22nd Sep 2009 07:00
Oilex Ltd regrets that AIM does not have the facilities to allow the Annual Report for 2009 to be published in a conventional format. To view the entire Annual Report including figures please acccess the Australian Stock Exchange website www.asx.com.au listing code OEX.
ANNUAL REPORT AND FINANCIAL STATEMENTS 30 JUNE 2009
CORPORATE INFORMATION
Incorporated under the Corporations Law in the State of Victoria on 2 June 1997Directors Registered and Principal Office M D J Cozijn BCom ASA MAICD Level 2Non-Executive Chairman 50 Kings Park Road West Perth WA 6005
B H McCarthy BSc (Hons) PhD (Geology) Australia
Managing Director Ph. +61 8 9485 3200 Fax +61 8 9485 3290
R G Barnes BSc (Hons) (Geology)
Technical Director Postal Address B J M Clube (Hons) (Geology) ACAFinance Director PO Box 588
L L Bhandari BSc (Geology) and MSc West Perth WA 6872 (Geology)
Australia
Independent Non-Executive Director
R L Miller MSc Engineering andBSc Ocean Engineering Non Excecutive Director Stock Exchange ListingsCompany Secretary Oilex's shares are listed under the codeM D J Cozijn BCom ASA MAICD OEX on the Australian Securities(ceased 1 May 2009) Exchange and the AIM Market of the London Stock Exchange.J W R Laurie BA LLB (Hons)(appointed 1 May 2009) Auditors Nominated Adviser to AIM MarketKPMG RFC Corporate Finance Ltd 253 St Georges Terrace Level 15 QV1 Building Perth WA 6000 250 St Georges Terrace Australia Perth WA 6000 Australia Solicitors Deacons Share Registries Level 39 BankWest Tower Security Transfer Registrars Pty Ltd (for ASX)108 St Georges Terrace 770 Canning HighwayPerth WA 6000 Applecross WA 6153Australia Australia Public Relations Computershare Investor Services PLC (forRead Corporate AIM) 3/100 Hay Street The Pavilions Subiaco WA 6008 Bridgwater Road Australia Bristol BS13 8AE United Kingdom Pelham Public Relations Ltd 12 Arthur Street Annual General Meeting London EC4R 9AB The annual general meeting of Oilex Ltd will be held at the Celtic Club, 48 OrdUnited Kingdom Street, West Perth at 1:30 pm on 26 November 2009. Website www.oilex.com.au Email [email protected]'s
Review......................1
Operations
Review......................2
Permit
Schedule...................14
Corporate GovernanceStatement..................15
Directors'
Report.....................25
Remuneration
Report.....................32
Auditor's Independence Declaration................40
Income
Statements.................41
Balance
Sheets.....................42
Statements of Changes inEquity.....................43Statements of CashFlows......................44Notes to the FinancialStatements.................45
Directors'
Declaration................79
Independent AuditReport.....................80
Shareholder
Information................82
Business Directory.........84
CHAIRMAN'S REVIEWDear Shareholder,The effect of the turmoil in financial markets around the world continued toaffect Oilex, as it did most oil and gas exploration companies on a globalscale. The Company participated in a number of oil and gas discoveries of whichtwo wells have been brought into production. As a consequence of ourexploration efforts not meeting expectations, coupled with the flight ofcapital from this sector of the market, the value of the Company declinedsignificantly, particularly after the disappointing results at Cambay Field inIndia. In spite of the effect that this conjunction of forces had on the value of theCompany, I am pleased to report that following a significant restructuring ofactivities and operating overheads, the Group has managed to significantlyreduce its commitments and conserve its cash resources to ensure that Oilex cansurvive and prosper in these volatile times. The core group of technical andsupport staff that is fundamentally important to the Company's future remainsintact and the Company's capacity to operate oil and gas ventures is notsignificantly diminished. With signs of an early recovery from the severefinancial constraints on exploration companies at the end of FY 2008, Oilex isa much leaner group and is in a strong position to resume its strategy to findand develop oil and gas production opportunities through drilling.There have been some very pleasing developments in 2009 that provide a solidplatform for growth. The Company announced a significant restructuring of itsinterest in the highly prospective Timor Sea exploration asset, the JPDA 06-103contract area, whereby we are to be carried on the first 2 wells of the initialprogram, retaining a 10% interest. Offshore Western Australia, the initialinterpretation of the recent 3D seismic data in permit WA-388P is also veryencouraging.Our operations in India saw the first continuous commercial oil production comeonstream from the MBS reservoir during the year. While the level of productionis currently not significant, India is presently cash flow positive and Oilexis seeking to maximise recoveries while we determine the future potential forcommercial scale gas recovery and additional oil production. In Oman, we havealso had success in proving the presence of hydrocarbons, however commercialityremains problematic and the Joint Venture is reviewing its options for thefuture work programs.Operations in Indonesia have proven to be very slow. The Company is striving toresolve a dispute with the operator of the West Kampar contract area in Sumatrato recover monies owed to Oilex by the operator and to rejuvenate theexploration and appraisal program by installing Oilex or a suitable third partyas operator. While the lack of progress in bringing the PSC into productionlast year has been a source of particular disappointment, the Company remainsoptimistic that a commercial solution will be found in the near term.The company is now well placed to manage the funding of its ongoingcommitments, and is confident that with its current portfolio of prospectivepermits, it can emerge from this restructuring with a balance of emergingproduction assets and medium term development acreage with significant upsidepotential.Whilst our operating costs and net corporate overheads have been significantlyreduced, the executive management team has been strengthened by the appointmentof Mr Ben Clube as Finance Director and the board has been enhanced with therecent appointment of Mr Ron Miller as an independent non-executive director.Our staff are to be congratulated for their constructive efforts in achievingthese changes, including their unstinting loyalty to Oilex through testingtimes and their acceptance of reductions in remuneration benefits. As part ofthe compensation package reflecting the belief in its future, the Companycontinues to offer participation to its executives and employees in theemployee option plan.
On behalf of the Board, I wish to record our appreciation for the ongoing support of our executives and staff, joint venture partners and stakeholders as we strive for the success that will be the catalyst for the successful evolution of the company into a self sustaining oil and gas explorer and producer.
Mr M D J CozijnChairman21 September 2009 OPERATIONS REVIEWOverview
The Company's operations in the past year were focussed on exploration and appraisal drilling programs onshore India and Oman and the acquisition of major 3D marine seismic surveys in the Joint Petroleum Development Area between Australia and Timor Leste (JPDA) and the Australian Northwest Shelf.
Since 1 July 2008, Oilex, on behalf of its Joint Ventures, has completed asubstantial appraisal and exploration work program comprised of acquisition andprocessing of 2,957 km2 of marine 3D seismic in two surveys; integration ofover 50,000 line km of regional marine 2D and 1,000km2 of 3D seismic data;drilled 8 wells (cumulative over 12,000 metres drilled) onshore in 2 countries;conducted workovers on 3 wells; and completed detailed geophysical andgeological studies on all operational areas in addition to conductingevaluations of over 20 new venture opportunities. Two wells in India werebrought into production.The 3D seismic surveys in the Timor Sea and the Carnarvon Basin provide thebasis for the next exciting phase of the Company's activity. The offshoredrilling in the JPDA that is planned for 2009 is the single largest project infinancial and logistical terms that the Company has operated and has been thefocus for 2009 to date. The contract area covered by the Production SharingContract (PSC) has the potential to host a significant volume of oil reservesin some highly attractive prospects near to existing producing fields and ENI'sKitan-1 oil discovery that was made early in 2008. As an appropriate risk management decision the Company, in August 2009,completed the farm-out of 15% of its 25% interest in the JPDA block to reduceits financial exposure to the first 2 wells in the contract area in addition toreceiving a portion of its sunk costs. The planned exploration drilling programin the forthcoming months is an exciting, near-term project and will complete asequence of intensive activity which saw the acquisition and interpretation ofthe large 3D data volume and the development of a portfolio of robustprospects.
The Company is working to secure the services of a drilling rig following the termination of the original rig contract by the drilling contractor due to issues unrelated to the Company. Current planning has the commencement of drilling of two wells in late 2009.
From a production perspective, the achievements for the year were disappointing. Two wells that drilled a Miocene age oil pool (MBS) in the Cambay Field PSC were brought into production in November 2008. This accounted for the bulk of Oilex net Indian oil sales of approximately 37,537 barrels during the year.
The Company had anticipated that progress on achieving production fromPendalian Field would have been made in Indonesia but operations continued tobe frustrated by the Joint Venture operator. In Oman bringing the explorationsuccesses through to production has proven challenging. Of 7 wells drilled todate in Block 56 the Company has had four successes (Sarha-1, Sarha-2, Ghadaq-1and Al Jumd-1) however the potential indicated by these discoveries has beendifficult to realise. The heavy oil encountered in the wells has meant thatencouraging shows, log response and initial flow rates from some discoverywells has not been able to be sustained through long term testing. Therevelation from testing the oil zone in Sarha-2 horizontal well that the oilwas significantly heavier and more viscous than at the nearby Sarha-1 well wasunexpected.In India, the Company is continuing to produce oil from the shallow MBS horizonand is evaluating options for the deeper Eocene gas/ condensate and oilreservoirs. Cambay-19Z and Cambay-73 were successfully tested and fracturestimulated. Significant "in-place" resources of oil and gas at variousstratigraphic levels, good commercial terms and strong market demand provideattractive exploration potential. Oilex is continuing to take all appropriate measures to resolve the JointVenture issues with the Operator in the West Kampar PSC, where the PendalianField development and exploration program have been temporarily suspended. Inall of its Joint Ventures, Oilex has striven to develop excellent cooperativeworking relationships with Government authorities, partners, contractors andthird parties with valid vested interests.On the important issue of health, safety and environmental protection, Oilex,as Operator, has achieved a record of zero lost-time incidents by its employeesand two lost-time incidents by contractor personnel during the year which is avery significant achievement given that operations were conducted offshore andonshore and in four countries, some simultaneously. No operational incidentsthat had an adverse impact on the natural environment or local communities wererecorded during the year.
Summary - Exploration and Appraisal
*Acquired over 3000 km2 of high quality seismic data in JPDA and WA388P
*Attractive oil prospects delineated in JPDA06-103
*Planning for initial two well drilling campaign in JPDA 06-103 has made good progress
*WA 388P seismic interpretation showing promising range of gas leads
*Drilled 4 wells in Cambay Field PSC discovering previously bypassed pay in Miocene and highlighting potential of the deeper section with tests of oil, gas and condensate
*Drilled 4 wells in Oman resulting in two discoveries and de-risking large Central Terrace area of Block 56
*Zero lost time incidents throughout operations centres.
JOINT PETROLEUM DEVELOPMENT AREA BETWEEN TIMOR-LESTE & AUSTRALIA
PRODUCTION SHARING CONTRACT JPDA 06-103: FLAMINGO TROUGH
[OILEX - 10% Interest, Operator]
The contract area JPDA 06-103, covering an area of 3,741 km2 is located in thehighly prospective Flamingo Trough portion of the Northern Bonaparte Basin. Itlies adjacent to significant recent discoveries and close to prolific producingfields further to the west along geological trend (Figure 1, 2).The Maura 3D seismic survey, the first phase of offshore operations in theblock, was completed successfully by the Geowave Champion seismic vessel inAugust 2008. The survey covered an area of 2,140 km2 and, in combination withexisting 3D seismic data in the block, provides 3D seismic coverage over about90% of the contract area. Processing of the data concluded early in 2009 andthe interpretation of the data over the entire block was available in lateMarch 2009. Prospects were mapped in detail based on the integrated set of new3D, regional 2D and older, reprocessed 3D seismic data and regional well data. The portfolio of prospects comprises over 20 structural closures in waterdepths ranging from about 100 -1,400 metres. The seismic data quality istypically excellent and the definition of events at the level of the topprimary objective Elang and Plover Formation reservoir, historically difficultto pick on older seismic data, allows for interpretation with a higher level ofconfidence than previously achievable.
Figure 1 - Location map JPDA 06-103, Timor Sea
The prospect portfolio was prioritised on the basis of potential resource volume and technical risk. While oil is the anticipated hydrocarbon phase based on nearest offset discoveries, the possibility also exists for significant gas condensate finds in the block. Conoco-Phillips' Bayu Undan gas condensate field is located about 40 km to the south of JPDA 06-103.
The Joint Venture selected the Lore and Lolotoe prospects, both in water depthsof less than 400 metres, as the first two prospects for drilling and theselocations were approved subsequently by the designated Government authority(ANP). Prospective oil resources (recoverable undiscovered oil) estimated on100% basis are given in Figure 3 below for Lore prospect with a range of 20 -515 MMSTBO (mean 195 MMSTBO) and Lolotoe prospect with a range of 14 - 220MMSTBO (mean 90 MMSTBO). The combined oil prospective resource for the twoprospects is 285 MMSTBOSubsequent to the end of financial year, Oilex announced that its wholly-ownedsubsidiary, Oilex (JPDA 06-103) Ltd, had entered into an agreement to farm downa 15% interest to Japan Energy E&P JPDA Pty Ltd (Japan Energy), a wholly-ownedsubsidiary of Japan Energy Corporation, for consideration including a refund ofpart of past costs and future funding for Oilex's remaining 10% share of thecosts for two commitment wells up to an agreed cap. The farmout has beenconcluded and preparations are being made for drilling later in 2009.
Concurrently with the farmout negotiations, Oilex has sought to acquire the services of a drilling rig and associated equipment and materials for the initial drilling campaign of two wells.
Background
In November 2006, Oilex (Operator) and the Joint Venture parties entered into aProduction Sharing Contract ("PSC") with the Timor Sea Designated Authority(now Autoridade Nacional do Petroleo - "ANP") for block JPDA 06-103 and the PSCwas signed in January 2007 (effective date 15 January 2007). The block islocated to the east of the Laminaria, Corallina and Kuda Tasi oil fields and tothe north of the Kakatua and Elang oil fields and the giant Bayu-Undan gascondensate field.In April 2008, a significant oil discovery at Kitan-1 and -2 was made by ENI,the operator of block JPDA 06-105 (adjacent to the west of JPDA 06-103). TheKitan-1 discovery well is reported to have flowed oil at a rate of 6,300 bopdfrom a drill stem test in the Elang/Plover Formation. The discovery wasfollowed by an appraisal well, Kitan-2, that confirmed the commercialviability. These wells lie close to the JPDA 06-103 block boundary and confirmthe oil potential of the block. ENI is now in the process of developing thefield.
Figure 2 - Prospects and leads JPDA 06-103
Figure 3 - Range of prospective resources on 100% basis, Lore & Lolotoe prospects JPDA 06-103
In third quarter of 2008, Oilex and Nexus entered into interdependent contractswith Sedco Forex International (Sedco) for the supply of the Transocean Legendsemi submersible drilling rig to perform a combined drilling program. In June2009 Sedco unilaterally terminated the Oilex contract following the terminationof the Nexus contract for its drilling program that was planned to beundertaken prior to the drilling program in JPDA 06-103.Due to the delay in the seismic acquisition program and limited availability inthe highly competitive market for offshore rigs and services at the time, Oilexmade application, on behalf of the JPDA 06-103 Joint Venture, for an extensionof time under the PSC to enable 2 wells that were originally planned to bedrilled in 2009 to be drilled by January 2010. The application was approved bythe relevant government authority (Autoridade Nacional do Petroleo or ANP) latein 2008.Following the termination by Sedco, an application was made to the ANP for anextension of Contract Year 3 given the limited availability of suitable rigsoperating offshore Australia during mid-2009. The application was approved byANP in August 2009.AUSTRALIA
WA-388-P: CARNARVON BASIN, OFFSHORE WESTERN AUSTRALIA
[OILEX - 14% Interest, Operator]
The WA-388-P permit area lies to the north of the North Rankin, Goodwyn and Perseus gas and condensate fields currently being produced for the domestic and LNG gas markets by the North West Shelf Venture and to the northeast of the large gas resources discovered in the Io/Jansz field area.
The permit was signed in August 2007. Initial work involved interpretation ofthe reprocessed 2D and existing third party seismic data and was completed in2008 with attractive structural and stratigraphic trends identified.
This work provided the basis for Sasol to farmin for 30% equity interest in the permit by funding 60% of certain costs of the Rose 3D seismic survey.
Figure 4 - Location map WA-388P
The Rose 3D seismic survey of 1,180 km2 began in August 2008 over thesouth-eastern part of the permit covering the area of prospective leads mappedfrom the older data (Figure 5). The seismic vessel "Geowave Champion"completed the survey in September 2008. Significant operational efficiencieswere obtained through jointly conducting the survey with holders on an adjacentpermit with Oilex acting as operator for the entire survey. The survey whichdirectly followed the acquisition of the Maura 3D survey in the Timor Seastarted about 8 months later than initially planned due to delays with thevessel finishing previous contracts.Processing of the 3D seismic was completedin July 2009. This was several months behind schedule as a result ofadditional work to resolve the imaging problems caused by rugose sea floormorphology. The delays in the acquisition and processing led to compression of timeavailable to decide on continuing into the second phase of the permit whichinvolved drilling of one well in the first year, Permit Year 4, of the secondterm. The primary term of the permit expired in August 2009 and under aprovision of the relevant legislation, variations to the secondary termcommitments may be negotiated prior to entering Permit Year 4. The DesignatedAuthority approved a variation to the secondary term commitments bytransferring a well from Permit Year 4 to Permit Year 5. During the secondaryterm, the permit may be renewed on an annual basis.
Figure 5 - Leads map, WA-388P
EPP27: OTWAY BASIN, OFFSHORE SOUTH AUSTRALIA
[relinquished]
Oilex, Videocon Industries and Gujarat State Petroleum Corporation eachacquired a 20% participating interest in the Exploration Permit for block EPP27, offshore South Australia pursuant to a farmin agreement with Great ArtesianOil & Gas Limited in February 2006. The Christine 2D seismic survey ofapproximately 1,300 line kilometres was completed on 20 July 2006 andintegrated into the interpretation. Based on the data, the Joint Venturereached the decision that a well was not justified on the block.The term of the final permit year 6 ended on 24 August 2008. Subsequentdiscussions between the Government and Joint Venture were very constructive andwere successfully concluded in March 2009 with agreement that the Joint Venturecould relinquish EPP 27 on the condition that Oilex, GSPC and Videocon enteredinto a Good Standing Arrangement (GSA) with the Government. The GSAconstitutes a fair and reasonable position and has been agreed by all parties.INDIA CAMBAY FIELD, GUJARAT
[Oilex - 45% Interest, Operator]
Total net oil sales from Cambay, Bhandut and Sabarmati Fields were ~37537 barrels of oil for the year to 30 June 2009.
Oil production from the Miocene Basal Sand (MBS) in the Cambay Field, Gujarat (Oilex Operator - 45%) continues. Cambay-74 and Cambay-64 produced at a combined average daily rate of approximately 300 BOPD since coming on production in November 2008.
Pump to provide artificial lift in Cambay-64 installed in July.
The fracture stimulated Cambay-19Z well continues production of gas and condensate from the deeper Eocene zone.
The Cambay Field is also producing intermittently from wells Cambay-72, Cambay-63, Cambay-20 and Cambay-8, while Cambay-73, previously producing, has been shut in.
Constraints on the Cambay oil offtake infrastructure have been resolved by adding storage capacity at the field and at the point of sale.
The India operations have been restructured pending a detailed review of appraisal and development options.
Oilex originally entered the Cambay Field PSC in March 2006 and became operatorin August 2006. The contract area covered by the PSC is located in thesouthern portion of the prolific Cambay Basin and contains a prominentstructural high and a number of prospective plays that require furtherevaluation. Oilex acquired a 3D seismic survey over the contract area in late2006 and these data have provided the basis for definition of prospects atvarious stratigraphic levels.A drilling program to appraise the Cambay Field Production Sharing Contractarea commenced in early 2008. The Cambay-23Z, Cambay-19Z, Cambay-73 andCambay-74 wells were drilled during 2008 (Figure 7). The drilling program wasto comprise six wells but was suspended prematurely in November 2008 after thediscovery of oil in the Miocene Basal sand (MBS) secondary objective inCambay-74. As a result of the oil discovered in the MBS, Cambay-74 did notproceed to test the deeper primary objective and was completed as an oilproduction well at the shallow interval. The deeper primary objectives in theregion of Cambay-74 may be drilled at a later time. The rig contract wasterminated in November 2008 after extended delays and cost over-runs associatedwith poor performance.
Figure 6 - Location map, Cambay Basin, Gujarat, India
Hydrocarbons were intersected in all of the main objective horizons in 3 of the4 wells drilled. Production tests of Cambay-19Z and Cambay-73 and subsequentlonger term testing following fracture stimulation gave encouraging earlyresults although production rates declined during extended production testing. Further evaluation is required to establish long term commercial productionviability from these zones. Significant potential remains at Cambay that mayform the basis for a renewed appraisal and exploration effort subject toavailability and approval of funding by the JV.While drilling of appraisal wells was in progress, three of the original ONGCwells (Cambay-64, -26 and -57) were subject to workover at the level of the MBSto assist in resolving anomalies on original logs and well reports. Of thesewells, in October 2008 Cambay-64 flowed oil from a 2 metre interval at thelevel of the MBS and was successfully brought into production from this unit inNovember 2008. The initial production rate stabilised at an average rate of310 bopd and has since experienced high water cut that appears to originate ata deeper level. Workover of the well was carried out in 2009 and a pump wasinstalled in an attempt to maintain oil production as pressure declined andwater cut increased.
Figure 7 - Cambay Basin - location map, infrastructure and oil and gas fields
Figure 8 - Cambay Field Western High Block Depth Maps with Appraisal Well Locations
The other two wells that were subject to workover, Cambay-26 and Cambay-57 both flowed water with minor amounts of oil. About 300 litres of light oil were recovered from Cambay-57.
Based on encouraging estimates of potential recoverable volumes an appraisaldrilling program for the MBS zone was prepared and Cambay-75 was drilled inApril 2009 near the crest of a separate fault compartment to the west of theexisting production. The well encountered good oil and gas shows whiledrilling but on testing flowed water with minor oil and gas. The result wasvery disappointing and further appraisal of the MBS was suspended followingevaluation of the results.
Eocene Production Performance
Cambay-23Z was fracture stimulated in the EP-III & EP-IV zones in early December with no gas flow recorded. The well is now shut in while an evaluation of the potential for producing gas from the shallower OS II is being completed.
Cambay-19Z was fracture stimulated at the EP-III & EP-IV in November and is nowflowing gas at about 100 mcf/day (17 boe/day) and an oil / condensate mixtureat about 20 bpd with a FTHP of 100 psi.Cambay-73 was also fracture stimulated at the EP-III & EP-IV in November anduntil shut-in in May 2009 flowed gas intermittently at about 100 mcf/day withan oil / condensate mixture at about 7 bpd and around 37 bpd water with a FTHPof 40-60 psi.A recent study of the Eocene production performance that was commissioned byOilex recommended continuing to produce Cambay-19Z. The report concluded thatthe wells are not performing to expectation, the main issue being very shorteffective fracture length in the vertical wells.
The potential of horizontal wells were reviewed and with a recommendation that a horizontal well with multiple, equally spaced transverse fractures will deliver a higher rate of return than a vertical well equivalent to Cambay-19z.
The company is evaluating the most economic and effective plans for developingthe significant in place resources in the Eocene and is continuing to monitorCambay-19Z production.Crude Oil Storage CapacityStorage capacity at Cambay of over 2,400 barrels of oil was secured and storagecapacity no longer presents a constraint on production even at substantiallyhigher daily average rates.
RESOURCE ESTIMATE
Figure 9 - Table of Resource Estimates, all hydrocarbon bearing horizons, Cambay Field
Hydrocarbon-In-Place estimates for the Miocene MBS, the Oligocene OS-I, OS-I-Iand OS-II, the Eocene EP-IV and the Basal EP-IV reservoirs for both oil and gaswere prepared earlier this year (Figure 9). These estimates were computed usingthe latest depth maps and fluid type and fluid distribution based on acombination of well information, seismic attribute extractions and mapped spillpoints.
The Best Estimate of total potential hydrocarbon-in-place for these reservoirs is approximately 55 mmstb of oil (including condensate) and 273 bcf of gas (including associated gas).
