TIDMMSMN
RNS Number : 8481Q
Mosman Oil and Gas Limited
02 December 2016
2 December 2016
Mosman Oil and Gas Limited
("Mosman" or the "Company")
Final Results for the Year ended 30 June 2016
Mosman Oil and Gas Limited (AIM: MSMN) the New Zealand and
Australia focussed oil exploration and development company,
announces its final results for the year ended 30 June 2016.
Mosman recognised early that the fall in oil price would have a
serious effect on global markets and adjusted the business model
accordingly by pursuing production in priority to exploration.
The company has been successful in reducing operational and
corporate costs overall as it looks to reposition into new projects
and explore existing permits.
After reviewing a number of opportunities Mosman identified the
South Taranaki Energy Project in New Zealand (the "STEP
transaction"). A conditional Sales and Purchase Agreement was
executed in September 2015, and for the following few months all
focus was dedicated to proceeding with the acquisition.
The decision to acquire was made when the relevant oil price
(Brent) was over USD50/bbl. The Company recognised the financial
risk of a further fall in the oil price, and included in the
contract a termination clause in the event the oil price went below
USD 40/bbl for over 30 days. Most unfortunately, Brent Oil
subsequently fell below USD 30/bbl. The Board reluctantly decided
that whilst the long term potential was attractive, the forecast
short term negative cash flow was not manageable and the
acquisition was cancelled in January 2016.
The cancellation of the STEP transaction led to an immediate
review of all expenditure and exploration activity. The Company
took steps to manage staff and consultancy costs; all exploration
permits were appraised; and all overhead costs were critically
reviewed resulting in cost savings.
Actions taken at that time have ensured the survival of the
Company, and those actions and subsequent investments have
maintained the Company's cash and investment position.
Importantly, strategic and focussed exploration work on existing
permits has continued, and in that respect over $630,705 was spent
on exploration over the financial year.
Post Year End Events
The Board recognises that this is only part of the necessary
action needed; and the search for sound production assets has
continued.
The company has since made two strategic investments. In May
2016 the Company made an investment of CAD$400,000 in the TSX.V
listed GEM International Resource Inc. (GEM.) which was shortly
followed by a further CAD $380,000 cash investment in the TSX.V
listed Hemisphere Energy Corporation. (HME) in July 2016.
As part of the rationalisation of permits Mosman withdrew from
its interest in the Officer Basin application. The contract
arrangement allowed the Company to buy back and cancel the shares
issued as consideration for that asset, and this share buyback was
approved by Shareholders resulting in the cancellation of 9 million
shares at a cost of $1.
On 9 November 2016 the Company announced the proposed
acquisition of an 80 per cent interest in the Pine Mills producing
oil field located in Wood County, Texas, USA together with the
acquisition of Buccaneer Operating LLC, the operating company for
the Pine Mills oil field ("Buccaneer" or the "Operator"), 12 acres
of freehold land and a workover rig (collectively the "Asset" or
"Acquisition") from Cue Energy Resources Limited (ASX:CUE)
("Cue").
The purchase and sale agreement included notice of a 20 day
pre-emptive rights period that commences when the Vendor gives
notice to the remaining 20 per cent working interest holders.
Acquisition was conditional on standard settlement issues that
included the 20 day pre-emptive rights period, joint venture
approvals as required, and verification of certain Vendor due
diligence information identified by Mosman's due diligence
undertaken.
On 29 November 2016 Mosman was advised by Cue that it will not
close the acquisition with Mosman as the pre-emptive right had been
exercised.
The matter has been referred to Mosman's lawyers who at the date
of this report are currently reviewing the contractual validity of
the purported pre-emption.
Outlook
The future is not yet radiant and life for junior oil and gas
companies is still challenging; but we continue to look forward to
2017 with cautious optimism.
Report and accounts posting
The Company's Annual Report has been dispatched to shareholders
today and will shortly be available from the Company's website
www.mosmanoilandgas.com.
Competent Person's Statement
The information contained in this announcement has been reviewed
and approved by Andy Carroll, Technical Director for Mosman, who
has over 35 years of relevant experience in the oil industry. Mr
Carroll is a member of the Society of Petroleum Engineers.
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
Enquiries:
Mosman Oil & Gas Limited NOMAD and Broker
John W Barr, Executive Chairman SP Angel Corporate Finance LLP
Andy Carroll, Technical Director Stuart Gledhill / Richard Hail
jwbarr@mosmanoilandgas.com +44 (0) 20 3470 0470
acarroll@mosmanoilandgas.com
Gable Communications Limited
Justine James / John Bick
+44 (0) 20 7193 7463
mosman@gablecommunications.com
Updates on the Company's activities are regularly posted on its
website
www.mosmanoilandgas.com
About Mosman
Mosman (AIM: MSMN) is an Australia and New Zealand focused oil
exploration and development company with a strategy to build a
sustainable oil and gas business by acquisition and organic growth.
Current exploration projects include the following permits which
are 100% owned.
Petroleum Creek Permit, New Zealand
The permit is a 143 sq. km project located near Greymouth on the
South Island in the southern extension of the proven Taranaki oil
system.
Taramakau Permit, New Zealand
The permit (990 sq. km onshore) surrounds the Petroleum Creek
Permit and shares similar geological characteristics and shares
similar prospective play types.
Murchison Permit, New Zealand
The permit (517 sq. km onshore) located approximately 100
kilometres north of Petroleum Creek has a 13 TCF prospective
resource identified.
Amadeus Basin Projects, Australia
Mosman owns two granted permits and one application in Central
Australia which total of 5,458 sq. km. The Amadeus Basin is
considered one of the most prospective onshore areas in the
Northern Territory of Australia for both conventional and
unconventional oil and gas, and hosts the producing Mereenie, Palm
Valley and Surprise fields.
Glossary of Oil and Gas Terms
% per cent
------------- ------------------------------------------------------
API American Petroleum institute gravity is a measure
of how heavy or light a petroleum liquid is compared
to water: if its API gravity is greater than 10,
it is lighter and floats on water, if less than
10, it is heavier than water and sinks
------------- ------------------------------------------------------
bbl barrel
------------- ------------------------------------------------------
bopd barrels of oil per day
------------- ------------------------------------------------------
km kilometre
------------- ------------------------------------------------------
m metre
------------- ------------------------------------------------------
LPG liquefied petroleum gas
------------- ------------------------------------------------------
Md or md millidarcy
------------- ------------------------------------------------------
MMbbl million barrels of oil
------------- ------------------------------------------------------
OOIP Oil originally in place
------------- ------------------------------------------------------
Permeability measure of the ease with which a fluid flows through
a rock. The units are millidarcies or darcies
------------- ------------------------------------------------------
Porosity measure of how much of a rock is open space. This
space can be between grains or within cracks or
cavities of the rock. Measured in %.
