ZIMI LIMITED - Annual Report 2012

WHL ENERGY LTD ABN 25 113 326 524

ANNUAL REPORT 2012

WHL ENERGY LTD – ANNUAL REPORT 2012

==> picture [596 x 75] intentionally omitted <==

==> picture [24 x 9] intentionally omitted <==

----- Start of picture text -----

Page 3
----- End of picture text -----

WHL ENERGY LTD – ANNUAL REPORT 2012

Corporate Information

WHL Energy Ltd ABn: 25 113 326 524

Directors

mr Trevor Bruce Benson – chairman mr Steven robert noske – managing Director mr David Paul rowbottam – Finance Director Dr Keiran John wulff – non-executive Director

Company Secretary mr matthew edward edmondson

Registered Office level 2, 22 Delhi Street west Perth wA 6005

Principal Place of Business level 2, 22 Delhi Street west Perth wA 6005 Phone: +61 8 6500 0271 Fax: +61 8 9321 5212 email: [email protected] web: www.whlenergy.com

corporate Information	1
chairman’s report	2
Directors’ report	4
corporate governance Statement	19
Auditor’s Independence Declaration	24
Statement of comprehensive Income	25
Statement of Financial Position	26
Statement of cash Flows	27
Statement of changes in equity	28
notes to the Financial Statements	29
Directors’ Declaration	66
Independent Auditor’s report	67
ASX Additional Information	69

Postal Address Po Box 1042, west Perth wA 6872 Share Registry link market Services ground Floor, 178 St georges Terrace Perth wA 6000 Phone: 1300 554 474

Solicitors Steinepreis Paganin level 4, 16 milligan Street, Perth wA 6000 Phone: +61 8 9321 4000 Fax: +61 8 9321 4333

Corrs Chambers Westgarth level 5, woodside Plaza, Perth wA 6000 Phone: +61 8 9460 1666 Fax: +61 8 9321 8555 Bankers Westpac level 6, 109 St georges Terrace, Perth wA 6000

Auditors HLB Mann Judd level 4, 130 Stirling Street, Perth wA 6000

Securities Exchange Listing whl energy ltd shares are listed on the Australian Securities exchange (ASX: whn)

The machinery, installations and locations shown pictorially are for illustrative purposes only and may not be assets of whl energy Pty ltd.

Page 1

WHL ENERGY LTD – ANNUAL REPORT 2012

Chairman’s Report

discussions with multiple parties. At the same time whl energy continues to develop the prospectivity of the acreage and has undertaken considerable geological and geophysical studies to mature its potential. This work addresses the geological key risks of the Seychelles portfolio and the undertaking of additional seismic reprocessing tests to determine if leading edge seismic processing techniques can further improve seismic data quality in the region. Planning for an infill 2D seismic program, which will mature the key leads to ready to drill status, has now commenced.

Trevor Benson non-executive chairman

The company’s objectives for the Seychelles have not changed as it continues to develop the exploration prospects in the Seychelles to prove up their considerable potential.

The company continues to engage with the Seychelles government’s regulator, PetroSeychelles ltd, seeking to rationalise the obligatory exploration commitments to improve the terms of the work program. It is expected this will enhance the attractiveness of the Seychelles acreage as the farmout campaign continues.

looking forward, it is anticipated that PetroSeychelles ltd will announce an international exploration acreage bid round during late 2012. The company believes this will heighten industry attention in the Seychelles blocks.

Australian assets La Bella (VIC/P67)

The company identified and targeted VIc/P67 on the back of its known reserves and its potential to offer foreseeable production and cash flow for the company from the undeveloped la Bella gas field. The company’s view is that there will be an upward movement in future east coast Australia gas pricing and this is supported by the large industry players and independent forecasters.

The permit also holds attractive exploration potential as an upside to la Bella. whl energy is planning the acquisition of a 3D seismic survey in the block - that is the first step to commercialisation of la Bella field. The company has also commenced the process of seeking farmin partners after receiving significant industry interest.

Palta (WA-460-P)

not reached, the Company continues to maintain

The company, as part of a consortium, was awarded a 33.33% interest in exploration Permit wA-460-P by the commonwealth-western Australian Joint Authority in november 2011. wA-460-P lies in the carnarvon Basin offshore western Australia and is assessed to contain an extension of the very large Palta-1

Page 2

WHL ENERGY LTD – ANNUAL REPORT 2012

Prospect. A Shell led Joint Venture is expected to drill the adjacent block in the second half of 2012. The company has mapped the Palta prospect as extending into wA-460-P, with a Prospective resource of 2.5 Tcf gas as part of the overall Palta prospect.

UK assets

UK wind business

During the period, the company made a strategic decision not to pursue its UK renewable energy project, allowing the team to focus solely on growing the Australian and International oil and gas interests.

The decision to relinquish the company’s UK-based wind Farm assets followed a lengthy investigation and independent technical review. The review concluded that the length of time and cost required to resolve the ongoing issues related to domestic radar mitigation and obtaining planning consent for its proposed wings law wind Farm would not provide sufficient value to whl energy and its shareholders.

The company has informed local land owners of its decision and it is now free to relinquish its obligations.

US assets

US oil and gas

The company strategically reviewed its US assets and made a decision to sell the remaining oil and gas project.

During the first half of 2012 the company accepted an offer for the sale of the combined mccune county oil and girard gas projects in Kansas. The transaction finalises the sale of the assets owned by the company in the USA. The transaction for all the equity in the whl energy (midcon) llc was completed and importantly released the company from any potential costs in terms of future environmental and abandonment liabilities.

Following the final settlement in June 2012, the company has concluded the dissolution process of the US corporate entity.

Equity issues

To meet the strategic focus of the company, a capital raising was undertaken during the year.

on the 5 April 2012 the company raised approximately $7.940 million through the placement of up to 180,450,000 ordinary shares at 4.4 cents per share to Australian and International institutions, along with sophisticated and professional investors.

