Preliminary Results

RNS Number : 9524Z

Global Petroleum Ltd

30 September 2009

 



GLOBAL: PETROLEUM LIMITED

PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2009

The full audited 2009 Financial Report is available at www.globalpetroleum.com.au.

REVIEW OF OPERATIONS AND ACTIVITIES

Leighton Project 

On 15 August 2008, the Company announced it was farming in to the Leighton oil prospect owned by Texon Petroleum Limited (ASX: TXN). The Company earned a 15% Working Interest ('WI') in the first well by funding 30% of the cost of drilling the well in addition to reimbursing Texon US$180,000 in respect of prospect generation and lease costs for the well.

When the first well on Leighton has been drilled, Global opted to participate in the drilling of a second well under the same terms to earn a 15% WI in the Leighton leases. All subsequent wells drilled on Leighton are at each company's earned working interest. 

Global has now commenced receiving revenue from the production of both Peeler #1 and Tyler Ranch #1.

Uganda 

During the year, Global announced that it has reached agreement ('Farm In Agreement') with Neptune Petroleum (Uganda) Limited ('Neptune'), a wholly-owned subsidiary of Tower Resources plc ('Tower'), an AIM listed oil and gas exploration company, to farm in to an interest in Neptune's Uganda acreage. Global has the right to earn a 50% interest in Exploration Area 5 ('EA5'), north western Uganda by meeting the cost of two exploration commitment wells. 

EA5 is a 6,040 sq km licence area situated at the northern end of the Albertine Graben in northern Uganda. A regional aeromagnetic survey has identified that EA5 contains one of five identified sedimentary depocentres (or basins), called the Rhino Camp Basin, within the Albertine Graben and a programme of seismic interpretation and geochemical sampling has been completed. 

It was agreed that Global's funding of Iti-1 was capped at US$6.5 million in the event that drill stem testing was not justified and US$7.5 million in the event that the presence of hydrocarbons supports the need for a drill stem test programme, after which Global would fund 25% of continuing well costs. In May 2009, Neptune drilled Iti-1 and advised that the well, which was drilled to a total depth of 592 meters, did not encounter any producible reservoir sands at the Iti-1 location. Minor hydrocarbon shows were monitored during drilling but evidence of limited quantities of oil in the lowermost target horizon remained ambiguous in the subsequent down-hole well logs and pressure test data. The lack of reservoir at this location did not justify further testing or the immediate move to drill a second well. The Company realised a write down in exploration expenditure of A$9,397,989 during the financial year in relation to the EA5 Project. 

There are no expenditure cap levels for the drilling of the second well. Notwithstanding the above, Global may opt not to fund the second well in which case Global may, at its sole discretion, continue with a 25% interest or withdraw from EA5 altogether.

A re-evaluation of the well data, combined with all other available technical data, has now been completed. 

Global is reviewing the results of this work before electing to participate in a second well.

Kenya

Notice has been given to Woodside Energy (Kenya) Pty Limited ('Woodside') terminating the Farm-In Agreement ('FIA'). The termination notice has been given based on Woodside's refusal to drill a second exploratory well in the project area in accordance with the FIA and its failure to take any steps to remedy this refusal, which the Company considers to be a repudiation and breach of the FIA.

The Company and joint venture partner Dana Petroleum (E&P) Limited are continuing legal proceedings to recover losses suffered as a result. The proceedings have progressed to the pre-trial disclosure stage. The Company anticipates a hearing in the English High Court of Justice in 2010.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Other than as outlined in the Review of Operations and Activities above, the only other significant change in the state of affairs of the Company during the year was the sale of its remaining parcel of Falkland Oil and Gas Limited shares during the year which realised a profit on sale of $2,087,167.

SIGNIFICANT POST BALANCE DATE EVENTS

As at the date of this report there are no matters or circumstances, which have arisen since 30 June 2009 that have significantly affected or may significantly affect:

• the operations, in financial years subsequent to 30 June 2009 of the Company;
• the results of those operations, in financials years subsequent to 30 June 2009 of the Company; or
• the state of affairs, in financial years subsequent to 30 June 2009 of the Company.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Company's operations are subject to various environmental laws and regulations under the relevant government's legislation. Full compliance with these laws and regulations is regarded as a minimum standard for all operations to achieve.

