ENEGEX LIMITED — Annual Report 2014

Sep 29, 2014

ENEGEX NL

ABN 28 160 818 986

ANNUAL FINANCIAL REPORT

FOR THE YEAR ENDED

30 JUNE 2014

ENEGEX NL ABN 28 160 818 986

CORPORATE DIRECTORY

G.A. Menzies (Chairman) R.J. Coppin B.D. Maltz

COMPANY SECRETARY

R.J. Wright

Registered Office

and Principal Administration Office Level 21, 500 Collins Street Melbourne, Victoria 3000, Australia Telephone: +61 (0)3 8610 4713 Facsimile: +61 (0)3 8610 4799 Email: admin@enegex.com.au

Auditor

Grant Thornton Audit Pty Ltd GPO Box 4736 Melbourne, Victoria 3001 Australia

Website: www.enegex.com.au

Share Registry Link Market Service Limited Level 1, 333 Collins Street Melbourne, Victoria 3000 Australia

Telephone: +61 (0)3 9615 9947 Facsimile: +61 (0)3 9633 8495 Website: www.linkmarketservices.com.au

Stock Exchange Listing

ASX Limited Level 45, South Tower, Rialto 525 Collins Street Melbourne, Victoria 3000 Australia

ASX Code: ENX Ordinary Shares ENXO 30 June 2015 Options

Incorporated in the State of Victoria 17 October 2012

CONTENTS

Directors’ Report ................................................ 1 Remuneration Report .......................................... 7 Directors’ Declaration ....................................... 11 Statement of Profit or Loss and Other Comprehensive Income ........................... 12 Statement of Financial Position ......................... 13 Statement of Changes in Equity ........................ 14 Statement of Cash Flows ................................... 15 Notes to the Financial Statements ..................... 16 Audit Report .................................................... 29 Auditor’s Independence Declaration ................. 31

FORWARD LOOKING STATEMENTS

This Annual Financial Report includes certain forward-looking statements that have been based on current expectations about future acts, events and circumstances. These forward-looking statements are, however, subject to risks, uncertainties and assumptions that could cause those acts, events and circumstances to differ materially from the expectations described in such forward-looking statements.

These factors include, among other things, commercial and other risks associated with the meeting of objectives and other investment considerations, as well as other matters not yet known to the company or not currently considered material by the company.

RISK FACTORS

Exploration for oil and gas is speculative, expensive and subject to a wide range of risks. There can be no assurance that any well drilled by the company will result in the discovery of oil or gas, nor that any discovery will prove to be commercially viable. Individual investors should consider these matters in light of their personal circumstances (including financial and taxation affairs) and seek professional advice from their accountant, lawyer or other professional adviser as to the suitability of an investment in the Company.

ENEGEX NL ABN 28 160 818 986

DIRECTORS’ REPORT

The directors present their report on the results and state of affairs of Enegex NL ( the company or Enegex ) for the year ended 30 June 2014.

PRINCIPAL ACTIVITY

The principal activity of the company during the financial year ended 30 June 2014 was oil and gas exploration, which has remained unchanged since incorporation of the company.

FINANCIAL RESULTS FOR THE YEAR

The company recorded an operating loss after income tax for the year ended 30 June 2014 of $373,165 (2013: $Nil).

SIGNIFICANT CHANGES IN STATE OF AFFAIRS Demerger of Enegex N L

Enegex listed on the Australian Securities Exchange (“ASX”) on 8 October 2013 following implementation of the Schemes of Arrangement between Enegex and its previous owner, Moby Oil and Gas Limited (“Moby”). Moby was delisted from the ASX on 4 October 2013.

DIVIDENDS

No dividend has been paid, provided or recommended during the financial year and to the date of this report.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

The likely developments in the company’s operations in future years and the expected result from those operations are dependent on exploration success in the permit areas in which the company holds an interest, as described in the Review of Operations section of this report.

REVIEW OF FINANCIAL POSITION

At 30 June 2014, the company had a working capital (current assets less current liabilities) surplus of $657,359 (2013: $1).

REVIEW OF OPERATIONS

The company holds working interests in two petroleum exploration permits and a petroleum retention lease in the offshore basins of Australia. One of the exploration permits is located in the Carnarvon Basin (WA-409-P) and the other in the Gippsland Basin (Vic/P47). The petroleum retention lease is located in the Browse Basin (WA-54-R). Details of these permits and retention lease and the work activities undertaken in each one during the financial year are provided in this section.

WA-409-P – Carnarvon Basin

The WA-409-P Joint Venture consists of the following parties:

Apache Northwest Pty Ltd	40.00% and Operator
Rankin Trend Pty Ltd	13.50%
(subsidiary of Moby Oil & Gas Limited)
Enegex NL *	16.50%
Cue Exploration Pty Ltd	30.00%

• subject to approval and registration by the National Offshore Petroleum Titles Administrator (NOPTA)

On 20 October 2010, Rankin Trend Pty and Cue Exploration Pty Ltd entered into the Apache Farmin Agreement under which Apache earned a 40% Participating Interest in and operatorship of WA-409-P by acquiring, processing,

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ENEGEX NL ABN 28 160 818 986

mapping and interpreting the Zeebries 3D seismic survey at its cost. Under the terms of the Apache Farmin all work commitments under the WA-409-P Permit are presently being met by Apache and will be so met until the end of the current permit year. That work program comprises PSDM Reprocessing of 500km[3] 3D Seismic Data, QI study and Geotechnical Studies.

On 23 September 2014, Apache gave the participants in the Joint Venture notice in accordance with the WA-409-P Joint Venture Operating Agreement (JVOA) of its decision to withdraw from WA-409-P and the JVOA with effect from the last day of the current permit year. At present the current permit year ends on 29 January 2015 but the Joint Venture has applied for an extension of the current permit year for a further 3 months. If the extension is granted, the current permit year will expire on 29 April 2015. Apache has also given notice that it resigns as operator under the JVOA.

The WA-409-P permit is displayed in the Carnarvon Basin Permit Location Map below.

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Figure 1: Carnarvon Basin Permit Location and Zeebries 3D Seismic Survey Map

WA-54-R – Cornea Retention Lease

The Cornea Joint Venture consists of the following interests:

Moby Oil & Gas Limited 7.500% Enegex NL 14.875% Cornea Oil & Gas Pty Ltd 17.000% Cornea Petroleum Pty Ltd 14.875% Cornea Resources Pty Ltd 13.100% and Operator Octanex Group. ( ASX Code: OXX) 18.750% Coldron Pty Ltd 7.500% Auralandia Pty Ltd 6.400%

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Award of the Cornea Retention Lease

The Retention Lease was granted for an initial 5-year term in May 2014 and is located in the Browse Basin, offshore from Western Australia. WA-54-R covers the Cornea Location Area of six graticular blocks (approximately 497 km²) located within what was the WA-342-P permit and incorporates the Cornea oil and gas accumulations ( Greater Cornea Fields ). The Greater Cornea Fields include the Cornea (Central and South), Focus and Sparkle Oil Fields and the Cornea North (Tear) Gas Field – see the Figure 2 Cornea Retention Lease Location Map.