With the termination of the drilling program in November 2008, prospects at OSII, EP IV and Basal EP IV in the northern and south eastern part of the block,remain to be drilled.The additional Oligocene (OSII) seismic anomalies, the Eocene section andfractured Deccan basalts (that have proven to be oil reservoirs in the Tarapurblock to the north of the Cambay Field) are attractive targets for a futuredrilling program (Figure 10). Resource potential remains significant andcombined with the excellent commercial terms of this PSC, provides a compellingcase for further appraisal.BackgroundThe Cambay Field was discovered in 1957 by Oil and Natural Gas Corporation Ltd("ONGC"), the first oil discovery in western India, onshore or offshore and wasdeveloped as a gas field mainly from OS II reservoirs in the southern part ofthe Cambay contract area. Since inception the field has produced about 52 bcfof gas until it was shut-in in the early 1990's due to water and sandproduction problems.
Figure 10 - Areas of seismic anomalies and exploration target horizons that may be drilled in a future drilling program, Cambay PSC
BHANDUT AND SABARMATI FIELDS: GUJARAT, INDIA
The fields (Figure 6, 8) were discovered and developed initially by ONGC.Hydrocarbons were found in Miocene sandstones at Bhandut and Eocene sandstonesat Sabarmati and continue to be produced on at combined average ofapproximately about 30 barrels of oil per day. The fields were acquired by theGSPC and Niko Joint Venture in 1995 and Oilex subsequently acquired Niko'sinterest in 2006.
Sabarmati Field
[Oilex - 40% interest, Operator]
The field is located on the southern culmination of a trend of producing oilfields operated by ONGC, on the outskirts of Ahmedabad, the largest city inGujarat. Oil has been produced from the one well in the Sabarmati FieldContract Area at very low rates on an intermittent basis since inception of thePSC in 1994. The well produces at a daily average rate 16 bopd from an Eocenereservoir which is about 5m thick, through 2m of perforations.
Bhandut Field
[Oilex - 40% interest, Operator]
The first 3D seismic survey over Bhandut field was acquired in February 2007.The main reservoir units in the shallower section are sandstones with irregulardistribution and at deeper stratigraphic levels, exploration targets that arelikely to be gas-bearing will be considered for drilling when environmentalapprovals are received for new well locations. The field remains prospectiveand 3D seismic interpretation indicates that the crest of the main structure isto the northwest of the existing wells. A well to test this interpretedstructural crest would target multiple reservoir objectives from Miocene tofractured Deccan is being considered and ranked against other exploration/appraisal opportunities.
OMAN
BLOCK 56: ONSHORE SOUTHERN OMAN
[Oilex - 25% Interest, Operator]
Oilex continued an active exploration and appraisal/testing program during theyear following on from the early 2008 Phase I drilling program (Figure 12)which included the Sarha-1 and Ghadaq-1 oil discoveries and the Alyanbou-1 dryhole drilled in a remote far NE area of the contract area. The Sarha-1 andGhadaq-1 discoveries confirmed that the productive trend in the adjacent blockto the west continues into Block 56. New seismic data combined withreprocessing of existing data indicated that there were a number of structuressimilar to Sarha-1 present in the western flank area of Block 56 and the mostprospective of these were the locations for three of the wells in the Phase 2drilling campaign.The Sarha-2 appraisal well located to the west of the Sarha discovery was thefirst of the wells in the second phase of drilling which commenced in September2008. The well was drilled to appraise the Al Khlata Formation oil discoverythat was successfully tested in Sarha-1 and to establish the economic viabilityof field development. After encountering technical difficulties in thesubsurface horizontal section, the well was re-drilled and intersected up to275 metres gross interval of oil bearing sands, of which net pay ofapproximately 200 metres is calculated to be productive net pay. The wellinitially produced 150-200 bopd on pump test however the oil was considerablyheavier than that tested at Sarha-1 and this has had an adverse impact on thecommercial development of Sarha. Plans are suspended pending the outcome ofevaluation of commercial terms for the smaller accumulation.
Figure 11 - Infrastructure map Block 56, Oman
The Lathab-1 exploration well spudded in November 2008 and encountered oilshows through the Al Khlata, Haima and Huqf Formation reservoir intervals withthin oil pay intervals calculated from evaluation of wireline logs . The payintervals were however considered to be of insufficient thickness to warranttesting and the well was abandoned.The Al Jumd-1 exploration well located in the northwest area of Block 56 toevaluate a geological structure similar to the Sarha discovery spudded inDecember 2008. Good oil shows were encountered in the Al Khlata formation overthe interval 1163 - 1328 metres. This well was subsequently tested in March2009 over the Al Khlata Formation interval 1164.5m -1322.5m (158m gross, 46.5mnet). A total 475 bbls of water was produced and the well was shut-in. Duringabandonment operations a small quantity of oil was recovered from the annulusand found to be of 20 API gravity, a relatively lighter, mobile oil than foundin most other wells in this part of the basin. Re-evaluation of well logs usingthe lower salinity values obtained from analysis of the formation waterproduced during the test indicates that one of the sand packages tested iswater bearing and the deeper package is oil bearing and the likely source ofthe oil produced during the test. The well has been suspended pending furtherevaluation of results.The Umq-1 exploration well spudded in late December on a large structure in theuntested central portion of Block 56. Oil shows and associated high gasreadings were intersected in the Huqf primary objective over a gross intervalof over 500 metres. Operational difficulties prevented the further deepening ofthe well to intersect sandstone intervals predicted beneath the Huqf carbonate.The indications of hydrocarbons enhances the large untested potential of theCentral Terrace area which was identified as one of the main explorationobjectives before entry by the Joint Venture when it applied for Block 56. Insummary the Phase 2 program which included the drilling of the Sarha-2appraisal/exploration well and the Lathab-1, Al Jumd-1 and Umq-1 explorationwells have confirmed the oil potential of the Eastern Flank Salt Basin in Block56 and extended the prospective area into the extensive Central Terrace areawhere no previous drilling had been carried out.
Background
The Government of the Sultanate of Oman awarded the Exploration and ProductionSharing Agreement ("EPSA") for Block 56 to a consortium of Indian companies andOilex (Operator) on 28 June 2006. The block is located onshore, adjacent toproducing fields operated by PDO, the Oman national oil company, in the SouthOman Salt Basin, which is one of the main producing basins in Oman.The South Oman Salt Basin is a prolific oil producing province with extensivepipeline infrastructure linking the producing fields to the refining and exportfacilities in the north of the country. The oil produced from these fields ischaracteristically heavier with density in the range 150 - 280 API gravity.
All of the 7 reservoir objectives drilled in the first 2 wells appear to be oil-bearing and preliminary studies on the feasibility of producing the heavy oil are now in progress.
Figure 12 - Wells and prospects location on Mid Cretaceous structure map, Block 56, Oman
INDONESIA
WEST KAMPAR PRODUCTION SHARING CONTRACT
[Oilex - 45% entitled to 67.5% interest]
Oilex (West Kampar) Limited (Oilex), a wholly owned subsidiary of Oilex Ltd,was assigned a 45% participating interest in the West Kampar PSC pursuant to afarmout agreement entered into with PT Sumatera Persada Energi (SPE) in May2007. The West Kampar Production Sharing Contract covers an area of 4,471 km2.It is located in central Sumatra (Figure 13) adjacent to the most prolific oilproducing province in Indonesia, the Central Sumatra Basin, from which over 10billion barrels of oil have been produced to date (Figure 13).
Figure 13 - West Kampar PSC Location map, Sumatra, Indonesia
In August 2008, Oilex signed an agreement with PT Sumatera Persada Energi("SPE"), the Operator of West Kampar PSC, to acquire 15% additional equityinterest in the PSC thereby increasing its interest from 45% to 60% subject tomeeting certain conditions precedent. In January 2009 Oilex terminated thesecond farmout arrangement when conditions were not met by the due date andmany issues remained unresolved with the Operator. With the termination of thatagreement, SPE is required to reimburse the monies advanced by Oilex under theterms of that agreement.The amount due to be repaid is US$3.5 million approximately plus interest andcosts. Oilex holds security for that reimbursement. While SPE has acknowledgedtheir obligation to repay monies advanced, no repayment has yet been made.Oilex is vigorously pursuing its rights to recover the monies advanced (plusinterest and costs) under the relevant agreements including enforcing securitywhich is held by Oilex.To that end, Oilex has transferred a 22.5% participating interest in the PSCfrom SPE to Oilex pursuant to Oilex's rights under a Power of Attorney grantedby SPE to Oilex in August 2008 at the time of entering into the second farmoutagreement. The transfer is currently before BPMigas, the Indonesian Governmentregulator. Oilex intends to pursue the sale of this 22.5% interest to recovermonies owed to Oilex.
To ensure that recovery of monies owed to Oilex is maximised, Oilex is also enforcing a parent company guarantee from SPE's parent company PT Asiabumi Petroleo and has commenced an arbitration proceeding against it in the International Chamber of Commerce Court of Arbitration in Singapore in accordance with the provisions of the guarantee.
Background
Awarded in October 2005, the PSC work program commitment provides for the acquisition of 250 kms of 2D seismic and 50 km2 of 3D seismic along with drilling of the Pendalian-3 well and 4 exploration wells.
The Pendalian-3 well was drilled in 2007 to appraise the oil field discoveredin 1993 by the Pendalian-1 well, a cored slim hole which encountered a numberof oil zones at depths ranging from 250 metres to 500 metres. Two of the zonesflowed oil from drillstem tests in Pendalian-1 with maximum rates achieved ofup to 530 bopd.
Figure 14 - Location map Central Sumatra Basin fields and pipeline infrastructure.
CORPORATE REVIEWIssued CapitalThe total issued capital at 30 June 2009 was 176,054,885 fully paid shares inaddition to 32,775,000 unlisted options exercisable at prices between $0.50 and$2.75 per share and 926,000 performance rights.
During the 2009 financial year, the Company raised $10.07 million.
Organization restructure
Organization changes including reduction in personnel numbers have been implemented. Operating cash outflows and corporate overheads have continued to be reduced with further cost reduction programs being implemented at all locations.
Safety, Health and Environment
HSSE Record
Oilex has maintained an excellent operating record in its operations inAustralia, Oman, India and JPDA during the past 12 months. In total acrossoperations in India and Oman, 844,466 manhours were worked. Two Lost TimeIncidents (LTI's) occurred in Oman in relation to contractor personnel duringthe period giving a total Lost Time Incident Frequency Rate of 2.4 (incidents /million manhours worked).
Oilex recorded no LTI's in relation to its employees across all centres of operations giving a Lost Time Incident Frequency Rate for employees of zero.
Community Support and Training
The medical support program in Timor Leste that was undertaken in partnershipwith Australian Aid International (AAI) came to an end in February 2008. Oilexis very pleased with the achievements of that program in providing support tothe people of Artauro, the largest island apart from the mainland on the northcoast. AAI conducted regular clinics on Artauro, funded by Oilex as part ofits community support obligations in Timor Leste that contributed greatly tothe general health of the residents of the island for whom little support wasprovided previously.At the request of the Government of Timor Leste and the ANP, in place of themedical program, Oilex has agreed to contribute to a training program forcitizens of Timor Leste who have the capability to work offshore in the oil andgas industry. The aim of the program is to establish training facilities inTimor Leste in conjunction with an existing institution and to develop thelocal capabilities in training with the support of professional entities basedin Western Australia which currently conduct training to Australian andinternational standards for offshore industries.
Policy
Oilex is committed to protecting the health and safety of everybody who plays apart in our operations or lives in the communities where we operate. Whereverwe operate, we will conduct our business with respect and care for both thelocal and global, natural and social environment and systematically managerisks to drive sustainable business growth. We will strive to eliminate allinjuries, occupational illness, unsafe practise and incidents of environmentalharm from our activities. The safety and health of our workforce and ourenvironment stewardship are just as important to our success as operational andfinancial performance and the reputation of the company.As Oilex expands its presence in different parts of the world, we shallendeavour to understand the diversity of cultures and customs that weencounter, to incorporate that understanding into the business practice forthat country and to have a beneficial impact through our working involvementwith local communities. We shall strive to make our facilities safer andbetter places in which to work and our attention to detail and focus on safety,environmental, health and security issues will help to ensure high standards ofperformance. We are committed to a process of continuous improvement in all wedo and to the adoption of international industry standards and codes whereverpracticable. Through implementation of these principles, Oilex seeks to earnthe public's trust and to be recognised as a responsible corporate citizen.
LIST OF ABBREVIATIONS AND DEFINITIONS USED HEREIN
Associated Natural gas found in contact with or dissolved in crude oil in the Gas reservoir. It can be further categorized as Gas-Cap Gas or Solution Gas. Barrels of Oil Equivalent. Converting gas volumes to the oil equivalent is customarily done on the basis of the nominal heating content or calorific value of the fuel. Common industry gas
BOE conversion factors usually range between 1 barrel of oil equivalent
(BOE) = 5,600 standard cubic feet (scf) of gas to 1 BOE = 6,000 scf. (Many operators use 1 BOE = 5,620 scf derived from the metric unit equivalent 1 m(3) crude oil = 1,000 m(3) natural gas). BOPD barrels of oil per day BPD barrels (of fluid) per day BS&W base, sediment and water contaminants in oil FTHP flowing tubing head pressure Gas to oil ratio in an oil field, calculated using measured natural gas and crude oil volumes at stated conditions. The gas/oil ratio GOR may be the solution gas/oil , symbol Rs; produced gas/oil ratio, symbol Rp; or another suitably defined ratio of gas production to oil production. Volumes herein measured in scf/bbl. MCF/DAY thousand standard cubic feet (of gas) per day MMCF/DAY million standard cubic feet (of gas) per day MMSTBO million stock tank barrels of oil (recoverable) MMSTBOIP million stock tank barrels of oil in place
Prospective Those quantities of petroleum which are estimated, as of a given Resources date, to be potentially recoverable from undiscovered accumulations
SCF/BBL standard cubic feet (of gas) per barrel (of oil) The information in this report has been compiled by the Managing Director ofOilex Ltd, Bruce McCarthy B.Sc. (Hons) PhD (Geology) who has over 30 yearsexperience in petroleum geology. The estimates of hydrocarbons in place andprospective resources were reviewed by Ray Barnes B.Sc. (Hons), the TechnicalDirector of Oilex Ltd who has over 37 years experience in petroleum geology andis a member of the AAPG. Mr Barnes reviewed this announcement and consents tothe inclusion of the estimated hydrocarbons in place in the form and context inwhich they appear. The resource estimates contained in this report are inaccordance with the standard definitions set out by the Society of PetroleumEngineers, Petroleum Resources Management System, 2007. Further information isavailable at www.spe.org
PERMIT SCHEDULE
As at 30 June 2009
PERMIT BASIN / STATE / JOINT VENTURE EQUITY OPERATOR
COUNTRY PARTIES % 30.0 Oilex Ltd
Cambay Cambay / Gujarat / Oilex NL Holdings 15.0 Oilex Ltd
Field India (India) Limited Gujarat State 55.0 Petroleum Corp. Ltd Oilex NL Holdings 40.0 Bhandut Cambay / Gujarat / (India) Limited Oilex NL Holdings Field India (India) Limited Gujarat State 60.0 Petroleum Corp. Ltd Oilex NL Holdings 40.0 Sabarmati Cambay / Gujarat / (India) Limited Oilex NL Holdings Field India (India) Limited Gujarat State 60.0 Petroleum Corp. Ltd Oilex Oman Limited 25.0 GAIL (India) 25.0 Limited Videocon 25.0 Hydrocarbon Holding Block 56 South Oman / Oman Ltd Oilex Oman Limited Bharat 12.5 Petroresources Limited Hindustan Petroleum 12.5 Corp. Ltd Oilex (West Kampar) 67.5 West Central Sumatra / Limited (1) PT Sumatera
Persada
Kampar Sumatra/ Indonesia Energi Block PT Sumatera Persada 32.5 Energi Oilex (JPDA 06-103) 25.0 Flamingo / Joint Ltd Petroleum GSPC (JPDA) Limited 25.0 JPDA Development Area/ Oilex (JPDA
06-103)
06-103 Global Energy Inc. 25.0 Ltd Timor-Leste & Australia Bharat 25.0 Petroresources JPDA Ltd Oilex Ltd 14.0 Gujarat State 14.0 Petroleum Corp Ltd Videocon Industries 14.0 Ltd Oilex Ltd WA-388-P Carnarvon / WA / Australia Bharat 14.0 Petroresources Ltd Hindustan Petroleum 14.0 Corp. Ltd Sasol Petroleum 30.0 Australia Ltd (1) Oilex (West Kampar) Limited is entitled to have assigned an additional22.5% to its holding through exercise of its rights under a Power of Attorneygranted by SPE following the failure of SPE to repay funds due. The assignmentis before BPMigas, the Indonesian Government regulator.
CORPORATE GOVERNANCE STATEMENT
STATEMENT
Oilex Ltd ("the Company") has made it a priority to adopt systems of controland accountability as the basis for the administration of corporategovernance. Some of these policies and procedures are summarised in thisstatement. Commensurate with the spirit of the ASX Corporate GovernanceCouncil's Corporate Governance Principles and Recommendations ("Principles &Recommendations"), the Company has followed each recommendation where the Boardhas considered the recommendation to be an appropriate benchmark for itscorporate governance practices. Where the Company's corporate governancepractices follow a recommendation, the Board has made appropriate statementsreporting on the adoption of the recommendation. Where, after dueconsideration, the Company's corporate governance practices depart from arecommendation, the Board has offered full disclosure and reason for theadoption of its own practice, in compliance with the "if not, why not" regime.DISCLOSURE OF CORPORATE GOVERNANCE PRACTICESSummary StatementASX P&R Followed In not, why Followed In not, why (1) not (2) ASX P&R (1) not (2) Recommendation Recommendation 1.1 Y 4.3 Y Recommendation Recommendation 1.2 Y 4.4(3) n/a n/a Recommendation Recommendation 1.3(3) n/a n/a 5.1 Y Recommendation Recommendation 2.1 Y 5.2(3) n/a n/a Recommendation Recommendation 2.2 Y 6.1 Y Recommendation Recommendation 2.3 Y 6.2(3) n/a n/a Recommendation Recommendation 2.4 Y 7.1 Y Recommendation Recommendation 2.5 Y 7.2 Y Recommendation Recommendation 2.6(3) n/a n/a 7.3 ? Recommendation Recommendation 3.1 Y 7.4(3) n/a n/a Recommendation Recommendation 3.2 Y 8.1 Y Recommendation Recommendation 3.3(3) n/a n/a 8.2 Y Recommendation Recommendation 4.1 Y 8.3(3) n/a n/a Recommendation 4.2 Y
1) Indicates where the Company has followed the Principles & Recommendations.
2) Indicates where the Company has provided "if not, why not" disclosure.
3)Indicates an information based recommendation. Information based recommendations are not adopted or reported against using "if not, why not" disclosure - information required is either provided or it is not.
Website Disclosures
Further information about the Company's charters, policies and procedures maybe found at the Company's website at www.oilex.com.au, under the section markedCorporate Governance. A list of the published charters, policies andprocedures which are referred to in this Corporate Governance Statement,together with the Recommendations to which they relate, are set out below.Charters Recommendation(s) Board 1.3 Audit Committee 4.4 Nomination Committee 2.6 Remuneration Committee 8.3 Policies and Procedures Policy and Procedure for Selection and (Re)Appointment 2.6 of Directors Process for Performance Evaluation 1.2,2.5 Policy on Assessing the Independence of Directors 2.6 Securities Dealing Policy 3.2, 3.3 Code of Conduct 3.1, 3.3
Continuous Disclosure Policy and Continuous Disclosure 5.1, 5.2 Compliance Procedures (summary)
Procedure for Selection, Appointment and Rotation of 4.4 External Auditor Shareholder Communication Policy 6.1, 6.2 Risk Management Policy (summary) 7.1, 7.4
Disclosure - Principles & Recommendations
The Company reports on how it has followed (or otherwise departed from) each of the Principles & Recommendations during the 2008/2009 financial year ("Reporting Period") as set out below.
PRINCIPLE 1 - LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
RECOMMENDATION 1.1:
Companies should establish the functions reserved to the Board and those delegated to senior executives and disclose those functions.
Disclosure:
The Company has established the functions reserved to the Board and has set outthese functions in its Board Charter. The Board is collectively responsible forpromoting the success of the Company through its key functions of overseeingthe management of the Company, providing overall corporate governance of theCompany, monitoring the financial performance of the Company, engagingappropriate management commensurate with the Company's structure andobjectives, involvement in the development of corporate strategy andperformance objectives and reviewing, ratifying and monitoring systems of riskmanagement and internal control, codes of conduct and legal compliance.The Company has established the functions delegated to senior executives andhas set out these functions in its Board Charter. Senior executives areresponsible for supporting the Managing Director and assisting the ManagingDirector in implementing the running of the general operations and financialbusiness of the Company, in accordance with the delegated authority of theBoard. Senior executives are responsible for reporting all matters which fallwithin the Company's materiality thresholds at first instance to the ManagingDirector or, if the matter concerns the Managing Director, then directly to theChair or the lead independent director, as appropriate.
RECOMMENDATION 1.2:
Companies should disclose the process for evaluating the performance of senior executives.
Disclosure:The Managing Director is responsible for evaluating the performance of seniorexecutives. The performance evaluation of senior executives comprises informaldiscussions on group and individual performance; evaluations are held as partof strategy and business review coupled with the annual remuneration review.
RECOMMENDATION 1.3:
Companies should provide the information indicated in the Guide to reporting on Principle 1.
Disclosure:
During the Reporting Period the evaluation of senior executives occurred in accordance with the process disclosed at Recommendation 1.2.
PRINCIPLE 2 - STRUCTURE THE BOARD TO ADD VALUE
RECOMMENDATION 2.1:
A majority of the Board should be independent directors.
Notification of Departure:
The Board does not have a majority of independent directors. The independentdirectors of the Board are Laxmi Bhandari and Ron Miller (who was appointed on1 July 2009). The non independent directors of the Board are Max Cozijn, BruceMcCarthy, Ray Barnes and Ben Clube (who was appointed on 1 July 2009). TheChairman, Mr Cozijn was not an independent director in the Reporting Period dueto performing the role of Company Secretary which role, effective from 1 May2009, he no longer performs.
Accordingly, during the Reporting Period, only one director, Mr Bhandari, was independent.
Explanation for Departure:
The Board considers that its current composition is an appropriate blend of skills and expertise, relevant to the Company's business. The Board is aware of the importance of independent judgement and considers independence, amongst other things, when new appointments to the Board are made.
RECOMMENDATION 2.2:
The Chair should be an independent director.
Notification of Departure:
The Chair is not independent in accordance with the criteria set out in Box 2.1 of the ASX Principles and Recommendations.
Explanation for Departure:
The Board considers that Mr Cozijn is the most appropriate person for theposition as Chair because of his industry experience. For a majority of theReporting Period, Mr Cozijn was the Company Secretary, however, on 1 May 2009,Mr Cozijn stepped down from this role, with the Company's general counsel, MrJames Laurie, being appointed as Company Secretary.
The Board is of the view that it was only Mr Cozijn's services as Company Secretary that precluded him from being considered independent and that his role as Company Secretary was unlikely to cause a conflict of interest or impede his ability to exercise independent judgement. Accordingly, while Mr Cozijn was the Company Secretary, the Board considered him to be a suitable Chairman.
RECOMMENDATION 2.3:
The roles of the Chair and Chief Executive Officer should not be exercised by the same individual.
Disclosure:
The Managing Director is Bruce McCarthy who is not Chair of the Board.
RECOMMENDATION 2.4:
The Board should establish a Nomination Committee.
Notification of Departure:
The Company has not established a separate Nomination Committee. The Nomination Committee consists of the full Board.
Explanation for Departure:
The full Board considers those matters and issues that would usually fall to aNomination Committee. Given the size and composition of the Board, the Boarddoes not consider that any efficiencies or other benefits would be gained byestablishing a separate Nomination Committee. When the Board convenes as theNomination Committee it carries out those functions which are delegated in theCompany's Nomination Committee Charter and minutes of the Nomination Committeeare separately recorded. The Board deals with any conflicts of interest thatmay occur when convening in the capacity of Nomination Committee by ensuringthe director with conflicting interests is not party to the relevantdiscussions.
RECOMMENDATION 2.5:
Companies should disclose the process for evaluating the performance of the Board, its committees and individual directors.
Disclosure:
The Chair is responsible for evaluation of the Board and, when deemed appropriate, Board committees and individual directors. The Nomination Committee is responsible for evaluating the Managing Director.
