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Range Resources Ltd (RRL)

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Monday 01 October, 2018

Range Resources Ltd

Annual Financial Report

RNS Number : 4220C
Range Resources Limited
01 October 2018
 

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATIONS (EU) NO. 596/2014 ("MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA REGULATORY INFORMATION SERVICE ("RIS"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

 

AUDITED ANNUAL RESULTS FOR THE 12 MONTHS ENDED 30 JUNE 2018

 

Range, an international company with oil and gas projects and oilfield service businesses in Trinidad and Indonesia, today releases its Annual Report for the 12 months ended 30 June 2018.  A copy of the full Annual Report is available on the Company's website www.rangeresources.co.uk and also the Australian Securities Exchange website www.asx.com.au (ASX code: RRS).

 

Highlights

 

·     Increase in production: 25% production growth in Trinidad during the year (net average production of 650 bopd);

·     Continued drilling and workover programme in Trinidad: two new wells drilled, and over 250 workovers competed;

·     Encouraging levels of production from waterflood schemes: average production for the period of 200 bopd;

·     Two new acquisitions completed: oil and gas project in Indonesia and an oilfield services business in Trinidad;

·     3rd party contract wins for oilfield services business;

·     Indonesia operations initiated: field operations commenced; and

·     Financial: 

55% increase in revenues to US$13.1 million (2017: US$8.4 million);

43% improvement in OPEX per barrel for Trinidad upstream operations to US$26/barrel (2017: US$46/barrel);

24% improvement in EBITDAX with loss of US$6.0 million for the year (2017: loss of US$7.9 million).

 

Range's Chairman, Zhiwei Gu, commented:

 

"After another busy period, it is our pleasure to be reporting on significant operational and financial improvements delivered by the team. Looking ahead, we remain focused on achieving long-term profitability and positive operating cashflow through growth in revenues and production whilst maintaining a tight control over costs. On behalf of the Board, I would like to express our gratitude to our stakeholders and staff for their continued commitment and hard work to maximise the value of our high-quality assets. We look forward to reporting on our progress during the year ahead."

  

Operational summary

 

During the year, the Company's focus has been on growing production from its Trinidad assets with 25% increase in production achieved during the period (total production of 237,352 barrels and average of 650 bopd net to Range). Production growth was achieved as a result of the ongoing work programme, which included drilling of two new development wells, workovers on 250 wells, and production growth from the Beach Marcelle waterflood project. The Company also completed an upgrade to its oil handling and storage facilities at the Beach Marcelle field to accommodate production growth at the field.

 

In addition, the Company has been focused on integrating the newly acquired oilfield services business into the Group. The acquisition is particularly significant as it allows Range to have greater control over operating and drilling costs in Trinidad and the benefits of this acquisition have already been seen with the total cost for drilling the GY684 well in late 2017 being over 1/3rd cheaper than the cost of drilling the comparable GY681 well drilled prior to the acquisition. RRDSL has also been actively marketing its services to 3rd parties and has generated revenues of US$0.43 million.

 

In Indonesia, two offices and a services company have been established. The operations at the Perlak field commenced in May 2018, with reactivations on two wells underway. The initial production and well performance are below the original expectations, however work is still underway to establish stable production.

Range also provided an update on its reserves and contingent resources for Trinidad and Indonesia for the financial year ended 30 June 2018. The total reserves (net to Range) are estimated as follows: 1P of 9.3 MMbbl, 2P of 15.2 MMbbl, and 3P of 21.9 MMbbl. The total contingent resources (net to Range) are estimated as follows: 1C of 5.8 MMboe, 2C of 12.9 MMboe and 3C of 40.7 MMboe. The full summary of the reserves and resources statement is included with this announcement.

 

Financial summary

 

Range reports a significant improvement in the financial performance for the year with a materially reduced loss after tax of US$17.5 million compared to a loss in the prior year of US$54.4 million. Whilst still disappointing to be reporting a loss, the Company believes there has been positive progress seen in several key areas, including:

·     Revenues: 55% higher at US$13.1 million (prior year US$8.4 million) with 97% of revenues coming from upstream operations;

·     Realised oil price: 25% higher at US$55.40/barrel (prior year: US$44.27/barrel);

·     First revenues generated by RRDSL from 3rd party drilling work;

·  General and administration expenses: 21% lower at US$4.1 million (prior year US$5.2 million).  This includes one-off costs of US$0.75 million related to the AIM listing process completed during the year, therefore on an underlying basis the spend was lower at US$3.3 million (36% reduction from prior year); and

·  Operating expenses for Trinidad upstream operations of US$6.2 million, representing US$26/barrel, which is a 43% improvement on prior year (prior year: US$46/barrel).

During the year, Range continued to invest in growing the asset base of the Group with US$3.9 million capital expenditure in Trinidad in drilling, waterflood and workover activity. In addition to the activity undertaken at the core Trinidad fields, the Group also completed two important acquisitions. With the Perlak field in Indonesia, Range has invested approximately US$3.8 million during the year to firstly acquire its interest and then to fund its share of the operating costs during the first year of operation. 

It is important to highlight that this is the first financial year since 2013 where there has been no impairment charge recognised and the Company continues to see significant value in the Trinidad asset base which can be released in the years ahead as production growth is delivered.

Cash management remains a critical area of focus and at the period end the Group had cash on hand and other liquid assets of US$6.7 million (including a US$2.8 million refundable deposit). Post-reporting period, Range completed an equity placement raising gross proceeds of GBP 1 million.

The acquisition of RRDSL has resulted in an increase in the level of net borrowings and other interest-bearing payables to US$87 million (2017: US$61.9 million). Range continues to benefit from highly competitive terms offered by LandOcean across the various funding arrangements with no security provided over any assets, no financial covenants or restrictive controls in place, no amortisation due until maturity and a competitive interest rate of between 6-8% pa. The first repayment is due at the end of November 2019 and Range has held initial discussions with LandOcean regarding potential refinancing options. The Company will be considering the most appropriate means to repay or refinance the balance during the coming months.

Outlook

 

The upcoming work programme in Trinidad is principally focused on completing the upgrades to sales infrastructure at the Beach Marcelle field. Once this work has been completed, Range will be in a position to grow production through new drilling activity and other field work. Regrettably, the infrastructure upgrade programme is running behind the original schedule and Range currently anticipates this will not be fully completed until late 2018 / early 2019.

 

Once most of the upgrades are completed, the Company can commence drilling a new development well at the Beach Marcelle field (the GY684 400'NE well). Range has already commenced initial planning work for this well and received the relevant government approvals with the intention to commence drilling operations in December 2018. It is currently expected that the second development well will be drilled in 2019. As part of the ongoing optimization programme, the Company will also be undertaking workovers on approximately 50 wells. 

In addition, the Company is planning to undertake expansion of the Beach Marcelle waterflood project to incorporate more producer and injector wells. The programme is expected to deliver enhanced production during early 2019. The Company has already commenced data collection on some of the selected wells as part of expansion programme.

Range is also acquiring a new geological tool which will be instrumental in developing an extensive, shallow well drilling programme initially focused on the Morne Diablo field. This new tool is an enhanced version of the stratagem tool which was used very successfully by Range in the past and Range expects to receive the new tool later this year.

 

The delay to the infrastructure programme and the knock-on delay to drilling will clearly have an impact upon production growth and Range no longer expects to achieve its previous target of 1,000 bopd by the end of 2018. Range remains focused on seeking sustainable production growth from its Trinidad operations but given the anticipated timeline for infrastructure works and drilling, it will be into 2019 until that growth can be achieved.

 

In Indonesia, Range intends to undertake G&G studies to improve reservoir understanding and to assist in establishing a longer-term development plan for the field. Given that the results from the reactivation programme on two wells are below the original expectations, the Company does not believe the previous production guidance from Indonesian project of 200 bopd (gross) by the end of 2018 is achievable.

RRDSL has got off to an encouraging start to the FY2019 with 3rd party turnover year to date already in excess of the full year results for 2018. The focus for RRDSL remains securing 3rd party work and the Company is encouraged by the pipeline of drilling activity anticipated across both Trinidad and the wider Caribbean/Latin America region.

 

The Company will continue to provide updates on the progress of its operations as appropriate.

 

Reserves & resources and financial statements

 

Included with this announcement is a summary of Range's Reserves and Resources statement and Full Year Audited Annual Accounts for the year ended 30 June 2018 as extracted from the Annual Report, being:

 

-    Reserves and resources statement;

-    Consolidated Statement of Profit or Loss and Other Comprehensive Income;

-    Consolidated Statement of Financial Position;

-    Consolidated Statement of Changes in Equity;

-    Consolidated Statement of Cashflows; and

-    Notes to Financial Statements.

 

 

 

 

Contact Details

 

 

 

Range Resources Limited

Evgenia Bezruchko (Group Corporate Development Manager)

e. [email protected]

t.   +44 (0)20 3865 8430

Cantor Fitzgerald Europe (Nominated Adviser and Broker)

David Porter / Nick Tulloch (Corporate Finance)

t.   +44 (0)20 7894 7000

 

 

 

Qualified person review

In accordance with AIM Rules, Guidance for Mining and Oil & Gas Companies, the information contained in this announcement has been reviewed and approved by Mr Lubing Liu. Mr Liu is a suitably qualified person with 23 years of industry experience. Mr Liu is a full-time employee of Range and holds a role of a Chief Operating Officer and Trinidad General Manager. He holds a BSc in Petroleum Engineering from the Southwest Petroleum University, China and is a member of the SPE (Society of Petroleum Engineers). Mr Liu is qualified in accordance with ASX listing rule 5.41 and consents to the use of petroleum reserve and resource figures in the form and context in which they appear in this statement.

Glossary - SPE Definitions

MMbbl - Million Barrels of Oil.

MMboe - Million Barrels of Oil Equivalent.

Proved Reserves are those quantities of petroleum, which by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods, and government regulations. Probable Reserves are those additional Reserves which analysis of geoscience and engineering data indicate are less likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves.

1P - Proved Reserves. Probability of success 90%.

2P - Proved plus Probable Reserves. Probability of success 50%.

3P -  Proved, plus Probable, plus Possible Reserves. Probability of success 10%.

Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations by application of development projects, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingent Resources may include, for example, projects for which there are currently no viable markets, or where commercial recovery is dependent on technology under development, or where evaluation of the accumulation is insufficient to clearly assess commerciality. Contingent Resources are further categorized in accordance with the level of certainty associated with the estimates and may be sub-classified based on project maturity and/or characterised by their economic status.

1C - a low estimate category of Contingent Resources.

2C - a best estimate category of Contingent Resources.

3C - a high estimate category of Contingent Resources.

 

Note relating to statutory disclosure of significant shareholdings

Statutory disclosure of significant shareholdings (as defined in the AIM Rules) is different for Australian companies and may not always ensure compliance with the requirements of Rule 17 of the AIM Rules.  All shareholders who are holding (directly or indirectly), 3% or more of the issued and outstanding Ordinary Shares are requested to notify the Company without delay of any changes to their holding which increase or decrease such holding through any single percentage. Likewise, shareholders who acquire 3% or more of the issued and outstanding Ordinary Shares are requested to notify the Company without delay.

 

+ Reserves and Resources Statement

 

Reserves

As at 30 June 2018, Range's net proved and probable reserves (2P) are assessed to be 15.2 million barrels of oil (MMbbl). The key factors attributing to the revision in reserves are:

·      Production during the period; and

·      Amended timing for waterflood activity and drilling.

 

Reserves as at 30 June 2018 (MMbbl):

Category

Proved (1P)

Proved & probable (2P)

Proved, probable & possible (3P)

Developed

3.1

4.9

6.4

Undeveloped

6.2

10.3

15.5

Total

9.3

15.2

21.9

1.    The reserve figures (1P, 2P and 3P) include reserves associated with the Company's Morne Diablo, South Quarry and Beach Marcelle licences in Trinidad. Range's net interest in all three fields is 100%.

2.    Competent Persons Report ("CPR") prepared by Rockflow Resources Ltd, effective 30 June 2017 was used as a basis for estimation of the reserve figures.

3.    Range's Morne Diablo and South Quarry fields are operated under farm-out agreements, with rights to production net of Trinidad government royalties, overriding royalties, and production taxes.

4.    Range's Beach Marcelle field is operated under the terms of an Incremental Production Service Contract, entitling Range to a defined portion of the future revenue stream. No oil and gas reserves are owned by Range.

 

Movement in reserves (MMbbl):

Category

Proved (1P)

Proved & probable (2P)

Proved, probable & possible (3P)

Reserves as at 30 June 2017

10.0

16.0

22.9

FY 2018 production

-0.2

-0.2

-0.2

Revisions

-0.5

-0.6

-0.8

Reserves as at 30 June 2018

9.3

15.2

21.9

 

Contingent resources

As at 30 June 2018, Range's net contingent resources 2C (P50) are assessed to be 12.9 million barrels of oil equivalent (MMboe). The key factor attributing to the increase in contingent resources is the inclusion of the Indonesia assets.

 

Contingent resources as at 30 June 2018:

Category

1C

2C

3C

Project

Gas Bscf

Oil MMbbl

Total MMboe

Gas Bscf

Oil MMbbl

Total MMboe

Gas Bscf

Oil MMbbl

Total  MMboe

Trinidad (net 100 %)

-

4.6

4.6

-

8.0

8.0

-

15.4

15.4

Indonesia (net 23%)

1.7

0.9

1.2

10.9

3.1

4.9

41.1

18.4

25.3

Total

1.7

5.5

5.8

10.9

11.1

12.9

41.1

33.8

40.7

1.    The Trinidad resource figures (1C, 2C and 3C) include contingent resources associated with the Company's Morne Diablo, South Quarry and Beach Marcelle licences in Trinidad. Range's net interest in all three fields is 100%.

