BPH ENERGY LTD - Annual Report 2019

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03 03 2020

Companies Announcements Office ASX Limited 10[th] Floor, 20 Bridge Street SYDNEY NSW 2000

Advent Energy Ltd Annual Financial Report to 31 Dec 2019

Dear Sir/Madam,

BPH Energy Ltd (BPH) is pleased to provide the Annual Financial report for Advent Energy Ltd to 31 December 2019 .A summary of significant events is provided below.

Operating Results

 The operating profit for the group after tax for the year was $6,517,846 (2018: loss of $18,974,896) primarily as a result of the reversal of a $6,882,247 writedown booked on the PEP 11 permit in the previous period (2018: impairment of $18,780,680).

Significant Changes in State Of Affairs

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 31 December 2019. 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.
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

BPH Energy Ltd ACN 095 912 002 PO Box 317, North Perth, Western Australia 6906

14 View Street, North Perth, Western Australia 6006 [email protected] www.bphenergy.com.au

T: +61 8 9328 8366 F: +61 8 9328 8733

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.

 An application has been made to the Department of Mines, Industry Regulation and Safety (DMIRS) for a two year suspension and extension of the permit commitment terms in EP386 in the onshore Bonaparte Basin in Western Australia.

Yours sincerely

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David Breeze Chairman

Advent Energy Ltd ACN 109 955 400

Annual Financial Report 31 December 2019

Advent Energy Ltd and its controlled entities

Page Number

Directors’ Report ......................................................................................................................................................... 1 Auditor’s Independence Declaration .................................................................................................................. 10 Consolidated Statement of Profit or Loss and Other Comprehensive Income ............................................ 11 Consolidated Statement of Financial Position .................................................................................................... 12 Consolidated Statement of Changes in Equity .................................................................................................. 13 Consolidated Statement of Cash Flows ............................................................................................................... 14 Notes to the Consolidated Financial Statements ............................................................................................... 15 Directors’ Declaration .............................................................................................................................................. 45 Independent Auditor’s Report ............................................................................................................................... 46

Directors

Auditor

David Breeze – Executive Director Moore Stephens Stephen Kelemen – Non-Executive Director Level 15, Steve James – Non-Executive Director (appointed 6 August 2019) Exchange Tower Tony Huston – Non-Executive Director (appointed 6 August 2019) 2 The Esplanade Tom Fontaine – Non-Executive Director (appointed 6 August 2019) PERTH WA 6000 Company Secretary Australian Business Number 39 109 955 400

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

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

Advent Energy Ltd and its controlled entities

Directors' Report

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 year ended 31 December 2019.

Directors

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

David Breeze – Managing Director 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) 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) Hock Goh – Non-Executive Chairman (resigned 26 March 2019) Deborah Ambrosini – Executive Director (resigned 26 March 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) Debra Ambrosini – (resigned 29 April 2019)

Information on Directors

D Breeze

Executive Director (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 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

Directors' Report Advent Energy Ltd and its controlled entities

removed by shareholders and disputes the actions taken by the Directors of MEC. David is also a 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 )

Tony Huston has been involved for over 35 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. In 1996 Tony formed his own E&P Company on 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 15 years ago are still in operation. Recent focus (10 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.

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.

Magnum Gas and Power Limited (from August 2010 to December 2016) 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.

Advent Energy Ltd and its controlled entities

Directors' Report

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)

G Hock

Non-executive Director (appointed 9 November 2007, resigned 26 March 2019)

D Ambrosini

Executive Director (appointed 2 June 2010, resigned 26 March 2019)

Meetings of Directors

During the financial year, two meetings of directors were 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:

Directors’ Meetings

	Numbereligible to attend	Numberattended
D Breeze	1	1
T Fontaine	1	1
S James	1	1
T Huston	1	1
M Battrick	2	2
T Foster	2	2
S Kelemen	3	3
H Goh	-	-
D Ambrosini	-	-

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. The Company does not hold a Directors and Officers insurance policy.

Non-Audit Services

No fees for non-audit services were paid or payable to the external auditors during the year ended 31 December 2019 (2018: nil).

Advent Energy Ltd and its controlled entities

Directors' Report

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.

Operating Results

The operating profit for the group after tax for the year was $6,517,846 (2018: loss of $18,974,896) primarily as a result of the reversal of a $6,882,247 writedown booked on the PEP 11 permit in the previous period (2018: impairment of $18,780,680).