Work Programme designed to achieve early commercial production

The Greater Cornea Fields are seen as an economic value opportunity and the path to early development is to overcome the technical challenges to unlock that value as quickly as possible. The work programme calls for extensive engineering and complementary studies. In the main, the studies are a lead up to the first and fundamentally important operational activity of drilling a production test well in Year 4.

The design and required technologies for drilling and producing from what will likely be a horizontal test well are complex. The studies have been structured to overcome the technical challenges likely to be faced in bringing the Greater Cornea Fields into commercial production. The oil and gas volumes in the Greater Cornea Fields are such that, if threshold production flow rates can be demonstrated, the economics should be immediately attractive and provide a reasonable expectation of commercial development.

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Figure 2: Cornea Retention Lease Location Map

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Development scenario

For the purposes of undertaking a preliminary economic analysis, a full development of the southern portion of the Cornea South and Central Oil Fields, based on 32 producing wells around 3 hubs, was the subject of the economic analysis – see the schematic diagram at Figure 3.

==> picture [453 x 275] intentionally omitted <==

Figure 3: Greater Cornea Fields Preliminary Conceptual Development Schematic

Contingent Oil Resources

Table 1 below presents the probabilistically derived In-place and Contingent Oil Resources for the Cornea Central and South Oil Fields , with no development risk having been applied in deriving these volumes.

Middle Albian B & C Sands	Low Estimate (P90)	Best Estimate (P50)	High Estimate (P10)	Units
Total Oil In-place	298.0	411.7	567.2	mmbbl
Recovery Factor (RF)	2	7	25	%
Contingent Oil Resources	7.9	28.8	101.9	mmbbl
Prospective Enegex Economic Interest*	1.16	4.28	15.16	mmbbl

• Based on Enegex’s 14.875% Participating Interest in WA-342-P.

Table 1: In-place and Contingent Oil Resources for Cornea Central and South Fields

WA-342-P – Cornea Exploration Permit

Following the grant of the Cornea Retention Lease, the decision was made to surrender the WA-342-P permit.

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ENEGEX NL ABN 28 160 818 986

Vic/P47 – Gippsland Basin

The Vic/P47 Joint Venture consisted of the following parties:

Seaquest Petroleum Pty Ltd 40.00% and Operator Moby Oil & Gas Limited 15.75% Enegex NL 19.25% Oil Basins Limited (“ OBL* ”) 25.00%

• subject to approval and registration by NOPTA

Moby originally held a 35% undivided Participating Interest in Vic/P47 from which Enegex’s 19.25% participating Interest is derived.

The Vic/P47 permit is located in the offshore Gippsland Basin, 14 km from the coast and south of the Victorian town of Orbost with water depths ranging up to 80 metres – refer to the Vic/P47 Location Map (Figure 4).

==> picture [443 x 272] intentionally omitted <==

Figure 4: Vic/P47 Permit Location Map

The permit is in Year 4 of the first 5-year renewed term, where the work commitments are to carry out a reappraisal of the Judith gas resource and conceptual field development and well design studies. This follows the gas marketing studies and conceptual appraisal planning completed during Year 3. A further six month suspension and extension of the permit was granted on 26 June 2014. Year 4 of the permit now ends on 15 November 2014. The Year 4 program continues to be progressed.

DIRECTORS

The directors in office during the entire financial year and to the date of this report were:

GA Menzies LL.B

Chairman and Chief Executive Officer Executive Director Director since 17/10/12

Mr Menzies is a barrister and solicitor. He graduated from Melbourne University in 1971 and qualified for admission to the degree of Master of Laws in 1975. He was admitted to practice in 1972.

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ENEGEX NL ABN 28 160 818 986

Since 1987 he has carried on practice as a sole practitioner under the name of Menzies & Partners. In the course of his legal practice Mr Menzies has been involved in a wide range of activities, including takeovers, litigation in respect thereof, numerous capital raisings and corporate reconstructions. He has been involved as a lawyer in the listing of a large number of public companies ranging from junior explorers to substantial mining companies. Over recent years his activities have focused primarily on corporate reconstructions and capital raisings.

Mr Menzies is a director of Octanex NL, as well of a number of private and unlisted public companies.

RJ Coppin B.Sc. (Hons)

Non-Executive Director

Director since 17/10/12

Mr Coppin graduated from the University of Adelaide in 1965 with a Bachelor of Science with Honours, majoring in Geology and Physics. For the next 45 years he worked in the petroleum exploration industry, beginning with the South Australian Department of Mines and then moving to Esso in Australia and Malaysia where, as Exploration Projects Manager, he was involved in several oil and gas discoveries in the Malay Basin.

After a period with Exxon USA in Houston, Mr Coppin returned to Esso Australia as Western Division Manager in charge of exploration in Western Australia and the Delhi interests in the South Australian Cooper Basin. He then joined Santos Limited as South East Asia Exploration Manager and in this position was responsible for Santos’ exploration interests in Papua New Guinea and Malaysia and new venture activities in Vietnam, Cambodia, Thailand and Myanmar.

From 1994 to 2010, Mr Coppin was with Cue Energy Resources Limited where he oversaw that company’s focus on Papua New Guinea, Indonesia, New Zealand and Australia. For the last 12 of those years he was Chief Executive Officer of Cue. Mr Coppin is a former officer of the Australia Petroleum Production and Exploration Association where he was a councillor for 10 years and for 8 years was chairman of the APPEA exploration committee.

BD Maltz BBus, CA

Non-Executive Director

Director since 12/03/13

Mr Maltz is a Chartered Accountant with more than 15 years experience and a background in both public practice and commerce. He has been involved in a wide range of corporate transactions in the resources, funds management and financial services industries. He joined the Albers Group in 2008 as tax manager.

Prior to joining the Albers Group, Mr Maltz worked in the funds management industry, with full responsibility for the taxation requirements of a large fund manager and its property, agriculture and venture capital funds. He commenced his professional career in the mid-1990s at national chartered accounting firms in Sydney and Melbourne, advising high net worth individuals and corporates. Mr Maltz is a member of the Institute of Chartered Accountants in Australia and is a registered Tax Agent.

