Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Dec. 31, 2015 | Feb. 15, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2015 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | SSN | |
Entity Registrant Name | Samson Oil & Gas LTD | |
Entity Central Index Key | 1,404,079 | |
Current Fiscal Year End Date | --06-30 | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 2,837,834,301 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 943,289 | $ 2,062,720 |
Accounts receivable, net of allowance for doubtful accounts of $nil and $nil respectively | 1,714,094 | 3,645,223 |
Prepayments | 684,830 | 372,079 |
Fair value of derivative instruments | 723,370 | 159,216 |
Total current assets | 4,065,583 | 6,239,238 |
PROPERTY, PLANT AND EQUIPMENT, AT COST | ||
Oil and gas properties, successful efforts method of accounting, less accumulated depreciation, depletion and impairment of $56,894,155 and $44,273,976 at December 31,2015 and June 30, 2015, respectively | 17,360,238 | 29,715,540 |
Other property and equipment, net of accumulated depreciation and amortization of $553,012 and $553,428 at December 31, 2015 and June 30, 2015, respectively | 145,824 | 248,521 |
Net property, plant and equipment | 17,506,062 | 29,964,061 |
OTHER NON CURRENT ASSETS | ||
Fair value of derivative instruments | 101,269 | |
Undeveloped capitalized acreage | 2,491,422 | |
Capitalized exploration expense | 202,573 | 1,388,798 |
Other | 214,624 | 342,069 |
TOTAL ASSETS | 21,988,842 | 40,526,857 |
CURRENT LIABILITIES | ||
Accounts payable | 952,185 | 1,678,915 |
Accruals | 245,465 | 1,999,344 |
Provision for annual leave | 194,019 | 219,414 |
Credit facility | 19,000,000 | |
Total current liabilities | 20,391,669 | 3,897,673 |
NON CURRENT LIABILITIES | ||
Asset retirement obligations | 1,794,356 | 1,263,674 |
Credit Facility | 19,000,000 | 18,699,000 |
TOTAL LIABILITIES | 22,186,025 | 23,860,347 |
STOCKHOLDERS' (DEFICIT)/ EQUITY - nil par value | ||
2,837,834,301 (equivalent to 14,189,172 ADR's) and 2,837,782,022 (equivalent to 14,188,910 ADR's) ordinary shares issued and outstanding at September 30, 2015 and June 30, 2015, respectively | 104,493,249 | 104,491,774 |
Accumulated other comprehensive income | 932,095 | 996,256 |
Accumulated deficit | (105,622,527) | (88,821,520) |
Total stockholders' (deficit)/ equity | (197,183) | 16,666,510 |
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)/ EQUITY | $ 21,988,842 | $ 40,526,857 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2015 | Jun. 30, 2015 |
Consolidated Balance Sheets [Abstract] | ||
Other property and equipment, net of accumulated depreciation and amortization | $ 553,012 | $ 553,428 |
Oil and gas properties, successful efforts method of accounting, less accumulated depreciation, depletion and impairment | $ 56,894,155 | $ 44,273,976 |
Common stock, par value | $ 0 | |
Common stock, shares issued | 2,837,834,301 | 2,837,782,022 |
Common stock, shares issued ADR | 14,189,172 | 14,188,910 |
Common stock, shares outstanding ADR | 14,189,172 | 14,188,910 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations And Comprehensive Income (Loss) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
REVENUES AND OTHER INCOME: | ||||
Interest income | $ 667 | $ 9,884 | $ 2,202 | $ 19,523 |
Gain on derivative instruments | 200,017 | 2,306,135 | 572,569 | 3,087,705 |
Other | 265 | 6,561 | 17,902 | 6,772 |
TOTAL REVENUE AND OTHER INCOME | 2,336,602 | 5,009,633 | 5,369,002 | 9,059,248 |
EXPENSES: | ||||
Lease operating expense | (1,102,441) | (1,512,195) | (2,831,170) | (2,972,117) |
Depletion, depreciation and amortization | (1,399,511) | (1,118,619) | (2,883,243) | (2,073,680) |
Impairment expense | (9,682,965) | (3,027,288) | (9,802,987) | (3,060,684) |
Abandonment expense | (79,036) | (214,803) | ||
Exploration and evaluation expenditure | (3,699,651) | (362,540) | (4,192,719) | (11,465,956) |
Accretion of asset retirement obligations | (15,116) | (8,418) | (30,004) | (16,341) |
Amortisation of borrowing costs | (35,486) | (31,972) | (70,972) | (65,132) |
Interest expense | (196,357) | (147,343) | (386,396) | (231,285) |
General and administrative | (911,925) | (1,260,793) | (1,972,518) | (2,472,072) |
TOTAL EXPENSES | (17,043,452) | (7,548,204) | (22,170,009) | (22,572,070) |
Loss from operations | (14,706,850) | (2,538,571) | (16,801,007) | (13,512,822) |
Net loss | (14,706,850) | (2,538,571) | (16,801,007) | (13,512,822) |
OTHER COMPREHENSIVE GAIN (LOSS) [Abstract] | ||||
Foreign Currency Translation gain/( loss) | 6,623 | (97,689) | (64,161) | (226,399) |
Total comprehensive loss for the period | $ (14,700,227) | $ (2,636,260) | $ (16,865,168) | $ (13,739,221) |
Net gain/(loss) per ordinary share from operations: | ||||
Basic - cents per share | $ (0.52) | $ (0.09) | $ (0.59) | $ (0.48) |
Diluted - cents per share | $ (0.52) | $ (0.09) | $ (0.59) | $ (0.48) |
Weighted average ordinary shares outstanding: | ||||
Basic | 2,837,834,301 | 2,837,781,683 | 2,837,828,903 | 2,837,772,648 |
Diluted | 2,837,834,301 | 2,837,781,683 | 2,837,828,903 | 2,837,772,648 |
Oil [Member] | ||||
REVENUES AND OTHER INCOME: | ||||
Sales | $ 1,898,240 | $ 2,538,100 | $ 4,320,823 | $ 5,541,245 |
Gas [Member] | ||||
REVENUES AND OTHER INCOME: | ||||
Sales | 210,212 | $ 148,953 | 426,959 | $ 404,003 |
Other Liquids [Member] | ||||
REVENUES AND OTHER INCOME: | ||||
Sales | $ 27,201 | $ 28,547 |
Consolidated Statements Of Chan
Consolidated Statements Of Changes In Stockholders' Equity - 6 months ended Dec. 31, 2015 - USD ($) | Ordinary Shares [Member] | Retained Earnings/(Accumulated Deficit) [Member] | Other Comprehensive Income (Loss) [Member] | Total |
Balance at Jun. 30, 2015 | $ 104,491,774 | $ (88,821,520) | $ 996,256 | $ 16,666,510 |
