BPH ENERGY LTD - Annual Report 2020

Advent Energy Ltd ACN 109 955 400

Annual Financial Report 30 June 2020

Contents Advent Energy Ltd and its controlled entities

Page Number

Directors’ Report ......................................................................................................................................................... 1 Auditor’s Independence Declaration .................................................................................................................... 9 Consolidated Statement of Profit or Loss and Other Comprehensive Income ............................................ 10 Consolidated Statement of Financial Position .................................................................................................... 11 Consolidated Statement of Changes in Equity .................................................................................................. 12 Consolidated Statement of Cash Flows ............................................................................................................... 13 Notes to the Consolidated Financial Statements ............................................................................................... 14 Directors’ Declaration .............................................................................................................................................. 43 Independent Auditor’s Report ............................................................................................................................... 44

Directors

David Breeze – Executive Chairman Stephen Kelemen – Non-Executive Director Steve James – Non-Executive Director (appointed 6 August 2019) Tony Huston – Non-Executive Director (appointed 6 August 2019) Tom Fontaine – Non-Executive Director (appointed 6 August 2019)

Company Secretary

David Breeze – (appointed 6 August 2019)

Auditor

Moore Australia Audit (WA) Level 15, Exchange Tower 2 The Esplanade PERTH WA 6000

Australian Business Number 39 109 955 400

Registered Office

14 View Street North Perth WA 6006

Principal Business Address

14 View Street North Perth WA 6006 Telephone: (08) 9328 8711 Facsimile: (08) 9328 8733 Website: www.adventenergy.com.au

Directors' Report Advent Energy Ltd and its controlled entities

The directors of Advent Energy Ltd (“Advent”) or (“Company”) present their report on the Company and its controlled entities (“consolidated entity” or “group”) for the financial year ended 30 June 2020.

Directors

The names of directors in office at any time during or since the end of the year are:

Stephen Kelemen – Non-Executive Director David Breeze – Executive Chairman Steve James – Non-Executive Director (appointed 6 August 2019) Tony Huston – Non-Executive Director (appointed 6 August 2019) Tom Fontaine – Non-Executive Director (appointed 6 August 2019)

Matthew Battrick – Non-Executive Director (appointed 27 March 2019, resigned 7 August 2019) Tobias Foster – Non-Executive Director (appointed 27 March 2019, resigned 7 August 2019)

Mr Breeze was appointed a director of Advent on 10 November 2005 and was removed from the ASIC register by Advent directors on 26 November 2016. He neither resigned nor was removed by shareholders and disputes the actions taken by the Advent directors at that time. His continuing appointment as a director from 26 November 2016 was ratified by the Company’s directors on 8 August 2019.

Company Secretary

The names of company secretaries in office at any time during or since the end of the year are:

David Breeze – (appointed 6 August 2019) Andrew Bald - (appointed 29 April 2019, resigned 7 August 2019)

Information on Directors

D Breeze

Executive Chairman (appointed 10 November 2005 and Company Secretary (appointed 6 August 2019)

David Breeze is a Corporate Finance Specialist with extensive experience in the stock broking industry and capital markets. He has been a corporate consultant to Daiwa Securities; and held executive and director positions in the stock broking industry. David has a Bachelor of Economics and a Masters of Business Administration, and is a Fellow of the Financial Services Institute of Australasia, and a Fellow of the Institute of Company Directors of Australia. He has published in the Journal of Securities Institute of Australia and has also acted as an Independent Expert under the Corporations Act. He has worked on the structuring, capital raising and public listing of over 70 companies involving in excess of $250M. These capital raisings covered a diverse range of areas including oil and gas, gold, food, manufacturing and technology. In the past three years David has also held the following listed company directorships:

Grandbridge Limited (from December 1999 to present) BPH Energy Limited (from February 2001 to present) MEC Resources Limited (from April 2005)*

*David Breeze was a Director of MEC Resources Limited (“MEC”) from April 2005 and was removed from the ASIC register by MEC directors on 23 November 2016. He has neither resigned nor been removed by shareholders and disputes the actions taken by the Directors of MEC. David is also a

Directors' Report Advent Energy Ltd and its controlled entities

director of Cortical Dynamics Limited, Molecular Discovery Systems Limited, Diagnostic Array Systems Limited, and Advent subsidiaries Asset Energy Pty Limited and Offshore Energy Pty Limited.

S Kelemen

Non-Executive Director ( appointed 8 February 2018)

Stephen Kelemen has 40 years of experience in the upstream petroleum industry, primarily with Santos Ltd where he had leading roles involving exploration, development, field operations, reservoir engineering, drilling, geology, and mergers & acquisitions across conventional and unconventional assets. He oversaw Santos’ investment in Bayu-Undan & DLNG, and was responsible for the company’s entry into CSG and the concept of CSG to LNG. He has evaluated many of the Australian basins for the potential to deliver reserves.

Stephen is a Non-Executive Director for Galilee Energy, Elixir Energy as well as Advent Energy. He is also Adjunct Professor - Centre for CSG at University of Queensland, Deputy Chair Petroleum - Queensland Exploration Council, and on the Technical Advisory Council for Core Energy & Resources. Stephen has a BE from University of Adelaide .

T Huston

Non-Executive Director ( appointed 6 August 2019 )

Anthony ( Tony )Huston has been involved for over 40 years in engineering and hydrocarbon industries for both on and off shore exploration/development. Early career experience commenced with Fitzroy Engineering Ltd, primarily working on development of onshore oil fields. During the 1990’s Tony managed JFP NZ International, a Texas based exploration company that included a Jack Up rig operating in NZ waters. In 1994 Tony oversaw the environmental consent process required to drill a near inshore well that was drilled from “land” into the offshore basin during 1995. In 1996 Tony formed his own E&P Company to focus re-entry of onshore wells, primarily targeting shallow pay that had been passed or ignored from previous operations. This was successful and the two plays opened up 20 years ago are still in operation. Recent focus (12 years) has been to utilise new technology for enhanced resource recovery and has been demonstrated in various fields, including US, Mexico, Oman, Italy and Turkmenistan. During the last 3 years Tony has been a director of listed company BPH Energy Limited from June 2017 to present and is a non-executive Director of Advent Energy Ltd.

T Fontaine

Non-Executive Director ( appointed 6 August 2019)

Tom is a reservoir engineer with over 25 years of experience in project evaluation management, development and capital raising. Tom has been part owner of petroleum engineering companies Epic Consulting in Canada and Focal Petroleum in Australia and has provided technical services to many companies worldwide. He is also primarily responsible for the startup and subsequent listing on ASX of Bounty Oil & Gas NL in 2002, and Coal Bed Methane Company Pure Energy Resources Pty Ltd in 2006 which was acquired in 2009 by BG Group Plc in a $1 billion takeover. Tom is also currently involved with several small exploration companies in Canada, Russia, Cuba, Nepal, Timor Leste and Africa. During the last 3 years Tom has held the following listed company directorships: BPH Energy Limited (from April 2015 to October 2017)

S James

Non-Executive Director (appointed 6 August 2019)

Steve has over 30 years’ experience in the financial services industry having worked for Australia’s largest banks as well as European and American institutions. Steve has a thorough knowledge across foreign exchange trading, financial planning, capital raisings and stockbroking where he was a key figure in developing Australia’s largest wholesale broking business.

Directors' Report Advent Energy Ltd and its controlled entities

Steve is a highly experienced company director across both listed and unlisted entities in diverse operations from sporting bodies, financial services organisations and the property industry. Steve holds a Masters Degree in Financial Services Law, a Master Stockbroker Qualification, a Diploma of Financial Markets and is a graduate of the Australian Institute of Company Directors.

M Battrick

Non-executive Director (appointed 27 March 2019, resigned 7 August 2019)

T Foster

Non-Executive Director (appointed 27 March 2019, resigned 7 August 2019)

Meetings of Directors

During the financial year, four meetings of directors was held. The Board meets regularly by telephone to make day-to-day decisions with respect to the business of the Company. Attendances by each director during the year were:

day-to-day decisions during the year were:	with respect to the business of the Company. Attendances	with respect to the business of the Company. Attendances
	Directors’ Meetings
	Number eligible to attend	Number attended
D Breeze	2	2
T Fontaine	2	2
S James	2	2
T Huston	2	2
M Battrick	2	2
T Foster	2	2
S Kelemen	4	4

Indemnifying Officers or Auditors

During or since the end of the financial year the company has not given an indemnity or entered an agreement to indemnify Company officers or the auditors. The Company does not hold a Directors and Officers insurance policy.

Operating Results

The operating profit for the group after tax for the year was $3,901,465 (2019: $251,774).

Non-Audit Services

No fees for non-audit services were paid or payable to the external auditors during the year ended 30 June 2020 (2019: nil).

Dividends

The directors recommend that no dividend be paid in respect of the current period and no dividends have been paid or declared since the commencement of the period.

Directors' Report Advent Energy Ltd and its controlled entities

Financial Position

The net assets of the group have increased by $4,912,891 to $9,898,837 at 30 June 2020 primarily as a result of the reversal of a $6,882,248 writedown booked on the PEP 11 permit in a prior period (2019: $Nil) net of an impairment loss of $2,302,000 on EP386 (2019: $Nil).