------------- ------------------------------------------------------
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
Year Ended 30 June 2016
All amounts are in Australian Dollars
Notes Consolidated Consolidated
2016 2015
$ $
Interest income 6,623 2,772
Other income 9,923 4,029
Administrative expenses (322,118) (644,749)
Corporate expenses (1,184,225) (1,739,349)
Exploration expenses (37,181) (4,450)
Employee benefits expense (188,539) (228,873)
Share based payments expense - (646,987)
Gain/(Loss) on foreign exchange (300,354) 20,443
Depreciation expense (18,171) (18,868)
Finance expense (3,383) (20,541)
Exploration written off (STEP costs) 2 (1,293,295) -
Loss on financial assets (89,674) -
Impairment expense 2 (1,456,942) (112,728)
Loans to associated entities forgiven 2 (17,429) -
Loss from ordinary activities before income tax expense 3 (4,894,765) (3,389,301)
Income tax expense 3 - -
Net loss for the year (4,894,765) (3,389,301)
---------------------- --------------------
Other comprehensive loss
Items that may be reclassified to profit or loss:
Exchange differences arising on translation of foreign
- operations 523,825 (282,655)
Total comprehensive income attributable to members of the
entity (4,370,940) (3,671,956)
====================== ====================
Basic earnings/(loss) per share
(cents per share) 18 (2.53) cents (3.12) cents
Diluted earnings/(loss) per share
(cents per share) 18 (2.53) cents (3.12) cents
Consolidated Statement of Financial Position
As at 30 June 2016
All amounts are in Australian Dollars
Notes Consolidated Consolidated
30 June 2016 30 June 2015
$ $
Current Assets
Cash and cash equivalents 5 3,758,556 1,117,855
Trade and other receivables 6 194,115 346,680
Other assets 7 446,095 43,082
Other financial assets 8 7 -
-------------- --------------
Total Current Assets 4,398,773 1,507,617
-------------- --------------
Non-Current Assets
Other financial assets 8 - 274,806
Property, plant & equipment 9 224,448 222,514
Capitalised oil and gas exploration 10 10,955,203 11,733,041
-------------- --------------
Total Non-Current Assets 11,179,651 12,230,361
-------------- --------------
Total Assets 15,578,424 13,737,978
-------------- --------------
Current Liabilities
Trade and other payables 11 177,692 619,119
Provisions 11,846 9,307
Total Current Liabilities 189,538 628,426
-------------- --------------
Net Assets 15,388,886 13,109,552
============== ==============
Shareholders' Equity
Contributed equity 12 25,235,869 18,585,595
Reserves 13 1,304,610 780,785
Accumulated losses 14 (11,151,593) (6,256,828)
Total Shareholders' Equity 15,388,886 13,109,552
============== ==============
Consolidated Statement of Changes in Equity
Year Ended 30 June 2016
All amounts are in Australian Dollars
Accumulated
Losses Contributed Equity Reserves Total
$ $ $ $
Balance at 1 July 2014 (2,867,527) 11,972,319 416,453 9,521,245
Comprehensive income
Loss for the year (3,389,301) - - (3,389,301)
Other comprehensive income for the year - - (282,655) (282,655)
------------- ------------------- ---------- ------------
Total comprehensive loss for the year (3,389,301) - (282,655) (3,671,956)
Transactions with owners, in their capacity as owners,
and other transfers:
Shares issued to shareholders - 7,168,272 - 7,168,272
Capital raising costs - (554,996) - (554,996)
Options issued - - 646,987 646,987
------------- ------------------- ---------- ------------
Total transactions with owners and other transfers - 6,613,276 646,987 7,260,263
------------- ------------------- ---------- ------------
Balance at 30 June 2015 (6,256,828) 18,585,595 780,785 13,109,552
============= =================== ========== ============
Balance at 1 July 2015 (6,256,828) 18,585,595 780,785 13,109,552
------------- ------------------- ---------- ------------
Comprehensive income
Loss for the year (4,894,765) - - (4,894,765)
Other comprehensive loss for the year - - 523,825 523,825
------------- ------------------- ---------- ------------
Total comprehensive loss for the year (4,894,765) - 523,825 (4,370,940)
Transactions with owners, in their capacity as owners,
and other transfers:
Shares issued to shareholders - 7,242,293 - 7,242,293
Capital raising costs - (592,019) - (592,019)
Total transactions with owners and other transfers - 6,650,274 - 6,650,274
------------- ------------------- ---------- ------------
Balance at 30 June 2016 (11,151,593) 25,235,869 1,304,610 15,388,886
============= =================== ========== ============
Consolidated Statement of Cash Flows
Year Ended 30 June 2016
All amounts are in Australian Dollars
Notes Consolidated 2016 Consolidated 2015
$ $
Cash flows from operating activities
Interest received & other income 16,546 6,800
Payments to suppliers and employees (2,507,041) (3,100,575)
Interest paid (3,383) (57,104)
------------------ ------------------
Net cash outflow from operating activities 19 (2,493,878) (3,150,879)
------------------ ------------------
Cash flows from investing activities
Bonds refunded 45,300 -
Disposal of MEO shares 185,125 -
Payments for property, plant & equipment (6,304) (235,938)
Payments for exploration and evaluation (1,717,319) (5,784,628)
Payment for Shares in GEM International Limited 7 (423,549) -
Acquisition of subsidiary (net of cash acquired) - 35,043
------------------ ------------------
Net cash outflow from investing activities (1,916,747) (5,985,523)
------------------ ------------------
Cash flows from financing activities
Proceeds from shares issued 12 7,242,293 4,519,332
Payments for costs of capital (592,019) (554,996)
Net cash inflow from financial activities 6,650,274 3,964,336
------------------ ------------------
Net increase/(decrease) in cash and cash equivalents 2,239,649 (5,172,066)
------------------ ------------------
Exchange rate adjustment 401,052 -
------------------ ------------------
Cash and cash equivalents at the beginning of the financial year 1,117,855 6,289,921
------------------ ------------------
Cash and cash equivalents at the end of the financial year 5 3,758,556 1,117,855
------------------ ------------------
Notes to the Financial Statements
Year Ended 30 June 2016
All amounts are Australian Dollars
1 Statement of Accounting Policies
The principal accounting policies adopted in preparing the
financial report of Mosman Oil and Gas Limited (or "the Company")
and Controlled Entities ("Consolidated entity" or "Group"), are
stated to assist in a general understanding of the financial
report. These policies have been consistently applied to all the
years presented, unless otherwise indicated.
Mosman Oil and Gas Limited is a Company limited by shares
incorporated and domiciled in Australia.
(a) Basis of Preparation
This general purpose financial report has been prepared in
accordance with Australian Accounting Standards (including
Australian Interpretations) adopted by the Australian Accounting
Standards Board and the Corporations Act 2001. Compliance with
Australian Accounting Standards ensures that the financial
statements also comply with International Financial Reporting
Standards.
The financial report has been prepared on the basis of
historical costs and does not take into account changing money
values or, except where stated, current valuations of non-current
assets.
The financial report was authorised for issue by the Directors
on 2 December 2016.
(b) Principles of Consolidation
The consolidated financial statements incorporate the assets,
liabilities and results of entities controlled by Mosman Oil and
Gas Limited at the end of the reporting period. A controlled entity
is any entity over which Mosman Oil and Gas Limited has the ability
and right to govern the financial and operating policies so as to
obtain benefits from the entity's activities.
Where controlled entities have entered or left the Group during
the year, the financial performance of those entities is included
only for the period of the year that they were controlled. Details
of Controlled and Associated entities are contained in Notes 23 and
24 to the financial statements.
In preparing the consolidated financial statements, all
inter-group balances and transactions between entities in the
consolidated group have been eliminated in full on
consolidation.
Non-controlling interests, being the equity in a subsidiary not
attributable, directly or indirectly, to a parent, are reported
separately within the equity section of the consolidated statement
of financial position and statement of comprehensive income. The
non-controlling interests in the net assets comprise their
interests at the date of the original business combination and
their share of changes in equity since that date
(c) Use of Estimates and Judgements
The preparation of financial statements requires management to
make judgements, estimates and assumptions that affect the
application of accounting policies and reported amounts of assets
and liabilities, income and expenses. Actual results may differ
from these estimates. Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in
any future periods affected.
Critical Accounting Estimates and Judgements
Impairment of Exploration and Evaluation Assets
The ultimate recoupment of the value of exploration and
evaluation assets, is dependent on the successful development and
commercial exploitation, or alternatively, sale, of the exploration
and evaluation assets.
Impairment tests are carried out when there are indicators of
impairment in order to identify whether the asset carrying values
exceed their recoverable amounts. There is significant estimation
and judgement in determining the inputs and assumptions used in
determining the recoverable amounts.
