TIDMGBP
RNS Number : 8137P
Global Petroleum Ltd
21 October 2021
21 October 2021
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ('MAR'). Upon the
publication of this announcement via a Regulatory Information
Service ('RIS'), this inside information is now considered to be in
the public domain.
Global Petroleum Limited
("Global" or "the Company")
Final Results for the Year Ended 30 June 2021
Global Petroleum Limited announces its Final Results for the
year ended 30 June 2021:
Operational
-- Updated best estimate of Prospective Resources on PEL0094
showing threefold increase to 2,284 million barrels of oil net to
Global
-- Farm-out process for PEL0094 initiated and ongoing
-- Commenced remaining year of PEL0094 Initial Exploration Period, expiring in September 2022
Financial
-- Two successful equity raises in the year totaling GBP2.4
million strengthened finances and positioned Global to continue
exploration activities in Namibia
-- Cash balance at period end US$1,834,434 (30 June 2020:
US$932,818), increasing to US$2,682,940 at end September 2021
following further GBP1.0 million equity raise in August
-- Loss after tax US$3,927,794 (2020: loss US$1,526,449), after
impairment write-off following expiry of PEL0029 amounting to
US$2,410,272 (2020: Nil).
Strategy and Outlook
The Company remains committed to offshore Namibia, where work
will continue in seeking a farm-out partner to fund future
exploration drilling operations on PEL0094. The upcoming drilling
in the Orange Basin by oil majors Total and Shell, expected to
commence in Q4 this year, will be closely monitored. Global also
remains committed to pursuing its Italian applications,
notwithstanding the appeal which is still proceeding and the
previous exploration moratorium imposed by the Italian
Parliament.
In addition, as previously announced, the Company will continue
to explore all strategic alternatives in order to maximise
shareholder value.
The Company confirms that a full copy of its latest Annual
Report and Accounts will be available shortly on the Company's
website: www.globalpetroleum.com.au
+44 (0) 20 3 875
Global Petroleum Limited 9255
Peter Hill, Managing Director & CEO
Andrew Draffin, Company Secretary
Panmure Gordon (UK) Limited (Nominated Adviser +44 (0) 20 7886
& Joint Broker) 2500
John Prior / Ailsa MacMaster
Corporate Broking: Hugh Rich
ETX Capital (Joint Broker) +44 (0) 20 7392
Thomas Smith 1568
Tavistock (Financial PR & IR) +44 (0) 20 7920
Simon Hudson / Nick Elwes 3150
Chairman and CEO's Review
We are pleased to present to you the Global Annual Financial
Report for the year ended 30 June 2021.
The Company's focus during the reporting period and to date has
been completing the work programmes for its Namibian licences,
updating its estimate of Prospective Resources for licence PEL0094,
and strengthening its finances in order to position it to enter the
next sub-phase of the licence from September 2021. In addition, a
process to farm-out PEL0094 was commenced and is ongoing.
The updated PEL0094 Prospective Resources (best estimate) net to
Global on an unrisked basis - for the Company's main prospects
Marula and Welwitschia Deep along with 7 new leads - totals 2,284
million barrels of oil. This represented a threefold increase
compared with the previous estimate, and confirmed the Company's
view that the acreage is highly prospective.
In August 2021, Global notified the Ministry of Mines and Energy
of its intention to enter into the remaining one year of the
PEL0094 Initial Exploration Period, expiring in September 2022. The
commitment for this period is to shoot a 2,000 square kilometre 3D
seismic data survey, which the Company intends to fund via
farm-out, as above.
The Company's other Namibian licence, PEL0029, expired in
December 2020, enabling Global to focus its technical efforts on
PEL0094.
In Italy, regarding the outstanding appeal in relation to the
Company's four licence applications in the Adriatic Sea, the
judgement of the European Court is expected by the end of 2021. In
addition, the final extension of the moratorium on hydrocarbon
exploration activities, including permit applications, reportedly
expired on 30 September 2021. The report from the Commission
appointed to review and make recommendations in relation to future
exploration and development activities is expected shortly.
Corporate
On 8 July 2020 the Company formally ceased quotation on the ASX
resulting in the quotation of its securities being solely on the
Alternative Investment Market in London (AIM). The decision to
de-list was made following consideration of the volume of trades,
AIM being significantly higher versus ASX, the Company's limited
operations in Australia, the limited interest from institutional
and retail investors within Australia, and the compliance costs of
maintaining two listings.
Along with the continuation of PEL0094 and the updated estimate
of Prospective Resources on that licence, the other most
significant development for the Company during the year to 30 June
2021, and subsequently, was the strengthening of the Company's
financial position with three successful equity share placings -
including a subscription by directors alongside the first of the
placings in September 2020 - which raised total gross proceeds of
GBP3.4 million (excluding any further proceeds from the exercise of
warrants associated with each placing and the subscription).
We are pleased to have successfully completed this strengthening
of Global's finances in what remains a very difficult market,
particularly for small E&P companies, and are delighted to
welcome new shareholders to the Company.
Proceeds from these equity raises has positioned the Company to
continue with its exploration activities in Namibia, including
entering the remaining one year Initial Exploration Period on its
PEL0094 licence until September 2022, and its ongoing efforts to
farm-out part of its equity in this licence.
During the reporting period the Company has continued to focus
on reducing its cost base to conserve cash resources. A number of
measures including further reductions in the level of UK Directors'
remuneration, pending an improved financial position, were agreed
by the Board throughout the reporting period. In the light of the
Company's improved financial position, these remuneration
reductions ceased with effect from 1 July 2021.
As a pre-revenue company in the early stages of exploration in
Namibia, the impact on our business operations related to COVID-
19, and associated oil price weakness in the reporting period, has
fortunately been very limited.
Board
It was with great regret we announced in February 2021 the
passing of Peter Blakey, major shareholder and Non-executive
Director of the Company. Peter contributed significantly to Global
in his time as a Director over many years, and the Board
acknowledges its gratitude for this.
In August 2021 we announced that Peter Taylor, major shareholder
and Non-executive Director of the Company, had decided to resign
from the Board. The Board thanks Peter for his immense contribution
to the Company over many years, providing invaluable guidance in
shaping and steering Global.
Financial
During the year ended 30 June 2021, the Group recorded a loss
after tax of US$3,927,794 (2020: US$1,526,449). Cash balances at 30
June 2021 amounted to US$1,834,434 (2020: US$932,818), the increase
reflecting the proceeds from the equity raises completed in the
reporting period. At 30 September 2021 cash balances had increased
to US$2,682,940, following the equity raise in August 2021. The
Group has no debt outside of suppliers who are settled on normal
commercial terms
Strategy and Outlook
The Company remains committed to offshore Namibia, where work
will continue in seeking a farm-out partner to fund future
exploration drilling operations on PEL0094. The upcoming drilling
in the Orange Basin by oil majors Total and Shell, expected to
commence in Q4 this year, will be closely monitored. Global also
remains committed to pursuing its Italian applications,
notwithstanding the appeal which is still proceeding and the
previous exploration moratorium imposed by the Italian Parliament.
In addition, as previously announced, the Company will continue to
explore all strategic alternatives in order to maximise shareholder
value.
John van der Welle Peter Hill
Chairman Chief Executive Officer
OPERATING AND FINANCIAL REVIEW
Namibian Project
The Namibian Project consists of an operated 78 per cent
participating interest in Petroleum Exploration Licence ("PEL")
0094 (acquired in 2018) which covers Block 2011A (see Figure 1).
The Company also previously held an operated 85 per cent
participating interest in PEL0029 covering Blocks 1910B and 2010A.
PEL0029 expired on 3 December 2020, enabling the Company to focus
its technical efforts on PEL0094.
In July 2020 the Company announced updated estimates of
Prospective Resources for PEL0094 after interpretation of the
existing 3D seismic data, licensed from the Namibian State Oil
Company, NAMCOR, in March 2020. The agreement with NAMCOR to
licence the 3D seismic data on Block 2011A in return for extra
equity in the licence helped conserve the Company's cash resources.
The interpretation of the 3D seismic data led to increased
confidence in the two prospects, Marula and Welwitschia Deep. The
Marula prospect is a distal pinchout of Upper Cretaceous sandstones
onto the Welwitschia high. The Welwitschia Deep prospect was also
confirmed by interpretation of the 3D seismic data as an Albian
carbonate reservoir.
In July 2020, the Company also announced that the Ministry of
Mines and Energy in Namibia (the "Ministry") had agreed to extend
the PEL0094 licence sub-period from September 2020 to September
2021 and to modify the work commitments. The four-year Initial
Exploration Period had been split into two sub-periods of two years
each, with the first sub-period ending in September 2020. The
amendment agreed by the Ministry gave Global a further year to
fulfill a modified work commitment, concentrated on the licensing
of existing seismic data and the carrying out of studies
specifically designed to focus on the exciting Marula and
Welwitschia Deep prospects.
In August 2021 - post the reporting period - Global notified the
Ministry of its intention to enter into the remaining one year of
the Initial Exploration Period, expiring in September 2022. The
commitment for this period is to shoot a new 2,000 square kilometre
3D seismic data survey, which the Company intends to fund via a
farm-out. The Company expects to be able to secure a further
one-year extension to the Initial Exploration Period (to September
2023) if necessary, based on the precedent of PEL0029 and that of
other companies holding exploration licences offshore Namibia.
In accordance with the modified work programme, in November 2020
the Company purchased historic 2D seismic data in order to map the
source rock from the Wingat-1 and Murombe-1 wells in the south of
the Walvis Basin into Global's acreage to the north. The Company
also commissioned studies to examine the amplitude with offset
("AVO") response of the source rock in both the wells and on the
seismic data, and also performed seismic inversion on some of the
data. The Company's interpretation of this data, together with the
commissioned studies, enabled the source rock to be mapped with
even further confidence into Global's acreage.
In December 2020 the Company purchased further historic 2D
seismic data in order to improve interpretation of both its Marula
prospect and also the relatively under-explored eastern part of the
block.
Consequently, in January 2021 the Company announced an updated
estimate of Prospective Resources for PEL0094. The additional
Prospective Resources in the east of PEL0094 consist of 7 new leads
with a total unrisked gross Prospective Resources (Best Estimate)
of 2,048 million barrels of oil ("barrels"). As previously reported
in July 2020, the pre-existing prospects - Marula and Welwitschia
Deep - contain a total of 881 million barrels, making a new total
on the licence of 2,929 million barrels unrisked gross Prospective
Resources (Best Estimate). Regarding the Prospective Resources
attributable to Global, the total unrisked net Prospective
Resources (Best Estimate) now total 2,284 million barrels compared
with the previous number of 687 million barrels net to Global -
which related to Marula and Welwitschia Deep alone. This means that
the total unrisked net Prospective Resources (Best Estimate) - both
gross and net - are over three times as large, due to the new leads
identified. When adjusted for exploration risk, Prospective
Resources have approximately doubled.
The technical work undertaken in late 2020 more than fulfilled
the firm work commitments for the extended sub-period to September
2021. As well as identification of the significant new leads in the
eastern part of PEL0094, the geological chance of success of Marula
was increased from 18 per cent to 22 per cent and the further work
has significantly reinforced the Company's confidence that the
source rock is present and generating oil in PEL0094.The Company
believes that the latest work has vindicated the Company's view
that the acreage is highly prospective. The updated Prospective
Resources estimates were also timely as the Company commenced the
farm-out process for PEL0094, which is currently underway.