2.    The Trinidad resource figures are based on the CPR prepared by Rockflow Resources Ltd, effective 30 June 2017.

3.    The Indonesia resource figures (1C, 2C and 3C) include contingent resources associated with the Company's interest in the Perlak field. Range's net interest is 23%.

4.    The Indonesia resource figures are based on the CPR prepared by LEAP Energy Partners Sdn. Bhd, effective 1 August 2017.

5.    The interest in the Indonesia project was acquired during FY2018, therefore contingent resources for FY2017 do not include Indonesia resources.

6.    The conversion factor used for converting gas to oil equivalent volumes is 6,000 scf to 1 boe.

 

Movement in contingent resources (MMboe):

Category

1C

2C

3C

Contingent resources as at 30 June 2017

4.6

8.0

15.4

Revisions

+1.2

+4.9

+25.3

Contingent resources as at 30 June 2018

5.8

12.9

40.7

 

 

Notes on calculation of reserves and resources

·      The reserves and resources stated in this report are prepared in accordance with the definitions and guidelines in the Society of Petroleum Engineers (SPE) 2007 Petroleum Resources Management System (PRMS).

·      Range reviews and updates its oil and gas reserves and resources position on an annual basis and reports the updated estimates as of 30 June each year. Separately, Range reviews and updates its oil and gas reserves and resources position as frequently as required by the magnitude of the petroleum reserves and resources and changes indicated by new data.

·      The reserve and resource figures are reported according to Range's net economic interest, net of royalties and net of lease fuel up to the reference point.

·      The reference point defined as the point of sale to third parties.

·      Petroleum reserves and resources are prepared using deterministic and probabilistic methods.

·      Project and field totals are aggregated by arithmetic summation by category.

·      Totals may not exactly reflect arithmetic addition due to rounding.

·      Oil and gas reserves estimates are expressions of judgment based on knowledge, experience and industry practice. Estimates that were valid when originally calculated may alter significantly when new information or techniques become available. Additionally, by their very nature, reserve and resource estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further information becomes available through additional drilling and analysis, the estimates are likely to change. This may result in alterations to development and production plans which may, in turn, adversely impact the Company's operations. Reserves estimates and estimates of future net revenues are, by nature, forward looking statements and subject to the same risks as other forward-looking statements.

 

+ Consolidated Statement of Profit or Loss and other Comprehensive Income for the year ended 30 June 2018

The below consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

 

Note

Consolidated

2018 (US$)

2017 (US$)

Revenue from continuing operations

3

13,059,422

8,435,309

 

 

 

 

Operating expenses

 

(10,769,092)

(8,770,969)

Royalties

 

(4,605,811)

(2,494,497)

Depreciation, depletion and amortisation

 

(4,950,666)

(6,289,324)

Cost of sales

4a

(20,325,569)

(17,554,790)

 

 

 

 

Gross loss

 

(7,266,147)

(9,119,481)

 

 

 

 

Other income and expenses from continuing operations

Other income

3

421,897

174,367

Finance costs

4b

(3,094,795)

(3,806,226)

General and administration expenses

4c

(4,102,712)

(5,223,721)

Exploration expenditure and land fees

4d

(1,946,306)

(1,152,854)

Impairment of non-current assets

15

-

(28,985,014)

Loss before income tax expense from continuing operations

 

(15,988,033)

(48,112,929)

 

 

 

 

Income tax expense

6

(1,542,204)

(4,999,950)

Loss after income tax from continuing operations

 

(17,530,237)

(53,112,879)

Loss from discontinued operations, net of tax

5

-

(1,250,000)

Loss for the year attributable to equity holders of Range Resources Limited

 

(17,530,237)

(54,362,879)

 

 

 

 

Other comprehensive income

Items that may be reclassified to profit or loss

 

 

 

Exchange differences on translation of foreign operations

25c

(1,423,892)

2,144,373

Other comprehensive loss for year, net of tax

 

(1,423,892)

2,144,373

Total comprehensive loss attributable to equity holders of Range Resources Limited

 

(18,954,129)

(52,218,506)

 

 

 

 

Loss per share from continuing operations attributable to the ordinary equity holders of the Company:

Basic loss per share (cents per share)

8a

(0.23)

(0.68)

Diluted loss per share (cents per share)

8b

n/a

n/a

 

 

 

 

Loss per share attributable to the ordinary equity holders of the Company:

Basic loss per share (cents per share)

8a

(0.23)

(0.70)

Diluted loss per share (cents per share)

8b

n/a

n/a

+ Consolidated Statement of Financial Position as at 30 June 2018

The below consolidated statement of financial position should be read in conjunction with the accompanying notes.

 

Note

Consolidated

2018 (US$)

2017 (US$)

Assets

Current Assets

Cash and cash equivalents

9

3,945,683

17,254,360

Trade and other receivables

10

4,875,766

5,740,726

Inventory

11

3,277,096

2,353,143

Other current assets

11

3,054,911

233,140

Total current assets

 

15,153,456

25,581,369

 

 

 

 

Non-Current Assets

Trade and other receivables

10

2,251,384

6,866,394

Deferred tax asset

6c

13,517,531

6,853,135

Available for sale financial assets

13

-

45,238

Goodwill

15

3,241,472

-

Property, plant and equipment

16

25,489,614

2,021,682

Exploration assets

17

6,744,997

632,176

Producing assets

18

109,091,650

108,347,455

 

 

 

 

Total non-current assets

 

160,336,648

124,766,080

 

 

 

 

Total assets

 

175,490,104

150,347,449

 

 

 

 

Current liabilities

Trade and other payables

19

9,929,506

1,613,499

Current tax liabilities

 

246,917

283,220

Borrowings

20

1,600,000

-

Option liability

20b

33,345

341,618

Provisions

21

811,737

784,316

Total current liabilities

 

12,621,505

3,022,653

 

 

 

 

Non-current liabilities

Trade and other payables

19

50,441,779

51,390,088

Borrowings

20

42,439,606

21,071,631

Deferred tax liabilities

22

64,761,942

54,500,144

Employee service benefits

23

731,350

340,289

Total non-current liabilities

 

158,374,677

127,302,152

 

 

 

 

Total liabilities

 

170,996,182

130,324,805

 

 

 

 

Net assets

 

4,493,922

20,022,644

 

 

 

 

Equity 

Contributed equity

24

383,918,397

383,918,397

Reserves

25

24,822,953

26,339,311

Non-controlling interest

17

3,517,873

-

Accumulated losses

 

(407,765,301)

(390,235,064)

Total equity

 

4,493,922

20,022,644

+ Consolidated Statement of Changes in Equity for the year ended 30 June 2018

 

The below consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

 

Note

Contributed equity

Accumulated losses

Foreign currency translation reserve

Share-based payment reserve

Option premium reserve

Non-controlling interests

Total equity

(US$)

(US$)

(US$)

(US$)

(US$)

 

(US$)

Balance at 1 July 2016

 

383,882,192

(335,872,185)

3,620,738

8,549,024

12,057,363

-

72,237,132

Other comprehensive income

 

 

-

2,144,373

-

-

-

2,144,373

Loss attributable to members of the company

 

-

(54,362,879)

-

-

-

-

(54,362,879)

Total comprehensive loss for the year

 

-

(54,362,879)

2,144,373

-

-

-

(52,218,506)

 

 

 

 

 

 

 

 

 

Transactions with owners in their capacity as owners:

Issue of share capital

24

36,205

-

-

-

-

-

36,205

Cost of share-based payments

 

-

-

-

(32,187)

-

-

(32,187)

Balance at 30 June 2017

 

383,918,397

(390,235,064)

5,765,111

8,516,837

12,057,363

-

20,022,644

 

Balance at 1 July 2017

 

383,918,397

(390,235,064)

5,765,111

8,516,837

12,057,363

-

20,022,644

Other comprehensive income

 

-

-

(1,423,892)

-

-

-

(1,423,892)

Loss attributable to members of the company

 

-

(17,530,237)

-

-

-

-

(17,530,237)

Total comprehensive loss for the year

 

-

(17,530,237)

(1,423,892)

-

-

-

(18,954,129)

 

 

 

 

 

 

 

 

 

Transactions with owners in their capacity as owners:

Issue of share capital

24

-

-

-

-

-

-

-

Cost of share-based payments

4

-

-

-

(92,466)

-

-

(92,466)

Non-controlling interests on acquisition of subsidiary

17

-

-

-

-

-

3,517,873

3,517,873

Balance at 30 June 2018

 

383,918,397

(407,765,301)

4,341,219

8,424,371

12,057,363

3,517,873

4,493,922

 

+ Consolidated Statement of Cash Flows for the year ended 30 June 2018

 

The below consolidated statement of cashflows should be read in conjunction with the accompanying notes

 

Note

Consolidated

2018 (US$)

2017 (US$)

Cash flows from operating activities

Receipts from customers

 

6,580,150

8,531,655

Payments to suppliers and employees

 

(9,868,121)

(6,255,175)

Income taxes received

 

1,954,339

(958,253)

Interest received

 

115,477

85,123

Payment for exploration expenditure

 

(1,253,329)

-

Net cash inflow/(outflow) from operating activities

29

(2,471,484)

1,403,350

 

 

 

 

Cash flows from investing activities

Cash acquired on business combination

15(a)

357,940

-

Payment for property, plant & equipment

16

(254,088)

(4,363)

Payment for asset acquisition

17(i)

(2,560,000)

-

Proceeds from disposal of property, plant and equipment

 

19,061

63,106

Transfer from/(to) restricted deposit

 

-

8,000,000

Payments for available for sale assets

 

-

(6,830)

Payments for loan to external parties

 

(4,047,630)

(5,153,759)

Net cash inflow/(outflow) from investing activities

 

(6,484,717)

2,898,154

 

 

 

 

Cash flows from financing activities

On-demand refundable payment to LandOcean

11

(2,800,000)

-

Repayment of borrowings - convertible note interest

20

(1,600,000)

-

Net cash inflow/(outflow) from financing activities

 

(4,400,000)

-

 

Net increase/(decrease) in cash and cash equivalents

 

(13,356,201)

4,301,504

Net foreign exchange differences

 

47,524

(48,396)

Cash and cash equivalents at beginning of financial year

 

17,254,360

13,001,252

Cash and cash equivalents at end of financial year

9

3,945,683

17,254,360

 

+ Notes to Consolidated Financial Statements


Note 1: Significant accounting policies

These financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.  Range Resources Limited is a for-profit entity for the purpose of preparing the financial statements.

The financial statements cover the Group consisting of Range Resources Limited and its controlled entities. Financial information for Range Resources Limited as an individual entity is disclosed in Note 32. Range Resources Limited is a listed public company, incorporated and domiciled in Australia.

The following is a summary of the material accounting policies adopted by the Group in the preparation of the financial statements. The accounting policies have been consistently applied, unless otherwise stated. The financial report was authorised for issue by the Directors on 28 September 2018.

Basis of preparation

Reporting basis and conventions

The financial statements have been prepared on an accruals basis and are based on historical costs modified by the revaluation of selected non-current assets, and financial assets and financial liabilities for which the fair value basis of accounting has been applied.

Compliance with IFRS

The financial statements of Range Resources Limited also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The financial statements were approved by the Board of Directors on 28 September 2018.

Functional and presentation currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the "Functional Currency"). The consolidated financial statements are presented in United States Dollars (USD), which is Range Resources Limited's functional and presentation currency.

Going concern

This report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and settlement of liabilities in the normal course of business.

For the year ended 30 June 2018 the Group recorded a loss of US$17,530,237 (2017: US$54,362,879) and had net cash outflows of US$13,356,201 (2017: cash inflows of

Note 1: Significant accounting policies (continued)

US$4,301,504). At June 2018, the Group had a working capital surplus of US$2,531,951 (2017: surplus of US$22,558,716). 

The aility of the Group to continue as a going concern is dependent on securing additional funding through the issue of shares and/or debt to fund its operational activities and to finance the repayment of debt and payable obligation to LandOcean as this falls due.

These conditions indicate a material uncertainty that may cast a significant doubt about the Group's ability to continue as a going concern and, therefore, it may be unable to realise its assets and discharge its liabilities in the normal course of business.

At the reporting date, Range had US$3,945,683 of unrestricted cash at bank and an on-demand cash receivable from LandOcean of US$2,800,000 as explained in Note 11.

Subsequent to the year end, Range Resources Limited announced a subscription for new ordinary shares to raise US$1,300,000 million before expenses.

Management believe there are sufficient funds to meet the Group's working capital requirements as at the date of this report.

The Company will continue to focus its capital allocation on assets which maximise production and enhance cash generation and returns to shareholders.

Should the Company not be able to continue as a going concern, it may be required to realise its assets and discharge its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or liabilities that might be necessary should the Company not continue as a going concern.

Adoption of new and revised accounting standards

In the year ended 30 June 2018, the directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to the Company and effective for the current annual reporting period. 

As a result of this review, the directors have determined that there is no material impact of the new and revised Standards and Interpretations on the Company and, therefore, no material change is necessary to Group accounting policies.

(a) Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Range Resources Limited ("Parent Entity" or "Company") as at 30 June 2018 and the results of all subsidiaries for the year then ended. Range Resources Limited and its subsidiaries together are referred to as the "Group".

Subsidiaries are all those entities (including special purpose entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its investment with the entity and has the ability to affect those returns through its power to direct the activities of the entity. 

Where controlled entities have entered or left the Group during the year, their operating results have been included/excluded from the date control was obtained or until the

Note 1: Significant accounting policies (continued)

date control ceased. A list of controlled entities is contained in Note 14 to the financial statements. All controlled entities have a 30 June financial year-end.

All inter-company balances and transactions between entities in the Group, including any unrealised profits or losses have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the Group.

Associates are all entities over which the Group has significant influence but not control or joint control, generally accompanying a shareholding of between 20-50% of the voting rights. Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting, after initially being recognised at cost.

