consolidated financial statements incorporate assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described under 1(a)
Country of
incorporation
30-Jun-20
Equity Holding
%
30-Jun-19
Equity Holding
%
Name of Entity
Subsidiaries of Whitebark Energy Ltd
Tejon Energy Pty Ltd
Australia
Tejon Energy Inc (100% subsidiary of Tejon Energy Pty Ltd)
USA
Latent Petroleum Pty Ltd
Calor Energy Pty Ltd
Kubla Oil Pty Ltd
Salt Bush Energy Ltd
Iron Bark Energy Ltd
Australia
Australia
Australia
Canada
Canada
100
100
100
100
100
100
100
100
100
100
100
100
100
-
2020 ANNUAL REPORT
Page | 68
WHITEBARK ENERGY LTD
Notes to the Financial Statements
for the year ended 30 June 2020
35 Contingent Liabilities
There are no contingent liabilities at 30 June 2020 (2019: nil).
36 Commitments
The Group leases a photocopier/printer under operating leases and is lessee to the premises situated at Level 2, 6
Thelma Street West Perth. The future minimum lease payments are as follows;
30-Jun-20
30- Jun-19
Minimum lease payments due
Within 1 year
1 to 5 years
After 5 years
8,840
15,775
7,020
9,360
-
-
Total
15,860
25,135
Lease expense during the period amounted to $17,620 (2019: $74,542) representing the minimum lease payments.
The rental agreement for the photocopier/printer is for a term of 60 months and will expire in June 2024.
The Group as part of the Canadian joint venture has a share of joint venture commitments. The commitments are for
mineral lease payments. It should be noted that these commitments may be farmed out or relinquished.
30-Jun-20
30-Jun-19
37 Subsequent events
Within 1 year
Share of Joint Venture commitments
After 5 years
1 to 5 years
12,690
53,039
8,952
267,634
-
29,488
Total
21,642
350,161
The Company launched a 1 for 3 non-renounceable partially underwritten entitlement offer on 30 June 2020. The offer
closed on 30 July 2020 and was fully subscribed raising a total of $3,040,216 (before costs).
On 2 September 2020, the Company announced that it has commenced a formal process to evaluate opportunities to
maximise the full potential, and value for shareholders, of its 100% owned Warro gas field in Western Australia. The
Company may consider outright sale, farm-in or an alternative transaction structure.
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has during the second half of the year
significantly depressed energy demand and put pressure on commodity prices, the Company continues to safeguard its
staff and business operations while maintaining production from the Wizard Lake oilfield at reduced levels. In this period
of heightened uncertainty, it is not practicable to estimate the full extent of the potential impact and recovery from
COVID-19 for the period after the reporting date. The Company will continue to monitor any future consequences due
to the potential uncertainty in the medium to long term.
Other than the above, no material matters or circumstances have arisen since the end of the financial year which have
significantly affected or may significantly affect the operations, results or state of affairs of the consolidated entity.
2020 ANNUAL REPORT
Page | 69
WHITEBARK ENERGY LTD
Directors’ Declaration
for the year ended 30 June 2019
1.
In the opinion of the Directors of Whitebark Energy Ltd (“the Company”):
a. The financial statements and notes set out on pages 32 to 69, and the remuneration disclosures that are
contained in the Remuneration report in the Directors’ report, are in accordance with the Corporations Act
2001, including:
(i) Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2020 and of its
performance for the financial year ended on that date; and
(ii) Complying with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements;
b.
c.
the financial report also complies with International Financial Reporting standards as disclosed in note 2(a);
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 Section 295A of the Corporations Act 2001 by the chief
executive officer and chief financial officer for the financial year ended 30 June 2020.
Dated at Perth this 25 September 2020.
Signed in accordance with a resolution of the Directors.
On behalf of the Directors
David Messina
Managing Director
2020 ANNUAL REPORT
Page | 70
EXCHANGE LISTING
Whitebark Energy Ltd shares are listed on the Australian Securities Exchange. The Company’s ASX code is WBE.
SUBSTANTIAL SHAREHOLDERS (HOLDING NOT LESS THAN 5%)
WHITEBARK ENERGY LTD
Shareholder Information
As at 17 September 2020
Rank
1.
2.