Instances of environmental non-compliance by an operation are identified either by external compliance audits or inspections by relevant government authorities. 

There have been no significant known breaches by the Company during the financial year. 

LIKELY DEVELOPMENTS AND EXPECTED RESULTS 

It is the Board's current intention that the Company will focus on maximising the value of its oil and gas exploration assets in Kenya and Malta and continue to examine new opportunities in mineral exploration, particularly in the oil and gas sector.  

All of these activities are inherently risky and the Board is unable to provide certainty that any or all of these activities will be able to be achieved. In the opinion of the Directors, any further disclosure of information regarding likely developments in the operations of the Company and the expected results of these operations in subsequent financial years may prejudice the interests of the Company and accordingly, has not been disclosed.

INCOME STATEMENTS

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2009

	Consolidated		Company
	2009 $	2008 $	2009 $	2008 $
Oil and Gas Revenue	224,884	-	-	-
Cost of Sales	(282,906)	-	-	-
Gross Profit	(58,022)	-	-	-
Other Income	2,087,167	27,108,462	-	-
Administration costs	(954,468)	(992,491)	(933,941)	(959,011)
Business development	(4,664)	(125,126)	(4,663)	(125,126)
Exploration and evaluation expenditure written off	(9,945,093)	(9,378,112)	(9,563,564)	(547,607)
Impairment provision for inter-company loans	-	-	(420,980)	(672,679)
Impairment write-down of investment in controlled entities	-	-	(630)	(8,641,664)
Results from operating activities	(8,875,080)	16,612,733	(10,923,778)	(10,946,087)
Net financial income	1,642,379	819,917	229,233	392,764
Profit/(loss) before income tax	(7,232,701)	17,432,650	(10,694,545)	(10,553,323)
Income tax benefit/(expense)	1,599,622	(1,599,622)	-	-
Profit/(loss) after tax	(5,633,079)	15,833,028	(10,694,545)	(10,553,323)
Profit/(loss) attributable to members of the parent	(5,633,079)	15,833,028	(10,694,545)	(10,553,323)
Basic earnings/(loss) per share from continuing operations (cents per share)	(3.23)	9.08
Diluted earnings/(loss) per share from continuing operations (cents per share)	(3.23)	9.08

The accompanying notes form part of the Income Statements.

BALANCE SHEETS

AS AT 30 JUNE 2008

	Consolidated		Company
	2009 $	2008 $	2009 $	2008 $
Current assets
Cash and cash equivalents	26,151,515	34,454,208	2,396,752	5,365,560
Trade and other receivables	84,497	38,900	16,092	38,900
Other assets	600	600	600	600
Total current assets	26,236,612	34,493,708	2,413,444	5,405,060
Non-current assets
Trade and other receivables	-	-	1,592,118	326,198
Investments	-	4,618,239	925,624	925,624
Exploration and evaluation expenditure	-	-	-	-
Oil and gas assets	1,238,654	-	-	-
Total non-current assets	1,238,654	4,618,239	2,517,742	1,251,822
TOTAL ASSETS	27,475,266	39,111,947	4,931,186	6,656,882
Current liabilities
Trade and other payables	381,749	213,378	237,896	112,573
Current tax payable	-	1,654,255	-	-
Total current liabilities	381,749	1,867,633	237,896	112,573
Non-current liabilities
Trade and other payables	-	-	8,904,786	61,260
Provisions	8,503	-	-	-
Deferred tax liabilities	-	1,260,497	-	-
Total non-current liabilities	8,503	1,260,497	8,904,786	61,260
TOTAL LIABILITIES	390,252	3,128,130	9,142,682	173,833
NET ASSETS/(LIABILITIES)	27,085,014	35,983,817	(4,211,496)	6,483,049
Equity
Issued capital	35,590,053	35,590,053	35,590,053	35,590,053
Reserves	(153,590)	3,112,134	-	-
Accumulated losses	(8,351,449)	(2,718,370)	(39,801,549)	(29,107,004)
TOTAL EQUITY/(DEFICIT)	27,085,014	35,983,817	(4,211,496)	6,483,049

The accompanying notes form part of the Balance Sheets.