(b) Income tax

The charge for current income tax expense is based on the profit for the year adjusted for any non-assessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted by the reporting date within each jurisdiction.

Deferred tax is accounted for using the liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled. Deferred tax is credited in profit or loss except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised. 

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.  Current tax assets and liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. 

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the Group will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

Note 1: Significant accounting policies (continued)

(c) Property, plant and equipment

Owned assets

Plant and equipment are measured on the historical cost basis less accumulated depreciation and impairment losses.

The cost of fixed assets constructed within the Group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

Oil and gas assets

These properties represent the accumulation of all exploration, evaluation and development expenditure, pre-production development costs and ongoing costs of continuing the develop reserves for production incurred by or on behalf of the entity in relation to areas of interests.

Where further development expenditure is incurred in respect of a property after the commencement of production, such expenditure is carried forward as part of the cost of that property only when expected future economic benefits are to be received, otherwise such expenditure is classified as part of the cost of production.

Depreciation

The depreciable amount of all fixed assets including capitalised lease assets is depreciated on a straight-line basis over their useful lives to the Group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

The depreciation rates used for each class of depreciable asset are:

Class of fixed Asset

Depreciation Rate

Plant & equipment

11.25% - 33%

Production equipment

10 - 20%

Motor vehicles, furniture & fixtures

25 - 33%

Leasehold improvements

10 - 12.50%

The residual values of the assets and their useful lives are reviewed and adjusted if appropriate at each reporting date.

The carrying amount of plant and equipment is reviewed annually by the 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 which will be received from the employment of the assets and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

The carrying amount of the asset is written down to its recoverable amount if its carrying amount is greater than its estimated recoverable amount.

Note 1: Significant accounting policies (continued)

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in profit or loss. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to accumulated losses.

(d) Exploration and evaluation expenditure and the recognition of assets

Acquisition costs for exploration and evaluation projects are accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area 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.

The recoverability of the carrying amount of the exploration and evaluation assets is dependent on the successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.

The carrying values of expenditures carried forward are reviewed for impairment at each reporting date when the facts, events or changes in circumstances indicate that the carrying value may be impaired. 

Accumulated expenditures are written off to profit or loss to the extent to which they are considered to be impaired.

The group applies AASB 6 Exploration and Evaluation of Mineral Resources which is equivalent to IFRS 6.  The carrying value of exploration and evaluation expenditure is historical cost less impairment.

Ongoing exploration costs incurred in respect of the Group's Trinidadian and Indonesian interests are expensed as incurred. Initial acquisition costs to obtain the right to explore are capitalised.

(e) Producing assets

Upon the commencement of commercial production from each identifiable area of interest, the exploration and evaluation expenditure incurred up to that point is impairment tested and then reclassified to producing assets.

When production commences, the accumulated costs for the relevant area of interest are amortised on a "units of production" method which is based on the ratio of actual production to remaining proved and probable reserves (1P) as estimated by independent petroleum engineers over the life of the area according to the rate of depletion of the economically recoverable reserves. 

Subsequent costs such as workovers, are included in the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be reliably measured. All other costs are charged to profit or loss during the financial period in which they are incurred.

Note 1: Significant accounting policies (continued)

The carrying amount of producing assets is reviewed annually by the directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount of an asset is the greater of its fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows of an asset are discounted to their present value using a post-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where an asset does not generate cash flows that are largely independent from other assets or groups of assets, the recoverable amount is determined for the cash generating unit to which the asset belongs. For producing assets, the estimated future cash flows for the value-in-use calculation are based on estimates, the most significant of which are 2P hydrocarbon reserves, future production profiles, commodity prices, operating costs and any future development costs necessary to produce the reserves which the group is committed. Under a fair value less costs to sell calculation, future cash flows are based on estimates of 2P hydrocarbon reserves. Estimates of future commodity prices are based on the Group's best estimate of future market prices with reference to external market analysts' forecasts, current spot prices and forward curves. Future commodity prices are reviewed at least annually.

The carrying amount of an asset is written down to its recoverable amount if its carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount.  These gains or losses are included in profit or loss. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to accumulated losses.

The Group records the present value of the estimated cost of legal and constructive obligations to restore operating locations in the period in which the obligation arises. The nature of restoration activities includes the removal of facilities, abandonment of wells and restoration of affected areas. A restoration provision is recognised and updated at different stages of the development and construction of a facility and then reviewed on an annual basis. When the liability is initially recorded, the estimated cost is capitalised by increasing the carrying amount of the related exploration and evaluation/development assets.

Over time, the liability is increased for the change in the present value based on a post-tax discount rate appropriate to the risk inherent in the liability. The unwinding of the discount is recorded as an accretion charge within finance costs. The carrying amount capitalised in oil and gas properties is depreciated over the useful life of the related asset.

Costs incurred that relate to an existing condition caused by past operation and do not have a future economic benefit are expensed.

(f) Financial instruments

The Group's financial instruments include cash and cash equivalents, trade and other receivables and available-for-sale financial assets.

Recognition

Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition, these instruments are measured as set out below.

Note 1: Significant accounting policies (continued)

The Group classifies its financial assets in the following categories: loans and receivables and available-for-sale investments. The classification depends on the purpose for which the investments were acquired.  Management determines the classification of its investments at initial recognition.

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 stated at amortised cost using the effective interest rate method.

Available-for-sale financial assets

Available-for-sale financial assets include non-derivative financial assets designated in this category not included in any of the other categories.  Available-for-sale financial assets are reflected at fair value.  Unrealised gains and losses arising from changes in fair value are taken directly to the available for sale investment revaluation reserve in equity. Investments are designated as available-for-sale if they do not have fixed maturities and fixed determinable payments and management intends to hold them for the medium to long term.

Fair value

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities held at cost less impairment, including recent arm's length transactions, reference to similar instruments and option pricing models.

Changes in the fair value of monetary securities denominated in a foreign currency and classified as available-for-sale are analysed between translation differences resulting from changes in amortised cost of the security and other changes in the carrying amount of the security.  The translation differences related to changes in the amortised cost are recognised in profit or loss, and other changes in carrying amount are recognised in the available for sale investment revaluation reserve in equity.  Changes in the fair value of other monetary and non-monetary securities classified as available-for-sale are recognised in equity.

Impairment of assets

The Group assesses at each reporting date whether there is objective evidence that a financial asset or group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of a security below its cost is considered an indicator that the securities are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss (measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss) is removed from equity and included in profit or loss. Impairment losses recognised in the statement of profit or loss and other comprehensive income on equity instruments classified as available-for-sale are not reversed through profit or loss.

 

 

Note 1: Significant accounting policies (continued)

Recognition and de-recognition

Regular purchases and sales of financial assets are recognised on trade-date - the date on which the Group commits to purchase or sell the asset.  Investments are initially recognised at fair value plus transaction costs. Financial assets are de-recognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and reward of ownership.

When the securities classified as available-for-sale are sold, the accumulated fair value adjustments recognised in equity are included in profit or loss as gains and losses for investment securities.

(g) Foreign currency transactions and balances

Functional and presentation currency

The functional currency of each entity within the Group is determined using the currency of the primary economic environment in which that entity operates. 

Transaction and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items are recognised in profit or loss

Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity; otherwise the exchange difference is recognised in profit or loss.

(h) Provisions

Provisions for legal claims, service warranties and make good obligations are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated.  Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the reporting date.  The discount rate used to determine the present value reflects the current market assessments of the time value of money and the risk specific to the liability.  The increase in the provision due to the passage of time is recognised as interest expense.

Note 1: Significant accounting policies (continued)

(i) Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value, and bank overdrafts.  Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position.

(j) Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.  Trade receivables are generally due for settlement within 30 days.

Collectability of trade receivables is reviewed on an ongoing basis.  Debts which are known to be uncollectible are written off by reducing the carrying amount directly.  An allowance account (provision for impairment of trade receivables) is used when there is objective evidence that the Group will not be able to collect all amounts due, according to the original terms of the receivables.  Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The amount of impairment allowance is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.  Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial.

The amount of impairment loss is recognised in profit or loss within other expenses.  When a trade receivable, for which an impairment allowance had been recognised, becomes uncollectible in a subsequent period, it is written off against the allowance account.  Subsequent recoveries of amounts previously written off are credited against other expenses in profit or loss.

(k) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable.  Amounts disclosed as revenue are net of returns, trade allowances, rebates and amounts collected on behalf of third parties.  Revenue is recognised when the amount of revenue can be reliably measured, and it is probable that future economic benefits will flow to the Group.

Revenue from the sale of oil and gas and related products is recognised when the Group has transferred to the buyer the significant risks and rewards of ownership and the amounts can be measured reliably. In the case of oil, this usually occurs at the time of lifting.

Interest revenue is recognised on a time proportion basis taking into account the interest rates applicable to the financial assets.

(l) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office.  In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as

Note 1: Significant accounting policies (continued)

part of an item of the expense.  Receivables and payables in the statement of financial position are shown inclusive of GST.

Cash flows are presented in the consolidated statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

(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) Fair value estimation

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement for disclosure purposes.

The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted market prices at the reporting date.  The quoted market price used for financial assets held by the Group is the current bid price.

The fair value of financial instruments that are not traded in an active market (for example over-the-counter derivatives) is determined using valuation techniques.  The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each reporting date. 

The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short-term nature.  The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash follows at the current market interest rate that is available to the Group for similar financial instruments.

(o) Investments in associates      

Investments in associates are accounted for using the equity method of accounting in the consolidated financial statements.

Under the equity method, the investment in the associate is carried in the consolidated statement of financial position at cost plus post-acquisition changes in the Group's share of net assets of the associate.

After application of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss with respect to the Group's net investment in the associate.

The Group's share of the associate post-acquisition profits or losses is recognised in the statement of profit or loss and other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group's share of losses in the associate equals or exceeds its interest in the associate, including any unsecured long-term receivables and loans, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

 

Note 1: Significant accounting policies (continued)

The reporting dates of the associate and the Group are identical and the associate's accounting policies conform to those used by the Group for like transactions and events in similar circumstances.

(p) Prepayments for investments

Prepayments for acquisitions of financial assets are recorded at the fair value of consideration to acquire the assets.

On satisfaction of all terms of the acquisition contract have been satisfied the prepayment is transferred and accounted for as an investment.

(q) Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid.  The amounts are unsecured and are usually paid within 30 days of recognition unless alternative terms are agreed. The Group's most material balance is with LandOcean which has specific payment terms of 3 years.

(r) Dividends

Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the financial year but not distributed at reporting date.

(s) Contributed equity

Ordinary shares are classified as equity.  Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(t) Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares.

(u) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Chief Executive Officer.

 

Note 1: Significant accounting policies (continued)

(v) Impairment of assets

Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired.  Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.  An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.  The recoverable amount is the higher of an asset's fair value less costs to sell and value in use.  For the purposes of assessing impairment, assets are grouped at the lowest levels for which they are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units).  Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

(w) Intangible assets (goodwill)

Goodwill is measured at cost less any impairment write downs.  Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is not amortised but it is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses.  Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing.  The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose, identified according to operating segments (note 28).

(x) Share-based payments

The fair value of options granted is recognised as an expense with a corresponding increase in equity.  The total amount to be expensed is determined by reference to the fair value of the options granted, which includes any market performance conditions and the impact of any non-vesting conditions but excludes the impact of any service and non-market performance vesting conditions.

(y) Employee benefits

Wages and salaries and annual leave

Liabilities for wages and salaries, including non-monetary benefits are recognised in current liabilities 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.

Long service benefit

The liability for long service benefit is recognised in current and non-current liabilities, depending on the unconditional right to defer settlement of the liability for at least 12 months after the reporting date.  The liability is measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method.  Consideration is given to

 

Note 1: Significant accounting policies (continued)

expected future wage and salary levels, experience of employee departures and periods of service. 

(z) Leases

The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.

A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to ownership of leased assets, and operating leases, under which the lessor effectively retains substantially all such risks and benefits.

Finance leases are capitalised. A lease asset and liability are established at the fair value of the leased assets, or if lower, the present value of minimum lease payments.  Lease payments are allocated between the principal component of the lease liability and the finance costs, so as to achieve a constant rate of interest on the remaining balance of the liability.

Leased assets acquired under a finance lease are depreciated over the asset's useful life or over the shorter of the asset's useful life and the lease term if there is no reasonable certainty that the company will obtain ownership at the end of the lease term.

Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a straight-line basis over the term of the lease.

(aa) Borrowings

Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs.  They are subsequently measured at amortised cost using the effective interest method.

Where there is an unconditional right to defer settlement of the liability for at least 12 months after the reporting date, the loans or borrowings are classified as non-current.

(bb) Compound financial instruments

Compound financial instruments issued by the Group comprise convertible notes that can be converted to ordinary shares at the option of the holder, when the number of shares to be issued is fixed.

The liability component of a compound financial instrument is recognised initially at the fair value of a similar liability that does not have an equity conversion option.  The equity component is recognised initially at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component.  Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest method.  The equity component of a compound financial instrument is not re-measured subsequent to initial recognition.

Note 1: Significant accounting policies (continued)

Interest related to the financial liability is recognised in profit or loss.  On conversion the financial liability is reclassified to equity and no gain or loss is recognised.

Convertible notes that can be converted to share capital at the option of the holder and where the number of shares is variable, contains an embedded derivative liability. The embedded derivative liability is calculated (at fair value) first and the residual value is assigned to the debt host contract. The embedded derivative is subsequently measured at fair values and movements are reflected in the profit or loss.

Certain convertible notes issued by the Group which include embedded derivatives (option to convert to variable number of shares in the Group) are recognised as financial liabilities at fair value through profit or loss.  On initial recognition, the fair value of the convertible note will equate to the proceeds received and subsequently the liability is measured at fair value at each reporting period until settlement.  The fair value movements are recognised on the profit or loss as finance costs.