The wider perspective in offshore Namibian exploration is the
drilling programme in Namibia's Orange Basin to be undertaken by
the oil majors, Total (Venus-1) and Shell (Graff-1), both wells
expected to spud in Q4 2021.
Much of the interest by super-majors and other oil companies is
driven by the perception that the Barremian-Aptian source rock in
Namibia is of excellent quality, regionally developed and so
capable of generating substantial volumes of hydrocarbons. The
source rock has been proven by previous drilling in southern
Namibia where the Orange Basin is located. The same
Barremian-Aptian source rock is also proven by two previous wells
in the Walvis Basin in the north (where PEL0094 is situated).
Global has used part of the proceeds raised over the last year to
map the source rock from those wells into its licence, using the
latest technology, and has now started a study to calculate the
volume of oil likely generated and available to migrate into
Global's prospects and leads.
In the general Namibia context, it is to be expected that a
drilling success by any company would lead to other companies
wishing to acquire acreage, as was seen in recent years after the
major discoveries offshore Ghana, Senegal, Guyana and Surinam,
which in turn we would expect to be beneficial to the farm-out
process for PEL0094.
http://www.rns-pdf.londonstockexchange.com/rns/8137P_1-2021-10-21.pdf
FIGURE 1 - Map of Namibia showing Global Petroleum's
Licences
Permit Applications Offshore Italy
In August 2013, the Company submitted an application, proposed
work programme and budget to the Italian Ministry of Economic
Development for four exploration areas offshore Italy in the
Southern Adriatic (the "Permit Applications"). The Company's four
Application Blocks are contiguous with the Italian median lines
abutting Croatia, Montenegro and Albania respectively (Figure 2
below).
As previously reported, various local authorities and interest
groups appealed to either the Rome Tribunal or the President of the
Republic against the Environmental Decrees in relation to the
applications of the four areas. Publication of Environmental
Decrees is the final administrative stage before grant of the
Permits. All first instance appeals made to the Rome Tribunal and
to the President of the Republic were subsequently adjudicated in
Global's favour.
However, Puglia, as the Italian region principally interested,
made additional appeals to the Council of State (the highest level
of appeal in Italy) against the judgements of the Rome Tribunal.
The subsequent appeals were heard by the Council of State in
January 2020, and in February 2020 the Council of State issued a
judgement. Essentially, the Council of State suspended the
proceedings before it and referred the matter to the European
Court, requesting the Court to rule whether the four Licence
Applications contravene a relevant EU Directive relating to the
maximum permissible size of individual permits, in particular
having regard to the fact that the four permit applications are
contiguous. The town of Margherita di Savoia also appealed to the
Council of State against the Rome Tribunal judgments previously
made against it. The Council of State has deferred the Hearing of
this appeal pending the judgement of the European Court with
respect to the Puglia appeal.
The Company is currently advised that the European Court
judgement is expected by the end of 2021.
In February 2019, the Italian Parliament passed a Bill
suspending all hydrocarbon exploration activities - including
permit applications - for a period of 18 months. Under the proposed
legislation, a Government appointed Commission was to review all
onshore and offshore areas for the stated purpose of evaluating
their suitability for hydrocarbon exploration and development in
the future. In doing so, the suitability of such activities in the
context of social, industrial, urban, water source and
environmental factors were to be evaluated. In offshore areas,
suitability would additionally be assessed having regard to the
impact of such activity on the littoral environment, marine
ecosystems and shipping routes. Following the 18-month evaluation
period, the intention was that a hydrocarbon plan would be
activated, setting out a strategy for future exploration and
development.
Following the expiry of its initial 18-month term, the
moratorium has been extended twice. The latest, and final,
extension reportedly expired on 30 September 2021, and the
Commission is expected to publish the hydrocarbon plan shortly.
The southern Adriatic and adjacent areas continue to be the
focus of industry activity. Most notably, in Montenegro, offshore
concessions were awarded in 2016/2017 to Energean and Eni/Novatek
(the latter just 35 km from the nearest of the Applications).
Eni/Novatek reportedly committed nearly $100 million on exploration
on these permits, where an exploration well is currently underway
with results expected shortly.
Energean acquired 3D seismic data on its blocks in 2019. In
Albania, Shell continues to evaluate its Shpiragu discovery after
the Shpiragu -4 well tested at several thousand barrels of oil per
day in 2019.
http://www.rns-pdf.londonstockexchange.com/rns/8137P_2-2021-10-21.pdf
FIGURE 2 - Map of Global Petroleum's 4 Permit Applications
offshore Italy in Southern Adriatic
Results of operations
2021 2020
US$ US$
Loss from continuing operations before
tax (3,927,794) (1,526,449)
Income tax benefit (expense) - -
============ ============
Net profit (loss) (3,927,794) (1,526,449)
============ ============
The results of the Group include revenue from interest income of
US$792 (2020: US$23,928).
Review of financial conditions
As at 30 June 2021, the Group had cash of US$1,834,434 (2020:
US$932,818) and had no debt outside of suppliers who are settled on
normal commercial terms.
Placings and Subscription
On 16 September 2020 the Company announced that it had
successfully raised GBP1,327,500 in aggregate before costs, through
the placing of 177,000,000 Ordinary Shares at a placing price of
0.75 pence per share and that in addition certain Directors of the
Company intended to subscribe for, in aggregate, 9,666,667 Ordinary
Shares, raising GBP72,500. In aggregate, the gross quantum of funds
raised by the placing and the subscription were GBP1.4 million.
As a further component of the placing and the subscription,
186,666,667 Warrants were issued at an exercise price of 1.5 pence
per share for a period of 2 years (one Warrant for every one new
Ordinary Share). In the event the Warrants are exercised in due
course in full, associated proceeds will be GBP2.8 million, with
the result that the Company will have raised gross proceeds of
GBP4.2 million at a weighted average price of 1.125 pence per
share.
Panmure Gordon UK Limited ("Panmure Gordon") acted as the
Company's sole broker in respect of the placing. The Company had
announced Panmure Gordon's appointment as broker and NOMAD on 14
July 2020.
On 29 April 2021 the Company announced that it had successfully
raised GBP1,000,000 in aggregate before costs, through the placing
of 222,222,222 Ordinary Shares at a placing price of 0.45 pence per
share.
As a further component of the placing, 111,111,111 Warrants were
also issued at an exercise price of 0.9 pence per share for a
period of 2 years (one Warrant for every two new Ordinary Shares).
In the event the Warrants are exercised in due course in full,
associated proceeds will be GBP1.0 million, with the result that
the Company will have raised gross proceeds of GBP2.0 million at a
weighted average price of 0.6 pence per share.
Monecor (London) Ltd, trading as ETX Capital ("ETX Capital"),
acted as the Company's sole broker in respect of the placing, and
was appointed Joint Broker to the Company effective from 5 May
2021.
Subsequent to the reporting period, on 12 August 2021 the
Company announced that it had successfully raised GBP1,000,000 in
aggregate before costs through the placing of 200,000,000 Ordinary
Shares at a placing price of 0.5 pence per share.
As a further component of the placing, 100,000,000 Warrants were
also issued at an exercise price of 1.0 pence per share for a
period of 2 years (one Warrant for every two new Ordinary Shares).
In the event the Warrants are exercised in due course in full,
associated proceeds will be GBP1,000,000 with the result that the
Company will have raised gross proceeds of GBP2.0 million at a
weighted average price of 0.67 pence per share.
Monecor (London) Ltd, trading as ETX Capital ("ETX Capital"),
acted as sole broker in respect of the placing.
GLOBAL PETROLEUM LIMITED
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEARED 30 JUNE 2021
2021 2020
Note US$ US$
Continuing operations
Employee benefits expense (271,224) (370,867)
Administrative expense (873,302) (902,872)
Exploration and business development
expenses 11 (16,070) (98,315)
Depreciation and amortisation expense (3,439) (2,095)
Other expenses (196,303) (161,418)
Exploration written off 11 (2,410,272) -
Share based payments 19 (236,790) -
Foreign exchange gain (loss) 78,814 (14,810)
--------------- -----------
Results from operating activities (3,928,586) (1,550,377)
--------------- -----------
Finance income 792 23,928
--------------- -----------
Net finance income 792 23,928
--------------- -----------
(Loss) from continuing operations before
tax (3,927,794) (1,526,449)
--------------- -----------
Tax expense 3 - -
--------------- -----------
(Loss) from continuing operations after
tax (3,927,794) (1,526,449)
--------------- -----------
(Loss) for the year (3,927,794) (1,526,449)
=============== ===========
Earnings per share
From continuing and discontinued operations:
Basic earnings per share (cents) 6 (1.03) (0.75)
Diluted earnings per share (cents) 6 (1.03) (0.75)
The accompanying notes form part of these financial
statements
GLOBAL PETROLEUM LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021
2021 2020
Note US$ US$
Assets
Current assets
Cash and cash equivalents 7 1,834,434 932,818
Trade and other receivables 8 80,622 27,696
Other assets 12 39,384 54,450
--------------- ------------
Total current assets 1,954,440 1,014,964
--------------- ------------
Non-current assets
Property, plant and equipment 10 16,597 20,036
Exploration and evaluation assets 11 972,467 2,673,754
--------------- ------------
Total non-current assets 989,064 2,693,790
--------------- ------------
Total assets 2,943,504 3,708,754
--------------- ------------
Liabilities
Current liabilities
Trade and other payables 13 83,999 124,273
Provisions 14 163,458 166,309
--------------- ------------
Total current liabilities 247,457 290,582
--------------- ------------
Total liabilities 247,457 290,582
--------------- ------------
Net assets 2,696,047 3,418,172
=============== ============
Equity
Issued share capital 15 42,189,991 39,221,112
Reserves 23 1,249,042 1,535,305
Accumulated losses (40,742,986) (37,338,245)
--------------- ------------
Total equity 2,696,047 3,418,172
=============== ============
The accompanying notes form part of these financial
statements
GLOBAL PETROLEUM LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2021
Consolidated Group
Issued Share Option Reserve Foreign Accumulated Total
Capital US$ Currency Loses US$
US$ Translation US$
Reserve
US$
Balance at 1 July 2019 39,221,112 964,895 570,410 (35,811,796) 4,944,621
Comprehensive income/(loss)
Loss for the year - - - (1,526,449) (1,526,449)
------------ -------------- ------------ -------------- -------------
Total comprehensive income/(loss)
for the year - - - (1,526,449) (1,526,449)
------------ -------------- ------------ -------------- -------------
Transactions with owners,
in their capacity as
owners, and other transfers
Issue of shares - - - - -
------------ -------------- ------------ -------------- -------------
Total transactions with - - - - -
owners and other transfers
------------ -------------- ------------ -------------- -------------
Balance at 30 June 2020 39,221,112 964,895 570,410 (37,338,245) 3,418,172
============ ============== ============ ============== =============
Balance at 1 July 2020 39,221,112 964,895 570,410 (37,338,245) 3,418,172
Comprehensive income/(loss)
Loss for the year - - - (3,927,794) (3,927,794)
------------ -------------- ------------ -------------- -------------
Total comprehensive income
for the year - - - (3,927,794) (3,927,794)
------------ -------------- ------------ -------------- -------------
Transactions with owners,
in their capacity as
owners, and other transfers
Issue of shares 15 3,191,040 - - - 3,191,040
Transaction costs (222,161) - - - (222,161)
Expiry of options (523,053) - 523,053 -
Issue of options 16 - 236,790 - - 236,790
------------ -------------- ------------ -------------- -------------
Total transactions with
owners and other transfers 2,968,879 (286,263) - 523,053 3,205,669
------------ -------------- ------------ -------------- -------------
Balance at 30 June 2021 42,189,991 678,632 570,410 (40,742,986) 2,696,047
============ ============== ============ ============== =============
The accompanying notes form part of these financial
statements
GLOBAL PETROLEUM LIMITED
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE YEARED 30 JUNE 2021
Note 2021 2020
US$ US$
Cash flows from operating activities
Interest received 792 23,928
Payments to suppliers and employees (1,368,821) (1,450,447)
GST/VAT refunds received 26,833 23,651
---------------- -------------
Net cash (used in) operating activities 18(a) (1,341,196) (1,402,868)
---------------- -------------
Cash flows from investment activities
Payments for exploration and business
development expenditure (725,054) (432,975)
Payments for plant and equipment - (17,197)
---------------- -------------
Net cash (used in) investing activities (725,054) (450,172)
---------------- -------------
Cash flows from financing activities
Proceeds from issue of shares 3,191,040 -
Payments for capital raising costs (222,161) -
---------------- -------------
Net cash provided by financing activities 2,968,879 -
---------------- -------------
Net increase/(decrease) in cash held 902,629 (1,853,040)
Cash and cash equivalents at beginning
of financial year 932,818 2,786,791
Effect of exchange rates on cash holdings
in foreign currencies (1,013) (933)
---------------- -------------
Cash and cash equivalents at end of
financial year 7 1,834,434 932,818
================ =============
The accompanying notes form part of these financial
statements
GLOBAL PETROLEUM LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2021
Global Petroleum Limited ("Global", the "Company") is a company
domiciled in Australia. Global is a company limited by shares
incorporated in Australia whose shares are publicly traded on the
AIM market of the London Stock Exchange ("AIM"). The consolidated
annual financial statements of the Company as at, and for the 12
months ended, 30 June 2021 comprise the Company and its controlled
entities (together referred to as the "Group"). The Group is a
for-profit entity and is primarily involved in oil and gas
exploration and development.