The placement showed significant support for the company from Australian and International institutions, with offers far exceeding the amount being raised. The funds were raised to underpin the 2013 forward work program in the Seychelles and to strengthen the company’s capacity to ensure maximum growth for shareholders.

Board changes

Appointing highly experienced professionals to the Board is a key aspect in whl energy’s business

growth strategy. During the year to June 30, 2012 there were a number of changes to the Board. This was driven by the growth of the company and the shifting strategic focus of the business.

In September 2011 the company’s long-time nonexecutive chairman mr Peter Bartter retired as chairman. Subsequently, mr John chandler, who was serving as a non-executive Director, was appointed as chairman. mr Bartter later resigned as a nonexecutive Director in november 2012.

Following an offer to take up the roles of Professor in law at the University of western Australia and Director for the centre for mining, energy and natural resources law, mr chandler resigned from the company in June 2012 to pursue those interests. Following his resignation, I was elevated from the role of non-executive Director to the position of chairman. I would like to take this opportunity to thank both mr Bartter and mr chandler for their contributions to the company during their time in office.

To further strengthen the Board, the company appointed Dr Keiran wulff as a non-executive Director in June 2012. I would like to take this opportunity to officially welcome Dr wulff to the Board.

Outlook

The Board would like to thank shareholders for their ongoing support and welcome the new shareholders that have joined the share register through the expansion of the company’s capital base. while the ongoing anticipation of a farmin partnership in the Seychelles has not yet eventuated and made this a testing year for shareholders and management, the company remains committed to reaching this outcome. I believe all our shareholders appreciate that the year ended 30 June 2012 has been a year of growth in shareholder value against a backdrop of a difficult capital market.

I would like to thank the members of the Board for their contributions during the year of growth, especially the executive directors mr Steven noske and mr David rowbottam. The Board as a whole also extends its thanks to the management and staff, including the highly experienced technical team lead by mr mathew Fittall. The Board understands the importance of having the right people in place for the long term success of the company and believes whl energy is well positioned to meet this challenge.

Finally, the Board looks forward to a successful exploration phase through 2013 and 2014 and furthermore trusts that the 2012/2013 financial year provides a positive return to the company and its shareholders.

Trevor Benson non-executive chairman Perth, 21 September 2012

Page 3

WHL ENERGY LTD – ANNUAL REPORT 2012

Directors’ Report

==> picture [107 x 131] intentionally omitted <==

Mr Trevor Benson , B.Sc

Your directors submit the annual financial report of the consolidated entity consisting of WHL Energy Limited and its controlled entities (collectively “the Group”) for the financial year ended 30 June 2012. In order to comply with the provisions of the Corporations Act, the directors report as follows:

Directors

The names of directors who held office during or since the end of the year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

Non-Executive Chairman (4 June 2012 Appointed)

Previously Non-Executive Director (5 December 2011 Appointed)

mr Benson has over 25 years of experience in stockbroking, treasury operations and investment banking, with his career covering equity capital markets and m&A transactions within the resources and oil and gas sectors both in Australia and overseas.

mr Benson is currently the Director, corporate Advisory at PcF capital group and has previously held the positions of Director, corporate Advisory at Argonaut limited and head of corporate Finance, operations at Tolhurst InterFinancial and head of Bell Potter Securities in Perth. his cross-border experience includes advising companies on m&A, restructuring and listing on AIm in london, and he is currently involved with companies moving to the TSX in canada.

Page 4

WHL ENERGY LTD – ANNUAL REPORT 2012

==> picture [107 x 131] intentionally omitted <==

Mr Steven Noske , B.Eng Hons (Mech) Managing Director (6 June 2011 Appointed)

mr noske is a senior energy industry manager with more than 27 years’ experience, including 20 years in senior management roles, working in both Australia and throughout Asia.

mr noske’s career has encompassed periods with major oil and gas organisations building into senior management roles with BhPB, TrU energy and mitsui e&P Australia Pty ltd. he was initially employed with woodside energy for approximately 6 years in various engineering and operational roles. he has also been employed with Shell International (1990-1993) in Brunei, BhP Petroleum (19931999) and consulted to mitsui e&P Australia (2004-2011).

mr noske established BnA Petroleum Asset management Pty ltd (BnA) with his partners in 2002 to offer management services in the areas of petroleum commercialisation, specialising in the commercialisation of gas opportunities worldwide.

In the 3 years immediately before the end of the financial year, mr noske also served as a director of the following listed company:

exoma energy limited (november 2007 to november 2008).

==> picture [108 x 131] intentionally omitted <==

Mr David Rowbottam , B.Bus

Finance Director (6 June 2011 Appointed)

mr rowbottam was previously the founding managing Director of exoma energy limited; an ASX listed US focused oil and gas exploration company from July 2007 through to march 2010. Prior to that role mr rowbottam had worked as a senior financial executive with international and Australian experience as general manager, chief Financial officer, Financial controller, and in Senior management positions with businesses including Antares energy ltd (2006-2007), Alinta group (2002-2005) and the BhP group (1987-1999).

mr rowbottam was the group Financial controller for Antares energy ltd from 2006 through until forming exoma energy ltd. Through his role as Financial controller for Alinta Power Services Pty ltd (2004-2005) mr rowbottam was involved in the operation of five power stations and had a further two cogeneration Power Stations under construction. As manager of corporate Investments – Alinta ltd, Perth (2003-2004) he worked closely with the general manager for Business Development, involved in the financial assessment of ad-hoc project work, construction accounting, cost management services, corporate financial planning and modelling.

==> picture [108 x 131] intentionally omitted <==

Dr Keiran Wulff , B.Sc, Grad Dip, PhD

Non-Executive Director (1 June 2012 Appointed)

Dr wulff has an extensive career with operating, technical and managerial experience in the oil and gas industry spanning 28 years.

