RNS Number:1251R
Anzon Energy Limited
31 March 2008
31 March 2007
ANZON ENERGY LIMITED (CODE: AEL)
Financial Statements for the year ended 31 December 2007
The Board of Anzon Energy Limited ("the Company") is pleased to release the
audited Financial Statements of the Company for the year ended 31 December 2007.
Extracts from these Financial Statements follow, with amounts stated in
Australian dollars.
A full copy of the Company's 2007 Annual Report is available at the Company's
website at: www.anzonenergy.com.
For further information please contact:
Anzon Energy Limited: Mr Tony Strasser +61 2 99227899
Grant Thornton Corporate Finance: Fiona Owen +44 20 7383 5100
Operations Report
DEVELOPMENT ACTIVITIES
Sale of Indonesian Operations
On 27 September 2007, Anzon Energy Limited ("AEL") completed the sale of all its
shares in PT Binatek Reka Kruh (which holds the Kruh TAC, located in South
Sumatra) and PT Indama Putera Kayapratama (which holds the Kaya TAC, located in
South Sumatra).
Basker Manta Gummy (BMG) Production
2007 has been an exciting year for the BMG development. It was the first full
year of production.
Production to date since commissioning commenced on 17 December 2006 has been
approximately 2.9 million barrels. However, total production from the fields is
approaching 3.8 million barrels, when the 868,000 barrels produced during the
EPT is included, (nearly 10% of current proved plus probable oil reserves).
These production figures were achieved despite the impact of an incident that
occurred on 5 July 2007 when the Single Point Mooring (SPM) subsea chain for the
Basker Spirit parted and the Basker Spirit drifted from location. The incident
curtailed production for 4 months. Normal operation resumed in November 2007.
The incident was covered by our insurance policy.
In August 2007, the BMG Joint Venture was awarded production licences for permit
VIC/L27 and VIC/L28 in respect of the previously held retention leases VIC/RL9
and VIC/RL10. These new licences lie adjacent to the existing VIC/L26 which was
awarded to the BMG Joint Venture in 2005.
EXPLORATION ACTIVITIES
VIC/L26, VIC/L27, VIC/L28
The BMG Joint Venture holds three production licences in the Gippsland Basin.
Oil production commenced from VIC/L26 initially in 2005, with the Full Field
Development coming on line in December 2006. VIC/L27 and VIC/L28 provide for the
development of the known gas resources and exploration of further hydrocarbon
potential in the acreage.
Potential exists for additional hydrocarbon accumulations in the intra-latrobe
formations within the company's production licences. Geophysical and geological
studies by Anzon Australia have identified at least 4 leads which are presently
being matured for potential drilling in 2008 or later. Reprocessing of the 1996
Basker-Manta 3D seismic survey has been completed and is being used to refine
the leads previously mentioned.
Interests in VIC/L26, VIC/L27, VIC/L28 are:
Anzon Australia Limited 40% (Operator)
Beach Petroleum Limited 40%
CIECO Exploration and Production (Australia) Pty Limited 20%
PEP 38259
The Company advised the ASX in November 2006 that drilling of the Cutter-1
exploration well had reached final depth on 9 November 2006. The well was
drilled to a total depth of 2,930 metres before being plugged and abandoned.
Further feasibility studies are continuing in this exploration acreage.
Joint Venture interests in PEP 38259 are:
Tap (New Zealand) Pty Limited 40% (Operator)*
AWE New Zealand Pty Limited 25%
Beach Petroleum (NZ) Pty Limited 20%
Anzon New Zealand Limited 15%
*Upon Tap resigning as Operator, AWE was appointed effective 31 December 2007.
VIC/P56, VIC/P49
Anzon Australia farmed in to these Nexus operated exploration permit areas,
which are adjacent to the Basker-Manta fields. Further studies are continuing
in this exploration acreage, to prepare for drilling in 2009.
Joint Venture interests in VIC/P56 are as follows:
Nexus Energy Limited 80%* (Operator)
Anzon Australia Limited 20%*
*subject to regulatory approval
Joint Venture interests in VIC/P49 are as follows:
Nexus Energy Limited 80% (Operator)
Anzon Australia Limited 20%
Yours sincerely,
Andrew A Young
Managing Director
31 March 2008
Directors' Report
The Directors of Anzon Energy Limited hereby present the financial report of the
Company for the 12 month period ended 31 December 2007 and the Auditors' Report
thereon. In order to comply with the provisions of the Corporations Act 2001,
the Directors report as follows:
DIRECTORS
The names of the Directors of the Company who held office during the period and
in office as at the date of this report are:
Michael N Arnett (Chairman)
Term of office: Appointed Chairman on 4 April 2007
Appointed a Director on 7 August 2002
Qualifications: BCom, LLB
Skills and experience: Mr Arnett was a Partner, member of the Board of Directors
and national head of the Natural Resources Business Unit of the law firm
Deacons. He was also one of the firm's 3 representatives on the International
Management Board responsible for the management of Deacons' international
operations which extend throughout Asia. Mr Arnett has been involved in
significant corporate and commercial legal work for the resource industry for
over 18 years. Mr Arnett is the Chairman of Anzon Energy Limited.