CASH FLOW STATEMENTS

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008

	Consolidated		Company
	2009 $	2008 $	2009 $	2008 $
Cash flows from operating activities
Cash paid to suppliers and employees	(963,910)	(1,186,073)	(809,468)	(1,138,812)
Interest received	1,617,166	820,621	204,020	393,468
Oil and gas revenue received	116,765	-	-	-
Net cash used in operating activities	770,021	(365,452)	(605,448)	(745,344)
Cash flows from investing activities
Acquisition of investments	-	-	(630)	-
Payments for exploration expenditure	(11,389,363)	(160,706)	(9,591,521)	(159,512)
Proceeds from sale of investments	2,324,319	28,656,891	-	-
Repayment of loans from controlled entities	-	-	326,198	-
Advances from/(to) controlled entities	-	-	6,902,593	(48,271)
Net cash from/(used in) investing activities	(9,065,044)	28,496,185	(2,363,360)	(207,783)
Net increase/(decrease) in cash and cash equivalents	(8,295,023)	28,130,733	(2,968,808)	(953,127)
Cash and cash equivalents at 1 July	34,454,208	6,324,089	5,365,560	6,318,687
Effects of exchange rate changes on cash and cash equivalents	(7,670)	(614)	-	-
Cash and cash equivalents at 30 June	26,151,515	34,454,208	2,396,752	5,365,560

The accompanying notes form part of the Cash Flow Statements.

NOTES

	Consolidated		Company
	2009 $	2008 $	2009 $	2008 $
1. PROFIT/(LOSS) FROM OPERATIONS
(a)  Other Income
Gain on disposal of available-for-sale investments	2,087,167	27,108,462	-	-
(b)  Profit/(Loss) Before Tax
Profit/(loss) before income tax has been arrived at after charging the following expenses attributable to continuing operations:
Salaries and employee benefits expense	180,000	166,982	180,000	166,982
Consulting and professional fees	80,875	98,159	67,903	75,592
Shareholder costs	217,934	229,994	217,934	229,994
Administrative and other expenses	475,659	497,356	468,104	486,443
	954,468	992,491	933,941	959,011
(c)  Financial Income/(Expenses)
Interest income	1,617,166	820,621	204,020	393,468
Net foreign exchange gain/(loss)	25,213	(704)	25,213	(704)
	1,642,379	819,917	229,233	392,764
(d)  Cost of sales
Cost of oil and gas sold	39,716	-	-	-
Amortisation of oil and gas assets	243,190	-	-	-
	282,906	-	-	-

	Consolidated		Company
	2009 $	2008 $	2009 $	2008 $
2.  INCOME TAX
(a)  Recognised in the Income Statement
Current tax expense/(benefit)
Current year	516,321	1,654,255	(236,724)	(213,029)
Adjustments for prior years	(1,654,255)	-	-	-
	(1,137,934)	1,654,255	(236,724)	(213,029)
Deferred tax expense
Origination and reversal of temporary differences	-	(54,633)	-	(995,300)
Recognition of previously unrecognised tax losses	(461,688)	-	-	-
Tax benefits not brought to account	-	-	236,724	1,208,329
	(1,599,622)	(54,633)	236,724	213,029
Total income tax expense in the income statement	(1,599,622)	1,599,622	-	-
(b)  Reconciliation Between Profit/(Loss)         Before Tax and Tax Expense
Profit/(loss) before tax expense	(7,232,701)	17,432,650	(10,694,545)	(10,553,323)
Prima facie tax expense/(benefit) at 30%  (2008: 30%)	(2,169,810)	5,229,795	(3,208,364)	(3,165,997)
Increase/(decrease) in income tax expense due to:
Exploration and evaluation expenditure written off	3,028,484	-	2,876,219	87,496
Write-down of investment	-	-	189	2,592,499
Amortisation of oil and gas assets	72,957	-	-	-
Provision for intercompany loans	-	-	126,294	-
Gain on disposal of investments not assessable for income tax purposes	(383,414)	(5,079,826)	-	-
Other items	2,054	78,915	(31,062)	-
Over provision in prior years	(1,654,255)	-	-	-
Temporary differences not previously brought to account	-	1,370,738	-	1,870,172
Tax benefit not brought to account	(495,638)	-	236,724	1,208,328
Income tax expense on pre-tax net (profit)/loss	(1,599,622)	1,599,622	-	-