Net loss | (16,801,007) | (16,801,007) | ||
Foreign Currency Translation, net tax of $nil | (64,161) | (64,161) | ||
Total comprehensive loss for the period | (16,801,007) | (64,161) | (16,865,168) | |
Exercise of Options | 1,475 | 1,475 | ||
Balance at Dec. 31, 2015 | $ 104,493,249 | $ (105,622,527) | $ 932,095 | $ (197,183) |
Consolidated Statements Of Cha6
Consolidated Statements Of Changes In Stockholders' Equity (Parenthetical) | 6 Months Ended |
Dec. 31, 2015USD ($) | |
Consolidated Statements Of Changes In Stockholders' Equity [Abstract] | |
Foreign currency translation, tax | $ 0 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) | 6 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows (used in)/provided by operating activities | ||
Receipts from customers | $ 6,543,082 | $ 7,010,394 |
Proceeds from/(Payments for) derivative instruments | 109,684 | 228,837 |
Payments to suppliers & employees | (5,738,781) | (6,349,789) |
Interest received | 2,188 | 19,499 |
Interest paid | (398,837) | (172,917) |
State income taxes paid | (107,135) | |
Net cash flows provided by operating activities | 517,336 | 628,889 |
Cash flows from investing activities | ||
Payments for plant & equipment | (21,427) | |
Payments for exploration and evaluation | (314,639) | (1,399,142) |
Payments for oil and gas properties | (1,558,976) | (11,313,174) |
Net cash flows used in investing activities | (1,873,615) | (12,733,743) |
Cash flows from financing activities | ||
Proceeds from the exercise of options | 1,475 | 880 |
Proceeds from borrowings | 301,000 | 9,500,000 |
Borrowing costs | (83,690) | |
Share issuance costs | (45,000) | |
Net cash flows (used in)/ provided by financing activities | 302,475 | 9,372,190 |
Net increase/(decrease) in cash and cash equivalents | (1,053,804) | (2,732,664) |
Cash and cash equivalents at the beginning of the fiscal period | 2,062,720 | 6,846,394 |
Effects of exchange rate changes on cash and cash equivalents | (65,627) | (232,592) |
Cash and cash equivalents at end of fiscal period | $ 943,289 | $ 3,881,138 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Dec. 31, 2015 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | 1. Basis of Presentation These Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial reporting. All adjustments which are normal and recurring by nature, in the opinion of management, necessary for fair statement of Samson Oil & Gas Limited’s (the Company) Consolidated Financial Statements have been included herein. Interim results are not necessarily indicative of expected annual results because of the impact of fluctuations in prices received for oil and natural gas, as well as other factors. In the course of preparing the Consolidated Financial Statements, management makes various assumptions, judgments and estimates to determine the reported amounts of assets, liabilities, revenues and expenses, and in the disclosures of commitments and contingencies. Changes in these assumptions, judgments and estimates will occur as a result of the passage of time and the occurrence of future events, and, accordingly, actual results could differ from amounts previously established. The Company’s Consolidated Financial Statements have been prepared on a basis consistent with the accounting principles and policies reflected in the Company’s audited financial statements as of and for the year ended June 30, 201 5 . The year-end Consolidated Balance Sheet presented herein was derived from audited Consolidated Financial Statements, but does not include all disclosures required by GAAP. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in the Company’s latest annual report (“Form 10-K”). Accruals. A ccrued liabilities at December 31 , 201 5 and June 30, 201 5 consist primarily of estimate s for goods and services received but not yet invoiced. Prepayments. Prepayments at December 31, 2015 consist primarily of a $0.5 million deposit paid in connection with a purchase and sale agreement that we entered into on December 31, 2015. This deposit is only refundable if certain conditions with respect to title of environmental defects are identified and the transaction does not close as proposed. Refer to the discussions below under “Credit Facility” and “Subsequent Events” for additional discussion of this agreement. Other prepayments include insurance premiums paid in advance for the year. Prepayments at June 30, 2015 consists primarily of cash advanced to the operators of our South Prairie exploration project for a future exploration well and insurance premiums paid in advance for the year. The exploration well was drilled in October 2015 and was a dry hole. Costs were expensed as incurred. Comparatives. Changes have been made to the classification of certain prior period comparatives in order to remain consistent with the current period presentation. Recent Accounting Standards There are no new accounting pronouncements that have not been adopted by the Company as of December 31 , 2015 that will have a material effect on the Company’s financial statements . |
Income Taxes
Income Taxes | 3 Months Ended |
Dec. 31, 2015 | |
Income Taxes [Abstract] | |
