Norwest Energy NL : Full Year Statutory Accounts

ANNUAL FINANCIAL REPORT

For the year ending 30 June 2022

ABN 65 078 301 505

	CORPORATE DIRECTORY
NORWEST ENERGY NL	Registered Office
ABN 65 078 301 505	Level 2, 30 Richardson Street
ACN 078 301 505	West Perth WA 6005
Directors	Tel: + 61 8 9227 3240
Mr Ernest Anthony Myers	Share Registry
(Non-Executive Chairman)	Computershare Investor Services Pty Ltd
Mr Bruce Frederick William Clement	GPO Box D182
(Non-Executive Director)	Perth WA 6840
Managing Director	Level 11
	172 St Georges Terrace
Mr Iain Peter Smith	Perth WA 6000
Company Secretary	Telephone: [phone] (within Australia)
Ms Jo-Ann Long	[phone] (outside Australia)
Internet Address	Auditors
	Rothsay Audit & Assurance Pty Ltd
www.norwestenergy.com.au	Level 1, Lincoln House
Shareholder Enquiries	4 Ventnor Avenue
West Perth WA 6005
[e-mail]	Australian Securities Exchange
	NWE

Contents

Directors' Report	3
Lead Auditor's Independence Declaration	16
Corporate Governance Statement	17
Independent Audit Report	23
Directors' Declaration	27
Statement of Profit or Loss and other Comprehensive Income	28
Statement of Financial Position	29
Statement of Changes in Equity	30
Statement of Cash Flows	31
Notes to the Financial Statements	32

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Directors' Report

The Directors of Norwest Energy NL ("Norwest" or "the Company") herein present their financial report of the Company and its subsidiaries ("Consolidated entity" or "Group"), for the financial year ended 30 June 2022.

1. DIRECTORS AND OFFICERS

The names and details of the Company's Directors in office during the financial year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

Ernest Myers (Independent Non-Executive Chairman) CPA

Mr Myers became a Director of Norwest on 28 November 2018. Mr Myers, an Accountant by profession, has held senior management and executive roles within a number of ASX listed companies. During his career he has been instrumental in the capital raisings and financial management of these companies. With skills and knowledge gained from vast experiences in corporate, exploration and operational areas, Mr Myers has played a key role in maintaining the Company's financial stability. Mr Myers is an executive director and CEO of Pancontinental Energy NL.

Iain Smith (Managing Director) BSc, MSc, GD-BA

Mr Smith joined Norwest Energy on 2 April 2019. Mr Smith is a petroleum geoscientist with 33 years' broad experience of the upstream oil & gas industry, both internationally and in Australia. His early career saw him work offshore UK North Sea, before joining Premier Oil as a New Ventures Explorationist. Thereafter, Mr Smith spent seven years in the geoscience services sector, before joining Woodside Energy in a commercial role. At Woodside he worked within the Exploration & New Ventures group, and subsequently the Browse LNG project, with responsibilities including commercial analysis and asset divestment. In 2008 Mr Smith joined private exploration company Neon Energy, as Commercial Manager, and was responsible for the subsequent merger with ASX-listed Salinas Energy. He managed the commercial and investor relations aspects of the company's activities in Southeast Asia and California, including the high profile farmout of Neon's two offshore Vietnam projects. In 2016 Mr Smith joined Pilot Energy as Managing Director, overseeing an aggressive new ventures campaign that resulted in the low-cost acquisition of six exploration permits within Western Australia, including within the onshore and offshore Perth Basin.

Bruce Clement (Non-Executive Director) BEng, BSc, MBA

Mr Clement became a Director on 18 December 2019. Mr Clement has 42 years' oil and gas industry experience having held engineering, senior management, and board positions with a variety of companies including ExxonMobil, Ampolex, Roc Oil, AWE and Santos. He has extensive experience and knowledge of the Perth Basin, previously managing development of the Cliff Head oil field for Roc Oil and, more recently, overseeing the discovery of the Waitsia gas field as Managing Director of AWE. Mr Clement is a non-executive director of Horizon Oil Limited.

Jo-Ann Long (Company Secretary and Chief Financial Officer) B.Comm, FCA, GAICD

Ms Long was appointed CFO and Company Secretary on 2 April 2019. Ms Long has over 33 years of experience building, leading and advising corporations on financial management, restructuring, international expansion, acquisitions and risk management, initially with Deloitte's and subsequently with 23 years spent in the Oil and Gas industry with Woodside, and a number of junior Oil & Gas companies. Ms Long has specialised expertise in joint venture operations, commercial agreements, tax strategies, risk management and governance. With strong broad commercial and business skills Ms Long brings a strong discipline of financial management and a track record of documented contributions of improved financial performance, heightened productivity and enhanced internal controls. Ms Long is Managing Director of Eco Smart Designs and West Perth Accounting Services and holds non-executive directorships with Yijiyangu Corporation Limited and B2 Yaramarri Direct Benefits Trust.

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2. DIRECTORS' INTERESTS

As at the date of this report the Director's interests in the securities of the Company are as follows:

	Ordinary Shares	Options over Ordinary Shares
Iain Smith (Managing Director)	7,337,662	160,000,000
Ernest Myers (Non-Executive Chairman)	6,731,602	55,000,000
Bruce Clement (Non-Executive Director)	-	55,000,000
3. EARNINGS PER SHARE	2022	2021
Basic earnings per share (cents per share)	(0.034)	(0.01)
Diluted earnings per share (cents per share)	(0.034)	(0.01)

4. CORPORATE INFORMATION

Corporate Structure

The Company is a no liability company that is incorporated and domiciled in Australia.

Nature of Operations and Principal Activities

The principal activity of the Consolidated entity during the course of the financial year was exploration for hydrocarbon resources.

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5. OPERATING AND FINANCIAL REVIEW

Operational Review

As at the date of this report, the Company holds interests in the following North Perth Basin exploration permits:

• 20% working interest in EP368
• 22.22% working interest in EP426
• 25% working interest in TP/15 (as Operator)

Exploration Permits EP368 and EP426

During the reporting period the EP368 Joint Venture drilled the Lockyer Deep-1 well, to a depth of 4,274 metres. The well encountered a very significant conventional gas and condensate discovery in the Permian Kingia Sandstone reservoir, with 20 metres of net pay identified within excellent quality reservoir. Reservoir pressure of 6,514 psi was measured at the top of the Kingia pay zone, indicating a gas column estimated at approximately 800 metres based on offset-well water pressure gradients. The apparent presence of such a significant column suggests that gas may extend across the greater structure, covering an area of some 100 km2 and far exceeding the Company's pre-drill expectations.

Figure 1: Top Kingia Formation Depth Map

Lockyer Deep-1 was production-tested in late March 2022, with a six-day test program designed to determine well deliverability, reservoir quality and gas composition across a 25-metre interval of the Kingia Sandstone (4041.5m to 4066.75m, MDRT). The initial main flow period ran for several hours, during which flow was increased through a number of increasing choke settings. A maximum sustained flow rate of 102 MMscf/d (million standard cubic feet per day) was achieved through a 76/64" choke, with a maximum instantaneous gas flow rate of 117 MMscf/d; one of the highest rates recorded onshore Australia.

With a well head pressure of 3,618 psi, the well was capable of higher rates of delivery, however the main flow period was stopped at this point due to indications of sand being produced to surface (at rates in excess of 50 MMscf/d). Sand production is to be expected at such exceptionally high flow rates and the produced sand was captured by the installed sand filtration system. As with the nearby Waitsia development wells, future Lockyer Deep production wells will likely be completed with appropriate sand control measures in place in order to maintain long term reservoir and well integrity.

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