The consolidated annual financial statements of the Group as at,
and for the year ended, 30 June 2021 are available upon request
from the Company's registered office at C/- DW Accounting &
Advisory, Level 4, 91 William Street, Melbourne, Victoria, 3000,
Australia or at www.globalpetroleum.com.au .
The separate financial statements of the parent entity, Global
Petroleum Limited ("Parent"), have not been presented within this
annual financial report as permitted by the Corporations Act
2001.
The financial statements were authorised for issue on 20 October
2021 by the Board of Directors of the Company.
Note 1 Summary of Significant Accounting Policies
These general purpose consolidated financial statements have
been prepared in accordance with the Corporations Act 2001,
Australian Accounting Standards and Interpretations of the
Australian Accounting Standards Board and in compliance with
International Financial Reporting Standards as issued by the
International Accounting Standards Board. The Group is a for-profit
entity for financial reporting purposes under Australian Accounting
Standards. Material accounting policies adopted in the preparation
of these financial statements are presented below and have been
consistently applied unless stated otherwise.
Except for cash flow information, the financial statements have
been prepared on an accrual basis and are based on historical
costs, modified, where applicable, by the measurement at fair value
of selected non-current assets, financial assets and financial
liabilities.
(a) Going Concern
The financial statements have been prepared on the going concern
basis of accounting, which contemplates the continuity of normal
business activity and the realisation of assets and the settlement
of liabilities in the ordinary course of business.
The Group has no source of operating revenue and settles its
expenditure obligations from existing cash resources. It generated
a loss of US$3,927,794 (2020: loss of US$1,526,449) and had net
cash outflows from the operating activities of US$1,341,196 (2020:
net cash outflows of US$1,402,868) for the year ended 30 June 2021.
As of that date, the Group had net assets of US$2,696,047 (2020:
US$3,418,172) and cash assets of US$1,834,434 (2020: US$932,818).
The Group has no debt.
The Directors have prepared a cash flow forecast for the next 12
months based on best estimates of future inflows and outflows of
cash, to support the Group's ability to continue as a going
concern. The ability of the Company to continue as a going concern
is principally dependent upon a combination of one or more of the
following factors - management of existing funds; securing further
funds via raising capital from equity markets (See note 15 - Issued
Share Capital); concluding a farm-out arrangement whereby a farm-
in party would assume the costs of meeting certain future
exploration and other commitments on the Company's Namibian
licence; and the deferral of licence commitments. (See note 11 -
Exploration Assets and note 16 - Future Commitments).
The raising of additional equity capital is subject to market
conditions and investor demand; securing a farm-out requires
agreement with a suitable third party which the Group has not
achieved to date; and any deferral of licence commitments would
require the consent of the Namibian Ministry of Mines and Energy.
As each of these are not within the Company's control, these
conditions constitute a material uncertainty that may cast
significant doubt on the use of the going concern basis of
accounting. However the Directors have a reasonable expectation
that one or more of these actions will be achieved, and following
two successful equity placings in the reporting period which raised
gross proceeds of GBP2.4 million. In August 2021, Global announced
a further successful placing of ordinary shares in the Company,
raising gross proceeds of GBP1 million (See note 20 - Events After
the Reporting Period). On this basis the Group's projections
indicate that it will have sufficient liquidity to meet its
expenditure related liabilities as they fall due in the next twelve
months from the date of finalising these financial statements.
Accordingly, the Directors have a reasonable expectation that
the Group has adequate resources to continue in operational
existence for the foreseeable future, and therefore the Directors
continue to adopt the going concern basis of accounting in
preparing the financial statements. The financial statements do not
include any adjustments relating to the classification of assets
including Exploration and Evaluation assets, or the recoverability
of asset carrying values, or to the amount and classification of
liabilities, that might result should the Group be unable to
continue as a going concern.
(b) Principles of Consolidation
The consolidated financial statements incorporate all of the
assets, liabilities and results of Global Petroleum Limited and all
of its subsidiaries being entities that the Parent controls. The
Parent controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
A list of the subsidiaries is provided in Note 9.
The assets, liabilities and results of all subsidiaries are
fully consolidated into the financial statements of the Group from
the date on which control is obtained by the Group. The
consolidation of a subsidiary is discontinued from the date that
control ceases. Inter- company transactions, balances and
unrealised gains or losses on transactions between Group entities
are fully eliminated on consolidation. Accounting policies of
subsidiaries may be changed and adjustments made where necessary to
ensure uniformity of the accounting policies adopted by the
Group
Equity interests in a subsidiary not attributable, directly or
indirectly, to the Group are presented as "non-controlling
Interests". The Group initially recognises non-controlling
interests that are present ownership interests in subsidiaries and
are entitled to a proportionate share of the subsidiary's net
assets on liquidation at either fair value or the non-controlling
interests' proportionate share of the subsidiary's net assets.
Subsequent to initial recognition, non-controlling interests are
attributed their share of profit or loss and each component of
other comprehensive income. Non-controlling interests are shown
separately within the equity section of the statement of financial
position and statement of comprehensive income. No non-controlling
interests were recognised for the reporting period
Business Combinations
Business combinations occur where an acquirer obtains control
over one or more businesses.
A business combination is accounted for by applying the
acquisition method, unless it is a combination involving entities
or businesses under common control. The business combination will
be accounted for from the date that control is obtained, whereby
the fair value of the identifiable assets acquired and liabilities
(including contingent liabilities) assumed is recognised (subject
to certain limited exemptions).
When measuring the consideration transferred in the business
combination, any asset or liability resulting from a contingent
consideration arrangement is also included. Subsequent to initial
recognition, contingent consideration classified as equity is not
remeasured and its subsequent settlement is accounted for within
equity. Contingent consideration classified as an asset or
liability is remeasured each reporting period to fair value,
recognising any change to fair value in profit or loss, unless the
change in value can be identified as existing at acquisition
date.
All transaction costs incurred in relation to business
combinations, other than those associated with the issue of a
financial instrument, are recognised as expenses in profit or loss
when incurred.
The acquisition of a business may result in the recognition of
goodwill or a gain from a bargain purchase'
Goodwill
Goodwill is carried at cost less any accumulated impairment
losses. Goodwill is calculated as the excess of the sum of:
(i) the consideration transferred at fair value;
(ii) any non-controlling interest (determined under either fair
value or proportionate interest method); and
(iii) the acquisition date fair value of any previously held equity interest,
over the acquisition date fair value of any identifiable assets
acquired and liabilities assumed.
The acquisition date fair value of the consideration transferred
for a business combination plus the acquisition date fair value of
any previously held equity interest shall form the cost of the
investment in the separate financial statements.
Changes in the Group's ownership interests in subsidiaries that
do not result in the Group losing control over the subsidiaries are
accounted for as equity transactions. The carrying amounts of the
Group's interests and the non-controlling interests are adjusted to
reflect the changes in their relative interests in the
subsidiaries. Any difference between the amount by which the
non-controlling interests are adjusted and the fair value of the
consideration paid or received is recognised directly in equity and
attributed to owners of the Group.
When the Group loses control of a subsidiary, a gain or loss is
recognised in profit or loss and is calculated as the difference
between
(i) the aggregate of the fair value of the consideration
received and the fair value of any retained interest and (ii) the
previous carrying amount of the assets (including goodwill), and
liabilities of the subsidiary and any non-controlling interests.
All amounts previously recognised in other comprehensive income in
relation to that subsidiary are accounted for as if the Group had
directly disposed of the related assets or liabilities of the
subsidiary (i.e. reclassified to profit or loss or transferred to
another category of equity as specified/permitted by applicable
AASB Accounting Standards). The fair value of any investment
retained in the former subsidiary at the date when control is lost
is regarded as the fair value on initial recognition for subsequent
accounting under AASB 139: Financial Instruments: Recognition and
Measurement, when applicable, the cost on initial recognition of an
investment in an associate or a joint venture.
The amount of goodwill recognised on acquisition of each
subsidiary in which the Group holds less than 100% interest will
depend on the method adopted in measuring the non-controlling
interest. The Group can elect in most circumstances to measure the
non- controlling interest in the acquiree either at fair value
(full goodwill method) or at the non-controlling interest's
proportionate share of the subsidiary's identifiable net assets
(proportionate interest method). In such circumstances, the Group
determines which method to adopt for each acquisition and this is
stated in the respective note to the financial statements
disclosing the business combination.
Under the full goodwill method, the fair value of the
non-controlling interest is determined using valuation techniques
which make the maximum use of market information where
available.
Goodwill on acquisitions of subsidiaries is included in
intangible assets. Goodwill on acquisition of associates is
included in investments in associates.
Goodwill is tested for impairment annually and is allocated to
the Group's cash-generating units or groups of cash-generating
units, representing the lowest level at which goodwill is monitored
and not larger than an operating segment. Gains and losses on the
disposal of an entity include the carrying amount of goodwill
related to the entity disposed of.
(c) Income Tax
The income tax expense (income) for the year comprises current
income tax expense (income) and deferred tax expense (income).