The key areas of judgement and estimation include:
-- Recent exploration and evaluation results and resource estimates;
-- Environmental issues that may impact on the underlying tenements;
-- Fundamental economic factors that have an impact on the
operations and carrying values of assets and liabilities.
Taxation
Balances disclosed in the financial statements and the notes
related to taxation, are based on the best estimates of directors
and take into account the financial performance and position of the
Group as they pertain to current income tax legislation, and the
directors understanding thereof. No adjustment has been made for
pending or future taxation legislation. The current tax position
represents the best estimate, pending assessment by the tax
authorities.
Exploration and evaluation assets
The accounting policy for exploration and evaluation expenditure
results in expenditure being capitalised for an area of interest
where it is considered likely to be recoverable by future
exploitation or sale or where the activities have not reached a
stage which permits a reasonable assessment of the existence of
reserves.
This policy requires management to make certain estimates as to
future events and circumstances. Any such estimates and assumptions
may change as new information becomes available. If, after having
capitalised the expenditure under the policy, a judgement is made
that the recovery of the expenditure is unlikely, the relevant
capitalised amount will be written off to profit and loss.
(d) Income Tax
Current tax assets and liabilities for the current and prior
periods are measured at the amount expected to be recovered from or
paid to the taxation authorities. The tax rates and tax laws used
to compute the amounts are those that are enacted or substantively
enacted at the balance sheet date.
Deferred income tax is provided on all temporary differences at
the balance sheet date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting
purposes.
Deferred income tax liabilities are recognized for all taxable
temporary differences.
Deferred income tax assets are recognized for all deductible
temporary differences, carry-forward of unused tax assets and
unused tax losses, to the extent that it is probable that taxable
profit will be available against which the deductible temporary
differences and the carry-forward of unused tax credits and unused
tax losses can be utilized;
The carrying amount of deferred income tax assets is reviewed at
each balance sheet date reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow
all or part of the deferred income tax asset to be utilized.
Unrecognized deferred income tax assets are reassessed at each
balance sheet date and are recognized to the extent that it has
become probable that future taxable profit will allow the deferred
tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the
tax rates that are expected to apply to the period when the asset
is realized or the liability is settled, based on tax rates (and
tax laws) that have been enacted or substantively enacted at the
balance sheet date.
Income taxes relating to items recognized directly in equity are
recognized in equity and not in the income statement.
Deferred tax assets and deferred tax liabilities are offset only
if a legally enforceable right exists to set off current tax
liabilities and the deferred tax assets and liabilities relate to
the same taxable entity and the same taxation authority.
(e) Goods and Services Tax
Revenues, expenses and assets are recognized net of the amount
of GST except:
(i) Where the GST incurred on a purchase of goods and services
is not recoverable from the taxation authority, in which case the
GST is recognized as part of the cost of acquisition of the asset,
or as part of the expense item as applicable;
(ii) Receivables and payables are stated with the amount of GST
included;
(iii) The net amount of GST recoverable from, or payable to, the
taxation authority is included as part of receivables or payables
in the Statement of Financial Position;
(iv) Cash flows are included in the Statement of Cash Flows on a
gross basis and the GST component of cash flows arising from
investing and financing activities, which is recoverable from, or
payable to, the taxation authority, are classified as operating
cash flows; and
(v) Commitments and contingencies are disclosed net of the
amount of GST recoverable from, or payable to, the taxation
authority.
(f) Property, 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 recognized either in profit or
loss, or as a revaluation decrease if the impairment losses relate
to a revalued asset. A formal assessment of recoverable amount is
made when impairment indicators are present (refer to Note 1(p) 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.
(g) Depreciation
The depreciable amount of all fixed assets is depreciated on a
straight-line basis over the asset's useful life to the
consolidated 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.
(h) Exploration and Evaluation Assets
Mineral exploration and evaluation expenditure incurred is
accumulated in respect of each identifiable area of interest and is
subject to impairment testing. These costs are carried forward only
if they relate to an area of interest for which rights of tenure
are current and in respect of which:
Such costs are expected to be recouped through the successful
development and exploitation of the area of interest, or
alternatively by its sale; or
Exploration and/or evaluation activities in the area have not
reached a stage which permits a reasonable assessment of the
existence or otherwise of economically recoverable reserves and
active or significant operations in, or in relation to, the area of
interest are continuing.
In the event that an area of interest is abandoned accumulated
costs carried forward are written off in the year in which that
assessment is made. A regular review is undertaken of each area of
interest to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest.
Where a resource has been identified and where it is expected
that future expenditures will be recovered by future exploitation
or sale, the impairment of the exploration and evaluation is
written back and transferred to development costs. Once production
commences, the accumulated costs for the relevant area of interest
are amortized over the life of the area according to the rate of
depletion of the economically recoverable reserves.
Costs of site restoration and rehabilitation are recognized when
the Company has a present obligation, the future sacrifice of
economic benefits is probable and the amount of the provision can
be reliably estimated.
The amount recognized as a provision is the best estimate of the
consideration required to settle the present obligation at the
reporting date, taking into account the risks and uncertainties
surrounding the obligation. Where a provision is measured using the
cash flows estimated to settle the present obligation, its carrying
amount is the present value of those cash flows.
Exploration and evaluation assets are assessed for impairment if
facts and circumstances suggest that the carrying amount exceeds
the recoverable amount.
For the purpose of impairment testing, exploration and
evaluation assets are allocated to cash-generating units to which
the exploration activity relates. The cash generating unit shall
not be larger than the area of interest.
(i) Accounts Payable
These amounts represent liabilities for goods and services
provided to the Group prior to the end of the financial year and
which are unpaid. The amounts are unsecured and are usually paid
within 30 days of recognition.
(j) Contributed Equity
Issued Capital
Incremental costs directly attributable to issue of ordinary
shares and share options are recognised as a deduction from equity,
net of any related income tax benefit.
(k) Earnings Per Share
Basic earnings per share ("EPS") are calculated based upon the
net loss divided by the weighted average number of shares. Diluted
EPS are calculated as the net loss divided by the weighted average
number of shares and dilutive potential shares.
(l) Share-Based Payment Transactions
The Group provides benefits to Directors KMP and consultants of
the Group in the form of share-based payment transactions, whereby
employees and consultants render services in exchange for shares or
rights over shares ("Equity-settled transactions").
The value of equity settled securities is recognised, together
with a corresponding increase in equity.
Where the Group acquires some form of interest in an exploration
tenement or an exploration area of interest and the consideration
comprises share-based payment transactions, the fair value of the
assets acquired are measured at grant date. The value is recognised
within capitalised mineral exploration and evaluation expenditure,
together with a corresponding increase in equity.
(m) Comparative Figures
When required by Accounting Standards, comparative figures have
been adjusted to conform to changes in presentation for the current
financial year.
(n) Financial Risk Management
The Board of Directors has overall responsibility for the
establishment and oversight of the risk management framework, to
identify and analyse the risks faced by the Group. These risks
include credit risk, liquidity risk and market risk from the use of
financial instruments. The Group has only limited use of financial
instruments through its cash holdings being invested in short term
interest bearing securities. The Group has no debt, and working
capital is maintained at its highest level possible and regularly
reviewed by the full board.
(o) Financial Instruments
Recognition and Initial Measurement
Financial instruments, incorporating financial assets and
financial liabilities, are recognized when the entity becomes a
party to the contractual provisions of the instrument. Trade date
accounting is adopted for financial assets that are delivered
within timeframes established by marketplace convention.
Financial instruments are initially measured at fair value plus
transactions costs where the instrument is not classified as a fair
value through profit or loss. Transaction costs related to
instruments classified as a fair value through profit or loss are
expensed to profit or loss immediately. Financial instruments are
classified and measured as set out below.
