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Investor Presentaiton

Armour Energy and controlled entities Financial report continued Notes to the consolidated financial statements continued NOTE 39. COMMITMENTS Capital commitments Committed at the reporting date but not recognised as liabilities, payable: Oil and Gas assets Consolidated 30 June 2020 $ 30 June 2019 $ 6,333,398 armourenergy.com.au To keep tenements in good standing, work programs should meet certain minimum expenditure requirements. If the minimum expenditure requirements are not met, the Group has the option to negotiate new terms or relinquish the tenements. The Group also has the ability to meet expenditure requirements by joint venture or farm-in agreements. NOTE 40. CONTINGENT LIABILITIES EXPLORATION LIABILITIES Under the Company's native title agreement over EP 171 and EP 176, the Company is required to pay the greater of either $10,000 or 3% of exploration costs on each anniversary date. The capital commitments related to the executed Gas Acceleration Program (GAP) with the federal government, which aims to increase gas supply to the domestic gas market. The agreed work program consists of accelerating one production well and drilling three additional production wells at the Group's Kincora Project. The program finished in October 2019 and therefore there are no further amounts committed. Lease commitments - operating Under the Company's native title agreement over EP 174, EP 190, EP 191 and EP 192, the Company is required to pay the greater of either $5,000 or 3% of exploration costs on each anniversary date. Under the Company's native title agreement over ATP 1087, the Company is required to pay the greater of either: $50,000, or: 3% of exploration costs within the preceding financial year; and 1.5% of the exploration costs incurred in the Shared Area within the preceding financial year. Committed at the reporting date but not recognised as liabilities, payable: Within one year One to five years For personal use only 110 Lease commitments - finance 207,873 150,871 Other than the above, the Group had no other contingent assets or liabilities at 30 June 2020. NOTE 41. EVENTS AFTER THE REPORTING PERIOD 358,744 Committed at the reporting date and recognised as liabilities, payable: Within one year 38,381 28,786 One to five years Total commitment Less: Future finance charges Net commitment recognised as liabilities Exploration Expenditure Commitments Committed at the reporting date but not recognised as liabilities, payable: Within one year One to five years More than five years 67,167 67,167 13,451,427 33,037,547 18,442,987 37,477,283 1,810 46,488,974 55,922,080 CAPITAL COMMITMENTS The Group has certain obligations to expend minimum amounts on exploration in tenement areas. These obligations may be varied from time to time and are expected to be fulfilled in the normal course of operations of the Group. Other than the below subsequent events, no other matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly affect Armour's operations, the results of those operations, or Armour's state of affairs in future financial years. " On 1 July 2020, Armour announced that Cordillo Energy Pty Ltd, a 100% subsidiary of Oilex Limited and one of the companies include in the Oilex transaction with Armour, was successful in bidding for Block CO2019-E in the Northern Flank of the Cooper Basin, South Australia. On 10 July 2020, the Company announced a further extension to the closing date of the Entitlement Offer to 5 August 2020. On the 18 September 2020, the Company announced that it had successfully completed the capital raising and will raise a total of $15 million, subject to necessary approvals. On 27 July 2020, the Farmin Agreement between the Company and Santos QNT Pty Ltd was amended to accelerate payments relating to the permit award process, resulting in Santos made a one-off, unconditional accelerated cash payment of $A6 million in total in full consideration of all future contingent permit transfer payments covering the Application Areas. On 15 August 2020, the Company received the second payment of $3.5 million from the Sales and Purchase Agreement with Australia Pacific LNG Pty Ltd for the sale of Armour's 10% interest in Petroleum Lease 1084 known as the "Murrungama block" (PL1084). As a result of the above asset transactions, Armour made a $5.3 million early principal amortisation payment on the Secured Amortising Notes during August 2020. On 18 August 2020, Armour executed a term sheet with Auburn Resources Limited, a public, unlisted company, for the sale of Ripple Resources Pty Ltd, for 5,600,000 fully paid shares in Ripple Resources Pty Ltd. 11 111
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