Current income tax expense charged to profit or loss is the tax
payable on taxable income for the current period. Current tax
liabilities (assets) are measured at the amounts expected to be
paid to (recovered from) the relevant taxation authority using tax
rates (and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.
Deferred 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 outside profit or loss when the tax relates to items that
are recognised outside profit or loss or arising from a business
combination.
A deferred tax liability shall be recognised for all taxable
temporary differences, except to the extent that the deferred tax
liability arises from: (a) the initial recognition of goodwill; or
(b) the initial recognition of an asset or liability in a
transaction which: (i) is not a business combination; and (ii) at
the time of the transaction, affects neither accounting profit nor
taxable profit (tax loss).
Except for business combinations, no deferred income tax is
recognised from the initial recognition of an asset or liability,
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 and their measurement also
reflects the manner in which management expects to recover or
settle the carrying amount of the related asset or liability. With
respect to non-depreciable items of property, plant and equipment
measured at fair value and items of investment property measured at
fair value, the related deferred tax liability or deferred tax
asset is measured on the basis that the carrying amount of the
asset will be recovered entirely through sale. When an investment
property that is depreciable is held by the entity in a business
model whose objective is to consume substantially all of the
economic benefits embodied in the property through use over time
(rather than through sale), the related deferred tax liability or
deferred tax asset is measured on the basis that the carrying
amount of such property will be recovered entirely through use.
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, unless the
deferred tax asset relating to temporary differences arises from
the initial recognition of an asset or liability in a transaction
that:
- is not a business combination; and
- at the time of the transaction, affects neither accounting
profit nor taxable profit (tax loss).
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.
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: (i) a legally enforceable right of
set-off exists; and (ii) 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.
(d) Fair Value of Assets and Liabilities
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.
(e) Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost
or fair value as indicated less, where applicable, any accumulated
depreciation and impairment losses.
Plant and equipment
Plant and equipment are measured on the cost basis and therefore
carried at cost less accumulated depreciation and any accumulated
impairment. In the event the carrying amount of plant and equipment
is greater than the estimated recoverable amount, the carrying
amount is written down immediately to the estimated recoverable
amount and impairment losses are recognised either in profit or
loss. A formal assessment of recoverable amount is made when
impairment indicators are present (refer to Note 1(h) for details
of impairment).
The carrying amount of plant and equipment is reviewed annually
by directors to ensure it is not in excess of the recoverable
amount from these assets. The recoverable amount is assessed on the
basis of the expected net cash flows that will be received from the
asset's employment and subsequent disposal. The expected net cash
flows have been discounted to their present values in determining
recoverable amounts.
The cost of fixed assets constructed within the consolidated
group includes the cost of materials, direct labour, borrowing
costs and an appropriate proportion of fixed and variable
overheads.
Subsequent costs are included in the asset's carrying amount or
recognised as a separate asset, as appropriate, only 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 repairs and maintenance are recognised as
expenses in profit or loss during the financial period in which
they are incurred.
Depreciation
The depreciable amount of all fixed assets including buildings
and capitalised leased assets, but excluding freehold land, is
depreciated on a straight-line basis over the asset's useful life
to the Group commencing from the time the asset is held ready for
use. Leasehold improvements are depreciated over the shorter of
either the unexpired period of the lease or the estimated useful
lives of the improvements.
The depreciation rates used for each class of depreciable assets
are:
Class of Fixed Asset Depreciation Rate
Plant and equipment 20%
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its
recoverable amount if the asset's carrying amount is greater than
its estimated recoverable amount.
Gains and losses on disposals are determined by comparing
proceeds with the carrying amount. These gains and losses are
recognised in profit or loss in the period in which they arise.
Gains shall not be classified as revenue. When revalued assets are
sold, amounts included in the revaluation surplus relating to that
asset are transferred to retained earnings.
(f) Exploration and Evaluation Expenditure
Expenditure on exploration and evaluation is accounted for in
accordance with the 'area of interest' method and with AASB 6
Exploration for and Evaluation of Mineral Resources, which is the
Australian equivalent of IFRS 6 - Exploration for and Evaluation of
Mineral Resources.
Exploration and evaluation costs are capitalised as intangible
assets and assessed for impairment where facts and circumstances
suggest that the carrying amount of an exploration and evaluation
asset may exceed the recoverable amount. Exploration and evaluation
costs are capitalised if the rights to tenure of the area of
interest are current and either:
(i) the expenditure relates to an exploration discovery where,
at balance sheet date, activities have not yet reached a stage
which permits an 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; or
(ii) it is expected that the expenditure will be recouped
through successful exploitation of the area of interest, or
alternatively, by its sale.
Costs incurred before the Group has obtained the legal rights to
explore an area are expensed.
Each potential or recognised area of interest is reviewed every
six months to determine whether economic quantities of reserves
have been found or whether further exploration and evaluation work
is underway or planned to support the continued carry forward of
capitalised costs.
Where a determination is made that there is no further value to
be extracted from the data licenses then any unamortised balance is
written off.
Once management has determined the existence of economically
recoverable reserves for an area of interest, deferred costs are
tested for impairment and then classified from exploration and
evaluation assets to oil and gas assets on the Consolidated
Statement of Financial Position.
The recoverability of the carrying amount of the exploration and
evaluation assets is dependent on successful development and
commercial exploitation, or alternatively, sale of the respective
areas of interest
(g) Financial Instruments
Recognition and Initial Measurement
Financial assets and financial liabilities are recognised when
the Group becomes a party to the contractual provisions to the
instrument. For financial assets, this is the date that the Group
commits itself to either the purchase or sale of the asset (i.e.
trade date accounting is adopted).
Financial instruments (except for trade receivables) are
initially measured at fair value plus transactions costs except
where the instrument is classified 'at fair value through profit or
loss' in which case transaction costs are expensed to profit or
loss immediately. Where available, quoted prices in an active
market are used to determine fair value. In other circumstances,
valuation techniques are adopted.
Trade receivables are initially measured at the transaction
price if the trade receivables do not contain a significant
financing component or if the practical expedient was applied as
specified in AASB 15.63.
Classification and Subsequent Measurement
Financial liabilities
Financial instruments are subsequently measured at:
- amortised cost; or
- fair value through profit or loss.
A financial liability is measured at fair value through profit
and loss if the financial liability is:
- held for trading; or
- initially designated as at fair value through profit or loss.
All other financial liabilities are subsequently measured at
amortised cost using the effective interest method.
The effective interest method is a method of calculating the
amortised cost of a debt instrument and of allocating interest
expense in profit or loss over the relevant period. The effective
interest rate is the internal rate of return of the financial asset
or liability. That is, it is the rate that exactly discounts the
estimated future cash flows through the expected life of the
instrument to the net carrying amount at initial recognition.
A financial liability is held for trading if:
- it is incurred for the purpose of repurchasing or repaying in the near term; or
- it is part of a portfolio where there is an actual pattern of short-term profit taking.
Any gains or losses arising on changes in fair value are
recognised in profit or loss to the extent that they are not part
of a designated hedging relationship are recognised in profit or
loss.
The change in fair value of the financial liability attributable
to changes in the issuer's credit risk is taken to other
comprehensive income and are not subsequently reclassified to
profit or loss. Instead, they are transferred to retained earnings
upon derecognition of the financial liability. If taking the change
in credit risk in other comprehensive income enlarges or creates an
accounting mismatch, then these gains or losses should be taken to
profit or loss rather than other comprehensive income.
A financial liability cannot be reclassified.
Financial assets
Financial assets are subsequently measured at:
- amortised cost;
- fair value through other comprehensive income; or
- fair value through profit or loss.
Measurement is on the basis of two primary criteria:
- the contractual cash flow characteristics of the financial asset; and
- the business model for managing the financial assets.
A financial asset that meets the following conditions is
subsequently measured at amortised cost:
- the financial asset is managed solely to collect contractual cash flows; and
- the contractual terms within the financial asset give rise to
cash flows that are solely payments of principal and interest on
the principal amount outstanding on specified dates.
A financial asset that meets the following conditions is
subsequently measured at fair value through other comprehensive
income:
- the contractual terms within the financial asset give rise to
cash flows that are solely payments of principal and interest on
the principal amount outstanding on specified dates;
- the business model for managing the financial assets comprises
both contractual cash flows collection and the selling of the
financial asset.
By default, all other financial assets that do not meet the
measurement conditions of amortised cost and fair value through
other comprehensive income are subsequently measured at fair value
through profit or loss.
The Company initially designates a financial instrument as
measured at fair value through profit or loss if:
- it eliminates or significantly reduces a measurement or
recognition inconsistency (often referred to as "accounting
mismatch") that would otherwise arise from measuring assets or
liabilities or recognising the gains and losses on them on
different bases;
- it is in accordance with the documented risk management or
investment strategy, and information about the groupings was
documented appropriately, so that the performance of the financial
liability that was part of a group of financial liabilities or
financial assets can be managed and evaluated consistently on a
fair value basis.
The initial designation of the financial instruments to measure
at fair value through profit or loss is a one-time option on
initial classification and is irrevocable until the financial asset
is derecognised.
Derecognition
Derecognition refers to the removal of a previously recognised
financial asset or financial liability from the statement of
financial position.
Derecognition of financial liabilities
A liability is derecognised when it is extinguished (i.e. when
the obligation in the contract is discharged, cancelled or
expires). An exchange of an existing financial liability for a new
one with substantially modified terms, or a substantial
modification to the terms of a financial liability is treated as an
extinguishment of the existing liability and recognition of a new
financial liability.
The difference between the carrying amount of the financial
liability derecognised and the consideration paid and payable,
including any non-cash assets transferred or liabilities assumed,
is recognised in profit or loss.
Derecognition of financial assets
A financial asset is derecognised when the holder's contractual
rights to its cash flows expires, or the asset is transferred in
such a way that all the risks and rewards of ownership are
substantially transferred.
All of the following criteria need to be satisfied for
derecognition of financial asset:
- the right to receive cash flows from the asset has expired or been transferred;
- all risk and rewards of ownership of the asset have been substantially transferred; and
- the Company no longer controls the asset (i.e. the Company has
no practical ability to make a unilateral decision to sell the
asset to a third party).
On derecognition of a financial asset measured at amortised
cost, the difference between the asset's carrying amount and the
sum of the consideration received and receivable is recognised in
profit or loss.
On derecognition of a debt instrument classified as at fair
value through other comprehensive income, the cumulative gain or
loss previously accumulated in the investment revaluation reserve
is reclassified to profit or loss.
On derecognition of an investment in equity which was elected to
be classified under fair value through other comprehensive income,
the cumulative gain or loss previously accumulated in the
investment revaluation reserve is not reclassified to profit or
loss, but is transferred to retained earnings.
Impairment
The Group recognises a loss allowance for expected credit losses
on:
- financial assets that are measured at amortised cost or fair
value through other comprehensive income.
Loss allowance is not recognised for:
- financial assets measured at fair value through profit or loss.
Expected credit losses are the probability-weighted estimate of
credit losses over the expected life of a financial instrument. A
credit loss is the difference between all contractual cash flows
that are due and all cash flows expected to be received, all
discounted at the original effective interest rate of the financial
instrument.