COMPANY SECRETARY

RJ Wright B Bus, CPA – appointed 17 October 2012

Mr Wright is a senior financial professional with over 25 years commercial experience in the resource, energy and manufacturing industries gained at various companies and locations, including 14 years at BHP. As well as carrying out his secretarial duties for Enegex, he is the company’s Chief Financial Officer and the Company Secretary and CFO of several listed and unlisted exploration companies. Mr Wright is a member of CPA Australia.

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ENEGEX NL ABN 28 160 818 986

BOARD AND COMMITTEE MEETINGS

The following table sets out the number of meetings held during the year and the number of meetings attended by each director.

by each director.
	Board of Directors		Audit	Committee
	Held	Attended	Held	Attended
GA Menzies	2	2	1	1
RJ Coppin	2	2	1	1
BD Maltz	2	2	1	1

The board undertakes all audit committee functions.

DIRECTORS’ INTERESTS

At the date of this report, the relevant beneficial and non-beneficial interests of each of the directors in the shares and options in the company were:

	Ordinary	30/06/2015
	Shares	Listed Options
GA Menzies	1,479,444	268,333
RJ Coppin	16,667	-
BD Maltz	41,416	235,000

SHARE CAPITAL

ORDINARY SHARES

Following implementation of the Schemes of Arrangement between Enegex and its previous owner, Moby Oil and Gas Limited (“Moby”) Moby shareholders, including the directors of Enegex NL, were issued one fully paid Enegex Share in exchange for every three Moby Shares held at 1 July 2013. This resulted in 53,666,486 ordinary fully paid shares in the company being issued during the year ended 30 June 2014.

OPTIONS

Following implementation of the Schemes of Arrangement between Enegex and Moby option holders, including the directors of Enegex NL, were granted one Enegex Option in exchange for every three Moby Options held at 30 June 2013. Details of the listed options outstanding at the date of this report are:

• 30 June 2015 Listed Options – Exercise price 10 cents – 7,357,105 Options (2013: Nil) .

REMUNERATION REPORT

This report is audited.

Directors / Executives Position Held

GA Menzies Chairman and Chief Executive Officer RJ Coppin Non-Executive Director BD Maltz Non-Executive Director

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ENEGEX NL ABN 28 160 818 986

REMUNERATION REPORT (Continued)

All directors held their position for all of the year ended 30 June 2014 and to the date of signing this report.

During the year there were no employees or consultants to the company that meet the definition of key management personnel, other than the directors.

Remuneration levels for company officers are competitively set to attract and retain experienced directors.

The remuneration structure explained below is designed to attract suitably qualified candidates, reward the achievement of strategic objectives and achieve the broader outcome of creation of value for shareholders.

The remuneration structure takes into account:

• the capability and experience of the directors;

• the ability of directors to control the entity’s performance; and

Remuneration levels are reviewed annually through a process that considers the performance of individual directors and the overall performance of the entity.

Director Remuneration

During the year under review, directors were remunerated a total of $98,325 (2013: $Nil) which included shareholder-approved non-executive remuneration of $65,550 (2013: $Nil).

There is no performance related remuneration for directors. Directors’ remuneration paid covers all board activities including serving on committees.

The directors do not receive employee benefits, including annual leave and long service leave, but remuneration may include the grant of options (share based payments) over shares of the company to align directors’ interests with that of the shareholders. The company aims to reward directors with a level and mix of remuneration commensurate with their position and responsibilities within the company.

There is no direct relationship between remuneration of directors and the company’s performance since incorporation

Components of directors’ compensation are disclosed below.

		Short Term		Post	Equity	Total
				Employment	Settled
	Year	Directors	Other	Super-	Options		Options as
		Fees	Fees	annuation			percentage of
		$	$	$	$	$	Total
GA Menzies	2014	30,000	-	2,775	-	32,775	-
	2013	-	-	-	-	-	-
RJ Coppin	2014	30,000	-	2,775	-	32,775	-
	2013	-	-	-	-	-	-
BD Maltz	2014	30,000	-	2,775	-	32,775	-
	2013	-	-	-	-	-	-
TOTAL	2014	90,000	-	8,325	-	98,325	-
	2013	-	-	-	-	-	-

End of Remuneration Report

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ENEGEX NL ABN 28 160 818 986

INDEMNIFICATION OF OFFICERS AND AUDITORS

During the financial year and to the date of this report, the company did not pay premiums in respect of contracts insuring officers or auditors of the company against liabilities arising from their position of officers or auditor of the company.

ENVIRONMENT, HEALTH AND SAFETY

The company has adopted an environmental, health and safety policy and conducts its operations in accordance with the APPEA Code of Practice.

The company’s petroleum exploration activities are subject to environmental conditions specified in the Offshore Petroleum and Greenhouse Gas Storage Act 2006, associated Regulations and Directions, as well as the Environment Protection and Biodiversity Conservation Act 1999. There were no known contraventions of any relevant environmental regulations by the company, its subsidiary or by the operator of any of the permits in which an interest is held.

The company believes all injuries are avoidable and has policies and procedures to ensure employees and contractors manage safety accordingly. The company monitors and evaluates its procedures. During the year there were no known contraventions of health and safety by the company or reported health and safety incidents.

During the year the company did not act as operator of any of the exploration permits in which an interest is held.

CORPORATE GOVERNANCE

The ASX Corporate Governance Council has issued “Corporate Governance Principles and Recommendations” (the CGC Paper) requiring ASX listed companies to report their corporate governance practices against those principles and recommendations. The directors have agreed the company adopt those principles and recommendations set out in the latest CGC Paper that are appropriate to a company of the size and stage of development of Enegex.

WEBSITE

The company has a website that can be found at www.enegex.com.au where relevant company documents and information are displayed.

EVENTS SINCE BALANCE DATE

There has been no significant after balance date event up to the date of signing this report.

PROCEEDINGS ON BEHALF OF THE COMPANY

No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section 237 of the Corporations Act 2001.

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ENEGEX NL ABN 28 160 818 986

AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES

A copy of the auditor’s independence declaration, as required under Section 307C of the Corporations Act 2001, is attached and forms part of this Directors’ Report for the year ended 30 June 2014.

No fees were paid to the auditor for non-audit services.

Signed in accordance with a resolution of the directors in Melbourne on 30 September 2014.

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G A Menzies Director

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ENEGEX NL ABN 28 160 818 986

DIRECTORS’ DECLARATION

The directors of the company declare that:

1. The financial statements, comprising the statement of profit or loss and other comprehensive income, statement of financial position, statement of cash flows, statement of changes in equity, and accompanying notes, are in accordance with the Corporations Act 2001 and

2. (a) comply with Accounting Standards and the Corporations Regulations 2001;

3. (b) give a true and fair view of the company’s financial position as at 30 June 2014 and of its performance for the year ended on that date; and

4. (c) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1(a).

