INVICTUS ENERGY LTD — Interim / Quarterly Report 2012

Mar 13, 2012

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ACN 150 956 773

Half-Year Financial Report

31 December 2011

SUNBIRD ENERGY LTD

CORPORATE DIRECTORY

DIRECTORS

Kerwin Rana

Non Executive Chairman

William Barker Managing Director

Andrew Leibovitch Executive Director

Marcus Gracey Non Executive Director

SOLICITORS TO THE COMPANY

Hardy Bowen Level 1, 28 Ord Street, West Perth, WA 6005

Corporate Advisors

Cygnet Capital Pty Ltd 50 Ord Street, West Perth, WA 6005

SHARE REGISTRY

COMPANY SECRETARY

Jerry Monzu

REGISTERED OFFICE

Suite B9, 431 Roberts Road SUBIACO, WA 6008

Telephone: (08) 9287 4600 Facsimile: (08) 9287 4655

Link Market Services Limited Ground Floor, 178 St Georges Terrace Perth, WA 6000

Telephone (within Australia): 1300 554 474 Telephone (outside Australia): +61 2 8280 7111 Facsimile: +61 2 9287 0303 Email: registrars@linkmarketservices.com.au

AUDITORS

BDO Audit (WA) Pty Ltd 38 Station Street Subiaco, WA 6008

ASX CODE

“SNY”

1

SUNBIRD ENERGY LTD

Half-yearly financial statements for the period ended 31 December 2011

DIRECTORS’ REPORT

The Directors present their report together with the financial statements for the half-year period commencing on 17 May 2011 and ending on 31 December 2011. This is the Company’s first half-year, and therefore no comparative information is available to disclose.

Directors

The names of the Directors of Sunbird Energy Ltd throughout the reporting period and at the date of this report are:

Mr Kerwin Rana (appointed 12 October 2011) Chairman

Mr William Barker (a ppointed 17 May 2011) Managing Director

Mr Andrew Leibovitch (appointed 17 May 2011) Executive Director

Mr Marcus Gracey (appointed 17 May 2011) Non Executive Director

Results of Operations

The net loss from continuing operations for the half-year period to 31 December 2011 amounted to $868,124.

Review of Operations

Sunbird Energy Ltd was successfully admitted to the ASX on 19 January 2012. The listing followed a successful Initial Public Offering which closed oversubscribed on 19 December 2011 having raised $9m through the issue of 45m fully paid ordinary shares.

During the half-year period to 31 December 2011 the Company formed a strategic alliance with Umbono, which provides Sunbird with access to an experienced operational team and new project pipeline through the Management Services and New Ventures Agreement.

In conjunction with Umbono, Sunbird identified and appraised a number of potential projects throughout southern Africa. As a result of this process, Sunbird acquired the following interests post balance date:

• 74% of Pretzavest 37 (Propietary) Limited, which owns four South African Projects; and

• 100% of Greatways Holdings Limited which owns one Botswana Project.

These holdings provide Sunbird with a portfolio of five CBM projects in different geological settings, across two of southern Africa’s investment markets, covering in excess of two million acres.

Since listing the Company has focused on advancing a phased exploration program that will delineate the resource base and demonstrate the commercial potential of its portfolio of CBM projects. This has involved advancing planning and contracting activities for a core hole drilling program and undertaking negotiations of landholder access agreements.

Sunbird has also continued to investigate further new business opportunities in southern Africa that may create shareholder value.

2

SUNBIRD ENERGY LTD

Half-yearly financial statements for the period ended 31 December 2011

DIRECTORS’ REPORT (CONTINUED)

Post Balance Date Events

1. On 17 January 2012 Sunbird Energy Ltd ( or the "Company") confirmed that completion had occurred under the share subscription agreement between Tsimpilo Trading 102 (Proprietary) Limited, Umbono Capital Partners (Proprietary) Limited, Pretzavest 37 (Proprietary) Limited ("Pretzavest") and the Company dated 12 August 2011, and that the Company was the legal and beneficial owner of 74% of the issued capital of Pretzavest.

2. On 17 January 2012 the Company also confirmed that completion had occurred under the share sale agreement between Salt Mineral Investments Limited, Greatways Holdings (BVI) Limited ("Greatways Holdings"), Greatways Properties (Proprietary) Limited and the Company dated 20 August 2011, and that the Company was the legal and beneficial owner of 100% of the issued capital of Greatways Holdings.