Directorships of other listed companies in last 3 years:
* Non Executive Director, Anzon Australia Limited
* Non-Executive Director, Archipelago Resources PLC
* Non-Executive Director, Cloncurry Metals Limited
* Non-Executive Director, NWR Holdings Limited
* Non-Executive Director, Queensland Energy Resources Ltd
* Non-Executive Director, Red Sky Energy Limited
* Non-Executive Director, Axiom Mining Limited (Resigned 30 April 2007)
* Non-Executive Chairman, Aztec Resources Limited (Resigned 20 February 2006)
* Non-Executive Director, Kids Campus Limited (Resigned 29 May 2006)
Andrew A Young (Chief Executive Officer/Managing Director)
Term of office: Appointed a Director on 1 September 2006
Qualifications: BE - Chemical (Melbourne); MBA (Hons) (Rochester, New York),
SPE, FAICD
Skills and experience: Mr Young performs the role of Chief Executive Officer of
Anzon Australia Limited on secondment from Anzon Energy Limited. Mr Young is
also the Managing Director of Anzon Energy Limited. Mr Young has over 30 years
experience in the oil industry, having commenced his career with Esso Australia
Limited working on the Bass Strait operations prior to joining Bridge Oil
Limited where he was Production Manager. Subsequently, Mr Young was the General
Manager of Operations for the New Zealand Natural Gas Corp. and Managing
Director/CEO of Century Drilling prior to establishing the Gaffney Cline &
Associates consulting group in Australasia. Between 1997 and 2001, he served as
a Non-Executive Director of the National Safety Council of Australia (NSCA).
Most notably he was the 2003 President of the International Society of Petroleum
Engineers (SPE) and is a Board member of the University of NSW, School of
Petroleum Engineering. Mr Young is a Council Member of the Australian Petroleum
Production and Exploration Association (APPEA).
Directorships of other listed companies in last 3 years:
* Director, Anzon Australia Limited
Olivier Fric
Term of office: Appointed a Director on 6 September 2002
Skills and experience: Mr Fric has extensive experience in the international oil
and gas industry, with a particular focus on project and structured finance.
During his career he has been involved in numerous oil and gas financings and
trades. He is a former Director, Energy Derivatives at Total Fina Elf, based in
Geneva, focusing on marketing and strategic development, and formerly worked in
senior executive roles at Elf Trading in Paris and at Credit Lyonnais in SE Asia
and Europe.
Directorships of other listed companies in last 3 years:
Nil.
Steven J Koroknay
Term of office: Appointed a Director on 7 August 2002.
Qualifications: BE (Hons) - Civil Eng (Sydney), FAICD, FAusIMM, FIEA
Skills and experience: Mr Koroknay was appointed a Director, Executive Chairman
and Chief Executive Officer of Anzon Australia Limited on 18 December 2003, and
is now the Non-Executive Chairman of Anzon Australia. Mr Koroknay's career
encompasses over 30 years in the international oil and gas industry commencing
with Esso Australia Limited. During 15 years with Esso Australia, he served in
senior management positions, namely Head of Operations and Technical Manager,
Bass Strait fields, as well as undertaking US assignments. Mr Koroknay then
spent 10 years at Bridge Oil becoming Executive Director and COO. He was
formerly a councillor of Australian Petroleum Production and Exploration
Association (APPEA) and Chairman of the Advisory Board for the School of
Petroleum Engineering at UNSW. Mr Koroknay previously held the position of
Chairman of Anzon Energy Limited and is currently a Non-Executive Director of
Anzon Energy Limited.
Directorships of other listed companies in last 3 years:
* Non-Executive Director, Anzon Australia Limited
Robert C.A. Leon
Term of office: Appointed a Director on 6 September 2002
Skills and experience: Mr Leon is currently a managing partner in Qualis, a
diversified French private equity group. Prior to working with Qualis, Mr Leon
was a member of the Board and CEO of the Groupe Arnault holding company. In this
role, Mr Leon was also a member of the Board and Adviser and Delegate of the
President of Louis Vuitton - Moet Hennessy (LVMH). Mr Leon was specifically in
charge of strategic and financial operations and of the negotiations which were
instrumental to the construction of the LVMH Group.