Dr wulff is currently the executive chairman of Aligned energy limited. his previous experience has involved a number of senior roles in the oil and gas industry. This includes a period of 15 years with ASX-listed oil Search limited, where he performed roles including chief operating officer responsible for its new Business in the middle east and north Africa. his expansive career also consists of technical, operational and managerial roles in Australia, South east Asia, the middle east and northern and central Africa, along with developing strategic business relationships with foreign governments.

In the 3 years immediately before the end of the financial year, mr rowbottam also served as a director of the following listed company:

exoma energy limited (July 2007 to march 2010).

Page 5

WHL ENERGY LTD – ANNUAL REPORT 2012

Directors’ Report

Mr Peter Bartter

Non-Executive Chairman (10 March 2005 Appointed) (30 September 2011 Resigned)

Non-Executive Director (22 November 2011 Resigned)

mr Bartter is the former chairman of Bartter enterprises Pty ltd, which owned and operated the Steggles brand, one of Australia’s two largest wholesale chicken producers, employing over 4,500 people in Australia. Peter Bartter founded the business in late 1956 and later with his brother acted as joint managing Directors of Bartter enterprises Pty ltd, whilst chairman of the company.

Mr John Chandler , LL.B (Hons), Diploma in Business Administration

Non-Executive Chairman (30 September 2011 Appointed) (3 June 2012 Resigned)

Previously Non-Executive Director (17 August 2011 Appointed)

mr chandler was initially appointed to the Board of Directors as a non-executive Director. mr chandler brought to the Board a background in oil and gas company management and corporate governance.

After graduating with a ll.B (hons), mr chandler went on to establish a career within the legal industry, progressing to become a managing Partner at Parker and Parker, as well as at the Perth office of KPmg legal. he had over 30 years commercial and legal experience.

mr chandler is also a non-executive Director of ASX listed oil and gas company Sino gas & energy holdings limited and an unlisted engineering company. mr chandler resigned from his position at whl energy upon his appointment to the roles of Professor in law at the University of western Australia and Director for the centre for mining, energy and natural resources law.

In the 3 years immediately before the end of the financial year, mr chandler served as a director of the following listed company:

Sino Gas & Energy Limited (16 April 2008)*.
denotes current directorships

CoMPaNY SECRETaRY

Mr Matthew Edmondson , B.Comm. CA, ACIS

Company Secretary (21 September 2010 Appointed)

mr edmondson holds a Bachelor of commerce degree from the University of western Australia and is a member of the Institute of chartered Accountants in Australia. mr edmondson is also an Associate member of the Institute of chartered Secretaries in Australia. he has more than 20 years of experience in a variety of roles and industries involving accounting and corporate administration in the United Kingdom and Australia. mr edmondson is now primarily focused on providing company secretarial services to ASX listed companies.

Directors’ interests in the shares and options of the Company and related bodies corporate

The following relevant interests in shares of the company or a related body corporate were held by the directors as at the date of this report.

Directors	Number of Shares
mr Benson	-
mr chandler	130,000
mr noske	3,500,000
mr rowbottam	-
Dr wulff	-

Page 6

WHL ENERGY LTD – ANNUAL REPORT 2012

The following unlisted share options of whl energy limited were granted to directors and key management personnel of the company during or since the end of the financial year as part of their remuneration:

Directors and offcers	Number of options granted	Number of options over ordinary shares
Directors:
mr Benson	-	-
mr chandler	2,000,000	2,000,000
mr noske	15,000,000	15,000,000
mr rowbottam	10,000,000	10,000,000
Dr wulff	-	-
Key management personnel:
mr Fittall (exploration manager)	10,000,000	10,000,000
mr laurie (commercial manager and	-	-
general counsel)

Subsequent to 30 June 2012 mr chandler’s options were forfeited.

Shares under options

At the date of this report unissued ordinary shares of the company under option are:

Expiry Date Exercise price	Number of shares under option
Unlisted options 31/07/2013 $0.0392 31/08/2013 $0.0850 30/09/2013 $0.0750 30/09/2013 $0.0500 31/12/2013 $0.0495 31/12/2013 $0.0001	4,550,000 5,000,000 5,000,000 5,000,000 35,000,000 250,000,000
	304,550,000

on the 30 June 2012 169,808,346 listed options exercisable at $0.075 lapsed.

no shares in whl energy limited were issued during the year ended 30 June 2012 upon the exercise of options.

Dividends

The directors do not recommend the payment of a dividend in respect of the year ended 30 June 2012. no dividends have been paid or declared during the financial year.

Principal activities

The principal activities of the entities within the consolidated entity during the year were oil and gas

exploration. whl energy limited is an Australian based diversified energy company with projects in the republic of Seychelles and Australia. The company has continued to expand its business model which incorporates conventional oil and gas projects, focusing more specifically on opportunities within the east African and Australian offshore areas.

Review of operations

Seychelles

The company holds 100% equity in 21,426 square kilometres of highly prospective oil and gas exploration interests in the shallow water area off the southern Seychelles coast. The Sy10 multiclient 2D Seismic Survey (“mc2D”) in the greater

Page 7

WHL ENERGY LTD – ANNUAL REPORT 2012

Directors’ Report

Seychelles area was completed in April 2011 and the company licensed a further acquisition of 2D seismic totalling 7,966 km of the Sy10 mc2D over its blocks. A preliminary processed dataset, which consists of a post stack time migration, was delivered to the company in June 2011 and a pre-stack time migration (“PSTm”) product, that is a more sophisticated processing algorithm, was delivered to the company in August 2011.

During the year the company continued interpretation of the PSTm dataset. The interpretation has added additional leads in the Junon area and in the deep water area in the south east corner of the acreage (lead y) and confirmed a substantial Prospects and leads Inventory in the company’s acreage. The generation of the Prospects and leads Inventory was supported by regional geological synthesis studies that were concluded in 2011.

During the third quarter of 2011 a concerted industry wide farmout campaign commenced and the company received substantial interest with major global petroleum exploration and production companies visiting the physical data-room in the new Perth office. The company data-room closed at the end of november 2011 and the company commenced commercial discussions with several potential partners. Discussions were held with potential farminees to secure an acceptable farmout for the company however an agreement was not reached. Subsequent to mid-December the company had further strong interest shown by companies not part of the initial data-room sessions. The company continues to receive unsolicited interest in its Seychelles acreage.