5. 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.

6. The remuneration disclosures included in pages 7 to 8 of the Directors’ Report, (as part of the audited Remuneration Report), for the year ended 30 June 2014, comply with section 300A of the Corporations Act 2001.

7. The directors have been given the declarations by the chief executive officer and chief financial officer required by section 295A.

This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors by:

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GA Menzies Director

Melbourne, 30 September 2014

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STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2014

		2014	2013
	NOTE	$	$
Revenue - interest received		945	-
Expenses	3	(374,110)	-
		__	__
Loss before income tax expense		(373,165)	-
Income tax expense	4	-	-
		__	__
Loss for the year		(373,165)	-
		__	__
Other comprehensive income		-	-
		__	__
Total comprehensive income for the year		(373,165)	-
		__	__
Basic loss per share (cent per share)	16	($0.930)	-
Diluted loss per share (cent per share)	16	($0.930)	-

The above Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the accompanying notes.

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STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2014

		2014	2013
	NOTE	$	$
CURRENT ASSETS
Cash and cash equivalents	5	756,812	1
Trade and other receivables	6	2,420	-
		__	__
TOTAL CURRENT ASSETS		759,232	1
		__	__
NON-CURRENT ASSETS
Exploration and evaluation assets	7	66,383	-
		__	__
TOTAL NON-CURRENT ASSETS		66,383	-
		__	__
TOTAL ASSETS		825,615	1
		__	__
CURRENT LIABILITIES
Trade and other payables	8	101,873	-
		__	__
TOTAL CURRENT LIABILITIES		101,873	-
		__	__
TOTAL LIABILITIES		101,873	-
		__	__
NET ASSETS		723,742	1
		========	=======
EQUITY
Issued capital	9	1,096,907	1
Accumulated losses		(373,165)	-
		__	__
TOTAL EQUITY		723,742	1
		========	=======

The above Statement of Financial Position is to be read in conjunction with the accompanying notes.

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STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014

	Issued	Accumulated	Total
2014	Capital	Losses	Equity
	$	$	$
At 1 July 2013	1	-	1
Transactions with owners in their
capacity as owners
Issue of shares	1,096,906	-	1,096,906
Loss after tax for the period	-	(373,165)	(373,165)
	__	__	____
Total comprehensive income for the year	-	(373,165)	(373,165)
	__	__	____
At 30 June 2014	1,096,907	(373,165)	723,742
	=======	=======	=========
2013
At 1 July 2012	-	-	-
Transactions with owners in their
capacity as owners
Issue of shares	1	-	1
Total comprehensive income for the year	-	-	-
	__	__	____
At 30 June 2013	1	-	1
	=======	=======	=========

The above Statement of Changes in Equity is to be read in conjunction with the accompanying notes.

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ENEGEX NL ABN 28 160 818 986

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014

	NOTE	2014	2013
		$	$
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers		(274,657)	-
Interest received		945	-
		__	__
Net cash outflow in operating activities	(i)	(273,712)	-
		__	__
CASH FLOWS FROM INVESTING ACTIVITIES
Payments to suppliers - exploration		(66,383)	-
		__	__
Net cash outflow from investing activities		(66,383)	-
		__	__
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of ordinary shares under schemes of arrangement 2		1,096,906	1
		__	__
Net cash inflow from financing activities		1,096,906	1
		__	__
Net increase in cash and cash equivalents		756,811	1
Cash and cash equivalents at the beginning of the year		1	-
		__	__
CASH AND CASH EQUIVALENTS AT YEAR END	5	756,812	1
		=======	=======
(i) RECONCILIATION OF LOSS TO NET CASH OUTFLOW IN OPERATING		ACTIVITIES
Loss after income tax		(373,165)	-
Changes in Assets and Liabilities:
Increase in payables		101,873	-
Increase in receivables		(2,420)	-
		__	__
Net cash outflow from operating activities		(273,712)	-
		=======	=======

The above Statement of Cash Flows is to be read in conjunction with the accompanying notes.

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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2014

NOTE 1 SIGNIFICANT ACCOUNTING POLICIES

Enegex NL (“Enegex” or ‘the company”) is a for-profit company incorporated and domiciled in Australia with its registered office and principal place of business located at Level 21, 500 Collins Street, Melbourne, Victoria 3000. The financial report of the company for the year ended 30 June 2014 comprises the company and its interest in joint operations.

The principal activity of the company during the year was exploration for petroleum in Australia and has remained unchanged since incorporation. The company entered into schemes of arrangement effective 1 July 2013 (Note 2).

The financial report was authorised for issue by the directors on 30 September 2014.

(a) Statement of compliance

The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards, including the Accounting Interpretations, issued by the Australian Accounting Standards Board (‘AASB’) and the Corporations Act 2001 . The financial report of the company complies with International Financial Reporting Standards and interpretations adopted by the International Accounting Standards Board.

(b) Basis of preparation

The financial report is presented in Australian dollars which is the company’s functional currency and is prepared on the accrual and historical cost basis.

The preparation of a financial report in conformity with Australian Accounting Standards requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Judgements made by management in the application of Australian Accounting Standards that have a significant effect on the financial report and estimates with a significant risk of material adjustment in the next year are discussed in note 1(n).

The accounting policies set out below have been applied consistently to all periods presented in the financial report.

(c) Exploration and evaluation expenditure

Exploration and evaluation assets are capitalised as exploration and evaluation assets on an area of interest basis.

Exploration and evaluation costs are only recognised when the rights to tenure of the area of interest are current and either:

(i) the expenditures are expected to be recouped through successful development and exploitation of the area of interest, or alternatively by its sale, or partial sale; or

(ii) activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active and significant operations in, or in relation to, the area of interest are continuing.

Exploration and evaluation assets are assessed for impairment if the facts and circumstances suggest that the carrying amount exceeds the recoverable amount (see impairment, accounting policy 1 (g)).

Proceeds form the sale of exploration permits or recoupment of exploration costs from farmin arrangements are credited against exploration costs previously capitalised. Any excess of the proceeds over costs recouped are accounted for as a gain on disposal.

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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2014

NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (continued)

(d) Restoration, rehabilitation and environmental expenditure

Restoration, rehabilitation and environmental costs necessitated by exploration and evaluation activities are provided for as part of the cost of those activities. Costs are estimated on the basis of current legal requirements, anticipated technology and future costs that have been discounted to their present value. Estimates of future costs are reassessed at each reporting date.

