7f4badbcf5c8d382c1cf2c.pdf
WHL Energy Limited
ABN 25 113 326 524
ANNUAL REPORT
FOR THE FINANCIAL YEAR ENDED 30 June 2015
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Page
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Corporate Information
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3
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Directors‟ Report
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4
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Auditor‟s Independence Declaration
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25
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Statement of Comprehensive Income
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26
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Statement of Financial Position
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27
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Statement of Cash Flows
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28
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Statement of Changes in Equity
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29
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Notes to the Financial Statements
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30
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Directors‟ Declaration
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72
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Independent Auditor‟s Report
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73
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Corporate Governance Statement
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75
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ASX Additional Information
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88
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ABN: 25 113 326 524
Directors:
Mr Stuart Brown - Chairman
Mr Graham Durtanovich - Non-Executive Director Mr Faldi Ismail - Non-Executive Director
Company Secretary:
Mr Steven Wood
Registered office:
Level 2, 22 Delhi Street, West Perth WA 6005
Principal place of business:
Level 2, 22 Delhi Street, West Perth WA 6005
Phone: +61 8 6500 0271
Fax: +61 8 9321 5212
Email: [email protected] Web: www.whlenergy.com
Postal Address:
PO Box 1042, West Perth WA 6872
Share registry:
Link Market Services
Level 4, Central Park, 152 St Georges Terrace, Perth WA 6000 Phone: 1300 554 474
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Solicitors:
Corrs Chambers Westgarth
Level 5, Woodside Plaza, Perth WA 6000
Phone: +61 8 9460 1666 Fax: +61 8 9321 8555
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DLA Piper Australia
Level 31, Central Park, 152-158 St Georges Terrace, Perth WA 6000
Phone: +61 8 9211 3600 Fax: +61 8 9211 3690
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Bankers:
Westpac
Level 6, 109 St Georges Terrace, Perth WA 6000
Auditors:
HLB Mann Judd
Level 4, 130 Stirling Street, Perth WA 6000
Securities Exchange Listing:
WHL Energy Ltd shares are listed on the Australian Securities Exchange (ASX: WHN)
Your Directors submit the annual financial report of the Consolidated Entity consisting of WHL Energy Limited and its controlled entities ('the Group') for the financial year ended 30 June 2015. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows:
Directors
The names of directors who held office during or since the end of the financial year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.
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Mr Stuart Brown, B.Sc Honours (Geology) Independent Chairman (Appointed 2 June 2015)
Independent Non-Executive Director (Appointed 6 December 2013)
Mr Brown has a proven and successful track record in the oil and gas industry with extensive experience at technical, managerial, executive and Board levels. Mr Brown has been involved in all areas of the upstream oil and gas industry with demonstrated success in strategic, business, technical and human resource management.
Mr Brown is currently the Managing Director of International Oil and Gas Strategies Pty Limited. Previously he held the position of Vice President Strategic Planning with Woodside Energy Limited and his career spans more than 30 years of international experience with both Woodside and Shell International.
In the 3 years immediately before the end of the financial year, Mr Brown also served as a Non-Executive Director of the following listed companies:
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Empire Oil and Gas N.L (ASX: EGO) (Appointed 21 January 2014)
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Galicia Energy Corporation Limited (ASX: GAL) (31 January 2014 - 18 February 2015)
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Cue Energy Resources Limited (ASX: CUE) (Appointed 24 July 2014)
Interests in WHL Energy Limited:
678,125 Ordinary shares
129,375 Options
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Mr Faldi Ismail, B.Bus
Independent Non-Executive Director (Appointed 2 June 2015)
Independent Non-Executive Chairman (Appointed 24 September 2013, Resigned 2 June 2015)
Mr Ismail is an experienced corporate advisor who specialises in the restructure and recapitalisation of a wide range of ASX-listed companies. He has many years of investment banking experience and has advised on numerous cross border transactions including capital raisings, structuring of acquisitions and joint ventures overseas.
Mr Ismail is also the founder and operator of Otsana Capital, a boutique advisory firm specialising in mergers & acquisitions, capital raisings and Initial Public Offerings.