Mr Leon's former roles have also included Head of Division of Crude Oil
(Products Supply) in the French Ministry of Industry and Head of CIRI (French
Industrial Restructuring Authority) at the French Ministry of Economics and
Finance.
Directorships of other listed companies in last 3 years:
* Non Executive Director, Anzon Australia Limited
* Member of the Board of the Mandarin Oriental Group.
Vincenzo Paglione
Term of office: Appointed a Director on 21 January 2004
Skills and experience: Mr Paglione has 30 years of experience in the oil and gas
industry, former executive Vice-Chairman of the Board of Directors of Petroleos
de Venezuela SA; former Managing Director of Petroleos de Venezuela UK; former
Vice-President of the Committee of Developing Countries and the World Energy
Council Program (1991-1998); former member of the Venezuela-US Department of
Energy Agreement Co-ordinating Committee.
Directorships of other listed companies in last 3 years:
Nil.
Charles J Pope, ONZM
Term of office: Appointed a Director on 7 August 2002
Qualifications: B Com (Economics), Fellow Institute of Directors in New Zealand
Skills and experience: More than 30 years corporate experience. Chairman and
Director of major New Zealand corporations, including Chairman of TeamTalk Ltd
and Revera Ltd. Former Chairman of NZ Market Development Board and Horticulture
and Food Research Institute. Former CEO of Petrochemical Corporation of NZ and
NZ Apple and Pear Marketing Board. Fellow on the Institute of Directors of New
Zealand
Directorships of other listed companies in last 3 years:
Chairman, TeamTalk Limited
Non Executive Director, Cavotec MSL Holdings Limited
Peter D Sadler
Term of office: Appointed a Director on 30 August 2007
Qualifications: BA (Physics), MSc (Petroleum Engineering)
Skills and experience: Mr Sadler is Chief Executive Officer of Ras Al Khaimah
Petroleum PCL (RAK Petroleum) and is RAK Petroleum's nominated representative on
the Board of Anzon Energy. Mr Sadler commenced work with Schlumberger Limited in
1978 and after obtaining his MSc joined Union Oil Company of California as a
petroleum engineer. After working in a steady progression of staff and
consulting engineering roles, in 1996, Mr Sadler was appointed Head of
Engineering at Novus Petroleum Limited. His role with Novus was combined with
his appointment as Regional Manager Middle East in 2000 when he relocated to
Dubai in order to manage the company's portfolio in the United Arab Emirates,
Oman, Pakistan, Egypt and Qatar. Peter became the Chief Executive Officer of
Indago Petroleum Limited when the Middle East assets of Novus where separated
and floated on AIM of the London Stock Exchange in December 2005. Peter was
appointed the Chief Executive Officer of RAK Petroleum following RAK Petroleum's
acquisition in 2007 of a major portion of Indago's production and exploration
assets.
Directorships of other listed companies in last 3 years:
Indago Petroleum Limited (resigned April 2007)
Philip G Turberville
Term of office: Appointed a Director on 7 December 2006 and resigned effective
25 July 2007
Qualifications: MA (Accounting and Economics), Member of the Institute of
Chartered Accountants of Scotland.
Skills and experience: Mr Turberville has had an extensive international career
in the oil, gas and energy industries. He has progressed rapidly via various
senior financial and commercial positions to challenging Chief Executive roles
in large-scale enterprises such as Royal Dutch Shell (President European Oil
Products Division) and TXU Corp Dallas (President of International Operations).
Mr Turberville is currently Chief Executive Officer of RAK Petroleum PCL.
Directorships of other listed companies in last 3 years:
Nil.
COMPANY SECRETARY
Anthony J Strasser
Term of office: Appointed 7 August 2002
Qualifications: BCom (Accounting), CA
Skills and experience: Mr Strasser has been involved in taxation, corporate
finance and advisory services for more than 16 years, having gained experience
initially in the taxation division of Arthur Andersen and subsequently reaching
senior management level with Coopers & Lybrand in their Corporate Finance
division. More recently, Mr Strasser has held senior positions with boutique
investment and advisory firms Inteq Limited and Claymore Capital in Sydney,
focusing on financial management, due diligence assignments, mergers and
acquisitions and private and public capital raisings. In addition to his role as
Company Secretary of the Company, Mr Strasser also performs the role of Chief
Financial Officer and jointly with Ms Nairn, the role of Company Secretary of
Anzon Australia Limited.