(e) Trade and other receivables

Trade receivables are recognised at original invoice amounts less an allowance for uncollectible amounts and have repayment terms between 30 and 90 days. Collectability of trade receivables is assessed on an ongoing basis. Debts which are known to be uncollectible are written off. An allowance is made for doubtful debts where there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the company will not be able to collect all amounts due according to the original terms.

(f) Cash and cash equivalents

Cash and cash equivalents comprise cash balances and at call bank deposits. Bank overdrafts that are repayable on demand and form an integral part of the company’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

(g) Impairment of assets

The carrying amounts of the company’s assets are reviewed at each statement of financial position date to determine whether there are indicators of impairment. At each reporting date the company assesses whether there is any indication that individual assets are impaired. Where impairment indicators exist, recoverable amount is determined and impairment losses are recognised in profit or loss where the asset's carrying value exceeds its recoverable amount. Recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purpose of 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.

Where it is not possible to estimate recoverable amount for an individual asset, recoverable amount is determined for the cash-generating unit to which the asset belongs.

(h) Share capital

Ordinary share capital is recognised at the fair value of the consideration received by the company. Transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the consideration received, net of any related income tax benefit.

(i) Provisions

A provision is recognised in the statement of financial position when the company has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

(j) Trade and other payables

Trade, accruals and other payables are recorded initially at fair value and subsequently at amortised cost. Trade payables are non-interest bearing and are normally settled on 60-day terms.

(k) Revenue

Revenue is recognised at the fair value of consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances and duties and taxes paid. The following specific recognition criteria must also be met before revenue is recognised:

Interest

Revenue is recognised as interest accrues using the effective interest method. The effective interest method uses the effective interest rate which is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial asset.

17

ENEGEX NL ABN 28 160 818 986

NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2014

NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (continued)

(l) Income tax

Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the statement of financial position date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the statement of financial position liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

The initial recognition of assets or liabilities that do not affect accounting nor taxable profit is not provided for in determining deferred tax amounts. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the statement of financial position date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be applied. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

The Company recognises deferred tax assets arising from unused tax losses of the company to the extent that is probable that future taxable profits of the company will be available against which the asset can be utilised.

(m) Goods and services tax

Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the statement of financial position.

Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

(n) Accounting estimates and judgements

Management determine the development, selection and disclosure of the company’s critical accounting policies and estimates and the application of these policies and estimates. There are no estimates and judgements that are considered to have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

There is, however, a risk that actual expenditure to achieve minimum work obligations could differ from estimates disclosed in the notes to the financial statements (Note 13). The estimated amounts represent the higher end of possible future expenditure. Work requirements achieved by farm-ins materially reduce the level of expenditure incurred by the company to comply with work program commitments.

Management has determined that realisation of the estimated deferred tax asset arising from tax losses and temporary differences is not probable and has not brought to account the asset at balance date (Note 4).

Per Note 1(c) and 1(g) management exercise judgement as to the recoverability of exploration expenditure. Any judgement may change as new information becomes available. If, after having capitalised exploration and evaluation expenditure, management concludes that the capitalised expenditure is unlikely to be recovered by future sale or exploitation, then the relevant capitalised amount will be written off through profit or loss.

18

ENEGEX NL ABN 28 160 818 986

NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2014

NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (continued)

(o) Joint Operations

Interest in joint operations is brought to account, by including in the respective classifications, the company’s share of individual assets employed, liabilities, income and expenses incurred. Where the company is acquiring or disposing of a joint operation interest the company’s share of joint operation assets is based on the contributions made to the joint operation.

( p) Fair value

Fair values may be used for financial asset and liability measurement as well as for sundry disclosures. Fair values for financial instruments traded in active markets are based on quoted market prices at statement of financial position date. The quoted market price for financial assets is the current bid price and the quoted market price.

The fair value of financial instruments that are not traded in an active market are determined using valuation techniques. Assumptions used are based on observable market prices and rates at balance date. Estimated discounted cash flows are used to determine fair value of the remaining financial instruments.

The carrying value (less impairment provision of trade receivables and payables) are assumed to approximate their fair values due to their short-term nature. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the company for similar financial instruments

(q) Foreign Currency Translation

The functional and presentation currency of the company is Australian dollars (A$).

Foreign currency transactions are translated into the functional currency using the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the statement of financial position date. Foreign exchange gains and losses resulting from settling foreign currency transactions, as well as from restating foreign currency denominated monetary assets and liabilities, are recognised in profit or loss, except when they are deferred in equity as qualifying cash flow hedges or where they relate to differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity.

Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when fair value was determined.

(r) Earnings per Share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to members of Enegex, adjusted for the after-tax effect of preference dividends on preference shares, if any, classified as equity, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares during the year.

Diluted earnings per share

Earnings used to calculate diluted earnings per share are calculated by adjusting the basic earnings by the after-tax effect of dividends and interest associated with dilutive potential ordinary shares. The weighted average number of shares used is adjusted for the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

19

ENEGEX NL ABN 28 160 818 986

NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2014

NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (continued)

(s) New standards adopted during the year

A number of new and revised standards are effective for annual periods beginning on or after 1 July 2013. Information on these new standards is presented below.

AASB 11 Joint Arrangements

AASB 11 supersedes AASB 131 Interests in Joint Ventures (AAS 131) and AASB Interpretation 113 Jointly Controlled Entities- Non-Monetary-Contributions by Venturers. AASB 11 revises the categories of joint arrangement, and the criteria for classification into the categories, with the objective of more closely aligning the accounting with the investor’s rights and obligations relating to the arrangement. In addition, AASB 131’s option of using proportionate consolidation for arrangements classified as jointly controlled entities under that Standard has been eliminated. AASB 11 now requires the use of the equity method for arrangements classified as joint ventures (as for investments in associates).

Management has reviewed the joint arrangements for its interests in exploration joint ventures in accordance with AASB 11 and has concluded these are joint operations. AASB 11 requires a joint operator to recognise its interest in assets, liabilities, revenue and expenses of the joint operation.

AASB 13 Fair Value Measurement

AASB 13 clarifies the definition of fair value and provides related guidance and enhanced disclosures about fair value measurements. It does not affect which items are required to be fair-valued. The scope of AASB 13 is broad and it applies for both financial and non-financial items for which other Australian Accounting Standards require or permit fair value measurements or disclosures about fair value measurements, except in certain circumstances.

AASB 13 applies prospectively for annual periods beginning on or after 1 January 2013. Its disclosure requirements need not be applied to comparative information in the first year of application.

(t) Comparatives

The company was incorporated on 17 October 2012. As such, the comparative amounts disclosed represent the period 17 October 2012 to 30 June 2013.