3. On 11 January 2012 the Company issued 45 million, 20 cent ordinary shares in accordance with its initial public offering prospectus which closed on 19 December 2011.

4. On 19 January 2012 Sunbird Energy Ltd was officially admitted to the Australian Securities Exchange under the code “SNY”.

Auditor’s Independence Declaration

A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act is set out on page 23 and forms part of this report.

This report is made in accordance with a resolution of directors.

Dated at Perth this 14th day of March 2012

Signed in accordance with a resolution of the Directors.

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................................................

Will Barker

Managing Director

3

SUNBIRD ENERGY LTD

Half-yearly financial statements for the period ended 31 December 2011

STATEMENT OF COMPREHENSIVE INCOME For the Half-Year Period Ended 31 December 2011

Continuing operations Interest revenue Other revenue Corporate expenses Directors fees Exploration expenses Share based payments Loss before income tax Income tax expense Loss from continuing operations Loss for the half-year period attributable to the members of Sunbird Energy Ltd Other comprehensive income for the half-year Total comprehensive income for the half-year period attributable to the members of Sunbird Energy Ltd Loss per share Loss per share on loss from continuing operations attributable to the ordinary equity holders of the company Basic and diluted loss per share (cents per share)

December 2011 $ 7,378 2,366 (564,075) (27,435) (203,457) (82,901) (868,124) - (868,124) (868,124) - (868,124) (8.80)

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

4

SUNBIRD ENERGY LTD

Half-yearly financial statements for the period ended 31 December 2011

STATEMENT OF FINANCIAL POSITION As at 31 December 2011

Note Current assets Cash and cash equivalents 2 Trade and other receivables Prepayments Total current assets Total assets Current liabilities Trade and other payables Total current liabilities Total liabilities Net assets Equity Issued capital 3 Reserves 4 Accumulated losses Total Equity	December 2011 $ 9,650,621 41,694 12,612
	9,704,927
	9,704,927
	674,240
	674,240
	674,240
	9,030,687
	9,815,910 82,901 (868,124)
	9,030,687

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

5

SUNBIRD ENERGY LTD

Half-yearly financial statements for the period ended 31 December 2011

STATEMENT OF CHANGES IN EQUITY For the Half-Year Period Ended 31 December 2011

Balance on incorporation Comprehensive income for the half-year Loss for the half-year Total comprehensive income for the half-year Transactions with owners in their capacity as owners: Share-based payments Issue of shares, net of transaction costs Total transactions with owners Balance at 31 December 2011	Issued capital $ Accumulated losses $ Share based payment reserve $ Total $ - - - -
	- (868,124) - (868,124)
	- (868,124) - (868,124)
	- - 82,901 82,901 9,815,910 - - 9,815,910
	9,815,910 - 82,901 9,898,811
	9,815,910 (868,124) 82,901 9,030,687

The above statement of changes in equity should be read in conjunction with the accompanying notes.

6

SUNBIRD ENERGY LTD

Half-yearly financial statements for the period ended 31 December 2011

STATEMENT OF CASH FLOWS

For the Half-Year Period Ended 31 December 2011

TATEMENT OF CASH FLOWS or the Half-Year Period Ended 31 December 2011
Note Cash flows from operating activities Payments to suppliers and employees Interest received Payments for exploration Net cash used in operating activities Cash flows from financing activities Proceeds from issue of shares Transaction cost Net cash from financing activities Net increase in cash and cash equivalents Cash and cash equivalents on incorporation Cash and cash equivalents at 31 December 2	December 2011 $ (53,358) 7,378 (119,309)
	(165,289)
	10,050,000 (234,090)
	9,815,910
	9,650,621 -
	9,650,621

The above statement of cash flows should be read in conjunction with the accompanying notes.

7

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS For The Period Ended 31 December 2011

SUNBIRD ENERGY LIMITED

Half-yearly report for the period ended 31 December 2011

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(a) Statement of Compliance

The financial statements of Sunbird Energy Ltd for the half-year period ended 31 December 2011 were authorised for issue in accordance with a resolution of the Directors on 14 March 2012 and have been prepared in accordance with Accounting Standard AASB134 Interim Financial Reporting and the Corporations Act 2001.

The financial statements are presented in the company’s functional currency, Australian dollars. Sunbird Energy Ltd is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange.