Gillian M Nairn
Term of office: Appointed March 2006
Qualifications: BA/LLB, LLM
Skills and experience: Ms Nairn was appointed as a solicitor of New South Wales
in 1991 and was involved in commercial litigation work for 8 years. Prior to her
appointment as Company Secretary, Ms Nairn was working as Special Counsel in the
Workplace Relations group of a medium sized commercial law firm. In addition to
her role as Company Secretary of the Company, Ms Nairn also performs the role of
Company Secretary of Anzon Australia Limited, jointly with Mr Strasser.
Principal Activities
The principal activities of the Group in the year consisted of the following:
* The evaluation of potential acquisitions of mature, underexploited
oil and gas properties, in the international oil and gas market;
* Through its 53.1% - owned subsidiary, Anzon Australia Limited, the
development of it's offshore oil project (Basker-Manta oil fields) in
Gippsland Basin, Bass Strait, Australia;
* Securing of key strategic partners and additional funds for the Company.
Operating Results
The profit / (loss) after income tax for the Group for the year ended 31
December 2007 was $131,777,848 (2006: ($22,342,258)).
Review of Operations and Likely Developments
A summary of the operations for the financial year, together with future
developments, are set out in the Chairman's Letter to shareholders.
Dividends
After the balance sheet date, Anzon Australia Limited, a 53.1% - owned
subsidiary of Anzon Energy Limited, proposed a special unfranked dividend of 7
cents per ordinary share, payment of which will be conditional upon both the
Anzon Australia Limited and Anzon Energy Limited Schemes of Arrangement per the
proposed acquisition by Nexus Energy Limited becoming effective. The proposed
amount has not been recognised as a liability in 2007 but will be brought to
account in 2008 when it is proposed that it will be declared. The record date
and timing for payment of the proposed dividend is yet to be determined.
No dividend was recommended or paid during the prior year ended 31 December
2006.
Changes in state of affairs
During the year, there was no significant change in the state of affairs of the
Company other than that referred to in the financial statements or notes
thereto.
Subsequent Events
There has not been any matter or circumstance, other than that referred to in
the financial statements or notes thereto, that has arisen since the end of the
financial period, that has significantly affected, or may affect, the operations
of the Company, the results of those operations, or the state of affairs of the
Company in future financial years.
Share Options
Unissued ordinary shares of the Company under option at the date of this report
are:
Number of share options Exercise Price Expiry Date
1,800,000 US$0.50 16 February 2009
5,500,000 US$0.50 5 April 2010
750,000 GBP1.13 1 February 2014
8,050,000
Since the date of the last Annual Report, the following movements in the
unissued ordinary shares of the Company under option occurred:
* In April 2007, the Company issued 750,000 options to an executive of
the Company with an exercise price of GBP1.13 and an expiry date of
1 February 2014.
* On 15 January 2007, 900,000 options with an exercise price of US$0.50
and an expiry date of 16 February 2009 were exercised resulting in
US$450,000 of equity funds.
Meeting of Directors
The following table sets out the number of Directors' meetings held during the
year ended 31 December 2007 and the number of meetings attended by Directors in
office during the period.
Director Directors Meetings Audit and Risk Management Committee Meetings
Eligible to Number Eligible to Attend Number Attended
Attend Attended
M N Arnett 18 18 2 2
O Fric 18 16 2 2
S J Koroknay 18 18 - -
R C A Leon 18 17 - -
V Paglione 18 15 - -
C J Pope 18 16 2 2
+P Sadler 7 6 - -
*P G Turberville 9 8 - -
A A Young 18 18 - -
+Mr Sadler was appointed on 30.08.2007
*Mr Turberville resigned on 25.07.07
Remuneration of Key Management Personnel
Remuneration of Directors is approved by the Board and is set in aggregate
within the maximum amount approved by the shareholders from time to time.
The remuneration and terms and conditions of employment for the Chief Executive
and other Senior Executives are reviewed annually having regard to performance
and relative comparative information, and approved by the Board after seeking
independent professional advice, as required.
During or since the end of the financial year, no Director of the Company has
received or become entitled to receive a benefit other than a benefit included
in the aggregate amount of emoluments received or due and receivable by
Directors shown in Note 27 of the financial statements or the fixed salary of a
full time employee of the Company.