	Consolidated		Company
	2009 $	2008 $	2009 $	2008 $
(c)  Deferred Income Tax
Deferred income tax at 30 June 2009 relates to the following:
Deferred tax liabilities
Exploration and evaluation assets	55,550	-	-	-
Available-for-sale investments	-	1,315,130	-	-
Deferred tax assets used to offset deferred tax liabilities	(55,550)	(54,633)	-	-
	-	1,260,497	-	-
Deferred tax assets
Share issue costs	-	33,033	-	33,033
Other financial assets	-	-	126,483	-
Accrued expenses	21,600	21,600	21,600	21,600
Deferred tax assets used to offset deferred tax liabilities	(55,550)	(54,633)	-	-
Recognised tax losses	33,950	-	-	-
Tax benefit not brought to account	-	-	(148,083)	(54,633)
	-	-	-	-
(d)  Tax losses not brought to account
Australia Unused tax losses for which no deferred tax asset has been recognised	3,095,104	4,634,060	3,095,104	4,634,060
Potential tax benefit @30%	928,531	1,390,218	928,531	1,390,218
United Kingdom Unused tax losses for which no deferred tax asset has been recognised	596,562	586,566	-	-
Potential tax benefit @28%	167,037	164,238	-	-

The adjustment in respect of income tax of previous years was in relation to the treatment of the sale of Falkland Oil and Gas shares during the financial year ended 30 June 2008. Documentation provided to the Company following the lodgement of the 2008 Financial Report allowed the Company to adjust its income tax calculations and reduce the tax liability on the sale of the shares.

	Consolidated		Company
	2009 $	2008 $	2009 $	2008 $
3.  INVESTMENTS
Listed equity securities available-for-sale
- at fair value	-	4,618,239	-	-
Investments in controlled entities
- at recoverable amount	-	-	925,624	925,624
	-	4,618,239	925,624	925,624

Investments in listed equity securities available-for-sale were previously recognised at fair value (current market value) and represent an investment in Falkland Oil and Gas Limited ('FOGL'). The balance of FOGL shares were sold during the year ended 30 June 2009.

The Company recognised an impairment loss amounting to $630 in respect of investments in controlled entities at recoverable amount during the current financial year. In 2008 the Company recognised an impairment loss amounting to $8,641,664 in respect of investments in controlled entities at recoverable amount owing to the impairment or disposal of exploration and evaluation assets.

		Consolidated			Company
	Notes	2009 $	2008 $		2009 $		2008 $
4.  EXPLORATION AND       EVALUATION EXPENDITURE
Cost
Carrying amount at beginning of year		-		9,247,206		-		388,095
Expenditure incurred		11,520,945		171,093		9,563,564		159,512
Exchange differences		(94,008)		(40,187)		-		-
Expenditure written off		(9,945,093)		(9,378,112)		(9,563,564)		(547,607)
Transferred to Oil and Gas Assets		(1,481,844)		-		-		-
Carrying amount at end of year		-		-		-		-

Expenditure written-off during the 2009 year primarily relates to the Uganda project. The recoverability of the carrying amounts of exploration and evaluation assets is dependent on the successful development and commercial exploitation or sale of the respective area of interest.