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.

Options

At the date of this report, there were no unissued ordinary shares of Advent under option (2018: nil). During the year ended 31 December 2019, nil ordinary shares of Advent were issued on the exercise of options granted under the Advent Energy Limited Employee Option Plan (2018: Nil).

Subsequent to year end the directors resolved to issue a total of 10 million options to directors and contractors with an exercise price of $0.10 per share and an expiry date of 30 November 2024. The Company’s shareholders approved the issue of the options to the directors at its Annual General Meeting held on 29 November 2019.

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.

Financial Position

The net assets of the group have increased by $7,050,346 to $11,563,763 over the year to 31 December 2019 primarily as a result of the reversal of a $6,882,247 writedown booked on the PEP 11 permit in the previous period.

Subsequent Events

Directors' Report

Advent Energy Ltd and its controlled entities

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%

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.

Future Developments

The Company will continue to develop its investee portfolio projects including PEP11, EP 386 and RL1 and may evaluate and invest in a range of resource projects.

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 EP386 and RL1 (100%) in the onshore Bonaparte Basin in the north of Western Australia and Northern territory and PEP11 (85%) in the offshore Sydney Basin.

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.

Advent’s two core prospects in PEP11 have previously been calculated via external assessment to have the potential for un-risked (P50) prospective gas resources of 472 and 2,131 billion cubic feet (“BCF”) respectively, with multi-trillion cubic feet upside (“multi-TCF”, Pmean). Undiscovered prospective recoverable gas resources for structural targets within the PEP11 offshore permit have been estimated at 5.7 TCF (at the best estimate level by Pangean Resources)

Advent has previously interpreted significant seismically indicated gas features. Key indicators of hydrocarbon accumulation features have been interpreted following review of the 2004 seismic data

Advent Energy Ltd and its controlled entities

Directors' Report

(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 area surrounding the proposed drilling site on 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 )

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.

Western Australia / Northern Territory – Onshore Bonaparte Basin

Advent Energy Ltd (“Advent”), through wholly owned subsidiary Onshore Energy Pty Ltd, holds 100% of each of EP 386 and 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.

Within EP386, recoverable resource estimates range from 53.3 Bcf (Low) to 1,326.3 Bcf (High) of Prospective Resources, with a Best Estimate of 355.9 Bcf of gas.

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

Directors' Report Advent Energy Ltd and its controlled entities

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 projects in EP386 and RL1.

Unconventional Resources within EP 386 and 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 EP386 and RL1. Advent has calculated a Prospective Resource (best estimate) of 9.8 TCF for the shale gas areas of the Bonaparte permits of EP386 and RL1.

Significant Changes in State Of Affairs

In May 2019 it was announced that Onshore Energy had been successful in its application to WA DMIRS for funding from their Exploration Incentive Scheme. The Government co-funded exploration drilling grant provides $200,000 to OE on the basis of 1:1 co-funding of drilling expenditure. OE’s application described a new well targeting an as-yet untested formation exhibiting live oil shows in the Waggon Creek area, within EP386 in the onshore Bonaparte Basin, east Kimberley region. The co-funded drilling project must be completed before 30 June 2020 to ensure the EIS funding. An application will be made to extend the time to complete this project.
In August 2019 the Company entered into a Deed of Settlement and Release (“Deed”) with BPH, MEC, GBA, Trandcorp Pty Ltd (“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 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 has 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. Advent requested the In-Specie Distribution on 6 August 2019.
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

Directors' Report

Advent Energy Ltd and its controlled entities

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 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.
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 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. Advent, through Onshore Energy, also holds 100% of EP 386 in addition to RL 1 in the onshore Bonaparte Basin in northern Australia.
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.
An application has been made to the Department of Mines, Industry Regulation and Safety (DMIRS) for a two year suspension and extension of the permit commitment terms in EP386 in the onshore Bonaparte Basin in Western Australia.
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

Advent Energy Ltd and its controlled entities

Directors' Report

June 2019 R and D claim by MEC, have been recharged to MEC and are showing as a current asset of the Company at 31 December 2019. 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.

Auditor’s Independence Declaration

The lead auditor’s independence declaration for the year ended 31 December 2019 has been received and can be found on page 10.