Derecognition
Financial assets are derecognized where the contractual rights
to receipt of cash flows expires or the asset is transferred to
another party whereby the entity is no longer has any significant
continuing involvement in the risks and benefits associated with
the asset. Financial liabilities are derecognized where the related
obligations are either discharged, cancelled or expire. The
difference between the carrying value of the financial liability
extinguished or transferred to another party and the fair value of
consideration paid, including the transfer of non-cash assets or
liabilities assumed, is recognized in profit or loss.
Classification and Subsequent Measurement
i. Financial assets at fair value through profit or loss
Financial assets are classified at fair value through profit or
loss when they are held for trading for the purpose of short term
profit taking, where they are derivatives not held for hedging
purposes, or designated as such to avoid an accounting mismatch or
to enable performance evaluation where a Group of financial assets
is managed by key management personnel on a fair value basis in
accordance with a documented risk management or investment
strategy. Realized and unrealized gains and losses arising from
changes in fair value are included in profit or loss in the period
in which they arise.
ii.Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market and are subsequently measured at amortized cost using the
effective interest rate method.
iii.Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets
that have fixed maturities and fixed or determinable payments, and
it is the Group's intention to hold these investments to maturity.
They are subsequently measured at amortized cost using the
effective interest rate method.
iv.Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial
assets that are either designated as such or that are not
classified in any of the other categories. They comprise
investments in
the equity of other entities where there is neither a fixed
maturity nor fixed or determinable payments.
v.Financial Liabilities
Non-derivative financial liabilities (excluding financial
guarantees) are subsequently measured at amortized cost using the
effective interest rate method.
vi.Impairment
At each reporting date, the Group assesses whether there is
objective evidence that a financial instrument has been impaired.
In the case of available-for-sale financial instruments, a
prolonged decline in the value of the instrument is considered to
determine whether an impairment has arisen. Impairment losses are
recognized in the income statement.
(p) Impairment of Assets
At each reporting date, the Group reviews the carrying values of
its tangible assets to determine whether there is any indication
that those assets have been impaired. If such an indication exists,
the recoverable amount of the asset, being the higher of the
asset's fair value less costs to sell and value in use, is compared
to the asset's carrying value. Any excess of the asset's carrying
value over its recoverable amount is expensed to the income
statement. Impairment testing is performed annually for goodwill
and intangible assets with indefinite lives.
Where it is not possible to estimate the recoverable amount of
an individual asset, the Group estimates the recoverable amount of
the cash-generating until to which the asset belongs.
(q) Employee Entitlements
Liabilities for wages and salaries, annual leave and other
current employee entitlements expected to be settled within 12
months of the reporting date are recognized in other payables 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
recognized when the leave is taken and measured at the rates paid
or payable.
Contributions to employee superannuation plans are charged as an
expense as the contributions are paid or become payable.
(q) Provisions
Provisions are recognized 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 results and
that outlay can be reliably measured.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at
call with banks, other short-term highly liquid investments with
original maturities of 3 months or less, and bank overdrafts. Bank
overdrafts are shown within short-term borrowings in current
liabilities on the balance sheet.
(s) Revenue and Other Income
Interest revenue is recognized using the effective interest rate
method, which, for floating rate financial assets, is the rate
inherent in the instrument.
(t) Acquisition of Subsidiary Not Deemed a Business Combination
When an acquisition of assets does not constitute a business
combination, the assets and liabilities are assigned a carrying
amount based on their relative fair values in an asset purchase
transaction and no deferred tax will arise in relation to the
acquired assets and assumed liabilities as the initial exemption
for deferred tax under AASB 12 applies. No goodwill will arise on
the acquisition and transaction costs of the acquisition will be
included in the capitalised cost of the asset.
(u) New standards and interpretations
Account Standard and Interpretation
The Group has adopted all of the new, revised or amending
Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the
current reporting period. These changes do not materially impact on
this financial report.
Any new, revised or amending Accounting Standards or
Interpretations that are not yet mandatory have not been adopted
early. Adoption would not materially impact on this financial
report.
Consolidated Consolidated
2016 2015
$ $
2 Expenses include:
Listing and share register maintenance
costs 389,471 272,801
MEO bid costs - 226,125
Trident acquisition related costs - 82,994
Impairment of exploration and evaluation
assets (Note 10) 1,456,942 -
Loans to associated entities forgiven
(i) 17,429 -
Exploration written off (Note 10b) 1,293,295 -
(i) Further to the Company's decision to withdraw its 25%
interest in the Officer Basin Application the Board made a
unanimous decision to write off all loans to APPPL "(Australasian
Petroleum Portfolio Pty Ltd") (Refer to Note 24 for associated
entities)
3 Income Tax
No income tax is payable by the Group as it has incurred losses
for income tax purposes for the year, therefore current tax,
deferred tax and tax expense is $Nil (2015 - Nil).
(a) Numerical reconciliation of income tax expense to prima
facie tax payable
Consolidated Consolidated
2016 2015
$ $
Loss before tax (4,894,765) (3,389,301)
Income tax calculated at 30% (2015:
30%) (1,468,429) (1,016,790)
Tax effect of amounts which are deductible/non-deductible
In calculating taxable income:
Project abandonment costs 128,733 -
Share based payments - 194,096
Capital raising costs 86,788 160,285
Impairment expense 442,311 13,028
Upfront exploration expenditure
claimed (177,804) (1,393,689)
Other (178,665) 62,468
Effects of unused tax losses and tax
offsets not recognized as deferred
tax assets 1,167,066 1,980,602
------------- -------------
Income tax expense attributable to
operating profit NIL NIL
(b) Tax Losses
As at 30 June 2016 the company had Australian tax losses of
$3,899,473 (2015: $4,516,907). The benefit of deferred tax assets
not brought to account will only be realized if:
-- Future assessable income is derived of a nature and of an
amount sufficient to enable the benefit to be realized; and
-- The conditions for deductibility imposed by tax legislation
continue to be complied with and no changes in tax legislation
adversely affect the Company in realizing the benefit.
(b) Unbooked Deferred Tax Assets and Liabilities
Unbooked deferred tax assets comprise:
Capital Raising Costs 486,874 474,435
Provisions/Accruals/Other 36,329 33,971
Tax losses available for offset against
future taxable income 3,899,473 2,561,607
---------- ----------
4,422,676 3,070,013
========== ==========
Consolidated Consolidated
2016 2015
$ $
4 Auditors Remuneration
Audit - Somes Cooke
Audit of the financial
statements 7,000 28,500
Audit - Greenwich & Co Audit Pty Ltd
Audit of the financial 18,000 -
statements
------- -------
25,000 28,500
------- -------
5 Cash and Cash Equivalents
Cash at Bank 3,758,556 1,117,855
---------- ----------
6 Trade and Other Receivables
Deposits 150,533 195,834
GST receivable 43,419 126,637
Other receivables 163 24,209
-------- --------
194,115 346,680
-------- --------
7 Other assets
Prepayments 22,546 43,082
Share Applications (i) 423,549 -
-------- -------
446,095 43,082
-------- -------
(i) On 24 May 2016 the Group invested CAD$400,000 cash in TSXV
listed GEM international Resource Inc. (GEM). Subsequent to balance
date the Company was allotted shares in GEM for the equivalent
amount. Refer to Note 26.