The evaluation of the Board, any applicable committees and individual directorscomprised ongoing informal discussions by the Chair with the Managing Director.The Chair of the Nomination Committee informally evaluated the performance ofthe Managing Director for the Reporting Period.
RECOMMENDATION 2.6:
Companies should provide the information indicated in the Guide to reporting on Principle 2.
Disclosure:
Skills, Experience, Expertise and Term of Office of each Director
A profile of each director containing their skills, experience, expertise and term of office is set out in the Directors' Report.
Identification of Independent Directors
The independent directors of the Company are Laxmi Bhandari and Ron Miller (whowas appointed on 1 July 2009). These directors are independent as they arenon-executive directors who are not members of management and who are free ofany business or other relationship that could materially interfere with, orcould reasonably be perceived to materially interfere with, the independentexercise of their judgment.Independence is measured having regard to the relationships listed in Box 2.1of the Principles & Recommendations and the Company's materiality thresholds. The materiality thresholds are set out below.
Company's Materiality Thresholds
The Board has agreed on the following guidelines for assessing the materiality of matters, as set out in the Company's Board Charter:
* Balance sheet items are material if they have a value of more than 10% of
pro-forma net asset.
* Items are also material if they impact on the reputation of the Company,
involve a breach of legislation, are outside the ordinary course of
business, they could affect the Company's rights to its assets, if
accumulated they would trigger the quantitative tests, involve a contingent
liability that would have a probable effect of 10% or more on balance sheet
or profit and loss items, or they will have an effect on operations which
is likely to result in an increase or decrease in net income or dividend
distribution of more than 10%.
Profit and loss items are material if they will have an impact on the current year operating result of 10% or more.
Contracts will be considered material if they are outside the ordinary courseof business, contain exceptionally onerous provisions in the opinion of theBoard, impact on income or distribution in excess of the quantitative tests,there is a likelihood that either party will default, and the default maytrigger any of the quantitative or qualitative tests, are essential to theactivities of the Company and cannot be replaced, or cannot be replaced withoutan increase in cost of such a quantum, triggering any of the quantitativetests, contain or trigger change of control provisions, they are between or forthe benefit of related parties, or otherwise trigger the quantitative tests.
Statement concerning availability of Independent Professional Advice
To assist directors with independent judgement, it is the Board's policy thatif a director considers it necessary to obtain independent professional adviceto properly discharge the responsibility of their office as a director then,provided the director first obtains approval for incurring such expense fromthe Chair, the Company will pay the reasonable expenses associated withobtaining such advice.
Nomination Matters
The full Board, in its capacity as the Nomination Committee, held two meetings during the Reporting Period. All Board members were in attendance at both meetings.
To assist the Board to fulfil its function as the Nomination Committee, it has adopted a Nomination Committee Charter.
The explanation for departure set out under Recommendation 2.4 above explains how the functions of the Nomination Committee are performed.
Performance Evaluation
During the Reporting Period, an evaluation of the Board, applicable committeeand individual directors occurred in accordance with the process disclosed atRecommendation 2.5.
Selection and (Re) Appointment of Directors
In determining candidates for the Board, the Nomination Committee (orequivalent) follows a prescribed policy and procedure whereby it evaluates therange of skills, experience and expertise of the existing Board and considersthe balance of independent directors on the Board as well as the skills andqualifications of potential candidates that will best enhance the Board'seffectiveness.The Board recognises that Board renewal is critical to performance and theimpact of Board tenure on succession planning. The longest serving one third ofdirectors and any director holding office for more than 3 years, must retireeach year. This does not apply to the Managing Director. Retiring directors mayresubmit themselves for re-election. Re-appointment of directors is notautomatic.
PRINCIPLE 3 - PROMOTE ETHICAL AND RESPONSIBLE DECISION-MAKING
RECOMMENDATION 3.1:
Companies should establish a Code of Conduct and disclose the code or a summaryof the code as to the practices necessary to maintain confidence in thecompany's integrity, the practices necessary to take into account their legalobligations and the reasonable expectations of their stakeholders and theresponsibility and accountability of individuals for reporting andinvestigating reports of unethical practices.
Disclosure:
The Company has established a Code of Conduct as to the practices necessary tomaintain confidence in the Company's integrity, practices necessary to takeinto account their legal obligations and the expectations of their stakeholdersand responsibility and accountability of individuals for reporting andinvestigating reports of unethical practices.
Recommendation 3.2:
Companies should establish a policy concerning trading in company securities by directors, senior executives and employees, and disclose the policy or a summary of that policy.
Disclosure:
The Company has established a policy concerning trading in the Company's securities by directors, senior executives and employees.
Recommendation 3.3:
Companies should provide the information indicated in the Guide to reporting on Principle 3.
Disclosure:
Please refer to the section above marked Website Disclosures.
PRINCIPLE 4 - SAFEGUARD INTEGRITY IN FINANCIAL REPORTING
RECOMMENDATION 4.1
The Board should establish an Audit Committee.
Notification of Departure:
During the Reporting Period, the full Board undertook the function of the AuditCommittee. Since 1 July 2009, however, the Company has established a separateAudit Committee comprising 3 non-executive directors, 2 of whom are independentdirectors. The Company was an ASX Top 300 company at 1 July 2009 andaccordingly established a separate Audit Committee to comply with the Company'sobligations under the ASX Listing Rules with respect to ASX Top 300 companies.
Explanation for Departure:
Given the size and composition of the Company during the Reporting Period, theBoard believed that no efficiencies or other benefits would be gained byestablishing a separate Audit Committee. Accordingly, the Board performed therole of Audit Committee during the Reporting Period. When the Board convened asthe Audit Committee it carried out those functions which are delegated in theCompany's Audit Committee Charter and minutes of the Audit Committee wereseparately recorded. The Board dealt with any conflicts of interest thatoccurred when convening in the capacity of Audit Committee by ensuring thedirector with conflicting interests was not party to the relevant discussions.RECOMMENDATION 4.2:
The Audit Committee should be structured so that it:
* consists only of non-executive directors
* is chaired by an independent Chair, who is not Chair of the Board
* has at least three members.
consists of a majority of independent directors
Notification of Departure:
The Audit Committee was not structured in accordance with Recommendation 4.2for the Reporting Period (however is so structured from 1 July 2009 as notedabove).Explanation for Departure:
During the Reporting Period, the Board's size and composition meant that an Audit Committee could not be structured in accordance with the recommended structure. Accordingly, the Audit Committee was comprised of the full Board namely Messrs Cozijn, McCarthy, Barnes and Bhandari. Further, during audit related discussions Mr Cozijn maintained the Chair due to his financial qualifications and expertise. Further, the Audit Committee Charter also provides that the Board may meet with the external auditor, without management present, as required.
RECOMMENDATION 4.3:
The Audit Committee should have a formal charter.
Disclosure:
The Company has adopted an Audit Committee Charter.
RECOMMENDATION 4.4:
Companies should provide the information indicated in the Guide to reporting on Principle 4.
Disclosure:
The full Board, in its capacity as the Audit Committee, held two meetings during the Reporting Period. All Board members were in attendance at both Audit Committee meetings except for Mr Barnes who was absent from one meeting. To assist the Board to fulfil its function as the Audit Committee, it has adopted an Audit Committee Charter.
The explanation for departure set out under Recommendation 4.1 above explains how the functions of the Audit Committee were performed for the Reporting Period.
Details of each of the director's qualifications are set out in the Directors' Report.
Mr Cozijn has a Bachelor of Commerce Degree and is an Associate of CPAAustralia. He has over 30 years experience in the administration of listedmining companies. Further, the Company's finance director is a charteredaccountant with international oil and gas commercial expertise, having spent 15years at BHP Billiton Petroleum in a variety of senior management roles. MessrsCozijn's and Clube's qualifications and experience enable them to meet the testof financial expertise. The Company has established procedures for the selection, appointment androtation of its external auditor. The Board is responsible for the initialappointment of the external auditor and the appointment of a new externalauditor when any vacancy arises, as recommended by the Audit Committee (or itsequivalent). Candidates for the position of external auditor must demonstratecomplete independence from the Company through the engagement period. The Boardmay otherwise select an external auditor based on criteria relevant to theCompany's business and circumstances. The performance of the external auditoris reviewed on an annual basis by the Audit Committee (or its equivalent) andany recommendations are made to the Board.
PRINCIPLE 5 - MAKE TIMELY AND BALANCED DISCLOSURE
RECOMMENDATION 5.1:
Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies.
Disclosure:
The Company has established written policies designed to ensure compliance withASX Listing Rule disclosure and accountability at a senior executive level forthat compliance.RECOMMENDATION 5.2:
Companies should provide the information indicated in the Guide to reporting on Principle 5.
Disclosure:
Please refer to the section above marked Website Disclosures.
PRINCIPLE 6 - RESPECT THE RIGHTS OF SHAREHOLDERS
RECOMMENDATION 6.1:
Companies should design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose their policy or a summary of that policy.
Disclosure:
The Company has designed a communications policy for promoting effective communication with shareholders and encouraging shareholder participation at general meetings.
RECOMMENDATION 6.2:
Companies should provide the information indicated in the Guide to reporting on Principle 6.
Disclosure:
Please refer to the section above marked Website Disclosures.
PRINCIPLE 7 - RECOGNISE AND MANAGE RISK
RECOMMENDATION 7.1:
Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies.
Disclosure:
The Board has adopted a Risk Management Policy, which sets out the Company'srisk profile. Under the policy, the Board is responsible for approving theCompany's policies on risk oversight and management and satisfying itself thatmanagement has developed and implemented a sound system of risk management andinternal control.Under the policy, the Board delegates day-to-day management of risk to theManaging Director, who is responsible for identifying, assessing, monitoringand managing risks. The Managing Director is also responsible for updating theCompany's material business risks to reflect any material changes, with theapproval of the Board.
In fulfilling the duties of risk management, the Managing Director may have unrestricted access to Company employees, contractors and records and may obtain independent expert advice on any matter that he believes appropriate, with the prior approval of the Board.
In addition, the following risk management measures have been adopted by the Board to manage the Company's material business risks:
* the Board has established authority limits for management which require
prior Board approval before they may be exceeded;
* the Board has adopted a corporate governance manual which contains other
policies to assist the Company to establish and maintain its governance
practices
the Board has adopted a compliance procedure for the purpose of ensuring compliance with the Company's continuous disclosure obligations; and
Risk assessment is reviewed generally twice per year and more frequently on anindividual project basis as the need arises. In September 2009, the Boardresolved to review, formalise and document the management of its materialbusiness risks and expects to continue to implement this system through the2009/2010 financial year. This system includes the preparation of a riskregister by management to identify the Company's material business risks andrisk management strategies for these risks. In addition, the process ofmanagement of material business risks will be allocated to members of seniormanagement. The risk register will be reviewed and updated as required.
The categories of risk to be reported on or referred to as part of the Company's systems and processes for managing material business risk include exploration, appraisal, reserves, development, production, financial, commercial, sovereign, legal / regulatory, operations including weather, environmental, health and safety, retention of personnel, security and information systems.
A summary of the Company's Risk Management Policy is available on the Company'swebsite as noted above.RECOMMENDATION 7.2: The Board should require management to design and implement the risk managementand internal control systems to manage the Company's material business risksand report to it on whether those risks are being managed effectively. TheBoard should disclose that management has reported to it as to theeffectiveness of the Company's management of its material business risks.
Disclosure:
The Board has required management to design, implement and maintain risk management and internal control systems to manage the Company's material business risks. The Board has received a report on material business risks and whether those risks are being managed effectively.
RECOMMENDATION 7.3:
The Board should disclose whether it has received assurance from the ChiefExecutive Officer (or equivalent) and the Chief Financial Officer (orequivalent) that the declaration provided in accordance with section 295A ofthe Corporations Act is founded on a sound system of risk management andinternal control and that the system is operating effectively in all materialrespects in relation to financial reporting risks.
Disclosure:
The Managing Director and Finance Director have provided a declaration to theBoard in accordance with section 295A of the Corporations Act and have assuredthe Board that such declaration is founded on a sound system of risk managementand internal control and that the system is operating effectively in allmaterial respects in relation to financial risk.
RECOMMENDATION 7.4:
Companies should provide the information indicated in the Guide to reporting on Principle 7.
Disclosure:
The Board has received the report from management under Recommendation 7.2.
The Board has received the assurance from the Managing Director and the Finance Director under Recommendation 7.3.
A summary of the Company's Risk Management Policy is available on the Company's website as noted above
PRINCIPLE 8 - REMUNERATE FAIRLY AND RESPONSIBLY
RECOMMENDATION 8.1:
The Board should establish a Remuneration Committee.
Notification of Departure:
The Company has not established a separate Remuneration Committee.
Explanation for Departure:
The full Board considers those matters and issues that would usually fall to aRemuneration Committee. Given the size and composition of the Board, the Boarddoes not consider that any efficiencies or other benefits would be gained byestablishing a separate Remuneration Committee. When the Board convenes as theRemuneration Committee it carries out those functions which are delegated inthe Company's Remuneration Committee Charter and minutes of the RemunerationCommittee are separately recorded. Further, in accordance with the CorporationsAct requirements, no directors participate in any deliberations regarding theirown remuneration or related issues.
RECOMMENDATION 8.2:
Companies should clearly distinguish the structure of non-executive directors' remuneration from that of executive directors and senior executives.
Disclosure:
Non-executive directors are remunerated at market rates for time, commitmentand responsibilities. Remuneration for non-executive directors is not linked tothe performance of the Company. Given the stage of development of the Companyand the financial restrictions placed on it, the Company may consider itappropriate, as an additional incentive or a reward, to issue unquoted optionsto non-executive directors, subject to obtaining the relevant approvals. Thispolicy is subject to annual review.Pay and rewards for executive directors and senior executives consists of abase salary and performance incentives. Long term performance incentives mayinclude options granted at the discretion of the Board and subject to obtainingthe relevant approvals.
RECOMMENDATION 8.3:
Companies should provide the information indicated in the Guide to reporting on Principle 8.
Disclosure:Details of remuneration, including the Company's policy on remuneration, arecontained in the "Remuneration Report" which forms of part of the Directors'Report.The full Board, in its capacity as the Remuneration Committee, held threemeetings during the Reporting Period. Messrs Cozijn and McCarthy attended allmeetings and Messrs Barnes and Bhandari did not attend the meetings. To assistthe Board to fulfil its function as the Remuneration Committee, it has adopteda Remuneration Committee Charter.
The explanation for departure set out under Recommendation 8.1 above explains how the functions of the Remuneration Committee are performed.
There are no termination or retirement benefits for non-executive directors (other than for superannuation).
The Company's Remuneration Committee Charter (available on the Company's website as noted above) includes a statement of the Company's policy on prohibiting transactions in associated products which limit the risk of participating in unvested entitlements under any equity based remuneration schemes.
FINANCIAL REPORT CONTENTS
Directors'
Report...........................25
Remuneration
Report...........................32
Auditor's Independence Declaration.................................40
Income
Statements.......................41
Balance
Sheets...........................42
Statements of Changes inEquity...........................43Statements of CashFlows............................44Notes to the FinancialStatements.......................45
Directors'
Declaration......................79
Independent AuditReport...........................80
Shareholder
Information......................82
DIRECTORS REPORTThe Directors present their report together with the financial report of OilexLtd (the "Company") and of the consolidated entity, being the Company and itscontrolled entities (the "Group") for the financial year ended 30 June 2009 andthe Auditors' report thereon.DIRECTORS
The names and details of the directors of the Company in office during the financial year and until the date of this report are detailed below. Directors were in office for this entire period unless otherwise stated.
Mr Max Dirk Jan Cozijn(Non-Executive Chairman)BCom ASA MAICDAge: 59Chairman since the Company listed on the Australian Securities Exchange ("ASX")in 2003. Mr Cozijn has over 30 years experience in the administration of listedmining and industrial companies. He is a Non-Executive Director of CarbonEnergy Limited, Executive Director of Magma Metals Limited and Chairman ofMalagasy Minerals Limited and is a Director of various private companies,having also previously been a Non-Executive Director of Kagara Zinc Ltd for 20years.
During the last three years Mr Cozijn has been a director of the following listed companies:
* Carbon Energy Limited (from September 1992 to current)
* Malagasy Minerals Limited (from September 2006 to current)
* Elkedra Diamonds NL (from April 2000 to November 2007)
Magma Metals Limited (from June 2005 to current)
Dr Bruce Henry McCarthy(Managing Director)BSc (Hons) PhD GeologyAge:59
Appointed Managing Director in February 2005, Dr McCarthy has over 30 years experience in the oil and gas exploration and production industry in geotechnical and management positions. Further details of Dr McCarthy's qualifications and experience can be found in the Executive Management section of the Directors' Report.
During the last three years Dr McCarthy has not been a director of any otherlisted companies.Mr Raymond George Barnes(Technical Director)BSc (Hons) GeologyAge: 58
Appointed as a Director in September 2005, Mr Barnes has over 37 years experience in the oil and gas exploration and production industry. Further details of Mr Barnes' qualifications and experience can be found in the Executive Management section of the Directors' Report.
During the last three years Mr Barnes has not been a director of any other listed companies.
Mr Ben Clube(Finance Director)BSc (Hons) Geology ACAAge:43Appointed as a Director in July 2009, Mr Clube has over 15 years experience inthe oil and gas exploration and production industry. Further details of MrClube's qualifications and experience can be found in the Executive Managementsection of the Directors' Report.
During the last three years Mr Clube has not been a director of any other listed companies.
Mr Laxmi Lal Bhandari
(Independent Non-Executive Director)
BSc Geology and MSc Geology
Age: 74
Mr Bhandari was appointed as a director in November 2006 and is based in NewDelhi, India. He trained as a geologist and worked with Oil and Natural GasCorporation Ltd ("ONGC"), the largest public sector corporation in the oil andgas sector in India, on many significant projects over 38 years including thediscovery and development of the Bombay High offshore fields. Mr Bhandari heldhigh level positions including Chairman and Managing Director of ONGC Videsh,the international exploration arm of ONGC, and Chairman of ONGC. On leavingONGC, Mr Bhandari became President of Tata Petrodyne, the oil and gassubsidiary of Tata Industries, a very large Indian industrial corporation. In2003 he took up the position of Managing Director of India Hydrocarbons Ltd andcontinued until June 2006.
During the last three years Mr Bhandari has not been a director of any other listed companies.
Mr Ronald Miller(Non-Executive Director)
MSc Engineering and BSc Ocean Engineering
Age:57
Mr Miller was appointed as a director in July 2009. A chartered engineer, MrMiller brings more than 30 years of experience in the international petroleumindustry including corporate governance, extensive background in leadingmulti-disciplinary upstream organisations and project developments, includingthe design and construction of oil and gas projects. During his career, MrMiller held a range of senior positions including with Mobil, Ampolex, Cloughand Hyundai Heavy Industries.
During the last three years Mr Miller has been a director of the following listed company:
Salinas Energy Limited (from March 2006 to current)
DIRECTORS' MEETINGS
During the year all members of the Board were members of the Audit, Remuneration and Nomination Committees. The number of meetings of Directors (including meetings of committees of Directors) and the number of meetings attended by each Director of the Company during the financial year are:
Board Audit Committee Remuneration Committee Nomination Committee Meetings Meetings Meetings Meetings A B A B A B A B M D J 10 10 2 2 3 3 2 2 Cozijn B H 10 9 2 1 3 3 2 2 McCarthy R G 10 9 2 2 3 0 2 2 Barnes L L 10 6 2 2 3 0 2 2 Bhandari
A - Number of meetings held during the time the Director held office during the year
B - Number of meetings attended
B Clube and R Miller were appointed as Directors in July 2009.
EXECUTIVE MANAGEMENTDr Bruce Henry McCarthy(Managing Director)BSc (Hons) PhD GeologyAge:59 Dr McCarthy has onshore and offshore experience gained in UK, Australia andIndia working for independent and large multinational companies. He has workedas an independent consultant and for Cairn Energy PLC (UK) responsible for theoperating subsidiary in India until 2002 when he returned to Australia. From1996 to 2000, Dr McCarthy was based in India with Command Petroleum India Ltd("Command") and with Cairn Energy India Pty Ltd ("Cairn") after Command mergedwith Cairn in 1997. Until 1995, he spent 14 years with Marathon Oil Corporationworking in the North Sea and based in the United Kingdom, working on the NorthWest Shelf of Western Australia and in the Timor Sea based out of Perth,Western Australia.Mr Raymond George Barnes(Technical Director)BSc (Hons) GeologyAge:58 Mr Barnes has worked in Europe, North and South America, South East Asia, theMiddle East and Australia with an outstanding record of finding and developingcommercial oil and gas discoveries in Australia and internationally. Recentappointments include Technical Director of Voyager Energy Limited from 2001until 2005 and Exploration Manager of Apache Energy based in Perth during avery aggressive exploration and development phase in the offshore CarnarvonBasin when over 40 discoveries were made. Prior to 1997, Mr Barnes held seniormanagement positions for Ampolex based in Denver, Colorado where he wasresponsible for the United States and South American operations following aperiod in Perth, Western Australia where he was responsible for North WestShelf and Timor Sea operations.Mr Ben Clube(Finance Director)BSc (Hons) Geology ACAAge:43Mr Clube joined Oilex in May 2008 and brings a depth of commercialinternational oil and gas expertise to the Oilex group, having spent the past15 years at BHP Billiton Petroleum in a variety of senior management roles,including Vice President of Finance and Planning in Houston, London and Perth.A Chartered Accountant, he holds a Bachelor of Science with Honours in Geologyfrom the University of Edinburgh and previously worked as Audit Manager atPricewaterhouseCoopers in London.
Mr Richard Steven Paces
(Chief Operating Officer) - Resigned May 2009
BSc Chemical Engineering
Age: 52
Mr Paces was appointed as Chief Operating Officer in May 2006 and has over 26years of experience in the oil and gas exploration and production industry. Hisbackground includes broad petroleum and reservoir engineering experience aswell as extensive operations and management experience. He has worked onshoreand offshore with both large and small multinational companies and has avariety of international experience. Prior to joining Oilex he was VicePresident and Country Manager in Equatorial Guinea, Central Africa where heworked on a major LNG expansion project for Marathon Oil Corporation.From 1998 to 2002, Mr Paces was based in India with Cairn as General Manager -Technical and subsequently as Country Manager in India. After leaving Cairn, hespent one year working for Reliance Industries in India as Chief OperatingOfficer of their oil and gas division.Mr Paul Senycia(Exploration Manager)MAppSc GeophysicsAge:52Mr Senycia was formerly Head of Evaluation at Woodside Energy Ltd responsiblefor worldwide exploration and new ventures, and was seconded from Woodside toPetroleum Development Oman (PDO) from 1997 to 2000. Mr Senycia has more than 25years of exploration experience in Australasia, North & West Africa, NorthAmerica and Europe.
Mr Kim Morrison
(Business Development Manager)
BSc (Hons) Geology and Geophysics
Age: 47
Mr Morrison joined Oilex in May 2008 as Business Development Manager withresponsibility for growing Oilex's portfolio of assets in the countries aroundthe Indian Ocean rim. He has more than 23 years of wide ranging experience inSoutheast and South Asia, North Africa, North America and Australasia invarious senior explorationist roles with Woodside Energy Ltd, ShellInternational and Marathon Oil Company.
Mr Jay Laurie
(General Counsel & Company Secretary)
BA LLB (Hons)
Age: 38
Mr Laurie has over 15 years experience in private practice and in-house legalroles. Following a number of years with a large commercial law firm, he hasheld in-house counsel roles in the Australian and international resourcessector over the last 9 years. Mr Laurie was Senior Counsel at Woodside EnergyLtd before joining Oilex in 2007 as General Counsel. Mr Laurie was appointed asCompany Secretary on 1 May 2009.
PRINCIPAL ACTIVITIES
The principal activities of the consolidated entity during the course of the financial year included:
* Exploration for oil and gas;
* Production and sale of oil.
Appraisal and development of oil and gas properties; and
There were no significant changes in the nature of these activities during the year.
OPERATING RESULTS
The loss after income tax of the consolidated entity for the year ended 30 June 2009 amounted to $49,798,971 (2008: loss of $7,976,691).
DIVIDENDS
No dividend was paid or declared during the year and the Directors do not recommend the payment of a dividend.