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

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David Breeze Director

Dated this 27th day of February 2020

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

Level 15, Exchange Tower, 2 The Esplanade, Perth, WA 6000 PO Box 5785, St Georges Terrace, WA 6831 T +61 (0)8 9225 5355 F +61 (0)8 9225 6181

www.moorestephens.com.au

I declare that, to the best of my knowledge and belief, during the year ended 31 December 2019, there have been:

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

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NEIL PACE PARTNER

MOORE STEPHENS CHARTERED ACCOUNTANTS

Signed at Perth this 27th day February 2020.

Consolidated Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2019

Advent Energy Ltd and its controlled entities

Note Revenue 2 Other income Foreign exchange gain Finance costs Administration expenses Consulting and legal expenses Director related fees 3 Accounting and auditing Impairment of intangibles Impairment reversal / (writedown of exploration asset) 3 Doubtful debts Termination fees Share sale agreement written back Depreciation 11 Operating profit / (loss) before income tax Income tax expense 9 Operating profit / (loss) 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 / (Loss) Profit / (loss) per share: Basic and diluted (cents per share) 24	Consolidated 31 December 2019 $ 31 December 2018 $ 36 433 2,727 - - 4,137 (25) (664) (60,123) (7,559) (30,343) (89,374) (161,806) (22,432) (10,424) (8,923) - (22,674) 6,786,395 (18,780,680) (8,494) - - (128,640) - 81,844 (97) (364)
	6,517,846 (18,974,896) - -
	6,517,846 (18,974,896) - - - -
	6,517,846 (18,974,896)
	3.7 (11.7)

The accompanying notes form part of these financial statements.

Consolidated Statement of Financial Position as at 31 December 2019

Advent Energy Ltd and its controlled entities

Note Current Assets Cash and cash equivalents 6 Trade and other receivables 7 Financial assets 8 Total Current Assets Non-Current Assets Financial assets 8 Exploration and evaluation expenditure 10 Property plant and equipment 11 Total Non-Current Assets Total Assets Current Liabilities Trade and other payables 12 Financial liabilities 13 Total Current Liabilities Non-Current Liabilities Trade and other payables 12 Financial liabilities 13 Total Non- Current Liabilities Total Liabilities Net Assets Equity Issued capital 15 Option reserve 14 Accumulated losses Total Equity	Consolidated 31 December 2019 $ 31 December 2018 $
	1,687 13,022 1,053 132,068 796,971 787,046
	799,711 932,136
	50,000 50,000 16,302,020 9,415,500 110 207
	16,352,130 9,465,707
	17,151,841 10,397,843
	131,215 65,659 695,040 667,891
	826,255 733,550
	639,668 484,462 4,122,155 4,666,414
	4,761,823 5,150,876
	5,588,078 5,884,426

	11,563,763 4,513,417
	42,196,146 41,663,646 792,019 792,019 (31,424,402) (37,942,248)
	11,563,763 4,513,417

The accompanying notes form part of these financial statements.

Consolidated Statement of Changes in Equity for the year ended 31 December 2019

Advent Energy Ltd and its controlled entities

Balance at 31 December 2017 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 31 December 2018 Profit 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 31 December 2019	Consolidated Issued Capital $ Accumulated losses $ Option Reserve $ Total Equity $
	41,191,646 (18,967,352) 792,019 23,016,313 - (18,974,896) - (18,974,896)
	- (18,974,896) - (18,974,896) 472,000 - - 472,000
	41,663,646 (37,942,248) 792,019 4,513,417 - 6,517,846 - 6,517,846
	- 6,517,846 - 6,517,846 532,500 - - 532,500
	42,196,146 (31,424,402) 792,019 11,563,763

The accompanying notes form part of these financial statements.

Consolidated Statement of Cash Flows for the year ended 31 December 2019 Advent Energy Ltd and its controlled entities

Note Cash Flows From Operating Activities Receipts from Joint Venture partner Payments to suppliers and employees Finance costs Interest Received Net cash from / (used in) operating activities 16 Cash Flows From Investing Activities Exploration expenditure net of reimbursements Net cash provided by investing activities Cash Flows From Financing Activities Amounts( repaid to) / received from other entities Net cash (used in) / provided by financing activities Net (decrease) / increase in cash held Cash at the beginning of the year Cash at the end of the financial year 6	Consolidated 31 December 2019 $ 31 December 2018 $
	115,093 - (2,754) (433,080) (25) (664) 36 433
	112,350 (433,311)
	(104,926) (428,163)
	(104,926) (428,163)
	(18,759) 869,000
	(18,759) 869,000
	(11,335) 7,526 13,022 5,496
	1,687 13,022

The accompanying notes form part of these financial statements.

