Blue Energy : 2021 Financial Statements

Published: 2021-09-30 03:52:42 ET BLU.AX

F I N A N C I A L R E P O R T F O R T H E Y E A R

E N D E D 3 0 J U N E 2 0 2 1

BLUE ENERGY LIMITED

ACN 054 800 378

C O N T E N T S

Page

Directors' Report

Auditor's Independence Declaration

Independent Auditor's Report

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Consolidated Financial Statements

Corporate and Group Information

Basis of Preparation and Other Significant Accounting Policies

Invested Capital

Working Capital and Financial Risk Management

Capital and Related Party Disclosures

Results for the Year

Other

Directors' Declaration

Additional Shareholder Information

Corporate Directory

BLUE ENERGY LIMITED AND CONTROLLED ENTITIES

D I R E C T O R S ' R E P O R T

The Directors of Blue Energy Limited ("the Company", "Blue Energy" or "BLU") submit herewith their report on the Company and its controlled entities ("the Group") with respect to the financial year ended 30 June 2021.

DIRECTORS

The names and particulars of the Directors of the Company in office during or since the end of the financial year are as follows:

Name

Position

Date Appointed

Date Resigned

John Ellice-Flint

Executive Chairman

05/04/2012

John Phillips

Managing Director (Executive)

28/06/2010

Rodney Cameron

Non-executive Director (Deputy Chairman)

15/11/2011

Mark Hayward

Non-executive Director

16/02/2021

Karen Johnson

Non-executive Director

30/09/2011

10/11/2020

John Ellice-Flint BSc (Hons) Harvard, AMP

Mr John Ellice-Flint is an Australian-born businessman whose foresight and wide-ranging oil and gas industry credentials are recognised internationally. John has over 45 years of exploration, production, operations and commercial experience in the oil and gas industry and has held many senior positions with multinational exploration and production companies. John's achievements in the oil and gas industry are well-known and highly respected. Following a 26 year international career at Unocal Corporation, serving in a variety of senior executive roles within strategic planning, exploration and technology functions, John became Managing Director and CEO of Santos Limited, Australia's largest domestic gas producer, from 2000 - 2008. John guided Santos Limited through a major growth period which culminated in the recognition of the potential of coal seam gas development through the Gladstone LNG export project in Queensland.

John Phillips BSc (Hons), GAICD

John is a Petroleum Geologist with over 35 years' experience in the oil and gas industry. John joined Blue Energy as Chief Operating Officer in May 2009, was promoted to CEO in April 2010 and joined the Board of Blue Energy in June 2010. John's career in industry has involved oil and gas experience in a variety of petroleum basins both domestically and internationally. John has gained extensive operational experience through his involvement with Delhi Petroleum, Esso, Conoco, Petroz and Novus, culminating in his role as Chief Operating Officer with Sunshine Gas before its takeover by QGC and subsequently by the BG Group.

Rodney Cameron BAdmin (Hons), MBA, MFM, FAICD, FCPA

Rodney has over 35 years industry experience, particularly in the energy and resources industries. He is a seasoned financial executive having been CFO for an ASX listed multi-national renewable energy company, as well as an executive director and CFO for a US multinational independent power generation company. Rodney has also worked in various management capacities for National Australia Bank, Rio Tinto, Telstra, and Atlantic Richfield Inc.

Mark Hayward BBus(ACC), MAICD, FCA

Mark is a Chartered Accountant and was a partner at Ernst and Young for 31 years until 30 June 2020 primarily in the financial audit group. He has extensive experience working both locally and internationally with companies in the energy and resources sectors includin g those with operations in Australia, Canada, USA , Singapore and South America. Mark brings to the Board strong technical accounting skills and an ability to identify the key risk areas for the company and industry.

Mark will chair the Risk and Audit Committee.

Karen Johnson BComm, FCA, GAICD - resigned 10/11/2020

Over the last 30 years Karen has held senior roles specialising in audit, assurance, technical and corporate governance consulting and financial accounting engagements within Chartered Accounting firms, public sector entities and private companies. Karen brings to the Board strong technical accounting skills through knowledge and application of Australian Accounting and Auditing Standards and an ability to quickly grasp complex business operations and identify the key risk areas for analysis, risk assessment and critical evaluation.

Directorships of other listed companies

No Directorships in other listed companies were held by current directors in the three years up to 30 June 2021.

COMPANY SECRETARY

Mr Stephen Rodgers was appointed Company Secretary on 15 March 2018. Mr Rodgers is a lawyer with over 33 years' experience and holds a Bachelor of Laws degree from Queensland University of Technology. Stephen practiced law with several firms in Brisbane and for many years operated his own specialist commercial and property law practice before joining the ASX listed Sunshine Gas Limited as the in-house Legal and Commercial Counsel. In 2008, Stephen was appointed as Company Secretary to Comet Ridge Limited, a position he still holds. Stephen is also the Company Secretary for Galilee Energy Limited. Stephen has extensive experience in the operat ion and running of an ASX listed oil and gas company as well as a detailed knowledge of Governance and legal matters.

EARNINGS PER SHARE

2021

2020

(Cents)

Basic loss per share

(0.07)

(0.38)

Diluted loss per share

(0.07)

(0.38)

BLUE ENERGY LIMITED AND CONTROLLED ENTITIES

D I R E C T O R S ' R E P O R T

DIVIDENDS

No dividends were paid or declared by the Company during the financial year. The Directors do not recommend the payment of a final dividend (2020: nil).