These financial statements are the Company’s first financial statements and cover the period from incorporation 17 May 2011 to 31 December 2011. As a result no comparative information has been disclosed.

(b) Basis of Preparation

The financial statements are general purpose financial statements which have been prepared in accordance with Australian Accounting Standards (including Australian Interpretations) issued by the Australian Accounting Standards Board and the Corporations Act 2001 .

The financial statements also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. The financial statements have also been prepared on a historical cost basis and should be read in conjunction with the prospectus dated 1 December 2011 and any public announcements.

The accounting policies have been consistently applied, unless otherwise stated.

Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have not been adopted by the entity for the half-year reporting period ended 31 December 2011. These are outlined in the table below:

Reference	Title	Summary	Application date of standard	Impact on consolidated financial report	Application date for Group
AASB 9 (issued December 2009 and amended December 2010)	Financial Instruments	Amends the requirements for classification and measurement of financial assets. The following requirements have generally been carried forward unchanged from AASB 139 Financial Instruments: Recognition and Measurement into AASB 9. These include the requirements relating to: � Classification and measurement of financial liabilities; and � Derecognition requirements for financial assets and liabilities. However, AASB 9 requires that gains or losses on financial liabilities measured at fair value are recognised in profit or loss, except that the effects of changes in the liability’s credit risk are recognised in other comprehensive income.	Periods beginning on or after 1 January 2013	Due to the recent release of these amendments and that adoption is only mandatory for the 31 December 2013 year end, the entity has not yet made an assessment of the impact of these amendments. The entity does not have any financial liabilities measured at fair value through profit or loss. There will therefore be no impact on the financial statements	1 July 2013

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NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS For The Period Ended 31 December 2011

Reference	Title	Summary	Application date of standard	Impact on consolidated financial report	Application date for Group
AASB 9 (issued December 2009 and amended December 2010) (cont...)				when these amendments to AASB 9 are first adopted.
AASB 10 (issued August 2011)	Consolidated Financial Statements	Introduces a single ‘control model’ for all entities, including special purpose entities (SPEs), whereby all of the following conditions must be present: �Power over investee (whether or not power used in practice) �Exposure, or rights, to variable returns from investee �Ability to use power over investee to affect the entity’s returns from investee.	Annual reporting periods commencing on or after 1 January 2013	When this standard is first adopted for the year ended 30 June 2014, there will be no impact on transactions and balances recognised in the financial statements because the entity does not have any special purpose entities.	1 July 2013
AASB 11 (issued August 2011)	Joint Arrangements	Joint arrangements will be classified as either ‘joint operations’ (where parties with joint control have rights to assets and obligations for liabilities) or ‘joint ventures’ (where parties with joint control have rights to the net assets of the arrangement). Joint arrangements structured as a separate vehicle will generally be treated as joint ventures and accounted for using the equity method (proportionate consolidation no longer allowed). However, where terms of the contractual arrangement, or other facts and circumstances indicate that the parties have rights to assets and obligations for liabilities of the arrangement, rather than rights to net assets, the arrangement will be treated as a joint operation and joint venture parties will account for the assets, liabilities, revenues and expenses in accordance with the contract.	Annual reporting periods commencing on or after 1 January 2013	When this standard is first adopted for the year ended 30 June 2014, there will be no impact on transactions and balances recognised in the financial statements.	1 July 2013
AASB 13 (issued September 2011)	Fair Value Measurement	Currently, fair value measurement requirements are included in several Accounting Standards. AASB 13 establishes a single framework for measuring fair value of financial and non-financial items recognised at fair value in the	Annual reporting periods commencing on or after 1 January 2013	Due to the recent release of this standard, the entity has yet to conduct a detailed analysis of the differences	1 July 2013

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NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS For The Period Ended 31 December 2011