Notes to the Financial Statements

Advent Energy Ltd 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 27 February 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 31 December 2019 of $6,517,846 (2018: loss of $18,974,896) and has a working capital deficit of $26,544 (2018: deficiency of $198,586) (refer note15 (c)) 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.

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.

Notes to the Financial Statements

Advent Energy Ltd and its controlled entities

1. Statement of Significant Accounting Policies (continued)

Financial Position (continued)

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 31 December 2019.

Included in non-current trade and other payables are balances totalling $639,668 (2018: $484,462) 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 non-exploration 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

Advent Energy Ltd and its controlled entities

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 19 to the financial statements. All controlled entities have a December financial year-end for the purposes of this report.

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

Advent Energy Ltd and its controlled entities

1. Statement of Significant Accounting Policies (continued)

(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.

Advent Energy Ltd and its controlled entities

Notes to the Financial Statements

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

Advent Energy Ltd 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.

Advent Energy Ltd and its controlled entities

Notes to the Financial Statements

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

Advent Energy Ltd 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

Advent Energy Ltd and its controlled entities

1. Statement of Significant Accounting Policies (continued)

(o) Application of New and Revised Accounting Standards

Standards and Interpretations applicable to 31 December 2019

In the period ended 31 December 2019, 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 reporting periods beginning on or after 1 January 2019.

AASB 16 Leases

AASB 16 replaces AASB 117 Leases . AASB 16 removes the classification of leases as either operating leases of finance leases-for the lessee – effectively treating all leases as finance leases. AASB 16 is applicable to annual reporting periods beginning on or after 1 July 2019.

Impact on operating leases

AASB 16 will change how the group accounts for leases previously classified as operating leases under AASB 117, which were off-balance sheet. The consolidated entity does not have any operating leases.

Impact on finance leases

The main differences between AASB 16 and AASB 117 with respect to assets formerly held under a finance lease is the measurement of the residual value guarantees provided by the lessee to the lessor. The consolidated entity does not have any finance leases.

Standards and Interpretations on issue not yet adopted

The Directors have also reviewed all of the new and revised Standards and Interpretations in issue not yet adopted for the year ended 31 December 2019. 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 group and, therefore, no change is necessary to group accounting policies.

Advent Energy Ltd and its controlled entities

Notes to the Financial Statements

1. Statement of Significant Accounting Policies (continued)

(p) 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

Advent Energy Ltd and its controlled entities

1. Statement of Significant Accounting Policies (continued)

(p) 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.

Advent Energy Ltd and its controlled entities

Notes to the Financial Statements

1. Statement of Significant Accounting Policies (continued)

(p) 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’. This replaced AASB 139’s ‘incurred loss model’. Instruments within the scope of the new requirements included 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

Advent Energy Ltd and its controlled entities

venue Interest Revenue xpenses Employee Expenses Director Fees Director consulting fees (Impairment reversal) Write down of exploration asset	Consolidated 2019 $ 2018 $
	36 433
	36 433
	132,774 22.432 29,032 -
	161,806 22.432
	(6,882,247) - 95,852 18,780,680
	(6,786,395) 18,780,680

2. Revenue

3. Expenses

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.

uditor’s Remuneration Remuneration of the auditor of the parent entity for: Moore Stephens	Consolidated 2019 $ 2018 $
	10,424 5,322
	10,424 5,322

4. Auditor’s Remuneration

Notes to the Financial Statements

Advent Energy Ltd 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

David Breeze - Managing Director 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)

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) Hock Goh – Non-Executive Chairman (resigned 26 March 2019) Deborah Ambrosini – Executive Director (resigned 26 March 2019)