PRINCIPAL ACTIVITIES

Blue Energy Limited is an energy company that undertakes exploration, evaluation and development of conventional and unconven tional oil and gas resources. This activity is carried out in a single significant geographical segment, being Australia, principally in Queensland and the Northern Territory. In Queensland, Blue Energy has 100% equity holding in all its exploration tenements and is the Operator. In the Northern Territory exploration tenements, Blue Energy is earning an interest through funding a farm in work program but is the Operator. As a result of being the Operator in all of its tenement holdings, Blue Energy is in control of all capital and operating expenditures and is the point of contact for the respective State and Territory Regulators regarding work program. There has been no change in the principal activities of the Group from the prior year.

OPERATING AND FINANCIAL REVIEW

Reserve and Resource Position

There has been no material change to the Group's Reserve or Resource position in the last 12 month period to 30 June 2021. Blue Energy's Bowen Basin 2P and 3P Reserves are estimated (by the independent consultancy Netherland, Sewell and Associates, Inc of Dallas Texas (NSAI)) to be 71 PJ and 298 PJ respectively. Blue Energy's current 3C Contingent Resource estimate is 4,179 PJ of technically recoverable gas, whilst the 1C and 2C Contingent Resource estimates are 158 PJ and 1,166 PJ respectively. The Gas Reserves remain confined to ATP814P in the North Bowen Basin, whilst the Contingent Resources are established by NSAI in Blue's ATP814P, ATP813P and ATP854P tenements. The current Reserve and Resource estimate by NSAI has not varied from the prior year and this is tabled below (Table 1).

These reserves are not yet developed, there has been no production of gas by Blue Energy to deplete the reserves. All reserve s and resources stated in the table are in respect of unconventional gas (Coal Seam Gas) and are undeveloped reserves and net to Blue Energy.

These reserves remain undeveloped due to local market conditions and lack of gas pipeline infrastructure from the North Bowen Basin region to the main east coast domestic gas market. It is the Group's intention to develop these reserves by facilitating appropriate commercial transactions to enable the economic construction of appropriate gas infrastructure. The reserves are proximate to existing production but require appropriate infrastructure and commercial arrangements to be put in place for them to be brought to market. Both the Federal and Queensland Governments are prioritising studies into the feasibility of gas pipeline infrastructure as part o f the Federal Government's post COVID "Gas Led Recovery" initiative.

Several commercial transactions have been entered into by the Company in the last 12 months, including a Heads of Agreement to supply 100 PJ of gas to Energy Australia over 10 years at Wallumbilla, from the Company's ATP 814 tenement. Additionally, a Heads of Agreement with Origin Energy to supply up to 300 PJ of gas over 10 years also at Wallumbilla. These two most recent agreements are in addition to the Memorandum of Understanding executed in 2019 with Queensland Pacific Metals to supply 112 PJ over 15 years to their proposed Nickel refinery in Townsville.

The Group's entire reserve and resource position is independently reviewed and certified by NSAI, an independent reserve certifier, and reported by the Group directly should there be a change. The Group continues to work with NSAI on providing any updates on the reserve and resources position.

Table 1: Blue Energy Ltd's Reserve and Resource Inventory

Permit

Block

1C (PJ)

1P (PJ)

2C (PJ)

2P (PJ)

3C (PJ)

3P (PJ)

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

ATP854P

101

Surat Basin Qld

ATP813P

830

Galilee Basin Qld

ATP814P

Sapphire

108

186

216

Bowen Basin Qld

Central

306

Monslatt

619

2,054

Lancewood

435

South

Hillalong

182

237

Total (PJ)

158

1,166

4,179

298

BLUE ENERGY LIMITED AND CONTROLLED ENTITIES

D I R E C T O R S ' R E P O R T

Competent Person Statement

The estimates of reserves and contingent resources have been provided by Mr John Hattner of NSAI. Mr Hattner is a full-time employee of NSAI, has over 30 years of industry experience and 20 years of experience in reserve estimation, is a licensed geologist, and has consented to the use of the information presented herein. The estimates in the report by Mr Hattner have been prepared in accordance with the definitions and guidelines set forth in the 2007 Petroleum and Resource Management System (PRMS) approved by the Society of Petroleum Engineers (SPE), utilising a deterministic methodology.

ATP814P (Blue Energy 100% and Operator) - Bowen Basin

This permit currently has 2P reserves of 71 PJ, 3P reserves of 298 PJ and 3,248 PJ of Contingent Resources (as independently estimated by NSAI). It consists of 7 separate blocks, with the Sapphire Block holding the majority of the 2P and 3P reserves. This Block is in very close proximity to the current production from the Moranbah Gas Project Joint Venture.

Blue's MoU with pipeliner APA Group to investigate a pipeline route to take Blue's gas to the southern market remains on foot and has been strengthened by the interest the Federal and State Governments' have in bringing new gas supply from the North Bowen Basin to market as evidenced by their independent feasibility study for the pipeline connection

The 3 separate Production Licence Applications (PLA's) lodged previously with the Queensland Department of Resources are still under consideration by the Regulator as Blue continues to progress the necessary studies for the environmental authorities required for Grant of the Production Licences, together with Native Title Agreements for the respective areas.

Figure 1: Location of ATP814P and the PCA and PL Applications

ATP813P Galilee Basin Queensland (Blue Energy 100% - and Operator)

ATP813P is located to the north of the Aramac township in central west Queensland. Blue Energy's exploration work on the permit to date has resulted in 830 PJ of Contingent Resource being estimated by the Company's independent reserve specialist NSAI.

Blue lodged 9 separate Potential Commercial Area Applications in 2017, and as at 30 June 2021, these were still evaluated for grant by the Queensland Government.

BLUE ENERGY LIMITED AND CONTROLLED ENTITIES

Disclaimer

Blue Energy Limited published this content on 30 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 September 2021 07:51:10 UTC.