Reference	Title	Summary	Application date of standard	Impact on consolidated financial report	Application date for Group
AASB 13 (issued September 2011) (cont...)		statement of financial position or disclosed in the notes to the financial statements. Additional disclosures required for items measured at fair value in the statement of financial position, as well as items merely disclosed at fair value in the notes to the financial statements. Extensive additional disclosure requirements for items measured at fair value that are ‘level 3’ valuations in the fair value hierarchy that are not financial instruments, e.g. land and buildings, investment properties etc.		between the current fair valuation methodologies used and those required by AASB 13. However, when this standard is adopted for the first time for the year ended 30 June 2014, there will be no impact on the financial statements because the revised fair value measurement requirements apply prospectively from 1 July 2013. When this standard is adopted for the first time on 1 July 2013, additional disclosures will be required about fair values.
AASB 2011- 9 (issued September 2011)	Amendments to Australian Accounting Standards - Presentation of Items of Other Comprehensive Income	Amendments to align the presentation of items of other comprehensive income (OCI) with US GAAP. Various name changes of statements in AASB 101 as follows: � 1 statement of comprehensive income– to be referred to as ‘statement of profit or loss and other comprehensive income’ � 2 statements– to be referred to as ‘statement of profit or loss’ and ‘statement of comprehensive income’. OCI items must be grouped together into two sections: those that could subsequently be reclassified into profit or loss and those that cannot.	Annual periods commencing on or after 1 July 2012	When this standard is first adopted for the year ended 30 June 2013, there will be no impact on amounts recognised for transactions and balances for 30 June 2013 (and comparatives). However, the statement of comprehensive income will include name changes and include subtotals for items of OCI that can subsequently be reclassified to	1 July 2012

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NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS For The Period Ended 31 December 2011

Reference	Title	Summary	Application date of standard	Impact on consolidated financial report	Application date for Group
AASB 2011- 9 (issued September 2011) cont...				profit or loss in future (e.g. foreign currency translation reserves) and those that cannot subsequently be reclassified (e.g. fixed asset revaluation surpluses).
AASB 1054 (issued May 2011)	Australian Additional Disclosures	Moves additional Australian specific disclosure requirements for for-profit entities from various Australian Accounting Standards into this Standard as a result of the Trans-Tasman Convergence Project. Removes the requirement to disclose each class of capital commitment and expenditure commitment contracted for at the end of the reporting period (other than commitments for the supply of inventories).	Annual reporting periods commencing on or after 1 July 2011	When this Standard is adopted for the first time for the year ended 30 June 2012, the financial statements will no longer include disclosures about capital and other expenditure commitments as these are no longer required by AASB 1054.	1 July 2011
AASB 12 (issued August 2011)	Disclosure of Interests in Other Entities	Combines existing disclosures from AASB 127_Consolidated_ and Separate Financial Statements, AASB 128 Investments in Associates_and AASB 131_Interests in Joint Ventures. Introduces new disclosure requirements for interests in associates and joint arrangements, as well as new requirements for unconsolidated structured entities.	Annual reporting periods commencing on or after 1 January 2013	As this is a disclosure standard only, there will be no impact on amounts recognised in the financial statements. However, additional disclosures will be required for interests in associates and joint arrangements, as well as for unconsolidated structured entities.	1 July 2013

(c) Critical accounting judgements and significant estimates

The application of accounting policies requires the use of judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

11

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS For The Period Ended 31 December 2011

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont...)

(c) Critical accounting judgements and significant estimates (Cont...)

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

(d) Cash and Cash Equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.

(e) Income Tax

The charge for current income tax expenses is based on the profit for the year adjusted for any non-assessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted by the reporting date.

Deferred tax is accounted for using the liability method in respect of temporary differences arising between the tax base 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 this has 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 credited in the statement of comprehensive income except where it relates to items that may be credited 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 can be utilised.

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 Company will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions or deductibility imposed by the law.

(f) Impairment of Assets

At each reporting date, the Entity reviews the carrying values of tangible assets and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the profit or loss.

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

(g) Financial Instruments

At present, the Entity does not undertake any hedging or deal in derivative instruments.

Recognition

Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method. They are included in current assets, except for those maturities greater than 12 months after the balance sheet date which are classified as non-current assets. Loans and receivables are included in trade and other receivables. They are measured initially at fair value and subsequently at amortised cost.

12

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS For The Period Ended 31 December 2011

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont...)

(g) Financial Instruments (Cont...)

Financial Liabilities

Non-derivative financial liabilities are recognised initially at fair value and subsequently at amortised cost, comprising original debt less principle payments and amortisation.

Impairment

At each reporting date, the Entity assesses whether there is objective evidence that a financial instrument has been impaired. If there is evidence of impairment for any of the Entity’s financial assets carried at amortised cost, the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows, excluding future credit losses that have not been incurred. The cash flows are discounted at the asset’s original effective interest rate. Any impairment losses are taken to the statement of comprehensive income.