Directors	Amount Owing 31 December 2019 ($)	Short term benefit 2019 ($)	Short term benefit 2018 ($)
D Breeze S Kelemen T Fontaine T Huston S James PreviousDirectors	145,349 47,432 10,137 10,137 10,137 416,476	106,395 25,000 10,137 10,137 10,137 -	- 22,432 - - - -
Short term benefit Balance owing at 31 December 2019	639,668	161,806	22,432

ash and cash equivalents Cash at bank and in hand	Consolidated 2019 $ 2018 $
	1,687 13,022

6. Cash and cash equivalents

The average effective interest rate on short-term bank deposits was 1.25%: (2018: 1.25%)

Notes to the Financial Statements

Advent Energy Ltd and its controlled entities

7. Trade and other Receivables Current Trade receivables Other receivables 8. Financial Assets Current Loan receivable from MEC (i) Non-Current Cash held as security (ii)		Consolidated 2019 $ 2018 $
		- 124,436 1,053 7,632
		1,053 132,068
		796,971 787,046
		796,971 787,046
		50,000 50,000
		50,000 50,000

(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.

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

Notes to the Financial Statements

Advent Energy Ltd and its controlled entities

9. 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: Profit / (loss) from ordinary activities before income tax Prima facie tax benefit on profit / (loss) from ordinary activities before income tax at 27.5% (2018: 27.5%) Add tax effect of: - (Non-assessable) / non-deductible items - Revenue losses and other deferred tax balances not recognised Income tax expense b. Deferred tax recognised at 27.5% (2018: 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% (2018: 27.5%): Carry forward losses	Consolidated 2019 $ 2018 $
	6,517,846 (18,974,896) 1,792,408 (5,218,096) (1,892,618) 5,164,687 100,210 53,409
	- -
	4,483,056 2,589,262 4,483,056 2,589,262
	- -
	8,301,369 10,176,471
	8,301,369 10,176,471

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

Prior year comparatives have been adjusted where required to comply with the current year format.

Notes to the Financial Statements

Advent Energy Ltd and its controlled entities

10. Evaluation Exploration Expenditure Exploration and evaluation expenditure Reconciliation of the movement during the year: Opening balance at 1 January Impairment reversal / (writedown) (i) EP 325 expenditure written off Capitalised expenditure net of reimbursements R and D costs backcharged (ii) Balance at 31 December	Consolidated 2019 $ 2018 $ 16,302,020 9,415,500 16,302,020 9,415,500 9,415,500 28,196,442 6,882,247 (18,780,680) (95,852) - 104,926 428,163 (4,801) (428,425) 16,302,020 9,415,500

Recoverability of the carrying amount of exploration assets is dependent on the successful exploration and sale of natural gas. Capitalised costs amounting to $104,926 (2018: $428,163) 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) 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 31 December 2019. Of the $796,971 costs recharged, $557,247 relates to expenditure previously capitalised by Advent, of which $124,021 was capitalised at 31 December 2017.

Advent Energy Ltd and its controlled entities

Notes to the Financial Statements

10. Evaluation Exploration Expenditure (continued)

In MEC’s June 2019 Annual Financial Report it was stated that in order to maintain an interest in the exploration tenements, the group is committed to meet the conditions under which the tenements were granted. These are the subject of applications for variation that remain outstanding. 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.

An application has been made to the Department of Mines, Industry Regulation and Safety (DMIRS) for a two year suspension and extension of the permit commitment terms in EP386 in the onshore Bonaparte Basin in Western Australia.

Capital expenditure forecasted for at the reporting date but not recognised as liabilities within a period greater than one year and less than 5 years was $18,225,000.

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, RL1 and EP 386 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.

Notes to the Financial Statements

Advent Energy Ltd 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 payables is 45 days. 13. Financial liabilities Current - interest free Secured loan payable to BPH Energy Limited (a) Unsecured loan payable to Grandbridge Limited (c) Non-Current – interest free Secured loan payable to MEC Resources Ltd (a) Unsecured loan payable to MEC Resources Ltd (b)		Consolidated 2019 $ 2018 $ 21,133 21,133 (21,023) (20,926) 110 207 207 571 (97) (364) 110 207 12,542 65,659 118,673 - 131,215 65,659 639,668 484,462 639,668 484,462 189,713 162,564 505,327 505,327









		695,040 667,891
		3,600,000 3,600,000 522,155 1,066,414
		4,122,155 4,666,414

Notes to the Financial Statements

Advent Energy Ltd and its controlled entities

13. Financial liabilities (continued)

(a) Secured loans

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.

