Investor Presentaiton
Armour Energy and controlled entities
armourenergy.com.au
Financial report continued
Notes to the consolidated financial statements continued
NOTE 5. USE OF ESTIMATES AND JUDGEMENTS
The Group has identified a number of critical accounting policies under which significant judgements, estimates and assumptions
are made. Actual results may differ from these estimates under different assumptions and conditions. This may materially affect
financial results and the carrying amount of assets and liabilities to be reported in the next and future periods. These estimates and
underlying assumptions are reviewed on an ongoing basis.
Additional information relating to these critical accounting policies is embedded within the following notes:
9
Deferred tax assets
17
Exploration and evaluation assets
18
Oil and Gas assets
Sp
18
20
Provision for restoration and abandonment
Government Grants
There are no other critical accounting judgements, estimates and assumptions that are likely to affect the current or future financial
years.
NOTE 6. OPERATING SEGMENTS
IDENTIFICATION OF REPORTABLE OPERATING SEGMENTS
The Group has identified its operating segment based on the internal reports that are reviewed and used by the Board (chief
operating decision makers "CODM") in assessing performance and determining the allocation of resources. The Group is managed
primarily on a geographic basis, which is the location of the respective areas of interest (tenements) in Queensland, Northern
Territory, and Victoria, Australia.
Ser
Operating segments are determined on the basis of financial information reported to the Board.
For the year ended 30 June 2020, Management identified the Group as having two main reporting segments, being Exploration,
Evaluation and Appraisal activities (EEA), and the Production and Development of petroleum products (oil, gas, LPG and
condensate) in the Surat Basin, Queensland (Surat), and will report on these segments accordingly.
The Corporate and other segment represents administration and other overheads that are not allocated to the operating segments.
The CODM reviews EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) on a monthly basis. The accounting
policies adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.
TYPES OF PRODUCTS AND SERVICES
The principal products and services of each of these operating segments are as follows:
EEA
The Group does not produce any products or services from this operating segment; it involves expenditure to explore and evaluate
potential future economic reserves and resources.
Surat
The Group produces petroleum products from its Kincora operating plant in the Surat Basin, which includes a mix of Gas, LPG, Oil
and Condensate and sells these to LNG and Domestic customers.
Intersegment transactions
An internally determined cost base is set for all intersegment services provided. All such transactions are eliminated on
consolidation of the Group's financial statements.
Intersegment receivables, payables, and loans
Intersegment loans are initially recognised at the consideration received. Intersegment loans receivable and loans payable that
earn or incur non-market interest are not adjusted to fair value based on market interest rates. Intersegment loans are eliminated
on consolidation.
Intersegment Assets
Segment assets are clearly identifiable based on their nature and physical location.
Intersegment Liabilities
Liabilities are allocated to segments where there is a direct nexus between the liability and the operations of the segment.
Borrowings and tax liabilities are generally considered to relate to the whole Group and are not allocated. Segment liabilities
include trade and other payables and certain provisions.
Major customers
During the year ended 30 June 2020 approximately 58% (2019: 69%) of the Group's external revenue was derived from sales to one
Australian based customer.
Unallocated items
The following items of income, expenses, assets, and liabilities are not allocated to operating segments as they are not considered
core to the operation of any segment:
Corporate head office costs and salaries of non-site-based staff.
Proceeds from capital raisings and associated convertible note debt.
19
64
65View entire presentation