		Consolidated		Company
		2009 $	2008 $	2009 $		2008 $
5.  ISSUED CAPITAL
(a)  Issued and Paid Up Capital
174,444,787 (2008: 174,444,787 ) fully paid ordinary shares	35,590,053		35,590,053		35,590,053		35,590,053

(b)  Movements in Ordinary Share Capital During the Past Two Years Were as Follows:

Date	Details	Number of Ordinary Shares	$
1 July 2007	Opening balance	174,444,787	35,590,053
30 June 2008	Closing balance	174,444,787	35,590,053
30 June 2009	Closing balance	174,444,787	35,590,053

Effective 1 July 1998, the Company Law Review Act abolished the concept of par value shares and the concept of authorised capital. Accordingly, the Company does not have authorised capital or par value in respect of its issued shares.

	Consolidated		Company
	2009 $	2008 $	2009 $	2008 $
6.  RESERVES
(a)  Balances
Investments available-for-sale-reserve
Shares - listed	-	4,404,696	-	-
Deferred tax liability in respect of unrealised gain	-	(1,315,130)	-	-
	-	3,089,566	-	-
Foreign currency translation reserve	(153,590)	22,568	-	-
Total Reserves	(153,590)	3,112,134	-	-

(b)  Nature and purpose of reserves

(i)  Investments available-for-sale reserve

The investments available-for-sale reserve is used to record fair value changes on available-for-sale investments.

(ii)  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 reporting entity, as well as from the translation of liabilities that hedge the Company's net investment in a foreign subsidiary.

(c)  Dividends

No dividends have been declared, provided for or paid in respect of the years ended 30 June 2009 or 2008. With respect to the payment of dividends by Global Petroleum in subsequent reporting periods (if any), no franking credits are currently available, or are likely to become available in the next 12 months.

7.  RELATED PARTIES

(a)  Key Management Personnel 

The following were key management personnel of the Company at any time during the reporting period and unless otherwise indicated were key management personnel for the entire period:

Mr Mark Savage

Mr Peter Blakey

Mr Peter Taylor 

Mr Ian Middlemas

Mr Shane Cranswick 

(i)  Director and Executive remuneration

Company and Consolidated	2009 $	2008 $
Short-term employee benefits	180,000	164,341
Post-employment benefits	-	2,641
Other - Consulting fees	45,000	47,250
Total compensation	225,000	214,232

Key management personnel disclosures previously required by AASB 124 Related Party Disclosures paragraphs Aus25.2 to Aus25.6 and Aus25.7.1 and Aus25.7.2 are included the Remuneration Report section of the Directors' Report.

(ii)  Loans to key management personnel and their related parties

There were no loans made to key management personnel or their related parties during the reporting period.

(iii)  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. The terms and conditions of these transactions were no more favourable than those available, or which might be available, or which might reasonably be expected to be available, on similar transactions to unrelated entities on an arm's length basis.

During the year the Company paid $175,197 (2008: $204,505) to TM Services Limited, a company controlled by Mr P Taylor and Mr P Blakey, for office usage and administrative and technical assistance in London. 

There were no liabilities arising from the above transactions at 30 June 2009 (2008: $nil).

(iv)  Options and rights over equity instruments

No options were held by key management personnel related parties during the year ended 30 June 2009.

The movement during the year ended 30 June 2008 in the number of options over ordinary shares in Global Petroleum Limited held, directly, indirectly or beneficially, by each key management person, including their related parties, is as follows:

Directors	Held at 1 July 2007	Granted as Compen-sation	Exercised	Expired	Held at 30 June 2008	Vested and Exercisable at 30 June 2008
Mr P Dighton	200,000	-	-	-	200,000(1)	200,000(1)

Notes

(1)    The balance shown as the closing balance for Mr P Dighton is his balance as at his date of resignation of 31 January 2008.

No options have been granted since the end of the year.