Principal Activities

Company Focus and Developments

Advent Energy Ltd is an unlisted oil and gas exploration and development company with onshore and offshore exploration and near-term development assets around Australia. Advent’s assets include PEP11 (85%) in the offshore Sydney Basin and RL1 (100%) in the onshore Bonaparte Basin in the Northern territory.

PEP 11 Oil and Gas Permit

Advent, through wholly owned subsidiary Asset Energy Pty Ltd, holds 85% of Petroleum Exploration Permit PEP 11 – an exploration permit prospective for natural gas located in the Offshore Sydney Basin.

PEP 11 is a significant offshore exploration area with large scale structuring and potentially multi-Trillion cubic feet (Tcf) gas charged Permo-Triassic reservoirs. Mapped prospects and leads within the Offshore Sydney Basin are generally located less than 50km from the Sydney-Wollongong-Newcastle greater metropolitan area and gas pipeline network.

The offshore Sydney Basin has been lightly explored to date, including a multi-vintage 2D seismic data coverage and a single exploration well, New Seaclem-1 (2010). Its position as the only petroleum title offshore New South Wales provides a significant opportunity should natural gas be discovered in commercial quantities in this petroleum title. It lies adjacent to the Sydney-Newcastle region and the existing natural gas network servicing the east coast gas market. The total P50 Prospective Resource calculated for the PEP11 prospect inventory is 5.9 Tcf with a net 5 Tcf to Advent Energy (85%WI). The two largest prospects in the inventory are Fish and Baleen.

Advent has previously interpreted significant seismically indicated gas features in PEP11. Key indicators of hydrocarbon accumulation features have been interpreted following review of the 2004 seismic data (reprocessed in 2010). The seismic features include apparent Hydrocarbon Related Diagenetic Zones (HRDZ), Amplitude Versus Offset (AVO) anomalies and potential flat spots.

In addition, a geochemical report has provided support for a potential exploration well in PEP11. The report reviewed the hydrocarbon analysis performed on sediment samples obtained in PEP11 during 2010. The 2010 geochemical investigation utilised a proprietary commercial hydrocarbon adsorption and laboratory analysis technique to assess the levels of naturally occurring hydrocarbons in the seabed sediment samples.

The report supports that the Baleen prospect appears best for hydrocarbon influence relative to background samples. In addition, the report found that the Baleen prospect appears to hold a higher probability of success than other prospects.

Importantly, “a recent review of more than 850 wildcat wells – all drilled after geochemical surveys – finds that 79% of wells drilled in positive anomalies resulted in commercial oil and gas discoveries.” (Surface geochemical exploration for oil and gas: New life for an old technology, D. Schumacher, 2000, The Leading Edge ).

Directors' Report Advent Energy Ltd and its controlled entities

Advent has demonstrated considerable gas generation and migration within PEP11, with the mapped prospects and leads highly prospective for the discovery of gas.

Advent Energy has conducted a focused seismic campaign around a key drilling prospect in PEP11 at Baleen, in the offshore Sydney Basin. The high resolution 2D seismic survey covering approximately 200-line km was performed to assist in the drilling of the Baleen target approximately 30 km south east of Newcastle, New South Wales. A drilling target on the Baleen prospect at a depth of 2150 metres subsea has been identified in a review of previous seismic data. Intersecting 2D lines suggest an extrapolated 6000 acre (24.3 km2) seismic amplitude anomaly area at that drilling target. The report on this drilling target noted previous 2D seismic data showed that the Permian aged section of the Bowen Basin has producing conventional gas fields at a similar time and depth to PEP11 at the Triassic/Permian age boundary.

Advent’s prior presentation ‘Strategic Summary: Tactics to Success ‘ confirmed the strategy of “Complete current 2D seismic commitment to deliver shallow hazard survey work …to deliver ‘drill ready’ gas prospect ....for early drilling ,capturing near-term rig availability off Australia’s coast.”

The high resolution 2D seismic data over the Baleen prospect designed to evaluate (amongst other things) shallow geohazard indications including shallow gas accumulations that can affect future potential drilling operations. It is a drilling prerequisite that a site survey is made prior to drilling at the Baleen location. On 31 December 2018 MEC announced that there were “no ‘seismically defined shallow gas hazards “at the proposed well location on the Baleen Prospect.

Onshore Bonaparte Basin

Advent Energy Ltd (“Advent”), through wholly owned subsidiary Onshore Energy Pty Ltd, holds 100% of RL 1 in the onshore Bonaparte Basin in northern Australia. The Bonaparte Basin is a highly prospective petroliferous basin, with significant reserves of oil and gas. Most of the basin is located offshore, covering 250,000 square kilometres, compared to just over 20,000 square kilometres onshore.

In the Northern Territory, Advent holds Retention Licence RL1 (166 square kilometres in area), which covers the Weaber Gas Field, originally discovered in 1985. Advent has previously advised that the 2C Contingent Resources for the Weaber Gas Field in RL1 are 11.5 billion cubic feet (Bcf) of natural gas following an independent audit by RISC. Significant upside 3C Contingent Resources of 45.8 Bcf have also been assessed by RISC.

The current rapid development of the Kununurra region in northern Western Australia, including the Ord River Irrigation Area phase 2, the township of Kununurra, and numerous regional resource projects provides an exceptional opportunity for Advent to potentially develop its nearby gas resources. Market studies have identified a current market demand of up to 30.8 TJ per day of power generation capacity across the Kimberley region that could potentially be supplied by Advent Energy’s conventional gas project RL1.

Unconventional Resources within RL1

The prospectivity of the Bonaparte Basin is evident from the known oil and gas fields in both the offshore and onshore portions of the basin. Advent has identified significant shale areas in RL1.

Significant Changes in State Of Affairs

In August 2019 the Company entered into a Deed of Settlement and Release (“Deed”) with BPH Energy Limited (BPH”), MEC Resources Limited (“MEC”), Grandbridge Limited, Trandcorp and Mr David Breeze and other relevant parties. As part of the settlement it was agreed that Messrs Matthew Battrick and Tobias Foster would appoint Messrs Steven James, Tony Huston

Directors' Report Advent Energy Ltd and its controlled entities

and Thomas Fontaine as directors of Advent, and that Messrs Matthew Battrick and Tobias Foster would then resign from the Board of Advent. The incoming directors have since confirmed and acknowledged Mr David Breeze as a duly elected director of Advent.

The other key terms of the settlement are as follows:

MEC provided an irrevocable proxy to BPH on the voting rights attaching to 100% of the shares held by MEC in Advent at any meeting of shareholders of the Company up to 23 July 2021.
Until 23 July 2021, MEC agrees to not directly or indirectly interfere with the board composition and/or management of Advent.
For a period of one year commencing from 6 August 2019 MEC must not sell or otherwise dispose of any shares it holds in Advent, other than by an in-specie distribution to MEC if requested in writing to do so by Advent. If notice is given, MEC must do all that is required to effect and support the In-Specie Distribution.
The loans owed by Advent to MEC will be recoverable by MEC only by the following means and only in the following circumstances:

One month prior to the scheduled commencement date for the drilling of a well within the PEP 11 Permit Area, Advent will issue to MEC ordinary shares to the face value of the debt calculated at 80% of (a) the volume-weighted average price of Advent shares over the 5 days trading immediately prior to that date; or (b) if as at that date Advent shares are not listed on any securities exchange, the price at which ordinary shares in Advent were last issued.

On 28 September 2018, MEC announced the signing of a binding term sheet for the majority sale of Onshore Energy Pty Ltd (“OE”) to Bonaparte Petroleum Pty Ltd (“BP”). This agreement was terminated on 10 August 2019.
Onshore Energy (“Onshore”) made an application for suspension and extension of the permit conditions in EP386 which was not accepted by the Department (DMIRS). Onshore sought a review of the decision by the Minister of Resources who responded setting out a course of action in relation to that decision which Onshore is following, being an appeal to the State Administrative Appeals Tribunal (SAT).
The conditional farmin agreement to PEP11 between Asset Energy Pty Ltd and RL Energy Pty Ltd was registered as a dealing by the National Offshore Petroleum Titles Administrator in September 2018. This registration was a condition precedent to the farmin agreement. This farmin agreement was terminated on 17 September 2019.
On 17 September 2019 BPH announced that Advent has now terminated by mutual consent the RL Energy Joint Venture Agreement for the PEP11 permit. As a result Advent, through wholly owned subsidiary Asset Energy Pty Ltd, now holds an 85% interest and is operator of the permit (and RL Energy has no further interest). Bounty Oil and Gas NL (ASX: BUY) holds the remaining 15%.
Advent Energy Ltd has submitted to the National Offshore Petroleum Titles Administrator (NOPTA) an application to enable the drilling of the Baleen drill target in the PEP11 permit offshore NSW. The PEP11 Joint Venture has reviewed the work program and now proposes to proceed with the drilling of a well at Baleen subject to approvals from NOPTA and other regulatory authorities and financing and has now made application to NOPTA to change the current Permit conditions. The current permit expiry date is in March 2021.The application to NOPTA includes the extension of the permit title for up to two years to enable the drilling and includes an application for the removal of the requirement for a 500 sq. km 3D seismic program. NOPTA has confirmed that this application is now in the final decision phase.