REVIEW OF OPERATIONS
A review of the operations of the Group during the financial year and the results of those operations are set out on pages 2 to 13 of this report.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Shareholders of the Company, at a General Meeting held 30 January 2009 approvedthe resolutions to raise $10.07 million through the issue of 19.8 millionordinary shares in Tranche 1 and 24 million ordinary shares in Tranche 2 at anissue price of $0.23 per share. The shares were issued predominantly toinstitutional, sophisticated and professional investors.
There have been no other significant changes in the state of affairs of the Group that occurred during the financial period not otherwise disclosed in this report or the financial statements.
SIGNIFICANT EVENTS AFTER BALANCE DATE
On 3 August 2009 Oilex (JPDA 06-103) Ltd, a wholly owned subsidiary of OilexLtd, entered into an Agreement to farm down 15% of the 25% interest it held inoffshore Block 06-103 Production Sharing Contract (PSC) in the Joint PetroleumDevelopment Area (JPDA) of the Timor Sea to Japan Energy E&P JPDA Pty Ltd(Japan Energy), a wholly owned subsidiary of Japan Energy Corporation. On 28August 2009 Oilex announced that all conditions precedent for the agreement tofarm down were satisfied, including the approval of the transfer of the 15%interest from Oilex to Japan Energy by the Autoridade Nacional do Petroleo andthe other Joint Venture participants. Consideration for Japan Energy's 15%participating interest includes a refund of part of past costs and funding forOilex's remaining 10% share of the costs for two initial commitment wells up toan agreed cap. Oilex will remain as operator of the PSC.
During August 2009 3,250,000 unlisted options were issued pursuant to the Employee Performance Rights Plan and 2,000,000 unlisted options were issued to Advisors.
LIKELY DEVELOPMENTSOther than the matters referred to elsewhere in this report, further disclosureas to likely developments in the operations of the Group and expected resultsof those operations would, in the opinion of the Board, be speculative and notin the best interests of the Group.
FINANCIAL POSITION
Capital Structure and Treasury Policy
At the date of this report, the Company had a total issued capital of 176,074,885 ordinary shares, 36,475,000 unlisted options exercisable at prices between $0.30 and $2.75 per share and 555,000 performance rights.
Cash management is reviewed on a regular basis by the Group's Finance Director and reported to the Board on a monthly basis to ensure the Group is able to meet its financial obligations as and when they fall due. Until sufficient operating cash flows are generated from its operations, the Group remains reliant on equity or debt funding to fund its exploration commitments and administration.
Liquidity and Funding
As at 30 June 2009 the Group had no borrowings or undrawn financing facilities.The Company continues to actively develop funding options in order that it canmeet its expenditure commitments (see Note 27) and its planned futurediscretionary expenditure.
ENVIRONMENTAL ISSUES
The Group's oil and gas exploration and production activities are subject toenvironmental regulation under the legislation of the respective states andcountries in which it operates. The majority of the Group's activities involvelow level disturbance associated with its exploration drilling programs. TheBoard actively monitors compliance with these regulations and as at the date ofthis report is not aware of any material breaches in respect of theseregulations.
DIRECTORS' INTERESTS
The relevant interest of each director in shares and options issued by the Company, as notified by the Directors to the ASX in accordance with S205G(1) of the Corporations Act 2001, at the date of this report is as follows.
Number of Ordinary Shares Number of Options Over Ordinary Shares Direct Indirect Direct Indirect M D J - 1,500,000 500,000 500,000 Cozijn L L - - - 300,000 Bhandari B H - 1,150,000 3,000,000 4,000,000 McCarthy R G 198,871 600,000 4,000,000 - Barnes B J M 52,174 - 1,500,000 - Clube R L - 2,424,436 - - Miller
SHARE OPTIONS AND PERFORMANCE RIGHTS
Options and Performance Rights Granted to Directors and Executives of the Company
During or since the end of the financial year, the Company granted options forno consideration over unissued ordinary shares in the Company, to the followingExecutives of the Company as part of their remuneration. No performance rightswere issued to Executives.
OPTIONS Number of Options Granted Exercise Price Expiry Date
Executives P G Senycia 1,000,000 $0.30 1 July 2014 J W R Laurie 750,000 $0.30 1 July 2014 J Lamberto 300,000 $0.30 1 July 2014 W K Morrison 300,000 $0.30 1 July 2014
During the financial year no options or performance rights were granted to Directors. Since the end of the financial year, subject to shareholder approval, the Company has agreed to issue 1,500,000 unlisted options to Mr Clube and 750,000 unlisted options to Mr Miller. These unlisted options will have an exercise price of $0.30 and a 5 year term.
Unissued Shares Under Options and Rights
At the date of this report unissued ordinary shares of the Company under option (with an exercise price) are:
Expiry Date Exercise Number of Expiry Date Exercise Number of Price Shares Price Shares 31 October $1.50 500,000 31 January $2.50 400,000 2009 2011 31 October $1.75 500,000 31 March 2011 $2.00 2,500,000 2009 14 December $0.80 4,250,000 31 March 2011 $2.25 300,000 2009 31 December $1.00 500,000 30 April 2011 $2.70 350,000 2009 31 December $1.50 3,000,000 30 June 2011 $1.75 900,000 2009 31 January $1.40 450,000 30 June 2011 $2.25 900,000 2010 31 January $2.00 400,000 30 June 2011 $0.30 2,000,000 2010 31 March 2010 $0.50 4,500,000 1 July 2011 $2.00 3,900,000 31 March 2010 $1.75 300,000 1 July 2011 $2.50 3,900,000 30 April 2010 $1.60 350,000 30 September $1.57 500,000 2011 30 April 2010 $2.10 350,000 31 March 2012 $2.75 300,000 31 July 2010 $0.90 775,000 30 June 2012 $2.75 900,000 31 October $2.00 500,000 1 July 2014 $0.30 3,250,000 2010 TOTAL 36,475,000
These options do not entitle the holder to participate in any share issue of the Company or any other body corporate.
At the date of this report unissued ordinary shares of the Company under option which are subject to performance rights are:
Expiry Date Exercise Number of Price Rights 1 July 2011 - 2006 - 40,000 rights 1 July 2012 - 2007 - 360,000 rights 1 July 2013 - 2008 - 155,000 rights 555,000 Vesting of the performance rights is subject to the Company meeting performanceconditions based on the share price growth of the Company compared to thegrowth in the Standard & Poors (S&P) / ASX 200 Energy Sector Index (code XEJ)and at the discretion of the Board of Oilex Ltd.
Performance rights are usually granted in three tranches with each tranche having a grant date, performance measurement date and expiry date. Performance rights will vest only if specified performance conditions are satisfied.
Under the performance condition, the Oilex (OEX) share price growth is compared to the growth of the Standard & Poors (S&P) / ASX 200 Energy Sector Index.
If the OEX share price growth is equal to or greater than 100% of the Index growth, the performance rights will vest.
If, over a three year measurement period, the OEX share price growth is equalto or greater than 150% of the Index, the outperformance rights will be grantedand vest immediately.
Shares Issued on Exercise of Options and Employee Performance Rights
During or since the end of the financial year, the Company has not issued any ordinary shares as a result of the exercise of options.
During or since the end of the financial year, the Company issued ordinary shares as a result of the exercise of Employee Performance Rights as follows (there were no amounts unpaid on the shares issued):
Number of Shares Amount Paid on Each Share 191,000 -
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Group paid a premium in respect of insurance cover for the directors andofficers of the Group. The Group has not included details of the nature of theliabilities covered or the amount of the premium paid in respect of thedirectors' liability and legal expense insurance contracts, as such disclosureis prohibited under the terms of the insurance contract.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of Court to bring proceedings on behalf of theCompany or intervene in any proceedings to which the Company is a party for thepurpose of taking responsibility on behalf of the Company for all or any partof those proceedings.
The Company was not a party to any such proceedings during the year.
NON-AUDIT SERVICES
The Company may decide to employ the Auditor on assignments additional to theirstatutory audit duties where the Auditor's expertise and experience with theGroup is important. The Board has considered their position and, in accordance with the advicereceived from the Audit Committee, is satisfied that the provision of thenon-audit services is compatible with the general standard of independence forauditors imposed by the Corporations Act 2001. The Directors are satisfied thatthe provision of non-audit services by the Auditor, as set out below, did notcompromise the auditor independence requirements of the Corporations Act 2001for the following reasons:
all non-audit services have been reviewed by the Audit Committee to ensure they do not impact the impartiality and objectivity of the Auditor; and
none of the services undermine the general principles relating to auditorindependence as set out in APES 110 Code of Ethics for Professional Accountants, including reviewing or auditing the Auditor's own work, acting in amanagement or decision-making capacity for the Company, acting as an advocatefor the Company or jointly sharing risks and rewards. Details of the amounts paid to the Auditor of the Company, KPMG Australia, andits related practices for audit and non-audit services provided during the yearare set out below. Consolidated 2009 2008 $ $ Audit Services Auditors of the Company Audit and review of financial reports (KPMG Australia) 117,879 49,743 Audit and review of financial reports (KPMG related practices) 68,815 63,543 186,694 113,286 Other Services Assurance and Other Services KPMG Australia 6,590 12,350 KPMG related practices 6,591 16,746 Taxation Services
Taxation compliance services (KPMG Australia) 132,370 104,591
Taxation compliance services (KPMG related practices) 12,201 32,426 157,752 166,113
REMUNERATION REPORT - AUDITED
PRINCIPLES OF COMPENSATION
Remuneration of directors and executives is referred to as compensation as defined in AASB 124.
Compensation levels for key management personnel of the Group are competitivelyset to attract and retain appropriately qualified and experienced directors andexecutives. The Remuneration Committee obtains independent advice on theappropriateness of compensation packages of both the Company and theconsolidated Group given trends in comparative companies both locally andinternationally and the objectives of the Company's compensation strategy.
The compensation structures explained below are designed to attract suitably qualified candidates, reward the achievement of strategic objectives and achieve the broader outcome of creation of value for shareholders. The compensation structures take into account:
* the capability and experience of the key management personnel;
* the Company's performance including:
* the Group's earnings;
* the growth in share price and delivering constant returns on shareholder
wealth; and
* the structure of each compensation package for key management personnel.
the ability of key management personnel to control the performance of the relevant segments;
Compensation packages include a mix of fixed compensation and long term performance-based incentives.
1.1 Fixed Compensation
Fixed compensation consists of base compensation as well as employercontributions to superannuation funds. Compensation levels are reviewedannually by the Remuneration Committee through a process that considersindividual, segment and overall performance of the Group. In addition,external independent consultants with specific oil and gas industry experienceprovide analysis and advice to ensure the directors' and senior executives'compensation is competitive in the market. Compensation for senior executivesis also reviewed on promotion.
1.2 Performance-Linked Compensation
Compensation of employees linked to performance of the Company includes long-term incentives designed to reward key management personnel for growth in shareholder wealth. The long term incentive plan ("LTI") is used to reward performance by granting options over ordinary shares of the Company. The exercise price of the options is set at a premium to the share price at the time they are granted. The change in share price is the key performance criteria for achieving a benefit under the plan as the value that may be generated on exercise of options is dependent upon an increase in the share price above the exercise price of the options.
The Company has established an Employee Performance Rights Plan that entitlesemployees to zero exercise price options. The performance rights are subject toa performance benchmark, based on Oilex's percentage share price growthcompared to the growth in the S&P/ASX 200 Energy Sector Index, which, subjectto the discretion of the Board of Oilex Ltd, must be satisfied before anyperformance rights can be exercised enabling the relevant employee to receiveshares in the Company.
The Employee Performance Rights Plan also governs the unlisted options issued to staff.
Given Oilex is an exploration company that is not yet generating profits or netoperating cash flows and as such has not paid any dividends, it is theperformance of the overall exploration program and ultimately share price thatlargely determines the success of Oilex's management team. The RemunerationCommittee therefore considers that fixed compensation combined with an LTIcomponent is achieving the Company's objectives to the benefit of employees andshareholders alike.1.3 Non-Executive DirectorsTotal compensation for all Non-Executive Directors is set based on advice fromexternal advisers with reference to fees paid to non-executive directors ofcomparable companies. For the year ended 30 June 2009 the Chairman'scompensation package was allocated between company secretarial services (ceased1 May 2009) and director's fees. Director's fees cover all main boardactivities. From 1 July 2009 Non-Executive Directors' base fees are $34,880 perannum and the compensation package for the Chairman is $87,200.
Payments to Director Related Parties during the financial year are disclosed in Note 29.
EMPLOYMENT CONTRACTS
The following table summarises the key terms and conditions of contracts between key executives and the Company:
Executive Position Contract Contract Resignation Unvested Termination Termination
Start Termination Notice Options and notice payment Date Date Required Performance required Rights on from the Resignation Company3 B H Managing 1 May 30 April 6 months Forfeited 6 months $500,000 plus McCarthy Director 2008 2011 GST within 30 1 days after the date of the notice of termination provided that, if required under the Corporations Act 2001 (Cth), all necessary approvals are obtained. In the event of a Material Change Event, a severance payment equivalent to 12 month fee may be payable. R G Technical 1 July 30 June 6 months Forfeited 6 months $500,000 plus Barnes 2 Director 2008 2011 GST within 30 days after the date of the notice of termination provided that, if required under the Corporations Act 2001 (Cth), all necessary approvals are obtained. In the event of a Material Change Event, a severance payment equivalent to 12 month fee may be payable. B J M Finance 5 May n/a 6 months Forfeited 6 months An amount Clube Director 2008 equal to the sum of the following: (1) the then current remuneration (including salary, superannuation and other benefits) payable for 12 months plus (2) the amount payable for the termination notice period (which, to avoid doubt, is payable even if employee and Company agree that employee should leave prior to the end of the notice period). The above termination payments are also payable if the employee gives notice following a Material Change Event. P G Exploration 30 n/a 3 months Forfeited 3 months An amount Senycia Manager October equal to the 2006 sum of the following: (1) the then current remuneration (including salary, superannuation and other benefits) payable for 12 months plus (2) the amount payable for the termination notice period (which, to avoid doubt, is payable even if employee and Company agree that employee should leave prior to the end of the notice period). The above termination payments are also payable if the employee gives notice following a Material Change Event. W K Business 1 May n/a 1 month Forfeited 1 month None Morrison Development 2008 Manager Executive Position Contract Contract Resignation Unvested Termination Termination Start Termination Notice Options and notice payment Date Date Required Performance required Rights on from the Resignation Company3 J W R General 12 March n/a 3 months Forfeited 3 months An amount Laurie Counsel & 2007 equal to the Company sum of the Secretary following: (1) the then current remuneration (including salary, superannuation and other benefits) payable for 12 months plus (2) the amount payable for the termination notice period (which, to avoid doubt, is payable even if employee and Company agree that employee should leave prior to the end of the notice period). The above termination payments are also payable if the employee gives notice following a Material Change Event. J. Chief 1 May n/a 1 month Forfeited 1 month None Lamberto Geophysicist 2007 1 On 1 May 2008 the Company entered into an agreement with Macuale ConsultancyPty Ltd for the provision of Dr McCarthy's services in the position of ManagingDirector of Oilex Ltd.2 On 1 July 2008 the Company entered into an agreement with Ad Valorem ResourceConsultants Pty Ltd for the provision of Mr Barnes' services in the position ofTechnical Director of Oilex Ltd for a period of three years.3 The Company may terminate the contract immediately if serious misconduct hasoccurred. In this case the termination payment is only the fixed remunerationearned until the date of termination. On termination with cause, any unvestedoptions and performance rights will immediately be forfeited.
DIRECTORS' AND EXECUTIVE OFFICERS' REMUNERATION (COMPANY AND CONSOLIDATED)
Details of the nature and amount of each major element of remuneration of eachDirector of the Company and each of the named Company Executives and relevantGroup Executives who received the highest remuneration are: Short -Term Share Based Payments Value of Value of Performance Post Other Termination Options as Rights as STI Non Employment Long / Proportion Proportion Salary Cash Monetary Superannuation Term Sign-on Performance of of & Fees Bonus Benefits Total Benefits Benefits Benefits Options Rights Total Renumer- Renumer- Year $ $ $ $ $ $ $ $ $ $ % % Non-ExecutiveDirectorsM D J Cozijn 2009 100,002 - - 100,002 9,000 - - 363 - 109,365 0% - Chairman 2008 100,000 - - 100,000 9,000 - - 192,478 - 301,478 64% -LL Bhandari 2009 40,001 - - 40,001 - - - 216 - 40,217 1% -Non-Executive 2008 40,000 - - 40,000 - - - 115,487 - 155,487 74% -DirectorExecutiveDirectorsB H McCarthy 2009 466,665 - - 466,665 - - - 2,908 - 469,573 1% -Managing Director 2008 387,368 - 10,795 398,163 86,082 - - 1,702,762 - 2,187,007 78% - R G Barnes 2009 360,000 - - 360,000 - - - 11,366 - 371,366 3% -Technical 2008 299,600 - - 299,600 - - - 1,228,957 - 1,528,557 80% -Director 2008 ExecutivesB J M Clube 2009 257,188 - - 257,188 33,829 - - 290,121 - 581,138 50% -Chief Finance 2008 21,538 - - 21,538 1,938 - - 52,842 - 76,318 # -andCommercialOfficer(Appointed 5 May 2008) 1
R S Paces 2009 506,948 - 164,681 671,629 16,829 - - 158,585 (67,446) 779,597 20% ##
Chief 2008 424,525 - 90,210 514,735 14,606 - - 435,483 63,287 1,028,111 42% 6% OperatingOfficer(Ceased 5 May 2009)
P G Senycia 2009 276,951 - - 276,951 79,426 - - 148,648 48,137 553,162 27% 9%
Exploration 2008 227,980 - - 227,980 69,024 - - 373,944 44,219 715,167 52% 6% Manager
W K Morrison 2009 285,000 - - 285,000 25,650 - - 266,103 - 576,753 46% -
Business 2008 47,500 - 47,500 4,275 - 40,000 84,584 - 176,359 # -DevelopmentManager(Appointed 1 May 2008) 2
J W R Laurie 2009 270,000 - - 270,000 24,300 - - 62,229 35,683 392,212 16% 9%
General 2008 226,251 - - 226,251 20,363 - - 135,703 65,830 448,147 30% 15%Counsel / CompanySecretaryJ Lamberto 2009 253,623 40,000 - 293,623 50,000 - - 90,341 44,669 478,633 19% 9%Chief 2008 229,361 - - 229,361 20,642 - - 298,326 40,019 588,348 51% 7%GeophysicistThe Directors of the Company may be Directors of the Company's subsidiaries. Noremuneration is received for directorships of subsidiaries. All key managementpersonnel are employed by the parent entity.
1 B J M Clube appointed Finance Director 1 July 2009
2 Relocation benefits paid on appointment
# Not calculated YE June 08 as the inclusion would distort for the period given commencement date of May 2008
## Not calculated YE June 09 as the inclusion would distort the period given the reversal of the share based payment expense in full following the resignation of the employee
Notes in Relation to the Table of Directors' and Executive's Remuneration
The fair value of the options is calculated at the date of grant using theBlack-Scholes Model. Because of the performance condition attaching to theperformance rights, a Monte Carlo Simulation is used to value the rights. Thefair value of the options and rights is allocated to each reporting periodevenly over the period from grant date to vesting date. The value disclosed isthe portion of the fair value of the options and performance rights allocatedto this financial year. In valuing the options and performance rights, marketconditions have been taken into account.
The following factors and assumptions were used in determining the fair value of 2009 options and performance rights on grant date:
Fair Value Price of Risk Free Grant Expiry Per Option/ Exercise Shares on Expected Interest DividendDate Date Right Price Grant Date Volatility Rate Yield OPTIONS Not Applicable for the year ended 30 June 2009 PERFORMANCE RIGHTS 11 July 1 July $0.98 - $1.10 60-80% 6.60% - 2008 2013 Equity Instruments
All options refer to options and rights over shares of the Company, which are exercisable on a one-for-one basis.
4.1 Options and Rights Over Equity Instruments Granted as Compensation
Details on options and rights over ordinary shares in the Company that were granted as compensation to key management personnel and executives during the financial year and details on options that were vested during the financial year are as follows:
Number Exercise Price of Expiry of Number of Fair Value of Options Date of Options Grant Options Options
Options
Granted Date Vested Granted Granted Granted OPTIONS Executive Directors B H - - 2,000,000 - - - McCarthy R G Barnes - - 2,500,000 - - - Non-Executive Directors M D J - - 250,000 - - - Cozijn L L - - 150,000 - - - Bhandari Executives B J M - - 500,000 - - - Clube R S Paces - - 775,000 - - - P G - - 400,000 - - - Senycia W K - - 400,000 - - - Morrison J W R - - 150,000 - - - Laurie J Lamberto - - 350,000 - - - Number of Expiry Rights Number of Fair Value Date of Grant Rights Per Rights at Exercise Price of Rights Granted Date Vested Grant Date Rights Granted Granted PERFORMANCE RIGHTS Executives P G 50,000 11 - $0.98 - 1 July Senycia July 2013 2008
4.2 Options and Rights Over Equity Instruments Granted as Compensation granted since year end:
Details of options over ordinary shares in the Company that were granted as compensation to key management personnel and executives since the end of the financial year are as follows:
Exercise Price of Number of Number of Fair Value Options Expiry Date Options Grant Options of Options of Options Granted Date Vested Granted Granted Granted Executives B J M - - - - - - Clube P G 1,000,000 17 - $185,612 $0.30 1 July 2014 Senycia August 2009 W K 300,000 24 - $53,926 $0.30 1 July 2014 Morrison August 2009 J W R 750,000 17 - $139,209 $0.30 1 July 2014 Laurie August 2009 J Lamberto 300,000 17 - $55,684 $0.30 1 July 2014 August 2009 With the exception of options that have vested, which can be retained by theemployee irrespective of termination or resignation, all options expire on theearlier of their expiry date or termination of the individual's employment. Theoptions vest over periods of one to three years of continuous service and areexercisable at any time between the vesting date and the expiry date. Furtherdetails, including grant dates and exercise dates regarding options granted tokey management personnel are in Note 20 to the financial statements.
No options or performance rights were issued to Directors during the financial year.
Since the end of the financial year, no options or performance rights have beengranted to Directors. The Company, subject to shareholder approval has agreedto issue 1,500,000 options to Mr Clube and 750,000 options to Mr Miller at anexercise price of $0.30 and a 5 year term.
4.3 Modification of Terms of Equity-Settled Share-Based Payment Transactions
No terms of equity-settled share-based payment transactions (including options granted as compensation to key management personnel) have been altered or modified by the issuing entity during the financial year.
4.4 Exercise of Options Granted as Compensation
During the financial year no shares were issued on the exercise of options previously granted as compensation.
During the financial year, the following shares were issued on the exercise of performance rights previously granted as compensation.
Number of Amount paid per shares share Executives R S Paces 50,000 -
4.5 Analysis of Options and Performance Rights Granted as Compensation
Details of vesting profiles of the options and performance rights granted asremuneration to each key management person and each of the five named Companyexecutives and relevant Group executives is detailed below: Options and Performance Rights Granted Financial % Vested Forfeited Years in Which Grant Number Date in Year in Year Vests Executive Directors B H 4,000,000 22 November 50% - (a) McCarthy 2007 B H 6,000,000 14 December - 50% (b) McCarthy 2005 R G 3,000,000 22 November 50% - (a) Barnes 2007 R G 3,000,000 14 December - 67% (b) Barnes 2005 Non-Executive Directors M D J 500,000 22 November 50% - (a) Cozijn 2007 L L 300,000 22 November 50% - (a) Bhandari 2007 Executives B J M 1,500,000 1 May 2008 33% - (b) Clube P G 50,000 11 July - - (c) Senycia 2008 P G 1,200,000 18 January 33% - (b) Senycia 2007
4.5 Analysis of Options and Performance Rights Granted as Compensation
(continued) Executives (continued) P G 95,000 11 January - - (d) Senycia 2007 W K 1,200,000 17 March 33% - (b) Morrison 2008 J W R 450,000 17 March 33% - (b) Laurie 2008 J W R 80,000 3 August - - (d) Laurie 2007 J 1,050,000 1 May 2007 33% - (b) Lamberto J 100,000 8 August - - (d) Lamberto 2007
No options or performance rights were granted to non-executive or executive directors during the financial year.
The options issued may vest and can be exercised as one half immediately and in full during the year after grant date. All options that have vested can be retained by the Director upon resignation or termination of employment.