8 Other financial assets
Current
Shares in a listed entity 7 -
--- --------
Non-Current
Shares in a listed entity - 274,806
--------
9 Property, Plant and Equipment
Land and Buildings Office Equipment and Furniture Vehicles Total
$
$
$ $
Cost
Balance at 1 July 2015 163,814 155,168 23,098 342,080
Additions - 6,304 - 6,304
Effective movement in exchange rates 12,573 - 1,773 14,346
------------------- ------------------------------- --------- --------
Balance at 30 June 2016 176,387 161,472 24,871 362,730
------------------- ------------------------------- --------- --------
Depreciation
Balance at 1 July 2015 405 114,959 4,202 119,566
Depreciation for the year 454 13,366 4,351 18,171
Effective movement in exchange rates 49 - 496 545
------------------- ------------------------------- --------- --------
Balance at 30 June 2016 908 128,325 9,049 138,282
------------------- ------------------------------- --------- --------
Carrying amounts
Balance at 30 June 2015 163,409 40,209 18,896 222,514
------------------- ------------------------------- --------- --------
Balance at 30 June 2016 175,479 33,147 15,822 224,448
------------------- ------------------------------- --------- --------
Consolidated Consolidated
2016 2015
$ $
10 Capitalised Oil and Gas Expenditure
Cost brought forward 11,733,041 3,986,591
Acquisition of Trident Group Limited (Note 23) - 3,227,550
Exploration costs incurred during the year 1,480,667 4,912,160
Exploration expenditure impaired (i) (1,456,942) (69,302)
Exploration expenditure written off (ii) (1,293,295) -
FX movement 491,732 (323,958)
-------------- ----------------------
Carrying value at end of year 10,955,202 11,733,041
-------------- ----------------------
The recoupment of costs carried forward is dependent on the successful development and/or
commercial exploitation or alternatively sale of the respective areas of interest.
(i) Expenditure impaired relate to the impairment of all capitalised costs associated with:
1. VIC/P62 for the amount of $487,022 as a result of the withdrawal and termination of the
Group's 30% Joint Venture;
2. STP-EPA-0071 of the Group's 25% interest in the Officer Basin for the amount of $969,920
due to expiry of its application as the Native Title Act requirements were not met.
(ii) On 1 February 2016, the Company cancelled the Sale and Purchase Agreement with Origin
Energy Limited ("Origin") to acquire the South Taranaki Project ("STEP". As a result all costs
associated with the transaction were written off.
11 Trade and Other Payables
Trade creditors 66,448 549,073
Other creditors and accruals 111,244 70,046
----------------- ----------------
177,692 619,119
----------------- ----------------
Included within trade and other creditors and accruals is an amount of $13,842 (2015 $159,950)
relating to exploration expenditure.
12 Contributed Equity
Ordinary Shares :
Value of Ordinary Shares fully paid
============ ============
Movement in Contributed Equity Number of Contributed
shares Equity $
------------ ------------
Balance as at 1 July 2014: 77,927,175 11,972,319
Date Nature of Transaction Issue Price
Exercise of
14/07/14 options $0.2000 1,000,000 200,000
Exercise of
14/07/14 options $0.1500 100,000 15,000
Exercise of
16/07/14 options $0.0500 2,000,000 100,000
15/09/14 Shares issued $0.3770 6,250,000 2,356,250
14/10/14 Shares issued $0.4010 2,796,440 1,120,108
Exercise of
06/11/14 options $0.1473 368,302 54,249
10/11/14 Shares issued $0.2360 96,533 22,829
10/11/14 Shares issued $0.5000 265,858 132,929
17/12/14 Shares issued $0.5000 1,000,000 500,000
02/04/15 Shares issued $0.0975 10,000,000 975,000
05/06/15 Shares issued $0.0901 3,057,155 275,482
15/06/15 Shares issued $0.0704 606,919 42,750
24/06/05 Shares issued $0.0512 16,000,000 818,833
30/06/15 Shares issued $0.5000 1,109,684 554,842
Capital raising costs - (554,996)
------------ ------------
Balance as at 1 July 2015: 122,578,066 18,585,595
Shares issued
28/07/2015 (i) $0.0377 22,857,143 857,143
Shares issued
22/09/2015 (i) $0.0980 33,333,333 3,261,018
Shares issued
30/10/2015 (i) $0.0848 36,822,466 3,124,132
Capital raisings costs (592,019)
------------ ------------
Balance at end of year 215,591,008 25,235,869
============ ============
(i) Placements via capital raising as announced
Consolidated Consolidated
2016 2015
$ $
13 Reserves
Options reserve 1,063,440 1,063,440
Foreign currency translation reserve 241,170 (282,655)
---------- ----------
1,304,610 780,785
---------- ----------
Options Reserve
Nature and purpose of the Option reserve
The options reserve represents the fair value of equity
instruments issued to employees as compensation and issued to
external parties for the receipt of goods and services. This
reserve will be reversed against issued capital when the underlying
shares are converted and reversed against retained earnings when
they are allowed to lapse.
Consolidated Consolidated
2016 2015
Movement in Options Reserve $ $
Options Reserve at the beginning of
the year 1,063,440 416,453
Incentive options issued to KMP's - 459,702
Options related to other holders - 187,285
-------------
Options Reserve at the end of the year 1,063,440 1,063,440
------------- -------------
Foreign Currency Translation Reserve
Nature and purpose of the Foreign Currency Translation
Reserve
Functional currency balances are translated into the
presentation currency using the exchange rates at the balance sheet
date. Value differences arising from movements in the exchange rate
is recognised in the Foreign Currency Translation Reserve.
Consolidated Consolidated
Movement in Foreign Currency Translation
Reserve 2016 2015
$ $
Foreign Currency Translation Reserve
at the beginning of the year (282,655) -
Current year movement 523,825 (282,655)
------------- -------------
Foreign Currency Translation Reserve
at the end of the year 241,170 (282,655)
------------- -------------
14 Accumulated Losses
Accumulated losses at the beginning
of the year 6,256,828 2,867,527
Net loss attributable to members 4,894,765 3,389,301
----------- ----------
Accumulated losses at the end of the
year 11,151,593 6,256,828
----------- ----------
Related Party Transactions
Key Management Personnel Remuneration Consolidated Consolidated
2016 2015
$ $
Short term employee benefits (i) 789,016 950,439
Share-based payments (ii) - 459,702
------------ ------------
Total 789,016 1,410,141
============ ============
I. During the year to 30 June 2016:
a. Directors fees of $60,000 and consulting fees of $235,000
were paid and payable to Kensington Advisory Services Pty Ltd;
b. Director fees of $30,000 and consulting fees of $316,000 were
paid and payable to Australasian Energy Pty Ltd;
c. Fees paid to AR Carroll include an amount of $196,000 for
consulting services provided during the STEP transaction which took
place in the first half of the 2016 year. Mr. Carroll's services
were utilised rather than external operators.
d. Directors fees of $30,000 were paid to Metallon Resources Pty Ltd;
e. Mr Lewis resigned as Company Secretary on the 28th of July
2015 and was remunerated to that date;
f. CFO, Company Secretary and Consulting Fees totaling $114,605
were paid and payable to J T White's accounting firm, Traverse
Accountants Pty Ltd.
II. For the period ending 30 June 2015, Mr. Carroll received
1,500,000 incentive options valued at $255,390. Mr. John W Barr and
Mr. Young both received 500,000 incentive options, each valued at
$85,130 for a total of $170,260. Mr. Lewis received 200,000
incentive options valued at $34,052.
Movement in Shares and Options
The aggregate numbers of shares and options of the Company held
directly, indirectly or beneficially by Key Management Personnel of
the Company or their personally-related entities are fully detailed
in the Directors' Report.
Amounts owing to the Company from subsidiaries:
Petroleum Creek Limited
At 30 June 2016 the Company's 100% owned subsidiary, Petroleum
Creek Limited (PCL), owed Mosman Oil and Gas Limited $7,660,930
(2015: $6,440,398). The Company has executed a Loan Agreement with
PCL covering amounts up to $2,000,000 bearing interest at 7% pa and
secured by a Fixed and Floating charge over the assets of PCL, as
registered with the NZ Ministry of Economic Development Companies
Office on 17 April, 2014.
Mosman Oil and Gas (NZ) Limited
At 30 June 2016 the Company's 100% owned subsidiary, Mosman Oil
and Gas (NZ) Limited, owed Mosman Oil and Gas Limited $169,128
(2015: $95,803).