Directors' Report Advent Energy Ltd and its controlled entities

On 19 September 2019 BPH announced Advent has been granted a renewal of Retention Licence 1 (RL1) in the Northern Territory by the NT Department of Primary Industry and Resources for a five-year term concluding July 2023. Advent, through its wholly owned subsidiary Onshore Energy Pty Ltd, holds a 100 % interest in RL1 and is operator of the Retention Licence.
In November 2019 it became apparent that the Company’s previous management, who were also the management of MEC prior to the Deed entered into in August 2019 between the Company and other relevant parties, had lodged a Research and Development Tax Incentive claim for the year ending 30 June 2018 in the name of MEC in respect of work performed on the PEP 11 permit, the majority of which costs had been borne by Advent. MEC owned only 53% of Advent.

MEC noted in their December 2018 quarterly Appendix 4C cash flow report lodged with ASX on 31 January 2019 that they had been “granted a Research and Development (“R & D”) incentive in the quarter ended 31 December 2018 after recent seismic activities within PEP 11. An amount of $384k was received under the scheme in Q2”. Subsequent to the Deed the Company’s new management questioned why the R and D claim not been submitted in the name of Advent. As a result of these enquiries the $728,563 costs incurred by Advent in respect of the PEP 11 June 2018 R and D claim, together with $68,408 costs in respect of a proposed June 2019 R and D claim by MEC, have been recharged to MEC and are showing as a current asset of the Company at 30 June 2020. The Company has commenced legal action to recover these amounts from MEC.

The legality of MEC’s conversion of $532,500 of debt into Company shares in March 2019 at a time when, given the R and D recharges that should have been booked, potentially no such convertible debt existed, is currently under review.

On 7 February 2020 BPH Energy Limited (“BPH”) announced that in accordance with shareholder approval received by Advent shareholders on 29 November 2019, it intends to now convert a receivable of $162,566 into 3,251,320 shares in Advent at a conversion price of $0.05 per share and that Grandbridge Limited (“GBA”), in accordance with shareholder approval received by Advent shareholders on 29 November 2019, intends to now convert a receivable of $505,325 into 10,106,500 shares in Advent at a conversion price of $0.05 per share. The effect on the capital structure of the Company will be to increase the number of shares on issue from 177,595,234 to 190,953,234 shares representing a 7.52 % dilution effect to existing Advent shareholders including MEC Resources Limited (“MEC”). The receivables were converted to shares on 11 February 2020. As a result of these conversions BPH’s direct shareholding in Advent increased from 22.6% to 22.7%, GBA’s direct shareholding in Advent increased from 6.6% to 11.4%, and MEC’s direct shareholding in Advent decreased from 53% to 49.3%
During the year the Company issued 3,400,000 shares at $0.05 for $170,000 cash. A further $15,000 had been received at year end for shares issued subsequent to year end.

Future Developments

The Company will continue to develop its investee portfolio projects including PEP11 and RL1 and may evaluate and invest in a range of resource projects.

Subsequent Events

There have not been any other matters or circumstance that have arisen since the end of the period, that have significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years.

Directors' Report Advent Energy Ltd and its controlled entities

Options

At the date of this report there were the following share options on issue:

Issued	Number	Exercise Price	Expiry Date
15/1/2020	10,000,000	$0.10	30/11/24

During the year ended 30 June 2020 no ordinary shares of Advent were issued on the exercise of options granted under the Advent Energy Limited Employee Option Plan (2019: Nil). No options have been granted since year end. No person entitled to exercise the option had or has any right by virtue of the option to participate in any share issue of any other body corporate.

Environmental Issues

Advent Energy published its Environmental Performance Report for the PEP11 2D Baleen HR Seismic Survey which was undertaken in April 2018. The report confirmed that procedures were undertaken in accordance with the requirements of the Environmental Protection and Biodiversity Conservation (EPBC) Act Policy Statement 2.1 describing the interaction between offshore seismic exploration and whales. No non-compliance events were documented in relation to marine fauna interactions, mitigation or source operational procedures. No environmental matters have occurred in the period.

Proceedings on Behalf of Company

No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year.

Auditor’s Independence Declaration

The lead auditor’s independence declaration for the year ended 30 June 2019 has been received and can be found on page 9.

Signed in accordance with a resolution of the Board of Directors.

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David Breeze Chairman

Dated this 21st day of September 2020

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Moore Australia Audit (WA)

Level 15, Exchange Tower, 2 The Esplanade, Perth, WA 6000 PO Box 5785, St Georges Terrace, WA 6831 T +61 8 9225 5355 F +61 8 9225 6181

www.moore-australia.com.au

AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF ADVENT ENERGY LIMITED & CONTROLLED ENTITIES

I declare that, to the best of my knowledge and belief, during the year ended 30 June 2020, there have been:

a) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit, and
b) no contraventions of any applicable code of professional conduct in relation to the audit.

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NEIL PACE MOORE AUSTRALIA AUDIT (WA) PARTNER CHARTERED ACCOUNTANTS

Signed at Perth this 21[st] day of September 2020.

Moore Australia Audit (WA) – ABN 16 874 357 907. An independent member of Moore Global Network Limited - members in principal cities throughout the world. Liability limited by a scheme approved under Professional Standards Legislation.

Consolidated Statement of Financial Position as at 30 June 2020 Advent Energy Ltd and its controlled entities

Note Revenue 2 Other income Finance costs Administration expenses Consulting and legal expenses Director related fees Accounting and auditing Exploration costs written off 9 Impairment reversal / (impairment) 3 Provision for doubtful debts Share based payments expense Termination fees Share sale agreement written back Depreciation 11 Traveling expenses Operating profit before income tax Income tax expense 8 Operating profit from continuing operations Other Comprehensive Income Items that will never be reclassified to profit or loss Items that are or may be reclassified to profit or loss Total Comprehensive Profit Basic and diluted earnings / (loss) per share (cents per share) 25	Consolidated 2020 $ 2019 $ 32 4,481 - 2,727 (25) (664) (122,750) (7,981) (15,292) (123,557) (243,806) (34,932) (27,445) (10,522) (95,852) - 4,540,207 (22,674) - (8,494) (173,534) - - (128,640) - 81,844 (110) (199) - (3,163)
	3,901,465 (251,774) - -
	3,901,465 (251,774) - - - -
	3,901,465 (251,774)
	2.1 (0.1)

The accompanying notes form part of and should be read in conjunction with these financial statements.

Consolidated Statement of Financial Position as at 30 June 2020 Advent Energy Ltd and its controlled entities

Note Current Assets Cash and cash equivalents 6 Trade and other receivables 7 Other assets Financial assets 10 Total Current Assets Non-Current Assets Exploration and evaluation expenditure 9 Financial assets 10 Property plant and equipment 11 Total Non-Current Assets Total Assets Current Liabilities Trade and other payables 12 Financial liabilities 14 Total Current Liabilities Non-Current Liabilities Trade and other payables 12 Financial liabilities 14 Total Non- Current Liabilities Total Liabilities Net Assets Equity Issued capital 15 Option reserve 13 Accumulated losses Total Equity	Consolidated (Restated) 2020 $ 2019 $
	24,349 40,225 4,880 1,570 21,411 - 796,971 796,971
	847,611 838,766
	14,010,190 9,475,857 50,000 50,000 - 110
	14,060,190 9,525,967
	14,907,801 10,364,733
	179,637 28,499 5,004 667,891
	184,641 696,390
	702,168 519,483 4,122,155 4,162,914
	4,824,323 4,682,397
	5,008,964 5,378,787

	9,898,837 4,985,946
	43,034,038 42,196,146 965,553 792,019 (34,100,754) (38,002,219_)_
	9,898,837 4,985,946

The accompanying notes form part of and should be read in conjunction with these financial statements.

Consolidated Statement of Changes in Equity for the year ended 30 June 2020 Advent Energy Ltd and its controlled entities

Balance at 30 June 2018 Loss attributable to members of the consolidated entity Total comprehensive loss Transactions with owners in their capacity as owners: Shares issued in extinguishment of debt Balance at 30 June 2019 Research and development costs recharged to MEC (note 10) Balance at 30 June 2019 (restated) Profit attributable to members of the consolidated entity Total comprehensive profit Transactions with owners in their capacity as owners: Shares issued in extinguishment of debt Shares issued for cash Share based payments expense Balance at 30 June 2020	Consolidated Issued Capital $ Accumulated losses $ Option Reserve $ Total Equity $
	41,191,646 (37,990,170) 792,019 3,993,495 - (251,774) - (251,774)
	- (251,774) - (251,774) 1,004,500 - - 1,004,500
	42,196,146 (38,241,944) 792,019 4,746,221 - 239,725 - 239,725
	42,196,146 (38,002,219) 792,019 4,985,946 - 3,901,465 - 3,901,465
	- 3,901,465 - 3,901,465 667,892 - - 667,892 170,000 - - 170,000 - - 173,534 173,534
	43,034,038 (34,100,754) 965,553 9,898,837

The accompanying notes form part of and should be read in conjunction with these financial statements.

Consolidated Statement of Cash Flows for the year ended 30 June 2020 Advent Energy Ltd and its controlled entities

Note Cash Flows From Operating Activities Payments to suppliers and employees Finance costs Interest Received Net cash used in operating activities 16 Cash Flows From Investing Activities Exploration expenditure (net of reimbursements) Loans received from other entities Net cash provided by investing activities Cash Flows From Financing Activities Loans (repaid to) / received from MEC 16(b) Proceeds from shares issued Net cash provided by financing activities Net (decrease) in cash held Cash at the beginning of the financial year Cash at the end of the financial year 6	Consolidated 2020 $ 2019 $
	(100,190) (283,924) (25) (664) 32 4,481
	(100,183) (280,107)
	(49,938) (83,478) 5,004 -
	(44,934) (83,478)
	(40,759) 146,000 170,000 -
	129,241 146,000
	(15,876) (217,585) 40,225 307,810
	24,349 90,225

The accompanying notes form part of and should be read in conjunction with these financial statements.