The options issued may vest and can be exercised as one third one year fromgrant date, two thirds two years after grant date and in full three years fromgrant date. All options that have vested can be retained by the employee uponresignation or termination of employment.
The performance rights are available in full as at 1 July 2009, subject to satisfying performance conditions. Such performance conditions will be re-measured as at 30 June 2011.The maximum value of performance rights yet to vest is not determinable as it depends on satisfying the future performance conditions.
The performance rights are available in three tranches over three years, subject to satisfying performance conditions.
4.6 Analysis of Movements in Options
The movement during the financial year, by value, of options over ordinary shares in the Company held by each key management person and each of the five named Company executives and relevant Group executives is detailed below:
Value of Options $ Granted in Year (a) Exercised in Year (b) Forfeited in Year (c) Executive Directors B H McCarthy - - 406,275 R G Barnes - - 276,807 Executives B J M Clube - - - P G Senycia - - - W K Morrison - - - J W R Laurie - - - J Lamberto - - -
The value of options granted in the year is the fair value of the options calculated at grant date using the Black-Scholes Model. The total value of the options granted is included in the table above. This amount is allocated to remuneration over the vesting period.
The value of options exercised during the year is calculated as the market price of shares of the Company on the ASX as at close of trading on the date the options were exercised after deducting the price paid to exercise the option.
The value of options forfeited during the year represents the benefit foregone and is calculated at the date the options were forfeited using the Black-Scholes Model.
There were no movements in options during the financial year for any other Director or Executive other than those disclosed above.
4.7 Analysis of Movements in Performance Rights
The movement during the financial year, by value, of performance rights overordinary shares in the Company held by each key management person and each ofthe five named Company executives and relevant Group executives is detailedbelow: Value of Performance Rights $ Granted in Year (a) Exercised in Year (b) Forfeited in
Year (c) Executives B J M Clube - - - R S Paces - 70,000 113,500 P G Senycia 49,000 - - J W R Laurie - - - J Lamberto - - -
The value of rights granted in the year is the fair value of the rights calculated at grant date using a Monte Carlo Simulation. The total value of the rights granted is included in the table above. This amount is allocated to remuneration over the vesting period.
The value of rights exercised during the year is calculated as the market price of shares of the Company on the ASX as at close of trading on the date the rights were exercised after deducting the price paid to exercise the option.
The value of performance rights forfeited during the year represents the benefit foregone and is calculated at the date the rights were forfeited using a Monte Carlo simulation.
AUDITOR'S INDEPENDENCE DECLARATION
The lead Auditor's Independence Declaration for the year ended 30 June 2009 has been received and can be found on page40.
......................................... ............................................
Mr M.D.J. Cozijn Dr B.H. McCarthy
Chairman Managing Director
Signed in accordance with a resolution of the Directors
West PerthWestern Australia21 September 2009
Lead Auditor's Independence Declaration under Section 307C of the Corporations Act 2001
To: the directors of Oilex Ltd
I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended 30 June 2009there have been:
no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation tothe audit. KPMG Brent SteedmanPartnerPerth, WA21 September 2009
KPMG, an Australian partnership, is part of the KPMG International network of indepenent member firms affiliated with KPMG International, is a Swiss cooperative.
INCOME STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
Consolidated Company 2009 2008 2009 2008 Note $ $ $ $ Continuing Operations Revenue 6(a) 1,974,960 572,281 1,059,448 49,552 Other (expense)/ income 6(b) (4,423,270) 2,868,260 (4,423,270) 2,868,260 Employee benefits expense 6(c) (1,378,667) (1,236,430) (1,378,927) (1,192,631) Depreciation expense (558,883) (421,726) (435,690) (346,795) Exploration expenditure (14,527,850) (3,943,942) (3,093,642) (1,247,263) Impairment of exploration and evaluation expenditure (24,878,979) - (4,874,067) - Production costs (1,096,605) (568,603) (448,157) (191,744) Well abandonment provision 18 (80,248) (223,017) - (133,810) Impairment of loans to subsidiaries - - (32,130,442) (3,474,187) Administration expense (2,421,559) (2,758,438) (2,312,704) (2,645,161) Share based payments 20 (1,333,603) (5,562,488) (1,311,999) (5,441,320) Other expenses (620,836) - (337,656) - Results from operating activities (49,345,540) (11,274,103) (49,687,106) (11,755,099) Finance income 573,581 3,275,136 2,567,764 4,580,732 Finance costs (825) (695,485) (825) (695,485) Foreign exchange gain / (loss) 86,177 (394,603) 6,757,884 (4,543,767) Net finance income/ (expense) 658,933 2,185,048 9,324,823 (658,520) Loss before income tax (48,686,607) (9,089,055) (40,362,283) (12,413,619) Deferred tax (expense)/income 7 (1,112,364) 1,112,364 (1,112,364) 1,112,364 Loss for the period (49,798,971) (7,976,691) (41,474,647) (11,301,255) Earnings per share Basic loss per share (cents per share) 8 (32.8) (6.1) Diluted loss per share (cents per share) 8 (32.8) (6.1)
The income statements are to be read in conjunction with the notes to the financial statements.
BALANCE SHEETS AS AT 30 JUNE 2009
Consolidated Company 2009 2008 2009 2008 Note $ $ $ $ Current assets Cash and cash 9 10,506,379 33,487,053 10,019,593 30,409,656 equivalents Trade and other 10 1,384,981 4,202,996 1,462,364 4,711,711 receivables Prepayments 11 161,703 202,161 118,325 148,721 Inventories 12 1,892,203 2,887,528 919,121 1,322,869 Total current assets 13,945,266 40,779,738 12,519,403 36,592,957 Non-current assets Trade and other 10 - - 19,212,483 21,025,380 receivables Exploration and 13 31,261,621 31,464,923 10,016,126 8,265,450 evaluation Property, plant and 14 884,614 1,249,171 672,808 1,006,974 equipment Investments 15 - 9,850,219 8,542 9,858,761 Total non-current 32,146,235 42,564,313 29,909,959 40,156,565 assets Total assets 46,091,501 83,344,051 42,429,362 76,749,522 Current liabilities Trade and other 16 3,795,494 8,608,338 1,669,400 2,811,011 payables Employee benefits 17 167,453 193,011 148,478 149,212 Total current 3,962,947 8,801,349 1,817,878 2,960,223 liabilities Non-current liabilities Provisions 18 2,829,930 1,719,838 1,442,877 966,435 Total non-current 2,829,930 1,719,838 1,442,877 966,435 liabilities Total liabilities 6,792,877 10,521,187 3,260,755 3,926,658 Net assets 39,298,624 72,822,864 39,168,607 72,822,864 Equity Issued capital 19 110,734,909 101,368,396 110,734,909 101,368,396 Reserves 19 18,330,351 13,037,876 13,327,948 16,489,814 Accumulated losses (89,766,636) (41,583,408) (84,894,250) (45,035,346) Total equity 39,298,624 72,822,864 39,168,607 72,822,864
The balance sheets are to be read in conjunction with the notes to the financial statements.
STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2009 Asset Issued Option Revaluation Foreign Currency Accumulated Capital Reserve Reserve Translation Reserve Losses Total Equity $ $ $ $ $ $ Consolidated Balance at 1 July 2007 100,690,896 7,753,044 330,053 513,379 (33,820,895) 75,466,477 Total - - - - (7,976,691) (7,976,691) recognised income and expense Total income and expense recognised directly in equity - - 2,265,463 (3,172,373) - (906,910) Shares issued - - - - - - Capital - - - - - - raising costs Shares issued 677,500 - - - - 677,500 on exercise of options Transfer on - (214,178) - - 214,178 - exercise of options Equity-settled share-based payment transactions - 5,562,488 - - - 5,562,488 Balance at 30 June 2008 101,368,396 13,101,354 2,595,516 (2,658,994) (41,583,408) 72,822,864 Balance at 1 July 2008 101,368,396 13,101,354 2,595,516 (2,658,994) (41,583,408) 72,822,864 Total - - (2,595,516) 8,170,131 (49,798,971) (44,224,356) recognised income and expense Shares issued 10,074,000 - - - - 10,074,000 Capital (707,487) - - - - (707,487) raising costs Transfer on exercise of options or performance rights - (239,400) - - 239,400 - Transfers on forfeit of options - (1,376,343) - - 1,376,343 - Equity-settled share-based payment transactions - 1,333,603 - -
- 1,333,603 Balance at 30 June 2009 110,734,909 12,819,214 - 5,511,137 (89,766,636) 39,298,624 Asset Foreign Currency Issued Option Revaluation Translation Accumulated Capital Reserve Reserve Reserve
Losses Total Equity Company $ $ $ $ $ $ Balance at 1
July 2007 100,690,896 7,753,044 330,053 320,047
(33,948,269) 75,145,771 Total - - - - (11,301,255) (11,301,255) recognised income and expense Total income and expense recognised directly in equity - - 2,265,463 472,897 - 2,738,360 Shares issued - - - - - - Capital - - - - - - raising costs Shares issued 677,500 - - - - 677,500 on exercise of options Transfer on - (214,178) - - 214,178 - exercise of options Equity-settled share-based payment transactions - 5,562,488 - - - 5,562,488 Balance at 30
June 2008 101,368,396 13,101,354 2,595,516 792,944
(45,035,346) 72,822,864 Balance at 1
July 2008 101,368,396 13,101,354 2,595,516 792,944
(45,035,346) 72,822,864 Total - - (2,595,516) (284,210) (41,474,647) (44,354,373) recognised income and expense Shares issued 10,074,000 - - - - 10,074,000 Capital (707,487) - - - - (707,487) raising costs Transfer on exercise of options or performance rights - (239,400) - - 239,400 - Transfers on forfeit of options - (1,376,343) - - 1,376,343 - Equity-settled share-based payment transactions - 1,333,603 - -
- 1,333,603 Balance at 30 June 2009 110,734,909 12,819,214 - 508,734 (84,894,250) 39,168,607
The statements of changes in equity are to be read in conjunction with the notes to the financial statements.
STATEMENT OF CASH FLOW FOR THE YEAR ENDED 30 JUNE 2009 Consolidated Company 2009 2008 2009 2008 Note $ $ $ $ Cash flows from operating activities Cash receipts from 2,055,801 - 792,835 - customers Payments to (4,846,209) (4,251,366) (4,027,398) (3,775,728) suppliers and employees Interest received 801,791 3,044,667 799,915 4,350,264 Interest paid - (695,485) - (695,485) Net cash used in 21 (1,988,617) (1,902,184) (2,434,648) (120,949) operating activities Cash flows from investing activities Advances from/(to) 1,774,613 (1,859,211) 1,750,735 (1,040,719) joint ventures Proceeds from sale 5,489 184,344 5,489 184,344 of assets Proceeds from sale 1,825,067 - 1,825,067 - of investment Acquisition of (4,128,333) - - - petroleum interests Payments for (28,950,955) (19,678,692) (8,938,080) (9,587,188) exploration and evaluation Acquisition of (192,378) (1,067,948) (140,836) (852,973) property, plant and equipment Net cash used in (29,666,497) (22,421,507) (5,497,625) (11,296,536)investing activities Cash flows from financing activities Proceeds from issue 10,074,000 - 10,074,000 - of share capital Proceeds from - 677,500 - 677,500 exercise of options Repayment of - (10,000,000) - (10,000,000)borrowings Payment for share (707,488) - (707,488) - issue costs Advances to - - (21,132,230) (14,843,660)subsidiaries Net cash from/(used 9,366,512 (9,322,500) (11,765,718) (24,166,160)in) financing activities Net decrease in cash (22,288,602) (33,646,191) (19,697,991) (35,583,645)held Cash and cash 33,487,053 66,993,383 30,409,656 66,264,305 equivalents at 1 July Effect of exchange (692,072) 139,861 (692,072) (271,004) rate fluctuations on cash held Cash and cash 9 10,506,379 33,487,053 10,019,593 30,409,656 equivalents at 30 June
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
NOTE 1 - REPORTINGENTITY Oilex Ltd (the "Company") is a company domiciled in Australia. The consolidatedfinancial statements of the Company as at and for the year ended 30 June 2009comprise the Company and its subsidiaries (together referred to as the"Group"). Oilex Ltd is a limited liability company incorporated in Australiawhose shares are publicly traded on the Australian Securities Exchange ("ASX")and on the AIM Market of the London Stock Exchange. The Group is primarilyinvolved in the exploration, evaluation, development and production ofhydrocarbons.NOTE 2 - BASIS OF PREPARATIONStatement of ComplianceThe financial report is a general purpose financial report which has beenprepared in accordance with Australian Accounting Standards ("AASBs")(including Australian Interpretations) adopted by the Australian AccountingStandards Board ("AASB") and the Corporations Act 2001. The consolidatedfinancial report of the Group and the financial report of the Company complywith International Financial Reporting Standards (IFRSs) and interpretationsadopted by the International Accounting Standards Board (IASB).
The financial statements were approved by the Board of Directors on 21 September 2009.
Basis of Measurement
The consolidated financial statements have been prepared on the historical cost basis except for the following:
* financial instruments at fair value through profit or loss are measured at
fair value;
* liabilities for cash-settled share-based payment arrangements are measured
at fair value.
available-for-sale financial assets are measured at fair value; and
Functional and Presentation Currency
The consolidated financial statements are presented in Australian dollars, which is the Group's and Company's functional currency. The functional currency of the majority of the Company's subsidiaries is United States dollars.
Use of Estimates and Judgements
The preparation of financial statements requires management to make judgements,estimates and assumptions that affect the application of accounting policiesand the reported amounts of assets, liabilities, income and expenses. Actualresults may differ from these estimates. Estimates and underlying assumptionsare reviewed on an ongoing basis. Revisions to accounting estimates arerecognised in the period in which the estimate is revised and in any futureperiods affected.In the process of applying the Group's accounting policies, management has madethe following judgements, apart from those involving estimates, which have themost significant effect on the amount recognised in the financial statements.
Exploration and Evaluation Assets
The Group's accounting policy for exploration and evaluation expenditure is setout in Note 3(e). The application of this policy necessarily requiresmanagement to make certain estimates and assumptions as to future events andcircumstances, including, in particular, the assessment of whether economicquantities of reserves have been found. Any such estimates and assumptions maychange as new information becomes available. If, after having capitalisedexpenditure under this policy, it is determined that the expenditure isunlikely to be recovered by future exploitation or sale, then the relevantcapitalised amount will be written off to the income statement.
Rehabilitation Obligations
The Group estimates the future removal costs of onshore oil and gas productionfacilities, wells and pipeline at the time of installation of the assets. Inmost instances, removal of assets occurs many years into the future. Thisrequires judgemental assumptions regarding removal date, future environmentallegislation, the extent of reclamation activities required, the engineeringmethodology for estimating cost, future removal technologies in determining theremoval cost, and asset specific discount rates to determine the present valueof these cash flows. For more detail regarding the policy in respect ofprovision for rehabilitation refer to Note 3(k).
Going Concern
The Directors believe that it is appropriate to prepare the financialstatements on a going concern basis. As at 30 June 2009, the Group's currentassets exceeded current liabilities by $9,982,319 and the Group has cash andcash equivalents of $10,506,379. The Directors are satisfied that the value ofthe Group's assets can be realised through further evaluation, development andproduction or alternatively through asset sale. The Directors are alsosatisfied that the Company has adequate plans in place in order that itsfunding requirements in the foreseeable future can be met and that the Companyis progressing with these plans accordingly. The Group's cash flow forecastindicates that the financing plans will ensure the Group will have sufficientcash resources to fulfil all of its operational activities in the future,including the Group's commitments set out in Note 27. The Directors regularlymonitor funding requirements along with the Group's asset portfolio,operational activities and in light of altering market conditions to ensurethey are appropriately balanced by either revising the Company's financingplans, making changes to its operational activities, realising assets orraising capital as required. Such changes may possibly include the realisationof assets or settling of liabilities other than in the normal course ofbusiness at amounts that may be different to those stated in the financialreport.
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements, and have been applied consistently by Group entities.
Basis of Consolidation
Subsidiaries
Subsidiaries are entities controlled by the Company. Control exists when theCompany has the power, directly or indirectly, to govern the financial andoperating policies of an entity so as to obtain benefits from its activities.In assessing control, potential voting rights that presently are exercisable orconvertible are taken into account. The financial statements of subsidiariesare included in the consolidated financial statements from the date thatcontrol commences until the date that control ceases. The accounting policiesof subsidiaries have been changed when necessary to align them with thepolicies adopted by the Company.
In the Company's financial statements, investments in subsidiaries are carried at cost, subject to impairment testing.
Joint Ventures
Joint ventures are those entities over whose activities the Group has joint control, established by contractual agreement.
Jointly Controlled Operations and Assets
The interest of the Group in unincorporated joint ventures and jointly controlled assets are brought to account by recognising, in its financial statements, the assets it controls, the liabilities that it incurs, the expenses it incurs and the share of income that it earns from the sale of goods or services by the joint venture.
Transactions Eliminated on Consolidation
Intragroup balances and any unrealised gains and losses or income and expenses arising from intragroup transactions, are eliminated in preparing the consolidated financial statements.
Foreign Currency
Foreign Currency Transactions
Transactions in foreign currencies are translated to the respective functionalcurrencies of Group entities at exchange rates at the dates of thetransactions. Monetary assets and liabilities denominated in foreign currenciesat the reporting date are retranslated to the functional currency at theforeign exchange rate at that date. The foreign currency gain or loss onmonetary items is the difference between amortised cost in the functionalcurrency at the beginning of the period, adjusted for effective interest andpayments during the period, and the amortised cost in foreign currencytranslated at the exchange rate at the end of the period. Non-monetary assetsand liabilities denominated in foreign currencies that are measured at fairvalue are retranslated to the functional currency at the exchange rate at thedate that the fair value was determined. Foreign currency differences arisingon retranslation are recognised in profit or loss.
Foreign Operations
The assets and liabilities of foreign operations are translated to Australiandollars at exchange rates at the reporting date. The income and expenses offoreign operations are translated to Australian dollars at exchange rates atthe dates of the transactions.Foreign currency differences are recognised in the foreign currency translationreserve (FCTR). Foreign exchange gains and losses arising from a monetary itemreceivable from a foreign operation, the settlement of which is neither plannednor likely in the foreseeable future, are considered to form part of a netinvestment in a foreign operation and are recognised directly in equity in theFCTR in the financial statements of the Group.Financial Instruments Share CapitalOrdinary Shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity.
Non-Derivative Financial Instruments
Non-derivative financial instruments comprise investments in equity and debtsecurities, trade and other receivables, cash and cash equivalents, loans andborrowings and trade and other payables.
Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs, except as described below. Subsequent to initial recognition non-derivative financial instruments are measured as described below.
A financial instrument is recognised if the Group becomes a party to thecontractual provisions of the instrument. Financial assets are derecognised ifthe Group's contractual rights to the cash flows from the financial assetsexpire or if the Group transfers the financial asset to another party withoutretaining control or substantially all risks and rewards of the asset. Regularway purchases and sales of financial assets are accounted for at trade date,i.e. the date that the Group commits itself to purchase or sell the asset.Financial liabilities are derecognised if the Group's obligations specified inthe contract expire or are discharged or cancelled.
Available for Sale Financial Assets
The Group's investments in equity securities and certain debt securities areclassified as available-for-sale financial assets. Subsequent to initialrecognition, they are measured at fair value and changes therein, other thanimpairment losses (see Note 3(i)(i)), and foreign exchange gains and losses onavailable-for-sale monetary items (see Note 3(b)(i)), are recognised as aseparate component of equity. When an investment is derecognised, thecumulative gain or loss in equity is transferred to profit or loss.
Investments at Fair Value through Profit and Loss
An instrument is classified as at fair value through profit and loss if it isheld for trading or is designated as such upon initial recognition. Financialinstruments are designated at fair value through profit or loss if the Groupmanages such investments and makes purchase and sale decisions based on theirfair value in accordance with the Group's documented risk management orinvestment strategy. Upon initial recognition, attributable transaction costsare recognised in profit or loss when incurred. Financial instruments at fairvalue through profit or loss are measured at fair value, and changes thereinare recognised in profit or loss.
Other
Other non-derivative financial instruments are measured at amortised cost using the effective interest method, less any impairment losses.
Impairment
At each reporting date, the Group assesses whether there is objective evidencethat a financial instrument has been impaired. In the case ofavailable-for-sale financial instruments, a prolonged decline in the value ofthe instrument is considered to determine whether impairment has arisen.Impairment losses are recognised in the income statement.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash balances, call deposits, cash in transit and short-term deposits with an original maturity of three months or less.
Exploration and Evaluation Expenditure
Exploration and evaluation expenditure in respect of each area of interest is accounted for under the successful efforts method.
Exploration licence acquisition costs relating to established oil and gas exploration areas are capitalised.
The costs of drilling exploration wells are initially capitalised pending theresults of the well. Costs are expensed where the well does not result in thesuccessful discovery of potentially economically recoverable reserves.
All other exploration and evaluation expenditure, including general administration costs, geological and geophysical costs and new venture expenditure is expensed as incurred, except where:
The expenditure relates to an exploration discovery for which, at balance date, an assessment of the existence or otherwise of economically recoverable reserves is not yet complete; or
The expenditure relates to an area of interest under which it is expected that the expenditure will be recouped through successful development and exploitation or by sale.
When an oil or gas field has been approved for commercial development, the accumulated exploration and evaluation costs are transferred to development expenditure. Amortisation of capitalised costs is not charged on revenues earned from production testing.
Development Expenditure
Development expenditure includes past exploration and evaluation costs,pre-production development costs, development drilling, development studies andother subsurface expenditure pertaining to that area of interest. Costs relatedto surface plant and equipment and any associated land and buildings areaccounted for as property, plant and equipment.The definition of an area of interest for development expenditure is narrowedfrom the exploration permit for exploration and evaluation expenditure to theindividual geological area where the presence of an oil or natural gas fieldexists, and in most cases will comprise an individual oil or gas field.
Development expenditure is reviewed for impairment at each reporting date where there is an indication that the individual geological area may be impaired (refer Note 3(i)(ii)).
Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until production commences. When production commences, carried forward development costs are amortised on a units of production basis over the life of economically recoverable reserves.
Property, Plant and Equipment
Recognition and Measurement
Items of property, plant and equipment are measured at cost less accumulateddepreciation and accumulated impairment losses. The cost of self-constructedassets includes the cost of materials, direct labour, the initial estimate,where relevant, of the costs of dismantling and removing the items andrestoring the site on which they are located and an appropriate proportion ofoverheads.Gains and losses on disposal of an item of property, plant and equipment aredetermined by comparing the proceeds from disposal with the carrying amount ofproperty, plant and equipment and are recognised net within 'other income' inprofit or loss.Subsequent CostsThe cost of replacing part of an item of property, plant and equipment isrecognised in the carrying amount of the item if it is probable that the futureeconomic benefits embodied within the part will flow to the Group and its costcan be measured reliably. All other costs are recognised in the incomestatement as an expense as incurred.
Depreciation
Depreciation is recognised in profit or loss using the reducing balance methodover the estimated useful life of the assets, with the exception of softwarewhich is depreciated at 40% prime cost. The estimated useful lives in thecurrent and comparative periods are as follows: * Motor vehicles 2 to 7 years * Office furniture 2 to 10 years
Plant and equipment 2 to 7 years
Depreciation methods, useful lives and residual values are reviewed and adjusted if appropriate, at each financial year end.
Inventories
Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
Impairment
Financial Assets
A financial asset is assessed at each reporting date to determine whether thereis any objective evidence that it is impaired. A financial asset is consideredto be impaired if objective evidence indicates that one or more events have hada negative effect on the estimated future cash flows of that asset. Animpairment loss in respect of a financial asset measured at amortised cost iscalculated as the difference between its carrying amount, and the present valueof the estimated future cash flows discounted at the original effectiveinterest rate. An impairment loss in respect of an available-for-sale financialasset is calculated by reference to its current fair value. Individuallysignificant financial assets are tested for impairment on an individual basis.The remaining financial assets are assessed collectively in groups that sharesimilar credit risk characteristics.
All impairment losses are recognised in profit or loss. Any cumulative loss in respect of an available-for-sale financial asset recognised previously in equity is transferred to profit or loss.
An impairment loss is reversed if the reversal can be related objectively to anevent occurring after the impairment loss was recognised. For financial assetsmeasured at amortised cost and available-for-sale financial assets that aredebt securities, the reversal is recognised in profit or loss. Foravailable-for-sale financial assets that are equity securities, the reversal isrecognised directly in equity.