Income Taxes | 2. Income Taxes The Company has cumulative net operating losses (“NOLs”) that may be carried forward to reduce taxable income in future years. The Tax Reform Act of 1986 contains provisions that limit the utilization of NOLs if there has been a change in ownership as described in Internal Revenue Code Section 382. The Company’s prior year NOLs are limited by IRC Section 382. ASC Topic 740 requires that a valuation allowance be provided if it is more likely than not that some portion or all deferred tax assets will not be realized. The Company’s ability to realize the benefits of its deferred tax assets will depend on the generation of future taxable income through profitable operations. Due to the Company’s history of losses and the uncertainty of future profitable operations, the Company has recorded a full valuation allowance against its deferred tax assets. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 3. Earnings Per Share Basic earnings (loss) per share is calculated by dividing net earnings (loss) attributable to ordinary shares by the weighted average number of shares outstanding for the period. Under the treasury stock method, diluted earnings per share is calculated by dividing net earnings (loss) by the weighted average number of shares outstanding including all potentially dilutive ordinary shares (which in Samson’s case consists of unexercised stock options). In the event of a net loss, however no potential ordinary shares are included in the calculation of shares outstanding since the impact would be anti-dilutive. The following table details the weighted average dilutive and anti-dilutive securities outstanding, which consist of transferable options to purchase ordinary shares which are tradeable on the ASX (“options”), for the periods presented: Three months ended Six months ended 31-Dec-15 31-Dec-14 31-Dec-15 31-Dec-14 Dilutive - - - - Anti–dilutive 324,615,486 389,168,104 323,287,581 389,177,139 The following tables set forth the calculation of basic and diluted loss per share: Three months ended Six months ended 31-Dec-15 31-Dec-14 31-Dec-15 31-Dec-14 Net income (loss) $ (14,706,850) (2,538,571) $ (16,801,007) (13,512,822) Basic weighted average ordinary shares outstanding 2,837,834,301 2,837,781,683 2,837,828,903 2,837,772,648 Basic earnings per ordinary share – cents per share (0.52) (0.09) (0.59) (0.48) Diluted earnings per ordinary share – cents per share (0.52) (0.09) (0.59) (0.48) |
Asset Retirement Obligations
Asset Retirement Obligations | 3 Months Ended |
Dec. 31, 2015 | |
Asset Retirement Obligations [Abstract] | |
Asset Retirement Obligations | 4. Asset Retirement Obligations The Company’s asset retirement obligations primarily represent the estimated present value of the amounts expected to be incurred to plug, abandon and remediate producing and shut–in properties at the end of their productive lives in accordance with applicable state and federal laws. The Company determines the estimated fair value of its asset retirement obligations by calculating the present value of estimated cash flows related to those obligations. The significant inputs used to calculate such liabilities include estimates of costs to be incurred, the Company’s credit adjusted discount rates, inflation rates and estimated dates of abandonment. The asset retirement liability is accreted to its present value each period and the capitalized asset retirement cost is depleted using the units–of–production method. The liabilities settled in the six months to December 31, 2014 relate to work performed to plug and abandon three wells in our Greens Canyon prospect in Wyoming. These wells were drilled 10 years ago and did not produce economic quantities of hydrocarbons. The liabilities settled in the quarter ended December 31, 2015 relates to the plugging of one well in our North Stockyard property, the Harstad. This well’s performance was sub-optimal and experienced high levels of hydrogen sulphide. The following table summarizes the activities for the Company’s asset retirement obligations for the three months ended December 31, 2015 and 2014: Six months ended 31-Dec-15 31-Dec-14 Asset retirement obligations at beginning of period $ 1,810,674 $ 1,775,792 Liabilities incurred or acquired - 42,805 Liabilities settled (46,322) (710,561) Disposition of properties - - Accretion expense 30,004 16,341 Asset retirement obligations at end of period 1,794,356 1,124,377 Less: current asset retirement obligations (classified with accounts payable and accrued liabilities) - - Long-term asset retirement obligations $ 1,794,356 $ 1,124,377 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 5. Fair Value Measurements Fair value is defined as the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. The FASB has established a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). The three levels of the fair value hierarchy are as follows: Level 1—Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2—Pricing inputs are other than quoted prices in active markets included in level 1, but are either directly or indirectly observable as of the reported date and for substantially the full term of the instrument. Inputs may include quoted prices for similar assets and liabilities. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. Level 3—Pricing inputs include significant inputs that are generally unobservable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value as of December 31, 2015 and June 30, 2015. Carrying value at December 31, 2015 Level 1 Level 2 Level 3 Netting (1) Fair Value at December 31, 2015 Current Assets: Cash and cash equivalents $ 943,289 $ 943,289 $ - $ - $ - $ 943,289 Derivative Instruments 723,370 - 2,030,217 - (1,306,847) 723,370 Non Current Assets Derivative Instruments - - - - - Current Liabilities Derivative instruments - - 1,306,847 - (1,306,847) - Non Current Liabilities Derivative Instruments - - - - - Carrying value at June 30, 2015 Level 1 Level 2 Level 3 Netting (1) Fair Value at June 30, 2015 Current Assets: Cash and cash equivalents $ 2,062,720 $ 2,062,720 $ - $ - $ - $ 2,062,720 Derivative Instruments 159,216 - 379,540 - (220,324) 159,216 Non Current Assets Derivative Instruments 101,269 - 298,703 - (197,434) 101,269 Current Liabilities Derivative instruments - - 220,324 - (220,324) - Non Current Liabilities Derivative Instruments - - 197,434 - (197,434) - (1) Netting In accordance with the Company’s standard practice, its commodity derivatives are subject to counterparty netting under agreements governing such derivatives and therefore the risk of loss is somewhat mitigated. The following methods and assumptions were used to estimate the fair value of the assets and liabilities in the table above: Level 1 Fair value Measurements Fair Value of Financial Instruments. The Company’s financial instruments consist primarily of cash and cash equivalents, restricted cash, accounts receivable and payable and derivatives (discussed below). The carrying values of cash equivalents and accounts receivable and payable are representative of their fair values due to their short–term maturities. Level 2 Fair Measurements Derivative Contracts. The Company’s derivative contracts consist of oil collars and oil call options. The fair value of these contracts are based on inputs that are either readily available in the public market, such as oil future prices or inputs that can be corroborated from active markets. Fair value is determined through the use of a discounted cash model using applicable inputs discussed above. Other fair value measurements Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis. The Company also applies fair value accounting guidance to measure non–financial assets and liabilities such as business acquisitions, proved oil and gas properties, and asset retirement obligations. These assets and liabilities are subject to fair value adjustments only in certain circumstances and are not subject to recurring revaluations. These items are primarily valued using the present value of estimated future cash inflows and/or outflows. Given the unobservable nature of these inputs, they are deemed to be Level 3. Some oil and gas properties are stated at fair value as at December 31 , 2015. As a result of the significant decline in oil prices experienced in recent months, the carrying value of oil and gas properties was reviewed and subject to impairment costs of $ 9.6 million relating to our North Stockyard field due to the continued decrease in the oil price . |
Commitments And Contingencies
Commitments And Contingencies | 3 Months Ended |
Dec. 31, 2015 | |
Commitments And Contingencies [Abstract] | |
Commitments And Contingencies | 6. Commitments and Contingencies The Company has no accrued environmental liabilities for its sites, including sites in which governmental agencies have designated the Company as a potentially responsible party , because it is not probable that a loss will be incurred and the minimum cost and/or amount of loss cannot be reasonably estimated. However, due to uncertainties associated with environmental assessment and remediation activities, future expense to remediate the currently identified sites, and sites identified in the future , if any, could be incurred. Management believes, based upon current site assessments, that the ultimate resolution of any such matters will not materially affect our results of operations or cash flows. From time to time, we are involved in various legal proceedings through the ordinary course of business. While the ultimate outcome is not known, management believes that any resolution will not materially impact the financial statements. Halliburton Dispute In 2013, Halliburton Energy Services, Inc., a co-participant in the Company’s Hawk Springs project, filed a complaint in Harris County, Texas District Court against Samson USA seeking unpaid oil revenue attributable to its ownership interest in the Hawk Springs Project. The unpaid oil revenue was approximately $ 126,000 at that time, and has since increased to approximately $170,000 . Samson USA answered the complaint, including counterclaims against Halliburton arising out of Samson USA’s engagement of Halliburton’s Project Management group in May of 2011 in connection with its drilling program in Roosevelt County, Montana. In those counterclaims, Samson USA claimed approximately $336,000 from Halliburton on account of Halliburton’s refusal to pay an invoice for demobilization of the drilling rig used in the Roosevelt project. Samson USA also counterclaimed for a judicial accounting of the fees and expenses Halliburton charged to Samson in connection with the Spirit of America well in Goshen County, Wyoming, and the Australia II well in Roosevelt County, Wyoming, in light of Samson USA’s prior discovery of self-dealing and bill padding by Halliburton’s onsite project manager. In September 2015, Samson filed an amended counterclaim in which it has alleged that (i) Halliburton selected a rig that was inappropriate for the geology where the Spirit of America 1 well was located, and (ii) the project supervisor assigned by Halliburton to oversee the construction and drilling of the Spirit of America 1 well was unqualified and lacked the credentials and experience to perform the duties required of a project manager. Samson has alleged that Halliburton’s failure in this regard caused Halliburton to be unable to reach the target reservoir and, in the process, caused Samson to incur $4,505,587 in costs that could have been avoided if a proper rig and qualified project supervisor had been selected and used on the project. The parties have attended one mediation session with a court appointed mediator, however this failed to reach an agreement. Another mediation is scheduled to be held on March 10, 2016. While Samson believes its counterclaims are meritorious and is confident that Samson USA will obtain a net positive recovery from the litigation, there can be no assurance as to the ultimate outcome. |