In the 3 years immediately before the end of the financial year, Mr Ismail also served as a director of the following listed companies:
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Advanced Engine Components (ASX:ACE) (Appointed 5 June 2015)
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Galicia Energy Corporation (ASX:GAL) (Appointed 15 May 2015)
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BGD Corporation Limited (ASX:BGD) (Appointed 10 May 2014)
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Style Limited (ASX: SYP) (Appointed 3 May 2013 - Resigned 10 August 2015)
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Emergent Resources Limited (ASX: EMG) (Appointed 31 May 2014)
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Kalimantan Gold Corporation Limited (TSX.V: KLG) (Appointed 12 September 2009)
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Coventry Resources Inc (ASX: CYY) (Appointed 28 May 2009 - Resigned 8 January 2013)
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Ascot Resources Limited (ASX: AZQ) (Appointed 24 September 2010 - Resigned 27 March 2013)
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Minbos Resources Limited (ASX: MNB) (Appointed 17 December 2009 - Resigned 1 January 2012)
Interests in WHL Energy Limited:
350,000 Ordinary shares
20,000 Options
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Mr Graham Durtanovich, BEc, GradDipAppFin, MBA Independent Non-Executive Director (Appointed 2 June 2015)
Mr Durtanovich brings extensive Financial Management experience from large private enterprise. He previously held the role of Chief Financial Officer within that company and was responsible for the financial administration, strategic planning, risk analysis and Corporate Governance.
In the 3 years immediately before the end of the financial year, Mr Durtanovich held no other directorship in listed companies.
Interests in WHL Energy Limited: NIL
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Mr David Rowbottam, B.Bus
Managing Director (Appointed 1 October 2013) (Resigned 31 May 2015)
Finance Director (Appointed 6 June 2011)
Mr Rowbottam was previously the founding Managing Director of Exoma Energy Limited; an ASX listed US focused oil and gas exploration company from July 2007 through to March 2010. In this role Mr Rowbottam led the management team and was responsible for overseeing the company‟s ASX listing and its management of offshore assets. Prior to that Mr Rowbottam worked as a senior financial executive with international and Australian experience as Chief Financial Officer, Financial Controller, and in Senior Management positions with businesses including Antares Energy Limited, the Alinta Group and BHP.
As Manager of Corporate Investments at Alinta Group he worked closely with the General Manager for Business Development and was involved in the financial assessment of project investments, construction accounting, cost management services, corporate financial planning and modelling. In his subsequent role as Financial Controller he was involved in the operation of five power stations and had a further two Cogeneration Power Stations under construction.
In the 3 years immediately before the end of the financial year, Mr Rowbottam held no other directorship in listed companies:
Interests in WHL Energy Limited at date of resignation:
1,355,000 Ordinary shares
66,666 Options
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Mr Jeffrey Schrull, M.S. Geophysics
Independent Non-Executive Director (Appointed 15 April 2014) (Resigned 18 August 2014)
Mr Schrull is a Senior Executive with over 25 years‟ experience as an oil and gas professional in the upstream exploration and production business. In recent years, Mr Schrull held the position of Managing Director at Rialto Energy Limited (now Azonto Petroleum Limited), focussed on West Africa, following his successful role as General Manager Exploration at Addax Petroleum. Mr Schrull spent over 18 years working internationally with Chevron in E&P roles of increasing responsibility.
His experience, together with his strong technical and commercial background in both exploration and developmental projects, provided WHL Energy with further strength for future growth in terms of executive technical and commercial resources at a Board level.
In the 3 years immediately before the end of the financial year, Mr Schrull served as the Managing Director of the following listed company:
Interests in WHL Energy Limited (at date of resignation): NIL
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Company Secretary
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Mr Ian Hobson, B. Bus, FCA, ACIS, MAICD
Company Secretary (Appointed 23 August 2013) (Resigned 26 August 2015)
Mr Hobson is a Fellow Chartered Accountant in Australia and Chartered Secretary. Mr Hobson is a sole practioner with over 25 years‟ experience in the profession. Mr Hobson provides company secretarial, finance and administration services to listed public companies and a number of private/ benevolent organisations.
Interests in WHL Energy Limited: NIL
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Mr Steven Wood, B. Comm, CA
Company Secretary (Appointed 26 August 2015)
Mr Wood is a Chartered Accountant and specialises in corporate advisory, company secretarial and financial management services. Mr Wood has previously been involved in various private and seed capital raisings as well as successful ASX listings, whilst also providing company secretarial and financial management services to both ASX and unlisted public and private companies.