The Group uses the following approaches to impairment, as
applicable under AASB 9: Financial Instruments:
- the general approach
General approach
Under the general approach, at each reporting period, the Group
assesses whether the financial instruments are credit-impaired, and
if:
- the credit risk of the financial instrument has increased
significantly since initial recognition, the Group measures the
loss allowance of the financial instruments at an amount equal to
the lifetime expected credit losses; or
- there is no significant increase in credit risk since initial
recognition, the Group measures the loss allowance for that
financial instrument at an amount equal to 12-month expected credit
losses.
(h) Impairment of Assets
At the end of each reporting period, the company assesses
whether there is any indication that an asset may be impaired. The
assessment will include the consideration of external and internal
sources of information, including dividends received from
subsidiaries, associates or joint ventures deemed to be out of
pre-acquisition profits. If such an indication exists, an
impairment test is carried out on the asset by comparing the
recoverable amount of the asset, being the higher of the asset's
fair value less costs of disposal and value in use, to the asset's
carrying amount. Any excess of the asset's carrying amount over its
recoverable amount is recognised immediately in profit or loss,
unless the asset is carried at a revalued amount in accordance with
another Standard (e.g. in accordance with the revaluation model in
AASB 116: Property, Plant and Equipment ). Any impairment loss of a
revalued asset is treated as a revaluation decrease in accordance
with that other Standard.
Where it is not possible to estimate the recoverable amount of
an individual asset, the entity estimates the recoverable amount of
the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill,
intangible assets with indefinite lives and intangible assets not
yet available for use.
When an impairment loss subsequently reverses, the carrying
amount of the asset (or cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised
for the asset (or cash-generating unit) in prior years. A reversal
of an impairment loss is recognised immediately in profit or loss,
unless the relevant asset is carried at a revalued amount, in which
case the reversal of the impairment loss is treated as a
revaluation increase
(i) Interests in Joint Arrangements
Joint arrangements represent the contractual sharing of control
between parties in a business venture where unanimous decisions
about relevant activities are required.
Separate joint venture entities providing joint venturers with
an interest to net assets are classified as a joint venture and
accounted for using the equity method.
Joint operations represent arrangements whereby joint operators
maintain direct interests in each asset and exposure to each
liability of the arrangement. The company's interests in the
assets, liabilities, revenue and expenses of joint operations are
included in the respective line items of the financial
statements.
Gains and losses resulting from sales to a joint operation are
recognised to the extent of the other parties' interests. When the
Company makes purchases from a joint operation, it does not
recognise its share of the gains and losses from the joint
arrangement until it resells those goods/assets to a third
party.
(j) Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of the Company is the currency of the
primary economic environment in which that entity operates. The
financial statements are presented in United States dollars, which
is the Company's functional currency.
Transaction and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the date of the
transaction. Foreign currency monetary items are translated at the
year-end exchange rate. Non-monetary items measured at historical
cost continue to be carried at the exchange rate at the date of the
transaction. Non-monetary items measured at fair value are reported
at the exchange rate at the date when fair values were
determined.
Exchange differences arising on the translation of monetary
items are recognised in profit or loss, except exchange differences
that arise from net investment hedges.
Exchange differences arising on the translation of non-monetary
items are recognised directly in other comprehensive income to the
extent that the underlying gain or loss is recognised in other
comprehensive income, otherwise the exchange difference is
recognised in the profit or loss.
The Company
The financial results and position of foreign operations whose
functional currency is different from the entity's presentation
currency are translated as follows:
- assets and liabilities are translated at exchange rates
prevailing at the end of the reporting period;
- income and expenses are translated at exchange rates on the date of transaction; and
- all resulting exchange differences are recognised in other comprehensive income.
Exchange differences arising on translation of foreign
operations with functional currencies other than Australian dollars
are recognised in other comprehensive income and included in the
foreign currency translation reserve in the statement of financial
position and allocated to non-controlling interest where relevant.
The cumulative amount of these differences is reclassified into
profit or loss in the period in which the operation is disposed
of.
(k) Employee Benefits
Short-term employee benefits
Provision is made for the Company's obligation for short-term
employee benefits. Short-term employee benefits are benefits (other
than termination benefits) that are expected to be settled wholly
before twelve months after the end of the annual reporting period
in which the employees render the related service, including wages,
salaries and sick leave. Short-term employee benefits are measured
at the (undiscounted) amounts expected to be paid when the
obligation is settled.
The Company's obligations for short-term employee benefits such
as wages, salaries and sick leave are recognised as part of current
trade and other payables in the statement of financial position.
The Company's obligations for employees' annual leave and long
service leave entitlements are recognised as provisions in the
statement of financial position.
Other long-term employee benefits
Provision is made for employees' long service leave and annual
leave entitlements not expected to be settled wholly within 12
months after the end of the annual reporting period in which the
employees render the related service. Other long-term employee
benefits are measured at the present value of the expected future
payments to be made to employees.
Expected future payments incorporate anticipated future wage and
salary levels, durations of service and employee departures and are
discounted at rates determined by reference to market yields at the
end of the reporting period on government bonds that have maturity
dates that approximate the terms of the obligations. Any
remeasurements for changes in assumptions of obligations for other
long- term employee benefits are recognised in profit or loss in
the periods in which the changes occur.
The Company's obligations for long-term employee benefits are
presented as non-current provisions in its statement of financial
position, except where the company does not have an unconditional
right to defer settlement for at least 12 months after the end of
the reporting period, in which case the obligations are presented
as current provisions.
(l) Provisions
Provisions are recognised when the Group has a legal or
constructive obligation, as a result of past events, for which it
is probable that an outflow of economic benefits will result and
that outflow can be reliably measured.
Provisions are measured using the best estimate of the amounts
required to settle the obligation at the end of the reporting
period.
(m) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and deposits
available on demand with banks, other short-term highly liquid
investments with original maturities of 3 months or less.
(n) Revenue and Other Income Revenue recognition
Interest income is recognised using the effective interest
method.
(o) Trade and Other Payables
Trade and other payables represent the liabilities for goods and
services received by the Group that remain unpaid at the end of the
reporting period. The balance is recognised as a current liability
with the amounts normally paid within 30 days of recognition of the
liability. Trade and other payables are initially measured at fair
value and subsequently measured at amortised cost using the
effective interest method.
(p) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount
of GST/VAT, except where the amount of GST/VAT incurred is not
recoverable from the relevant taxation authority.
Receivables and payables are stated inclusive of the amount of
GST/VAT receivable or payable. The net amount of GST/VAT
recoverable from, or payable to, the relevant taxation authority is
included with other receivables or payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST/VAT
components of cash flows arising from investing or financing
activities which are recoverable from, or payable to, the relevant
taxation authority are presented as operating cash flows included
in receipts from customers or payments to suppliers.
(q) Comparative Figures
When required by Accounting Standards, comparative figures have
been adjusted to conform to changes in presentation for the current
financial year.
Where the Group retrospectively applies an accounting policy,
makes a retrospective restatement or reclassifies items in its
financial statements, an additional (third) statement of financial
position as at the beginning of the preceding period in addition to
the minimum comparative financial statements is presented.
(r) Critical Accounting Estimates and Judgements
The preparation of the consolidated financial statements in
conformity with IFRS requires management to make judgements,
estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income
and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods
affected.
Information about critical judgements in applying accounting
policies that have the most significant effect on the amounts
recognised in the financial statements is included in the following
Notes:
- Note 11 - Exploration and evaluation assets
- Note 3 - Taxes
Note 2 Parent Information
The following information has been extracted from 2021 2020
the books and records of the financial
information of the parent entity has been prepared
in accordance with Australian Accounting Standards. US$ US$
Statement of Financial Position Assets
Current assets 1,949,993 989,196
Non-current assets 333,879 2,721,663
Total assets
2,283,872
3,710,859
Liabilities
Current liabilities 243,965 290,792
Non-current liabilities - -
Total liabilities 243,965 290,792
----------------------------------
Net assets 2,039,907 3,420,067
Equity
Issued capital 42,189,991 39,221,112
(40,828,716)
Accumulated losses (36,765,940)
Option reserve 678,632 964,895
Total equity 2,039,907 3,420,067
==================================
Statement of Profit or Loss and Other Comprehensive
Income
Loss for the year (4,062,776) (2,411,588)
----------------------------------
(4,062,776)
Total comprehensive income/(loss) (2,411,588)
As at 30 June 2021, the parent entity has no capital
commitments (2020: Nil).
Note 3 Tax Expense
Consolidated Group
Note 2021 2020
US$ US$
(a) The prima facie tax on
profit from ordinary activities
before income tax is reconciled
to income tax as follows:
Prima facie tax payable on
profit from ordinary activities
before income tax at 19% (2020:
19%)
* Consolidated Group (746,281) (290,025)
Increase (decrease) in income
tax expense due to:
Expenditure not allowable
for income tax purposes 500,763 24,722
Deferred tax assets not recognised 245,518 265,303
---------- ----------
Income tax attributable to - -
entity
========== ==========
( b) Current tax payable
The Group has no current tax payable (2020: Nil).
On 1 April 2014, Global Petroleum Limited changed its tax
domicile from Australia to the United Kingdom. However, it must be
noted that under Australian tax law, Global Petroleum Limited
remains an Australian tax resident. As a result, Global Petroleum
Limited is a tax resident of both Australia and the United Kingdom.
Under the terms of the Australia-United Kingdom Double Tax Treaty,
Global Petroleum Limited will be a dual resident company deemed to
be a resident in the UK for the purposes of allocating taxing
rights.
Multilateral Instruments (MLI) came into force in January 2019
which impact the tie breaker rule previously used for dual resident
entities. The MLI changes currently cover six of Australia's double
tax treaties which includes the UK. The dual residents entitlement
to any treaty benefits will be denied where the two competent
authorities, the Australia Taxation Office and HM Revenue and
Customs do not reach an agreement on a single jurisdiction of tax
residency. On 13 October 2020, the Company received a decision from
the Australian Taxation Office determining the Company is deemed to
be a resident only in the UK.
(c) Deferred income tax
2021 2020
US$ US$
Deferred tax assets
Tax losses available to offset
future taxable income 3,662,676 2,720,565
Tax benefit not brought to account (3,662,676) (2,720,565)
------------ ------------
- -
============ ============
The amount of UK tax losses carried forward is US$13.28 million
as at 30 June 2021 (2020: US$12.25 million). A corresponding
deferred tax asset, calculated using the rate of 25% (which has
been enacted in the Finance Act 2021 effective from 1 April 2023),
of US$3.32 million (2020: US$2.33 million at 19%) has not been
recognised due to insufficient certainty regarding the availability
of future profits against which the losses can be utilised.
In addition the Group has a pool of pre-trading revenue
expenditure of US$0.2 million (2020: US$1.03 million) and a pool of
pre-trading capital expenditure of approximately US$7.8 million
(2020: US$8.5 million) arising in the overseas subsidiaries for
which no deferred tax asset has been recognised due to insufficient
certainty regarding the availability of future profits against
which the costs can be utilised
Note 4 Key Management Personnel Compensation
Refer to the Remuneration Report contained in the Directors'
Report for details of the remuneration paid or payable to each
member of the Group's key management personnel (KMP) for the year
ended 30 June 2021.