Petroleum consultant, netherland Sewell and Associates, Inc. (“nSAI”) of Dallas Texas, was commissioned to provide an independent assessment of gross unrisked prospective resources for certain leads in the company’s Seychelles exploration area. nSAI is a leading oil and gas consulting firm providing independent reserve reports and services to the global petroleum industry and financial community.

The nSAI report supports the company’s internal assessment of the Seychelles exploration portfolio being an early stage, but nevertheless, world-class exploration opportunity. The nSAI report estimated a total unrisked mean Prospective resource of 3.45 billion boe for the 21 most highly ranked leads of the company’s portfolio, which compares with whl

energy’s unrisked estimate of 4.03 billion boe for the same leads.

Against a background where the company sees increasing value in its flagship Seychelles project, the company continues to actively progress partnering discussions in its offshore Seychelles acreage.

The company is committed to ensuring that the significant value of its large 100% held position on the east Africa conjugate margin is realised for its shareholders, and the company remains confident in its ability to secure partner(s) for its Seychelles acreage.

It is anticipated that PetroSeychelles ltd will announce an international exploration acreage bid round later in 2012 and the company believes this will heighten industry attention in the Seychelles blocks. given the detailed level of geological modelling, petroleum system modelling and seismic interpretation completed, the company is of the view that the industry will continue to increase its estimate of the asset’s value as 2012/13 progresses.

At the same time the company continues its interpretation of the Seychelles acreage and since its last report has evaluated the deep water, South east corner of the acreage. This review has identified a number of leads that appear to have substantial potential but require further definition because of relatively sparse data. At this early stage these leads appear to have amplitude support and they will be further evaluated with infill seismic acquisition.

one new area of interest, “lead y”, is a conventional tilted fault block in which potential reservoirs in the cretaceous section appear to brighten up dip, which is often an indication of the presence of hydrocarbons.

The company continues to develop the prospectivity of the acreage and has undertaken considerable geological and geophysical studies to assist with optimising the potential areas for further seismic to be acquired and processed.

while a farmout has not been achieved thus far, ongoing technical work continues to reinforce the potential of the Seychelles. The company’s objectives for the Seychelles have not changed and the focus remains to develop the exploration prospects in the Seychelles as per the original milestones.

Page 8

WHL ENERGY LTD – ANNUAL REPORT 2012

The company also continues to engage with the Seychelles government in relation to rationalising the obligatory exploration work commitments in the block and related matters.

Australian operations La Bella VIC/P67

In may 2012 the company was awarded 100% equity in the exploration permit VIc/P67 by the national offshore Petroleum Title Administrator (“noPTA”). VIc/P67 lies in the offshore otway Basin, approximately 200 km wSw of melbourne off the Victorian coastline. The company understands there were multiple bidders for the block. The company has commenced farmin discussions for the permit area after having previously received an early, formal farmin offer for the block (subject to the company being awarded the acreage).

It is the company’s belief that the VIc/P67 release block was of considerable interest to the oil and gas industry due to its proximity to existing development infrastructure, including the Santos operated casino development, the origin operated otway gas project, the BhPB operated minerva development and TrU energy Iona gas plant. The project is well positioned to capture the anticipated growth in south east Australia gas demand arising from the growing impact of the expansion of lng projects in Queensland and nSw, with many analysts forecasting that east coast gas pricing will ultimately move towards lng netback pricing as export demand increases.

The inclusion of the VIc/P67 block in the company’s portfolio will not have any meaningful impact on the company’s cash requirement for 2012. It is planned to undertake high resolution 3D seismic over la Bella and other high impact leads in 2013. The company has interpreted the block to contain at least a 2c contingent resource of 158 PJ of gas and 1.2 mmbbls of condensate - with internal planning targeting first commercial production as early as 2017. The company views the award of this block as a significant step in the establishment of a quality exploration portfolio to underpin the long term growth of the company.

==> picture [299 x 808] intentionally omitted <==

Page 9

WHL ENERGY LTD – ANNUAL REPORT 2012

Directors’ Report

The company holds 100% equity in the exploration Permit and the mandatory work program commitments consist of:

Year 1 - 1,000km reprocessing of 1,000km 2D seismic and studies
Year 2 - 811 sq. km. 3D seismic acquisition, processing and studies
Year 3 - Drill 2 exploration wells, acquire 650km of 2D seismic, processing and studies

VIc/P67 also contains a number of exploration leads, with relatively low risk prospects present at highlander and west la Bella providing additional tie-back opportunities to a potential la Bella development. larger potential leads, at higher risk, are also present within the la Bella area, including the lowlander leads that offer significant upside potential.

Palta WA-460-P

During october 2011, the company announced it held a 33.33% interest in a consortium that had been offered the gazettal round acreage w10-25 in the commonwealth - western Australian Joint Authority 2010 Australian offshore Petroleum exploration Acreage release. The company as part of the consortium was awarded the exploration Permit in november 2011 that was renamed by the Joint Authority as wA-460-P.

wA-460-P is located 70 km west of cape range and lies adjacent to the Shell exploration permit wA384-P in which the Palta-1 well is planned to be drilled in late 2012. The company’s interpretation of wA-460-P is that it is estimated to cover in the order of 20% (or 2.5 tcf) of the estimated 13.3 tcf Palta prospect that straddles exploration license wA-384-P in which Shell holds a 100% interest. This provides the company with near-term leverage to an upcoming high-impact oil and gas exploration well to be

==> picture [218 x 196] intentionally omitted <==

drilled and financed by Shell.

As planned by the consortium, minimal activities have been undertaken in wA-460-P by the operator, Strike energy limited. The major work program obligation consists of a small 3D seismic survey in 2014. The current activity for the block is to monitor the adjacent Shell operated block. The company understands that the drilling of Palta-1 by Shell in the adjacent wA-384-P with the deep water rig noble clyde Boudreaux continues to be on schedule for later this year.