Interests in WHL Energy Limited: NIL
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Directors' interests in the shares options and performance rights of the Company and related bodies corporate
The following relevant interests in the shares of the Company or a related body corporate were held by the Directors as at the date of this report.
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Directors
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Shares
No.
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Listed options
No.
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Unlisted options and performance rights
No.
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Mr Brown
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678,125
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129,375
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-
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Mr Durtanovich
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-
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-
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-
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Mr Ismail
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350,000
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20,000
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-
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Ordinary shares issued as a result of options and performance rights issued
Details of ordinary shares issued by the Company during or since the end of the financial year as a result of the exercise of options and performance rights are:
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Interest exercised
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Shares
No.
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Paid per share
$
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Performance rights and options*
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2,040,000
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0.0000
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*Post consolidation
Unlisted Options and performance rights that have lapsed
Details of options and performance rights of the Company that have lapsed during or since the end of the financial year are:
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Lapsed
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Shares
No.
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Exercise price
$
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WHNAI (Series 5)*
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340,000
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0.0000
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WHNAS*
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1,640,000
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0.0000
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*Post consolidation
Remuneration of key management personnel
Information about the remuneration of key management personnel is set out in the Remuneration Report of this Directors‟ Report, on pages 12 to 23. The Remuneration Report details the remuneration arrangements for key management personnel ('KMP') who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company, directly or indirectly, including any director (whether executive or otherwise) of the Company.
Unissued ordinary shares under option by KMP
At the date of this report there are no unissued ordinary shares of the Company under option held by the Directors and other members of KMP.
Share under options
At the date of this report unissued ordinary shares of the Company under option are:
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Expiry date
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Exercise price
$
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Shares under option No.
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Listed options
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30/11/2016*
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0.18
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3,638,715
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30/06/2018
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0.002
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37,858,095
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41,496,810
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Unlisted options
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03/12/2017
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0.014
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19,300,000
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31/07/2018
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0.004
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350,000,000
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369,300,000
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*Post consolidation
Dividends
The Directors do not recommend the payment of a dividend in respect of the year ended 30 June 2015. No dividends have been paid or declared during the financial year.
Principal activities
The principal activities of the entities within the Group during the year were oil and gas exploration. WHL Energy is an Australian based exploration company with projects both within the Republic of Seychelles and Australia. The Group‟s asset portfolio is comprised of conventional oil and gas projects, focusing specifically on opportunities within Africa and offshore Australia.
Review of operations
During the 2015 financial year, the Group continued to progress the exploration of it‟s existing projects and seek opportunities to grow its asset portfolio. This information outlined below has been previously released in announcements to the ASX during the financial period.
VIC/P67 - La Bella
(WHN: 100% Operator), Offshore Otway Basin, Victoria, SE Australia.
VIC/P67 contains the La Bella gas discovery and a substantial portfolio of attractive exploration prospects. The area is located close to existing development infrastructure, including the Santos operated Casino facility, the Origin operated Otway gas project and the BHPB operated Minerva development.
The Company‟s objective in VIC/P67 is to commercialise the substantial gas potential within the block through successful exploration drilling and the development of the La Bella field.
Activities in VIC/P67 during the year concentrated on the maturation of drilling targets for the Year 3 wells and the preparations for drilling. The PreSTM processing of the La Bella 3D seismic survey was completed in July 2014. A further Simultaneous Inversion processing of a 215 km2 subset of the La Bella 3D seismic survey was also undertaken during the third quarter in support of the prospect characterisation.
The company, on behalf of the Joint Venture during Peedamullah Petroleum‟s ('AWE') involvement, carried out an extensive interpretation of the La Bella 3D seismic data to define the prospect inventory for the block, from which the Year 3 commitment wells could be selected. A portfolio of some 14 prospects and leads were mapped with total best estimate prospective resources of some 1044 bcf gas and 31.2 MMbbls of condensate and LPG, announced in September 2014.
A group of prospects have been mapped on the Ferrier Terrace immediately west of the La Bella Field, which are characterised by stacked structurally conforming amplitude anomalies (Mylius, Mylius West, Ferrier and Ferrier South). These prospects have low geological risk and Best Estimate Prospective Resources* total 196 Bcf sales gas and 6.2 MMbbls of condensate and LPG. This is in addition to the La Bella discovery, with a 2C Contingent Resource of 74 Bcf sales gas and 2.4 MMbbls of condensate and LPG. These low risk prospects, in combination with the La Bella field, could form a core gas development in VIC/P67 in the case of successful exploration drilling.