The totals of remuneration paid to KMP of the Company and the
Group during the year are as follows
2021 2020
US$ US$
Short-term employee benefits 422,791 540,411
Post-employment benefits 19,070 15,874
Share-based payments 162,014 -
Total KMP compensations 603,875 556,285
======== ========
Short-term employee benefits
- these amounts include fees and benefits paid to the
Non-Executive Chairman and Non-Executive Directors as well as all
salary, paid leave benefits, fringe benefits and cash bonuses
awarded to Executive Directors and other KMP.
Post-employment benefits
- these amounts are the current year's estimated costs of
providing for the Group's defined benefits scheme post-retirement,
superannuation contributions made during the year and
post-employment life insurance benefits.
Share-based payments
- these amounts represent the expense related to the
participation of KMP in equity-settled benefit schemes as measured
by the fair value of the options, rights and shares granted on
grant date.
Further information in relation to KMP remuneration can be found
in the Remuneration Report.
Other key management personnel transactions
A number of Directors, or their related parties, hold positions
in other entities that result in them having control or significant
influence over the financial or operating policies of those
entities. A number of these entities transacted with the Company or
its controlled entities in the reporting period.
During the year, the Company paid DW Accounting and Advisory Pty
Ltd, a company controlled by Mr A Draffin US$46,671 (2020:
US$46,671) for company secretarial services and accountancy fees
and Northlands Advisory Services Limited, a company controlled by
Mr J van der Welle, US$22,384 (2020: US$41,319) for consulting
services.
Note 5 Auditor's Remuneration
2021 2020
US$ US$
Remuneration of the auditor
for:
- auditing or reviewing of the
Group's financial statements 23,358 24,879
23,358 24,879
======================== =======
The Company's auditor for 2021 is Hall Chadwick WA Audit Pty
Ltd, and for 2020, the auditor was Bentleys Audit and Corporate
(WA) Pty Ltd.
Note 6 Earnings per Share
(a) Reconciliation of earnings to profit or
loss
2021 2020
US$ US$
Loss used in calculating basic and diluted
earnings per share (3,927,794) (1,526,449)
Weighted average number of ordinary shares
used in calculating basic earnings per share 380,503,965 202,652,927
Effect of dilutive securities - -
----------- -----------
Adjusted weighted average number of ordinary
shares and potential ordinary shares used in
calculating basic and diluted earnings per
share 380,503,965 202,652,927
Basic and diluted (loss) per share (1.03) (0.75)
The above data reflects the income and share data used in the
calculations of basic and diluted earnings per share.
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Company, excluding any costs
of servicing equity other than ordinary shares, by the weighted
average number of ordinary shares outstanding during the year,
adjusted for bonus elements in ordinary shares issued during the
year.
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account the
after 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
Note 7 Cash and Cash Equivalents
2021 2020
US$ US$
Cash at bank and on hand 1,834,434 932,818
Short term bank deposits - -
------------------- -------
1,834,434 932,818
=================== =======
Reconciliation of cash
Cash and cash equivalents at the end of the financial
year as shown in the statement of cash flows
is reconciled to items in the statement of financial
position as follows
Cash and cash equivalents 1,834,434 932,818
Bank overdrafts - -
------------------- -------
1,834,434 932,818
=================== =======
Note 8 Trade and Other Receivables
Other receivables 2021 2020
US$ US$
- deposits -
- GST & VAT receivable 80,622 27,696
------ -------
Total current trade and other
receivables 80,622 727,696
====== =======
Credit risk
The Group has no significant concentration of credit risk with
respect to any single counter party or group of counter parties
other than those receivables specifically provided for and
mentioned within Note 8. The class of assets described as Trade and
Other Receivables is considered to be the main source of credit
risk related to the Group.
On a geographic basis, the Group has significant credit risk
exposures in United Kingdom and Australia given the substantial
operations in those regions. The Group's exposure to credit risk
for receivables at the end of the reporting period in those regions
is as follows:
2021 2020
US$ US$
Australia 11,030 (8,785)
United Kingdom 69,592 36,481
------ -------
80,622 27,696
====== =======
The Group always measures the loss allowance for trade
receivables at an amount equal to lifetime expected credit loss.
The expected credit losses on trade receivables are estimated using
a provision matrix by reference to past default experience of the
debtor and an analysis of the debtor's current financial position,
adjusted for factors that are specific to the debtors, general
economic conditions of the industry in which the debtors operate
and an assessment of both the current as well as the forecast
direction of conditions at the reporting date.
There has been no change in the estimation techniques or
significant assumptions made during the current reporting
period.
The Group writes off a trade receivable when there is
information indicating that the debtor is in severe financial
difficulty and there is no realistic prospect of recovery, e.g.
when the debtor has been placed under liquidation or has entered
into bankruptcy proceedings, or when the trade receivables are over
two years past due, whichever occurs earlier. None of the trade
receivables that have been written off is subject to enforcement
activities.
2021 2020
US$ US$
Financial Assets Measured at Amortised $ $
Cost
Trade and other Receivables
* Total current 80,622 27,696
- -
* Total non-current
------ ------
Total financial assets measured
at amortised cost 80,622 27,696
====== ======
Note 9 Interests in Subsidiaries
(a) Information about Principal Subsidiaries
The subsidiaries listed below have share capital consisting
solely of ordinary shares or ordinary units which are held directly
by the Group. The proportion of ownership interests held equals the
voting rights held by Group. Each subsidiary's principal place of
business is also its country of incorporation.
Ownership interest
held by the Group
Name of subsidiary Principal place of 2021 2020
business (%) (%)
Global Petroleum UK
Limited United Kingdom 100% 100%
Global Petroleum Exploration
Limited United Kingdom 100% 100%
Global Petroleum Namibia
Limited British Virgin Islands 100% 100%
Subsidiary financial statements used in the preparation of these
consolidated financial statements have also been prepared as at the
same reporting date as the Group's financial statements.
(b) Significant Restrictions
There are no significant restrictions over the Group's ability
to access or use assets, and settle liabilities, of the Group.
Note 10 Property, Plant and Equipment
2021 2020
US$ US$
Plant and Equipment
Furniture and Fittings
At cost 33,535 33,535
Accumulated depreciation (16,938) (13,499)
-------- --------
16,597 20,036
======== ========
Total plant and equipment 16,597 20,036
======== ========
(a) Movements in Carrying Amounts
Movements in carrying amounts for each class of property, plant
and equipment between the beginning and the end of the current
financial year:
Furniture Total
and
Fittings
US$ US$
Consolidated Group:
Balance at 1 July 2019 4,933 4,933
Additions 17,198 17,198
Depreciation expense (2,095) (2,095)
--------- --------
Balance at 30 June 2020 20,036 20,036
--------- --------
Additions - -
Depreciation expense (3,439) (3,439)
--------- --------
Balance at 30 June 2021 16,597 16,597
========= ========
Note 11 Exploration and Evaluation Assets
2021 2020
US$ US$
Balance at beginning of year 2,673,754 2,339,095
Expenditure capitalised during the year 708,985 334,659
Expenditure written off during the year (2,410,272) -
Balance at end of year 972,467 2,673754
=========== =========
At 30 June 2021, the balance of the Group's exploration and
evaluation assets relates solely to its Namibian licence
PEL0094.
During the year, the Group wrote off US$2,410,272 (2020:Nil) in
capitalised expenditure on expiry of the licence PEL0029 (refer
note 16 for further details).
During the year, the Group did not incur any exploration and
evaluation expenditure that did not meet the criteria for
recognition as exploration assets under the Group's accounting
policy (2020: Nil).
In addition, an amount of US$16,070 (2020: US$98,315) was spent
on business development, which relates to the Group's activities in
assessing opportunities in the oil and gas sector.
Namibia
In September 2018, Global Petroleum Namibia was awarded licence
PEL0094 and a Petroleum Agreement was signed on 11 September 2018.
The Initial Exploration Period runs for four years, and is divided
into two sub periods of two years each; IEP1, and IEP2. IEP1 runs
from September 2018 to September 2020. During IEP1, Global has
undertaken to purchase and reprocess the existing available 3D
seismic data and other 2D data, as well as some additional G &
G studies. In July 2020, agreement was reached with the Ministry of
Mines and Energy ("MME") for the extension of the sub-period ending
in September 2020 for one year to September 2021, with a modified
work commitment. The Company has met all IEP1 commitments at the
date of this report. In August 2021, the Company announced that the
Namibian authorities had acknowledged the exercise by the Company
of its option to enter into the next sub-period of PEL0094 from
September 2021 to September 2022.
Exploration commitments on the Company's exploration tenements
are detailed in Note 16.
Note 12 Other Assets
2021 2020
US$ US$
Current
prepayments 39,384 54,450
39,384 54,450
======== ========
Note 13 Trade and Other Payables
2021 2020
US$ US$
Current
Unsecured liabilities
Trade payables 35,161 10,908
Sundry payables and accrued expenses 48,838 113,365
------ -------
83,999 124,273
====== =======
Financial liabilities at amortised cost classified
as trade and other payables
Trade and other payables
* Total current 83,999 124,273
- -
* Total non-current
------ -------
Financial liabilities as trade and other
payables 83,999 124,273
====== =======
Note 14 Provisions
2021 2020
US$ US$
Current
Employee benefits
Opening balance at 1 July 166,309 142,632
Additional provisions (2,851) 23,677
------- -------
Balance at 30 June 163,458 166,309
======= =======
Provision for Employee Benefits
Provision for employee benefits represents amounts accrued for
annual leave and long service leave.
Liabilities for wages, salaries and remuneration, including
non-monetary benefits, annual leave and accumulating sick leave
expected to be settled within 12 months of the reporting date are
recognised in provisions in respect of employees' services up to
the reporting date and are measured at the amounts expected to be
paid when the liabilities are settled. Liabilities for
non-accumulating sick leave are recognised when the leave is taken
and measured at the rates paid or payable. Employee benefits
payable later than one year are measured at the present value of
the estimated future cash flows to be made for those benefits.
Note 15 Issued Capital
2021 2020
US$ US$
611,541,816 (2020: 202,652,927) fully
paid ordinary shares 42,189,991 39,221,112
41,189,991 39,221,112
========== ==========
At 30 June 2021, the Group has authorised share capital
amounting to 611,541,816 fully paid ordinary shares. The shares
have no par value.
2021 2020
(a) Ordinary Shares No. US$ No. US$
At the beginning of the reporting period 202,652,927 39,221,112 202,652,927 39,221,112
Shares issued during the year 408,888,889 3,191,040 - -
Less: Transaction costs - (222,161) - -
----------- ---------- ------------ ----------
At the end of the reporting period 611,541,816 42,189,991 202,652,927 39,221,112
=========== ========== ============ ==========
(b) Options 2021 2020
Number of Weighted Number Weighted
of
options average options average
exercise exercise
price price
(a) Ordinary Shares US$ US$
At the beginning of the reporting period 8,100,000 0.0380 15,700,000 0.0380
Options expired during the year - - (7,600,000) -
Options issued during the year 19,000,000 0.0143 - -
----------- ---------- ------------ ----------
At the end of the reporting period 27,100,000 0.0214 8,100,000 0.0380
=========== ========== ============ ==========
(c) Warrants 2021 2020
Number of Weighted Number Weighted
of
warrants average warrants average
exercise exercise
price price
GBP GBP
At the beginning of the reporting period - - - -
Warrants issued during the year 297,777,778 0.012 - -
----------- ---------- ------------ ----------
At the end of the reporting period 297,777,778 0.012 - -
=========== ========== ============ ==========
(d) 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. Given the stage of development
of the Group, the Board's objective is to minimise debt and to
raise funds as required through the issue of new shares. The
Company conducted two equity fund-raisings during the reporting
period and one after the year-end. (See Note 1(a) - Going Concern
and Note 20 - Events After the Reporting Period)
There were no changes in the Group's approach to capital
management during the year. The Group is not subject to any
externally imposed capital requirements.