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

1. Statement of Significant Accounting Policies

Corporate Information

The financial report includes the consolidated financial statements and the notes of Advent Energy Ltd and its controlled entities (‘consolidated entity’ or ‘group’). Advent Energy Ltd is an unlisted public company, incorporated and domiciled in Australia. The financial report was authorised for issue on 21 September 2020 by the board of directors.

Basis of Preparation

The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

Statement of Compliance

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards and the Corporations Act 2001. Advent Energy Ltd is a for-profit entity for the purpose of preparing the financial statements.

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions to which they apply. Material accounting policies adopted in the preparation of this financial report are presented below. They have been consistently applied unless otherwise stated.

The consolidated financial statements of the Advent Energy Limited comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

Financial Position / Going Concern

The group has incurred a net profit before tax for the year ended 30 June 2020 of $3,901,465 (2019: loss of $251,774) and has a working capital surplus of $662,970 (2019: restated surplus of $142,376) (refer note14 (b)) at that date.

Included in non-current liabilities are loans payable to MEC of $4,122,155 which will be recoverable by MEC only by the following means and only in the following circumstances; one month prior to the scheduled commencement date for the drilling of a well within the PEP 11 Permit Area, Advent will issue to MEC ordinary shares to the face value of the debt calculated at 80% of: (a) the volume-weighted average price of Advent shares over the 5 days trading immediately prior to that date; or (b) if as at that date Advent shares are not listed on any securities exchange, the price at which ordinary shares in Advent were last issued.

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

1. Statement of Significant Accounting Policies (continued)

Financial Position / Going Concern (continued)

In November 2019 it became apparent that the Company’s previous management, who were also the management of MEC prior to the Deed entered into in August 2019 between the Company and other relevant parties, had lodged a Research and Development Tax Incentive claim for the year ending 30 June 2018 in the name of MEC in respect of work performed on the PEP 11 permit, the majority of which costs had been borne by Advent. MEC owned only 53% of Advent. MEC noted in their December 2018 quarterly Appendix 4C cash flow report lodged with ASX on 31 January 2019 that they had been “granted a Research and Development (“R & D”) incentive in the quarter ended 31 December 2018 after recent seismic activities within PEP 11. An amount of $384k was received under the scheme in Q2”. Subsequent to the Deed the Company’s new management questioned why the R and D claim not been submitted in the name of Advent.

As a result of these enquiries the $728,563 costs incurred by Advent in respect of the PEP 11 June 2018 R and D claim, together with $68,408 costs in respect of a June 2019 R and D claim by MEC, have been recharged to MEC and are showing as a current asset of the Company at 30 June 2020 and 30 June 2019.

Included in trade and other payables are balances totalling $764,200 (2019: $519,483) payable to current and former directors. The directors have reviewed their expenditure and commitments for the consolidated entity and have implemented methods of costs reduction. The directors, as a part of their cash monitoring, have voluntarily suspended cash payments for their directors’ fees to conserve cash resources until such time that the consolidated entity has sufficient cash resources. The directors have prepared cash flow forecasts that indicate that the group will have sufficient cash flows to meet its nonexploration commitments and a portion of exploration commitments for a period of at least 12 months from the date of this report. Based on the cash flow forecasts and the monitoring of operational costs, the directors are satisfied that, the going concern basis of preparation is appropriate. The financial report has therefore been prepared on a going concern basis, which assumes continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.

Should the consolidated entity not be successful in raising additional funds through the issue of new equity, should the need arise there is a material uncertainty that may cast significant doubt as to whether or not the consolidated entity will be able to continue as a going concern and therefore, whether it will realise its assets and discharge its liabilities as and when they fall due and in the normal course of business and at the amounts stated in the financial report. The financial statements do not include any adjustments relative to the recoverability and classification of recorded asset amounts or, to the amounts and classification of liabilities that might be necessary should the entity not continue as a going concern.

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

1. Statement of Significant Accounting Policies (continued)

Accounting Policies

(a) Principles of Consolidation

Subsidiaries

Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases.

A list of controlled entities is contained in Note 20 to the financial statements. All controlled entities have a June financial year-end.

As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the consolidated financial statements as well as their results for the year then ended.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate.

The purchase method of accounting is used to account for business combinations by the group (see Note 1 (b) below).

Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or loss and other comprehensive income, statement of changes in equity and statement of financial performance.

(b) Business Combinations

Business combinations occur where control over another business is obtained and results in the consolidation of its assets and liabilities. All business combinations, including those involving entities under common control, are accounted for by applying the purchase method.

The purchase method requires an acquirer of the business to be identified and for the cost of the acquisition and fair values of identifiable assets, liabilities and contingent liabilities to be determined as at acquisition date, being the date that control is obtained. Cost is determined as the aggregate of fair values of assets given, equity issued and liabilities assumed in exchange for.

Goodwill is recognised initially at the excess of cost over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If the fair value of the acquirer’s interest is greater than cost, the surplus is immediately recognised in profit or loss.

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

1. Statement of Significant Accounting Policies (continued)

(b) Business Combinations

(c) Income Tax

The charge for current income tax expense is based on the profit for the year adjusted for any nonassessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantively enacted by the statement of financial position date. Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is recognised in the statement of comprehensive income except where it relates to items that may be recognised directly to equity, in which case the deferred tax is adjusted directly against equity. Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences or unused tax losses or tax credits can be utilised.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the group will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

Advent Energy Ltd and its wholly-owned Australian subsidiaries formed an income tax consolidated group under the tax consolidation regime on 1 July 2010.

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

1. Statement of Significant Accounting Policies (continued)

(d) Property, plant and equipment

Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses. Plant and equipment is measured on the cost basis.

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of profit or loss and other comprehensive income during the financial period in which they are incurred.

Depreciation

The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding freehold land, is depreciated on a straight-line basis over their useful lives to the consolidated group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

Class of Fixed Asset	Depreciation Rate
Plant and equipment	33.33%

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of profit and loss and other comprehensive income. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.

(e) Exploration, Evaluation and Development Expenditure

Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward where right of tenure of the area of interest is current and to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made.

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

1. Statement of Significant Accounting Policies (continued)

(e) Exploration, Evaluation and Development Expenditure (continued)

Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified from Intangible assets to mining property and development assets within property, plant and equipment. Should exploration be successful and result in a project, costs of site restoration are provided over the life of the facility from when exploration commences and are included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal, and rehabilitation of the site in accordance with clauses of the mining permits. Such costs have been determined using estimates of future costs, current legal requirements and technology.

Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation. Accordingly the costs have been determined on the basis that the restoration will be completed within one year of abandoning the site.

(f) Impairment of Assets

The group reviews non-financial assets, other than deferred tax assets, at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill, and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated each year at the same time.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit” or “CGU”). An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the other assets in the unit (group of units) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

(g)

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position.

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

1. Statement of Significant Accounting Policies (continued)

(h) Revenue and Other Income

Revenue from the sale of goods is recognised upon the delivery of goods to customers.

Interest revenue is recognised when it is probable that the economic benefits will flow to the group and the amount of revenue can be measured reliably. Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.

Revenue from the rendering of a service is recognised by reference to the stage of completion of the contract. All revenue is stated net of the amount of goods and services tax (GST).

(i) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.

Receivables and payables in the statement of financial position are shown inclusive of GST.

Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

(j) Intangibles

Goodwill

Goodwill and goodwill on consolidation are initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled entity exceeds the fair value attributed to its net assets at date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates.

Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

(k) Employee Benefits

Provision is made for the company's liability for employee benefits arising from services rendered by employees to statement of financial position. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

(l) Comparative Figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

1. Statement of Significant Accounting Policies (continued)

(m) Share based payments

Share based compensation benefits are provided to employees via the Company’s Employee Option plan.

The fair value of options granted under the Company’s Employee Option Plan is recognized as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognized over the period during which the employees become unconditionally entitled to the options.

The fair value at grant date is independently determined using an option pricing model that takes into account the exercise price, the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradeable nature of the option, the share price at grant date and expected volatility of the underlying share, the expected dividend yield and risk free interest rate for the term of the option.

The fair value of the options granted excludes the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. At each balance sheet date, the group revises its estimate of the number of options that are expected to vest. The employee benefit expense recognised each period takes into account the most recent estimate. Upon the exercise of options, the balance of the share-based payments reserve relating to those options is transferred to share capital.

(n) Critical accounting estimates and judgments

The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group.

Key Judgments —Impairment of capitalised and carried forward exploration expenditure

Exploration and evaluation costs are carried forward where right of tenure of the area of interest is current. These costs are carried forward in respect of an area that has not at statement of financial position date reached a stage that permits reasonable assessment of the existence of economically recoverable reserves, refer to the accounting policy stated in note 1(e).

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

1. Statement of Significant Accounting Policies (continued)

(o) Application of New and Revised Accounting Standards

Standards and Interpretations in issue not yet adopted

The Directors have reviewed new accounting standards and interpretations that have been published that are not mandatory for 30 June 2020 reporting periods. As a result of this review, the Directors have determined that there is no material impact of the new and revised Standards and Interpretations on the Company and, therefore, no material change is likely to company accounting policies.