Directors' and officers' remuneration for the year ended 31 December 2007:
Salary & Fees Bonus Super- Options Total Performance
annuation Related
Directors $ $ $ $ $ %
Michael Arnett 187,500 - 16,875 - 204,375 -
Andrew Young 475,153 - 42,764 - 517,917 -
Olivier Fric 75,000 - - - 75,000 -
Steven Koroknay 12,500 - 1,125 - 13,625 -
Robert Leon 75,000 - - - 75,000 -
Vincenzo Paglione 75,000 - - - 75,000 -
Charles Pope 75,000 - - - 75,000 -
Philip Turberville 56,250 - - - 56,250 -
Peter Sadler - - - -
Total 1,031,403 - 60,764 - 1,092,167
Executives
Bruce Atkins 350,092 - 31,508 - 381,600 -
Anthony Strasser 261,250 - 23,513 - 284,763 -
611,342 - 55,021 - 666,363
Directors' and officers' remuneration for the year ended 31 December 2006:
Salary & Fees Bonus Super- Options Total Performance
annuation Related
Directors $ $ $ $ $ %
Michael Arnett 110,000 - 11,970 15,741 137,711 -
Andrew Young 404,816 200,000 36,433 153,674 794,923 -
Jean-Marc Georgy 102,500 - - 15,741 118,241 -
Olivier Fric 50,000 - - 15,741 65,741 -
Steven Koroknay 424,664 200,000 38,220 15,741 678,625 -
Robert Leon 50,000 - - 15,741 65,741 -
Vincenzo Paglione 50,000 - - 15,741 65,741 -
Charles Pope 50,000 - - 15,741 65,741 -
Total 1,241,980 400,000 86,623 263,861 1,992,464
Executive
Bruce Atkins 305,046 50,000 27,454 16,369 398,869 -
Anthony Strasser 259,150 50,000 23,323 15,741 348,214 -
564,196 100,000 50,777 32,110 747,083
The elements of remuneration for key management personnel are not dependent on
the satisfaction of any specific performance conditions.
Key Management Personnel Shareholdings
At the date of this report, the direct and indirect interests of the key
management personnel in the securities of the Company are as follows:
Shares Options over unissued ordinary
shares
Director
S J Koroknay 2,245,000 500,000
M N Arnett 367,375 500,000
R C A Leon 250,000 500,000
O Fric 350,000 500,000
V Paglione 350,000 500,000
C J Pope - 500,000
A A Young 85,500 500,000
P G Turberville - -
P Sadler - -
Total 3,647,875 3,500,000
Other Key Management Personnel
B N Atkins - 500,000
A J Strasser 250,000 500,000
Total 250,000 1,000,000
The terms of the options are set out in Note 28 to the Financial Statements.
Indemnification of Officers
During the period, the Company paid a premium in respect of a contract insuring
the Directors and Officers of the Company and of any related body corporate
against a liability incurred as such a Director, Secretary or Executive Officer
to the extent permitted by the Corporations Act 2001. The contract of insurance
prohibits disclosure of the nature of liability and the amount of the premium.
No claims under the indemnity insurance policy have been made against the
Company during or since the end of the financial year.
Environmental Regulations
The Company participates in ventures which are parties' exploration and
development licences. These licences specify the environmental regulations
applicable to the exploration, construction and operations of petroleum. As the
Company is in the development planning stages of its operations, there have been
no known breaches of the environmental obligations of the Company's contracts or
licences at this time.
Rounding
The amounts contained in this report and in the financial report have been
rounded to the nearest $1,000 (where rounding is applicable) under the option
available to the Company under ASIC Class Order 98/0100. The Company is an
entity to which the Class Order applies.
Auditors' Independence Declaration
In accordance with the Audit Independence requirements of the Corporations Act
2001, the Directors have received and are satisfied with the "Audit Independence
Declaration" provided by the Company's external auditors, PKF. The Audit
Independence Declaration has been attached following the Directors' Report.
Non-Audit Services
The following non-audit services were provided by the entity's auditor, PKF. The
Directors are satisfied that the provision of non-audit services is compatible
with the general standard of independence for auditors imposed by the
Corporations Act 2001. The nature and scope of each type of non-audit service
provided means that audit independence was not compromised.
PKF received or are due to receive the following amounts for the provision of
non-audit services from the Group:
$'000
Taxation services 284
Due diligence services 72
356
Signed in accordance with a resolution of the Directors made pursuant to s.298
(2) of the Corporations Act 2001.
For and on behalf of the Directors
Michael N Arnett
Chairman
31 March 2008
Corporate Governance Statement
Corporate Governance Policy
The Board of Directors is responsible for the corporate governance of the
Company. The Board monitors the business and affairs of the Company on behalf of
the shareholders by whom they are elected and to whom they are accountable.
Composition of the Board
The composition of the Board is subject to shareholder approval. All nominations
for appointment to the Company's Board will be reviewed by the Board.
The number of directors is specified in the Company's Constitution as a minimum
of three and up to a maximum of nine. At present, there are eight (8) Directors
of the Company, seven (7) of whom are non-executive Directors.
The retirement and rotation of Directors is governed by the Corporations Act
2001 and the Company's Constitution. Each year one third of the Directors (apart
from the Chairman) retire from office and may offer themselves for re-election.