(e) Dividends
No dividends have been paid or declared during the year (2020:
Nil).
(f) Capital Raise
In August 2021, the Company completed a capital raise where an
additional 200,000,000 ordinary shares were issued bringing the
total ordinary shares on issue to 811,541,816 at the date of this
report.
Note 16 Capital and Joint Venture Commitments
(a) Exploration expenditure commitments
In order to maintain current rights of tenure to exploration
tenements, the Group is required to perform minimum exploration
work to meet the minimum expenditure requirements specified by
various foreign governments where exploration tenements are held.
These obligations are subject to renegotiation when application for
a tenement is made and at other times. These obligations are not
provided for in the financial statements. Financial commitments for
subsequent periods can only be determined at future dates, as the
success or otherwise of exploration programmes determines courses
of action allowed under options available in tenements. The Group's
only exploration expenditure commitments relate to its interest in
joint ventures. Refer to Note 16(b) for further information.
(b) Namibia Licence PEL0094
Global was awarded licence PEL0094 in Namibia in September 2018,
and a Petroleum Agreement was signed on 11 September 2018. The
Initial Exploration Period ("IEP") runs for four years, and is
divided into two sub periods of two years each; IEP1, and IEP2. IEP
1 runs from December 2018 to December 2020. In July 2020, agreement
was reached with the MME for an extension of the sub period ending
September 2020 for one year to September 2021, with a modified work
commitment.
During IEP1, Global has undertaken to licence existing seismic
data and the carry out of studies specifically designed to focus on
the Marula and Welwitschia Deep prospects. The technical work
undertaken in late 2020 has more than fulfilled the firm work
commitments in respect of IEP1. In August 2021, the Company elected
to enter the next licence sub-period IEP2 until September 2022. The
commitment is to shoot and process a new 2,000 square kilometre 3D
seismic data survey.
Global Petroleum Namibia Limited has an 78 per cent interest in
the PEL0094, however it is responsible for 100 per cent of the
expenditure requirements with its joint venture partners holding a
total of 22 per cent free carried interest.
With respect to PEL0029 (Blocks 1910B and 2010A), the licence
was issued on 3 December 2010 and expired under its terms on 3
December 2020, further extensions not being permitted under
Namibian petroleum exploration law. The Company completed its
outstanding licence work programme commitments for PEL0029 under
budget in the latter part of 2020.
Note 17 Operating Segments
General Information
Identification of reportable segments
The Group operates in the oil and gas exploration, development
and production segments as described below: The Group currently
holds a prospective oil and gas exploration interests offshore
Namibia.
Basis of accounting for purposes of reporting by operating
segments
(a) Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of
Directors, being the chief operating decision makers with respect
to operating segments, are determined in accordance with accounting
policies that are consistent with those adopted in the annual
financial statements of the Group.
(b) Intersegment transactions
An internally determined transfer price is set for all
intersegment sales. This price is reset quarterly and is based on
what would be realised in the event the sale was made to an
external party at arm's length. All such transactions are
eliminated on consolidation of the Group's financial
statements.
Corporate charges are allocated to reporting segments based on
the segment's overall proportion of revenue generation within the
Group. The Board of Directors believes this is representative of
likely consumption of head office expenditure that should be used
in assessing segment performance and cost recoveries.
Intersegment loans payable and receivable are initially
recognised at the consideration received/to be received net of
transaction costs. If intersegment loans receivable and payable are
not on commercial terms, these are not adjusted to fair value based
on market interest rates. This policy represents a departure from
that applied to the statutory financial statements.
(c) Segment assets
Where an asset is used across multiple segments, the asset is
allocated to the segment that receives the majority of the economic
value from the asset. In most instances, segment assets are clearly
identifiable on the basis of their nature and physical
location.
(d) Segment liabilities
Liabilities are allocated to segments where there is direct
nexus between the incurrence of the liability and the operations of
the segment. Borrowings and tax liabilities are generally
considered to relate to the Group as a whole and are not allocated.
Segment liabilities include trade and other payables and certain
direct borrowings.
(e) Unallocated items
The following items of revenue, expense, assets and liabilities
are not allocated to operating segments as they are not considered
part of the core operations of any segment:
-- Derivatives
-- Net gains on disposal of available-for-sale investments
-- Impairment of assets and other non-recurring items of revenue or expense
-- Income tax expense
-- Deferred tax assets and liabilities
-- Current tax liabilities
-- Other financial liabilities
-- Intangible assets
-- Discontinued operations
-- Retirement benefit obligations
(f) Segment information
(i) Segment performance
Africa Consolidated
2021 2020 2021 2020
US$ US$ US$ US$
Interest income - 792 23,928
Net foreign exchange gain/(loss) - 78,814 (14,810)
Corporate and administration costs - (1,597,128) (1,535,567)
Exploration written off (2,410,272) (2,410,272) -
----------------- ------------- --------------- ---------------
Loss before income tax (2,410,272) (3,927,794) (1,526,449)
----------------- ------------- --------------- ---------------
Income tax (expense)/benefit for continuing - - -
operations
----------------- ------------- --------------- ---------------
Loss for the year (2,410,272) (3,927,794) (1,526,449)
================= ============= =============== ===============
(ii) Segment assets and liabilities Africa Consolidated
2021 2020 2021 2020
US$ US$ US$ US$
Segment assets
Assets 972,467 2,673,754 972,467 2,673,754
----------------- ------------- --------------- ---------------
Total segment assets 972,467 2,673,754 972,467 2,673,754
----------------- ------------- --------------- ---------------
Unallocated assets - 1,971,037 1,035,000
----------------- ------------- --------------- ---------------
Consolidated assets 972,467 2,673,754 2,943,504 3,708,754
================= ============= =============== ===============
Segment liabilities
Liabilities 3,500 8,584 3,500 8,584
----------------- ------------- --------------- ---------------
Total segment liabilities 3,500 8,584 3,500 8,584
----------------- ------------- --------------- ---------------
Unallocated liabilities - 243,957 281,998
----------------- ------------- --------------- ---------------
Consolidated liabilities 3,500 8,584 247,457 290,582
================= ============= =============== ===============
Acquisition of non-current assets, including
capitalised
exploration assets 708,985 334,659 708,985 334,659
----------------- ------------- --------------- ---------------
Note 18 Cash Flow Information
2021 2020
US$ US$
(a) Reconciliation of cash flows from operating
activities with profit after
Loss after income tax (3,927,794) (1,526,449)
Adjustments for items classified as investing/financing
activities: - 98,315
Adjustments for non-cash items:
Depreciation 3,439 2,095
Unrealised net foreign exchange (gain)/loss (35,844) 12,581
Share based payments 236,790 -
Exploration written off 2,410,272 -
Changes in assets and liabilities, net of the
effects of purchase and disposal of subsidiaries:
Decrease/ (increase) in receivables and prepayments 15,066 45,971
(Decrease)/ increase in payables (40,274) (59,058)
Increase/ (decrease) in provisions (2,851) 23,677
----------- -----------
Net cash (used in) operating activities (1,341,196) (1,402,868)
=========== ===========
Note 19 Share-based Payments
The aggregate share-based payments for the year ended 30 June
2021 are set out below
30 June 2021 30 June 2020
Number Weighted average Number Weighted average
exercise price exercise price
US$ US$
Options outstanding
as at 1 July 8,100,000 0.0380 15,700,000 0.0380
Granted 19,000,000 0.0143 - -
Expired - - (7,600,000) -
=========== ================= ============ =================
Options outstanding
as at 30 June 27,100,000 0.0214 8,100,000 0.0380
=========== ================= ============ =================
The following share-based payment arrangements were in existence
during the current reporting period
Number Grant Date Expiry Date Exercise Fair value Vesting
Price at grant Period
date
=========== ============ ============ ========== =========== ========
(i) Options 14 November 13 November
granted 8,100,000 2017 2022 US$0.0190 441,842 N/A
(ii) Options 7 January 21 January
granted 19,000,000 2021 2026 US$0.0143 236,790 N/A
Options were valued using the Black-Scholes model. Where
relevant, the expected life used in the model has been adjusted
based on management's best estimate of the effects of
non-transferability of exercise restrictions. Expected volatility
is based on the historical share price volatility of the Company's
ordinary shares over the reporting period.
Number Share price Exercise Expected Option life Risk free
at grant Price volatility interest
date US$ rate
US$
=========== ============ ========= ============ ============ ==========
8,100,000 0.024 0.0190 85% 5 years 2.24%
19,000,000 0.013 0.0143 160% 5 years 1.49%
Note 20 Events After the Reporting Period
On 10 August 2021, the Company announced that the Namibian
authorities had acknowledged the exercise by the Company of its
option to enter into the next sub-period of PEL0094 from September
2021 to September 2022.
On 12 August 2021 the Company announced that it had successfully
raised GBP1,000,000 in aggregate before costs, through the placing
of 200,000,000 Ordinary Shares at a placing price of 0.5 pence per
share.
As a further component of the placing, 100,000,000 Warrants were
also issued at an exercise price of 1 pence per share for a period
of 2 years (one Warrant for every two new Ordinary Shares). In the
event the Warrants are exercised in due course in full, associated
proceeds will be GBP1,000,000 with the result that the Company will
have raised gross proceeds of GBP2,000,000 at a weighted average
price of 0.67 pence per share.
Monecor (London) Ltd, trading as ETX Capital ("ETX Capital"),
the Company's Joint Broker, acted as sole broker in respect of the
placing. On 31 August 2021, the Company announced the resignation
of long-term Director and major shareholder, Mr Peter Taylor.
Note 21 Related Party Transactions
Related Parties
(a) Ultimate parent
Global Petroleum Limited is the ultimate Parent Entity of the
Group.
(b) Key Management Personnel:
The key management personnel of the Group during or since the
end of the financial year were as follows:
Directors
Mr John van der Welle Non-Executive Chairman
Mr Peter Hill Managing Director and Chief Executive
Officer
Mr Andrew Draffin Non-Executive Director and Company
Secretary
Mr Garrick Higgins Non-Executive Director
Mr Peter Taylor (resigned 31 August Non-Executive Director
2021)
Mr Peter Blakey (deceased 28 January Non-Executive Director
2021)
Other key management personnel transactions
A number of Directors, or their related parties, hold positions
in other entities that result in them having control or significant
influence over the financial or operating policies of those
entities. A number of these entities transacted with the Company or
its controlled entities in the reporting period.
During the year, the Company paid DW Accounting and Advisory Pty
Ltd, a company controlled by Mr A Draffin US$46,671 (2020:
US$46,671) for company secretarial services and accountancy fees
and Northlands Advisory Services Limited, a company controlled by
Mr J van der Welle, US$22,384 (2020: US$41,319) for consulting
services.