Issue of Share Capital
Issue of Share Capital | 3 Months Ended |
Dec. 31, 2015 | |
Issue of Share Capital [Abstract] | |
Issue of Share Capital | 8. Share Capital Issue of Share Capital During the six months ended December 31, 2 01 5 , 52, 279 options with an exercise price of 3.8 cent s (Australian) per ordinary share were exercised for net proceeds of $ 1,475 . During the six months ended December 31, 2014 24,025 options with an exercise price of 3.8 cents (Australian) per ordinary share were exercised for net proceeds of $880 . All options exercised were issued in a public rights offering conducted in June 2013. |
Cash Flow Statement
Cash Flow Statement | 3 Months Ended |
Dec. 31, 2015 | |
Cash Flow Statement [Abstract] | |
Cash Flow Statement | 9. Cash Flow Statement Reconciliation of loss after tax to the net cash flows from operations: Six months ended 31-Dec-15 31-Dec-14 Net loss after tax $ (16,801,007) $ (13,512,822) Depletion, depreciation and amortization 2,883,243 2,073,680 Accretion of asset retirement obligation 30,004 16,341 Impairment expense 9,802,987 3,060,684 Exploration and evaluation expenditure 4,192,719 11,465,956 Amortization borrowing costs 70,972 65,132 Abandonment expense - 214,803 Non cash (gain)/loss on derivative instruments (462,885) (2,619,664) Changes in assets and liabilities: Decrease in receivables 1,931,129 2,132,371 Increase/(decrease) in provision for annual leave (25,395) (19,082) (Decrease)/Increase in payables (1,104,431) (2,248,510) NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES $ 517,336 $ 628,889 |
Credit Facility
Credit Facility | 3 Months Ended |
Dec. 31, 2015 | |
Credit Facility [Abstract] | |
Credit Facility Disclosure | 10. Credit Facility Six months ended 31-Dec-15 31-Dec-14 Credit facility at beginning of period $ 18,699,000 $ 6,000,000 Cash advanced under facility $ 301,000 9,500,000 Repayments - - Credit facility at end of period (1) $ 19,000,000 $ 15,500,000 - Funds available for drawdown under the facility $ - 3,500,000 (1) The credit facility in the current period has been presented as a current liability. In previous periods (prior to the quarter ended September 30, 2015) the facility was presented as a non-current liability. Due to the continuing weakness in the global oil price, there is doubt as to whether or not we will be able to meet our future debt covenants. We are working with the bank to renegotiate our facility and will continue to ask for waivers on a quarterly basis as necessary; however there can be no guarantee they will be granted. In January 2014, we entered into a $ 25.0 million credit facility with our primary lender, Mutual of Omaha Bank, with an initial borrowing base of $8.0 million, which was increased to $ 15.5 million in June 2014. In November 2014, the borrowing base was increased to $19.0 million which was fully drawn down as of December 31, 2015. As a result, unless the borrowing base is increased or we pay down outstanding borrowings, we are unable to borrow additional amounts under this facility. Our primary lender is currently assessing our borrowing base in conjunction with the pending acquisition of certain assets including proved reserves in Montana and North Dakota, as announced in a Form 8-K filed on January 7, 2016. The acquisition was due to close on February 15 th , but the continuing volatility in petroleum markets has prevented us from concluding arrangements for financing of the acquired assets with the our primary lender. While we remain optimistic that we will obtain the necessary financing and close the acquisition, our failure to meet the February 15th deadline entitles the seller to terminate the purchase agreement at any time. We currently expect that the necessary financing will be obtained on or before February 29th, 2016, and that the seller will close the sale on that date. There can be no assurance, however, that the seller will not exercise its right to terminate before we obtain the funds needed and close the transaction. Our primary lender has indicated that it is considering providing the funds needed to close the acquisition. If it does agree to provide the funds, we expect our borrowing base to be increased to $34.5 million following the closing of the acquisition. We believe that this funding would be subject to certain additional commitments, including finding an additional source of capital in order to reduce the lender’s exposure within a reasonable time period following the closing of the acquisition and a continued reduction in our general and administrative expenditure. If this acquisition does not close as proposed or is terminated by the seller, it is likely that our borrowing base would be decreased, and we would need to repay outstanding amounts under the credit facility in excess of the decreased borrowing base to cure the resulting breach. Under the credit facility, we must commence repayment of outstanding amount s in excess of the reduced borrowing base within 30 days of our receipt of a borrowing base deficiency notice. Such excess is required to be repaid in six equal consecutive monthly installments, unless our primary lender consents to an extension or amendment to this timeline. Our failure to timely repay such amounts would be deemed an event of default under our credit agreement. In the current oil pricing climate, there can be no guarantee of our ability to timely repay such amounts. Additional increases in the borrowing base, up to the credit facility maximum of $50.0 million, may be made available to us in the future depending on the value of our reserves. Borrowing base redeterminations are performed by the lender every six months based on our June and December reserve reports. We also have