(h) Revenue Recognition

Revenue from the sale of goods and disposal of other assets is recognised when the Entity has passed control of the goods or other assets to the buyer. Interest revenue is recognised when it is due, on the accruals basis.

(i) Borrowing Costs

Borrowing costs are recognised as an expense when incurred except those that relate to the acquisition, construction or production of qualifying assets where the borrowing cost is added to the cost of those assets until such time as the assets are substantially ready for their intended use or sale. Assets capitalised within AASB 6 have not been considered to be qualifying assets.

(j) Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company, excluding any loss of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

(k) Leases

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses on a straight line basis over the lease term.

(l) Interest-bearing loans and borrowings

All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs.

13

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS For The Period Ended 31 December 2011

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont...)

(m) Share-based payment transactions

Equity settled transactions:

The Entity provides benefits to employees (including senior executives) or consultants of the Entity in the form of share-based payments, whereby employees or consultants render services in exchange for shares or rights over shares in the Company (equity-settled transactions).

The cost of these equity-settled transactions with employees or consultants is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an internal valuation using an appropriate option pricing model for options or market price for ordinary shares or the fair value of the services received.

In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Sunbird Energy Ltd (market conditions) if applicable.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting period).

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share.

(n) Employee leave benefits

Wages, salaries, annual leave and sick leave

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable.

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.

(o) Provisions

Provisions are recognised when the Entity has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will results and that outflow can be reliably measured.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the balance sheet date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognized as interest expense.

(p) Foreign currency translation

Both the functional and presentation currency of Sunbird Energy Ltd is Australian dollars.

Transactions:

Transactions in foreign currencies are initially recorded in the functional currency by applying 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 balance date.

All exchange differences in the financial report are taken to profit or loss with the exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to equity until the disposal of the net investment, at which time they are recognised in profit or loss.

14

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS For The Period Ended 31 December 2011

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont...)

(p) Foreign currency translation (Cont...)

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction.

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

(q) Issued capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.

(r) Trade and other payables

These amounts represent liabilities for goods and services provided to the Entity prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

(s) Goods and services Tax (GST) and Value Added Tax (VAT)

Revenues, expenses and assets are recognised net of the amount of associated GST/VAT, unless the GST/VAT incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST/VAT receivable or payable. The net amount of GST/VAT recoverable from, or payable to, the taxation authority is included within other receivables or payables in the balance sheet.

Cash flows are presented on a gross basis. The GST/VAT components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.

(t) Exploration, Evaluation and Development Expenditure

The Company, when acquiring exploration and evaluation assets will carry those projects at acquisition value in the statement of financial position, less any subsequent impairment.

All exploration and evaluation expenditure within an area of interest will be expensed until the Directors conclude that the technical feasibility and commercial viability of extracting a mineral resource are demonstrable and that future economic benefits are probable. In making this determination, the Directors consider the extent of exploration, the proximity to existing mine or development properties as well as the degree of confidence in the mineral resource.

Where the Directors conclude that the technical feasibility and commercial viability of extracting a mineral resource are demonstrable and that future economic benefits are probable, further expenditure is capitalised as part of property, plant and equipment.

No amortisation is charged during the exploration and evaluation phase. Amortisation is charged upon commencement of commercial production. Exploration and evaluation assets are tested for impairment annually or when there is an indication of impairment, until commercially viable mineral resources are established. Upon establishment of commercially viable mineral resources, exploration and evaluation assets are tested for impairment when there is an indicator of impairment.

Subsequently the assets are stated at cost less impairment provision.

15

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS For The Period Ended 31 December 2011

December 2011 $

2. Cash & Cash Equivalents

Cash at bank 9,650,621

3. Issued Capital

December 2011 $ 60,000,000 fully paid ordinary shares 9,815,910

Movement in ordinary share capital: 17 May 2011 – issue of seed capital at 1 cent 17 October 2011 – issue of seed capital at 10 cents Issue of IPO securities at 20 cents Less share issue costs Balance at 31 December 2011	No of Shares $ Value 5,000,000 50,000 10,000,000 1,000,000 45,000,000 9,000,000 (234,090)
	60,000,000 9,815,910

4. (a) Reserves

Share Based Payments Reserve

December 2011 $ 82,901

(b) Nature and Purpose of Reserves

The share based payments reserve arises from an issue of options as consideration for a service or an acquisition transaction. Details on options issued, exercised and lapsed during the financial year, and options outstanding at the end of the reporting period is set out in note 5.