Finance costs

Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in which they are incurred.

(cc) Non-current assets classified as held for sale

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use.  They are measured at the lower of their carrying amount and fair value less costs to sell.  For non-current assets to be classified as held for sale, they must be available for immediate sale in their present condition and their sale must be highly probable.

An impairment loss is recognised for any initial or subsequent write down of the non-current assets to fair value less costs to sell.  A gain is recognised for any subsequent increases in fair value less costs to sell of a non-current asset, but not in excess of any cumulative impairment loss previously recognised.

Non-current assets are not depreciated or amortised while they are classified as held for sale.  Interest and other expenses attributable to the liabilities of assets held for sale continue to be recognised.

Non-current assets classified as held for sale are presented separately on the face of the consolidated statement of financial position, in current assets.  The liabilities of disposal groups classified as held for sale are presented separately on the face of the statement of financial position, in current liabilities.

(dd) Discontinued operations

A discontinued operation is a component of the Group's business, the operations and cash flows of which can be clearly distinguished from the rest of the Group and which:

·      represents a separate major line of business or geographical area of operations

·      is part of a single co-ordinated plan to dispose of a separate major line of business or geographical are of operations

·      is a subsidiary acquired exclusively with a view to resale.

 

Note 1: Significant accounting policies (continued)

Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to be classified as held-for-sale.

When an operation is classified as a discontinued operation, the comparative consolidated statement of profit or loss and other comprehensive income is re-presented as if the operation had been discontinued from the start of the comparative year.

(ee) Inventories

Inventories include consumable supplies and maintenance spares and are valued at the lower of cost and net realisable value. Cost is determined on a weighted average basis and includes direct costs and an appropriate portion of fixed and variable production overheads where applicable. Inventories determined to be obsolete or damaged are written down to net realisable value, being the estimated selling price less selling costs.

Note 2: Critical accounting estimates and judgements

The directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best available current information.  Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group.  Areas involving a higher degree of judgement or complexity, or areas where estimations and assumptions are significant to the financial statements are disclosed here.

Producing asset expenditure

The classification of exploration and evaluation expenditure to producing assets is based on the time of first commercial production. Producing asset expenditure for each area of interest is carried forward as an asset provided certain conditions listed in Note 1(e) are met and depreciated on a unit of production basis on P1 reserves. P1 reserves have been determined by an independent expert.

Producing assets are assessed for impairment when facts and circumstances suggest that the carrying amount of a production asset may exceed its recoverable amount. These timings, calculations and reviews require the use of assumptions and judgement. The related carrying amounts are disclosed in Note 18.

Reserves and resources

Estimates of reserves requires judgement to assess the size and quality of reservoirs and their anticipated recoveries. Estimates of reserves are used to calculate depreciation, depletion and amortisation charges.

Impairment of goodwill and producing assets

The Group tests whether goodwill or the producing assets has suffered any impairment in accordance with the accounting policies stated in notes 1(e) and 1(w).  The recoverable amount of the cash-generating unit to which the assets belong is estimated based on the present value of future cash flows. 

The expected future cash flow estimation is always based on a number of factors, variables and assumptions, the most important of which are estimates of reserves, future production profiles, commodity prices and costs.  In most cases, the present value of future cash flows is most sensitive to estimates of future oil price and discount rates. A

Note 2: Critical accounting estimates and judgements (continued)

change in the modelled assumptions in isolation could materially change the recoverable amount. Refer to note 15 for details of these key assumptions.

Deferred tax liability

Upon acquisition of SOCA Petroleum Ltd in June 2011, in accordance with the requirement of AASB 112 Income Taxes, a deferred tax liability of US$46,979,878 was recognised in relation to the difference between the carrying amount for accounting purposes of deferred development assets and their actual cost base for tax purposes.

The carrying value of this deferred tax liability is US$28,429,185 at 30 June 2018. In the event that the manner by which the carrying value of these assets is recovered differs from that which is assumed for the purpose of this estimation, the associated tax charges may be significantly less than this amount.

Recoverability of deferred tax assets

Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Management considers that it is probable that future taxable profits will be available to utilise those temporary differences. Judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future profits.

Fair value of assets acquired and liabilities assumed in business combination

Identifiable assets acquired and liabilities assumed in business combination are measured at their fair values at the acquisition date.

Share based payments transactions

The Group measures the cost of equity-settled share-based payment transactions with employees by reference to the fair value of the equity instruments at the grant date. The fair value is determined using a Black-Scholes model. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact expenses and derivative liability.

Contingent liabilities

The Directors are of the opinion that no provision is required to be raised in respect to any of the matters disclosed in Note 27 as the likely outcome of any outflow is considered to be remote.

Recoverability of capitalised exploration and evaluation expenditure

The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale. Factors that could impact the future recoverability include the level of reserves and resources, future technological changes, which could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices. To the extent that capitalised exploration

Note 2: Critical accounting estimates and judgements (continued)

and evaluation expenditure is determined not to be recoverable in the future, profits and net assets will be reduced in the period in which this determination is made.

Note 3: Revenue

 

Note

Consolidated

2018 (US$)

2017 (US$)

From continuing operations

Revenue from sale of oil

 

12,629,996

8,435,309

Revenue from third party services

 

429,426

-

Total revenue from continuing operations

 

13,059,422

8,435,309

Other income

Interest income

 

240,390

78,021

Other income

 

181,507

96,346

Total other income

 

421,897

174,367

 

Note 4: Expenses

 

Note

Consolidated

2018 (US$)

2017 (US$)

Loss before income tax includes the following specific expenses:

a: Cost of sales

Costs of production

 

6,688,758

6,613,133

Royalties

 

4,605,811

2,494,497

Staff costs

 

4,080,334

2,157,836

Oil and gas properties depreciation, depletion and amortisation

 

4,950,666

6,289,324

Total cost of sales

 

20,325,569

17,554,790

 

 

 

 

b: Finance costs

Fair value movement of derivative liability

 

(2,308,556)

(786,021)

Fair value movement of option liability

20(b)

(308,273)

(494,096)

Foreign exchange loss

 

193,109

1,362,426

Interest expense

 

3,209,959

2,119,996

Interest on convertible note

 

2,308,556

1,871,318

Other finance income

 

-

(267,397)

 Total finance costs

 

3,094,795

3,806,226

 

-

 

 

c: General and administration expenses

Directors' and officers' fees and benefits

 

840,599

1,097,029

Share based payments - employee, director and consultant options

 

(92,466)

(32,187)

Other expenses

 

3,354,579

4,158,879

Total general and administration expenses

 

4,102,712

5,223,721

 

Note 4: Expenses (continued)

 

d: Exploration expenditure

Indonesia (i)

 

1,253,329

-

Trinidad (ii)

 

670,856

822,383

Other

 

22,121

330,471

Total exploration expenditure

 

1,946,306

1,152,854

(i) Amounts expensed in the year in Indonesia relate to exploration activities in the Perlak field for which the company policy is to expense. 

(ii) Amounts expensed in the year in Trinidad relate to land fees in relation to St Mary's for which the company policy is to expense.

Note 5: Discontinued operations

During 2017 the Group fully wrote down the asset held-for-sale which relates to 45% interest in the unlisted company Strait Oil & Gas Limited ("Strait") due to uncertainty over its recoverability.

 

Note

Consolidated

2018 (US$)

2017 (US$)

a: Results of discontinued operations

Revenue

 

-

-

Cost of sales

 

-

-

Asset write off

 

-

(1,250,000)

Other expenses

 

-

-

 

 

 

 

Results from operating activities

 

-

(1,250,000)

Income tax (expense)/benefit

 

-

-

Results from operating activities, after tax

 

-

(1,250,000)

Loss on sale of subsidiary asset

 

-

-

Loss from discontinued operations

 

-

(1,250,000)

 

Note 6: Income Tax Expense

 

Note

Consolidated

2018 (US$)

2017 (US$)

a: Income tax expense

Current tax

 

-

-

Deferred tax

 

1,419,725

4,974,750

Adjustments for current tax of prior periods

 

122,478 9

25,200

 

 

1,542,204

4,999,950

Income tax expense/(benefit) is attributable to:

Loss from continuing operations

 

1,542,204

4,999,950

Loss from discontinued operations

 

-

-

Aggregate income tax expense

 

1,542,204

4,999,950

b:  The prime facie tax on profit from ordinary activities before income tax is reconciled to the income tax as follows:

Loss from continuing operations before income tax

 

(15,988,033)

(48,112,929)

Loss from discontinuing operations before income tax

 

-

(1,250,000)

 

 

(15,988,033)

(49,362,929)

Prime facie tax payable on loss from ordinary activities before income tax at 30% (2017: 30%) Group

 

(4,474,410)

(14,433,879)

 

 

(4,796,410)

(14,433,879)

Add tax effect of:

Other taxes

 

88,626

25,200

Expenses not deductible for tax

 

4,883,415

23,850,271

Tax losses not brought to account

 

11,316,449

11,471,474

Capital expenses deductible for tax purposes

 

(5,961,448)

(8,092,768)

Deferred tax assets not brought to account

 

331,010

4,179,397

Differences in tax rates

 

(4,319,439)

(11,999,745)

 

 

1,542,204

4,999,950

Unrecognised deferred tax asset

Capital losses

 

443,654

443,654

Revenue losses

 

10,595,377

10,470,664

Other

 

2,866,987

1,400,991

Offset of deferred tax liabilites

 

(5,680,826)

(3,147,098)

Net Deferred Tax Assets not brought to account

 

8,225,192

9,168,211

c: Recognised deferred tax assets

Temporary differences

 

13,517,531

6,853,135

 

 

13,517,531

6,853,135

Recognised deferred tax liabilities

Accelerated depreciation

 

(36,332,757)

(26,167,218)

DTL arising on business combination

 

(28,429,185)

(28,332,926)

Net deferred tax liabilities

 

(64,761,942)

(54,500,144)

         

Deferred tax assets not brought to account, the benefits of which will only be realised if the conditions for deductibility set out in Note 1(b) occur.

 

 

 

 

 

Note 7: Auditor's remuneration

 

Note

Consolidated

2018 (US$)

2017 (US$)

Remuneration of the auditor of the Parent Entity for:

Auditing or reviewing the financial report by BDO Audit (WA) Pty Ltd

 

56,016

70,000

Non-audit services provided by a related entity of BDO Audit (WA) Pty Ltd in respect to Parent Entity's tax compliance

 

17,010

17,828

Professional services provided by BDO UK LLP in respect to AIM admission

 

160,591

-

Total remuneration for the Parent Entity

 

233,617

87,828

Remuneration of the auditors of the subsidiaries

Auditing or reviewing the financial report by BDO UK

 

2,016

5,327

Auditing or reviewing the financial report by BDO Barbados

 

14,175

10,331

Auditing or reviewing the financial report by BDO Trinidad

 

30,801

29,251

Auditing or reviewing the financial report by BDO Indonesia

 

19,300

-

Total remuneration for the subsidiaries

 

66,292

44,909

Note 8: Loss by share

 

Note

Consolidated

2018 (US$)

2017 (US$)

a: Basic loss per share

Loss per share from continuing operations attributable to the ordinary equity holders of the company

 

(0.23)

(0.68)

Loss per share attributable to the ordinary equity holders of the company

 

(0.23)

(0.70)

b: Diluted loss per share

Loss per share from continuing operations attributable to the ordinary equity holders of the company

 

n/a

n/a

Loss per share attributable to the ordinary equity holders of the company

 

n/a

n/a

c: Reconciliation of loss used in calculating earnings per share

Basic/ Diluted loss per share

 

 

 

Loss from continuing operations attributable to the ordinary equity holders of the company

 

(17,530,237)

(53,112,879)

Loss attributable to the ordinary equity holders of the company

 

(17,530,237)

(54,362,879)

d: Weighted average number of shares used as the denominator

Weighted average number of ordinary shares used as the denominator in calculating basic EPS

 

7,595,830,782

7,595,830,782

Note 9: Cash and cash equivalents

 

Note

Consolidated

2018 (US$)

2017 (US$)

Cash at bank and on hand

 

3,945,683

17,254,360

 

Risk exposure

Information about the Group's exposure to credit risk, foreign exchange risk and price risk is provided in Note 33.

 

Note 10: Trade and other receivables

 

Note

Consolidated

2018 (US$)

2017 (US$)

Current

Trade receivables (i)

 

1,197,336

658,338

Taxes receivable

 

3,678,430

5,082,388

Total trade and other receivables

 

4,875,766

5,740,726

 

(i) Trade receivables are generally due for settlement within 30 days.  They are presented as current assets unless collection is not expected for more than 12 months after the reporting date.  Trade receivables are neither past due nor impaired.

Fair value approximates the carrying value of trade and other receivables at 30 June 2018 and 30 June 2017.

 

Note

Consolidated

2018 (US$)

2017 (US$)

Non-current

Other receivables (i)

 

2,251,384

6,886,394

Total trade and other receivables

 

2,251,384

6,886,394

 

(i) Other receivables are comprised of receivables from LandOcean Energy Services Co. Ltd (US$1,220,713) and Sincep Oilog Equipment Co. Ltd (US$44,150) which are both part of LandOcean group of companies. The total interest due is US$986,521.

Fair value approximates the carrying value of trade and other receivables at 30 June 2018 and 30 June 2017.

Risk exposure

Information about the Group's exposure to credit risk, foreign exchange risk and price risk is provided in Note 33.

 

 

 

Note 11: Other current assets

 

Note

Consolidated

2018 (US$)

2017 (US$)

Current

Prepayments

 

242,142

208,946

Inventory - finished goods

 

3,277,096

2,353,143

Other assets (i)

 

2,812,769

24,194

Total other current assets

 

6,332,007

2,586,283

(i) Other assets include a refundable payment of $2,800,000 made to LandOcean Petroleum Corp. Ltd on 22 December 2017 in respect of RRDSL acquisition. The amount is receivable on-demand, unsecured and accrues 6% interest.