The Board reviews its composition on a regular basis to ensure that it has the
appropriate mix of skills, expertise and experience. When a Board vacancy exists
or where it is considered that the Board would benefit from the appointment of a
director with particular skills or experience, the Board will make an
appointment of a candidate with the appropriate range of skills, qualifications
and experience based on the recommendations of the Board's Nomination Committee.
Any casual vacancy filled is subject to shareholder vote at the next annual
general meeting of the Company.
Board Committees
The Board has established the following four Committees to assist with the
execution of its responsibilities: the Audit and Risk Management Committee, the
Remuneration Committee, the Nomination Committee and the Strategy Committee.
The membership of the Board's Committees is set out below:
Committee Members
Audit and Risk Management Michael N. Arnett (Chairman)
Peter D Sadler
Charles J Pope ONZM
Olivier Fric
Remuneration Steven J Koroknay (Chairman)
Vincenzo Paglione
Robert C A Leon
Nomination Steven J Koroknay (Chairman)
Robert C A Leon
Vincenzo Paglione
Strategy Steven J Koroknay (Chairman)
Andrew A Young
Robert C A Leon
Peter D Sadler
Audit and Risk Management Committee
The Audit and Risk Management Committee consists of four members all of whom are
non-executive Directors. The duties of the Committee are set out in a formal
Terms of Reference approved by the Board.
The Audit and Risk Management Committee's responsibilities include:
* assisting the Board in ensuring that the Company's published
financial statements comply with applicable accounting standards;
* reviewing the effectiveness of the Company's internal financial
controls and audit arrangements and investigating and advising on these and
related matters;
* discussing with the Company's auditors matters arising from their
work and encouraging and monitoring compliance with relevant codes of best
practice in corporate governance and general reporting; and
* keeping under review, the scope and results of the annual audit, its
cost effectiveness and independence and objectivity of the auditors.
Remuneration Committee
The Remuneration Committee comprises three members all of whom are non-executive
directors. The main purpose of the Remuneration Committee is to:
* set the remuneration of the executive directors of the Company; and
* demonstrate to the shareholders of the Company that the remuneration
of the principal executive directors of the Company and other senior executives
of the Company and its subsidiaries is set by a committee of the Board whose
members have no personal interest in the outcome of the decisions of the
Committee and who will have due regard to the interests of shareholders.
The Remuneration Committee reviews and makes recommendations to the Board on an
annual basis regarding all elements of the remuneration of executive directors.
Remuneration levels are competitively set to attract or retain, as appropriate,
qualified and experienced directors and senior executives.
From time to time, the Board or the Remuneration Committee seeks independent
professional advice on the appropriateness of remuneration packages.
Nomination Committee
The Nomination Committee comprises three members, all of whom are non-executive
directors and were appointed on 2 March 2007.
Strategy Committee
The Strategy Committee comprises four directors, three of whom are non-executive
directors. The fourth member of the Committee is Andrew Young who is the
Company's Chief Executive Officer.
The members of the Strategy Committee were appointed on 2 March 2007.
Independent Professional Advice
To facilitate independent judgment in decision making, each Director has the
right to seek independent professional advice at the Company's expense with the
prior approval of the Chairman
Business Risk
The Board monitors and receives advice on areas of operational and financial
risk, and considers strategies for appropriate risk management arrangements on a
regular basis.
Specific areas of risk that are identified are regularly considered at Board
meetings. Included in these areas are foreign currency and commodities price
fluctuations, performance of activities, human resources, the environment,
general business environment and continuous disclosure obligations.
Ethical Standards
The Board's policy for the Directors and Management is to conduct themselves
with the highest ethical standards. All Directors and employees are expected to
act with integrity and objectivity, striving at all times to enhance the
reputation and performance of the Company.
The Board is responsible for ensuring compliance with legal requirements and
ethical principles. The Board monitors systems to ensure prompt and appropriate
responses to any shareholder enquiry or complaint.
Environment, Health and Safety Management
The Company recognises the importance of environmental and occupational health
and safety issues and is committed to the highest levels of performance in these
areas. All employees are required to continually assess and minimise the impact
of the Company's operations on the environment; comply with all relevant
environmental and occupational health and safety legislation; and to encourage
the adoption of similar standards by the Company's principal suppliers and
contractors.