The highest potential prospect in the block is the Lowlander structure which has a best estimate Prospective Resources of 135 bcf gas and upside (P10) Prospective Resources of 279 bcf gas. The seismic data over western half of this feature suffers from ray path distortion and multiples and a further specialised PreSDM and de-multiple
processing of the data is required to mature this prospect for drilling. Additional upside potential lies in the Highlander structure, particularly in Waarre C reservoirs within closure on the eastern flank, and the Alexandra structure.
Further development concept selection engineering studies and commercial evaluations were also undertaken and extensive preparations for the drilling of the Year 3 wells were also made.
During the year, AWE, which previously held 60% equity in the block, withdrew from the Joint Venture (19 December 2014) under a right of withdrawal in the farm-in agreement. AWE had already funded the majority of the costs of the La Bella 3D seismic survey acquisition and processing.
In September 2013 TAP Oil Limited ('TAP') had entered into a Farm in option agreement to earn between 10 and 15% by funding up to $3m of the La Bella 3D seismic survey. On 12 February 2015, TAP elected not to exercise their option to farm-in. Consequently WHL Energy again holds 100% equity in VIC/P67.
While it is disappointing that AWE withdrew from the VIC/P67 permit, and TAP elected not to exercise their option to participate in the drilling phase, the company‟s ongoing development of the potential in the permit continues to reinforce the value of this acreage.
A further farm-out campaign was undertaken in late 2014. Unfortunately this coincided with the recent collapse in oil price which has placed many companies under financial pressure and forced others to review their business plans. This had a negative impact on the interest in the farm-out campaign.
An application for an Above Work Program Variation and Suspension and Extension was made to the National Offshore Petroleum Titles Administrator (NOPTA) in May 2015 and was awarded on 19 August 2015. The above work program variation acknowledges the Simultaneous Inversion processing already completed and the requirement for PreSDM reprocessing, while the 12 month Suspension and Extension to Year 3 will provide time for completion of the PreSDM reprocessing, interpretation and well planning for drilling.
Seychelles
(WHN: 25% Non-Operator)
The Company retains a 25% equity position in a 12,856km2 high potential, frontier exploration area offshore Seychelles, which is operated by Ophir Energy Plc following a farm-out by WHL Energy in early 2014. Significant progress continued to be been made on the Seychelles project during the year, with the acquisition, processing and ongoing interpretation of the Junon 3D seismic survey. This data and its evaluation will be pivotal to the decision by Ophir on whether to enter the drilling phase of their farm-in.
The Junon 3D seismic survey was acquired under WHL Energy‟s farm-out to Ophir, in which WHL Energy was fully carried through the costs of the acquisition of 1500 km2 of 3D seismic data up to a cost cap of US$17million. Acquisition of the 1,528km2 Junon 3D seismic survey was completed at the end of July with no reportable environmental or safety incidents, within budget, and with no cost exposure to WHL Energy.
A preliminary PreSTM processed volume was received in November 2014 and the final PreSDM volume in May 2015. Interpretation of a preliminary PreSTM volume of the Junon 3D seismic data by WHL Energy confirmed a number of key prospects in the Junon area that were initially identified by the previous regional 2D seismic survey. Interpretation of the PreSDM data by Ophir has commenced, to re-evaluate these prospects on the final processed data.
Under Ophir‟s farm-in agreement, on or before 31 December 2015, Ophir may either withdraw or exercise the option to (i) fully fund the acquisition of a further 1,000km2 of 3D seismic, up to a total amount of US$12 million; and (ii) fund 90% of the costs of the first exploration well, up to a total amount of US$30 million. Additionally, upon exercising the option to retain its interests, Ophir will pay WHL Energy a further US$2 million in cash. The company looks forward
to the results of the final interpretation and Ophir‟s decision.
WA 460-P (Palta)
(WHN: 33.33% Non-Operator), Carnarvon Basin, Western Australia
The Company previously held 33.33% equity in WA 460-P located 70km west of Cape Range. During the year the company successfully exited this permit.