US operations

McCune County Kansas

During April 2012 the company received and accepted an unconditional offer for the sale of it’s remaining US asset. The transaction for all the equity in whl energy (midcon) llc was completed in June 2012 and importantly released the company from any potential costs in terms of environmental and abandonment liabilities. Following the final settlement the company has dissolved the dormant US corporate entity.

Wardlaw oil project Texas

During the year the company completed its review on the legal options to consider a litigation action to recover a drilling advance made to glen rose Petroleum corporation (“grPc”) as part of the wardlaw joint venture. The matter did not proceed due to commercial risks identified in litigating the matter.

UK operations

During the year the company appointed a technical consultant to advise on the potential success of the project’s radar mitigation strategy. As announced previously, progress had been delayed on lodging a fresh application for the planning consent at the wings law wind Farm (“wlwF”) as part of the

==> picture [215 x 196] intentionally omitted <==

Page 10

WHL ENERGY LTD – ANNUAL REPORT 2012

ladymoor renewable energy Scheme in north Ayrshire, Scotland; due to ongoing technical issues with the radar mitigation strategy.

The consultant’s investigations and in depth assessment, concluded and confirmed the company’s view that the significant investment, and management time required to successfully resolve the domestic radar mitigation issues, would not provide sufficient returns to the company and its shareholders. The company has informed local land owners of its decision and subsequently relinquished its rights and future obligations. The company is in the process of dissolving the UK corporate entities.

Significant changes in the state of affairs

The extensive review of the aviation mitigation strategies was concluded in February 2012. Subsequently the company discontinued its UK wind Farm Projects in march 2012 and is in the process of dissolving the UK entities.

In march 2012, the company accepted an offer for the sale of the US remaining assets in Kansas. The transaction was completed for all the equity in whl energy (midcon) llc and released the company from any potential cost in terms of environmental and abandonment liabilities. This transaction concluded all activities in the US and the company has dissolved the remaining entity.

Operating results for the year

The net loss after income tax of the group for the year ended 30 June 2012 totalled $4,742,812 (year ended 30 June 2011: loss $5,884,114). This is equivalent to a loss of 0.38 cents per share (year ended 30 June 2011 loss of 0.95 cents per share). The loss from continuing operations equates to a loss of 0.33 cents per share (year ended 30 June 2011: loss of 0.26 cents per share).

	30 June 2012 30 June 2011
net loss after tax from continuing operations ($) net loss after tax from discontinued operations ($) overall net loss after tax ($)	4,133,760 1,603,267 609,052 4,280,847
	4,742,812 5,884,114

Shareholder returns

The table below shows the financial performance against shareholder returns as measured by the closing share price at 30 June 2012:

	30 June 2012	30 June 2011
net loss after tax ($)	4,742,812	5,884,114
Basic loss per share	0.38	0.95
(cents) closing period end
share price (cents)	2.9	2.6

on 5 April 2012 the company raised $7.940 million through the placement of 180,450,000 ordinary shares at 4.4 cents per share. on the 30 June 2012 169,808,346 listed options exercisable at $0.075 lapsed.

In may 2012 the company was awarded 100% equity in VIc/P67 “la Bella” exploration permit. The company sees significant value for the la Bella gas field and additional exploration potential.

Significant events after balance date Capital raising

on 12 September 2012 the company announced a “Shareholder entitlement option Programme” managed by Quattro capital group. The renounceable offer was opened to all shareholders at the record date of 24 September, with every qualifying shareholder entitled to apply for one option for every four shares held at the record date. At the time of this report the prospectus is still open for applications. The options have a strike price of $0.04 cents and an expiry date of 30 november 2014, the company intends to apply to the ASX to have the options listed after the closing date of 15 october 2012.

The Shareholder entitlement option Programme is expected to raise approximately $3,517,956 at issue less costs and if fully exercised in november 2014 approximately a further $14,000,000 would be raised. The money is being raised to further progress seismic activity in the otway basin and for general working capital purposes.

note: net loss after tax and ePS included discontinued operations

Page 11

WHL ENERGY LTD – ANNUAL REPORT 2012

Directors’ Report

Employee share options lapsed

on 2 August 2012 mr chandler’s employee share options lapsed following his resignation. There has not been any other matter or circumstance that has arisen after balance date that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial periods.

Likely developments and expected results

Disclosure of information regarding likely developments in the operations of the consolidated entity in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the group. Therefore, this information has not been presented in this report.

Environmental legislation

The operations of the group are subject to a range of statutory environmental regulations relating to oil and gas exploration in Australia and the Seychelles. There is legislation that governs the general requirements for managing environmental impact and specific environmental authorities with conditions for each area of operation.

The Board of Directors in its ongoing monitoring of compliance with environmental regulations has not become aware of any significant breach of the regulations governing the company’s operations during the period covered by this report.

Key management personnel

Directors
Mr Bartter
non-executive chairman	resigned 30 September 2011
non-executive Director	resigned 22 november 2011
Mr Benson
chairman	Appointed 4 June 2012
non-executive Director	Appointed 5 December 2011
Mr Chandler
non-executive chairman	resigned 3 June 2012
	Appointed 30 September 2011
Mr Noske
managingDirector	Appointed 6 June 2011
Mr Rowbottam
Finance Director	Appointed 6 June 2011
Dr Wulff
non-executive Director	Appointed 1 June 2012
executives
Mr Fittall
exploration manager	Appointed 6 June 2011
Mr Laurie
commercial manager
and general counsel	Appointed 5 June 2012

Remuneration philosophy

The performance of the company depends upon the quality of the directors and executives. The philosophy of the company in determining remuneration levels is to:

Remuneration report (Audited)

This report outlines the remuneration arrangements in place for the key management personnel of the group for the financial year ended 30 June 2012. The information provided in this remuneration report has been audited as required by Section 308(3c) of the corporations Act 2001.