Note 12: Assets held for sale

During 2017 the Group fully wrote down the asset held-for-sale which relates to 45% interest in the unlisted company Strait Oil & Gas Limited ("Strait") due to uncertainty over its recoverability.

 

Note

Consolidated

2018 (US$)

2017 (US$)

Movements in assets classified as held for sale are as follows:

Opening net book amount

 

-

1,250,000

Transfer from investment in associate

 

-

-

Sold in period

 

-

-

Impairment loss relating to discontinued operations

 

-

(1,250,000)

Closing net book amount

 

-

-

 

Note 13: Financial assets available for sale

 

Note

Consolidated

2018 (US$)

2017 (US$)

Interest in other corporations

 

-

45,238

 

 

 

 

Total available-for-sale financial assets

 

-

45,238

 

 

 

 

Movement in financial assets available-for-sale

Opening balance

 

45,238

45,238

Impairment recognised in profit or loss

 

(45,238)

-

Closing Balance

 

-

45,238

Available-for-sale financial assets comprise investments in the ordinary share capital of various entities. There are no fixed returns or fixed maturity date attached to these investments.

Risk exposure

Information about the Group's exposure to credit risk, foreign exchange risk and price risk is provided in Note 33.

Note 14: Controlled Entities

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with accounting policy described in Note 1(a).

Controlled Entities Consolidated

Country of Incorporation

Percentage Owned (%)

30 June 2018

30 June 2017

Subsidiaries of Range Resources Limited:

Range Resources (Barbados) Limited

Barbados

100

100

   SOCA Petroleum Limited

Barbados

100

100

   Range Resources Drilling Services Limited

Trinidad

100

-

   West Indies Exploration Company Limited

Trinidad

100

100

   Range Resources Trinidad Limited

Trinidad

100

100

   Range Resources West Coast Limited

Trinidad

100

100

Range Resources (Barbados) GY Limited

Barbados

100

100

   Range Resources GY Shallow Limited

Trinidad

100

100

   Range Resources GY Deep Limited

Trinidad

100

100

Range Resources Upstream Services Limited

United Kingdom

100

100

Range Resources HK Limited

Hong Kong

100

100

   PT Hengtai Weiye Oil and Gas

Indonesia

60

-

   PT Jasmine Oil and Gas Services (ii)

Indonesia

60

-

   PT Lubuk Kawai Raya (i)

Indonesia

46.8

-

   PT Aceh Timur Kawai Energi (i)

Indonesia

42.1

-

 

(i) Indirect control of these companies was obtained with the acquisition of 60% of share capital in PT Hengtai Weiye Oil and Gas.

(ii) Newly established entity.

Note 15a: Business Combinations

On 30th November 2017, Range acquired RRDSL from LandOcean Petroleum Corp. Ltd. for a consideration of US$5,500,000. Details of the purchase consideration, the net assets acquired and goodwill are below.

 

Purchase consideration comprises:

 

 

US$

Cash payable

 

5,500,000

Total consideration

 

5,500,000

 

The group has reported provisional amounts for the assets and liabilities acquired as follows:

Net identifiable assets acquired

 

2,258,528

 

 

 

Net assets acquired:

 

 

Plant and equipment

 

24,739,434

Deferred tax asset

 

2,544,203

Cash and cash equivalents

 

357,940

Trade and other receivables

 

4,013,278

Inventory

 

1,470,349

Trade and other payables

 

(1,745,851)

Deferred tax liability

 

(5,289,460)

Borrowings

 

(23,831,365)

Goodwill

 

3,241,472

 

(a)        Goodwill recognition and allocation

On 30th November 2017, Range acqured RRDSL from LandOcean Petroleum Corp. Ltd. for a consideration of US$5,500,000 which is payable on 30 November 2020.

 

Goodwill of US$3,241,472 represents the costs savings achieved within the Group now that RRDSL is part of Range group.

 

 (b)       Revenue and loss contribution

Revenue and net loss before tax of RRDSL included in the consolidated statement of profit or loss and other comprehensive income from the acquisition date to 30 June 2018 were US$429,426 and US$(3,015,699). 

If the acquisition had occurred on 1 July 2017, revenue and net profit from RRDSL would have been US$529,002 and US$268,188.

 

(c)        Purchase consideration - cash outflow

Outflow of cash to acquire subsidiary net of cash acquired      US$

 

Cash consideration

 

     -

Less cash acquired

 

     357,940

Net inflow of cash - investing activities

 

     357,940

       

 

Acquisition related costs

Acquisition related costs of $736,881 are included in general and administration expenses in profit or loss and in operating cash flows in the statement of cash flows.

(d)        Accounting policy

The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of subsidiary comprises the:

(i)         fair values of the assets transferred

(ii)         liabilities incurred to the former owners of the acquired business

(iii)        equity interests issued by the group

(iv)        fair value of any asset or liability resulting from contingent consideration arrangement, and

(v)         fair value of any pre-existing equity interest in the subsidiary

 

Note 15a: Business Combinations (continued)

Identifiable assets acquired and liabilities and contingent liabilities assumed in business combination are, with limited exceptions, measured initially at their fair values at the acquisition date.

Acquisition-related costs are expensed as incurred.

The excess of the

(i)         consideration transferred,

(ii)         amount of any non-controlling interest in the acquired entity, and

(iii)        acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired

is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired, the difference is recognised directly in profit or loss as bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which similar borrowing could be obtained from an independent financier under comparable terms and conditions.

Note 15b: Intangible Assets

 

Note

Consolidated

2018 (US$)

2017 (US$)

 

Cost

 

3,241,472

28,985,014

Impairment write down

 

-

(28,985,014)

Net book amount

 

3,241,472

-

 

 

 

 

Year ended 30 June 2018

Opening net book amount

 

-

28,985,014

Additions-acquisition

15(a)

3,241,472

-

Impairment charge

 

-

(28,985,014)

Closing net book amount

 

3,241,472

-

 

Impairment tests

During the year ended 30 June 2018, the Group did not record an impairment with respect to goodwill.

Goodwill has been allocated for impairment testing purposes to one cash-generating unit (CGU), identified according to operating segments, being Trinidad - oil and gas production. The goodwill represents the costs savings achieved within the group as a result of the RRDSL acquisition.

 

 

Note 15b: Intangible Assets (continued)

Estimates of the recoverable amount is based on an asset's fair value less costs to sell using a discounted cash flow method and is most sensitive to the following key assumptions:

·      Obtaining all required approvals and permissions to undertake waterflood development;

·      Obtaining lease extensions until 2031;

·      P1 and P2 Recoverable reserves;

·      Commodity price of between US$60 and US$72 per barrel dependent on the year;

·      Operating costs at 10%-26% of revenue, depending on oil price and production at that time;

·      Post-tax discount rate of 10.0%.

Economical recoverable reserves represent management's expectations at the time of completing the impairment testing and based on the reserves statements and exploration and evaluation work undertaken by appropriately qualified persons. A summary of the Company's Trinidad reserves and resources are published on the Group's website.

The commodity price for oil was based on mean WTI forecast oil price data from a variety of different analysts and other sources. Estimates (calendar years) are US$61/bbl in 2018, US$66/bbl in 2019, US$63/bbl in 2020, US$65/bbl in 2021, US$64/bbl in 2022, US$68/bbl in 2024, US$67/bbl in 2025 and then escalating at 2% per annum for the remainder of the project.

Operating cost assumptions were based on FY19 budgets, actual costs incurred in FY18 and estimates of additional operating costs for waterflood activities received from Range Resources Drilling Services Limited. An adverse 20% change to oil prices, production, operating costs and the discount rate would not result in an impairment.

  

Note 16: Property, Plant & Equipment

Consolidated

Production equipment and access roads

Gathering station and field office

Leasehold improvement

Motor vehicle, furniture, fixtures & fittings 

 

Total

 

US$

US$

US$

US$

US$

Year ended 30 June 2017

Opening net book amount

1,770,165

98,119

214,300

246,644

2,329,228

Foreign currency movement

(28,211)

(2,813)

(4,421)

(1,523)

(36,968)

Additions

-

-

-

4,363

4,363

Disposals

-

-

-

(3,916)

(3,916)

Depreciation charge

(134,384)

(7,861)

(25,022)

(103,758)

(271,025)

Closing net book amount

1,607,570

87,445

184,857

141,810

2,021,682

At 30 June 2017

Cost

6,288,571

502,697

529,599

1,134,146

8,455,013

Accumulated depreciation

(4,681,001)

(415,252)

(344,742)

(992,336)

(6,433,331)

Net book amount

1,607,570

87,445

184,857

141,810

2,021,682

 

Year ended 30 June 2018

Opening net book amount

1,607,570

87,445

184,857

141,810

2,021,682

Foreign currency movement

2,381

127

404

210

3,122

Acquisitions from business combination

23,742,231

-

-

997,203

24,739,434

Additions

214,331

-

14,484

228,082

456,897

Depreciation charge

(1,475,122)

(11,571)

(18,255)

(226,573)

(1,731,521)

Closing net book amount

24,091,391

76,001

181,490

1,140,732

25,489,614

At 30 June 2018

Cost

30,265,925

496,647

539,886

2,337,172

33,639,630

Accumulated depreciation

(6,174,534)

(420,646)

(358,396)

(1,196,440)

(8,150,016)

Net book amount

24,091,391

76,001

181,490

1,140,732

25,489,614

 

 

 

 

Note 17: Exploration assets

 

Note

Consolidated

2018 (US$)

2017 (US$)

Opening balance (ii)

 

632,176

645,801

Acquisition (i)

 

6,077,873

-

Foreign exchange

 

34,948

(13,625)

Closing net book amount

 

6,744,997

632,176

 

(i) Asset acquisition

On 30th October 2017, Range Resources Limited acquired through Range Resources HK Limited, 60% of the shares of PT Hengtai Weiye Oil and Gas ("Hengtai"), resulting in an indirect interest of 42% (a 23% indirect equity interest and further 19% indirect economic interest) in the Perlak field, Indonesia. Control has been obtained through the shareholder agreements in place at each entity level.  

Details of the fair value of the assets acquired are as follows:

Purchase consideration comprises:

 

US$

Cash

 

2,560,000

Total cash paid

 

2,560,000

Total consideration

 

2,560,000

 

Net assets acquired:

 

US$

Exploration and evaluation assets

 

6,077,873

Less: non-controlling interests

 

(3,517,873)

Total

 

2,560,000

 

Put option agreement

The vendor has agreed to provide Range with a put option, whereby Range has the option to enforce a buyback of its full 60% interest in Hengtai should agreed milestones not be achieved, therefore providing protection to Range's investment. These milestones, amongst others, include achieving minimum production of 800 bopd from Perlak field over a continuous 90-day period, as well as proving up independently audited 1P reserves of at least 10 mmbbl within a three-year period. On acquisition, a cash consideration of US$2,560,000 was paid. No value has been recognised for this option as there is no evidence that the milestones will not be achieved.

Asset acquisition accounting policy

The transaction is not deemed a business combination as the assets acquired did not meet the definition of a business. When an asset acquisition 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 recognition exemption for deferred tax under AASB 112 applies.  No goodwill arose on the acquisition and transaction costs of the acquisition will be included in the capitalised cost of the asset. The

Note 17: Exploration assets (continued)

non-controlling interest is recognised at fair value. All the other expenses in relation to Indonesia are expensed in exploration costs in the Income Statement.

(ii) Trinidad

At 30 June 2018, US$667,124 (30 June 2017: US$632,176) capitalised exploration and evaluation expenditure relates to the interests of the Group in the Guayaguayare and St Mary's Blocks in Trinidad.

Note 18: Producing assets

 

Note

Consolidated

2018 (US$)

2017 (US$)

Cost

 

152,711,418

150,555,891

Accumulated amortisation

 

(43,619,768)

(42,208,436)

Net book value

 

109,091,650

108,347,455

 

 

 

 

Opening net book amount

 

108,347,455

95,077,882

 

 

 

 

Foreign currency movement

 

88,034

(761,346)

Additions

 

3,875,306

20,049,219

Amortisation charge

 

(3,219,145)

(6,018,300)

Closing net book amount

 

109,091,650

108,347,455

 

Refer to Note 15 for the assessment of the recoverable amount of the producing assets.

Note 19: Trade and other payables

 

Note

Consolidated

2018 (US$)

2017 (US$)

a: Current

Trade payables

 

1,416,480

381,237

Sundry payables and accrued expenses

 

8,513,026

1,232,262

Total

 

9,929,506

1,613,499

b: Non-Current

Interest bearing trade payables

 

41,359,805

40,851,038

Accrued expenses

 

5,796,050

10,539,050

Other payables - interest bearing

 

3,242,977

-

Other payables - non-interest bearing

 

42,947

-

Total

 

50,441,779

51,390,088

 

Risk exposure

Trade payables are non-interest bearing. Interest bearing other payables are amounts due to LandOcean and are not payable until April 2020. Interest charged at 6%. Other interest-bearing payables relate to the consideration due to LandOcean Petroleum Corp

 

Note 17: Exploration assets (continued)

 

Ltd for RRDSL acquisition, interest bearing at 6% on net balance outstanding which is due to be paid in November 2020. LandOcean payables are unsecured.

 

Information about the Group's exposure to credit risk, foreign exchange risk and price risk is provided in Note 33.