Trident Energy Pty Ltd
At 30 June 2016 the Company's 100% owned subsidiary, Trident
Energy Pty Ltd, owed Mosman Oil and Gas Limited $2,453,911 (2015:
$2,148,655).
OilCo Pty Ltd
At 30 June 2016 the Company's 100% owned subsidiary, OilCo Pty
Ltd (OilCo), owed Mosman Oil and Gas Limited $607,878 (2015:
$497,641).
Related Party Transactions
Key Management Personnel Remuneration Consolidated Consolidated
2016 2015
$ $
Short term employee benefits (i) 789,016 950,439
Share-based payments (ii) - 459,702
------------ ------------
Total 789,016 1,410,141
============ ============
III. During the year to 30 June 2016:
g. Directors fees of $60,000 and consulting fees of $235,000
were paid and payable to Kensington Advisory Services Pty Ltd;
h. Director fees of $30,000 and consulting fees of $316,000 were
paid and payable to Australasian Energy Pty Ltd;
i. Fees paid to AR Carroll include an amount of $196,000 for
consulting services provided during the STEP transaction which took
place in the first half of the 2016 year. Mr. Carroll's services
were utilised rather than external operators.
j. Directors fees of $30,000 were paid to Metallon Resources Pty Ltd;
k. Mr Lewis resigned as Company Secretary on the 28th of July
2015 and was remunerated to that date;
l. CFO, Company Secretary and Consulting Fees totaling $114,605
were paid and payable to J T White's accounting firm, Traverse
Accountants Pty Ltd.
IV. For the period ending 30 June 2015, Mr. Carroll received
1,500,000 incentive options valued at $255,390. Mr. John W Barr and
Mr. Young both received 500,000 incentive options, each valued at
$85,130 for a total of $170,260. Mr. Lewis received 200,000
incentive options valued at $34,052.
Movement in Shares and Options
The aggregate numbers of shares and options of the Company held
directly, indirectly or beneficially by Key Management Personnel of
the Company or their personally-related entities are fully detailed
in the Directors' Report.
Amounts owing to the Company from subsidiaries:
Petroleum Creek Limited
At 30 June 2016 the Company's 100% owned subsidiary, Petroleum
Creek Limited (PCL), owed Mosman Oil and Gas Limited $7,660,930
(2015: $6,440,398). The Company has executed a Loan Agreement with
PCL covering amounts up to $2,000,000 bearing interest at 7% pa and
secured by a Fixed and Floating charge over the assets of PCL, as
registered with the NZ Ministry of Economic Development Companies
Office on 17 April, 2014.
Mosman Oil and Gas (NZ) Limited
At 30 June 2016 the Company's 100% owned subsidiary, Mosman Oil
and Gas (NZ) Limited, owed Mosman Oil and Gas Limited $169,128
(2015: $95,803).
Trident Energy Pty Ltd
At 30 June 2016 the Company's 100% owned subsidiary, Trident
Energy Pty Ltd, owed Mosman Oil and Gas Limited $2,453,911 (2015:
$2,148,655).
OilCo Pty Ltd
At 30 June 2016 the Company's 100% owned subsidiary, OilCo Pty
Ltd (OilCo), owed Mosman Oil and Gas Limited $607,878 (2015:
$497,641).
17 Segment Information
The Group has identified its operating segments based on the
internal reports that are reviewed and used by the board to make
decisions about resources to be allocated to the segments and
assess their performance.
Operating segments are identified by the board based on the Oil
and Gas projects in Australia, and New Zealand. Discrete financial
information about each project is reported to the board on a
regular basis.
The reportable segments are based on aggregated operating
segments determined by the similarity of the economic
characteristics, the nature of the activities and the regulatory
environment in which those segments operate.
The Group has two reportable segments based on the geographical
areas of the mineral resource and exploration activities in
Australia, New Zealand and in the prior year, Papua New Guinea.
Unallocated results, assets and liabilities represent corporate
amounts that are not core to the reportable segments.
(i) Segment performance
New Zealand Australia Total
$
$ $
------------ ------------ ------------
Year ended 30 June 2016
Revenue
Interest revenue 6 6,616 6,623
Other income 6,000 3,924 9,923
------------ ------------ ------------
Segment revenue 6,006 10,540 16,546
------------ ------------ ------------
Segment Result
Loss
Allocated
- Corporate Costs (108,617) (1,075,608) (1,184,225)
- Administrative Costs (24,949) (297,169) (322,118)
- Depreciation (4,805) (13,366) (18,171)
- Exploration expenses - (37,181) (37,181)
- Foreign Exchange Loss gain/ (loss) 386 (300,740) (300,354)
------------ ------------ ------------
Segment net loss before tax (137,985) (1,724,064) (1,862,049)
------------ ------------ ------------
Reconciliation of segment result to net loss before tax
Amounts not included in segment result but reviewed by the Board
- Exploration expenditure written off (1,031,306) (261,989) (1,293,295)
- Exploration expenditure impaired - (1,456,942) (1,456,942)
- Loans to associated entities forgiven - (17,429) (17,429)
Unallocated items
- Employee Benefits Expense - - (188,539)
- Loss on financial assets - - (89,674)
- Finance costs - - (3,383)
Net Loss before tax from continuing operations (4,894,765)
------------
Year ended 30 June 2015
Revenue
Interest revenue 137 2,635 2,772
Other income - 4,029 4,029
---------- ------------ ------------
Segment revenue 137 6,664 6,801
---------- ------------ ------------
Segment Result
Loss
Allocated
- Corporate Costs (85,165) (1,654,184) (1,739,349)
- Administrative Costs (42,546) (606,651) (649,197)
- Depreciation (4,835) (14,033) (18,868)
Foreign Exchange Loss gain/
- (loss) 138 20,305 20,443
Segment net loss before tax (132,408) (2,254,563) (2,386,971)
Reconciliation of segment result
to net loss before tax
Amounts not included in segment
result but reviewed by the Board
Exploration expenditure written
- off - (69,302) (69,302)
Unallocated items
- Employee Benefits Expense - - (228,873)
- Share based payments - - (646,987)
- Impairment - - (43,426)
- Finance - - (20,541)
------------
Net Loss before tax from continuing
operations (3,389,301)
------------
(ii) Segment assets
New Zealand Australia Total
$ $ $
------------ ------------ -----------
As at 30 June 2016
Segment assets as at 1 July 2015 6,691,897 5,041,144 11,733,041
Segment asset increases/(decreases) for the year
- Exploration and evaluation 641,089 (1,418,927) (777,838)
------------ ------------ -----------
7,332,986 3,622,217 10,955,203
------------ ------------ -----------
Reconciliation of segment assets to total assets:
Other assets 273,460 4,349,761 4,623,221
------------ ------------ -----------
Total assets from continuing operations 7,606,446 7,971,978 15,578,424
------------ ------------ -----------
As at 30 June 2015
Segment assets as at 1 July 2014 3,017,931 968,660 3,986,591
Segment asset increases for the year
- Exploration and evaluation 3,673,966 4,072,484 7,746,450
---------- ---------- -----------
6,691,897 5,041,144 11,733,041
---------- ---------- -----------
Reconciliation of segment assets to total assets:
Other assets 359,892 1,645,045 2,004,937
---------- ---------- -----------
Total assets from continuing operations 7,051,789 6,686,189 13,737,978
---------- ---------- -----------
(iii) Segment liabilities
New Zealand Australia Total
$
$ $
------------ ---------- ----------
As at 30 June 2016
Segment liabilities as at 1 July 2015 108,895 519,531 628,426
Segment liability (decreases) for the year (99,741) (339,147) (438,888)
------------ ---------- ----------
9,154 180,384 189,538
------------ ---------- ----------
Reconciliation of segment liabilities to total liabilities:
Other liabilities - - -
------------ ---------- ----------
Total liabilities from continuing operations 9,154 180,384 189,538
------------ ---------- ----------
As at 30 June 2015
Segment liabilities as at 1 July 2014 798,334 227,294 1,025,628
Segment liability increases/(decreases) for the year (689,439) 292,237 (397,202)
------------ ---------- ----------
108,895 519,531 628,426
------------ ----------
Reconciliation of segment liabilities to total liabilities:
Other liabilities - - -
------------ ---------- ----------
Total liabilities from continuing operations 108,895 519,531 628,426
------------ ---------- ----------
18 Earnings/ (Loss) per shares Consolidated
Consolidated 2016 2015
$ $
The following reflects the loss and share data used in the calculations of
basic and diluted
earnings/ (loss) per share:
Earnings/ (loss) used in calculating basic and diluted earnings/
(loss) per share (4,894,765) (3,389,301)
------------------ -----------------
Number of shares Number of shares
2016 2015
Weighted average number of ordinary shares used in calculating basic
earnings/(loss) per
share: 193,534,581 108,580,362
Basic loss per share (cents per share) 2.53 3.12
19 Notes to the statement of cash flows
Reconciliation of loss from ordinary
activities after income tax to net Consolidated Consolidated
cash outflow from operating activities: 2016 2015
$ $
------------- -------------
(Loss) from ordinary activities after
related income tax (4,894,765) (3,389,301)
Exploration expenses written off 1,293,295 4,450
Depreciation 18,171 18,868
Impairment 1,456,942 112,728
Share based payments - 646,987
Loss on financial assets 89,674 -
Decrease in other assets 20,536
Decrease / (Increase) in trade and
other receivables 107,265 (110,869)
(Decrease) in trade and other payables
relating to operating activities (587,535) (433,742)
Increase in provisions 2,539 -
Net cash outflow from operating activities (2,493,878) (3,150,879)
------------- -------------
20 Financial Instruments
The Company's activities expose it to a variety of financial and
market risks. The Company's overall risk management program focuses
on the unpredictability of financial markets and seeks to minimize
potential adverse effects on the financial performance of the
Company.
