PANCONTINENTAL OIL &

PCL
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Pancontinental Oil & Gas NL : Annual Report to shareholders

10/27/2019 | 05:37pm

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9

Corporate Information

ABN 95 003 029 543

Directors

Henry David Kennedy

Non-Executive Chairman

Ernest Anthony Myers

Executive Director & CEO

Vesna Petrovic

Executive Director

Roy Barry Rushworth

Non-Executive Director

Marie Michele Malaxos

Non-Executive Director

Company Secretary

Vesna Petrovic

Registered Office

Level One, 10 Ord Street

West Perth

WA

6005

Telephone:

+61 8

6363 7090

Fax:

+61 8

6363 7099

Share Registry

Advanced Share Registry Services

PO Box 1156

Nedlands

WA

6909

Telephone:

+61 8

9389 8033

Auditors

Rothsay Chartered Accountants

Level 1, Lincoln House

4 Ventnor Avenue

West Perth

WA

6005

Internet Address & Contact

www.pancon.com.au

info@pancon.com.au

ASX Code

PCL

Contents

Chairman's Review

3

Permit Schedule

5

Review of Operations

7

Directors' Report

15

Auditor's Independence Declaration

30

Corporate Governance Statement

31

Statement of Comprehensive Income

44

Statement of Financial Position

45

Statement of Changes in Equity

46

Statement of Cash Flows

47

Notes to the Financial Statements

48

Directors' Declaration

68

Independent Audit Report

69

ASX Additional Information

72

Corporate Information

Who we are

  • Pancontinental Oil & Gas NL is an Australian based international oil and gas exploration company with interests in Africa and Australia.
  • The Company's headquarters are in West Perth, Western Australia.
  • The Company is listed on the Australian Securities Exchange under code PCL.
  • Pancontinental is managed by a team of experienced individuals from corporate, technical and financial backgrounds.

1

Corporate Information

Strategy & Business

Model

Identify oil & gas

basins with

overlooked potential

  • seek funding for PCL's original ideas

Create value for

Secure acreage at

low entry cost and

Shareholders

complete initial work

programmes

Attract highly

reputable companies to partner in projects

2

Chairman's Review

Dear Shareholder,

The Board of Directors of Pancontinental Oil & Gas NL is pleased to present to you the Company's 2019 Annual Report.

The highlights of the 2019 financial year for Pancontinental include:

  • exploration on the Company's PEL 87 project producing positive results;
  • participating in the drilling of the Cormorant-1 well, offshore Namibia;
  • receiving the second instalment of US $5.5 million for the partial sale of one of Pancontinental's Namibian assets;
  • streamlining the Group's portfolio to focus on areas of Board expertise and divest of non-core assets.

During the financial year exploration work continued on Petroleum Exploration Licence 87, offshore Namibia. Pancontinental holds a strong position in this project with a 75% interest as well as being the Joint Venture Operator. The Company has held the licence for less than two years and during this period the exploration programme outcomes have delivered encouraging results. The "Saturn Superfan" has been identified within the licence area as the largest of the prospective Plays. Based on interpretation of the seismic data, it is a Cretaceous (Late Aptian) turbidite fan system which may contain a number of individual Leads. However, Pancontinental believes that there is a probability of the fan being one, vast, single oil trap due to the structure being overlaid by sealing shale. The oil potential in the licence area has been independently assessed and Pancontinental is currently seeking farminees for an accelerated 3D seismic and drilling programme.

Elsewhere in Namibia, Pancontinental holds a 20% interest in the PEL 37 project it initiated in 2011 through an interest (66.67%) in subsidiary Pancontinental Namibia Pty Ltd. The Cormorant-1 well was drilled in September 2018 to test the oil potential of a mid-Cretaceous marine turbidite "fan" sandstone system. The well reached its planned depth however no hydrocarbons were found. Although the results of the drilling were disappointing, the Company was not financially exposed to the drilling costs of the well as per the previously negotiated farmout agreement with operator Tullow Namibia Pty Ltd (a subsidiary of Tullow Oil plc). Other Prospects within the licence area will be assessed based on the drilling results going forward.

A number of exploration wells are planned for drilling by other companies offshore Namibia during 2020 and 2021. A discovery in any of these may have a huge impact on Pancontinental's holdings offshore Namibia.

Pancontinental acquired acreage situated in the United States through the acquisition of Bombora Natural Energy Pty Ltd in 2017. The Company drilled two wells which did not produce satisfactory results and as such the Board resolved to divest of the investments in California to focus on the Company's core assets. As such, during the year Pancontinental signed a binding sale and purchase agreement with Raven Energy Limited (now Gasfields Limited) for the Bombora subsidiary. This transaction completed the exit from California, however the Company now has a shareholding in Gasfields Limited which gives Pancontinental shareholders upside through Gasfields' operations in USA and elsewhere.

The Company has spent time evaluating a number of projects to assess their suitability in Pancontinental's portfolio. As a result of this, the Company signed a binding term sheet in July 2019 to farmin to two large exploration permits, ATP 920 and the Ace Area of 924 in the Cooper Basin, Queensland. Both ATPs are located on conventional trends which are prospective for both oil and gas however, drilling planned for late 2019 will focus on the oil prone acreage.

In addition to the project activity conducted throughout the year, the Company also underwent changes in its corporate division. Long term Director Ernie Myers now holds responsibility for the overall management of the Company as Chief Executive Officer. Mr Myers has played a vital role in the project and corporate transactions of the Company since his appointment to the Board in 2004.

3

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Disclaimer

Pancontinental Oil & Gas NL published this content on 28 October 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 October 2019 22:36:00 UTC

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