the ability to request a borrowing base redetermination at another period, once a year. The facility matures January 28, 2017 . The interest rate is LIBOR plus 3.75% or approximately 3.98% for the quarter ended December 31, 2015. The credit facility includes the following covenants, tested on a quarterly basis: · Current ratio greater than 1 · Debt to EBITDAX (annualized) ratio no greater than 3.5 · Interest coverage ratio minimum of between 2.5 and 1.0 The credit facility also includes an annual cap on general and administrative expenditures of $6,000,000 per year which was tested for the first time for the calendar year ended December 31, 2014 and each subsequent December 31 thereafter while the facility is in place. As at December 31, 2014 we were in breach of our debt to EBITDAX covenant. We received a waiver from our primary lender with respect to this breach for this quarter only. We were in compliance with all other covenants. As at March 31, 2015 we were in breach of our debt to EBIDTAX covenant. We received a waiver from our primary lender with respect to this breach for this quarter only. We were in compliance with all other covenants. We were in compliance with all of our covenants as at June 30, 2015. As at September 30, 2015 we were in breach of our Debt to EBITDAX and interest coverage ratio covenants. We received a waiver from our primary lender with respect to these covenants for this quarter only. As at December 31, 2015 we were in breach of our Debt to EBITDAX and interest coverage ratio covenants. We have requested a waiver from our primary lender with respect to these covenants for this quarter only, and it is still considering this request. If the current pricing environment does not improve it will difficult to maintain compliance with covenants based our current debt levels. If we are not in compliance with the financial covenants in the credit facility, or if we do not receive a waiver from the lender, and if we fail to cure any such noncompliance during the applicable cure period, the due date of our debt could be accelerated by the lender. In addition, failure to comply with any of the covenants under our credit facility could adversely affect our ability to fund ongoing operations. We incurred $0. 4 million in borrowing costs (including legal fees and bank fees) in connection with the establishment of this facility which have been deferred and are being amortized over the life of the facility. |
Derivatives
Derivatives | 3 Months Ended |
Dec. 31, 2015 | |
Derivatives [Abstract] | |
Derivatives | 11. Derivatives The Company has not designated any of its derivative contracts as hedges for accounting purposes. The Company records all derivative contracts at fair value. Changes in derivative contracts are recognized in earnings. Changes in settlements and valuation gains and losses are included in loss/(gain) on derivative instruments in the Statement of Operations. These contracts are settled on a monthly basis. Derivative assets and liabilities arising from the Company’s derivative contracts with the same counterparty that provide for net settlement are reported on a net basis in the Balance Sheet. The Company is exposed to commodity price risk, which impacts the predictability of its cash flows from the sale of oil. The Company seeks to manage this risk through the use of commodity derivative contracts These derivative contracts allow the Company to limit its exposure to commodity price volatility on a portion of its forecasted oil sales. At December 31, 2015, the Company’s commodity derivative contracts consisted of collars and fixed price swaps, which are described below: Collar Collars contain a fixed floor price (put) and fixed ceiling price (call). If the market price exceeds the call strike price or falls below the put strike price, the Company receives the fixed price and pays the market price. If the market price is between the call and the put strike price, no payments are due from the either party. Fixed price swap The Company receives a fixed price for the contract and pays a floating market price to the counterparty over a specified period for a contracted volume. All of the Company’s derivative contracts are with the same counterparty (a large multinational oil company) and are shown on a net basis on the Balance Sheet. The Company’s counterparty has entered into an inter-creditor agreement with the Company’s primary lender, and as such, no additional collateral is required by the counterparty. During the quarter ended December 31, 2015 we recognized $ 200,017 gain on derivative instruments in the Statement of Operations. We intend to increase our derivative portfolio as our production increases in order to provide downside protection to our future production. In October 2014, we entered into a deferred put spread arrangement with respect to 36,600 barrels from production in 2016. These options have a floor of $82.50 (the Company receives $82.50 when the market price settles between $67. 