BPH has a first ranking security over its loan to Advent.

(b) Unsecured loan – MEC

During the year MEC Resource converted an amount of $532,500 of its unsecured loan from Advent to equity at a price of $0.05 per share and withdrew net $18,759 cash from Advent. 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.

(c) Unsecured loan – GBA

In December 2016 GBA charged Advent $128,640 for termination fees in relation to the termination of the Advent Services Agreement on or around 24 November 2016. Pursuant to the Advent Services Agreement, payment for termination became due and payable by Advent to GBA at that time. GBA has previously made demand for payment of the termination payments and no payment was made or settlement offer made. The directors of Advent at that time disputed the validity of this termination fees and they were not recorded in the financial statements of the group. The termination fees have been recorded in the financial statements of the group in the previous financial period.

BPH and GBA entered into a debt assignment on 30 June 2017 whereby $123,080 of the debts owning from the group to GBA were assigned from GBA to BPH. The directors of Advent at that time disputed the validity of this assignment and it was not recorded in the financial statements of the group. The assignment has been recorded in the financial statements of the group in the previous financial period.

Consolidated 2019 2018 $ $

14. Reserves

Option Reserve

The option reserve records items recognized as expenses on the valuation of director, employee and contractor share options.

Opening and closing balance

792,019 792,019

Notes to the Financial Statements

Advent Energy Ltd and its controlled entities

15. Issued Capital 177,595,414 (2018: 166,945,414) fully paid ordinary shares of no par value Less: Capital raising costs Issued Capital (a) Ordinary Shares At the beginning of reporting period Shares issued during the year At reporting date	2019 2018	Consolidated 2019 $ 2018 $ 42,837,622 42,305,122 (641,476) (641,476)
		42,196,146 41,663,646
		2019 2018
	$ $ 41,663,646 41,191,646 532,500 472,000	Number Number 166,945,414 157,505,414 10,650,000 9,440,000
	42,196,146 41,663,646	177,595,414 166,945,414

Fully Paid Ordinary Share Capital

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

(b) Options

There were nil options on issue at the end of the current and prior year.

(c) 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 at 31 December 2019 and at 31 December 2018 is as follows:

Cash and cash equivalents Financial assets Trade and other receivables Trade and other payable Financial liabilities Working capital position		Consolidated 2019 $ 2018 $
		1,687 13,022 796,971 787,046 1,053 132,068 (131,215) (65,659) (695,040) (667,891)
		(26,544) (198,586)

Refer to Note 1 for disclosure on the Company’s financial position.

Notes to the Financial Statements

Advent Energy Ltd 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) / writedown of exploration asset Doubtful debt provision Non-cash expenses Impairment of intangibles Depreciation Research and development recharges Foreign exchange Termination fees Changes in net assets and liabilities Decrease in trade and other receivables Increase / (decrease) in trade payables and accruals (Decrease) in provisions Net cash inflow / (outflow) from operating activities (b) 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 (c) Financing facilities (d) Changes in liabilities arising from financing activities – unsecured borrowings Balance 1 January Net cash (paid) / received from financing activities Conversion of debt to equity Other Balance 31 December		Consolidated 2019 $ 2018 $ 6,517,846 (18,974,896) (6,786,395) 18,780,680 8,494 - 7,000 - - 22,674 97 364 (5,127) (112,108) - (4,137) - 128,640 122,522 30,194 247,913 (222,878) - (81,844) 112,350 (433,311) 1,697 307,810 - - 1,066,414 662,466 (18,759) 869,000 (532,500) (472,000) 7,000 6,948 522,155 1,066,414

Advent Energy Ltd and its controlled entities

Notes to the Financial Statements

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

Advent Energy Ltd 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

Consolidated
2019 Effective Average Interest Rate %	Floating Interest Rate $	Non- Interest Bearing $ Total $
*Financial Assets* Cash and cash equivalents 1.25 Financial assets Trade and other receivables *Financial Liabilities* Trade and sundry payables Financial liabilities Consolidated	1,687 - -	- 1,687 796,971 796,971 1,053 1,053
	1,687	798,024 799,711
	- -	770,883 770,883 4,817,195 4,817,195
	-	5,588,078 5,588,078