Conceptual Framework for Financial Reporting (Conceptual Framework)

The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January 2020 and early adoption is permitted. The Conceptual Framework contains new definition and recognition criteria as well as new guidance on measurement that affects several Accounting Standards. Where the consolidated entity has relied on the existing framework in determining its accounting policies for transactions, events or conditions that are not otherwise dealt with under the Australian Accounting Standards, the consolidated entity may need to review such policies under the revised framework.

At this time, the application of the Conceptual Framework is not expected to have a material impact on the consolidated entity's financial statements.

Standards and Interpretations applicable to 30 June 2020

In the 12 month period ended 30 June 2020, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to the Company and effective for the current annual reporting period.

AASB 16 Leases

The consolidated entity has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 'Leases' and for lessees eliminates the classifications of operating leases and finance leases. Except for short-term leases and leases of low-value assets, right-of-use assets and corresponding lease liabilities are recognised in the statement of financial position. Straight-line operating lease expense recognition is replaced with a depreciation charge for the right-of-use assets (included in operating costs) and an interest expense on the recognised lease liabilities (included in finance costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results improve as the operating expense is now replaced by interest expense and depreciation in profit or loss. For classification within the statement of cash flows, the interest portion is disclosed in operating activities and the principal portion of the lease payments are separately disclosed in financing activities. For lessor accounting, the standard does not substantially change how a lessor accounts for leases.

There is no material impact to profit or loss or net assets on the adoption of this new standard in the current or comparative years.

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

1. Statement of Significant Accounting Policies (continued)

(q) Financial Instruments

Recognition and derecognition

Financial assets and financial liabilities are recognised when the group becomes a party to the contractual provisions of the financial instrument. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.

Classification and initial measurement of financial assets

Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in accordance with AASB 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable). For the purpose of subsequent measurement, financial assets, other than those designated and effective as hedging instruments, are classified into the following categories:

amortised cost
fair value through profit or loss (FVTPL)
equity instruments at fair value through other comprehensive income (FVOCI)
debt instruments at fair value through other comprehensive income (FVOCI).

All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs, finance income or other financial items, except for impairment of trade receivables which is presented within other expenses.

The classification is determined by both:

the entity’s business model for managing the financial asset, and
the contractual cash flow characteristics of the financial asset.

Subsequent measurement of financial assets

(i) Financial assets at amortised cost

Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVTPL):

they are held within a business model whose objective is to hold the financial assets to collect its contractual cash flows
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.

After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. The group’s cash and cash equivalents, trade and most other receivables fall into this category of financial instruments.

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

1. Statement of Significant Accounting Policies (continued)

(q) Financial Instruments (continued)

(ii) Financial assets at fair value through profit or loss (FVTPL)

Financial assets that are held within a different business model other than ‘hold to collect’ or ‘hold to collect and sell’ are categorised at fair value through profit and loss. Further, irrespective of business model financial assets whose contractual cash flows are not solely payments of principal and interest are accounted for at FVTPL. All derivative financial instruments fall into this category, except for those designated and effective as hedging instruments, for which the hedge accounting requirements apply. The category also contains an equity investment. The group accounts for the investment at FVTPL and did not make the irrevocable election to account for the investment in unlisted and listed equity securities at fair value through other comprehensive income (FVOCI). The fair value was determined in line with the requirements of AASB 9, which does not allow for measurement at cost. Assets in this category are measured at fair value with gains or losses recognised in profit or loss. The fair values of financial assets in this category are determined by reference to active market transactions or using a valuation technique where no active market exists.

(iii) Equity instruments at fair value through other comprehensive income (Equity FVOCI)

Investments in equity instruments that are not held for trading are eligible for an irrevocable election at inception to be measured at FVOCI. Under Equity FVOCI, subsequent movements in fair value are recognised in other comprehensive income and are never reclassified to profit or loss. Dividend from these investments continue to be recorded as other income within the profit or loss unless the dividend clearly represents return of capital. This category includes unlisted equity securities that were previously classified as ‘available-for-sale’ under AASB 139. Any gains or losses recognised in other comprehensive income (OCI) are not recycled upon derecognition of the asset.

(iv) Debt instruments at fair value through other comprehensive income (Debt FVOCI)

Financial assets with contractual cash flows representing solely payments of principal and interest and held within a business model of collecting the contractual cash flows and selling the assets are accounted for at debt FVOCI. The group accounts for financial assets at FVOCI if the assets meet the following conditions:

• they are held under a business model whose objective it is to “hold to collect” the associated cash flows and sell financial assets; and

• the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Any gains or losses recognised in other comprehensive income (OCI) will be recycled upon derecognition of the asset.

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

1. Statement of Significant Accounting Policies (continued)

(q) Financial Instruments (continued)

Impairment of financial assets

AASB 9’s impairment requirements use more forward-looking information to recognise expected credit losses – the ‘expected credit loss (ECL) model’. Instruments within the scope of the requirements include loans and other debt-type financial assets measured at amortised cost and FVOCI, trade receivables, contract assets recognised and measured under AASB 15 and loan commitments and some financial guarantee contracts (for the issuer) that are not measured at fair value through profit or loss. Recognition of credit losses is no longer dependent on the group first identifying a credit loss event. Instead the group considers a broader range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

In applying this forward-looking approach, a distinction is made between:

• financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit risk (‘Level 1’) and

• financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not low (‘Level 2’).

• ‘Level 3’ would cover financial assets that have objective evidence of impairment at the reporting date.

‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are recognised for the second category. Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected life of the financial instrument.

Trade and other receivables and contract assets

The group makes use of a simplified approach in accounting for trade and other receivables as well as contract assets and records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. In calculating, the group uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses using a provision matrix. The group assess impairment of trade receivables on a collective basis as they possess shared credit risk characteristics they have been grouped based on the days past due.

Classification and measurement of financial liabilities

The group’s financial liabilities include borrowings, trade and other payables and derivative financial instruments. Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the group designated a financial liability at fair value through profit or loss. Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for derivatives and financial liabilities designated at FVTPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss (other than derivative financial instruments that are designated and effective as hedging instruments).

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

venue Interest Revenue xpenses Impairment (reversal) / impairment Impairment reversal PEP11 (i) Provision against EP386 exploration costs (ii) Impairment of intangibles		Consolidated 2020 $ 2019 $ 32 4,481 32 4,481 (6,882,247) 2,302,000 - - - 22,674



		(4,580,247) 22,674

2. Revenue

3. Expenses

(i) In the prior year capitalised costs were assessed for impairment by reference to the value implied for PEP 11 by virtue of a conditional farmin agreement entered into with RL Energy Pty Ltd. Based on this assessment the asset was considered to be impaired and an adjustment to the fair value was booked at 30 June 2018. This farmin agreement was terminated on 17 September 2019 and therefore the writedown of $18,780,680 booked to the fair value at 30 June 2018 was pre-emptive. In the current period the directors have assessed the valuation of the PEP 11 permit against what they consider a comparable transaction with the result that the prior year PEP 11 impairment has been reversed to the extent of $6,882,247.
(ii) Onshore Energy (“Onshore”) made an application for suspension and extension of the permit conditions in EP386 which was not accepted by the Department (DMIRS). Onshore sought a review of the decision by the Minister of Resources who responded setting out a course of action in relation to that decision. Onshore is lodging an appeal against that decision with the WA State Administrative Tribunal (SAT). The Directors consider it prudent to make an impairment provision against the permit exploration costs at this time.

uditors’ Remuneration Remuneration of the auditor of the parent entity for: Moore Australia Audit (WA)		Consolidated 2020 $ 2019 $
		19,424 7,322
		19,424 7,322

4. Auditors’ Remuneration

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

5. Key Management Personnel Compensation

Names and positions held of consolidated entity key management personnel in office at any time during the financial year are as follows. They were appointed for the whole year unless stated otherwise:

Key Management Personnel

Matthew Battrick – Non-Executive Director (appointed 27 March 2019, resigned 7 August 2019) Tobias Foster – Non-Executive Director (appointed 27 March 2019, resigned 7 August 2019)

Directors	Amount Owing 30 June 2020 ($)	Short Term Benefit 2020 – Fees ($)	Short Term Benefit 2019 – Fees ($)	Share based payment expense - 2020($)
D Breeze S Kelemen T Fontaine T Huston S James Previous Directors	222,881 54,932 22.637 22.637 22,637 416,476	89,863 25,000 22.637 22.637 22,637 -	- 34,932 - - - -	- 34,707 34,707 34,707 34,707 -
	767,200	247,806	34,932	138,828

David Breeze has a holding in the Company of 2,000,000 shares. Share based payments to each person listed represent 2 million options each with an exercise price of $0.10 per share and an expiry date of 30 November 2024. There was no share based payments expense in the prior year.