5 0 and $82.50) and a sub floor of $67.50 (the Company receives the market price plus $15 for any prices below $67.50) with a cost of $5.50 per barrel which is deferred until the settlement of the derivative instrument. In April 2015, we closed out our open 2015 hedge positions (from April 2015 to December 2015) for net proceeds of $1.2 million. We also entered into a three way costless collar arrangement with respect to 73,500 barrels from production from May 2015 to December 2015. These options have a ceiling of $70.50, a floor of $45.00 (the Company receives $45.00 when the market price settles between $32.50 and $45.00) and a sub floor of $32.50 (the Company receives the market price plus $15 for any prices below $32.50). Also in April, we also entered into a deferred three way collar with respect to 27,375 (average of 75 barrels per day) for 2016 production. The options have a ceiling of $80, a floor or $55 and a sub floor of $45. These options have a premium of $1.63 per barrel, which is deferred until the contract settlement. At December 31, 2015 the Company’s open derivative contracts consisted of the following: Oil Price Collars - WTI Volumes (Bbls) Sub Floor US$ Floor US$ Ceiling US$ January 2016 - February 2016 2,788 - 85.00 89.85 January 2016- December 2016 36,600 - 67.50 82.50 January 2016 -December 2016 27,450 40.00 55.00 80.00 Oil Price Swaps - WTI Volumes (Bbls) Price US$ January 2016 - February 2016 2,788 105.00 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Schedule Of Weighted Average Dilutive And Anti-Dilutive Securities | Three months ended Six months ended 31-Dec-15 31-Dec-14 31-Dec-15 31-Dec-14 Dilutive - - - - Anti–dilutive 324,615,486 389,168,104 323,287,581 389,177,139 |
Schedule Of Calculation Of Basic And Diluted Earnings Per Share | Three months ended Six months ended 31-Dec-15 31-Dec-14 31-Dec-15 31-Dec-14 Net income (loss) $ (14,706,850) (2,538,571) $ (16,801,007) (13,512,822) Basic weighted average ordinary shares outstanding 2,837,834,301 2,837,781,683 2,837,828,903 2,837,772,648 Basic earnings per ordinary share – cents per share (0.52) (0.09) (0.59) (0.48) Diluted earnings per ordinary share – cents per share (0.52) (0.09) (0.59) (0.48) |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Asset Retirement Obligations [Abstract] | |
Summary Of Activities Of Asset Retirement Obligations | Six months ended 31-Dec-15 31-Dec-14 Asset retirement obligations at beginning of period $ 1,810,674 $ 1,775,792 Liabilities incurred or acquired - 42,805 Liabilities settled (46,322) (710,561) Disposition of properties - - Accretion expense 30,004 16,341 Asset retirement obligations at end of period 1,794,356 1,124,377 Less: current asset retirement obligations (classified with accounts payable and accrued liabilities) - - Long-term asset retirement obligations $ 1,794,356 $ 1,124,377 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurements [Abstract] | |
Schedule Of Fair Value, Assets And Liabilities Measured On Recurring And Nonrecurring Basis | Carrying value at December 31, 2015 Level 1 Level 2 Level 3 Netting (1) Fair Value at December 31, 2015 Current Assets: Cash and cash equivalents $ 943,289 $ 943,289 $ - $ - $ - $ 943,289 Derivative Instruments 723,370 - 2,030,217 - (1,306,847) 723,370 Non Current Assets Derivative Instruments - - - - - Current Liabilities Derivative instruments - - 1,306,847 - (1,306,847) - Non Current Liabilities Derivative Instruments - - - - - Carrying value at June 30, 2015 Level 1 Level 2 Level 3 Netting (1) Fair Value at June 30, 2015 Current Assets: Cash and cash equivalents $ 2,062,720 $ 2,062,720 $ - $ - $ - $ 2,062,720 Derivative Instruments 159,216 - 379,540 - (220,324) 159,216 Non Current Assets Derivative Instruments 101,269 - 298,703 - (197,434) 101,269 Current Liabilities Derivative instruments - - 220,324 - (220,324) - Non Current Liabilities Derivative Instruments - - 197,434 - (197,434) - |
Cash Flow Statement Reconcilati
Cash Flow Statement Reconcilation (Tables) | 3 Months Ended |
Dec. 31, 2015 | |
Cash Flow Statement [Abstract] | |
Schedule Of Cash Flow Statement Reconciliation | Six months ended 31-Dec-15 31-Dec-14 Net loss after tax $ (16,801,007) $ (13,512,822) Depletion, depreciation and amortization 2,883,243 2,073,680 Accretion of asset retirement obligation 30,004 16,341 Impairment expense 9,802,987 3,060,684 Exploration and evaluation expenditure 4,192,719 11,465,956 Amortization borrowing costs 70,972 65,132 Abandonment expense - 214,803 Non cash (gain)/loss on derivative instruments (462,885) (2,619,664) Changes in assets and liabilities: Decrease in receivables 1,931,129 2,132,371 Increase/(decrease) in provision for annual leave (25,395) (19,082) (Decrease)/Increase in payables (1,104,431) (2,248,510) NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES $ 517,336 $ 628,889 |
Credit Facility (Tables)
Credit Facility (Tables) | 3 Months Ended |
Dec. 31, 2015 | |
Credit Facility [Abstract] | |
Schedule of Line of Credit Facilities [Table Text Block] | Six months ended 31-Dec-15 31-Dec-14 Credit facility at beginning of period $ 18,699,000 $ 6,000,000 Cash advanced under facility $ 301,000 9,500,000 Repayments - - Credit facility at end of period (1) $ 19,000,000 $ 15,500,000 - Funds available for drawdown under the facility $ - 3,500,000 |
Derivatives (Tables)
Derivatives (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Derivatives [Abstract] | |
Schedule Of Open Derivative Contracts | Oil Price Collars - WTI Volumes (Bbls) Sub Floor US$ Floor US$ Ceiling US$ January 2016 - February 2016 2,788 - 85.00 89.85 January 2016- December 2016 36,600 - 67.50 82.50 January 2016 -December 2016 27,450 40.00 55.00 80.00 Oil Price Swaps - WTI Volumes (Bbls) Price US$ January 2016 - February 2016 2,788 105.00 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Abstract] | ||||
Anti-dilutive | 324,615,486 | 389,168,104 | 323,287,581 | 389,177,139 |
Net income | $ (14,706,850) | $ (2,538,571) | $ (16,801,007) | $ (13,512,822) |
Basic weighted average ordinary shares outstanding | 2,837,834,301 | 2,837,781,683 | 2,837,828,903 | 2,837,772,648 |
Diluted weighted average ordinary shares outstanding | 2,837,834,301 | 2,837,781,683 | 2,837,828,903 | 2,837,772,648 |
Basic earnings per ordinary share - cents per share | $ (0.52) | $ (0.09) | $ (0.59) | $ (0.48) |
Diluted earnings per ordinary share - cents per share | $ (0.52) | $ (0.09) | $ (0.59) | $ (0.48) |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2015 | |