 

Note 20: Borrowings

 

Note

Consolidated

2018 (US$)

2017 (US$)

Current borrowings

Interest on convertible note

20c

1,600,000

-

Option liability

20b

33,345

341,618

Total current borrowings

 

1,633,345

341,618

Non-current borrowings

Borrowings at amortised cost

20a

24,481,224

-

Convertible note

20c

17,958,382

21,071,631

Total non-current borrowings

 

42,439,606

21,071,631

 

 

Note

Consolidated

2018 (US$)

2017 (US$)

a: Borrowings

Principal

 

15,640,024

-

Interest due on outstanding balance

 

8,841,200

-

Closing net book amount

 

24,481,224

-

 

These are unsecured payables to EPT, Unionpetro, GPN and LO Petroleum, which all belong to the LandOcean group of companies. Interest is charged at 6% on net balance outstanding, with the amounts being payable within three years.

 

Note

Consolidated

2018 (US$)

2017 (US$)

b: Option liability

Option liability at fair value through profit or loss

 

33,345

341,618

Closing net book amount

 

33,345

341,618

During 2018, no options were exercised (2017: 0).

Total fair value movement recognised in the Statement of Profit and Loss was a gain of US$308,273 (2017: US$494,096).

 

 

Note 20: Borrowings (continued)

 

Note

Consolidated

2018 (US$)

2017 (US$)

c: Convertible note

Convertible note liability element

 

16,507,750

16,507,750

Convertible note derivative element

 

384,007

2,692,563

Interest due on outstanding balance - non-current

 

1,066,625

271,318

Interest due on outstanding balance- current

 

1,600,000

1,600,000

Closing net book amount

 

19,558,382

21,071,631

In 2017, Range signed an agreement with LandOcean Energy Services Co. Limited. for the issuance of a US$20,000,000 convertible note.

The terms of the convertible note are as follows:

Issuer

Range Resources Limited

Noteholder

LandOcean Energy Services Co. Limited

Amount

US$20,000,000

Tenor

Three years, maturity date 28 November 2019

Repayment

Bullet at maturity date

Interest

8% per annum, payable annually in arrears (i)

Security

None

Conversion price

0.88p per share

Lender Conversion Right

At any time, in a minimum amount of US$10,000,000

(i) The next interest payment of US$1,600,000 is due on 28 November 2018 and annually thereafter.

The proceeds from this convertible note were utilised solely to replace a portion of the outstanding payable balance due to LandOcean under the terms of the Integrated Master Services Agreement ("IMSA").

Note 21: Provision for rehabilitation

The Group records the present value of the estimated cost of legal and constructive obligations to restore operating locations in the period in which the obligation arises.  The nature of restoration activities includes removal of facilities, abandonment of wells and restoration of affected areas.

 

Note

Consolidated

2018 (US$)

2017 (US$)

Provision for rehabilitation

 

811,737

784,316

Movement in the provision for rehabilitation during the financial year are set out below:

Carrying amount at the start of the year

 

784,316

740,268

Additional provision recognised

 

27,420

44,048

Carrying amount at the end of the year

 

811,737

784,316

Note 22: Deferred taxes

 

 

Accrued interest

Total

  Deferred tax asset                                                                      US$                       US$

Movements: Year ended 30 June 2018

Opening balance

6,853,135

6,853,135

Charged/(credited) -      to profit or loss

4,120,193

4,120,193

Acquisition of subsidiary

2,544,203

2,544,203

Closing net book amount

13,517,531

13,517,531

         

 

 

Fair value uplift on business combination

Accelerated depreciation

Total

Deferred tax liability                                            US$                       US$                       US$

Movements: Year ended 30 June 2017

Opening balance

30,046,205

17,515,407

47,561,612

Foreign currency movement

-

(1,007,041)

(1,007,041)

Charged/(credited) -      to profit or loss

(1,713,279)

9,658,852

4,872,363

Closing net book amount

28,332,926

26,167,218

54,500,144

 

 

 

 

Movements: Year ended 30 June 2018

Opening balance

28,332,926

26,167,218

54,500,144

Foreign currency movement

-

(567,580)

(567,580)

Charged/(credited) -      to profit or loss

96,259

5,443,659

5,539,918

Acquisition of subsidiary

-

5,289,460

5,289,460

Closing net book amount

28,429,185

36,332,757

64,761,942

         

 

As a result of business combination, at the date of acquisition a deferred tax liability has been recognised in relation to the difference between the carrying amount of the deferred exploration and development costs for accounting purposes and the cost base of the asset for tax purposes in accordance with the requirements of Australian Accounting Standard AASB 112 Income Taxes.  The Group does not have a tax payable in relation to the deferred tax liability at 30 June 2018 and it is anticipated that the deferred taxation liability will be reduced in the future as the deferred exploration and development costs are amortised in future periods.

 

Note 23: Other non-current liabilities

 

Note

Consolidated

2018 (US$)

2017 (US$)

Employee service benefits

 

731,350

340,289

Total

 

731,350

340,289

 

Risk exposure

Information about the Group's exposure to credit risk, foreign exchange risk and price risk is provided in Note 33.

 

 

Note 24: Contributed equity

 

Note

Consolidated

2018 (US$)

2017 (US$)

7,595,830,782 (2017: 7,595,830,782) fully paid ordinary shares

 

404,910,284

404,910,294

Share issue costs

 

(20,991,887)

(20,991,897)

Total contributed equity

 

383,918,397

383,918,397

 

 

Consolidated

2018 No.

2018 (US$)

2017 No.

2017 (US$)

a: Fully paid ordinary shares

At the beginning of reporting period

7,595,830,782

404,910,284

7,589,790,100

404,874,079

Shares issued during year

-

-

6,040,682

36,205

Total contributed equity

7,595,830,782

404,910,284

7,595,830,782

404,910,284

 

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held.

On a show of hands every holder of ordinary shares present at a meeting of the Company, in person or by proxy, is entitled to one vote and upon a poll each share is entitled to one vote.

 

Consolidated

 

2018 No.

2017 No.

b: Options

At the beginning of reporting period

808,844,977

903,055,747

Options issued during year (refer Notes 20 and 30)

-

8,000,000

Options expired

(27,000,000)

(102,210,771)

Options exercised during year

-

-

Total options

781,844,977

808,844,977

Note 24: Contributed equity (continued)

At 30 June 2018, the unissued ordinary shares under option are as follows:

Date of expiry

Exercise price

Number under option

14 July 2018

£0.01

161,472,247

14 July 2018

£0.02

118,729,593

31 August 2018

£0.01

14,000,000

3 September 2019

£0.01

194,585,862

3 September 2019

£0.02

172,557,275

30 March 2020

£0.01

120,500,000

Total number under option:

781,844,977

 

The holders of these options do not have any rights under the options to participate in any share issues of the company.

During the year ended 30 June 2018, no ordinary shares of Range were issued on the exercise of options (2017: nil).

 

Note 25: Reserves

 

Note

Consolidated

2018 (US$)

2017 (US$)

a: Share-based payment reserve

Balance 1 July 2017

 

8,516,837

8,549,023

Share based payment expenses (Note 30)

 

(92,466)

(32,186)

Expired options reclassified to retained earnings

 

-

-

Balance 30 June 2018

 

8,424,371

8,516,837

The share based payment reserve records items recognised as expenses on the fair valuation of shares and options issued as remuneration to employees, directors and consultants.

 

Note

Consolidated

2018 (US$)

2017 (US$)

b: Option premium reserve

Balance 1 July 2017

 

12,057,363

12,057,363

Fair value movement of exercised options that were originally classified as a derivative liability

 

-

-

Balance 30 June 2018

 

12,057,363

The option premium reserve is used to recognise the grant date fair value of options.

 

 

 

 

Note 25: Reserves (continued)

 

Note

Consolidated

2018 (US$)

2017 (US$)

c: Foreign currency translation reserve

Balance 1 July 2017

 

5,765,111

3,620,738

Currency translation differences arising during the year

 

(1,423,892)

2,144,373

Balance 30 June 2018

 

4,341,219

5,765,111

 

The foreign currency translation reserve is used to record exchange differences arising from the translation balances of foreign subsidiaries.

Total reserves at 30 June 2018

24,822,953

26,339,311

 

Note 26: Commitments

 

Note

Consolidated

2018 (US$)

2017 (US$)

Expenditure and Capital commitments

Not later than 1 year

 

-

5,509,200

Total

 

-

5,509,200

 

Note 27: Contingent liabilities and contingent assets

Geeta Maharaj

Range received an invoice from Geeta Maharaj, a Trinidad based attorney seeking payment for legal services in the amount of approximately US$1.9 million. The invoice purports to relate to legal work undertaken during mid-2014 including the preparation of inter-company loan agreements. Range strongly refutes the amount of this purported invoice and considers it to be vastly excessive and therefore not payable. A claim has been filed by Ms Maharaj seeking the sum of TT$12,019,573 (approximately US$1.9 million) plus interest and costs. Range filed a notice of application to strike out this claim on 14 July 2017. An initial hearing on this application was held on 29 September 2017 at which the parties were ordered to file and exchange written submissions by 20 October 2017 with replies, if any, to be filed by 30 October 2017. Both parties filed and exchanged written submissions and responses by the requested dates and a further hearing was scheduled for 1 December 2017. This hearing was rescheduled by the court and the Company is awaiting notification of a rescheduled date.

Separately, Range has received further correspondence from Ms Maharaj on a related matter claiming damages of TT$6,000,000 (approximately US$890,000) on the basis of a conspiracy designed to damage Ms Maharaj's reputation. Again, Range firmly refutes the allegation and in conjunction with its legal counsel in Trinidad has responded to this demand. A claim has been filed by Ms Maharaj seeking damages of TT$6,000,000 (approximately US$890,000) plus interest and costs. The Company, in conjunction with its legal counsel, has filed a defence in respect of this claim and a preliminary hearing was

Note 27: Contingent liabilities and contingent assets (continued)

scheduled for 1 December 2017. This hearing was rescheduled by the court and the Company is awaiting notification of a rescheduled date.

While the Company, having taken legal advice, considers the probability of Ms Maharaj succeeding in either of her claims to be remote, there can be no guarantee that there will be a favourable outcome for the Company.

Indonesia acquisition

Range completed the acquisition of an indirect interest in an established oil block in Indonesia on 30 October 2017. As per terms of the acquisition, the Company has acquired an indirect 42% interest (a 23% indirect equity interest and further 19% indirect economic interest) in the Perlak field located in a mature hydrocarbon province of Northern Sumatra. Please refer to Operations section for further details on the asset.

The remaining consideration of US$0.64 million will be payable upon completion of the minimum work obligation.

Colombian exploration licences

In January 2016, Range received notification from Agencia Nacional de Hidrocarburos ("ANH") in Colombia advising that the E&P licences over three exploration blocks (PUT-5, VSM-1 and VMM-7) had been revoked.  The licences had been awarded to a Consortium of Optima Oil Corporation ("Optima") and the Company in December 2012.  ANH alleges that various obligations and commitments agreed within the exploration licences have not been complied with and also that invalid letters of credit had been presented to ANH by Optima to support the minimum work obligations.  The effect of revocation of the licences by ANH is: (i) expiry of the contracts, (ii) Range would be unable to enter into any further agreement with Colombian State for a period of 5 years, (iii) final settlement and liquidation of the licences, and (iv) joint and several liability of the Consortium partners to ANH for all sums due to ANH and for potential damages claim of up to the aggregate financial value of the work commitments of the Consortium for the three licences which totalled approximately US$53 million. The value of the allegedly invalid letters of credit provided was approximately US$11 million.

On 1 September 2016, Range received a demand notice from ANH addressed to the Consortium seeking payment of the full amount of the outstanding obligations due to ANH totalling up to approximately US$53 million. The deadline for making the payment, or otherwise responding to ANH with a defence against the action, was 7 September 2016. A comprehensive response was subsequently submitted to ANH by the consortium on this date. This response addressed the numerous areas in which Range and the consortium object to the demand which was received from ANH.

A Joint Operating Agreement ("JOA") is in place amongst the Consortium partners.  Under the terms of the JOA it was agreed between the Consortium that it was the sole responsibility of Optima to complete the minimum work obligations and to provide all necessary funding, including the provision of valid letters of credit in favour of ANH.  Under the JOA, Range has an indemnity to recover from Optima any payment incurred by

 

Note 27: Contingent liabilities and contingent assets (continued)

Range for any contractual obligations under the licences which were not paid by Optima.  Range has engaged legal advisers in Colombia.

Range has no material assets in Colombia.

In addition to the ongoing work with legal advisers in Colombia, Range has sought advice from its Australian advisers regarding the ability of ANH to try and enforce a claim against Range in Australia (where Range is incorporated). The Company's legal advisers confirm that there is no provision in Australian law to enable either judgments of Colombian courts, or administrative orders of ANH to be recognised in Australia. If ANH did seek to make any claim in Australia it would be required to commence court proceedings in the Australian courts and to prove its entitlement to such claim. Range would have the right to defend such claim. Range has not received any claim from ANH in Australia and would defend itself against any such claim if ever received.

During the year, the Company reached an agreement with ANH to settle all outstanding historic claims and disputes between ANH and the Consortium. The key terms of the settlement arrangement are that ANH confirms that Range (and the Consortium) has no liability for any payments or debts, all proposed penalties have been lifted, the Consortium agrees to waive all potential claims against ANH and the consortium agrees to the termination of the exploration licences.  The agreement between the Consortium and ANH is subject to court approval in Colombia.

The Directors are not aware of any further contingent liabilities or contingent assets as at 30 June 2018.