6. Cash and cash equivalents

Cash at bank and in hand

	Consolidated	Consolidated
	2020	2019
	$	$
	24,349	90,225

The average effective interest rate on short-term bank deposits was 1.25%: (2019: 1.25%)

7. Trade and other receivables

Current Other receivables	4,880 1,570
	4,880 1,570

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

8. Income Tax Expense
a.
The prima facie tax benefit on profit / (loss) from ordinary activities before
income tax is reconciled to the income tax as follows:
Prima facie tax benefit on profit / (loss) from ordinary activities before
income tax at 27.5% (2019: 27.5%)
Add tax effect of:
- Other non-assessable items
- Revenue losses and other deferred tax balances not recognised
Income tax expense
b.
Deferred tax recognised at 27.5% (2019: 27.5%):
Deferred tax liabilities:
Exploration expenditure
Deferred tax assets:
Carry forward revenue losses
Net deferred tax
c.
Unrecognised deferred tax assets at 27.5% (2019: 27.5%):
Carry forward losses

Consolidated
2020
$
2019
$
1,072,903
(69,237)
(1,259,568)
-
186,665
69,237
-
-
3,852,802
2,759,103
3,852,802
2,759,103
-
-
9,022,928
9,994,629
9,022,928
9,994,629

The tax benefits of the above deferred tax assets will only be obtained if:

(a) the company derives future assessable income of a nature and of an amount sufficient to enable the benefits to be utilised;
(b) the company continues to comply with the conditions for deductibility imposed by law; and
(c) no changes in income tax legislation adversely affect the company in utilising the benefits

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

9. Exploration and Evaluation Expenditure Exploration and evaluation expenditure Reconciliation of the movement during the year: Opening balance at 1 July Impairment reversal – PEP 11 (i) Capitalised expenditure – PEP 11 Capitalised expenditure – EP 386 / RL 1 Impairment provision - EP 386 (ii) Exploration costs written off – EP325 (iii) Research and development cost_s_ recharged to MEC (note 10) Balance at 30 June	Consolidated (Restated) 2020 $ 2019 $ 14,010,190 9,475,857 14,010,190 9,475,857 9,475,857 9,926,841 6,882,247 - 6,829 50,842 43,109 55,420 (2,302,000) - (95,852) - - (557,246)
	14,010,190 9,475,857

9. Exploration and Evaluation Expenditure
Exploration and evaluation expenditure
Reconciliation of the movement during the year:
Opening balance at 1 July
Impairment reversal – PEP 11 (i)
Capitalised expenditure – PEP 11
Capitalised expenditure – EP 386 / RL 1
Impairment provision - EP 386 (ii)
Exploration costs written off – EP325 (iii)
Research
and
development
cost_s_
recharged to MEC (note 10)
Balance at 30 June

Consolidated
(Restated)
2020
$
2019
$
14,010,190
9,475,857
14,010,190
9,475,857
9,475,857
9,926,841
6,882,247
-
6,829
50,842
43,109
55,420
(2,302,000)
-
(95,852)
-
-
(557,246)

14,010,190
9,475,857

Recoverability of the carrying amount of exploration assets is dependent on the successful exploration Recoverability of the carrying amount of exploration assets is dependent on the successful exploration and sale of natural gas. Capitalised costs net of reimbursements amounting to $49,939 (2019: $83,478) have been included in cash flows from investing activities in the statement of cash flows.

(i) In the prior year capitalised costs were assessed for impairment by reference to the value implied for PEP 11 by virtue of a conditional farmin agreement entered into with RL Energy Pty Ltd. Based on this assessment the asset was considered to be impaired and an adjustment to the fair value was booked at 30 June 2018. This farmin agreement was terminated on 17 September 2019 and therefore the writedown of $18,780,680 booked to the fair value at 30 June 2018 was pre-emptive. In the current period the directors have assessed the valuation of the PEP 11 permit against what they consider a comparable transaction with the result that a prior year PEP 11 impairment has been reversed to the extent of $6,882,247.
(ii) Onshore Energy (“Onshore”) made an application for suspension and extension of the permit conditions in EP386 which was not accepted by the Department (DMIRS). Onshore sought a review of the decision by the Minister of Resources who responded setting out a course of action in relation to that decision which Onshore is following. Onshore is lodging an appeal against that decision with the WA State Administrative Tribunal (SAT). The Directors consider it prudent to make an impairment provision against the permit exploration costs at this time.
(iii) The consolidated entity no longer have title to this permit and the exploration costs have been written off.

Refer to Note 24 for capital expenditure commitments at period end.

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

9. Evaluation Exploration Expenditure (continued)

Advent is continually seeking and reviewing potential sources of both equity and debt funding. Advent is now embarking on a fresh marketing campaign to attract new investors and/or joint venture partners. Management has confidence that a suitable outcome will be achieved however there is no certainty at this stage that this will result in further funding being made available. Asset Energy Pty Ltd has invested over $25 million in the PEP11 title and, along with its JV partner Bounty Oil and Gas NL, is committed to continuing to explore for and ultimately exploit any petroleum accumulations which may be identified in this title area. If Advent is unable to source further funding for each of PEP11 and RL1 each of these permits are at risk.

The above conditions indicate a material uncertainty that may affect the ability of Advent to realise the carrying value of the exploration assets in the ordinary course of business and may affect the ability of the Company to realise the carrying value of its loan receivables and its investment in Advent in the ordinary course of business.

nancial Assets Current Loan receivable from MEC (i) Non-Current Cash held as security (ii)	Consolidated (Restated) 2020 $ 2019 $ 796,971 787,046
	796,971 787,046
	50,000 50,000
	50,000 50,000

10. Financial Assets

(i) In November 2019 it became apparent that the Company’s previous management, who were also the management of MEC prior to the Deed entered into in August 2019 between the Company and other relevant parties, had lodged a Research and Development Tax Incentive claim for the year ending 30 June 2018 in the name of MEC in respect of work performed on the PEP 11 permit, the majority of which costs had been borne by Advent. MEC owned only 53% of Advent.

MEC noted in their December 2018 quarterly Appendix 4C cash flow report lodged with ASX on 31 January 2019 that they had been “granted a Research and Development (“R & D”) incentive in the quarter ended 31 December 2018 after recent seismic activities within PEP 11. An amount of $384k was received under the scheme in Q2”. Subsequent to the Deed the Company’s new management questioned why the R and D claim not been submitted in the name of Advent. As a result of these enquiries the $728,563 costs incurred by Advent in respect of the PEP 11 June 2018 R and D claim, together with $68,408 costs in respect of a proposed June 2019 R and D claim by MEC, have been recharged to MEC and are showing as a current asset of the Company at 30 June 2020 and 30 June 2019. Of these costs, $557,246 relate to capitalised exploration costs and $239,725 to retained earnings.

(i) The cash security deposit is held in trust by Department of Primary Industry and Resources.

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

11. Property Plant and Equipment Plant and equipment: At cost Accumulated depreciation Total Property, plant and equipment Movements in carrying value: Balance at the beginning of the year Depreciation expense Carrying amount at the end of the year 12. Trade and other payables Current: Trade payables - unsecured Sundry payables and accrued expenses - unsecured Non-current: Sundry payables and accrued expenses - unsecured The average credit period on trade payables is 105 days. 13. Reserves Option Reserve The option reserve records items recognized as expenses on the valuation of director, employee and consultant share options. Opening balance 1 July Share based payments expense Closing balance 30 June		Consolidated 2020 $ 2019 $
		21,073 21,133 (21,073) (21,023)
		- 110
		110 309 (110) (199)
		- 110
		156,635 28,499 23,002 -
		179,637 28,499
		702,168 519,483
		702,168 519,483
		792,019 792,019 173,534 - 965,533 792,019

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

14. Financial liabilities

Financial liabilities
Current Unsecured loan payable to BPH Energy Limited (b) (c) Unsecured loan payable to Grandbridge Limited (c) Non-Current Unsecured loan payable to MEC Resources Ltd (a) Unsecured loan payable to MEC Resources Ltd (a)	Consolidated 2020 $ 2019 $
	5,004 162,566 - 505,325
	5,004 667,891
	3,600,000 3,600,000 522,155 562,914
	4,122,155 4,162,914

(a) Unsecured loans - MEC

Advent entered into a secured loan agreement with MEC Resources Ltd in November 2010. The principal amount of the loan is $1 million, with further advances of up to an additional $3 million payable at MEC Resources’ discretion. The loan was secured by a second ranking charge over Advent’s present and future undertakings, assets and rights. An amount of $3.6 million has been drawn down at period end. MEC’s security is in the process of being released as part of a legal settlement reached in August 2019. As part of the same 6 August 2019 legal settlement loans owed by Advent to MEC will be recoverable by MEC only by the following means and only in the following circumstances: One month prior to the scheduled commencement date for the drilling of a well within the PEP 11 Permit Area, Advent will issue to MEC ordinary shares to the face value of the debt calculated at 80% of: (a) the volume-weighted average price of Advent shares over the 5 days trading immediately prior to that date; or (b) if as at that date Advent shares are not listed on any securities exchange, the price at which ordinary shares in Advent were last issued.

During the year MEC Resource withdrew net $40,759 cash from Advent. The legality of MEC’s conversion of $532,500 of debt into Company shares in the prior year (March 2019) at a time when, given the research and development recharges that should have been booked (refer note 10), potentially no such convertible debt existed, is currently under review.

(b) Unsecured loans – BPH and GBA

In accordance with shareholder approval received by Advent shareholders on 29 November 2019 BPH converted a receivable of $162,566 into 3,251,320 shares in Advent at a conversion price of $0.05 per share and GBA converted a receivable of $505,325 into 10,106,500 shares in Advent at a conversion price of $0.05 per share.