(i) Interest Rate Risk
The Company's exposure to interest rate risk, which is the risk
that a financial instrument's value will fluctuate as a result of
changes in market, interest rates and the effective weighted
average interest rates on those financial assets, is as
follows:
Consolidated
2016
Note Fixed Assets/ Total
Weighted Funds Available Interest (Liabilities)
Average at a Floating Rate Non
Effective Interest Interest
Interest Rate Bearing
% $ $ $ $
-------------------- ----- ----------- ---------------- ---------- --------------- ----------
Financial
Assets
Cash and Cash
Equivalents 5 0.2% 3,758,556 - - 3,758,556
Trade and
other Receivables 6 - - 194,115 194,115
Other assets 7 - - 446,095 446,095
Other financial
assets 8 - - 7 7
---------------- ---------- --------------- ----------
Total Financial
Assets 3,758,556 - 640,217 4,398,773
---------------- ---------- --------------- ----------
Financial
Liabilities
Trade and
other Payables 11 - - 177,692 177,692
Provisions - - 11,846 11,846
---------------- ---------- --------------- ----------
Total Financial
Liabilities - - 189,538 189,538
---------------- ---------- --------------- ----------
Net Financial
Assets 3,758,556 - 428,126 4,186,682
================ ========== =============== ==========
20 Financial Instruments (continued)
Consolidated
2015
Financial Assets
Cash and Cash
Equivalents 5 0.3% 1,117,855 - - 1,117,855
Trade and other
Receivables 6 - - 346,680 346,680
Other assets 7 - - 43,082 43,082
----- ---------- ---- ------------ ----------
Total Financial
Assets 1,117,855 - 389,762 1,507,617
---------- ---- ------------ ----------
Financial Liabilities
Trade and other
Payables 11 - - (619,119) (619,119)
---------- ---- ------------ ----------
Total Financial
Liabilities - - (619,119) (619,119)
---------- ---- ------------ ----------
Net Financial
Assets 1,117,855 - (229,357) (888,498)
========== ==== ============ ==========
(i) Credit Risk
The maximum exposure to credit risk, excluding the value of any
collateral or other security, at balance date, is the carrying
amount, net of any provisions for doubtful debts, as disclosed in
the balance sheet and in the notes to the financial statements. The
Company does not have any material credit risk exposure to any
single debtor or group of debtors, under financial instruments
entered into by it.
(ii) Commodity Price Risk and Liquidity Risk
At the present state of the Company's operations it has minimal
commodity price risk and limited liquidity risk due to the level of
payables and cash reserves held. The Company's objective is to
maintain a balance between continuity of exploration funding and
flexibility through the use of available cash reserves.
(iii) Net Fair Values
For assets and other liabilities, the net fair value
approximates their carrying value. No financial assets and
financial liabilities are readily traded on organised markets in
standardised form. The Company has no financial assets where the
carrying amount exceeds net fair values at balance date.
The aggregate net fair values and carrying amounts of financial
assets and financial liabilities are disclosed in the balance sheet
and in the notes to the financial statements.
21 Contingent Liabilities
There were no material contingent liabilities not provided for
in the financial statements of the Company as at 30 June 2016.
Mosman Oil and Gas Limited - Parent Entity Disclosures
2016 2015
$ $
------------ -----------
Financial position
Assets
Current Assets 3,836,354 1,240,479
Non-Current Assets 11,555,969 10,578,083
--------------------------- ------------ -----------
Total Assets 15,392,323 11,818,562
--------------------------- ------------ -----------
Liabilities
Current Liabilities 180,382 447,228
Total Liabilities 180,382 447,228
--------------------------- ------------ -----------
Net Assets 15,211,941 11,371,334
=========================== ============ ===========
Equity
Contributed equity 25,235,869 18,585,595
Reserves 1,063,440 1,063,440
Accumulated losses (11,087,368) (8,277,701)
Total Equity 15,211,941 11,371,334
=========================== ============ ===========
Financial Performance
Loss for the year (2,890,667) (5,424,923)
Other comprehensive income - -
--------------------------- ------------ -----------
Total comprehensive income (2,890,667) (5,424,923)
=========================== ============ ===========
23 Controlled Entities
Investments in group entities comprise:
Beneficial percentage
held by economic
Name Principal activities Incorporation entity
----------------------- ------------------------ --------------- ------------------------
2016 2015
% %
----------------------- ------------------------ --------------- ----------- -----------
Mosman Oil and Gas
Limited Parent entity Australia
Wholly owned and
controlled entities:
Mosman Oil & Gas
Limited Oil & Gas exploration New Zealand 100 100
Mosman Oil and Gas
(NZ) Limited Oil & Gas exploration New Zealand 100 100
Petroleum Portfolio
Pty. Ltd Oil & Gas exploration Australia 100 100
OilCo Pty Limited Oil & Gas exploration Australia 100 100
Trident Energy Pty
Ltd Oil & Gas exploration Australia 100 100
Mosman Oil and Gas Limited is the Parent Company of the Group,
which includes all of the controlled entities. See also Note 26
Subsequent Events for additional corporate activity in progress
subsequent to the 30 June 2016 year end.
23 Controlled Entities (continued)
30 June 2015
a) Trident Energy Pty Ltd
On 19 September 2014, the Group obtained control of Trident
Energy Pty Ltd, an oil and gas exploration entity, by acquiring
100% of Trident's shares from existing shareholders.
The acquisition of Trident Energy Pty Ltd was assessed by the
Board in the current period and it was determined that the
acquisition was an asset acquisition, rather than a business
combination as the substance and intent of the acquisition was for
the Group to acquire the exploration and evaluation assets of
Trident Energy Pty Ltd for the purpose of expanding the Groups
overall resource base.