Following a submission to Joint Authority, WHL Energy was advised in May 2015 that the Company qualified to enter into a Good Standing Arrangement ('GSA') with respect to the cancellation of Petroleum Exploration Permit WA- 460-P. The GSA with the Joint Authority is subject to terms and conditions in accordance with the Exploration Permit Guidelines. This includes an obligation to expend an amount of A$277,409 in a qualifying permit obtained through successful bidding on re-release area in the Australian Governments annual Offshore Petroleum Acreage Release.
New Business Development
During the course of the year the company evaluated a number of new asset opportunities which were complementary to the company‟s existing portfolio, at both the open acreage bid rounds and asset acquisition levels. The company was an under-bidder in an Australian acreage release block and the company made substantial progress with a potential near term production opportunity in Africa, however discussions were subsequently suspended due to commercial and financial risks.
*Best Estimate Prospective Resources
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Prospective Resources; The estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) related to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration, appraisal and evaluation are required to determine the existence of a significant quantity of potentially moveable hydrocarbons.
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The reported best estimate Prospective Resources are 100% gross deterministic best estimates. WHL Energy's net equity interest in these estimates is 100% in VIC/P67.
These Prospective Resource estimates were initially reported to the ASX on 8 September 2014.
Operating results for the year
The net loss after income tax of the Group for the year ended 30 June 2015 totalled $3,181,018 (year ended 30 June 2014: loss $5,520,850). This is equivalent to a loss of 1.91 cents per share (year ended 30 June 2014: loss of 3.69 cents per share).
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Operating results for the year
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30 June 2015
$
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30 June 2014
$
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Net loss after tax from continuing operations
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3,181,018
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5,520,850
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Overall net loss after tax
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3,181,018
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5,520,850
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Shareholder returns
The table below shows the financial performance against shareholder returns as measured by the closing share price at 30 June 2015:
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Shareholder returns
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30 June 2015
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30 June 2014
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|
Net loss after tax ($)
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3,181,018
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5,520,850
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Basic loss per share (cents)*
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1.91
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3.69
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Closing period end share price (cents)
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0.6
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1.2
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*Based on post consolidation number of shares.
Review of financial conditions
The net assets of the Group have increased to $26,008,106 at 30 June 2015 (2014: $25,539,654). The increase is attributable to the movement in foreign exchange and a decrease in the operating expenditure as a result of cost management strategies that were entered into during the year.
The Group‟s cash position at 30 June 2015 is $1,230,069 (30 June 2014: $3,833,381).
Cash of $645,930 generated from the non-renounceable pro-rata entitlement offer before costs has been used to fund exploration and development expenditure and working capital. Significant costs were incurred as a result of debt financing activities set out in detail below.
Significant changes in the state of affairs Board of Directors
There were several changes to the Board during the year. On 18 August 2014, Mr Schrull tendered his resignation, as he was no longer in a position to actively participate as a Director after relocating to the Eastern States for business purposes.
In conjunction with the Company‟s proposed re-capitalisation, Mr Rowbottam departed the Company on 31 May 2015. Mr Brown assumed the role of Chairman of the board while Mr Ismail was joined in the role of Non-Executive Director by Mr Durtanovich on 2 June 2015. The Board assumed management of the Company‟s affairs. A replacement for Mr Rowbottam has not yet been sought. With the focus on further cost reduction measures, the board will continue to manage the Company‟s day-to-day activities while fully reviewing the Managing Director role.
Farm-in activities
On 19 December 2014, the Company received notification from Peedamullah Petroleum that AWE had elected not to proceed as part of the VIC/P67 Joint Venture.
On 12 February 2015, TAP advised that it had elected not to proceed with an option to acquire an initial 10% interest in the WHL Energy-operated VIC/P67 permit off the coast of Victoria. Payment of their final seismic cost amounting to US$2,778,887 was received on 31 March 2015 and TAP have no further obligation or liability in respect of permit VIC/P67.
Capital raising and financing facilities
The Company undertook a non-renounceable pro-rata entitlement offer on 22 September 2014 on the basis of 3 Shares for every 10 Shares held, together with 2 free attaching New Listed Options (WHNO) for every 3 Shares subscribed for, at an issue price of $0.01 per Share. The Entitlement Offer was undertaken through a prospectus and was not underwritten. The entitlement offer closed on Friday, 31 October 2014 with subscriptions for 54,501,148 ordinary shares raising a total of $545,011.48. The total shortfall under the Shareholder Entitlement Offer was 88.8% of the total offering.