(v)  Movements in shares

The movement during the reporting period in the number of ordinary shares in Global Petroleum Limited held, directly, indirectly or beneficially, by each key management person, including their related parties, is as follows:

Year ended 30 June 2009	Opening Balance	Acquisitions	Received on Exercise of Options	Disposals	Closing Balance
Directors
Mr M Savage	-	-	-	-	-
Mr P Blakey	27,424,318	381,947	-	425,000	27,381,265
Mr P Taylor	27,424,318	1,430,074	-	425,000	28,429,392
Mr I Middlemas	1,430,000	-	-	-	1,430,000
Mr S Cranswick (1)	110,000	-	-	-	110,000

Year ended 30 June 2008	Opening Balance	Acquisitions	Received on Exercise of Options	Disposals	Closing Balance
Directors
Mr M Savage	-	-	-	-	-
Mr P Blakey	27,424,318	-	-	-	27,424,318
Mr P Taylor	27,424,318	-	-	-	27,424,318
Mr I Middlemas	1,430,000	-	-	-	1,430,000
Mr S Cranswick (1)	110,000	-	-	-	110,000
Former Directors
Mr P Dighton	-	-	-	-	-

Notes

(1)    The balance shown as the opening balance for Mr Cranswick is his balance at his date of appointment as a director - 6 June 2008.

No shares were granted to key management personnel during the reporting period as compensation in 2009 or 2008.

(vi)  Changes in key management personnel in the period after the reporting date and prior to the date when the financial report is authorised for issue

There were no changes in key management personnel in the period after the reporting date and prior to the date when the financial report is authorised for issue.

(b)  Non-Key Management Personnel Disclosure

(i)  Identity of related parties

The Company has a related party relationship with its subsidiaries (see Note 15), joint ventures (see Note 16) and with its key management personnel (see disclosures for key management personnel on preceding pages).

Subsidiaries

		Consolidated		Company
	Note	2009 $	2008 $	2009 $	2008 $
Provision for inter-company loans		-	-	420,980	672,679
Loan repayments received from controlled entities		-	-	326,198	-
Recharge amounts		-	-	-	48,271
Net amounts receivable from, and payable to, controlled entities at balance date were as follows:
Amounts receivable from controlled entities	4	-	-	1,592,118	326,198
Amounts payable to controlled entity	9	-	-	8,904,787	61,260

Amounts receivable from and payable to controlled entities are non-interest bearing and are repayable on demand.

An amount of $420,980 was provided for during the year (2008: $672,679).

	Consolidated	Consolidated
	2009 Cents per Share	2008 Cents per Share
8.  EARNINGS PER SHARE
Basic profit/(loss) per share	(3.23)	9.08
Diluted profit/(loss) per share	(3.23)	9.08

The following reflects the income and share data used in the calculations of basic and diluted earnings per share:

	Consolidated
	2009 $	2008 $
Net profit/(loss) used in calculating basic and diluted earnings per share	(5,633,079)	15,833,028
	Number of Shares 2009	Number of Shares 2008
Weighted average number of ordinary shares used in calculating basic earnings per share	174,444,787	174,444,787
Effect of dilutive securities	-	-
Adjusted weighted average number of ordinary shares and potential ordinary shares used in calculating basic and diluted earnings per share	174,444,787	174,444,787

(a)  Non-dilutive securities

No options were outstanding as at 30 June 2009 hence there is no dilutive effect.

(b)  Conversions, Calls, Subscriptions or Issues after 30 June 2008

Since 30 June 2009, no shares have been issued and no incentive options have been granted. No shares have been issued as a result of the exercise of options since 30 June 2009.

9.  SEGMENT INFORMATION

Segment information is presented in respect of the Consolidated Entity's geographical segments. The primary format, geographical segments, is based on the Consolidated Entity's management and internal reporting structure. Inter-segment pricing is determined on an arm's length basis. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one period.

(a)  Geographical Segments

The Company's geographical segments are as follows:

2009	Australia $	Europe $	Africa $	Falkland Islands $	USA $	Elimi- nations $	Consoli- dated $
Segment revenue
External revenue	-	-	-	-	224,884	-	224,884
Total revenue	-	-	-	-	224,884	-	224,884
Result
Segment result	702,656	53,066	(10,085,644)	2,087,167	(58,042)	68,096	(7,232,701)
Income tax expense							1,599,622
Profit for the period							(5,633,079)
Exploration and evaluation expenditure written off	-	-	9,945,093	-	-	-	9,945,093
Assets
Segment assets	26,334,526	-	-	-	1,410,740	-	27,475,266
Liabilities
Segment liabilities	237,896	2,770	141,083	-	8,503	-	390,252
Acquisitions of non-current assets, including capitalised exploration and evaluation expenditure	-	-	10,039,101	-	1,481,844	-	11,520,945