Non- Financial Assets
The carrying amounts of the Group's non-financial assets, other thaninventories and deferred tax, are reviewed at each reporting date to determinewhether there is any indication of impairment. If any such indication existsthen the asset's recoverable amount is estimated.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that are largely independent from other assets and groups. Impairment losses are recognised in profit or loss.
The recoverable amount of an asset or cash-generating unit is the greater ofits value in use and its fair value less costs to sell. In assessing value inuse, the estimated future cash flows are discounted to their present valueusing a pre-tax discount rate that reflects current market assessments of thetime value of money and the risks specific to the asset.Impairment losses recognised in prior periods are assessed at each reportingdate for any indications that the loss has decreased or no longer exists. Animpairment loss is reversed if there has been a change in the estimate used todetermine the recoverable amount. An impairment loss is reversed only to theextent that the asset's carrying amount does not exceed the carrying amountthat would have been determined, net of depreciation or amortisation, if noimpairment loss had been recognised.
Employee Benefits
Wages, Salaries, Annual Leave and Sick Leave
Liabilities for employee benefits for wages, salaries, annual leave and sickleave that are expected to be settled within 12 months of the reporting daterepresent present obligations resulting from employee services provided toreporting date. The liabilities are calculated at undiscounted amounts based onremuneration wage and salary rates that the Group expects to pay as at thereporting date.
Long-term Service Benefits
The Group's net obligation in respect of long-term service benefits is theamount of future benefit that employees have earned in return for their servicein the current and prior periods. The obligation is calculated using expectedfuture increases in wage and salary rates including related on-costs andexpected settlement dates, and is discounted using the rates attached to theCommonwealth Government Bonds at the balance sheet date which have maturitydates approximating to the terms of the Group's obligations.
Share-Based Payment Transactions
Employee options allow employees to acquire shares of the Company. The fairvalue of options granted is recognised as an employee expense with acorresponding increase in equity. The fair value is measured at grant date andspread over the period during which the employees become unconditionallyentitled to the options. Options are also provided as part of consideration forservices by financiers and advisers. The fair value of the options granted ismeasured using the Black-Scholes Model, taking into account the terms andconditions upon which the options were granted. The amount recognised as anexpense is adjusted to reflect the actual number of share options that vestexcept where forfeiture is only due to share prices not achieving the thresholdfor vesting.Performance rights are also granted to employees. The fair value of performancerights granted is recognised as an employee expense with a correspondingincrease in equity. The fair value is measured at grant date and allocated overthe period during which the employees become unconditionally entitled to theperformance rights. The fair value of the performance rights is determinedusing a Monte Carlo Simulation taking into account the terms of the performancecondition under which the rights are granted.
When the Group grants options and performance rights over its shares to employees of subsidiaries, the fair value at grant date is recognised as an increase in the investments in subsidiaries, with a corresponding increase in equity over the vesting period of the grant.
Provisions
Provisions are recognised when the Group has a present obligation (legal orconstructive) as a result of a past event, when it is probable that an outflowof resources embodying economic benefits will be required to settle theobligation and when a reliable estimate can be made of the amount of theobligation. Provisions are determined by discounting the expected future cashflows at a pre-tax rate that reflects current market assessments of the timevalue of money and where appropriate, the risks specific to the liability.
Provisions are made for site rehabilitation of an oil and gas field on an incremental basis during the life of the field (which includes the field plant closure phase). Provisions include reclamation, plant closure, waste site closure and monitoring activities. These costs have been determined on the basis of current costs, current legal requirements and current technology. Changes in estimates are dealt with on a prospective basis.
Interest-bearing Borrowings
All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost with any difference between cost and redemption value being recognised in the income statement over the period of the borrowings on an effective interest basis.
Revenue
Product Revenue
Revenue is recognised when the significant risks and rewards of ownership havetransferred to the buyer. Risks and rewards of ownership are considered passedto the buyer at the time of delivery of the product to the customer.
Services Revenue
Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.
All revenue is stated net of the amount of Goods and Services Tax ("GST").
Leases
Payments made under operating leases are recognised in the income statements ona straight line basis over the term of the lease. Lease incentives received arerecognised in the income statements as an integral part of the total leaseexpense and are allocated over the lease term.
Finance Income and Expenses
Finance income comprises interest income on funds invested. Interest income isrecognised as it accrues in profit or loss, using the effective interestmethod. Finance expenses comprise interest expense on borrowings and unrealisedforeign exchange losses. Foreign currency gains and losses are reported on anet basis.Income Tax
Income tax expense comprises current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet method, providing fortemporary differences between the carrying amounts of assets and liabilitiesfor financial reporting purposes and the amounts used for taxation purposes.Deferred tax is not recognised for differences relating to investments insubsidiaries to the extent that they probably will not reverse in theforeseeable future. Deferred tax is measured at the tax rates that areexpected to be applied to the temporary differences when they reverse, based onthe laws that have been enacted or substantively enacted by the reporting date.A deferred tax asset is recognised to the extent that it is probable thatfuture taxable profits will be available against which the temporary differencecan be utilised. Deferred tax assets are reviewed at each reporting date andreduced to the extent that it is no longer probable that the related taxbenefit will be realised.The Company and its wholly-owned Australian resident entities formed atax-consolidated group with effect from 1 July 2004 and are therefore taxed asa single entity from that date. The head entity within the tax-consolidatedgroup is Oilex Ltd.Current tax expense/income, deferred tax liabilities and deferred tax assetsarising from temporary differences of the members of the tax-consolidated groupare recognised in the separate financial statements of the members of thetax-consolidated group using the 'separate taxpayer within group' approach byreference to the carrying amounts of assets and liabilities in the separatefinancial statements of each entity and the tax values applying under taxconsolidation.
Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of GST except:
When the GST incurred on a purchase of goods and services is not recoverablefrom the taxation authority, in which case the GST is recognised as part of thecost of acquisition of the asset or as part of the expense item as applicable;and
Receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.
Cash flows are included in the Statements of Cash Flows on a gross basis andthe GST component of cash flows arising from investing and financingactivities, which is recoverable from, or payable to, the taxation authority,is classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
Discontinued Operations
A discontinued operation is a component of the Group's business that representsa separate major line of business or geographical area of operations that hasbeen disposed of or is held for sale, or is a subsidiary acquired exclusivelywith a view to resale. Classification as a discontinued operation occurs upondisposal or when the operation meets the criteria to be classified as held forsale, if earlier. When an operation is classified as a discontinued operation,the comparative income statement is restated as if the operation had beendiscontinued from the start of the comparative period.
Earnings Per Share
Basic earnings per share is calculated as net profit or loss attributable to members of the Group, divided by the weighted average number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is determined by adjusting the profit attributableto ordinary shareholders and weighted average number of shares outstanding forthe effects of all dilutive potential ordinary shares, which comprise shareoptions and performance rights granted to employees.
Segment Reporting
A segment is a distinguishable component of the Group that is engaged either in providing related products or services (business segment), or in providing related products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments.
Comparatives
Certain comparatives have been reclassified to conform with the presentation and classification in the current year.
New Standards and Interpretations Not Yet Adopted
The following standards, amendments to standards and interpretations have beenidentified as those which may impact the entity in the period of initialapplication. They are available for early adoption at 30 June 2009, but havenot been applied in preparing this financial report:AASB 8 Operating Segments introduces the "management approach" to segmentreporting. AASB 8, which becomes mandatory for the Group's 30 June 2010financial statements, will require the disclosure of segment information basedon the internal reports regularly reviewed by the Group's Chief OperatingDecision Maker in order to assess each segment's performance and to allocateresources to them. The Group has not yet determined the potential effect of therevised standard on the Group's disclosures.Revised AASB 101 Presentation of Financial Statements (2007) introduces theterm total comprehensive income, which represents changes in equity during aperiod other than those changes resulting from transactions with owners intheir capacity as owners. Total comprehensive income may be presented in eithera single statement of comprehensive income (effectively combining both theincome statement and all non-owner changes in equity in a single statement) or,in a income statement and a separate statement of comprehensive income. RevisedAASB 101, which becomes mandatory for the Group's 30 June 2010 financialstatements, is expected to have a significant impact on the presentation of theconsolidated financial statements. The Group plans to provide totalcomprehensive income in a single statement of comprehensive income for its 2010consolidated financial statements.
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New Standards and Interpretations Not Yet Adopted (continued)
* Revised AASB 123 Borrowing Costs removes the option to expense borrowing
costs and requires that an entity capitalise borrowing costs directly
attributable to the acquisition, construction or production of a qualifying
asset as part of the cost of that asset. The revised AASB 123 will become
mandatory for the Group's 30 June 2010 financial statements and will
constitute a change in accounting policy for the Group. In accordance with
the transitional provisions the Group will apply the revised AASB 123 to qualifying assets for which capitalisation of borrowing costs commences on
or after the effective date. The Group has not yet determined the potential
effect of the revised standard on future earnings.
* The definition of a business has been broadened, which is likely to result
in more acquisitions being treated as business combinations
* Contingent consideration will be measured at fair value, with subsequent
changes therein recognised in profit or loss
* Transaction costs, other than share and debt issue costs, will be expensed
as incurred
* Any pre-existing interest in the acquire will be measured at either fair
value with the gain or loss recognised in profit or loss * Any non-controlling (minority) interest will be measured at either fair value, or at its proportionate interest in the identifiable assets and liabilities of the acquiree, on a transaction-by-transaction basis. * Revised AASB 3, which becomes mandatory for the Group's 30 June 2010 financial statements, will be applied prospectively and therefore there will be no impact on prior periods in the Group's 2010 consolidated financial statement. * Revised AASB 127 Consolidated and Separate Financial Statements (2008) changes the accounting for investments in subsidiaries. Key changes include: the re-measurement to fair value of any previous/retained
investment when control is obtained/lost, with any resulting gain or loss
being recognised in profit or loss; and the treatment of increases in
ownership interest after control is obtained as transactions with equity
holders in their capacity as equity holders. The revised standard will
become mandatory for the Group's 30 June 2010 financial statements. The
Group has not yet determined the potential effect of the revised standard
on the Group's financial report.
* AASB 2008-1 Amendments to Australian Accounting Standard - Share-based
payment: Vesting Conditions and Cancellations changes the measurement of
share-based payments that contain non-vesting conditions. AASB 2008-1
becomes mandatory for the Group's 30 June 2010 financial statements. The
Group has not yet determined the potential effect of the amending standard
on the Group's financial report.
* AASB 2008-5 Amendments to Australian Accounting Standards arising from the
Annual Improvements Process and AASB 2008-6 Further Amendments to
Australian Accounting Standards arising from the Annual Improvements
Process affect various AASBs resulting in minor changes for presentation,
disclosure, recognition and measurement purposes. The amendments, which
become mandatory for the Company's 30 June 2010 financial statements, are
not expected to have any impact on the financial statements.
* AASB 2008-7 Amendments to Accounting Standards - Costs of an Investment in
a Subsidiary, Jointly Controlled Entity or Associate changes the
recognition and measurement dividend receipts as income and addresses the
accounting of a newly formed parent entity in the separate financial
statements. The amendments become mandatory for the Group's 30 June 2010
financial statements. The Group has not yet determined the potential effect
of the amendments.
Revised AASB 3 Business Combinations (2008) incorporates the following changes that are likely to be relevant to the Group's operations:
NOTE 4 - DETERMINATION OF FAIR VALUES
A number of the Group's accounting policies and disclosures require thedetermination of fair value, for both financial and non-financial assets andliabilities. Fair values have been determined for measurement and/ordisclosure purposes based on the following methods. Where applicable, furtherinformation about the assumptions made in determining fair values is disclosedin the notes specific to that asset or liability.
Investments In Equity and Debt Securities
The fair value of available-for-sale financial assets is determined by reference to their quoted closing bid price at the reporting date.
Trade and Other Receivables
The fair value of trade and other receivables, excluding construction work inprogress, is estimated as the present value of future cash flows, discounted atthe market rate of interest at the reporting date.
Non-derivative Financial Liabilities
Fair value, which is determined for disclosure purposes, is calculated based onthe present value of future principal and interest cash flows, discounted atthe market rate of interest at the reporting date.
Share-based Payment Transactions
The fair value of options is measured using the Black-Scholes Model. The fairvalue of performance rights is measured using a Monte Carlo Simulation.Measurement inputs include share price on measurement date, exercise price ofthe instrument, expected volatility (based on weighted average historicvolatility adjusted for changes expected due to publicly availableinformation), weighted average expected life of the instruments (based onhistorical experience and general option holder behaviour), expected dividends,and the risk-free interest rate (based on government bonds). Service andnon-market performance conditions attached to the transactions are not takeninto account in determining fair value.
NOTE 5 - SEGMENT REPORTING
Segment information is presented in respect of the Group's business and geographical segments. The primary format, geographical segments, is based on the Group's management and internal reporting structure.
Geographical Segments
The petroleum exploration and production segment is managed on a worldwide basis, but as at 30 June 2009 operated in five principal geographical areas: India, Australia, Oman, Timor-Leste and Indonesia.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly income-earning assets and revenue, interest-bearing loans, borrowings and expenses, and corporate assets and expenses.
Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one period.
Business Segments
The Group operates in one business segment, being the exploration, development and production of hydrocarbons.
NOTE 5 - SEGMENT REPORTING (Continued)
Geographical Segments India Australia Oman JPDA Indonesia Consolidated 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 $ $ $ $ $ $ $ $ $ $ $ $RevenueTotalsegmentrevenue 1,974,960 572,281 - - - - -
- - - 1,974,960 572,281
Segment
Result
(12,223,403)(2,477,626)(1,321,801)477,883(12,136,485)(1,854,903)(8,677,493)(256,637)(6,627,154)(617,392)(40,986,336)
(4,728,675) Unallocatedexpenses (8,359,204)(6,545,428)Loss beforefinancecosts (49,345,540)(11,274,103)Net finance(costs)/ income 658,933 2,185,048Deferred tax (expense)/ income (1,112,364) 1,112,364Loss for theperiod (49,798,971) (7,976,691)Segment
Assets 22,973,134 23,899,307 133,850 84,016 622,741 6,771,142 968,793 4,649,621 10,883,543 6,132,097 35,582,061 41,536,183
Unallocatedassets 10,509,440 41,807,868Total assets 46,091,501 83,344,051SegmentLiabilities 3,941,002 5,282,472 128,581 31,028 205,622 1,129,363 46,917 3,260,693 1,601,276 185,160 5,923,398 9,888,716Unallocatedliabilities 869,479 632,471Totalliabilities 6,792,877 10,521,187OtherAcquisitionofnon-currentsegmentassets #
8,717,730 6,559,836 - - 3,427,328 4,609,243 316,124 3,444,581
4,639,508 3,586,826 17,100,690 18,200,486Unallocatedacquisitions 129,861 769,605Totalacquisitions 17,230,551 18,970,091Depreciationof segmentassets 53,123 64,548 - - 60,450 35,446 34,140 27,651 - - 147,713 127,645Unallocateddepreciation 411,170 294,081Totaldepreciation 558,883 421,726Impairment ofexplorationand evaluation expenditure 9,647,273 - - - 9,827,422 - 4,455,579 - 948,705 - 24,878,979 - Othernon-cashsegmentexpenses - - - - - - - - - - 1,333,603 5,562,488
# The acquisition of non-current segment assets includes plant and equipment, capitalised exploration and evaluation expenditure.
Note 6 - revenue and expenses
Loss from ordinary activities before income tax has been determined after the following revenues and expenses:
Consolidated Company 2009 2008 2009 2008 $ $ $ $ (a) Revenue Oil Sales 1,974,960 572,281 1,059,448 49,552 (b) Other (Expense)/Income Profit on sale of exploration assets - 113,500 - 113,500 (Loss)/Profit on sale and revaluation of available-for-sale financial assets (4,317,272) 2,754,760 (4,317,272) 2,754,760 Loss on disposal of other assets (105,998) - (105,998) -
(4,423,270) 2,868,260 (4,423,270) 2,868,260
(c) Employee Benefits Expense Wages and salaries including superannuation (1,213,677)
(1,000,359) (1,213,677) (1,000,359)
Other associated personnel expenses (171,050)
(198,422) (165,984) (198,422)
(Increase)/decrease in liability for employee benefits 6,060 (37,649) 734 6,150 (1,378,667) (1,236,430) (1,378,927) (1,192,631) NOTE 7 - INCOME TAX EXPENSE
Numerical reconciliation between tax expense and pre-tax accounting loss:
Consolidated Company 2009 2008 2009 2008 $ $ $ $ Loss before tax (48,686,607) (9,089,055) (40,362,283) (12,413,619) Income tax using the domestic corporation tax rate of 30% (2008: 30%) (14,605,982) (2,726,717) (12,108,685) (3,724,086) Effect of tax rate in foreign jurisdictions (1,548,076) - (768,550) - Non-deductible expenses Share-based payments 400,081 1,668,747 368,905 1,632,396 Accounting loss on disposal of available-for-sale financial assets 1,295,182 - 1,295,182 - Foreign expenditure not brought to account 2,154,300 - - - Other non-deductible expenses 290,336 7,145 290,336 1,224,034 (12,014,159) (1,050,825) (10,922,812) (867,656) Unrecognised deferred tax assets not brought to account at balance date as realisation is not regarded as probable 10,901,795 - 9,810,448 - Recognition of current year tax losses - 1,050,825 - 867,656 Recognition of prior year tax losses - 61,539 - 244,708 Reversal of recognition of prior year deferred tax (1,112,364) - (1,112,364) - Deferred tax income /(expense) (1,112,364) 1,112,364 (1,112,364) 1,112,364 Consolidated Company 2009 2008 2009 2008 $ $ $ $ Unrecognised deferred tax assets not brought to account at balance date as realisation is not regarded as probable - temporary differences Other 3,629,243 519,031 2,097,617 197,432 Losses available for offset against future taxable income 19,054,165 7,673,009 9,864,723 6,173,333 Deferred tax asset not brought to account 22,683,408 8,192,040 11,962,340 6,370,765
The deductible temporary differences and tax losses do not expire under current tax legislation.
The deferred tax asset not brought to account for the 2009 financial year will only be obtained if:
* Future assessable income is derived of a nature and of an amount sufficient
to enable the benefit to be realised;
* The companies are able to meet the continuity of ownership and/or
continuity of business tests.
The conditions for deductibility imposed by the tax legislation continue to be complied with; and
Tax Consolidation
In accordance with tax consolidation legislation the Company, as the head entity of the Australia tax-consolidated group, has assured the deferred tax assets initially recognised by members of the tax-consolidated group.
Tax Assets and Liabilities
During the year ended 30 June 2008 $1,112,364 of tax losses were recognised andwere offset against the deferred tax liability resulting in nil tax assets andliabilities. In the year ended 30 June 2009 the deferred tax asset andliability was reversed in full as the assets that gave rise to the deferred taxasset and liability were sold. Consolidated Company 2009 2008 2009 2008 $ $ $ $ Liabilities opening balance 1,112,364 - 1,112,364 - Tax liability reversed in equity (1,112,364) - (1,112,364) - Available-for-sale financial assets - 1,112,364 - 1,112,364 Tax liabilities recognised in equity - 1,112,364 - 1,112,364 Assets opening balance 1,112,364 - 1,112,364 - Tax asset reversed in income statement (1,112,364) - (1,112,364) - Recognition of previously unrecognised tax losses - 1,112,364 - 1,112,364 Tax assets recognised in loss for the period - 1,112,364 - 1,112,364 Closing balance - - - - Net tax (assets)/liabilities - - - - after set off of tax NOTE 8 - LOSS PER SHAREBasic Loss Per ShareThe calculation of basic loss per share at 30 June 2009 was based on the lossfor the period attributable to ordinary shareholders of $49,798,971 (2008: lossof $7,976,691) and a weighted average number of ordinary shares outstandingduring the financial year ended 30 June 2009 of 151,750,483 (2008:130,632,789), calculated as follows: Consolidated 2009 2008 $ $ i) Loss Attributable to Ordinary Shareholders Loss for the Period 49,798,971 7,976,691 ii) Weighted Average Number of Ordinary Shares Issued ordinary shares at 1 July 132,083,885
129,383,885
Effect of shares issued 19,666,598
1,248,904
Weighted average number of ordinary shares at 30 151,750,483 130,632,789June Diluted Loss Per Share
The Company's potential ordinary shares, being its options and performance rights granted, are not considered dilutive as the conversion of these options and rights would result in a decrease in the net loss per share.
NOTE 9 - CASH AND CASH EQUIVALENTS
Consolidated Company 2009 2008 2009 2008 $ $ $ $ Cash at bank and on hand 9,297,790 4,138,319 8,811,004 1,060,922 Short-term bank deposits 1,208,589 29,348,734 1,208,589 29,348,734 10,506,379 33,487,053 10,019,593 30,409,656
The Group's exposure to interest rate risk and a sensitivity analysis for
financial assets and liabilities are disclosed in Note 23.
NOTE 10 - TRADE AND OTHER RECEIVABLES
Consolidated Company 2009 2008 2009 2008 $ $ $ $ CURRENT Joint venture receivables 773,589 2,529,373 2,685,151 3,066,007 Impairment of joint venture - - (2,099,645) - receivables Working advances to subsidiaries - - 497,442 859,896 (a) Other receivables 611,392 1,673,623 379,416 785,808 1,384,981 4,202,996 1,462,364 4,711,711 NON-CURRENT Unsecured loans to subsidiaries - - 55,284,237 27,066,337 (b) Impairment of loans to - - (36,071,754) (6,040,957)subsidiaries - - 19,212,483 21,025,380
Working advances to subsidiaries are short term and non-interest bearing.
Unsecured loans to subsidiaries are non-interest bearing with the exception of loans to subsidiaries registered in Cyprus amounting to $44,466,923 (2008: $25,286,488) which bear interest at 5% per annum (2008 5%). All loans are repayable on demand but will not be recalled for repayment until the subsidiaries are in a position to repay the loans.