Following shareholder approval at the AGM in November 2014, the Company undertook a consolidation of its share capital on the basis of one (1) share post consolidation for every existing ten (10) shares before consolidation. The process was completed in accordance with the prescribed ASX timetable and was completed on 9 December 2014.
The US$2,778,887 received on 31 March 2015 from TAP was used to repay the short term finance agreement of
$3,680,000 from Argonaut Equity partners.
As a result of the shortfall in the non-renounceable offer and the inability to conclude farm-outs of the Company‟s exploration assets the Company entered into a $500,000 secured short term loan with Mr Robert Richter QC in April 2015 (the Richter Loan) to provide funding flexibility while the Company pursued longer term financing arrangements, a farmout of the Seychelles asset and other business development opportunities. The amounts owing under the Richter Loan were secured over the Company‟s interests in VIC/P67 and the Seychelles exploration blocks.
The Company expected to repay the Richter Loan in full prior to its scheduled repayment date of 31 May 2015 from the proceeds of a convertible loan facility entered into with Magna Equities II, LLC (Magna) and through any potential proceeds anticipated from the ongoing farm-out negotiations.
While the facility with Magna did provide some short term funding and the ability to access the longer term financing required, it was not possible to secure immediate funds, from drawdown under the facility, to enable the Company to repay the Richter Loan. Furthermore, the anticipated farmout campaigns could not be concluded within the required timeframe to provide the Company with any additional funding with which to ensure repayment of the Richter Loan.
Accordingly, the Company was placed in a position where immediate and decisive action was required to raise sufficient funds to repay the Richter Loan and preserve the assets of the Company for the benefit of all Shareholders. The Company urgently sought proposals to provide immediate funding. These included further attempts to expedite farm-out of the Company‟s existing assets as well as secure alternative financial arrangements. The only proposal received by the Company, which was capable of raising sufficient funds in the timeframe required, was from Energy Capital Partners Pty Ltd (ECP). The Company subsequently entered into agreements with ECP to facilitate the recapitalisation of the Company.
The decision by the board to proceed with the recapitalisation was not taken lightly. However, the recapitalisation was considered by the board to be the only option available to the Company in the time available to ensure that
shareholders could continue to participate in the upside associated with the Company‟s Seychelles and VIC/P67 assets.
The recapitalisation proposal comprised the issue of convertible notes (Convertible Notes) secured over the Company‟s assets to the value of $2 million, converting into ordinary fully paid shares in the Company at $0.001 (subject to shareholder approval). Subject to the satisfaction of certain conditions precedent, ECP subscribed for, or procured the subscription for, the Convertible Notes in two tranches of $1 million during June 2015. Shareholder approval was obtained for the conversion of the Convertible Notes at a General Meeting on 31 July 2015, and 2,000,000,000 new ordinary shares in the Company were issued. In consideration for ECP procuring the subscription for Convertible Notes, the Company agreed to issue ECP 20,000,000 shares at an issue price of
$0.00001 and 350,000,000 options at an issue price of $0.00001 in the Company. ECP was also paid fees of 15% of the amount raised through the issue of Convertible Notes.
The funds received were used to repay monies owed by the Company under the Richter Loan, the Magna facility, ECP fees in connection with the issue of the Convertible Notes and for budgeted expenditure agreed between the Company and ECP.
The Controlled Placement Agreement ('CPA') entered into in September 2013 with Acuity Capital was terminated.
On 25 June 2015, the Company announced a proposed non-renounceable pro rata offer to Eligible Shareholders ('Rights Issue').
Vesting of performance rights, options and issue of shares
All remaining performance rights were voluntary forfeited by the Directors on 29 June 2015 and there are no further performance rights or performance options on issue at the date of this report.
Significant events after the balance date VIC/P67
On 19 August 2015, the Company received approval from the Commonwealth-Victoria Offshore Petroleum Joint
Authority for an above-commitment variation of the Permit Year 3 work program, and a 12 month suspension of the Permit Year 3 work program commitments, with a corresponding 12 month extension of the permit term. As a result, Permit Year 3 will end on 3 August 2016 and the permit term will end on 3 August 2019.
Conversion of convertible note
Shareholder approval was obtained for the conversion of the Convertible Notes at a General Meeting on 31 July 2015, and 2,000,000,000 new ordinary shares in the Company were issued. In consideration for ECP procuring the subscription for Convertible Notes, the Company agreed to issue ECP shares and options in the Company and pay fees on the terms set out in the Schedule to the announcement of 2 June 2015.