2008	Australia $	Europe $	Africa $	Falkland Islands $	USA $	Elimi- nations $	Consoli- dated $
Segment revenue
External revenue	-	-	-	-	-	-	-
Total revenue	-	-	-	-	-	-	-
Result
Segment result	(258,406)	(1,084,315)	(8,333,091)	27,108,462	-	-	17,432,650
Income tax expense							(1,599,622)
Profit for the period							15,833,028
Exploration and evaluation expenditure written off	-	1,071,877	8,306,235	-	-	-	9,378,112
Assets
Segment assets	35,549,364	4,481	-	4,618,239	-	(1,060,137)	39,111,947
Liabilities
Segment liabilities	3,088,585	572,080	201,404	326,198	-	(1,060,137)	3,128,130
Acquisitions of non-current assets, including capitalised exploration and evaluation expenditure	-	15,547	155,546	-	-	-	171,093

(b)  Business Segments

The Company operates within one business segment, being the petroleum and mineral exploration industry. Accordingly, the Company's total revenue and result for the year relate to that business segment.

(c)  Credit Standby Arrangements with Banks

At balance date, the Company had no used or unused financing facilities.

(d)  Non-cash Financing and Investing Activities

There were no significant non-cash financing or investing activities in the current or prior year.

10.  CAPITAL AND OTHER COMMITMENTS

(a)  Exploration Expenditure Commitments

In order to maintain current rights of tenure to exploration tenements, the Company 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 report and are payable:

	Consolidated		Company
	2009 $	2008 $	2009 $	2008 $
Within one year	-	-	-	-

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.

(b)  Joint Venture Commitments

Capital commitments of the Company to joint venture operations:

	Consolidated		Company
	2009 $	2008 $	2009 $	2008 $
Within one year	-	-	-	-
One year or later and no later than five years	-	-	-	-
	-	-	-	-

11.  CONTINGENCIES

(a)  Acquisition of Astral Petroleum Limited - Contingent Consideration

In accordance with the terms of the acquisition agreement (as amended), consideration payable upon the acquisition of Astral Petroleum Limited in December 2004 included amounts contingent on certain conditions relating to the farmout of the interest acquired by the Consolidated Entity in the Malta exploration study agreement. In June 2006, the Consolidated Entity entered a farmout agreement with RWE Dea AG. If RWE Dea AG, during the term of the exploration study agreement, commits to drill one well and enters into a production sharing contract, the Company will be required to issue 4 million fully-paid ordinary shares in the capital of the Company as additional consideration to the Astral vendors (Tranche 3 shares).

At the Company's AGM on 17 November 2006 shareholders approved an extension of time to 30 June 2008 for the issue to the related party vendors of Astral Petroleum Limited their share of an additional four million fully paid ordinary shares in the Company if the Company achieves an unconditional commitment by RWE to drill a well in respect of the Malta Exploration Study Agreement. This date has not been extended beyond 30 June 2008, however the Board will review this if an unconditional commitment to drill a well is received from RWE and revert to shareholders for approval as appropriate.  

(b)  Indemnities

Indemnities have been provided to directors and certain executive officers of the Company in respect of liabilities to third parties arising from their positions, except where the liability arises out of conduct involving a lack of good faith. No monetary limit applies to these agreements and there are no known obligations outstanding at 30 June 2009 and 2008.

(c)  Joint Ventures

In accordance with normal industry practice the Consolidated Entity has entered into joint ventures with other parties for the purpose of exploring for 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 venturers.

12.  SUBSEQUENT EVENTS

As at the date of this report there are no matters or circumstances, which have arisen since 30 June 2009 that have significantly affected or may significantly affect:

• the operations, in financial years subsequent to 30 June 2009 of the Consolidated Entity;
• the results of those operations, in financials years subsequent to 30 June 2009 of the Consolidated Entity; or
• the state of affairs, in financial years subsequent to 30 June 2009 of the Consolidated Entity.

 

END

 

 

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