NOTE 11 - PREPAYMENTS
Consolidated Company 2009 2008 2009 2008 $ $ $ $ Prepayments 161,703 202,161 118,325 148,721 NOTE 12 - INVENTORIES Consolidated Company 2009 2008 2009 2008 $ $ $ $ Oil on hand - net realisable value 84,185 215,185 50,531 26,770 Drilling inventory - cost 1,235,941 2,672,343 557,454 1,296,099 Drilling inventory - net realisable 572,077 - 311,136 - value 1,892,203 2,887,528 919,121 1,322,869
NOTE 13 - EXPLORATION AND EVALUATION
Consolidated Company 2009 2008 2009 2008 $ $ $ $ Balance at 1 July 31,464,923 13,498,334 8,265,450 4,396,926 Expenditure capitalised pending determination 12,909,841 19,560,074 5,416,964 4,387,583 Acquisition of exploration 4,128,333 - - - assets Impairment of exploration and (24,878,979) - (4,874,067) - evaluation expenditure Effect of movements in 7,637,503 (1,593,485) 1,207,779 (519,059)exchange rates Balance at 30 June 31,261,621 31,464,923 10,016,126 8,265,450
NOTE 14 - PROPERTY, PLANT AND EQUIPMENT
Motor Plant and Office Vehicles Equipment Furniture Total $ $ $ $ Consolidated Cost
Balance at 1 July 2007 85,699 876,099 113,861 1,075,659
Acquisitions 3,842 814,975 184,685 1,003,502 Disposals (65,877) (74,603) - (140,480) Currency translation differences (4,774) (16,304) (5,300) (26,378)
Balance at 30 June 2008 18,890 1,600,167 293,246 1,912,303
Balance at 1 July 2008 18,890 1,600,167 293,246 1,912,303
Acquisitions - 165,948 26,430 192,378 Disposals - (162,820) (92,491) (255,311) Currency translation differences 1,955 51,150 9,136 62,241
Balance at 30 June 2009 20,845 1,654,445 236,321 1,911,611
Depreciation and Impairment Losses
Balance at 1 July 2007 23,600 274,282 30,168 328,050
Depreciation charge for the year 8,575 356,107 57,044 421,726 Disposals (23,703) (45,933) - (69,636) Currency translation differences (1,594) (11,717) (3,697) (17,008)
Balance at 30 June 2008 6,878 572,739 83,515 663,132
Balance at 1 July 2008 6,878 572,739 83,515 663,132
Depreciation charge for the year 4,536 513,552 40,797 558,885 Disposals - (107,737) (36,086) (143,823) Currency translation differences (1,319) (30,360) (19,518) (51,197)
Balance at 30 June 2009 10,095 948,194 68,708 1,026,997
Carrying amounts At 1 July 2007 62,099 601,817 83,693 747,609 At 30 June 2008 12,012 1,027,428 209,731 1,249,171 At 1 July 2008 12,012 1,027,428 209,731 1,249,171 At 30 June 2009 10,750 706,251 167,613 884,614 Company Cost
Balance at 1 July 2007 73,250 739,123 83,855 896,228
Acquisitions - 663,535 142,985 806,520 Disposals (65,877) (34,448) - (100,325) Currency translation differences (3,305) (8,242) (1,759) (13,306)
Balance at 30 June 2008 4,068 1,359,968 225,081 1,589,117
Balance at 1 July 2008 4,068 1,359,968 225,081 1,589,117
Acquisitions - 114,702 26,133 140,835 Disposals - (162,820) (92,491) (255,311) Currency translation differences 601 15,926 (2,552) 13,975
Balance at 30 June 2009 4,669 1,327,776 156,171 1,488,616
Depreciation and Impairment Losses
Balance at 1 July 2007 22,488 224,270 28,496 275,254
Depreciation charge for the year 5,451 306,066 35,278 346,795 Disposals (23,703) (5,778) - (29,481) Currency translation differences (1,252) (7,154) (2,019) (10,425) Balance as at 30 June 2008 2,984 517,404 61,755 582,143
Balance at 1 July 2008 2,984 517,404 61,755 582,143
Depreciation charge for the year 972 413,152 21,566 435,690 Disposals - (107,737) (36,087) (143,824) Currency translation differences (1,853) (35,243) (21,105) (58,201)
Balance at 30 June 2009 2,103 787,576 26,129 815,808
Carrying amounts At 1 July 2007 50,762 514,853 55,359 620,974 At 30 June 2008 1,084 842,564 163,326 1,006,974 At 1 July 2008 1,084 842,564 163,326 1,006,974 At 30 June 2009 2,566 540,200 130,042 672,808 NOTE 15 - INVESTMENTS Consolidated Company 2009 2008 2009 2008 $ $ $ $
Listed equity securities available for sale - 5,705,700 - 5,705,700
Unlisted equity securities - options - 4,144,519 - 4,144,519
Investments in controlled entities - at - - 8,542 8,542 cost - 9,850,219 8,542 9,858,761
During the year the Company disposed of the available-for-sale financial assets. Unlisted equity securities represented options to purchase listed equity securities. The fair value of the listed shares had been based on the closing share price at the financial year end and the fair value of the unlisted options has been calculated using the Black-Scholes Model. The movement in fair value of the unlisted options is recorded in the Income Statement.
NOTE 16 - TRADE AND OTHER PAYABLES
Consolidated Company 2009 2008 2009 2008 $ $ $ $
Trade creditors and accruals 3,795,494 8,608,338 1,669,400 2,811,011
NOTE 17 - EMPLOYEE BENEFITS
Consolidated Company 2009 2008 2009 2008 $ $ $ $ Employee entitlements 167,453 193,011 148,478 149,212 NOTE 18 - PROVISIONS Consolidated Company 2009 2008 2009 2008 $ $ $ $ Site Restoration and Well Abandonment Balance at 1 July 1,719,838 1,714,387 966,435 954,401
Provisions made during the year 857,598 223,017 321,998 133,810
Effect of movements in exchange rates 252,494 (217,566) 154,444 (121,776) Balance at 30 June 2,829,930 1,719,838 1,442,877 966,435
NOTE 19 ISSUED CAPITAL AND RESERVES
Issued Capital
A reconciliation of the movement in capital and reserves for the Company andthe consolidated entity can be found in the Statements of Changes in Equity. Number of Ordinary Shares 2009 2008 On issue at 1 July - fully paid 132,083,885 129,383,885 Shares issued for cash 43,800,000 -
Shares issued on exercise of performance rights 171,000 -
Shares issued on exercise of options - 2,700,000 On issue at 30 June - fully paid 176,054,885 132,083,885
The Company has issued share options and performance rights to employees (see Note 20) and issued share options to financiers and advisers.
The Company does not have authorised capital or par value in respect of its issued shares.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.
Option Reserve
The option reserve recognises the fair value of options and performance rights issued but not exercised. Upon the exercise of options, the balance of the option reserve relating to those options is recognised in profit or loss or transferred to accumulated losses depending upon the nature or type of the options.
Asset Revaluation Reserve
The asset revaluation reserve comprises the cumulative net change in the fair value of available-for-sale financial assets until the investment is derecognised or impaired.
Foreign Currency Translation Reserve
The foreign currency translation reserve comprises exchange differences arisingfrom the translation of the financial statements of foreign operations. Theforeign currency translation reserve of the parent company comprises exchangedifferences arising from the translation of the financial statements of theforeign branch of the parent Company.
NOTE 20 - SHARE BASED PAYMENTS
The terms and conditions of options and performance rights granted by the Company to employees are as follows, whereby all options and performance rights are settled by physical delivery of shares:
Number of Contractual Life of Grant Date Instruments Vesting Conditions Options Options Key Management Personnel 3 December 2004 800,000 Vest immediately 5 years 14 December Yearly over three years of 2005 4,000,000 service 4 years Yearly over two years of 31 July 2006 1,550,000 service 3 years 31 July 2006 775,000 Three years of service 4 years 18 January Yearly over two years of 2007 800,000 service 3 years 18 January 2007 400,000 Three years of service 4 years In the first year of 3 April 2007 150,000 service 3 years 3 April 2007 150,000 Two years of service 4 years 3 April 2007 150,000 Three years of service 5 years 31 August 2007 350,000 One year of service 3 years 31 August 2007 350,000 Two years of service 3 years 31 August 2007 350,000 Three years of service 4 years 22 November 2007 3,900,000 Vest immediately 3 years 22 November 2007 3,900,000 One year of service 3 years 17 March 2008 400,000 One year of service 3 years 17 March 2008 400,000 Two years of service 3 years 17 March 2008 400,000 Three years of service 4 years 1 May 2008 500,000 One year of service 3 years 1 May 2008 500,000 Two years of service 3 years 1 May 2008 500,000 Three years of service 4 years Other Employees 3 December 2004 200,000 Vest immediately 5 years 14 December Yearly over three years of 2005 250,000 service 4 years 18 January 2007 50,000 Vest immediately 3 years In the first year of 3 April 2007 150,000 service 3 years 3 April 2007 150,000 Two years of service 4 years 3 April 2007 150,000 Three years of service 5 years Former Managing Director 3 December 2004 2,500,000 Vest immediately 5 years Financiers and Advisors 22 March 2006 3,100,000 Vest immediately 4 years 31 July 2006 1,400,000 Vest immediately 4 years 10 October Vest immediately 2006 1,000,000 3 years 10 October Vest immediately 2006 500,000 4 years 22 March 2007 2,500,000 Vest immediately 4 years 25 July 2007 500,000 One year of service 4 years Number of Contractual Life of Grant Date Instruments Vesting Conditions Options Performance rights Key Management Personnel 11 January 25,000 One year of service 5 years 2007 11 January 35,000 Two years of service 5 years 2007 11 January 35,000 Three years of 5 years 2007 service 3 August 2007 27,000 One year of service 5 years 3 August 2007 27,000 Two years of service 5 years 3 August 2007 26,000 Three years of 5 years service 8 August 2007 33,000 One year of service 5 years 8 August 2007 33,000 Two years of service 5 years 8 August 2007 34,000 Three years of 5 years service 11 July 2008 50,000 One year of service 5 years Other Employees 11 January 35,000 One year of service 5 years 2007 11 January 143,000 Two years of service 5 years 2007 11 January 138,000 Three years of 5 years 2007 service 8 August 2007 27,000 One year of service 5 years 8 August 2007 27,000 Two years of service 5 years 8 August 2007 26,000 Three years of 5 years service 14 October 33,000 One year of service 5 years 2007 14 October 33,000 Two years of service 5 years 2007 14 October 34,000 Three years of 5 years 2007 service 11 July 2008 34,000 One year of service 5 years 11 July 2008 35,000 Two years of service 5 years 11 July 2008 Three years of 5 years 36,000 service The number and weighted average exercise prices of share options are asfollows: Weighted Ave Weighted Average Number of Exercise Number of Exercise Price Options Price Options 2009 2009 2008 2008 Outstanding at the beginning of the period $1.37 39,925,100 $0.93 30,825,100 Forfeited during the $1.97 (150,000) $0.55 (250,000) period Lapsed during the $0.47 (7,000,100) - - period Exercised during the - - $0.25 (2,700,000)period Granted during the - - $2.21 12,050,000 period Outstanding at the $1.56 32,775,000 $1.37 39,925,100 end of the period Exercisable at the $1.47 29,825,000 $1.09 28,600,100 end of the period
The options outstanding at 30 June 2009 have an exercise price in the range of $0.50 to $2.75 and a weighted average contractual life of 1.2 years.
No options were exercised during the year ended 30 June 2009. The weighted average share price at the date of exercise for share options exercised during the year ended 30 June 2008 was $1.44.
The following factors and assumptions were used in determining the fair value of options and performance rights on grant date that were expensed in the current financial year:
Fair Price of Risk Free Grant Vesting Expiry Value Per Exercise Shares on Expected Interest DividendDate Date Date Option Price Grant Date Volatility Rate Yield OPTIONS 7 7 7 December December December 2005 2005 2008 $0.11 $0.50 $0.29 75.5% 5.50% - 14 15 14 December September December 2005 2006 2008 $0.15 $0.40 $0.31 75.9% 5.50% - 14 15 14 December September December 2005 2007 2008 $0.13 $0.50 $0.31 75.9% 5.50% - 14 15 14 December September December 2005 2008 2009 $0.09 $0.80 $0.31 75.9% 5.50% - 17 17 16 February February February 2006 2006 2009 $0.19 $0.50 $0.40 76.4% 6.00% - 22 March 22 March 31 March 2006 2006 2010 $0.33 $0.50 $0.53 78.7% 5.75% - 31 July 5 May 31 July 2006 2007 2009 $0.71 $0.50 $0.97 90.9% 5.75% - 31 July 5 May 31 July 2006 2008 2009 $0.66 $0.65 $0.97 90.9% 5.75% - 31 July 5 May 31 July 2006 2009 2010 $0.67 $0.90 $0.97 90.9% 5.75% - 24 31 July January 31 July 2006 2007 2009 $0.73 $0.45 $0.97 90.9% 5.75% - 24 31 July January 31 July 2006 2008 2009 $0.69 $0.55 $0.97 90.9% 5.75% - 4 7 October 4 October December 2006 2006 2008 $0.99 $0.50 $1.32 92.7% 6.00% - 10 10 31 October October October 2006 2006 2009 $0.80 $1.50 $1.34 92.8% 6.00% - 10 10 31 October October October 2006 2006 2009 $0.76 $1.75 $1.34 92.8% 6.00% - 10 10 31 October October October 2006 2006 2010 $0.83 $2.00 $1.34 92.8% 6.00% - 18 31 31 January October January 2007 2007 2010 $0.75 $1.40 $1.31 85.8% 6.25% - 18 31 31 January October January 2007 2008 2010 $0.64 $2.00 $1.31 85.8% 6.25% - 18 31 31 January October January 2007 2009 2011 $0.70 $2.50 $1.31 85.8% 6.25% - 18 31 31 January January January 2007 2007 2010 $0.75 $1.40 $1.31 85.8% 6.25% - 22 March 22 March 31 March 2007 2007 2011 $0.61 $2.00 $1.31 68.3% 6.25% - 3 April 31 March 31 March 2007 2008 2010 $0.55 $1.75 $1.35 66.0% 6.25% - 3 April 31 March 31 March 2007 2009 2011 $0.57 $2.25 $1.35 66.0% 6.25% - 3 April 31 March 31 March 2007 2010 2012 $0.60 $2.75 $1.35 66.0% 6.25% - 30 30 25 July September September 2007 2008 2011 $0.56 $1.57 $1.58 31.40% 6.25% - 1 May 30 April 30 April 2007 2008 2010 $0.52 $1.60 $1.22 39.10% 6.25% - 1 May 30 April 30 April 2007 2009 2010 $0.36 $2.10 $1.22 39.10% 6.25% - 1 May 30 April 30 April 2007 2010 2011 $0.33 $2.70 $1.22 39.10% 6.25% - 22 30 November November 1 July 2007 2007 2011 $0.45 $2.00 $1.62 35.90% 6.75% - 22 November 1 July 1 July 2007 2008 2011 $0.32 $2.50 $1.62 35.90% 6.75% - 17 March 30 April 30 April 2008 2009 2011 $0.47 $1.75 $1.20 64.0% 6.25% - 17 March 30 April 30 April 2008 2010 2011 $0.39 $2.25 $1.20 64.0% 6.25% - 17 March 30 April 30 April 2008 2011 2012 $0.42 $2.75 $1.20 64.0% 6.25% - 1 May 30 April 30 April 2008 2009 2011 $0.37 $1.75 $1.04 65.9% 7.25% - 1 May 30 April 30 April 2008 2010 2011 $0.31 $2.25 $1.04 65.9% 7.25% - 1 May 30 April 30 April 2008 2011 2012 $0.34 $2.75 $1.04 65.9% 7.25% - PERFORMANCE RIGHTS 11 1 July 1 July $1.40 Nil $1.40 70% - 90% 6.20% - January 2007 2011 2007 11 1 July 1 July $1.22 Nil $1.40 70% - 90% 6.20% - January 2008 2011 2007 11 1 July 1 July $1.05 Nil $1.40 70% - 90% 6.20% - January 2009 2011 2007 3 August 1 July 1 July $1.50 Nil $1.53 60% - 90% 6.30% - 2007 2008 2012 3 August 1 July 1 July $1.28 Nil $1.53 60% - 90% 6.30% - 2007 2009 2012 3 August 1 July 1 July $1.11 Nil $1.53 60% - 90% 6.30% - 2007 2010 2012 14 1 July 1 July $1.50 Nil $1.72 60% - 90% 6.60% - October 2008 2012 2007 14 1 July 1 July $1.45 Nil $1.72 60% - 90% 6.60% - October 2009 2012 2007 14 1 July 1 July $1.26 Nil $1.72 60% - 90% 6.60% - October 2010 2012 2007 11 July 30 July 1 July $0.98 Nil $1.10 60% - 80% 6.50% - 2008 2009 2013 11 July 30 July 1 July $0.91 Nil $1.10 60% - 80% 6.50% - 2008 2010 2013 11 July 30 July 1 July $0.79 Nil $1.10 60% - 80% 6.50% - 2008 2011 2013 The following share-based payments have been recognised in the IncomeStatements: Consolidated Company 2009 2008 2009 2008 $ $ $ $ Directors and employees
Share options - equity settled 1,083,808 4,715,161 1,083,808 4,715,161
Performance rights - equity settled 189,858 624,809 168,254 503,641
1,273,666 5,339,970 1,252,062 5,218,802 Financiers and advisors
Share options - equity settled 59,937 222,518 59,937 222,518
Total share-based payments expense 1,333,603 5,562,488 1,311,999 5,441,320
NOTE 21 - RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated Company 2009 2008 2009 2008 $ $ $ $ Net loss for the period (49,798,971) (7,976,691) (41,474,647) (11,301,255) Depreciation 558,883 421,726 435,690 346,795 Loss on sale of investment 4,317,272 - 4,431,336 - Loss/(profit) on disposal of assets 105,998 (2,754,760) (8,066) (2,754,760) Exploration expenditure 39,406,829 3,943,942 7,967,708 1,247,263 Equity-settled share-based payments 1,333,603 5,562,488 1,311,999 5,441,320 Unrealised foreign exchange (loss)/gain (104,857) 394,603 (6,794,986) 4,543,767 Deferred tax income/ (expense) 1,112,364 (1,112,364) 1,112,364 (1,112,364) Profit on sale of exploration assets - (113,500) - (113,500) Impairment of inventory 620,836 - 337,656 - Impairment of loans to subsidiaries - - 32,130,442 3,474,187 Operating Loss Before Changes in Working Capital and Provisions (2,448,043) (1,634,556) (550,504) (228,547) Increase in trade and other payables 146,264 251,750 149,664 291,340 (Increase)/decrease in prepayments 53,585 (66,406) 53,585 (66,406) Increase in trade and other receivables (209) (496,072) (2,066,277) (123,220) Increase in provisions 80,249 5,451 - 12,034 Decrease in oil inventory 185,597 - (20,382) - Increase/(decrease) in employee benefits (6,060) 37,649 (734) (6,150) Net Cash Used In Operating Activities (1,988,617) (1,902,184) (2,434,648) (120,949)
NOTE 22 - CONSOLIDATED ENTITIES
Country of Ownership Interest % Incorporation 2009 2008 Parent Entity Oilex Ltd Australia Subsidiaries
Independence Oil and Gas Limited Australia 100 100
Admiral Oil NL Australia 100 100 Oilex NL Holdings (India) Limited Cyprus 100 100 Oilex India Pvt Ltd India 90 90 Oilex Oman Limited Cyprus 100 100 Oilex (JPDA 06-103) Ltd Australia 100 100 Oilex (West Kampar) Limited Cyprus 100 100
Although the Group holds less than 100% of the voting power of Oilex India Pvt Ltd, the value attributable to outside equity interests is not material and therefore is not disclosed separately in the accounts.
NOTE 23 - FINANCIAL INSTRUMENTS
Financial risk management
The Company and Group have exposure to the following risks from their use of financial instruments:
Credit riskLiquidity riskMarket riskThis note presents qualitative and quantitative information in relation to theCompany's and Group's exposure to each of the above risks and the management ofcapital.The Board of Directors has overall responsibility for the establishment andoversight of the risk management framework and the development and monitoringof risk management policies. Risk management policies are established toidentify and analyse the risks faced by the Company and Group, to setappropriate risk limits and controls, and to monitor risks and adherence tolimits. Risk management policies and systems are reviewed regularly to reflectchanges in market conditions and the Company's and Group's activities.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer orcounterparty to a financial instrument fails to meet its contractualobligations, and arises principally from the Group's receivables from customersand joint ventures. For the Company it arises primarily from receivables fromsubsidiaries and joint ventures along with an investment.
Trade and other receivables
The Company's and Group's exposure to credit risk is influenced mainly by theindividual characteristics of each customer. The demographics of the Group'scustomer base, including the default risk of the industry and country in whichcustomers operate, has less of an influence on credit risk.The maximum exposure to credit risk is represented by the carrying amount ofeach financial asset. The maximum exposure to credit risk at the reporting datewas: Consolidated Company 2009 2008 2009 2008 $ $ $ $ Cash and cash equivalents 10,506,379 33,487,053 10,019,593 30,409,656 Trade and other receivables - current 1,384,981 4,202,996 1,462,364 4,711,711 Trade and other receivables - non current - - 19,212,483 21,025,380 Investments - 9,850,219 8,542 9,858,761 11,891,360 47,540,268 30,702,982 66,005,508
The Group's most significant customer, an Indian public sector petroleum company, accounts for $484,152 of the trade and other receivables carrying amount as 30 June 2009 (2008: $583,667).
Impairment losses
The aging of the trade and other receivables at the reporting date was:
2009 2008 Gross Impairment Gross Impairment $ $ $ $ Consolidated Not past due 927,292 - 3,738,564 - Past due 0-30 days 233,062 - 62,064 - Past due 31-120 days 168,025 - 36,282 - Past due 121 days to one year - - 328,613 - More than one year 56,602 - 37,473 - 1,384,981 - 4,202,996 - Company Not past due 58,636,256 38,171,399 31,718,872 6,040,957 Past due 0-30 days 140,962 - 12,867 - Past due 31-120 days 56,012 - 12,179 - Past due 121 days to one year - - 12,022 - More than one year 13,016 - 22,108 - 58,846,246 38,171,399 31,778,048 6,040,957
The Company and Group have established an allowance for impairment that represents their estimate of incurred losses in respect of trade and other receivables and investments. The main components of this allowance are a specific loss component that relates to individually significant exposures.
The movement in the allowance for impairment in respect of trade and other receivables for the Company during the year was as follows:
Company 2009 2008 $ $ Balance at 1 July 6,040,957 2,566,770
Impairment loss recognised 32,130,442 3,474,187
Balance at 30 June 38,171,399 6,040,957
The impairment loss relates to loans provided by the Company to subsidiaries, which are not supported by underlying assets of subsidiaries.
Based on the credit status of the counterparties, the Group and the Company believe that no impairment allowance is necessary in respect of trade and other receivables that are past due.
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 without incurring unacceptable losses or risking damage to the Group's reputation.
The Group manages liquidity by monitoring present cash flows and ensuring thatadequate cash reserves, financing facilities and equity raisings are undertakento ensure that the Group can meet its obligations.The table below analyses the Group's financial liabilities by relevant maturitygroupings based on the remaining period at the balance date to the contractualmaturity date. The amounts disclosed in the table are the contractualundiscounted cash flows. Carrying Contractual Cash 6 months or 6 - 12 1 - 2 Amount Flows less months years $ $ $ $ $ Consolidated 2009 Trade and other payables 3,795,494 3,795,494 3,795,494 - - Total financial liabilities 3,795,494 3,795,494 3,795,494 - - 2008 Trade and other payables 8,608,338 8,608,338 8,608,338 - - Total financial liabilities 8,608,338 8,608,338 8,608,338 - - Company 2009 Trade and other payables 1,669,400 1,669,400 1,669,400 - - Total financial liabilities 1,669,400 1,669,400 1,669,400 - - 2008 Trade and other payables 2,811,011 2,811,011 2,811,011 - - Total financial liabilities 2,811,011 2,811,011 2,811,011 - - Market riskMarket risk is the risk that changes in market prices, such as foreign exchangerates, interest rates and equity prices will affect the Group's income or thevalue of its holdings of financial instruments. The objective of market riskmanagement is to manage and control market risk exposures within acceptableparameters, while optimising the return.
Currency risk
An entity is exposed to currency risk on sales and purchases that are denominated in a currency other than the functional currency of the entity. The currencies giving rise to this risk are the US dollar and Indian rupee.
The exposure to currency risk at balance date was as follows: Consolidated Company 2009 2008 2009 2008 In USD INR USD INR USD INR USD INR equivalents of Australian dollar $ $ $ $ $ $ $ $ Cash and cash equivalents 5,132,838 273,265 6,054,958 - 4,744,929 179,415 6,054,958 - Trade and other
receivables 41,465 837,899 - 1,643,371 15,885,221 3,398,068 27,422,497 4,660,563
Trade and other payables (2,314,122) (590,779) - (426,931) (378,488) (408,395) - (170,798) Gross balance sheet
exposure 2,860,181 520,385 6,054,958 1,216,440 20,251,662 3,169,088 33,477,455 4,489,765
The following significant exchange rates applied during the year:
Average rate Reporting date spot rate
AUD 1 2009 2008 2009 2008
USD 0.7477 0.8968 0.8114 0.9623
INR 35.49 36.0683 38.15 40.8000
Foreign currency sensitivity
A 10% strengthening/weakening of the Australian dollar against the followingcurrencies at 30 June would have (increased)/ decreased the loss by the amountsshown below. This analysis assumes that all other variables, in particularinterest rates, remain constant. The analysis is performed on the same basisfor 2008. Consolidated Company 2009 2008 2009 2008 $ $ $ $ 10% Strengthening United States dollars (USD) (317,798) (464,776) (2,250,185) (2,980,037) Indian rupees (INR) (55,406) (110,585) (346,253) (215,768) 10% Weakening United States dollars (USD) 260,016 568,060 1,841,060 3,642,268 Indian rupees (INR) 49,276 135,160 283,298 263,717 Interest rate riskAt the reporting date the interest rate profile of the interest-bearingfinancial instruments was: Consolidated Company Carrying Amount Carrying Amount 2009 2008 2009 2008 $ $ $ $ Fixed Rate Instruments Financial assets 1,208,589 29,348,732 1,208,589 29,348,732 Financial liabilities - - - - Variable Rate Instruments Financial assets 4,971,418 4,028,538 4,966,393 951,143
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial instruments at fair value through profit or loss so a change in interest rates at the reporting date would not affect profit or loss or equity.