Name
MR KIM AARON MULLER
MR CHARLES WAITE MORGAN
CLASS OF SHARES AND VOTING RIGHTS
Units
267,000,000
255,284,012
% of Units
6.57%
6.28%
At 17 September 2020 there were 2,664 holders of 4,063,125,551 ordinary fully paid shares of the Company. The voting
rights attaching to the ordinary shares are in accordance with the Company’s Constitution being that:
a. each Shareholder entitled to vote may vote in person or by proxy, attorney or Representative;
b. on a show of hands, every person present who is a Shareholder or a proxy, attorney or Representative of a shareholder
has one vote; and
c. on a poll, every person present who is a shareholder or a proxy, attorney or Representative of a shareholder shall, in
respect of each fully paid Share held by him, or in respect of which he is appointed a proxy, attorney or Representative,
have one vote for the Share, but in respect of partly paid Shares, shall, have such number of votes as bears the
proportion which the paid amount (not credited) is of the total amounts paid and payable (excluding amounts
credited).
DISTRIBUTION OF SHAREHOLDERS
Spread of Holdings
No of holders
Ordinary Shares
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 9,999,999,999
Total
149
58
84
971
1,402
2,664
20,895
186,653
699,595
48,636,032
4,013,582,376
4,063,125,551
The number of shareholders holding less than a marketable parcel is 1,463.
UNLISTED OPTIONS
Securities
Number of
Securities on issue
Number of
Holders
Unlisted Options exercise price of $0.015 expiring 01/04/2021
Unlisted Options exercise price of $0.015 expiring 31/05/2021
Unlisted Options exercise price of $0.008 expiring 20/06/2021
Unlisted Options exercise price of $0.012 expiring 13/11/2022
Unlisted Options exercise price of $0.012 expiring 15/11/2022
Unlisted Options exercise price of $0.016 expiring 02/01/2023
11,000,000
100,000,000
10,000,000
25,000,000
22,800,000
80,000,000
4
3
1
3
1
3
ESCROWED SECURITIES
The Company does not have any securities on issue that are subject to escrow restrictions.
2020 ANNUAL REPORT
Page | 71
WHITEBARK ENERGY LTD
Shareholder Information
LISTING OF 20 LARGEST SHAREHOLDERS AS AT 17 SEPTEMBER 2020
Rank Name
MR KIM AARON MULLER
CHARLES WAITE MORGAN
COMMUNICATIONS POWER INCORPORATED (AUST) PTY LTD
ORABANT PTY LTD
SKYE EQUITY PTY LTD
MR CRAIG GRAEME CHAPMAN
MR STEPHEN LESLIE KEENIHAN + MRS SHERIDAN JAY KEENIHAN
4F INVESTMENTS PTY LTD
J & B SMITH SUPERANNUATION PTY LTD
BART SUPERANNUATION PTY LIMITED <4F INVESTMENTS SUPERFUND A/C>
MR MARK EDWIN ROBERTS
SACHA INVESTMENTS PTY LTD
VILLEMARETTE NOMINEES PTY LTD
MTANI PTY LTD
CHESSER NOMINEES PTY LTD
LEEJAMES NOMINEES PTY LTD
MR JIAN REN
CUTTING EDGE (WA) PTY LTD
SLADE TECHNOLOGIES PTY LTD
ALBA CAPITAL PTY LTD
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
TOTAL
Units
267,000,000
255,284,012
143,000,000
129,000,000
125,958,557
108,666,669
%
Units
6.57
6.28
3.52
3.17
3.10
2.67
100,083,332
2.46
87,500,000
65,000,000
54,148,339
51,200,000
50,549,487
46,856,085
43,945,333
41,926,237
40,000,000
39,333,333
36,451,538
35,547,233
34,305,953
1,755,756,108
2.15
1.60
1.33
1.26
1.24
1.15
1.08
1.03
0.98
0.97
0.90
0.87
0.84
43.17
2020 ANNUAL REPORT
Page | 72
WHITEBARK ENERGY LTD
Permits
PERMITS
Block
24-048-28W4
20-048-27W4
(03-04) 21-048-27W4
(01-02) (5-16) 21-048-27W4
22-048-27W4
17-048-27W4
W 16-048-27W4
8-048-27W4
9-048-27W4
5-048-27W4
N 4-048-27W4
32-047-27W4
Total
WIZARD LAKE, ALBERTA CANADA
Gross Acres
640
640
80
560
640
640
320
640
640
640
320
640
WI
100%
60%
60%
100%
60%
100%
60%
60%
100%
100%
60%
100%
Net acres
640
384
48
560
384
640
192
384
640
640
192
640
6400
83.5%
5344
Project
Warro JV – RL7
Net Acres
54,360
WI
100%
Location
Western Australia
AUSTRALIAN LAND INTERESTS
2020 ANNUAL REPORT
Page | 73
Continue reading text version or see original annual report in PDF
format above