Balance Sheet
As At 31 December 2007 Consolidated Company
2007 2006 2007 2006
Note $'000 $'000 $'000 $'000
ASSETS
Current Assets
Cash and cash equivalents 22 130,872 102,790 4,871 5,691
Trade and other receivables 7 18,414 5,128 3,059 1,972
Inventories 6 8,322 3,491 - -
Other financial assets 8 - 2,004 - -
Total Current Assets 157,608 113,413 7,930 7,663
Non-current Assets
Plant and equipment 10 1,959 478 1,189 43
Intangible assets 11 18,859 26,591 - -
Investments 13 120,222 90,659 12,332 12,332
Exploration and evaluation expenditure 1,218 - - -
Oil and gas assets 12 219,952 264,634 - -
Other non-current assets 9 1,996 4,378 255 11,098
Deferred tax assets 5 95,090 14,076 - -
Total Non-current Assets 459,296 400,816 13,776 23,473
TOTAL ASSETS 616,904 514,229 21,706 31,136
LIABILITIES
Current Liabilities
Trade and other payables 16 27,880 33,069 1,352 437
Provisions 17 24,750 425 169 39
Interest bearing liabilities 14 38,838 81,384 - -
Other financial liabilities 18 12,169 13,297 12,169 12,169
Total Current Liabilities 103,637 128,175 13,690 12,645
Non-current Liabilities
Interest bearing liabilities 14 51,147 75,009 - -
Provisions 17 31,083 23,070 - -
Other financial liabilities 18 41,787 46,117 - -
Deferred tax liabilities 5 45,328 53,421 - -
Total Non-current Liabilities 169,345 197,617 - -
TOTAL LIABILITIES 272,982 325,792 13,690 12,645
NET ASSETS 343,922 188,437 8,016 18,491
EQUITY
Contributed equity 19 109,933 109,358 72,803 72,228
Retained earnings 20 31,041 (29,263) (65,527) (54,402)
Reserves 20 31,321 18,170 740 665
Parent entity interest 172,295 98,265 8,016 18,491
Minority interest 171,627 90,172 - -
TOTAL EQUITY 343,922 188,437 8,016 18,491
Income Statement
For The Year Ended 31 December 2007 Consolidated Company
2007 2006 2007 2006
Note $'000 $'000 $'000 $'000
Continuing operations
Revenue 2 105,901 49,998 - -
Cost of sales (63,456) (18,478) - -
Gross profit 42,445 31,520 - -
Other income 3 106,734 12,200 8,767 339
Exploration and evaluation expenses (355) (7,831) (355) -
Depreciation and amortisation expense 4(b) (4,197) (9,062) (148) (30)
Administration expense 4(d) (20,192) (10,108) (7,817) (2,923)
Finance costs 4(a) (18,359) (7,818) (1,154) (1,138)
Impairment of non-current assets 4(e) (7,894) (22,789) (6,895) (35,976)
Fair value loss on financial instruments (19,437) - - -
Repairs and maintenance (17,109) - - -
Other expenses (625) (1,031) (3,523) (2,215)
Profit / (loss) from continuing operations before 61,011 (9,023) (11,125) (41,943)
tax
Income tax benefit / (expense) 5 72,896 (9,871) - -
Profit / (loss) from continuing operations after 133,907 (18,894) (11,125) (41,943)
tax
Discontinued operations
Loss from discontinued operations after tax 23 (2,129) (3,448) - -
Net profit / (loss) for the period 131,778 (22,342) (11,125) (41,943)
(Profit) / loss attributable to minority interest (71,474) (3,732) - -
Profit / (loss) attributable to members of the 60,304 (26,074) (11,125) (41,943)
parent entity
Earnings / (loss) per share for profit from
continuing operations attributable to the ordinary
equity holders of the Company:
Basic (cents per share) 21 65.11 (27.28)
Diluted (cents per share) 21 60.49 (27.28)
Earnings / (loss) per share for profit attributable
to the ordinary equity holders of the Company:
Basic (cents per share) 21 62.89 (31.00)
Diluted (cents per share) 21 58.42 (31.00)
Statement of Changes in Equity
For The Year Ended 31 December 2007
Consolidated Ordinary Asset Options Foreign Retained Minority Total
Shares Revaluation Reserve Currency Earnings Interest
Reserve Translation
Reserve
$'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 January 2006 73,840 - 621 (271) (3,189) 38,165 109,166
Net gains on available for sale - 33,807 - - - - 33,807
investments
Net gains on available for sale - (15,852) - - - 15,852 -
investments attributable to
minority interest
Translation of foreign operations - - - (477) - - (477)
Total income and expense for the - 17,955 - (477) - 15,852 33,330
year recognised directly in
equity
Loss for the year - - - - (22,342) - (22,342)
Profit attributable to minority - - - - (3,732) 3,732 -
interest
Total income for the year - 17,955 - (477) (26,074) 19,584 10,988
Equity transactions:
Issue of share capital 11,503 - - - - - 11,503
Transaction costs on share issues (648) - - - - - (648)