Note 22 Financial Risk Management
The Group's principal financial instruments comprise trade and
other receivables, trade and other payables, cash and term
deposits. The main risks arising from the Group's financial
instruments are interest rate risk, foreign currency risk, credit
risk and liquidity risk.
This note presents information about the Group's exposure to
each of the above risks, its objectives, policies and processes for
measuring and managing risk, and the management of capital. Other
than as disclosed, there have been no significant changes since the
previous financial year to the exposure or management of these
risks.
The Board of Directors has overall responsibility for the
establishment and oversight of the risk management framework. Given
the nature and size of the business, no formal risk management
committees have been established, however responsibility for
control and risk management is delegated to the appropriate level
of management with the Chairman, CEO and Company Secretary (or
their equivalent) having ultimate responsibility to the Board for
the risk management and control framework.
Risk management policies are established to identify and analyse
the risks faced by the Group, to set appropriate risk limits and
controls, and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect
changes in market conditions and the Group's activities.
Arrangements put in place by the Board to monitor risk
management include regular reporting to the Board in respect of the
operations and financial position of the Group. The Board also
reviews risks that relate to operations and financial instruments
as required, at least every six months.
Given the uncertainty as to the timing and amount of cash
inflows and outflows, the Group has not implemented any additional
strategies to mitigate the financial risks and no hedging has been
put in place. As the Group's operations change, the Directors will
review this policy periodically going forward.
The totals for each category of financial instruments, measured
in accordance with AASB 139: Financial Instruments: Recognition and
Measurement as detailed in the accounting policies to these
financial statements, are as follows.
Note 22: Financial Risk Management
(continued)
2021 2020
Note US$ US$
Financial Assets
Financial assets at amortised cost
- cash and cash equivalents 7 1,834,434 932,818
- trade and other receivables 8 80,622 27,696
-------------- ----------
Total financial assets 1,915,056 960,514
============== ==========
Financial Liabilities
Financial liabilities at amortised
cost
- trade and other payables 13 83,999 124,273
Total financial liabilities 83,999 124,273
Specific Financial Risk Exposures
and Management
The main risks the Group is exposed to through its financial
instruments are credit risk, liquidity risk and market risk
consisting of interest rate risk, foreign currency risk and other
price risk (commodity and equity price risk). There have been no
substantive changes in the types of risks the Group is exposed to,
how these risks arise, or the Board's objectives, policies and
processes for managing or measuring the risks from the previous
period.
a. Credit risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations. This arises principally from cash and
cash equivalents and trade and other receivables.
There are no significant concentrations of credit risk within
the Group with exception of cash on deposit as described below.
Trade and other receivables comprise accrued interest, GST, VAT
and other tax refunds due. Where possible, the Group trades only
with recognised, creditworthy third parties. It is the Group's
policy that all customers who wish to trade on credit terms are
subject to credit verification procedures. In addition, receivable
balances are monitored on an ongoing basis with the result that the
Group's exposure to bad debts is not significant. At 30 June 2021,
none (2020: none) of the Group's receivables are past due. No
impairment losses have been recognised in the Consolidated
Statement of Profit or Loss and Other Comprehensive Income.
With respect to credit risk from cash and cash equivalents, the
Group's exposure to credit risk arises from default of the
counterparty, with a maximum exposure equal to the carrying amount
of these instruments.
b. Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. The Board's
approach to managing liquidity is to ensure, as far as possible,
that the Group will have sufficient liquidity to meet its
liabilities when due. As at 30 June 2021, the Group has sufficient
liquid assets to meet its financial obligations.
The table below reflects an undiscounted contractual maturity
analysis for financial assets and financial liabilities. Financial
guarantee liabilities are treated as payable on demand since the
Group has no control over the timing of any potential settlement of
the liabilities.
Cash flows realised from financial assets reflect management's
expectation as to the timing of realisation. Actual timing may
therefore differ from that disclosed. The timing of cash flows
presented in the table to settle financial liabilities reflect the
earliest contractual settlement dates and do not reflect
management's expectations that banking facilities will be rolled
forward.
Financial Liability and Financial Asset Maturity Analysis
Consolidated 2021 2020 2021 2020 2021 2020 2021 2020
Group
US$ US$ US$ US$ US$ US$ US$ US$
-------------------- ---------- -------- ----- ----- ---------- --------- --------- -------
Financial liabilities due for payment
Trade and other 83,999 124,273 - - - - 83,999 124,273
payables
---------- -------- ----------------------------------- --------- -------
Total expected 83,999 124,273 - - - - 83,999 124,273
---------- -------- ----------------------------------- --------- -------
Within 1 Year 1 to 5 years Over 5 years Total
Consolidated 2021 2020 2021 2020 2021 2020 2021 2020
Group
US$ US$ US$ US$ US$ US$ US$ US$
-------------------- ---------- -------- ----- ----- ---------- --------- --------- -------
Financial assets - cash flows realisable
Cash and cash 1,834,434 932,818 - - - - 1,834,434 932,818
equivalents
Trade, term
and loan 80,622 27,696 - - - - 80,622 27,696
receivables
---------- -------- ----------------------------------- --------- -------
Total anticipated 1,915,056 960,514 - - - - 1,915,056 960,514
inflows
---------- -------- ----------------------------------- --------- -------
Net (outflow)
/ inflow 1,831,057 836,241 - - - - 1,831,057 836,241
on financial
instruments
========== ======== =================================== ========= =======
c. Market Risk
i. Interest rate risk
The Group's exposure to the risk of changes in market interest
rates relates primarily to the cash at bank and term deposits with
a floating interest rate.
These financial assets with variable rates expose the Group to
cash flow interest rate risk. All other financial assets and
liabilities, in the form of receivables and payables, are
non-interest bearing.
Interest rate sensitivity
A sensitivity of 50 basis points ("bp") increase or decrease to
the existing floating rate has been selected as this is considered
reasonable given the current level of both short term and long term
interest rates.
A change of 50 basis points in interest rate at the deporting
date would have increased (decreased) profit or loss and equity by
the amount shown below. The analysis assumes that all other
variables, in particular foreign currency rates, remain
constant.
The Group currently does not engage in any hedging or derivative
transactions to manage interest rate risk.
50bp Increase 50bp Decrease
US$ US$
2021
Cash and cash equivalents 9,172 9,172
-------------- --------------
2020
Cash and cash equivalents 4,664 4,664
-------------- --------------
ii. Foreign currency risk
The Company and its subsidiaries in the Group have a functional
currency of the US Dollar. The Group is exposed to foreign currency
risk from transactional currency exposure. Such exposure arises
from transactions denominated in currencies other than the
functional currency of the entities in the Group.
With instruments being held by overseas operations, fluctuations
in the US Dollar and UK Pound Sterling may impact on the Group's
financial results unless those exposures are appropriately
hedged.
The Group currently does not engage in any hedging or derivative
transactions to manage foreign currency risk.
Sensitivity analysis for currency risk
A sensitivity of 10% has been selected as this is considered
reasonable given historic and potential future changes in foreign
currency rates. This sensitivity analysis is prepared as at the
balance sheet date
Year ended 30 June 2021 Profit Equity
US$ US$
================================ ======== ========
+/- 10% in AU$/US$ and GBP/US$ 159,520 159,520
Year ended 30 June 2020 Profit Equity
US$ US$
================================ ======== ========
+/- 10% in AU$/US$ and GBP/US$ 18,703 18,703
There have been no changes in any of the methods or assumptions
used to prepare the above sensitivity analysis from the prior
year.
Fair Values
Fair value estimation
The fair values of financial assets and financial liabilities
are presented in the following table and can be compared to their
carrying amounts as presented in the statement of financial
position.
Differences between fair values and carrying amounts of
financial instruments with fixed interest rates are due to the
change in discount rates being applied by the market since their
initial recognition by the Group.
Note 2021 2020
Carrying Fair Carrying Fair
Value Amount Value Amount
Consolidated Group US$ US$ US$ US$
----------------------------------- ----------------------- ---------------------- ---------------------
Financial assets
Financial assets at amortised
cost:
Cash and cash equivalents 7 1,834,434 1,834,434 932,818 932,818
Trade and other receivables 8 80,622 80,622 27,696 27,696
---------- ---------- ---------- ---------
Total financial assets 1,915,056 1,915,056 960,514 960,514
========== ========== ========== =========
Financial liabilities at amortised
cost
Trade and other payables 13 83,999 83,999 124,273 124,273
---------- ---------- ---------- ---------
Total financial liabilities 83,999 83,999 124,273 124,273
========== ========== ========== =========
(i) Cash and cash equivalents, trade and other receivables, and
trade and other payables are short-term instruments in nature whose
carrying amounts are equivalent to their fair values.
(ii) Term receivables reprice to market interest rates every
three months, ensuring carrying amounts approximate fair value.
Note 23 Reserves
a. Foreign currency translation reserve
The foreign currency 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 Parent Entity. As a
result of the change in functional currency of the Company and
several of its subsidiaries on 1 July 2014, no further foreign
currency translation differences were recognised as all entities in
the Group have a US Dollar functional currency.
b. Option reserve
The option reserve comprises the cumulative grant date fair
value of options issued to Directors, other personnel and
consultants over the vesting period.
i. Analysis of items of other comprehensive income by each class of reserve
2021 2020
US$ US$
Foreign currency translation
reserve
Opening balance as at 1 July 570,410 570,410
Movement in foreign currency - -
translation reserve
========== ==========
Closing balance as at 30 June 570,410 570,410
========== ==========
Option reserve
Opening balance as at 1 July 964,895 964,895
Movement in options reserve (286,263) -
========== ==========
Closing balance as at 30 June 678,632 964,895
========== ==========
Total reserves 1,249,042 1,535,305
========== ==========
Note 24 Interests in Joint Operations
The Group holds interest in various joint ventures, whose
principal activities are in petroleum exploration and production.
Refer to Note 11 - Exploration and Evaluation Assets.
Costs incurred attributable to joint operations have been
capitalised based on accounting policies in Note 1(f) - Exploration
and Evaluation Expenditure.
Included in the assets and liabilities of the Group are the
following assets and liabilities relating to interests in joint
ventures:
2021 2020
US$ US$
Current assets
Trade and other receivables 4,447 25,768
Total current
assets 4,447
25,768
Non-current
assets
Exploration and evaluation assets 972,467 2,673,754
----------------------- --------------------
Total non-current assets 972,467 2,673,754
----------------------- --------------------
Total assets 976,914 2,699,522
======================= ====================
Current liabilities
Trade and other payables 3,500 8,584
----------------------- --------------------
Total current liabilities 3,500 8,584
----------------------- --------------------
Total liabilities 3,500 8,584
======================= ====================
Net assets 973,414 2,690,938
======================= ====================
The Parent Entity does not guarantee to pay the deficiency of
its controlled entities in the event of a winding up of any
controlled entity.
In accordance with normal industry practice, the Group has
entered into joint ventures with other parties for the purpose of
exploring and developing petroleum interests. If a party to a joint
venture defaults and does not contribute its share of joint venture
obligations, then the other joint venture participants may be
liable to meet those obligations. In this event, the interest in
the permit held by the defaulting party may be redistributed to the
remaining joint venture participants.
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END
FR GIBDGLDDDGBB
(END) Dow Jones Newswires
October 21, 2021 04:35 ET (08:35 GMT)
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