 

 

Note 28: Segment reporting

30 June 2018

Trinidad - Oil & Gas Production

US$

Trinidad - Oilfield Services

 US$

Indonesia US$

Unallocated US$

Total

US$

Segment revenue

Total segment revenue

12,629,996

3,561,259

-

-

16,191,255

Intersegment revenue

-

(3,131,833)

-

-

(3,131,833)

Revenue from external customers

12,629,996

429,426

-

-

13,059,422

Other income

161,828

15,060

-

245,009

421,897

Segment result

Depreciation

(2,374,508)

(2,576,158)

-

-

(4,950,666)

Interest income/(expense)

103,187

(498,435)

-

(2,704,172)

(3,099,420)

Other segment expenses

(12,044,090)

(4,874,421)

(1,253,329)

(3,247,456)

(21,419,296)

 

 

 

 

 

 

Loss before income tax

(1,523,587)

(7,504,498)

(1,253,329)

(5,706,619)

(15,988,033)

Income tax

(1,827,521)

285,317

-

-

(1,542,204)

Loss after income tax

(3,351,108)

(7,219,181)

(1,253,329)

(5,706,619)

(17,530,237)

Segment assets

Segment assets

127,047,106

34,469,110

6,077,873

7,896,015

175,490,104

Total assets

127,047,106

34,469,110

6,077,873

7,896,015

175,490,104

Segment liabilities

Segment liabilities

68,336,505

37,226,190

-

65,433,487

170,996,182

Total liabilities

68,336,505

37,226,190

-

65,433,487

170,996,182

 

30 June 2017

Trinidad - Oil & Gas Production

US$

Trinidad - Oilfield Services

 US$

Indonesia US$

Unallocated US$

Total

US$

Segment revenue

Revenue from continuing operations

8,435,309

-

-

-

8,435,309

Other income

96,347

-

-

78,020

174,367

Total revenue

8,531,656

-

-

78,020

8,609,676

Segment result

Segment expenses

(54,452,224)

-

-

(3,520,381)

(57,972,605)

Loss before income tax

(45,920,568)

-

-

(3,442,361)

(49,362,929)

Income tax

(4,999,950)

-

-

-

(4,999,950)

Loss after income tax

(50,920,518)

-

-

(3,442,361)

(54,362,879)

Segment assets

Segment assets

132,921,505

-

-

17,425,944

150,347,449

Total assets

132,921,505

-

-

17,425,944

150,347,449

Segment liabilities

Segment liabilities

103,755,172

-

-

26,569,633

130,324,805

Total liabilities

103,755,172

-

-

26,569,633

130,324,805

 

 

 

Note 28: Segment reporting (continued)

(i) Unallocated assets

 

30 June 2018

US$

30 June 2017

US$

Segment assets

Cash

3,000,847

17,254,360

Other

4,895,168

171,584

Total segment assets

7,896,015

17,425,944

 

 

Note

Consolidated

2018 (US$)

2017 (US$)

a: Other segment information

Segment other revenue - all other segments

Other income

 

245,009

78,020

Total unallocated segment revenue

 

245,009

78,020

 

 

Note

Consolidated

2018 (US$)

2017 (US$)

Segment result - all other segments

Directors' and officers' fees and benefits

 

939,802

1,069,490

Share based payments - employee and onsultant shares

 

(92,466)

(32,187)

Discontinued operations

 

-

1,250,000

Finance costs

 

2,393,872

792,362

Other general and administration expenses

 

2,895,353

1,510,206

Total unallocated segment expenses

 

6,136,561

4,589,871

Accounting policies

AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. The chief operating decision maker is the Chief Executive Officer and through this role the Board of Directors.

Following the adoption of AASB 8, the identification of the Group's reporting segments has changed since the prior period, with management allocating resources to "Trinidad - Oil & Gas Production" and "Trinidad - Oilfield Services" segments.

Information regarding these segments is presented above. The accounting policies of the reportable segments are the same as those of the Group. Segment information is prepared in conformity with the accounting policies of the entity as disclosed in Note 1.

Segment revenues and expenses are those directly attributable to the segments and include any joint revenue and expenses where a reasonable basis of allocation exists. Segment assets include all assets used by a segment and consist principally of cash, receivables, plant and equipment, exploration expenditure capitalised and development assets net of accumulated depreciation and amortisation. While most such assets can be directly attributed to individual segments, the carrying amount of certain assets used

Note 28: Segment reporting (continued)

jointly by two or more segments is allocated to the segments on a reasonable basis. Segment disclosures do not include deferred income taxes.

Revenue from Trinidad - Oil & Gas Production segment of US$12,629,996 (2017: US$8,435,309) is derived from the subsidiary's sole customer, which is Petroleum Company of Trinidad and Tobago Limited.

Intersegment transfers

Segment revenues, expenses and results do not include any transfers between segments.

Note 29: Cash flow information

 

Note

Consolidated

2018 (US$)

2017 (US$)

Reconciliation of cash flow from operations with loss after income tax

Loss after income tax

 

(17,530,237)

(54,362,879)

Non-cash flows in profit

 

 

 

Depreciation, depletion and amortisation

 

4,950,666

6,289,324

Share based payment- consultants and employees

 

(92,466)

(32,187)

Impairment of non-current assets

 

-

28,985,014

Finance costs (non-cash)

 

-

3,723,917

Foreign exchange (gain)/loss

 

193,079

1,362,426

Impairments recognised on held for sale assets

 

-

1,250,000

Fair value movement of derivative

4

(2,308,556)

(494,096)

Other non-cash items

 

 

 

Decrease in other current assets

 

(1,854,276)

(2,408,126)

Decrease/(increase) in trade and other receivables

 

5,479,970

(7,986,854)

(Increase)/decrease in deferred tax asset

 

(6,664,396)

(2,893,332)

(Decrease)/increase in trade and other payables

 

7,367,699

(11,433,731)

Decrease in income tax payable

 

-

(3,503)

Increase in deferred tax liabilities

 

10,261,798

7,946,065

(Decrease)/increase in provisions

 

27,420

44,048

Increase/(decrease) in borrowings

 

-

21,071,631

(Decrease)/Increase in non-current operating payables

 

(2,302,185)

10,345,663

Net cash outflow (from)/to operations

 

(2,471,484)

1,403,350

         

 

 

Note 29: Cash flow information (continued)

Financial liability reconciliation

 

2017

Cash Flows

Non-cash changes

2018

 

Acquisition

Fair value changes

Interest accrued

Borrowings

-

-

23,831,365

-

649,860

24,481,225

Convertible note

21,071,631

(1,600,000)

-

(2,308,556)

2,395,307

19,558,382

Total liabilities from financing activities

21,071,631

(1,600,000)

23,831,365

(2,308,556)

3,045,167

44,039,607

 

Note 30: Share based payments

No options were issued to key management personnel. The expense reversal is due to the change in the probability of meeting the vesting conditions as explained below.

Probability of meeting the 1,500 barrels of oil per day for a continuous 15-day period in Trinidad vesting condition is 100%.

Probability of meeting the 2,500 barrels of oil per day for a continuous 15-day period in Trinidad vesting condition is 0%.

Probability of meeting the 4,000 barrels of oil per day for a continuous 15-day period in Trinidad vesting condition is 0%.

The following share-based payment arrangements occurred during the financial year ended at 30 June 2017:

Quantity

Security

US$ Value

Purpose

8,000,000(i)

Unlisted options

7,096

Options issued to key mangement personnel

 

(i) The value of options have been expensed to the profit or loss on a proportionate basis for each financial year from grant to vesting date.

Employee option plan

Year ended 30 June 2018

No options were issued to key management personnel, employees and consultants.

 

 

Note 30: Share based payments (continued)

Year ended 30 June 2017

The following options were issued to key management personnel, employees and consultants:

Name

Number of options

Grant date

Expiry date

Key management personnel

8,000,000

29 September 2016

30 March 2020

The value of options have been expensed to the profit or loss on a proportionate basis for each financial year from grant to vesting date.

Quantity

Security

US$ Value

Purpose

19,987,481

Fully paid ordinary shares

580,406

Shares issued to employees and consultants

42,742,654

Unlisted options

1,176,524

Options issued in lieu of consulting fee

75,000,000

Unlisted options

85,464

Options issued to Directors in period

7,500,000

Unlisted options

895,049

Options issued in lieu of consulting fees

The fair value at grant date of unlisted options is independently determined using a Black Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility

of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.

Options granted 1 September 2015

The value per option at the grant date was 0.56 cents for key management personnel options and 0.45 cents for employee options, determined using the Black Scholes option price model using the following key inputs:

Volatility:

100%

Probability of meeting vesting conditions:

100%

Risk free rate:

1.92%

Exercise price

£0.01

USD/GBP exchange rate

0. 6509           

Share price on grant date

£0.0057

 

Options granted 25 May 2016

The fair value of options to be granted have been estimated at 30 June 2016 at 0.30 cents using the Black Scholes options pricing model using the following key inputs:

Volatility:

100%

Probability of meeting vesting conditions:

100%

Risk free rate:

1.92%

Exercise price

£0.01

USD/GBP exchange rate

0. 7468

Share price on grant date

£0.0037

 

Note 30: Share based payments (continued)

Expenses recognised in the profit or loss

During the year, share-based payments recognised in profit or loss amounts to a reversal of US$92,466 (2017: reversal of US$32,187).

 

 

2018 No.

Average exercise price (US$)

2017 No.

Average exercise price (US$)

As at 1 July

788,844,977

0.019

883,055,747

0.019

Granted during year:

 

 

 

 

Other

-

-

8,000,000

0.021

Expired

(27,000,000)

0.025

-

-

Forfeited

-

-

(102,210,770)

0.028

As at 30 June

761,844,977

0.023

788,844,977

0.023

 

 

 

 

 

Vested and exercisable at 30 June

701,845,000

0.025

728,845,000

0.023

Weighted average remaining contractual life options outstanding at end of period

153 days

 

518 days

 

 

Note 31: Related party transactions

(a) Parent entity

The ultimate Parent Entity and ultimate Australian Parent Entity within the Group is Range Resources Limited.

(b) Subsidiaries

Interests in subsidiaries are set out in Note 14.

(c) Transactions with Key Management Personnel

The following transactions occurred during the year with Key Management Personnel or their related parties:

 

2018

US$

2017

US$

Consulting fees paid or payable to Kaiyuan Guosen Management Consulting Limited, a company owned by Mr Gu

195,000

195,000

Consulting fees paid or payable to Plentiful Wise Holdings Limited, a company owned by Ms Wang

112,500

75,000

Consulting fees paid or payable to Ten Faye Limited, a company owned by Mr L Liu

25,740

39,660

Balances at year end to related parties

Lijun Xiu and related entities

42,000

42,000

 

Note 31: Related party transactions (continued)

 

 

Note

Consolidated

2018 (US$)

2017 (US$)

d: Key Management Personnel compensation

Short-term benefits

 

884,847

906,725

One-off payments

 

-

104,000

Post-employment benefits

 

39,737

33,315

Termination benefits

 

-

38,750

Share based payments

 

(83,985)

14,239

Total

 

840,599

1,097,029

 

Note 32: Parent entity information

The following details information related to the Parent Entity Range Resources Limited, at 30 June 2018. The information presented here has been prepared in accordance using consistent accounting policies as presented in Note 1.

 

Note

Consolidated

2018 (US$)

2017 (US$)

Current assets

 

5,823,790

16,760,518

Non-current assets

 

64,091,154

29,029,801

Total assets

 

69,914,944

45,790,319

 

 

 

 

Current liabilities

 

2,176,682

2,852,384

Non-current liabilities

 

63,244,340

23,245,915

Total liabilities

 

65,421,022

26,098,299

 

 

 

 

Contributed equity

 

383,918,396

383,918,396

Accumulated losses

 

(402,977,948)

(387,637,292)

Reserves

 

23,553,474

23,410,916

Total equity

 

4,493,922

19,692,020

 

 

 

 

Loss for the year from continuing operations

 

(15,352,002)

(51,299,139)

Loss for the year from discontinued operations

 

-

(1,250,000)

Total comprehensive loss for the year

 

(15,352,002)

(52,549,139)

 

The contingent liabilities of the parent are included within those of the Group as disclosed in Note 27.

The contractual commitments of the parent are included within those of the Group as disclosed in Note 27.

 

 

Note 33: Financial risk management

The Group has exposure to the following risks from their use of financial instruments:

·      Credit risk

·      Liquidity risk

·      Market risk

This note presents information about the Group's exposure to each of the above risks, their objectives, policies and processes for measuring and managing risk, and the management of capital.  Further quantitative disclosures are included throughout these financial statements.  The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.

Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed to reflect changes in market conditions and the Group's activities. The Group, through training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all consultants and agents understand their roles and obligations.

Credit risk

Credit risk is the risk of financial loss to the Group if counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group's  receivables and cash held at financial institutions.

Credit risk is managed on a group basis.  Individual risk limits are set based on internal or external ratings in accordance with limits set by the board.  There are no significant concentrations of credit risk, whether through exposure to individual customers, specific industry sectors and/or regions.

The credit quality of financial assets that are neither past due or impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates.

 

Note

Consolidated

2018 (US$)

2017 (US$)

Cash at bank, restricted deposits and short-term bank deposits (S&P ratings)

AAA -

 

2,509,501

15,971,560

AA-

 

490,986

571,294

A+ 

 

-

708,744

BBB+

 

945,196

-

BBB-

 

-

2,762

Not rated

 

-

-

Total

9

3,945,683

17,254,360

 

 

Note 33: Financial risk management (continued)

Exposure to credit risk

The carrying amount of the Group's financial assets represents the maximum credit exposure.  The Group's maximum exposure to credit risk at the reporting date was:

 

Note

Consolidated

2018 (US$)

2017 (US$)

Trade and other receivables - non-current (i)

10

2,251,384

6,866,394

Trade and other receivables - current (i)

10

4,875,766

5,740,726

Cash and cash equivalents

9

3,945,683

17,254,360

Total

 

11,072,833

29,861,480

(i) Counterparties without an external credit rating.

Loans and receivables

The Group's exposure to credit risk is influenced mainly by the individual characteristics of each debtor. No collateral was held in relation to these receivables.

Impairment losses

No impairment loss was recognised in relation to other receivables respectively in the prior year.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.