Issue of Equity
The following equity issues have been completed subsequent to 30 June 2015:
|
Date
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Type of Security Issued
|
Number of Securities Issued
|
Price per Security
|
Funds raised
|
Note
|
|
2 July 2015
|
Ord
|
20,000,000
|
$0.000001
|
$200
|
In accordance with terms of
Recapitalisation Deed
|
|
24 July 2015
|
Ord
|
18,384,572
|
$0.0042
|
$77,871
|
To fund working capital
|
|
31 July 2015
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Ord
|
2,222,160,000
|
$0.001
|
$2,222,160
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Conversion of convertible note and in lieu of amounts owed
|
|
31 July 2015
|
ULO
|
350,000,000
|
$0.004, 31 July 2018
|
|
10 September 2015
|
Ord
|
151,432,647
|
$0.001
|
$151,432.65
|
Rights Issue
|
|
10 September 2015
|
Listed Options ($0.002, 30 June
2018)
|
37,858,095
|
$0.001
|
$37,858.09
|
Rights Issue
|
Shareholder Meeting
A meeting of the Company‟s shareholders was held on 31 July 2015. The following resolutions were put to and approved by the shareholders of the Company:
Resolution 1-Approval for Issue of Shares On Conversion Of Convertible Notes Resolution 2-Ratification of Prior Issue of Shares To Energy Capital Partners Pty Ltd Resolution 3- Approval for Issue of Options To Energy Capital Partners Pty Ltd Resolution 4 - Approval for Issue of Shares To Mr Robert Richter QC
Resolution 5 - Approval for Issue of Shares To Mr Alan Matthew Fittall Resolution 6 - Approval for Issue of Shares To Pac Partners Pty Ltd
Capital Raising
On 25 June 2015, the Company announced a proposed non-renounceable pro rata offer to Eligible Shareholders ('Rights Issue'). The Prospectus was lodged on 13 August 2015 and the Rights Issue, if fully subscribed, will raise up to approximately $3,040,017. There are 2,432,013,666 New Shares on offer at an issue price of $0.001 per New Share and 608,003,416 New Listed Options at an issue price of $0.001 per New Option on offer. The capital raised will be directed to ongoing operations, financing exploration and evaluation of new projects and working capital. The Prospectus was not underwritten and was despatched to shareholders on 25 August 2015.The Rights Issue closed at 5.00pm WAT on Thursday 3 September 2015 in accordance with the timetable for the Rights Issue, and raised
$189,290.74. The shortfall of the Rights Issue will be allotted at the Directors Discretion.
Reassessment of US Tax Liability
The Company reviewed the 31 December 2014 tax return of its 100% owned subsidiary PetroQuest International Inc. prior to lodgement of the return in mid-September 2015 and in conjunction with discussions with the Company‟s tax accountants amended the estimated return to more accurately reflect the operations of the subsidiary. As a result it was deemed that the estimated tax liability of $303,376 that was previously recorded and included at note 4 was not correct and this amount is not a liability to the Company.
There has not been any other matter or circumstance that has arisen after balance date that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial periods.
Likely developments and expected results
Other than the matters included in this Directors Report or elsewhere in the Annual Financial Report, future developments, business strategies and prospects of the Company and the expected results of those operations have not been disclosed, as the Directors believe that their inclusion would most likely result in unreasonable prejudice to the Company.
Environmental legislation
The operations of the Company are subject to a range of statutory environmental regulations relating to oil and gas exploration in Australia and the Seychelles. There is legislation that governs the general requirements for managing environmental impact and specific environmental authorities with conditions for each area of operation.
The Board of Directors in its ongoing monitoring of compliance with environmental regulations has not become aware of any significant breach of the regulations governing the Company‟s operations during the period covered by this report.
Corporate Governance Statement
Under ASX Listing Rule 4.10.3 the Company‟s Corporate Governance Statement can be found at page 75 of this Annual Report.
Remuneration Report (Audited)
This report outlines the remuneration arrangements in place for the KMP of the Group for the financial year ended 30 June 2015. The information provided in this Remuneration Report has been audited as required by Section 308(3C) of the Corporations Act 2001.
The Remuneration Report details the remuneration arrangements for KMP who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including any director (whether executive or otherwise) of the Group.