(u) Accounting standards issued not yet effective

AASB 9 Financial Instruments

This standard introduces new requirements for the classification and measurement of financial assets and liabilities. These requirements improve and simplify the approach for classification and measurement of financial assets compared with the requirements of AASB 139 The entity has not yet assessed the full impact of AASB 9 as this standard does not apply mandatorily before 1 January 2018.

NOTE 2 SCHEMES OF ARRANGEMENT

Effective, 1 July 2013, the company issued 53,666,486 new Enegex shares and granted 7,357,105 new Enegex listed options pursuant to Moby Oil & Gas Limited (“Moby”) schemes of arrangement under which the participating shareholders of Moby (being all Moby shareholders other than Moby director EG Albers and interests associated with him) and all Moby optionholders approved the cancellation of their Moby shares and options and, in return, received shares and options issued and granted respectively by Enegex.

Under the Schemes of arrangement Enegex received subscription moneys of $1,096,906, issued the abovementioned shares and options and increased its contributed equity from $1 to $1,096,907.

20

ENEGEX NL ABN 28 160 818 986

NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2014

NOTE 2 SCHEMES OF ARRANGEMENT (Continued)

The schemes of arrangement were conditional on Enegex entering into the farmin agreement with Moby in relation to the WA-409-P permit, WA-342-P permit and the Vic/P47 permit, as described at Note 10. Enegex acquired participating interests in WA-342-P, WA-409-P and Vic/P47 in consideration of meeting pro rata future work commitments under the terms of Permits. The fair values of the permits acquired under the schemes of arrangement were determined to be $nil for each of the three permits.

No other assets or liabilities were acquired from the schemes of arrangement.

	NOTE	2014	2013
		$	$
NOTE 3 EXPENSES
Audit and other related fees	17	37,000	-
Directors’ remuneration		98,323	-
Consultants fees		112,321	-
Management fees		24,000	-
Office costs		13,623	-
Printing and stationery		26,211	-
Stock exchange and registry costs		52,496	-
Other expenses		10,136	-
		__	__
		374,110	-
		=======	=======
NOTE 4 INCOME TAX EXPENSE
Components of income tax expense
Current tax (benefit)/expense		(111,949)	-
Deferred tax relating to the origination and reversal of temporary differences		-	-
Deferred tax asset not brought to account		111,949	-
		__	__
Income tax expense		-	-
		=======	=======
Reconciliation between tax expense and pre-tax loss
Loss before tax		(373,165)	-
		=======	=======
Income tax using statutory income tax rate of 30% (2013: 30%)		(111,949)	-
		__	__
Tax benefit		(111,949)	-
Deferred tax asset not brought to account		111,949	-
		__	__
Income tax expense		-	-
		=======	=======
Unrecognised deferred tax asset
The estimated deferred tax asset arising from tax losses and temporary differences
not brought to account at balance date as realisation of the benefit is not probable:
Tax losses carried forward		127,064	-
Temporary differences		(15,115)	-
		__	__
		111,949	-
		=======	=======

21

ENEGEX NL ABN 28 160 818 986

NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2014

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||||
|---|---|---|
|NOTE|2014|2013|
|$|$|
|NOTE 5 CASH AND CASH EQUIVALENTS|
|Cash at bank and on hand|756,812|1|
|_|_|
|756,812|1|
|=======|=======|

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Cash and cash equivalents are subject to interest rate risk as they earn floating rates. The bank deposit is at call in 2014.

NOTE 6 TRADE & OTHER RECEIVABLES

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||||
|---|---|---|
|Other receivables|2,420|-|
|_|_|
|2,420|-|
|=======|=======|

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The carrying amount of all receivables is equal to their fair value as they are short term. None of the receivables are impaired or past due. The maximum credit risk for the company is the gross value of all receivables. All receivables are non-interest bearing.

NOTE 7 EXPLORATION AND EVALUATION ASSETS

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|||
|---|---|
|Balance at beginning of year|-|
|Expenditure for the year|66,383|
|_|_|
|Balance at end of year|66,383|

----- End of picture text -----

Exploration and evaluation assets relate to the areas of interest in the exploration phase for petroleum exploration permitsWA-409-P and Vic/P47. (2013: Nil).

Exploration and evaluation assets also include the petroleum retention lease WA-54-R. On 6 May 2014 the Cornea Joint Venture, of which the company holds an 14.75% interest, was granted a retention lease which covers six graticular blocks located within the WA-342-P exploration permit. At the same time as the grant of the WA-54-R the Cornea Joint Venture applied to surrender the exploration permit WA-342-P. This surrender was granted in August 2014.

WA-54-R, WA-409-P and Vic/P47 are held through joint operations and details of interests held in the permits can be found in Note 10.

NOTE 8 TRADE AND OTHER PAYABLES

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||||
|---|---|---|
|Other payables and accrued expenses|101,873|-|
|======= =======|

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Trade payables are current liabilities which result in their fair value being equal to the current carrying amount. Information about the company’s exposure to foreign exchange risk in relation to other trade payables and accrued expenses, including sensitivities to changes in foreign exchange rates, is provided in Note 14.

22

ENEGEX NL ABN 28 160 818 986

NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2014

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|||||||
|---|---|---|---|---|---|
|2014|2014|2013|2013|
|Shares|$|Shares|$|
|NOTE 9 ISSUED CAPITAL|
|Issued Capital|
|Ordinary shares fully paid|53,666,491|1,096,907|5|1|
|========= ========|========= ========|
|Ordinary Shares|
|Movements during the year|
|Balance at beginning of year|5|1|-|-|
|Shares issued:|
|-|Per Moby Scheme of arrangement (i)|53,666,486|1,096,906|5|1|
|_|_|_ _|
|Balance at end of year|53,666,491|1,096,907|5|1|
|========= ========|========= ========|

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(i) Following implementation of the Schemes of Arrangement (Note 2) between Enegex and its previous owner, Moby Oil and Gas Limited (“Moby”) Moby shareholders, including the directors of Enegex (Note 11), were issued one fully paid Enegex Share in exchange for every three Moby Shares held at 1 July 2013. This resulted in 53,666,486 ordinary fully paid shares in the company being issued during the year ended 30 June 2014.

Ordinary Shares

Ordinary shares entitle the holder to receive dividends as declared and, in the event of winding up the company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the company. The company does not have a limited authorised capital and issued shares have no par value.

Share Options

Each option entitles the holder to subscribe for a fully paid ordinary share that will from the date of issue rank equally in all respects with the then issued ordinary fully paid shares in the capital of the company, and will be subject to the provisions of the constitution of the company. The option does not entitle the holder to a vote at meeting of members of the company or to participate in new issues of ordinary shares offered to members of the company during the currency of the option.