Cash flow sensitivity analysis for variable rate instruments
An increase of 100 basis points in interest rates at the reporting date wouldhave decreased the loss by the amounts shown below. A decrease of 100 basispoints in interest rates at the reporting date would have had the oppositeimpact by the same amount. This analysis assumes that all other variables, inparticular foreign currency rates, remain constant. The analysis is performedon the same basis for 2008. Consolidated Company 2009 2008 2009 2008 $ $ $ $ Impact on profit or loss 145 40,285 145 40,285 Other Price Risks
The Group is exposed to equity price risks arising from equity investments. Equity investments are held for strategic rather than trading purposes. The Group does not actively trade these investments.
Equity Price Sensitivity
The sensitivity analysis below has been determined based on the exposure to equity price risks at the reporting date:
Consolidated Company 2009 2008 2009 2008 $ $ $ $ If equity prices had been 10% higher: Impact on profit or loss - 505,436 - 505,436
Impact on asset revaluation reserve - 570,570 - 570,570
If equity prices had been 10% lower: Impact on profit or loss - (498,948) -
(498,948)
Impact on asset revaluation reserve - (570,570) - (570,570) Capital risk managementThe Board's policy is to maintain a strong capital base so as to maintaininvestor, creditor and market confidence and to sustain future development ofthe business. The capital structure of the Group consists of equityattributable to equity holders of the Company, comprising issued capital,reserves and accumulated losses as disclosed in the statements of changes inequity.
Fair values of financial assets and liabilities
The net fair values of assets and liabilities of the Group approximate their carrying values. The Group has no off-balance sheet financial instruments.
NOTE 24 - AUDITORS' REMUNERATION
Consolidated Company 2009 2008 2009 2008 $ $ $ $ Audit Services Auditors of the Company Audit and review of financial reports (KPMG 117,879 49,743 111,629 42,082 Australia) Audit and review of financial reports (KPMG 68,815 63,543 18,492 16,962 related practices) 186,694 113,286 130,121 59,044 Other Services Assurance and Other Services KPMG Australia 6,590 12,350 6,590 12,350 KPMG related practices 6,591 16,746 - - Taxation Services Taxation compliance services (KPMG Australia) 132,370 104,591 59,360 91,296 Taxation compliance services (KPMG related 12,201 32,426 5,171 10,531 practices) 157,752 166,113 71,121 114,177
NOTE 25 - INTEREST IN JOINT VENTURE OPERATIONS
The Group has the following interests in joint ventures as at 30 June 2009.Principal activities are oil and gas exploration, development and production: Interest % Permit Country 2009 2008 OFFSHORE EPP27 Australia (Otway Basin) - (1) 20 JPDA 06-103 Timor-Leste / Australia (JPDA) 25 (2) 25 WA-388-P Australia (Carnarvon Basin) 14 20 ONSHORE Cambay Field India (Cambay Basin) 45 45 Bhandut Field India (Cambay Basin) 40 40 Sabarmati Field India (Cambay Basin) 40 40 Block 56 Oman (South Oman Salt Basin) 25 25 West Kampar Block Indonesia (Central Sumatra) 67.5 (3) 45 (1) On 20 March 2009 the Joint Venture parties entered into a Good StandingArrangement (GSA) with the Australian Government in consideration for the JointVenture not being required to drill a commitment well. Under the GSA, the JointVenture has no further obligations in respect of the Permit which has beenreturned to the Government.
(2) On 3 August 2009 Oilex (JPDA 06-103) Ltd entered into an agreement to farm down to 10%. Additional information is included in Note 31 Subsequent Events.
(3) On 5 March 2009 Oilex (West Kampar) Limited assigned an additional 22.5% toits holding of 45% through exercise of its rights under a Power of Attorneygranted by PT Sumatera Persada Energi (SPE), following the failure by SPE torepay funds due. The assignment is before BPMigas, the Indonesian Governmentregulator. SPE's parent company PT Asiabumi Petroleo granted to Oilex a ParentCompany Guarantee in the event SPE failed to repay funds due. In accordancewith the provisions of the Parent Company Guarantee, in May 2009, Oilexcommenced an arbitration proceeding against PT Asiabumi Petroleo in theInternational Chamber of Commerce Court of Arbitration in Singapore seeking therecovery of the funds due.NOTE 26 - OPERATING LEASESLeases as Lessee
Non-cancellable operating lease rentals are payable as follows:
Consolidated Company 2009 2009 2008 2008 $ $ $ $ Within one year 271,819 448,258 247,488 441,705
One year or later and no later than 171,874 127,918 171,874 127,918
five years 443,693 576,176 419,362 569,623 The Group leases its head office premises at Levels 2, 50 Kings Park Road, WestPerth under an operating lease. The existing lease expired 10 September 2009and the Group is negotiating the terms of an eighteen month sub-lease, with anoption to renew the lease for a further term after that date. Lease paymentsare increased every twelve months to reflect market conditions. The Group leases office premises in Muscat (Oman), Dili (Timor-Leste) andVadodara (India) under operating leases. The leases run for periods of between1 and 2 years, with an option to renew the lease for a further term after thatdate. Consolidated Company 2009 2009 2008 2008 $ $ $ $ Operating lease rentals expensed during the financial year. 639,336 624,182 564,958 574,360
NOTE 27 - EXPENDITURE COMMITMENTS
Exploration Expenditure Commitments
In order to maintain current rights of tenure to exploration permits, the Groupis required to perform minimum exploration work to meet the minimum expenditurerequirements specified by various state and national governments. Theseobligations are subject to renegotiation when application for an explorationpermit is made and at other times. These obligations are not provided for inthe financial report and are estimated to be payable as follows: Consolidated Company 2009 2009 2008 2008 $ $ $ $ Within one year 44,481 25,234,658 44,481 3,368,364
One year or later and no later than 19,899,770 17,470,634 - -
five years 19,944,251 42,705,292 44,481 3,368,364
Financial commitments for subsequent periods are contingent upon future exploration results and can not be estimated. These obligations are subject to renegotiation upon expiry of the exploration leases.
Capital Expenditure Commitments
Consolidated Company 2009 2009 2008 2008 $ $ $ $ Contracted but not provided for in the financial statements and payable: Within one year 204,891 - 38,789 -
Employee Compensation Commitments
Consolidated Company 2009 2009 2008 2008 $ $ $ $ Key Management Personnel Commitments under non-cancellable employment contracts not provided for in the financial statements and payable: Within one year 2,322,034 663,729 2,322,034 663,729 Other Employees Commitments under non-cancellable employment contracts not provided for in the financial statements and payable: Within one year 215,202 268,311 193,021 268,311
NOTE 28 - KEY MANAGEMENT PERSONNEL DISCLOSURES
The following were Key Management Personnel of the Group at any time during thefinancial year and unless otherwise indicated were key management personnel forthe entire period: Non-Executive Directors Position Mr Max Cozijn Director Mr Laxmi Bhandari Non-Executive Director Executive Directors Position Dr Bruce McCarthy Managing Director Mr Raymond Barnes Technical Director Executives Position Mr Ben Clube Chief Finance and Commercial Officer (Director from 1 July 2009) Mr Richard Paces (ceased 5 Chief Operating Officer May 2009) Mr Paul Senycia Exploration Manager Mr Kim Morrison Business Development Manager Mr Jay Laurie General Counsel / Company Secretary
Key Management Personnel Compensation
The compensation of non-executive Directors and Key Management Personnel was asfollows: Consolidated Company 2009 2008 2009 2008 $ $ $ $ Short-term employee benefits 2,562,755 2,029,559 2,562,755 2,029,559 Non monetary benefits 164,681 101,005 164,681 101,005 Post-employment benefits 189,034 222,388 189,034 222,388 Sign on benefits - 40,000 - 40,000 Equity compensation benefits 956,913 4,546,236 956,913 4,546,236 3,873,383 6,939,188 3,873,383 6,939,188
Individual Directors and Executives Compensation Disclosures
Information regarding individual Directors and Executives compensation is provided in the Remuneration Report section of the Directors' Report.
Apart from the details disclosed in this note, no Director has entered into amaterial contract with the Company since the end of the previous financial yearand there were no material contracts involving Directors' interests existing atyear end.
Key Management Personnel Transactions with the Company or its Controlled Entities
The terms and conditions of the transactions with Key Management Personnel andtheir related parties were no more favourable than those available, or whichmight reasonably be expected to be available, on similar transactions tonon-key management personnel related entities on an arm's length basis.
The aggregate amounts recognised during the year relating to Key Management Personnel and their related parties were as follows:
Note Consolidated Company Key Management Transaction 2009 2008 2009 2008 Personnel $ $ $ Dr B H McCarthy Management 1 466,665 83,333 466,665 83,333 services Mr R G Barnes Technical, 2 360,000 299,600 360,000 299,600 management
Key Management Personnel Transactions with the Company or its Controlled Entities (continued)
From 1 May 2008, the Group used the services of Macuale Consultancy Pty Ltd ofwhich Dr McCarthy is a director. Rates charged were at market rates and havebeen included in the remuneration of key management personnel disclosure.
Oilex used the services of Ad Valorem Resource Consultants Pty Ltd of which Mr Barnes is a director. Rates charged were at market rates and have been included in the remuneration of key management personnel disclosure.
Options and Performance Rights over Equity Instruments Granted as Compensation
The movement during the financial year in the number of options and performancerights over ordinary shares in the Company held, directly, indirectly orbeneficially, by each key management person, including their related parties,is as follows: Vested and Held at Vested exercisable Held at 1 Granted as Other 30 June during at 30 June 2009 July 2008 compensation Exercised changes # 2009 the year 2009 OPTIONS Directors M D J 1,000,000 - - - 1,000,000 250,000 1,000,000 Cozijn L L 300,000 - - - 300,000 150,000 300,000 Bhandari B H 10,000,000 - - 3,000,000 7,000,000 2,000,000 7,000,000 McCarthy R G 6,000,000 - - 2,000,000 4,000,000 2,500,000 4,000,000 Barnes Other Key Management Personnel B J M 1,500,000 - - - 1,500,000 500,000 500,000 Clube R S Paces 2,325,000 - - - 2,325,000 775,000 2,325,000 P G 1,200,000 - - - 1,200,000 400,000 800,000 Senycia W K 1,200,000 - - - 1,200,000 400,000 400,000 Morrison J W R 450,000 - - - 450,000 150,000 300,000 Laurie PERFORMANCE RIGHTS Directors
No performance rights were issued to Directors during the financial year
Other Key Management Personnel R S Paces 150,000 - 50,000 100,000 - - - P G 95,000 50,000 - - 145,000 - 25,000 Senycia J W R 80,000 - - - 80,000 - - Laurie
# Other changes represent options and rights that expired or were forfeited
during the year.
No options held by Key Management Personnel are vested but not exercisable.
Vested and Other Vested exercisable Held at 1 Granted as changes Held at 30 during at 30 June 2008 July 2007 compensation Exercised # June 2008 the year 2008 OPTIONS Directors M D J 1,500,000 500,000 1,000,000 - 1,000,000 250,000 750,000 Cozijn L L - 300,000 - - 300,000 150,000 150,000 Bhandari B H 6,000,000 4,000,000 - - 10,000,000 5,000,000 8,000,000 McCarthy R G 3,000,000 3,000,000 - - 6,000,000 2,500,000 3,500,000 Barnes Other Key Management Personnel B J M - 1,500,000 - - 1,500,000 - - Clube R S Paces 2,325,000 - - - 2,325,000 775,000 1,550,000 P G 1,200,000 - - - 1,200,000 400,000 400,000 Senycia W K - 1,200,000 - - 1,200,000 - - Morrison J W R 450,000 - - - 450,000 150,000 150,000 Laurie G J 500,000 - 250,000 - 250,000 250,000 - McCauley A D 500,000 - 250,000 250,000 - - - Beckett PERFORMANCE RIGHTS Directors
No performance rights were issued to Directors during the financial year.
Other Key Management Personnel R S Paces 150,000 - - - 150,000 50,000 50,000 P G 95,000 - - - 95,000 25,000 25,000 Senycia J W R - 80,000 - - 80,000 - - Laurie G J 75,000 - - - 75,000 25,000 25,000 McCauley A D 120,000 - - 80,000 40,000 40,000 40,000 Beckett
# Other changes represent options and rights that expired or were forfeited during the year.
No options held by Key Management Personnel are vested but not exercisable.
Movements in Shares
The movement during the financial year in the number of ordinary shares in the Company held, directly, indirectly or beneficially, by each Key Management Personnel, including their related parties, is as follows:
Held at Held at 1 July Received on exercise of 30 June 2009 2008 Purchases options Sales 2009 Directors M D J 1,300,000 200,000 - - 1,500,000 Cozijn L L - - - - - Bhandari B H 800,000 350,000 - - 1,150,000 McCarthy R G Barnes 623,871 175,000 - - 798,871 Other Key Management Personnel B J M - 52,174 - - 52,174 Clube R S Paces 365,000 - - (365,000) - P G - - - - - Senycia W K - - - - - Morrison J W R - - - - - Laurie Held at Held at 1 July Received on exercise of 30 June 2008 2007 Purchases options Sales 2008 Directors M D J 500,000 - 1,000,000 (200,000) 1,300,000 Cozijn L L - - - - - Bhandari B H 800,000 - - - 800,000 McCarthy R G Barnes 623,871 - - - 623,871 Other Key Management Personnel B J M - - - - - Clube R S Paces 365,000 - - - 365,000 P G - - - - - Senycia W K - - - - - Morrison J W R - - - - - Laurie G J - - 250,000 (250,000) - McCauley A D - - 250,000 (250,000) - Beckett
No shares were granted to key management personnel during the financial year as compensation.
NOTE 29 - RELATED PARTY TRANSACTIONS
Identity of Related Parties
The Group has a related party relationship with its subsidiaries (see Note 22),joint ventures (see Note 25) and with its Key Management Personnel (see Note28).
Other Related Party Transactions
Subsidiaries
Loans are made by the Company to wholly owned subsidiaries for capital,exploration and production expenditure. At 30 June 2009, the amount owed to theCompany was $55,284,237 (2008: $27,066,337). These loans have been recognisedas non-current receivables and are subject to impairment testing (refer Note10). Loans outstanding between the Company and its controlled entities have nofixed date of repayment and are non-interest bearing except for loans tosubsidiary companies registered in Cyprus which bear interest at a rate of 5%.Interest income arising from interest bearing loans was $1,996,040 (2008:$491,475).Director Related Parties Consolidated Company 2009 2008 2009 2008 $ $ $ $ Administration service fee paid to Carbon Energy Limited (M D J Cozijn is a Director of Carbon Energy 5,000 10,000 5,000 10,000Limited) NOTE 30 - CONTINGENCIES
The directors are of the opinion that provisions are not required in respect of these matters, as it is not probable that a future sacrifice of economic benefits will be required or the amount is not capable of reliable measurement.
Oilex Ltd has issued guarantees in relation to the lease of corporate officesin West Perth as well as credit card guarantees. The Bank Guarantees amount toAUD$208,589. An equal amount is held in cash and cash equivalents as securityby the Banks.On 20 March 2009 Oilex Ltd, as operator of EPP27, and the Joint Ventureparticipants entered into a Good Standing Arrangement (GSA) with the AustralianGovernment in consideration for the Joint Venture not being required to drill acommitment well. Oilex's monetary share of the GSA is $2,101,225 and is to beexpended on field activities in the primary term on re-released Australianoffshore acreage which is awarded in the next two bidding rounds pursuant to asuccessful bid or as a sole bidder during the next two newly releasedAustralian offshore acreage rounds.
NOTE 31 - SUBSEQUENT EVENTS
On 3 August 2009 Oilex (JPDA 06-103) Ltd, a wholly owned subsidiary of OilexLtd, entered into an Agreement to farm down 15% of the 25% interest it held inoffshore Block 06-103 Production Sharing Contract (PSC) in the Joint PetroleumDevelopment Area (JPDA) of the Timor Sea to Japan Energy E&P JPDA Pty Ltd(Japan Energy), a wholly owned subsidiary of Japan Energy Corporation. On 28August 2009 Oilex announced that all conditions precedent for the agreement tofarm down were satisfied, including the approval of the transfer of the 15%interest from Oilex to Japan Energy by the Autoridade Nacional do Petroleo andthe other Joint Venture participants. Consideration for Japan Energy's 15%participating interest includes a refund of part of past costs and funding forOilex's remaining 10% share of the costs for two initial commitment wells up toan agreed cap. Oilex will remain as operator of the PSC.
During August 2009 3,250,000 unlisted options were issued pursuant to the Employee Performance Rights Plan and 2,000,000 unlisted options were issued to Advisors.
DIRECTORS DECLARATION
In the opinion of the Directors of Oilex Ltd (the "Company"):
the financial statements and notes and the remuneration disclosures that arecontained in the Remuneration Report in the Directors' Report, set out on pages32 to 39, are in accordance with the Corporations Act 2001, including:giving a true and fair view of the Company's and the Group's financial positionas at 30 June 2009 and of their performance, for the financial year ended onthat date; and
complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001;
the financial report also complies with International Financial Reporting Standards as disclosed in Note 2(a);
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
The Directors have been given the declarations required by Section 295A of theCorporations Act 2001 from the Managing Director and Finance Director for thefinancial year ended 30 June 2009. Signed in accordance with a resolution of the Directors. ....................................... .......................................
Mr M.D.J. Cozijn Mr Bruce McCarthy
Chairman Managing Director West PerthWestern Australia21 September 2009
Independent auditor's report to the members of Oilex Ltd
Report on the financial report
We have audited the accompanying financial report of Oilex Ltd (the Company),which comprises the balance sheets as at 30 June 2009, and the incomestatements, statements of changes in equity and cash flow statements for theyear ended on that date, a summary of significant accounting policies and otherexplanatory notes 1 to 31 and the directors' declaration set out on pages 41 to79 of the Group comprising the Company and the entities it controlled at theyear's end or from time to time during the financial year.
Directors' responsibility for the financial report
The directors of the Company are responsible for the preparation and fairpresentation of the financial report in accordance with Australian AccountingStandards (including the Australian Accounting Interpretations) and theCorporations Act 2001. This responsibility includes establishing andmaintaining internal control relevant to the preparation and fair presentationof the financial report that is free from material misstatement, whether due tofraud or error; selecting and applying appropriate accounting policies; andmaking accounting estimates that are reasonable in the circumstances. In note 2(a), the directors also state, in accordance with Australian AccountingStandard AASB 101 Presentation of Financial Statements, that the financialreport, comprising the financial statements and notes, complies withInternational Financial Reporting Standards.
Auditor's responsibility
Our responsibility is to express an opinion on the financial report based onour audit. We conducted our audit in accordance with Australian AuditingStandards. These Auditing Standards require that we comply with relevantethical requirements relating to audit engagements and plan and perform theaudit to obtain reasonable assurance whether the financial report is free frommaterial misstatement.An audit involves performing procedures to obtain audit evidence about theamounts and disclosures in the financial report. The procedures selected dependon the auditor's judgement, including the assessment of the risks of materialmisstatement of the financial report, whether due to fraud or error. In makingthose risk assessments, the auditor considers internal control relevant to theentity's preparation and fair presentation of the financial report in order todesign audit procedures that are appropriate in the circumstances, but not forthe purpose of expressing an opinion on the effectiveness of the entity'sinternal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made bythe directors, as well as evaluating the overall presentation of the financialreport.
We performed the procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001 and Australian Accounting Standards (including the Australian Accounting Interpretations), a view which is consistent with our understanding of the Company's and the Group's financial position and of their performance.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
Auditor's opinionIn our opinion:
(a) the financial report of Oilex Ltd is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Company's and the
Group's
financial position as
at 30 June 2009 and of their performance for the year ended
on
that date; and
(ii)complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations2001.
(b) the financial report also complies with International Financial Reporting Standards as disclosed in note 2(a).
Report on the remuneration report
We have audited the Remuneration Report included in pages 32 to 39 of thedirectors' report for the year ended 30 June 2009. The directors of the companyare responsible for the preparation and presentation of the remuneration reportin accordance with Section 300A of the Corporations Act 2001. Ourresponsibility is to express an opinion on the remuneration report, based onour audit conducted in accordance with auditing standards.
Auditor's opinion
In our opinion, the remuneration report of Oilex Ltd for the year ended 30 June 2009, complies with Section 300A of the Corporations Act 2001.
KPMG Brent SteedmanPartnerPerth, WA21 September 2009
KPMG, an Australian partnership, is part of the KPMG International network of independent member firms affiliated with KPMG International, is a Swiss cooperative.
SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 27 August 2009.
Shareholding
Distribution of share and option holdings
Size of Number of Number of unlisted Number of performanceholding shareholders option holders right holders 1 - 1,000 263 - - 1,001 - 893 - - 5,000 5,001 - 578 - - 10,000 10,001 - 1,190 9 9 100,000 100,001 219 18 - and over Total 3,143 27 9
Of the above total, 547 ordinary shareholders hold less than a marketable parcel.
There are no substantial shareholders holding 5% or more of the Company's shares.
Voting Rights
The voting rights attached to the ordinary shares are governed by the Constitution.
On a show of hands every person present who is a Member or representative of aMember shall have one vote and on a poll, every Member present in person or byproxy or by attorney or duly authorised representative shall have one vote foreach share held. None of the options or performance rights give an entitlementto voting rights.
The name of the Company Secretary is Mr J W R Laurie.
The address of the principal registered office is Level 2, 50 Kings Park Road, West Perth WA 6005, Australia, Telephone +61 8 9485 3200.
Register of Securities
The register of securities listed on the Australian Securities Exchange is held by Security Transfer Registrars Pty Ltd, 770 Canning Highway, Applecross WA 6153, Australia, Telephone +61 8 9315 2333.
The register of securities listed on the AIM Market is held by ComputershareInvestor Services PLC, PO Box 82, The Pavilions, Bridgwater Road, Bristol BS138AE, United Kingdom, Telephone +44 870 702 003.
Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the Company on allMember Exchanges of the Australian Securities Exchange and the AIM Market ofthe London Stock Exchange and trades under the symbol OEX.
Detailed schedules of exploration and production permits held are included in the Operations Review.
Directors' interest in share capital is disclosed in the Directors' Report.
Unquoted Securities - Options & Performance Rights
Total unlisted options on issue are 36,475,000
Dr B H McCarthy (Managing Director) holds a total of seven million options, (see Note 20), which represents 19.19% of all outstanding options.
Total performance rights on issue are 555,000.
There is currently no on-market buy-back in place.
Twenty Largest Shareholders Shareholder Shares held % of issued capital JP Morgan Nominees Australia Limited 17,073,105 9.70 India Hydrocarbons Limited 7,600,000 4.32 Citicorp Nominees Pty Limited 6,850,501 3.89 Rock (Nominees) Limited 4,999,454 (#) 2.84 National Nominees Limited 4,993,008 2.84 ANZ Nominees Limited 3,422,623 1.94 Barclayshare Nominees Limited 2,626,875 (#) 1.49
HSBC Custody Nominees Australia Limited 2,599,321 1.48
L R Nominees Limited 2,596,880 (#) 1.47
TD Waterhouse Nominees (Europe) Limited 2,532,725 (#) 1.44
Miramar Superannuation Fund Pty Ltd 2,424,436 1.38 HSDL Nominees Limited 2,333,292 (#) 1.33 Humboldt Capital Corporation 2,100,150 1.19 Glenn Martin Courtis 2,005,361 1.14 Forest Nominees Limited 1,870,450 (#) 1.06 Pan Australian Nominees Pty Ld 1,682,144 0.96 Diplomat Holdings Pty Ltd 1,500,000 0.85 Bruce Henry McCarthy 1,150,000 0.65 Arredo Pty Ltd 1,150,000 0.65 Michael & Lina Maloney 1,117,500 0.63 Total 72,627,825 41.25
Total issued shares as at 27 August 2009 176,074,885 100.00
(#) Included within the total issued capital are 16,959,676 shares held on the AIM register. Included within the top 20 shareholders are certain AIM registered holders as marked.
REGIONAL OFFICES SULTANATE OF OMANMuscat Branch OfficeOilex Oman Limited24-26, 2nd FloorBuilding No 117Al Ma'aridh StreetGhala / BousherMuscatSultanate of Oman INDIAVadodara Project OfficeOilex Ltd101 - 102 Rubillite Hub32, Ajit Nagar SocietyDinesh Mill RoadVadodara 390007GujaratIndia TIMOR-LESTEDili Branch OfficeOilex (JPDA 06-103) LtdAvenida de PortugalKampo AlorDiliTimor-Leste
vendorRelated Shares:
OEX.L