2018 Effective Average Interest Rate %	Floating Interest Rate $	Non- Interest Bearing $ Total $
*Financial Assets* Cash and cash equivalents 1.25 Financial assets Trade and other receivables *Financial Liabilities* Trade and sundry payables Financial liabilities	13,022 - -	- 13,022 837,046 837,046 132,068 132,068
	13,022	969,114 982,136
	- -	550,121 550,121 5,334,305 5,334,305
	-	5,884,426 5,884,426

Notes to the Financial Statements

Advent Energy Ltd 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 Financial assets Trade and other receivables Financial Liabilities Financial liabilities Trade and other payables	2019 2018 Carrying Amount Fair Value Carrying Amount Fair Value 1,687 1,687 13,022 13,022 796,971 796,971 837,046 837,046 1,053 1,053 132,068 132,068
	799,711 799,711 982,136 982,136
	4,817,195 4,817,195 5,334,305 5,334,305 770,883 770,883 550,121 550,121
	5,588,078 5,588,078 5,884,426 5,884,426

Notes to the Financial Statements Advent Energy Ltd and its controlled entities

17. Financial Instruments (continued)

b) Financial Instruments (continued)

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
	2019	2018
Change in profit
— Increase in interest rate by 1%	-	-
— Decrease in interest rate by 0.5%	-	-

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.

31 December 2019 Financial liabilities Trade and other payables Unsecured loans Secured loan	Carrying amount Total 2 mths or less 2-12 mths 2-5 years 770,883 770,883 131,215 - 639,668 1,217,195 1,217,195 - 695,040 522,155 3,600,000 3,600,000 - - 3,600,000
	5,588,078 5,588,078 131,215 695,040 4,761,823

The security held by MEC in relation to the $3,600,000 loan is in the process of being released as part of an August 2019 legal settlement.

31 December 2018 Financial liabilities Trade and other payables Unsecured loans Secured loan	Carrying amount Total 2 mths or less 2-12 mths 2-5 years 550,121 550,121 65,659 - 484,462 1,734,305 1,734,305 - 667,891 1,066,614 3,600,000 3,600,000 - 3,600,000
	5,884,426 5,884,426 65,659 667,891 5,150,876

Notes to the Financial Statements

Advent Energy Ltd and its controlled entities

18. Subsequent Events

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 on 11 February 2020.

19. Controlled Entities

Name of Entity	Principal Activity	Country of Incorporation	Ownership Interest %
			2019 2018
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

20. Share-Based Payments

No share-based payment arrangements existed at 31 December 2019 or 31 December 2018, nor were there any movements in issued share options in the years to 31 December 2019 and 31 December 2018.

Advent Energy Ltd and its controlled entities

Notes to the Financial Statements

21. 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

A director, Mr David Breeze, is also the Managing Director of BPH and GBA. At period end BPH owned 22.6% and GBA 6.6% of the Company.

At period end MEC owned 53% of the share capital of Advent but does not have representation on the Advent board. In addition, as part of a legal settlement on 6 August 2019 MEC must, on written request by BPH, execute an irrevocable proxy valid until 23 July 2021 in favour of BPH in respect of all the business to be considered any meeting of members of Advent.

The parent entity in the group is Advent Energy Ltd.

(c) Related Party Transactions

(i) 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 is secured by a fixed and floating 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 legal settlement the loans owed by Advent to MEC at 6 August 2019 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.

The amount payable by the group to MEC reduced by $532,500 during the period as MEC converted debt into shares in Advent and decreased by $18,759 due to net cash repayments to MEC.

(ii) 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.
(iii) 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.
(iv) At period end the Company owed Mr David Breeze $35,257 (2018: $Nil) for expenses paid on behalf of the Company.

Notes to the Financial Statements

Advent Energy Ltd and its controlled entities

22. 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:

Work Program Commitments – Exploration permits Payable: Within one year Greater than one year less than five years Total	Consolidated 2019 $ 2018 $ - - 18,225,000 18,225,000
	18,225.000 18,225.000

Advent has been requested to provide a well management plan, environment plan and safety case for the decommissioning of Waggon Creek-1 and Vienta-1 in EP386.

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.

23. Contingent Liabilities

The Company and consolidated entity have no contingent liabilities.