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|||
|---|---|
|2014|2013|
|Options|Options|
|30 June 2015 Listed Options– exercisable at 10 cents|
|Balance at beginning of year|-|
|Options granted per Moby Scheme of Arrangement (ii)|7,357,105|
|_|_|
|Balance at end of year|7,357,105|

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(ii) Following implementation of the Schemes of Arrangement (Note 2) between Enegex and Moby optionholders, including the directors of Enegex NL (Note 11), were granted one Enegex Option in exchange for every three Moby Options held at 30 June 2013. As a result 7,357,105 options were granted during the year ended 30 June 2014.

23

ENEGEX NL ABN 28 160 818 986

NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2014

NOTE 10 INTEREST IN JOINT OPERATIONS

The company has an interest in the assets, liabilities and output of joint operations for the exploration and development of petroleum in Australia. The company has taken up its share of joint operations transactions based on the company’s contributions to the joint operations. Expenditure commitments in respect of the joint operations are disclosed in Note 13. Details of the company’s interests in the joint operations are:

	Interest	Interest	Interest
	30/6/2014	Acquired	30/6/2013
		(Disposed)
Cornea Joint Venture – WA-54-R (i)	14.875%	14.875%	-
Vic/P47(ii)	19.250%	19.250%	-
WA-409-P (iii)	16.500%	16.500%	-

(i) As part of the Moby Oil & Gas Limited schemes of arrangement Enegex signed a farmin deed on 15 July 2013. Enegex was entitled to earn the Farmin Interest in WA-342-P of 14.875% by meeting all future work commitments in relation to the Farmin Interest. Title was transferred and approved by the designated authority effective 14 February 2014. On 6 May 2014 the Cornea Joint Venture was granted a retention lease which covers six graticular blocks located within the WA-342-P exploration permit. At the same time as the grant of the WA-54-R the Cornea Joint Venture applied to surrender the exploration permit WA-342-P. This surrender was granted in August 2014 (ii) As part of the Moby Oil & Gas Limited schemes of arrangement Enegex signed a farmin deed on 15 July 2013. Enegex will become entitled to earn the Farmin Interest in Vic/P47 of 19.25% by meeting all future work commitments in relation to the Farmin Interest. Title has yet to be transferred and approved by the designated authority.

(iii) As part of the Moby Oil & Gas Limited schemes of arrangement Enegex signed a farmin deed on 15 July 2013. Enegex will become entitled to earn the Farmin Interest in WA-409-P of 16.50% by meeting all future work commitments in relation to the Farmin Interest. Title has yet to be transferred and approved by the designated authority.

Assets and liabilities of the joint operations are included in the financial statements as follows:

	2014	2013
	$	$
CURRENT ASSETS
Cash and cash equivalents	15,266	-
Trade and other receivables	855	-
	__	__
TOTAL CURRENT ASSETS	16,121	-
NON-CURRENT ASSETS
Exploration costs	66,383	-
	__	__
TOTAL ASSETS	82,504	-
	=======	=======
CURRENT LIABILITIES
Trade and other payables	22,213	-
Trade and other payables – director related	3,998	-
	__	__
TOTAL LIABILITIES	26,211	-
	=======	=======

There are no contingent liabilities in any of the joint operations. Minimum work requirements in exploration permit interests held in joint operations is estimated at reporting date and is shown at Note 13.

24

ENEGEX NL ABN 28 160 818 986

NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2014

NOTE 11 KEY MANAGEMENT PERSONNEL

Non-executive Directors BD Maltz RJ Coppin

Executive Director GA Menzies

During the year the only persons that met the definition of key management personnel were the directors. The company has no employees.

Fees paid to GA Menzies in his capacity as a consultant to Enegex are disclosed below in the Related Party Note 12. Fees paid to GA Menzies as director are summarised in the table below and detailed in the Remuneration Report section of the Directors’ Report.

Individual compensation disclosures

Information regarding individual director’s compensation is provided in the Remuneration Report section of the Directors’ Report. In summary form:

		Short	Term	Post	Equity	Total
				Employment	Settled
	Year	Directors	Other Fees	Super-
		Fees		annuation	Options
		$	$	$	$	$
TOTAL	2014	90,000	-	8,325	-	98,325
	2013	-	-	-	-	-

Interests in Equity Instruments of Enegex NL

Ordinary Shares

The movement during the reporting period in the number of ordinary shares and options over ordinary shares held directly, indirectly or beneficially, by each key management person, including their related parties, is detailed below. No shares were granted to directors during the reporting period as compensation.

	Held at	Prospectus	Options	Net	Held at
Directors	1 July 2013	Issue	Exercised	Change	30 June 2014
				Other (i)
GA Menzies	-	-	-	1,479,444	1,479,444
RJ Coppin	-	-	-	16,667	16,667
BD Maltz	-	-	-	41,416	41,416
	____	__	__	__	__
	-	-	-	1,537,527	1,537,527
	=========	=======	=======	=======	=========

(i) Following implementation of the Schemes of Arrangement (Note 2) between Enegex and its previous owner, Moby Oil and Gas Limited (“Moby”) Moby shareholders, including the directors of Enegex, were issued one fully paid Enegex Share in exchange for every three Moby Shares held at 1 July 2013.

25

ENEGEX NL ABN 28 160 818 986

NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2014

NOTE 11 KEY MANAGEMENT PERSONNEL (Continued)

Options over Ordinary Shares - Listed

30 June 2015	Options (exercisable at 10 cents per share)	Options (exercisable at 10 cents per share)
	Held at	Granted as		Net Change	Held at
Directors	1 July 2013	compensation	Exercised	Other(ii)	30 June 2014
GA Menzies	-	-	-	268,333	268,333
RJ Coppin	-	-	-	-	-
BD Maltz	-	-	-	235,000	235,000
	__	__	__	__	__
	-	-	-	503,333	503,333
	=======	=======	=======	========	=========

(ii) Following implementation of the Schemes of Arrangement (Note 2) between Enegex and Moby optionholders, including the directors of Enegex NL, were granted one Enegex Option in exchange for every three Moby Options held at 30 June 2013.

NOTE 12 RELATED PARTY TRANSACTIONS

Director-related Entities

Companies in which an Enegex director controls or significantly influences, that provide services to the company or to a joint operation in which the company has an interest.