The deemed fair value of net assets acquired at $
the
date of acquisition were as follows:
Cash and cash equivalents 35,043
Trade and other receivables 12,105
Property, plant and equipment 1,872
Exploration and evaluation assets 3,227,550
Trade and other payables (798,152)
Borrowings (1,015,481)
------------
Net assets acquired 1,462,937
------------
Acquisition consideration:
Shares issued (2,796,440 shares at $0.256), at
fair value 1,120,108
Shares issued (96,533 shares at $0.238), at fair
value 22,829
Acquisition costs 320,000
------------
Total purchase consideration 1,462,937
------------
b) OilCo Pty Ltd
On 27 August 2014, the Group obtained control of OilCo Pty Ltd,
an oil and gas exploration entity by acquiring 100% of OilCo Pty
Ltd's shares from existing shareholders.
The acquisition of OilCo Pty Ltd was assessed by the Board in
the current period and it was determined that the acquisition was
an asset acquisition, rather than a business combination.
The deemed fair value of net assets acquired at the date of $
acquisition were as follows:
-----
Fair value of net assets acquired Nil
-----
Acquisition consideration:
Overriding 2% royalty on production Nil
-----
The Board reviewed the royalty payable to OilCo Pty Ltd's previous shareholders and at this
point in time a reliable and quantitative value cannot be established
24 Associated Entity
Name Principal activities Incorporation Beneficial percentage held by Group
----- ----------------------- -------------- ----------------------------------------
2016 2015
Holds interest in Officer Basin Licence
Australasian Petroleum Portfolio Pty. Ltd. Application - Oil & Gas exploration Australia 25 25
--------------------------------------------- ---------------------------------------------- ---------- --- ---
Australasian Petroleum Portfolio Pty Ltd ('APPPL') holds a 100%
interest in the Officer Basin License Application and is 25% owned
by Petroleum Portfolio Pty. Ltd., itself a 100% owned subsidiary of
the Group as detailed in Note 23. The carrying value of assets and
liabilities accounted for in APPPL is not material to the Group.
There are currently nil commitments associated with the Officer
Basin License.
25 Share Based Payments
Consolidated Consolidated
2016 2015
$ $
Basic loss per share (cents per share) 2.53 3.12
The following share based payment arrangements existed at 30
June 2016:
Each of the three classes of unlisted options detailed below
entitle the holder to acquire one Ordinary share of the Company on
the terms disclosed, but do not entitle the holder to participate
in any share issue or dividends of the Company and are not
transferable. All options vested on the grant date and were
therefore not dependent on performance. Options do not lapse on a
Director leaving the Company.
(1) On 11 April 2011, 2,000,000 Options were issued to Directors
to take up ordinary shares of the Company at an exercise price of
$0.20 each. These options lapsed on 31 March, 2016.
(2) On 15 January 2014, 800,000 Options were issued to
consultants, an employee and others to take up ordinary shares of
the Company at an exercise price of $0.15 each. The options are
exercisable on or before 13 January, 2019. As at 30 June 2016
700,000 options still remain outstanding.
(3) On 15 January 2014, 2,500,000 Options were issued to KMP to
take up ordinary shares of the Company at an exercise price of
$0.15 each. The options are exercisable on or before 13 January,
2019.
(4) On 20 March 2014, 1,227,674 Options were issued to UK
consultants involved in the AIM IPO to take up ordinary shares of
the Company at an exercise price of $0.146 (8 GB pence) each. The
options are exercisable on or before 20 March, 2019. At 30 June
2016 859,372 options still remain outstanding.
(5) On 28 November 2014, 3,800,000 Options were issued to
Directors, employee & consultants to take up ordinary shares of
the Company at an exercise price of $0.58 each. The options are
exercisable on or before 28 November 2017.
25 Share Based Payments (continued)
A summary of the movements of all company option issues to 30
June, 2016 is as follows:
Company Options 2016 2015 2016 2015
Number of Options Number of Options Weighted Average Weighted Average
Exercise Price Exercise Price
------------------------ ------------------- ------------------- ------------------------ ------------------------
Outstanding at the
beginning of the year 9,859,372 9,527,674 $0.31 $0.14
------------------------ ------------------- ------------------- ------------------------ ------------------------
Granted - 3,800,000 - $0.58
------------------------ ------------------- ------------------- ------------------------ ------------------------
Exercised - (3,468,302) - -
------------------------ ------------------- ------------------- ------------------------ ------------------------
Expired (2,000,000) - $0.58 -
------------------------ ------------------- ------------------- ------------------------ ------------------------
Outstanding at the end
of the year 7,859,372 9,859,372 $0.24 $0.11
------------------------ ------------------- ------------------- ------------------------ ------------------------
Exercisable at the end
of the year 7,859,372 9,859,372 $0.24 $0.33
------------------------ ------------------- ------------------- ------------------------ ------------------------
No Options Granted were granted during the financial year ended
30 June 2016.
Subsequent Events
Material transactions arising since 30 June 2016 which will
significantly affect the operations of the Company, the results of
those operations, or the state affairs of the Company in subsequent
financial periods are:
Investment in Gem International Resource Inc. (TSX.V GEM)
On 24 May 2016 Note 6 the Company made a cash investment of
CAD$400,000in the TSX.V listed GEM International Resource Inc.
(GEM.) On 11 July 2016 the Company was allotted 8 million shares at
CAD 5 cents and 8 million two year CAD 15 cents non--transferrable
options.
Investment in Hemisphere Energy Corporation (TSX.V HME)
On 4 July 2016 the Company made a CAD$380,000 (AUD 394,000) cash
investment in the TSX.V listed Hemisphere Energy Corporation.
(HME), subscribing for two million shares at a price of CAD 19
cents per share.
The subscription was part of a larger 8 million share placing,
with the funds to be used for drilling to further increase
production. Following the transaction the Company's holding in HME
will equate to approximately 2.4% of the enlarged issued share
capital.
General Meeting Held - 2 August 2016
On 2 August 2016 The Company held its General meeting of
shareholders. The meeting was held as a result of the Company's
withdrawal 25% interest in the Officer Basin application, which
occurred in January 2016.
All resolutions put forward to shareholders were passed which
resulted in the cancellation of 9,000,000 selective buyback shares
of. Further Mr. A Carroll, Technical Director of Mosman now has a
beneficial interest in 2,076,500 Ordinary Shares representing
approximately 1.01% of the total voting rights in the Company. The
number of options held remain unchanged.
At the date of this report the Company has 206,591,008 ordinary
shares of no par value each in issue.
Acquisition of producing oil asset in USA
On 9 November 2016 the Company announced the proposed
acquisition of an 80 per cent interest in the Pine Mills producing
oil field located in Wood County, Texas, USA together with the
acquisition of Buccaneer Operating LLC, the operating company for
the Pine Mills oil field ("Buccaneer" or the "Operator"), 12 acres
of freehold land and a workover rig (collectively the "Asset" or
"Acquisition") from Cue Energy Resources Limited (ASX:CUE)
("Cue").
The purchase and sale agreement included notice of a 20 day
pre-emptive rights period that commences when the Vendor gives
notice to the remaining 20 per cent working interest holders.
Acquisition was conditional on standard settlement issues that
included the 20 day pre-emptive rights period, joint venture
approvals as required, and verification of certain Vendor due
diligence information identified by Mosman's due diligence
undertaken.
On 29 November 2016 Mosman was advised by Cue that it will not
close the acquisition with Mosman as the pre-emptive right had been
exercised.
The matter has been referred to Mosman's lawyers who at the date
of this report are currently reviewing the contractual validity of
the purported pre-emption.
There were no other events subsequent to balance date.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAAAAEDNKFFF
(END) Dow Jones Newswires
December 02, 2016 07:58 ET (12:58 GMT)
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