16

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS For The Period Ended 31 December 2011

4. Reserves (Cont...)

(c) Movement in Reserves

Share Based Payments Reserve

Share Based Payments Reserve
Date Details 22/9/2011 22/9/2011 22/9/2011 22/9/2011 22/9/2011 22/9/2011 22/9/2011 22/9/2011 Cornerstone Investor Options (20 cent ex price) Initial Portfolio Performance Options (25 cent ex price) Initial Portfolio Performance Options (30 cent ex price) New Venture Performance Options (25 cent ex price) New Venture Performance Options (30 cent ex price) Ordinary Options (20 cent ex price) Ordinary Options (20 cent ex price) Ordinary Incentive Options (20 cent ex price) 31/12/2011 Closing Balance	Number of options Amount $ 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 12,000,000 12,250,000 750,000 5,528 4,474 3,728 4,474 3,728 46,598 13,542 829
	50,000,000 82,901

5. Share Based Payments

Shareholders approved at the General Meeting held on 12 October 2011 the issue of 10,000,000 Initial Portfolio Performance Options to Key Management Personnel of the Company . The fair value of the options is estimated as at the date of grant using the BlackScholes calculation, taking into account the terms and conditions upon which the options were granted. The following table lists the inputs to the model used in the valuation:

Expected volatility (%)	100
Risk-free interest rate (%)	3.68
Exercise price	$0.25 & $0.30
Share price at grant date	$0.010
Fair value per option at grant date	$0.0009 & $0.0007
Grant Date	22 Sept 2011
Expiry date	Variable dependent on meeting KPI’s

Shareholders approved at the General Meeting held on 12 October 2011 the issue of 10,000,000 New Venture Performance Options to Key Management Personnel of the Company. The fair value of the options is estimated as at the date of grant using the Black-Scholes calculation, taking into account the terms and conditions upon which the options were granted. The following table lists the inputs to the model used in the valuation:

Expected volatility (%)	100
Risk-free interest rate (%)	3.68
Exercise price	$0.25 & $0.30
Share price at grant date	$0.010
Fair value per option at grant date	$0.0009 & $0.0007
Grant Date	22 Sept 2011
Expiry date	Variable dependent on meeting KPI’s

17

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS For The Period Ended 31 December 2011

5. Share Based Payments (Cont…)

Shareholders approved at the General Meeting held on 12 October 2011 the issue of 5,000,000 Cornerstone Investor Options to Key Management Personnel of the Company . The fair value of the options is estimated as at the date of grant using the Black-Scholes calculation, taking into account the terms and conditions upon which the options were granted. The following table lists the inputs to the model used in the valuation:

Expected volatility (%)	100
Risk-free interest rate (%)	3.68
Exercise price	$0.20
Share price at grant date	$0.010
Fair value per option at grant date	$0.0011
Grant Date	22 Sept 2011
Expiry date	19/01/2015

Shareholders approved at the General Meeting held on 12 October 2011 the issue of 750,000 Incentive Options to Key Management Personnel of the Company. The fair value of the options is estimated as at the date of grant using the Black-Scholes calculation, taking into account the terms and conditions upon which the options were granted. The following table lists the inputs to the model used in the valuation:

Expected volatility (%)	100
Risk-free interest rate (%)	3.68
Exercise price	$0.20
Share price at grant date	$0.010
Fair value per option at grant date	$0.0011
Grant Date	22 Sept 2011
Expiry date	19/01/2015

Shareholders approved at the General Meeting held on 12 October 2011 the issue of 12,000,000 Ordinary Options to Key Management Personnel of the Company. The fair value of the options is estimated as at the date of grant using the Black-Scholes calculation, taking into account the terms and conditions upon which the options were granted. The following table lists the inputs to the model used in the valuation:

Expected volatility (%)	110
Risk-free interest rate (%)	3.68
Exercise price	$0.20
Share price at grant date	$0.010
Fair value per option at grant date	$0.0039
Grant Date	22 Sept 2011
Expiry date	19/01/2015 to 19/01/2017

In accordance with a signed mandate with the Company’s financial advisor, on 13 October 2011 the Directors approved the issue of 12,250,000 Ordinary Options to clients of Cygnet Capital. The fair value of the options is estimated as at the date of grant using the Black-Scholes calculation, taking into account the terms and conditions upon which the options were granted. The following table lists the inputs to the model used in the valuation:

Expected volatility (%)	100
Risk-free interest rate (%)	3.68
Exercise price	$0.20
Share price at grant date	$0.010
Fair value per option at grant date	$0.0011
Grant Date	22 Sept 2011
Expiry date	19/01/2015

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NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS For The Period Ended 31 December 2011

5. Share Based Payments (Cont...)

Set out below is a summary of the options on hand at 31 December 2011:

	Expiry date Exercise price Balance at start of period Granted during the period Exercised during the period Expired/ Lapsed during the period Balance unvested at period end Balance vested and exercisable 19/01/2015 $0.20 - 22,000,000 - - 22,000,000 - 19/01/2016 $0.20 - 4,000,000 - - 4,000,000 - 19/01/2017 $0.20 - 4,000,000 - - 4,000,000 - Various $0.25 - 10,000,000 - - 10,000,000 - Various $0.30 - 10,000,000 - - 10,000,000 - - 50,000,000 - - 50,000,000 - Weighted average exercise price $0.23 $0.23	Balance at start of period Granted during the period Exercised during the period Expired/ Lapsed during the period Balance unvested at period end Balance vested and exercisable - 22,000,000 - - 22,000,000 - - 4,000,000 - - 4,000,000 - - 4,000,000 - - 4,000,000 - - 10,000,000 - - 10,000,000 - - 10,000,000 - - 10,000,000 -
		- 50,000,000 - - 50,000,000 -

*These options have expiry dates which are dependent upon the successful certification of gas discoveries by an independent expert, as stipulated in the terms and conditions of the relevant options. No option holder has any right under the options to participate in any other share issue of the Company.

6. Dividends

No dividend has been paid during or is recommended for the financial period ended 31 December 2011.

7. Commitments and Contingencies

The Company had no contingent liabilities as at 31 December 2011. The Company was committed to completion of the following two transactions subject to the successful raising of capital through the IPO;

1. Share Subscription Agreement

This agreement is between Tsimpilo Trading 102 (Proprietary) Limited, Umbono Capital Partners (Proprietary) Limited, Pretzavest 37 (Proprietary) Limited ("Pretzavest") and the Company dated 12 August 2011. Pursuant to the terms of this agreement, upon the successful raising of capital via the IPO, Sunbird was to pay A$1.2m to acquire 74% of Pretzavest 37 (Proprietary) Limited ("Pretzavest"), a South African domiciled Company. On 17 January 2012 Sunbird confirmed to the ASX that completion had occurred under this contract.

2. Share Sale Agreement

This agreement was between Salt Mineral Investments Limited, Greatways Holdings (BVI) Limited ("Greatways Holdings"), Greatways Properties (Proprietary) Limited and the Company dated 20 August 2011. Pursuant to the terms of this agreement Sunbird was to issue 40 million ordinary shares and 40 million options in the Company to Salt Mineral Investments Limited to acquire 100% of Greatways Holdings (BVI) Limited. On 17 January 2012 Sunbird confirmed to the ASX that completion had occurred under this contract.

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NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS For The Period Ended 31 December 2011

8. Events occurring after Balance Date

1. On the 17 January 2012 Sunbird Energy Ltd ("Company") confirmed that completion had occurred under the share subscription agreement between Tsimpilo Trading 102 (Proprietary) Limited, Umbono Capital Partners (Proprietary) Limited, Pretzavest 37 (Proprietary) Limited ("Pretzavest") and the Company dated 12 August 2011, and that the Company was the legal and beneficial owner of 74% of the issued capital of Pretzavest.

2. On 17 January 2012 the Company also confirmed that completion had occurred under the share sale agreement between Salt Mineral Investments Limited, Greatways Holdings (BVI) Limited ("Greatways Holdings"), Greatways Properties (Proprietary) Limited and the Company dated 20 August 2011, and that the Company was the legal and beneficial owner of 100% of the issued capital of Greatways Holdings.

3. On 11 January 2012 the Company issued 45 million, 20 cent ordinary shares in accordance with its initial public offering prospectus which closed on 19 December 2011. As all money had been received by December 2011 and was awaiting allotment, the Company has shown this as contributed equity for the purposes of these financial statements.

4. On 19 January 2012 Sunbird Energy Ltd was officially admitted to the Australian Securities Exchange under the code “SNY”.