During the year services were provided under normal commercial terms and conditions by:

Gresham Management Pty Ltd (Gresham), a director-related entity of GA Menzies

Service Provided		2014 $		2013 $
Gresham Management and consulting services to the Company		92,904		-
NOTE 13 EXPLORATION PERMIT COMMITMENTS Estimated expenditure to satisfy contractual and permit work obligations Not later than 1 year Vic/P47 WA-54-R Later than 1 year but not later than 3 years Vic/P47 WA-54-R		2014 $ 12,031 66,938 78,969 ====== - 193,376 193,376 ======		2013 $ - - - ====== - - - ======
	=		=

Expenditure commitments include obligations arising from farm-in arrangements, and minimum work obligations for the initial three year period of exploration permits and thereafter annually. Minimum work obligations, may, subject to negotiation and approval, be varied. They may also be satisfied by farmout, sale, relinquishment or surrender of a permit.

26

ENEGEX NL ABN 28 160 818 986

NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2014

NOTE 14 FINANCIAL INSTRUMENTS

Purchases and sales of financial assets and financial liabilities are recognised on trade date; the date on which the company commits to purchase or sell the financial assets or financial liabilities. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the company has transferred substantially all the risks and rewards of ownership.

Exposure to credit, interest rate, liquidity and currency risks arises in the normal course of the company’s business. The company’s overall risk management approach is to identify the risks and implement safeguards which seek to minimise potential adverse effects on the financial performance of the company.

Credit risk

Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. At balance date there were no significant concentrations of credit risk for the company. The maximum exposure to credit risk of financial assets is represented by the carrying amounts of each financial asset in the statement of financial position.

Interest rate risk

All financial liabilities and financial assets at floating rates expose the company to cash flow interest rate risk. The company has no exposure to interest rate risk at balance date, other than in relation to cash and cash equivalents which attract a floating interest rate. Details of cash and cash deposits can be found in Note 5. At balance date a 1% (100 basis point) increase/ decrease in the interest rate would improve / worsen the company’s post tax profit by $5,298 (2013: $Nil)

Liquidity risk

Liquidity risk is the risk that the company will not be able to meet its financial obligations as they fall due. Liquidity risk is monitored to ensure sufficient monies are available to meet contractual obligations as and when they fall due. All financial assets and liabilities have a maturity date of less than 12 months.

Foreign currency risk

The company is exposed to foreign currency risk arising on purchases that are denominated in a currency other than the Australian dollar functional currency. The company incurs seismic, exploration and well costs in US dollars. The risk is measured using sensitivity analysis and cash flow forecasting and monitored by management when seismic and drilling programs are current. To this extent, the company is exposed to exchange rate fluctuations between the Australian and US dollar.

As at 30 June 2014 the company has no US dollars in cash at bank.

Capital Management

When managing capital, directors’ objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits for other stakeholders.

It is the company’s plan that capital will be raised by any one or a combination of the following manners: placement of shares to excluded offerees, pro-rata issue to shareholders, the exercise of outstanding options, and/or a further issue of shares. Should these methods not be considered to be viable, or in the best interests of shareholders, then it would be the company’s intention to meet its exploration obligations by either partial sale of its interests or farmout, the latter course of action being part of its overall strategy.

The company is not subject to any externally imposed capital requirements.

27

ENEGEX NL ABN 28 160 818 986

NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2014

NOTE 15 SEGMENT INFORMATION

The company has adopted AASB 8 Operating Segments whereby segment information is presented using a 'management approach', i.e. segment information is provided on the same basis as information used for internal reporting purposes by the board of directors

At regular intervals the board is provided management information at a company level for the company’s cash position, the carrying values of exploration permits and a company cash forecast for the next twelve months of operation.

On this basis, no segment information is included in these financial statements.

All interest received has been derived in Australia. All exploration and evaluation assets are held in Australia.

NOTE 16 LOSS PER SHARE

The following reflects the loss and share data used in the calculation of basic and diluted loss per share:

	2014	2013
	$	$
Net Loss	(373,165)	-
The weighted average number of shares used for the purposes
of calculating diluted earnings per share reconciles to the
number used to calculated basic earnings per share as follows:
	Weighted	Weighted
	Average	Average
	Number of	Number of
	Shares	Shares
Basic and diluted loss per share	40,139,156	-
No options would be exercised at the share price of $0.013 at 30 June 2014.
	2014	2013
	$	$
NOTE 17 AUDITOR’S REMUNERATION
Amounts received or due and receivable by the auditor
of the Company for:
Audit of the full year and review of the half year
financial reports	33,000	-
Other assurance services	4,000	-
	__	_____
	37,000	-
	========	======

NOTE 18 EVENTS SINCE BALANCE DATE

There are no significant after balance date events up to the signing of this report.

28

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The Rialto, Level 30 525 Collins St Melbourne Victoria 3000

Correspondence to: GPO Box 4736 Melbourne Victoria 3001

T +61 3 8320 2222 F +61 3 8320 2200 E info.vic@au.gt.com W www.grantthornton.com.au

Independent Auditor’s Report To the Members of Enegex NL

Report on the financial report

We have audited the accompanying financial report of Enegex NL (the “Company”), which comprises the statement of financial position as at 30 June 2014, the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the company.

Directors’ responsibility 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. The Directors’ responsibility also includes 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. The Directors also state, in the notes to the financial report, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, the financial statements comply with International Financial Reporting Standards.

Auditor’s responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require us to comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error.

Grant Thornton Audit Pty Ltd ACN 130 913 594

a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

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In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation of the financial report that gives a true and fair view 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 Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.

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

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

Auditor’s opinion

In our opinion:

• a the financial report of Enegex NL is in accordance with the Corporations Act 2001, including:

• i giving a true and fair view of the Company’s financial position as at 30 June 2014 and of its performance for the year ended on that date; and

• ii complying with Australian Accounting Standards and the Corporations Regulations 2001; and

• b the financial report also complies with International Financial Reporting Standards as disclosed in the notes to the financial statements.

Report on the remuneration report

We have audited the remuneration report included in pages 7 to 8 of the directors’ report for the year ended 30 June 2014. The Directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s opinion on the remuneration report

In our opinion, the remuneration report of Enegex NL for the year ended 30 June 2014, complies with section 300A of the Corporations Act 2001.

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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Adrian Nathanielsz Partner - Audit & Assurance

Melbourne, 30 September 2014

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The Rialto, Level 30 525 Collins St Melbourne Victoria 3000

Correspondence to: GPO Box 4736 Melbourne Victoria 3001

T +61 3 8320 2222 F +61 3 8320 2200 E info.vic@au.gt.com W www.grantthornton.com.au

Auditor’s Independence Declaration To the Directors of Enegex NL

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Enegex NL for the year ended 30 June 2014, I declare that, to the best of my knowledge and belief, there have been:

• a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

• b no contraventions of any applicable code of professional conduct in relation to the audit.

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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Adrian Nathanielsz Partner - Audit & Assurance

Melbourne, 30 September 2014

Grant Thornton Audit Pty Ltd ACN 130 913 594

a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.