24. Earnings per Share

Total earnings / (loss) attributable to ordinary equity holders of the Company Earnings / (loss/ used in the calculation of basic earnings per share and diluted earnings per share Earnings / (loss) per share (cents per share) From continuing operations Total basic earnings per share and diluted earnings per share Weighted average number of ordinary shares outstanding during the year used in calculating EPS	Consolidated 2019 $ 2018 $ 6,517,846 (18,974,896)
	6,517,846 (18,974,896)
	3.7 (11.7)
	3.7 (11.7)
	Number 175,212,276 Number 161,677,509

Notes to the Financial Statements

Advent Energy Ltd and its controlled entities

25. 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	Company 2019 $ 2018 $ 242,342 259,691 18,764,805 11,991,595
	19,007,147 12,251,286
	625,132 582,335 4,800,803 5,140,329
	5,425,935 5,722,664
	42,196,146 41,663,646 (29,406,953) (35,927,043) 792,019 792,019
	13,581,212 6,528,662
	6,520,090 (18,976,777) - -
	6,520,090 (18,976,777)

Director’s 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 11 to 44 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 31 December 2019 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

Director

Dated this 27th day of February 2020

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

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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 31 December 2019, 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:

giving a true and fair view of the Group’s financial position as at 31 December 2019 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 various funding initiatives in order to fund its working capital and 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 may cast significant doubt about the Group’s ability to continue as a going concern. The Group financial statements do not include any adjustments that would result if the Group were unable to continue as a going concern.

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

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Material Uncertainty Regarding Carrying Value of Exploration Expenditure

We draw attention to Note 10 to the financial statements and note that recoverability of the carrying amount of the exploration assets is ultimately dependent on the successful commercialisation or sale of those assets. The ability of the Group to achieve these outcomes and timing of such remains uncertain at this time. These 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. 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 31 December 2019, 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.

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.

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INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF ADVENT ENERGY LIMITED (CONTINUED)

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 PARTNER

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MOORE STEPHENS CHARTERED ACCOUNTANTS

Signed at Perth on the 27th day of February 2020

AI assistant

BPH ENERGY LTD — Annual Report 2019

64555_rns_2020-03-02_9c7a24c3-3060-4cd7-a54a-d0a6edf01a43.pdf

Advent Energy Ltd Annual Financial Report to 31 Dec 2019

Operating Results

Significant Changes in State Of Affairs

Contents

Directors

Auditor

Registered Office

Principal Business Address

Directors' Report

Directors

Company Secretary

Information on Directors

D Breeze

S Kelemen

Non-Executive Director ( appointed 8 February 2018)

T Huston

Non-Executive Director ( appointed 6 August 2019 )

T Fontaine

S James

Non-Executive Director (appointed 6 August 2019)

Directors' Report

M Battrick

T Foster

G Hock

D Ambrosini

Meetings of Directors

Directors’ Meetings

Indemnifying Officers or Auditors

Non-Audit Services

Directors' Report

Dividends

Operating Results

Proceedings on Behalf of Company

Options

Environmental Issues

Financial Position

Subsequent Events

Directors' Report

Future Developments

Principal Activities

Company Focus and Developments

PEP 11 Oil and Gas Permit

Directors' Report

Western Australia / Northern Territory – Onshore Bonaparte Basin

Unconventional Resources within EP 386 and RL1

Significant Changes in State Of Affairs

Directors' Report

Directors' Report

Auditor’s Independence Declaration

Consolidated Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2019

Consolidated Statement of Financial Position as at 31 December 2019

Notes to the Financial Statements

1. Statement of Significant Accounting Policies

Corporate Information

Basis of Preparation

Statement of Compliance

Financial Position / Going Concern

Notes to the Financial Statements

1. Statement of Significant Accounting Policies (continued)

Financial Position (continued)

Notes to the Financial Statements

Accounting Policies

(a) Principles of Consolidation

Subsidiaries

(b) Business Combinations

Notes to the Financial Statements

1. Statement of Significant Accounting Policies (continued)

(c) Income Tax

Notes to the Financial Statements

1. Statement of Significant Accounting Policies (continued)

(d) Property, plant and equipment

Depreciation

Class of Fixed Asset

(e) Exploration, Evaluation and Development Expenditure

Notes to the Financial Statements

1. Statement of Significant Accounting Policies (continued)

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

BPH ENERGY LTD Annual Report 2019