Asset Retirement Obligations [Abstract] | |||||
Asset retirement obligations at beginning of period | $ 1,810,674 | $ 1,775,792 | |||
Liabilities incurred or acquired | 42,805 | ||||
Liabilities settled | (46,322) | (710,561) | |||
Accretion expense | $ 15,116 | $ 8,418 | 30,004 | 16,341 | |
Asset retirement obligations at end of period | 1,794,356 | 1,124,377 | 1,794,356 | 1,124,377 | |
Long-term asset retirement obligations | $ 1,794,356 | $ 1,124,377 | $ 1,794,356 | $ 1,124,377 | $ 1,263,674 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule Of Fair Value, Assets And Liabilities Measured On Recurring And Nonrecurring Basis) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2015 | Jun. 30, 2015 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Cash and cash equivalents | $ 943,289 | $ 943,289 | $ 2,062,720 | ||||
Derivative instruments, Current Assets | 723,370 | 723,370 | $ 723,370 | 159,216 | |||
Fair value of derivative instruments | 101,269 | ||||||
Impairment of Oil and Gas Properties | 9,682,965 | $ 3,027,288 | 9,802,987 | $ 3,060,684 | |||
Carrying Value [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Cash and cash equivalents | 943,289 | 943,289 | 2,062,720 | ||||
Derivative instruments, Current Assets | 723,370 | 723,370 | 159,216 | ||||
Fair value of derivative instruments | 101,269 | ||||||
Level 1 [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Cash and cash equivalents | 943,289 | 943,289 | 2,062,720 | ||||
Level 2 [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Derivative instruments, Current Assets | 2,030,217 | 2,030,217 | 379,540 | ||||
Fair value of derivative instruments | 298,703 | ||||||
Derivative Liability, Current | 1,306,847 | 1,306,847 | 220,324 | ||||
Derivative instrument, Non Current Liabilities | 197,434 | ||||||
Netting [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Derivative instruments, Current Assets | [1] | (1,306,847) | (1,306,847) | (220,324) | |||
Fair value of derivative instruments | [1] | (197,434) | |||||
Derivative Liability, Current | [1] | $ (1,306,847) | $ (1,306,847) | (220,324) | |||
Derivative instrument, Non Current Liabilities | [1] | $ (197,434) | |||||
[1] | Netting In accordance with the Company's standard practice, its commodity derivatives are subject to counterparty netting under agreements governing such derivatives and therefore the risk of loss is somewhat mitigated. |
Commitments And Contingencies (
Commitments And Contingencies (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Jun. 30, 2013 | |
Commitments And Contingencies [Abstract] | ||
Unpaid oil revenue claimed by Halliburton | $ 170,000 | $ 126,000 |
Disputed rig mobilisation invoice | 336,000 | |
Disputedwellcharges | $ 4,505,587 |
Capitalized Exploration Expense
Capitalized Exploration Expense (Details) - USD ($) | 6 Months Ended | |
Dec. 31, 2015 | Jun. 30, 2015 | |
Capitalized Exploration Expense [Abstract] | ||
Capiltalized exploration expense after write off | $ 200,000 | |
Undeveloped capitalized acreage | $ 2,491,422 |
Issue of Share Capital (Details
Issue of Share Capital (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Issue of Share Capital [Abstract] | |||
Shares issued upon exercise of options, shares | 24,025 | 52,279 | 24,025 |
Weighted average exercise price - cents (AUD) and (USD), exercised | $ 3.8 | $ 3.8 | |
Net proceeds from option exercises | $ 1,475 | $ 880 |
Cash Flow Statement (Details)
Cash Flow Statement (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash Flow Statement [Abstract] | ||||
Net income/(loss) after tax | $ (16,801,007) | |||
Net (loss) after tax | $ (14,706,850) | $ (2,538,571) | (16,801,007) | $ (13,512,822) |
Depletion, depreciation and amortization | 2,883,243 | 2,073,680 | ||
Accretion of asset retirment obligation | 15,116 | 8,418 | 30,004 | 16,341 |
Impairment expense | 9,802,987 | 3,060,684 | ||
Exploration and evaluation expenditure | 4,192,719 | 11,465,956 | ||
Amortisation of borrowing costs | $ 35,486 | 31,972 | 70,972 | 65,132 |
Abandonment expense | $ 79,036 | 214,803 | ||
Unrealized Gain (Loss) on Derivatives | (462,885) | (2,619,664) | ||
Increase in receivables | 1,931,129 | 2,132,371 | ||
Increase/(decrease) in provision for annual leave | (25,395) | (19,082) | ||
Increase in payables | (1,104,431) | (2,248,510) | ||
Net cash flows used in operating activities | $ 517,336 | $ 628,889 |
Credit Facility (Details)
Credit Facility (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | |
Credit Facility [Abstract] | ||||||
Line of Credit Facility, Current Borrowing Capacity | $ 19,000,000 | $ 8,000,000 | $ 15,500,000 | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 50,000,000 | $ 25,000,000 | $ 25,000,000 | |||
Line of Credit Facility, Remaining Borrowing Capacity | $ 3,500,000 | |||||
Debt Instrument, Interest Rate During Period | 3.98% | |||||
Debt Instrument, Maturity Date | Jan. 28, 2017 | |||||
Credit facility at end of period | $ 19,000,000 | 15,500,000 | ||||
Payments of Debt Issuance Costs | 83,690 | |||||
Cash advanced under facility | $ 301,000 | $ 9,500,000 |
Derivatives (Schedule Of Open D
Derivatives (Schedule Of Open Derivative Contracts) (Details) | 2 Months Ended | 12 Months Ended |
Feb. 29, 2016$ / bblbbl | Dec. 31, 2016bbl | |
Derivative Contract Three [Member] | ||
Derivative [Line Items] | ||
Volumes (bbls) | bbl | 2,788 | |
Floor US$ | $ / bbl | 85 | |
Ceiling US$ | $ / bbl | 89.85 | |
Derivative Contract Nine [Member] | ||
Derivative [Line Items] | ||
Volumes (bbls) | bbl | 36,600 | |
Derivative, Underlying | $ 5.50 | |
Swap [Member] | Derivative Contract Six [Member] | ||
Derivative [Line Items] | ||
Volumes (bbls) | bbl | 2,788 | |
Price US$ | $ / bbl | 105 |