Additional equity acquired as a 9,102 - - - - 32,260 41,362
result of shares issued by
controlled entity
Exercise of options 13,685 - - - - - 13,685
Equity component of convertible 1,876 - - - - - 1,876
note
Cost of share based payments - - 505 - - - 505
Attributable to minority interest - - (163) - - 163 -
Balance at 31 December 2006 109,358 17,955 963 (748) (29,263) 90,172 188,437
Net gains on available for sale - 21,254 - - - - 21,254
investments
Net gains on available for sale - (9,968) - - - 9,968 -
investments attributable to
minority interest
Translation of foreign operations - - - 1,976 - - 1,976
Foreign currency translation - - - (444) - - (444)
transferred to Income Statement
on disposal of subsidiaries
Total income and expense for the - 11,286 - 1,532 - 9,968 22,786
year recognised directly in
equity
Profit for the year - - - - 131,778 - 131,778
Profit attributable to minority - - - - (71,474) 71,474 -
interest
Total income for the year - 11,286 - 1,532 60,304 81,442 154,564
Equity transactions:
Exercise of options 575 - - - - - 575
Cost of share based payments - - 346 - - - 346
Attributable to minority interest - - (127) 114 - 13 -
Balance at 31 December 2007 109,933 29,241 1,182 898 31,041 171,627 343,922
Statement of Changes in Equity
For The Year Ended 31 December 2007
Company Ordinary Shares Options Reserve Retained Total
Earnings
$'000 $'000 $'000 $'000
Balance at 1 January 2006 45,812 491 (12,459) 33,844
Total income and expense for the year - - - -
recognised directly in equity
Loss for the year - - (41,943) (41,943)
Total income for the year - - (41,943) (41,943)
Equity transactions:
Issue of share capital 11,503 - - 11,503
Transaction costs on share issues (648) - - (648)
Exercise of options 13,685 - - 13,685
Equity component of convertible notes 1,876 - - 1,876
Cost of share based payments - 174 - 174
Balance at 31 December 2006 72,228 665 (54,402) 18,491
Total income and expense for the year - - - -
recognised directly in equity
Loss for the year - - (11,125) (11,125)
Total income for the year - - (11,125) (11,125)
Equity transactions:
Exercise of options 575 - - 575
Cost of share based payments - 75 - 75
Balance at 31 December 2007 72,803 740 (65,527) 8,016
Cash Flow Statement
For The Year Ended 31 December 2007 Consolidated Company
2007 2006 2007 2006
Note $'000 $'000 $'000 $'000
Cash flows from operating activities
Receipts from oil and gas production 98,459 43,853 - -
Other receipts 8,885 7,147 6,347 11
Payments to suppliers and employees (88,877) (33,709) (7,590) (3,967)
Borrowing costs (15,188) (12,719) (1,065) (1,248)
Interest received 8,317 2,765 140 313
Net cash flows provided by / (used in) operating 22(a) 11,596 7,337 (2,168) (4,891)
activities
Cash flows from investing activities
Purchase of plant and equipment (1,772) (378) (1,295) (1)
Proceeds from sale of subsidiaries 5,902 - - -
Purchase of available-for-sale financial assets (5) - - -
Payments for exploration expenditure (1,638) (4,392) (355) -
Purchase of exploration licences (8) (3,587) - -
Sale of retention leases 126,491 50,000 - -
Payments for development expenditure (34,020) (163,519) - -
Payment for purchase of investments - - - (12,321)
Advances from / (to) related entities - - 2,409 (10,104)
Net cash flows provided by / (used in) investing 94,950 (121,876) 759 (22,426)
activities
Cash flows from financing activities
Proceeds from issue of ordinary shares - 11,503 - 11,503
Payment of share issue costs - (648) - (577)
Proceeds from exercise of options 575 13,685 575 13,685
Proceeds from convertible notes - 50,390 - -
Proceeds from borrowings (net of costs) 12,489 101,303 - -
Repayment of borrowings (63,355) (1,348) - -
Payment for financial instruments (18,562) - - -
Net cash flows (used in) / provided by financing (68,853) 174,885 575 24,611
activities
Cash and cash equivalents at beginning of the year 102,790 46,307 5,691 9,004
Net increase / (decrease) in cash and cash 37,693 60,346 (834) (2,706)
equivalents
Effects of exchange rate changes on cash (9,611) (3,863) 14 (607)
Cash and cash equivalents at the year end 22(b) 130,872 102,790 4,871 5,691
This information is provided by RNS
The company news service from the London Stock Exchange
END
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