The remuneration report details the remuneration arrangements for key management personnel (“KmP”) who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the company and the group, directly or indirectly, including any director (whether executive or otherwise) of the group.

set competitive remuneration packages to attract and retain high calibre employees;
link executive rewards to shareholder value creation; and
establish appropriate, demanding performance hurdles for variable executive remuneration.

Remuneration committee

The nomination and remuneration committee is responsible for determining and reviewing compensation arrangements for the executive Directors. The remuneration for non-executive Directors is set out in the constitution of the company and the aggregate remuneration was approved in the annual general meeting for 2011. The current executive Directors’ contracts were approved by the chairman following an external review in the financial year ended 30 June 2011.

Page 12

WHL ENERGY LTD – ANNUAL REPORT 2012

The nomination and remuneration committee assesses the appropriateness of the nature and amount of remuneration of directors and executives on a periodic basis by reference to relevant employment market conditions with an overall objective of ensuring maximum stakeholder benefit for the retention of a high quality Board and executive team.

Remuneration structure

In accordance with best practice corporate governance, the structure of non-executive Director and executive Director remuneration is separate and distinct.

Non-Executive Director remuneration

The Board seeks to set aggregate remuneration at a level that provides the company with the ability to attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.

The Board considers advice from external stakeholders as well as the fees paid to nonexecutive Directors of comparable companies when undertaking the annual review process.

each director receives a fee for being a director of the company inclusive of additional fees paid for each Board committee on which a director sits.

The remuneration of non-executive Directors for the period ended 30 June 2012 is detailed in Table 1 of this report.

Senior Executive remuneration

remuneration consists of fixed remuneration and variable remuneration (comprising short-term and long-term incentive schemes).

remuneration for the executive Directors is subject to ongoing review by the nomination and remuneration committee. Senior management remuneration is subject to review by the Board.

Fixed remuneration

Fixed remuneration is reviewed annually. The process consists of a review of relevant comparative remuneration both within the market and internally and, where appropriate, external advice on policies and practices. The nomination and remuneration committee has access to external, independent advice where necessary.

==> picture [214 x 365] intentionally omitted <==

Senior executives are given the opportunity to receive their fixed (primary) remuneration in a variety of forms including cash and fringe benefits such as motor vehicles and other. It is intended that the manner of payment chosen will be optimal for the recipient without creating undue cost for the group.

The fixed remuneration component of the KmP of the group is detailed in Table 2.

Variable remuneration

The objective of the short term incentive program is to link the achievement of the group’s operational targets with the remuneration received by the executives and senior management charged with meeting those targets. The total potential short term incentive available is set at a level so as to provide sufficient incentive to achieve the operational targets such that the cost to the group is reasonable in the circumstances.

Page 13

WHL ENERGY LTD – ANNUAL REPORT 2012

Directors’ Report

Actual payments granted depend on the extent to which specific operating targets are met.

The aggregate of annual payments available for Senior executives across the group is subject to the approval of the Board. Payments made are delivered as a cash bonus in the following reporting period.

The company makes long term incentive awards to Senior executives in a manner that aligns this element of remuneration with the creation of shareholder wealth. The details of these awards are included in the employee share option plans.

Employment contracts

non-executive Directors

The company has entered into terms of engagement with mr Benson and Dr wulff whereby they are appointed respectively as chairman and nonexecutive Director of the company. The terms of the appointment are determined in accordance with the company’s constitution and are subject to the provisions of the constitution dealing with retirement, re-election and removal of directors of the company.

The terms of the engagement provide that the company will maintain an appropriate level of directors’ and officers’ insurance and provide access to the company’s records in accordance with the terms of indemnity, insurance and access entered into between the company and each nonexecutive Director.

The remuneration payable to the chairman, mr Benson, is $72,750 per annum exclusive of superannuation and payment commenced on 4 June 2012 following the resignation of mr chandler as chairman. The remuneration payable to the non-executive, Dr wulff, from 1 June 2012 is $54,750 per annum exclusive of superannuation.

executive Directors

At the date of this report mr noske and mr rowbottam are the only executive Directors.

mr noske was appointed managing Director on 6 June 2011 under an executive employment agreement. The executive employment agreement expires on 30 June 2014. mr noske’s annual base package with effect from 6 June 2011 is $450,000 exclusive of superannuation. During August 2011 mr noske was awarded a fringe benefit uplift of 25% of his base remuneration package. The executive employment agreement provides for a short-term incentive bonus for the period ending 30 June 2012 not exceeding $200,000 based on meeting pre-set annual performance requirements. Subsequent to

balance date the nomination and remuneration committee is to review the annual performance requirements for the short term incentive bonus for 2012 and recommend the quantum of the bonus to be paid, if any. The executive employment agreement provides for a long term incentive bonus of 15,000,000 share options under the employee Share option Plan.

The managing Director may terminate his executive employment by giving 3 months’ notice in writing, or such shorter period as may be agreed. In the event of a fundamental change he may terminate his executive employment by giving 1 month notice in writing. except for the company’s right to terminate without notice in prescribed circumstances, the company may terminate the executive director’s employment as follows:

by giving Mr Noske not less than 6 months written notice (or payment in lieu);
by providing either 1 month’s written notice, if by reason of any illness, injury or incapacity, mr noske is unable to perform his duties for a total of 3 months in any period of 12 months; or
in the event of redundancy or defined change in circumstances entitled to severance pay of 6 months’ salary.

Under an executive employment agreement dated 1 may 2011 mr rowbottam’s base package is $270,000 inclusive of superannuation. In August 2011 mr rowbottam was awarded a fringe benefit uplift of 25% of his base remuneration package. The executive employment agreement provides for a short-term incentive bonus of $100,000 based on the achievement of pre-set performance goals. Subsequent to balance date the nomination and remuneration committee is to review the annual performance requirements for the short term incentive bonus for 2012 and recommend the quantum of the bonus to be paid, if any. The executive employment agreement provides for a long term incentive bonus of 10,000,000 share options under the employee Share option Plan.