9. Segment Information

For the period ended 31 December 2011 the Company did not operate in a specific segment as it was progressing the Company’s IPO and subsequent listing. As a result, all balances disclosed at 31 December 2011 relate to corporate activities.

10. Related Party Transactions

Transactions and balances with Key Management Personnel

During the period to 31 December the following amounts were paid to related parties of the Company;

• In accordance with the terms and conditions of his appointment, an amount of $19,500 was accrued for payment to Millennium Falcon Ltd a company owned by Mr Marcus Gracey who is a Non Executive Director of Sunbird Energy Ltd.

• In accordance with the terms and conditions of his appointment, an amount of $7,038 was accrued for payment to Mr Kerwin Rana who is a Non Executive Director and Chairman of Sunbird Energy Ltd.

• In accordance with a consultancy agreement between Sunbird Energy Ltd and Crest Corporation Pty Ltd, for the provision of services of Mr Andrew Leibovitch, an Executive Director of Sunbird Energy Ltd, Sunbird has accrued $75,000 for the period until 31 December 2011.

• In accordance with a consultancy agreement between Sunbird Energy Ltd and Ballymoyer Pty Ltd, for the provision of services of Mr Will Barker, the Managing Director of Sunbird Energy Ltd, Sunbird has accrued $75,000 for the period until 31 December 2011.

• In accordance with a consultancy agreement between Sunbird Energy Ltd and Monzu Corporate Consulting, for the provision of services of Mr Jerry Monzu, Sunbird’s Company Secretary, Sunbird has paid $16,000 for the period until 31 December 2011.

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NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS For The Period Ended 31 December 2011

10. Related Party Transactions (Cont...)

• During the period the Company has accrued $147,226 as a payment to Umbono Financial Services Pty Ltd “Umbono” as a reimbursement for expenditure incurred by Umbono, on behalf of Sunbird Energy Ltd. Mr Kerwin Rana is a director of Umbono and all expenses incurred were on an arm’s length basis.

Directors Interests

The following relevant interests in shares and options of Sunbird Energy Ltd were held by the Directors as at the date of this report:

Director	Ordinary shares	Unlisted options
Kerwin Rana	Nil	Nil
Will Barker	2,000,000	18,500,000
Andrew Leibovitch	2,100,000	18,500,000
Marcus Gracey	50,000	750,000

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DIRECTORS’ DECLARATION

The Directors of the Company declare that:

1. The financial statements and notes are in accordance with the Corporations Act 2001 and:

2. a. comply with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations 2001; and

3. b. give a true and fair view of the consolidated entity’s financial position as at 31 December 2011 and of its performance for the half-year then ended on that date.

4. 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.

This declaration is made in accordance with a resolution of the Board of Directors.

Dated at Perth this 14th day of March 2012

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Will Barker Managing Director

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38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia

Tel: +8 6382 4600 Fax: +8 6382 4601 www.bdo.com.au

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14 March 2012

The Directors Sunbird Energy L td Suite B9, 431 Roberts Road Subiaco WA 6008

Dear Sirs,

DECLARATION OF INDEPENDENCE BY BRAD MCVEIGH TO THE DIRECTORS OF SUNBIRD ENERGY LTD

As lead auditor for the review of Sunbird Energy Ltd for the half-year period ended 31 December 2011, I declare that to the best of my knowledge and belief, there have been:

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

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

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Brad McVeigh Director

BDO Audit (WA) Pty Ltd

Perth, Western Australia

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

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Tel: +8 6382 4600 38 Station Street Fax: +8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

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INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF SUNBIRD ENERGY LTD

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Sunbird Energy Ltd, which comprises the statement of financial position as at 31 December 2011, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the halfyear period ended on that date, notes comprising a summary of accounting policies and other explanatory information, and the directors’ declaration.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the disclosing entity are responsible for the preparation of the half-year 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 half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the disclosing entity’s financial position as at 31 December 2011 and its performance for the period ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of Sunbird Energy L td , ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of Sunbird Energy Ltd, would be in the same terms if given to the directors as at the time of this auditor’s report.

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

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Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Sunbird Energy L t d is not in accordance with the Corporations Act 2001 including:

• (a) giving a true and fair view of the disclosing entity’s financial position as at 31 December 2011 and of its performance for the half-year period ended on that date; and

• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001 .

BDO Audit (WA) Pty Ltd

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Brad McVeigh Director

Perth, Western Australia Dated this 14[th] day of March 2012

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