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

15. Issued Capital

194,353,234 (2019: 177,595,414) fully paid ordinary shares of no par value

(a) Ordinary Shares 1 July Shares issued on conversion of debt Shares issued for cash 30 June	2019 2019 2019 2019
	$ $ Number Number 42,196,146 41,191,646 177,595,414 157,505,414 667,892 1,004,500 13,357,820 20,090,000 170,000 - 3,400,000 -
	43,034,038 42,196,146 194,353,234 177,595,414

Fully Paid Ordinary Share Capital

Fully paid ordinary shares carry one vote per share and carry the right to dividends.

(b) Capital risk management

The group’s objectives when managing capital are to safeguard their ability to continue as a going concern. The focus of the group’s capital risk management is the current working capital position against the requirements of the group to meet corporate overheads. The group’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raisings as required.

The working capital position of the group at 30 June 2020 and 30 June 2019 is as follows:

Cash and cash equivalents Trade and other receivables Other assets Financial assets Trade and other payables Financial liabilities Working capital position		Consolidated 2020 $ 2019 $
		24,349 90,225 4,880 1,570 21,411 - 796,971 - (179,637) (28,499) (5,004) (667,891) 662,970 (604,595)

Refer to Note 1 for disclosure on financial position.

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

16. Cash Flow Information
a) Reconciliation of Cash Flow from
Operations with Profit / (Loss) after
income tax
Operating profit / (loss) after income tax
Non-cash items:
Impairment (reversal) / impairment of intangibles
Exploration expenditure written off
Share based payments
Termination fees
Depreciation
Provision for doubtful debts
Changes in net assets and liabilities
(Increase) / decrease in trade and other
receivables
Increase / (decrease) in trade payables and
accruals
(Decrease) in provisions
Net cash outflow from operating activities
(a) Reconciliation of cash
Cash at the end of the financial year as shown in
the statement of cash flows is reconciled to items in
the statement of financial position as follows:
Cash and cash equivalents
(b) Changes in liabilities arising from financing
activities – unsecured borrowings
Balance 1 July
Net cash (repaid)/ received from MEC
Conversion of debt to equity
Other
Balance 30 June

Consolidated
2020
$
2019
$
3,901,465
(251,774)
(4,580,247)
22,674
95,852
173,534
-
-
128,640
110
199
-
8,494
(24,721)
143,486
333,824
(249,982)
-
(81,844)
(100,183)
(280,107)
24,349
90,225
562,914
1,414,414
(40,759)
146,000
-
(1,004,500)
-
7,000
522,155
562,914

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

17. Financial Instruments

a) Financial Risk Management

The group’s financial instruments consist mainly of deposits with banks, short-term investments, accounts receivable and payable, and loans to and from other parties. The main purpose of non-derivative financial instruments is to raise finance for group operations.

i. Financial Risks

The main risks that the Group is exposed to through its financial instruments are interest rate risk, liquidity risk and credit risk.

Interest rate risk

The group’s financial assets that are affected by interest rate risk are the group’s cash and cash equivalents and term deposits held. The group’s financial liabilities are currently not exposed to interest rate risk as the group has no variable rate interest bearing financial liabilities.

Liquidity risk

The Group manages liquidity risk by monitoring forecast cash flows.

Credit risk

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the financial statements.

Credit risk for derivative financial instruments arises from the potential failure by counter-parties to the contract to meet their obligations.

Foreign currency risk

The group is not exposed to any material risks in relation to fluctuations in foreign exchange rates.

Equity price risk

The group is not currently exposed to any risks in relation to equity prices.

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

17. Financial Instruments (continued)

b) Financial Instruments

i. Interest rate risk

The economic entity’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rates on classes of financial assets and financial liabilities, is as follows:

Consolidated 2020 Effective Average Interest Rate % *Financial Assets* Cash and cash equivalents 1.25 Trade and other receivables - Other assets - Financial assets - *Financial Liabilities* Trade and other payables - Financial liabilities - Consolidated	Consolidated 2020 Effective Average Interest Rate % *Financial Assets* Cash and cash equivalents 1.25 Trade and other receivables - Other assets - Financial assets - *Financial Liabilities* Trade and other payables - Financial liabilities - Consolidated
	2020 Effective Average Interest Rate %	Floating Interest Rate $ Non- Interest Bearing $ Total $
	*Financial Assets* Cash and cash equivalents 1.25 Trade and other receivables - Other assets - Financial assets - *Financial Liabilities* Trade and other payables - Financial liabilities - Consolidated	74,349 - 74,349 - 4,880 4,880 - 21,411 21,411 - 796,971 796,971
		74,349 823,262 897,611
		- 881,805 881,805 - 4,127,159 4,127,159
		- 5,008,964 5,008,964

Consolidated
2019 Effective Average Interest Rate %	Floating Interest Rate $ Non- Interest Bearing $ Total $
*Financial Assets* Cash and cash equivalents 1.25 Trade and other receivables - Financial assets - *Financial Liabilities* Trade and other payables - Financial liabilities -	90,225 - 90,225 - 1,570 1,570 - 796,971 796,971
	90,225 798,541 888,766
	- 547,982 547,982 - 4,830,805 4,830,805
	- 5,378,787 5,378,787

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

17. Financial Instruments (continued)

b) Financial Instruments (continued)

ii. Fair Values

The fair values of:

Term receivables are determined by discounting the cash flows, at the market interest rates of similar securities, to their present value.
Other assets and liabilities approximate their carrying value.

No financial assets and financial liabilities are readily traded on organised markets in standardised form. Aggregate fair values and carrying amounts of financial assets and financial liabilities at balance date:

Financial Assets Cash and cash equivalents Trade and other receivables Other assets Financial assets Financial Liabilities Financial liabilities Trade and other payables	2020 2019 Carrying Amount Fair Value Carrying Amount Fair Value 74,349 74,349 90,225 90,225 4,880 4,880 1,570 1,570 21,411 21,411 - - 796,971 796,971 796,971 796,971
	897,611 897,611 888,766 888,766
	4,127,159 4,127,159 4,830,805 4,830,805 881,805 881,805 547,982 547,982
	5,008,964 5,008,964 5,378,787 5,378,787

iii. Sensitivity Analysis

Interest Rate Risk

The group has performed sensitivity analysis relating to its exposure to interest rate risk at balance date. This sensitivity analysis demonstrates the effect on the current year results and equity which could result from a change in these risks.

Interest Rate Sensitivity Analysis

The effect on profit and equity as a result of changes in the interest rate, with all other variables remaining constant would be as follows:

	Consolidated	Consolidated
	2020	2019
Change in profit
— Increase in interest rate by 1%	743	902
— Decrease in interest rate by 0.5%	(371)	(451)

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

17. Financial Instruments (continued)

b) Financial Instruments (continued)

iv. Liquidity risk

Liquidity is the risk that the group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset.

The following are the contractual maturities at the end of the reporting period of financial liabilities.

30 June 2020 Financial liabilities Trade and other payables Unsecured loan Unsecured loans (i)	Carrying amount Total 2 mths or less 2-12 mths 2-5 years 881,805 881,805 179,637 - 702,168 5,004 5,004 5,004 - - 4,122,155 4,122,155 - 4,122,155 -
	5,008,964 5,008,964 184,641 4,122,155 702,168

(i) Refer to Note 14(a) with respect to the conversion rights attaching to these loans

30 June 2019 Financial liabilities Trade and other payables Unsecured loans Secured loan	Carrying amount Total 2 mths or less 2-12 mths 2-5 years 547,982 547,982 28,499 - 519,483 1,230,805 1,230,805 - 667,891 562,914 3,600,000 3,600,000 - - 3,600,000
	5,378,787 5,378,787 28,499 667,891 4,682,397

18. Subsequent Events

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

19. Related Party Transactions

(a) Key Management Personnel Remuneration & Equity Holdings

Details of key management personnel remuneration and retirement benefits are disclosed in note 5 to the financial statements.

(b) Related Entities

Refer to notes 10 and 14 in respect of financial asset and financial liability balances with related parties.

The amount payable by the group to MEC reduced by $40,759 during the period as a result of cash withdrawals from the group by MEC management during the period they were in control of Advent’s financial affairs.

Advent has entered into a Services Agreement with GBA effective 6 August 2019 at a rate of $10,720 per month for an initial term of three years, with the potential for the monthly fee to increase based on certain capital raising parameters. Should Advent terminate the Services Agreement at any time it will be liable for a 12 month termination fee to GBA.

Advent has entered into an agreement with Trandcorp effective 6 August 2019 for the provision of Mr David Breeze as Managing Director at a rate of $6,000 per month for an initial term of two years, with the potential for the issue of 3 million share options based on certain capital raising parameters. Should Advent terminate the agreement with Trandcorp it will be liable for a termination / notice period fee to Trandcorp of up to 18 months. Trade creditors at period end include $62,032 owing to Trandcorp.

(c) Parent Entity

The parent entity in the group is Advent Energy Ltd.

(d) Ultimate parent Entity

The company with majority ownership in the economic entity is MEC Resources Limited, however as part of the terms of the Deed MEC entered into with Advent in August 2019:

MEC provided an irrevocable proxy to BPH on the voting rights attaching to 100% of the shares held by MEC in Advent at any meeting of shareholders of the Company up to 23 July 2021.
For a period of one year commencing from 6 August 2019 MEC must not sell or otherwise dispose of any shares it holds in Advent, other than by an in-specie distribution to MEC shareholders if requested in writing to do so by Advent. If notice is given, MEC must do all that is required to effect and support the in-specie distribution. Advent requested the in-specie Distribution on 6 August 2019 and MEC has yet to comply with this request.