The Finance Director may terminate his executive employment by giving 2 months’ notice in writing, or such shorter period as may be agreed. except for the company’s right to terminate without notice in prescribed circumstances, the company may

Page 14

WHL ENERGY LTD – ANNUAL REPORT 2012

terminate the executive director’s employment as follows:

by giving Mr Rowbottam 6 months written notice (or payment in lieu); or
by providing either 1 month’s written notice, if by reason of any illness, injury or incapacity, mr rowbottam is unable to perform his duties for a total of two months in any period of 12 months.

executives

mr Fittall was appointed as exploration manager under an executive employment agreement on 6 June 2011. mr Fittall’s base package is $370,000 inclusive of superannuation. In August 2011 mr Fittall was awarded a fringe benefit uplift of 25% of his base remuneration package. The executive employment agreement provides for a short-term incentive bonus not exceeding $85,000 based on achieving predetermined performance criteria. Subsequent to balance date the nomination and remuneration committee is to review the annual performance requirements for the short term incentive bonus for 2012 and recommend the quantum of the bonus to

be paid, if any. The executive employment agreement provides for a long term incentive bonus of 10,000,000 share options under the employee Share option Plan.

The executive may terminate his executive employment by giving 3 months’ notice in writing, or such shorter period as may be agreed. except for the company’s right to terminate without notice in prescribed circumstances, the company may terminate the executive’s employment as follows:

by giving Mr Fittall 6 months written notice (or payment in lieu); or
in the event of redundancy or defined change in circumstances entitled to severance pay of 6 month’s salary.

mr laurie was appointed as commercial manager and general counsel under a fixed term executive employment agreement on 5 June 2012. mr laurie’s base package is $25,500 per month exclusive of superannuation.

mr laurie may terminate his executive employment by giving 1 months’ notice in writing, or such shorter period as may be agreed. except for the company’s right to terminate without notice in prescribed circumstances, the company may terminate the executive’s employment by giving mr laurie 1 months’ written notice (or payment in lieu).

==> picture [486 x 301] intentionally omitted <==

Page 15

WHL ENERGY LTD – ANNUAL REPORT 2012

Directors’ Report

Remuneration of key management personnel

Table 1: Directors’ remuneration for the year ended 30 June 2012

		Short-term employee benefits	Short-term employee benefits	Short-term employee benefits			Post-employment benefits	Post-employment benefits	Equity
		Salary &	Bonuses	Consulting	Other		Super- Other		Share based	Total	Performance
		fees		fees			annuation		payments		related
		$	$	$	$		$ $		$	$	%
mr Bartter	2012	21,667	-	-		-	1,950	-	78,228	101,845	nil
	2011	80,000					3,600		-	83,600	nil
mr Benson	2012	33,016	-	-		-	2,972	-	-	35,988	nil
	2011	-	-	-		-	-	-	-	-	nil
mr chandler	2012	54,060	-	-		-	4,865	-	31,291	90,216	nil
	2011	-	-	-		-	-	-	-	-	nil
mr Davies	2012	-	-	-		-	-	-	-	-	nil
	2011	21,450	-	-		-	-	-	-	21,450	nil
mr noske	2012	450,000	-	-	107,565		40,500	-	43,500	641,565	nil
	2011	60,086	-	77,249		-	3,767	-	-	141,102	nil
mr rowbottam	2012	254,220	-	-	60,871		15,780	-	29,000	359,871	nil
	2011	152,558	-	-		-	12,442	-	-	165,000	nil
Dr wulff	2012	4,563	-	-		-	411	-	-	4,974	nil
	2011	-	-	-		-	-	-	-	-	nil
Total Directors	2012	817,526	-	-	168,436		66,478	-	182,019	1,234,459	Nil
Remuneration	2011	314,094	-	77,249		-	19,809	-	-	411,152	Nil

Table 2: Remuneration of non-director key management personnel for the year ended 30 June 2012

		Short-term employee benefits	Short-term employee benefits	Short-term employee benefits	Post-employment benefits	Post-employment benefits	Post-employment benefits	Equity
		Salary &	Bonuses	Consulting	Other	Super-	Other	Share based	Total	Performance
		fees		fees		annuation		payments		related
		$	$	$	$	$	$	$	$	%
mr Fittall	2012	354,220	-	-	73,249	15,780	-	29,000	472,249	nil
	2011	25,818	-	34,000	-	1,267	-	-	61,085	nil
mr laurie	2012	23,146	-	-	-	1,315	-	-	24,461	nil
	2011	-	-	-	-	-	-	-	-	nil
mr radford	2012	-	-	-	-	-	-	-	-	nil
	2011	160,161	-	-	-	-	-	11,597	171,758	nil
Total Key	2012	377,366	-	-	73,249	17,095	-	29,000	496,710	Nil
Personnel	2011	185,979	-	34,000	-	1,267	-	11,597	232,843	Nil

Table 3: Unlisted option plans in existence during the financial year

Option series	Grant date	Expiry date	Fair value	Vesting date
			atgrant date
whnAI	04/03/2010	30/08/2012	$11,597	50% immediately and 50% dependent on performance
whnAI1	30/07/2011	31/12/2013	$101,500	Dependent on performance criteria
whnAI4	01/12/2011	31/08/2013	$31,291	on grant date
whnAQ	01/12/2011	31/08/2013	$78,228	ongrant date

For details on the valuation of the unlisted options, including models and assumptions used, refer to note 19. There were no alterations to the terms and conditions of options granted as remuneration since their grant date. At the general meeting held on 31 may 2011 shareholders approved an employee Share option Plan (whnAI). During the year the whnAI options series lapsed. Subsequent to the financial year end 30 June 2012 the whnAI4 option series lapsed, refer to note 26.