The Group uses activity-based costing to cost its activities, which assists in monitoring cash flow requirements and optimising its cash return on investments.  Typically, the Group ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 12 months; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

Group 2018

 

Carrying amount

Contractual cash flows

Within one year

1-2 years

2-5 years

Financial liabilities at amortised cost

Trade and other payables

60,371,285

60,371,285

9,929,506

50,441,779

-

Borrowings

44,039,606

42,439,605

1,600,000

42,439,606

-

Total

102,810,891

102,810,890

11,529,506

91,281,385

-

  

Note 33: Financial risk management (continued)

Group 2017

 

Carrying amount

Contractual cash flows

Within one year

1-2 years

2-5 years

Financial liabilities at amortised cost

Trade and other payables

53,003,587

54,491,940

11,475,641

-

43,466,299

Borrowings

21,071,631

24,800,000

1,600,000

 

21,600,000

Total

74,075,218

79,291,940

13,075,641

-

65,066,299

 

Market risk

Market risk is the risk that changes in market prices, such as interest rates and equity prices will affect the Group's income or the value of its holdings of available for sale assets. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Equity price risk

The Group is exposed to equity securities price risk.  This arises from investments held by the Group and classified on the statement of financial position as available for sale as well as from the option liability held as a current liability. A 10% increase in Range's share price would result in an increase to the option liability of US$3,335. A decrease would have had the equal but opposite effect.

Foreign exchange risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar, AU dollar, TT Dollar and British pound. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the entity's functional currency.  The risk is measured using sensitivity analysis and cash flow forecasting.

The Group's treasury risk management policy is to closely monitor exchange rate fluctuations. To date, the Group has not sought to hedge its exposure to fluctuations in exchange rates, however this policy will be reviewed on an ongoing basis.

The Group's exposure to foreign currency risk at the reporting date was as follows:

 

Consolidated

2018 AUD

2017 AUD

2018 GBP

2017 GBP

Cash

206,996

327,374

60,911

268,079

Amount payable to other entities

(73,269)

(104,555)

(50,550)

(361,758)

Total

133,727

222,819

10,361

(93,679)

 

Sensitivity

Based upon the amounts above, had the Australian dollar strengthened by 10% against the US dollar with all other variables held constant, the Group post-tax loss for the year on current amounts receivable/payable would have been US$18,064 higher (2017: US$32,164 higher), mainly as a result of foreign exchange gains/losses on translation of AUD

Note 33: Financial risk management (continued)

denominated payables as detailed in the table above. A 10% weakening of the Australian dollar against the above currencies at 30 June would have had the equal but opposite effect, on the basis that all other variables remain constant.

The Trinidad entities are minimally exposed to foreign exchange risk arising from various currencies, primarily with respect to the United States Dollar.

Interest rate risk

The group's main interest rate risk arises from non-current receivables. Non-current receivables issued at fixed rates expose the group to fair value interest rate if the loans are carried at fair value.  During 2018 and 2017, the group loan receivables were denominated in Australian Dollars, British Pounds and US Dollars.

 

 

Note 33: Financial risk management (continued)

Profile

At the reporting date, the interest rate profile of the Group's financial instruments which exposes the group to cash flow interest rate risks are:

 

 

Weighted Average

Effective Interest Rate

Floating Interest

Rate

Fixed Interest Maturing

Non-interest bearing

Total

 

2018

2017

2018

2017

2018

2017

2018

2017

2018

2017

 

%

%

US$

US$

US$

US$

US$

US$

US$

US$

Financial Assets:

Cash and cash equivalents

1.8%

0.4%

3,945,683

17,254,360

-

-

-

-

3,945,683

17,254,360

Trade and other receivables

-

-

-

-

-

-

7,127,150

12,607,120

7,127,150

12,607,120

Available for sale financial assets

-

-

-

-

-

-

-

45,238

-

45,238

Total financial assets

 

 

3,945,683

17,254,360

-

-

7,127,150

12,652,358

11,072,833

29,906,718

 

Financial Liabilities:

Trade and other payables

10%

9.3%

-

-

44,602,782

40,851,038

15,768,503

12,152,549

60,371,285

53,003,586

Borrowings

6%

8%

-

-

44,039,606

21,071,631

-

-

44,039,606

21,071,631

Total financial liabilities

-

-

-

-

88,642,388

61,922,669

15,768,503

12,152,549

104,410,891

74,075,217

 

 

Note 33: Financial risk management (continued)

Sensitivity analysis for variable rate instruments

The sensitivity on interest rates for 2018 and 2017 assumes a change of 100 basis points in the interest rates at the reporting date and would have increased / (decreased) profit or loss by the amounts shown. Both analyses for each year assume that all other variables, in particular foreign currency rates, remain constant.

 

Group

Weighted Average Interest Rate

%

2018  

 

+100    bps

US$

2018

 

-100    bps

US$

Weighted Average Interest Rate

%

2017  

 

+100    bps

US$

2017

 

-100    bps

US$

 

Variable rate instruments

 

Financial assets (cash and cash equivalents)

1.8%

-

-

0.4%

-

-

 

Financial assets (loan and receivables)

-

-

-

-

-

-

 

 

 

 

 

 

 

 

                           

Fair values versus carrying amounts

The fair value of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position, are as follows:

Group

30 June 2018

US$

30 June 2017

US$

Carrying amount

Fair value

Carrying amount

Fair

value

Available-for-sale financial assets

-

-

45,238

45,238

Trade and other receivables

7,127,150

7,127,150

12,607,120

12,607,120

Cash and cash equivalents

3,945,683

3,945,683

17,254,360

17,254,360

Trade and other payables

(60,371,285)

(60,371,285)

(53,003,587)

(53,003,587)

Borrowings

(44,039,606)

(44,039,606)

(21,071,631)

(21,071,631)

Total

(93,338,058)

(93,338,058)

(44,168,500)

(44,168,500)

 

The basis for determining fair value is disclosed in Note 1(n).

Other price risks

The Group is not exposed to any other price risks.

Capital management

The entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital.

The entity's overall strategy remains unchanged from 2017.

Note 33: Financial risk management (continued)

The capital structure of the group consists of cash and cash equivalents and equity attributable to equity holders of the Company, comprising issued capital, reserves and accumulated losses as disclosed in Notes 24 and 25 respectively.  None of the entities within the group are subject to externally imposed capital requirements.

Gearing ratio

The Board reviews the capital structure on an annual basis.  As a part of this review the Board considers the cost of capital and the risks associated with each class of capital.

 

Note

Consolidated

2018 (US$)

2017 (US$)

Financial assets

Cash and cash equivalents

 

3,945,683

17,254,360

Other financial assets

 

2,800,000

-

Financial liabilities

Trade and other payables

 

(60,371,285)

(53,003,587)

Borrowings

 

(44,602,782)

(21,071,631)

Net debt

 

(98,228,384)

(56,820,858)

Equity

 

4,443,822

20,022,644

Net debt to equity ratio

 

2,197.8%

283.8%

 

Categories of financial instruments

 

Note

Consolidated

2018 (US$)

2017 (US$)

Financial assets

Cash and cash equivalents

 

3,945,683

17,254,360

Trade and other receivables - non-current

 

2,251,384

6,866,394

Trade and other receivables - current

 

4,875,766

5,740,726

Available-for-sale financial assets

 

-

45,238

 

 

11,072,833

29,906,718

Financial liabilities

Trade and other payables

 

60,371,285

52,326,678

Borrowings

 

44,039,606

21,071,631

Option liability

 

33,345

341,618

Total

 

104,444,236

73,739,927

 

The carrying amount reflected above represents the Group's maximum exposure to credit risk for such loans and receivables.

 

 

 

 

Note 34: Fair value measurement of financial instruments

(a) Fair value hierarchy

AASB 13 requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:

(a) Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1),

(b) Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly (level 2), and

(c) Inputs for the asset or liability that are not based on observable market data (unobservable inputs (level 3).

The following table presents the Group's financial assets and financial liabilities measured and recognised at fair value at 30 June 2018 and 30 June 2017 on a recurring basis.

At 30 June 2018

Level 1

US$

Level 2

US$

Level 3

US$

Total

Assets

Available for sale financial assets

 

 

 

 

Equity securities

-

-

-

-

Total assets

-

-

-

-

 

 

 

 

 

Liabilities

Option liability at fair value through profit or loss

-

33,345

-

33,345

Derivative liability at fair value through profit or loss

-

384,007

-

384,007

Total liabilities

-

417,352

-

417,352

At 30 June 2017

Level 1

US$

Level 2

US$

Level 3

US$

Total

Assets

Available for sale financial assets

 

 

 

 

Equity securities

-

-

45,238

45,238

Total assets

-

-

45,238

45,238

 

 

 

 

 

Liabilities

Option liability at fair value through profit or loss

-

341,618

-

341,618

Derivative liability at fair value through profit or loss

-

2,692,563

-

2,692,563

Total liabilities

-

3,034,181

-

3,034,181

 

The Group's policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the end of the reporting period. There were no transfers between the levels of the fair value hierarchy during the year ended 30 June 2018.

(b) Fair values of other financial instruments

The Group has financial instruments which are measured at amortised cost in the consolidated statement of financial position. 

Note 34: Fair value measurement of financial instruments (continued)

Due to their short-term nature, the carrying amounts of the current receivables, current payables, current borrowings, and current other financial liabilities is assumed to approximate their fair value.

(c) Fair values of non-current receivables, payables and borrowings

For non-current receivables, payables and borrowings, the fair values are not materially different to their carrying amounts since the interest on these balances is close to current market rates.

Note 35: Events after the reporting date

Completion of US$1.3m subscription

Subsequent to the year end, Range announced a subscription for new ordinary shares to raise US$1,300,000 million before expenses (the "Subscription"). Pursuant to the Subscription, the Company issued 909,090,910 new ordinary shares at a price of 0.11 pence per new ordinary share. The Company intends to use the proceeds from the Subscription to fund sales infrastructure upgrade, as well as other general investment in asset upgrades in Trinidad.

Georgia update

Subsequent to the year end, Range signed an agreement to acquire Georgian Oil Pty Ltd (20% interest holder in SOG) for a nominal upfront sum. Following completion, Range will hold a 65% interest in SOG. Completion is anticipated to occur in October 2018.

Other than the above, no events occurred after the reporting date.

Note 36: New accounting Standards and interpretations

Australian accounting Standards/amendments released but not yet effective: 30 June 2018 year end

Certain new accounting Standards and Interpretations have been published that are not mandatory for 30 June 2018 reporting periods and have not been early adopted by the Group. The Group's assessment of the impact of these new Standards and Interpretations is set out below. In all cases the Group intends to apply these standards from the application date as indicated in the tables below.

 

 

Note 36: New accounting Standards and interpretations (continued)

Reference:

AASB 9

Title:

Financial Instruments

Standard application date:

1 January 2018

Group application date:

1 July 2018

 

Key Requirements

AASB 9 addresses the classification, measurement and derecognition of financial assets and financial liabilities and introduces new rules for hedge accounting.

 

In December 2014, the AASB made further changes to the classification and measurement rules and also introduced a new impairment model.  These latest amendments now complete the financial instruments standard.

 

Impact

Management is currently assessing the impact of the new rules. At this stage, the Group is not able to estimate the impact of the new rules on the Group's financial statements. The Group will make more detailed assessments of the impact over the next 12 months. 

 

Reference:

AASB 15

Title:

Revenue from Contracts with Customers

Standard application date:

1 January 2018

Group application date:

1 July 2018

 

Key Requirements

The AASB has issued a new standard for the recognition of revenue.  This will replace AASB 118 which covers contracts for goods and services and AASB111 which covers construction contracts. The new standard is based on the principle that revenue is recognised when control of a good or service transfers to a customer, so the notion of control replaces the existing notion of risks and rewards. 

 

The standard permits a modified retrospective approach for the adoption. Under this approach entities will recognise any applicable transitional adjustments in retained earnings on the date of the initial application without restating the comparative period.

 

Entities will only need to apply the new rules to contracts that are not completed as of the date of initial application.

 

Impact

Management is currently assessing the impact of the new rules. At this stage, the Group is not able to estimate the impact of the new rules on the Group's financial statements. The Group will make more detailed assessments of the impact over the next 12 months. 

 

 

Note 36: New accounting Standards and interpretations (continued)

Reference:

AASB 16

Title:

Leases

Standard application date:

1 January 2019

Group application date:

1 July 2019

 

Key Requirements

The key features of AASB 16 are as follows:

Lessee accounting

·      Lessees are required to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of a low value.

·      A lessee measures right-of-use assets similarly to other non-financial assets and lease liabilities similarly to other financial liabilities.

·      Assets and liabilities arising from a lease are initially measured on a present value basis. The measurement includes non-cancellable lease payments, and also includes payments to be made in optional periods if the lessee is reasonably certain to exercise an option to extend the lease, or not to exercise an option to terminate the lease. 

·      AASB 16 contains disclosure requirements for leases.

 

Lessor accounting

AASB 16 substantially carries forward the lessor accounting requirements in AASB 117. Accordingly, a lessor continues to classify its leases as operating leases or finance leases, and to account for those two types of leases differently. AASB 16 also requires enhanced disclosures to be provided by lessors that will improve information disclosed about a lessor's risk exposure, particularly to residual value risk.

 

Impact

Management is currently assessing the impact of the new rules. At this stage, the Group is not able to estimate the impact of the new rules on the Group's financial statements. The Group will make more detailed assessments of the impact over the next 12 months. 

There are no other standards that are not yet effective and that would be expected to have a material impact on Range in the current or future period and on foreseeable future transactions.

Note 37: Company details

The registered office of the company is:

c/o Edwards Mac Scovell, Level 7, 140 St Georges Terrace, Perth WA 6000

Telephone: +61 8 6205 3012

The principal place of business is:

c/o Edwards Mac Scovell, Level 7, 140 St Georges Terrace, Perth WA 6000

Telephone: +61 8 6205 3012

 


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