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

20. Controlled Entities

Name of Entity	Principal Activity	Country of Incorporation	Ownership Interest %
			2020 2019
Parent Entity
Advent Energy Ltd	Oil and Gas exploration	Australia
Subsidiaries of Advent Energy Ltd
Asset Energy Pty Ltd	Oil and Gas exploration	Australia	100 100
Onshore Energy Pty Ltd	Oil and Gas exploration	Australia	100 100

21. Share-Based Payments

The movement in unlisted options over the period is as follows:

1 July Issued 30 June Exercisable at year-end	2020 2019 Number of Options Weighted Average Exercise Price $ Number of Options Weighted Average Exercise Price $ - - - - 10,000,000 0.10 - -
	10,000,000 0.10 - -
	10,000,000 0.10 - -

The following share-based payment arrangements existed at 30 June 2020:

Total number	Grant Date	Exercise price	Fair value at grant date	Expiry date
10,000,000	15 January 2020	$0.10	$0.017	30 November 2024

The fair value of the options granted is estimated as at the date of grant using a Black-Scholes model taking into account the terms and conditions upon which the options were granted. The following table lists the inputs to the model used. A 30% discount has been applied to achieve the valuation stated to reflect that Advent is not listed on any stock exchange.

Fair value at grant date	$0.017
Share price at grant date	$0.05
Exercise price	$0.10
Expected volatility	78%
Expected life	5 years
Expected dividends	Nil
Risk-free interest rate	2.5%
Valuation	$173,534

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

22. Parent Entity Disclosures Financial Position Assets Current assets Non-current assets Total asset Liabilities Current liabilities Non-current liabilities Total liabilities Issued Capital Accumulated Losses Option Reserve Total equity Financial Performance Profit / (loss) for the year Other comprehensive income Total comprehensive income	(Restated) 2020 $ 2019 $ 268,524 291,547 16,664,964 11,930,879
	16,933,488 12,222,426
	152,736 537,676 4,863,303 4,681,850
	5,016,039 5,219,526
	43,034,038 42,196,146 (32,082,142) (35,985,265) 965,553 792,019
	11,917,449 7,002,900
	3,903,123 (237,908) - -
	(3,903,123) (237,908)

23. Contingent Liabilities

The Company and consolidated entity have no contingent liabilities.

Notes to the Financial Statements for the year ended 30 June 2020 Advent Energy Limited and its controlled entities

24. Commitments

In order to maintain an interest in the exploration tenements in which the Company is involved, the Company is committed to meet the conditions under which the tenements were granted. Capital expenditure forecasted for at the reporting date but not recognised as liabilities as follows:

		Consolidated	Consolidated	Consolidated	Consolidated
		2020			2019
		$				$
Work Program Commitments – Exploration permits
Payable:
Within one year		1,200,000	12,750,000
Greater than one year less than five years		17,025,000	5,475,000
Total		18,225,000	18,225,000
n application has been made to NOPTA for the extension of the permit title for up			to two		years	to
nabl	e drilling of PEP11 including an application for the removal of the requirement for a 500			sq. km		3D
eismi	c program.
5.	Earnings per Share
			Consolidated
		2020				2019
			$			$
	Total earnings / (loss) attributable to ordinary equity holders of the
	Company	3,901,465			(251,774)
	Earnings / (loss/ used in the calculation of basic earnings per share
	and diluted earnings per share	3,901,465			(251,774)
	Earnings / (loss) per share (cents per share)
	From continuing operations		2.1			(0.1)
	Total basic earnings per share and diluted earnings per share		2.1			(0.1)
		Number				Number
	Weighted average number of ordinary shares outstanding during the
	year
	used in calculating EPS	184,641,466			169,743,372

An application has been made to NOPTA for the extension of the permit title for up to two years to enable drilling of PEP11 including an application for the removal of the requirement for a 500 sq. km 3D seismic program.

25. Earnings per Share

Directors’ Declaration Advent Energy Ltd and its controlled entities

The directors of the company declare that:

the financial statements and notes, as set out on pages 10 to 42 are in accordance with the Corporations Act 2001 and:
(a) comply with Accounting Standards and the Corporations Regulations 2001; and
(b) give a true and fair view of the financial position as at 30 June 2020 and of the performance for the year ended on that date of the consolidated entity;
the Financial Statements and Notes comply with International Accounting Standards as disclosed in Note 1;
in the directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of the directors made pursuant to S295(5) of the Corporations Act 2001.

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………………………………………………………

David Breeze

Chairman

Dated this 21st day of September 2020

Moore Australia Audit (WA)

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ADVENT ENERGY LIMITED

Level 15, Exchange Tower, 2 The Esplanade, Perth, WA 6000 PO Box 5785, St Georges Terrace, WA 6831 T +61 8 9225 5355 F +61 8 9225 6181 www.moore-australia.com.au

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of Advent Energy Limited (the Company) and its controlled entities (the “Group”), which comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors’ declaration.

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001 , including:

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giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its financial performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the “Code”) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.

Material Uncertainty Related to Going Concern

In forming our opinion on the Group financial statements, which is not modified, we have considered the adequacy of the disclosure made in Note 1 to the financial statements concerning the Group’s ability to continue as a going concern. The Group is dependent upon the deferral of specified amounts payable to directors and various funding initiatives to provide working capital sufficient to discharge its liabilities in the normal course of business. This condition as explained in Note 1 to the financial statements indicates the existence of a material uncertainty which casts significant doubt about the Group’s ability to continue as a going concern. The Group financial statements do not include any adjustments, which might be material, that would result if the Group were unable to continue as a going concern.

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ADVENT ENERGY LIMITED (CONTINUED)

Material Uncertainty Regarding Carrying Value of Exploration Expenditure

The ability to realise the carrying value of exploration and evaluation assets is dependent upon the Company’s ability to do all things necessary to maintain tenure of the underlying tenements and to successfully develop and or sell its interest in the tenements. We also draw attention to Note 9 to the financial statements which describes the uncertainty around the basis of continuing to recognise the carrying value of exploration and evaluation assets. These matters and uncertainties may affect the ability of the Group to realise the carrying value of the exploration and evaluation assets in the ordinary course of business and at amounts recorded in the accounts. Our opinion is not modified in respect of this matter.

Other Information

The directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2020, but does not include the financial report and our auditor’s report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ADVENT ENERGY LIMITED (CONTINUED)

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, international omissions, misrepresentation, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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NEIL PACE MOORE AUSTRALIA AUDIT (WA) PARTNER CHARTERED ACCOUNTANTS

Signed at Perth this 21[st] day of September 2020.

AI assistant

BPH ENERGY LTD — Annual Report 2020

64555_rns_2020-09-21_c8556b9c-1d6f-4ac2-b240-3ccf2baa08c0.pdf

Contents Advent Energy Ltd and its controlled entities

Directors

Company Secretary

Auditor

Registered Office

Principal Business Address

Directors

Company Secretary

Information on Directors

D Breeze

Directors' Report Advent Energy Ltd and its controlled entities

S Kelemen

T Huston

T Fontaine

S James

Directors' Report Advent Energy Ltd and its controlled entities

M Battrick

T Foster

Meetings of Directors

Indemnifying Officers or Auditors

Operating Results

Non-Audit Services

Dividends

Financial Position

Principal Activities

Company Focus and Developments

PEP 11 Oil and Gas Permit

Directors' Report Advent Energy Ltd and its controlled entities

Onshore Bonaparte Basin

Unconventional Resources within RL1

Significant Changes in State Of Affairs

Directors' Report Advent Energy Ltd and its controlled entities

Future Developments

Subsequent Events

Options

Environmental Issues

Proceedings on Behalf of Company

Auditor’s Independence Declaration

Moore Australia Audit (WA)

AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF ADVENT ENERGY LIMITED & CONTROLLED ENTITIES

Consolidated Statement of Changes in Equity for the year ended 30 June 2020 Advent Energy Ltd and its controlled entities

1. Statement of Significant Accounting Policies

Corporate Information

Basis of Preparation

Statement of Compliance

Financial Position / Going Concern

1. Statement of Significant Accounting Policies (continued)

Financial Position / Going Concern (continued)

1. Statement of Significant Accounting Policies (continued)

Accounting Policies

(a) Principles of Consolidation

Subsidiaries

(b) Business Combinations

1. Statement of Significant Accounting Policies (continued)

(b) Business Combinations

(c) Income Tax

1. Statement of Significant Accounting Policies (continued)

(d) Property, plant and equipment

Depreciation

(e) Exploration, Evaluation and Development Expenditure

1. Statement of Significant Accounting Policies (continued)

(e) Exploration, Evaluation and Development Expenditure (continued)

(f) Impairment of Assets

(g)

Cash and Cash Equivalents

1. Statement of Significant Accounting Policies (continued)

(h) Revenue and Other Income

(i) Goods and Services Tax (GST)

(j) Intangibles

(k) Employee Benefits

(l) Comparative Figures

1. Statement of Significant Accounting Policies (continued)

(m) Share based payments

(n) Critical accounting estimates and judgments

1. Statement of Significant Accounting Policies (continued)

(o) Application of New and Revised Accounting Standards

Standards and Interpretations in issue not yet adopted

BPH ENERGY LTD Annual Report 2020