Page 16

WHL ENERGY LTD – ANNUAL REPORT 2012

Details of Employee Share Option Plans

The company believes that the best way to encourage employees is to align their interests with those of shareholders. on 31 may 2011 at a general meeting, shareholders approved the adoption of an employee Share and option Plan (“eSoP”).

with one or more third parties under which the farminee/s have a collective obligation to spend the greater of $10 million or 50% of the work commitment on the licences; or

The volume weighted average price of the company’s shares as traded on ASX is at least 10 cents or more for ten (10) consecutive trading days.

retention Incentive

As part of the policy to retain staff, other than directors and senior technical staff, options are available to be issued under the eSoP. Vesting of the options issued to employees will occur in accordance with the following milestones:

At the general meeting of shareholders held on 31 may 2011, approval was obtained for the issue under the eSoP of 15,000,000 options to Steve noske and 10,000,000 to mr rowbottam. These were issued during the financial year.

50% of the options will vest after 12 months continuous employment; and
50% of the options will vest after 24 months of continuous employment.

The exercise price of each option will be determined by reference to the 5-day volume-weighted average share price (“VwAP”) being $0.0495 together with a predetermined uplift factor based on the length until expiry of the options.

Performance Incentive

As part of the policy to retain executive directors and senior technical staff, options are available to be issued under the eSoP. Vesting of any options issued to executive directors and senior technical staff, will occur in accordance with the following milestones:

During the year under review 42,550,000 options were granted under this employee share option scheme. Subsequent to year end 2,000,000 options lapsed.

The Company (or one of its subsidiaries) has entered into one or more binding farmin agreements

Table 4: Share-based compensation to KMP during the current financial year

Name	No. granted	Date	FV at grant	No. vested	% of grant	% of grant	%*	Expiry date
		granted	date		vested	forfeited
mr chandler	2,000,000	01/12/2011	$0.0156	2,000,000	100	100	53.1	31/08/2013
mr Fittall	10,000,000	30/07/2011	$0.0145	-	-	-	6.14	31/12/2013
mr noske	15,000,000	30/07/2011	$0.0145	-	-	-	6.82	31/12/2013
mr rowbottam	10,000,000	30/07/2011	$0.0145	-	-	-	8.12	31/12/2013

*Percentage compensation for the year consisting of options no options were exercised as compensation during the year.

Table 5: Options granted, exercised or lapsed during the year to KMP

Name	Value of options granted	Value of options exercised	Value of options lapsed at
	at the grant date	at the exercise date	the date of lapse
	$	$	$
mr chandler	31,291	-	31,291
mr Fittall	29,000	-	-
mr noske	43,500	-	-
mr rowbottam	29,000	-	-

end of remuneration report.

Page 17

WHL ENERGY LTD – ANNUAL REPORT 2012

Directors’ Report

Director’s meetings

The number of meetings of directors (including meetings of committees of directors) held during the year and the numbers of meetings attended by each director were as follows:

	Board meetings	Audit and Risk	Nomination and
		committee meetings	Remuneration meetings
Number of meetings held	13	4	3
Number of meetings attended
mr Benson1	7	4	3
mr Bartter2	5	-	-
mr chandler3	10	3	2
mr noske4	12	1	-
mr rowbottam	13	4	-
Dr wulff5	2	1	1

mr Benson was appointed as a non-executive Director on 5 December 2011.
mr Bartter retired as a director on 22 november 2011.
mr chandler was appointed as a non-executive Director on 17 August 2011 and retired as chairman and non-executive Director on 3 June 2012.
mr noske was not a member of the Audit and risk committee and attended by invitation.
Dr wulff was appointed as a non-executive Director on 1 June 2012.

Proceedings on behalf of the Company

no person has applied to the court under Section 237 of the corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party, for the purposes of taking responsibility on behalf of the company for all or part of the proceedings. 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.

Indemnification and insurance of Directors and officers

The company has agreed to indemnify all the directors of the company for any liabilities to another person (other than the company or related body corporate) that may arise from their position as directors of the company and its controlled entities, except where the liability arises out of conduct involving a lack of good faith.

During the financial year the company paid a premium of $18,683 in respect of a contract insuring the directors and officers of the company and its controlled entities against any liability incurred in the course of their duties to the extent permitted by the corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability.

auditor independence and non-audit services

Section 307c of the corporations Act 2001 requires our auditors, hlB mann Judd, to provide the directors of the company with an Independence Declaration in relation to the audit of the annual report. This Independence Declaration is set out on page 24 and

forms part of this directors’ report for the year ended 30 June 2012.

Non-audit services

Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in note 25 to the financial statements. The directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the corporations Act 2001.

The directors are of the opinion that the services do not compromise the auditor’s independence as all non-audit services have been reviewed to ensure that they do not impact the integrity and objectivity of the auditor and none of the services undermine the general principles relating to auditor independence as set out in code of conduct APeS 110 code of ethics for Professional Accountants issued by the Accounting Professional & ethical Standards Board.

Signed in accordance with a resolution of the directors.

==> picture [146 x 59] intentionally omitted <==

Mr Noske managing Director Perth, 21 September 2012

Page 18

WHL ENERGY LTD – ANNUAL REPORT 2012

Corporate Governance Statement

whl energy and its Board are committed to achieving and maintaining best practice in corporate governance, consistent with its sector of operations and the size and maturity of the company. The listing rules of the Australian Securities exchange (“ASX”) require the company to disclose the extent to which it has followed the ASX corporate governance council’s Principles of good corporate governance and Best Practice recommendations (“ASX Principles”).

The group has adopted a Board charter which provides the framework for the group’s corporate governance practices. As part of its corporate governance practices, the group has adopted detailed guidelines and policies referred to as follows:

Corporate code of conduct
Audit and risk committee charter
Nomination and remuneration committee charter
Risk management statement
Securities trading policy
Shareholder communications strategy
Performance evaluation statement
Continuous disclosure statement
Diversity Policy

The Board charter and guidelines and policies referred to immediately above can be located on the company’s website.

At regular intervals the Board will review these policies and procedures, as it is expected that requirements will change as the company develops and grows in complexity. where, after due consideration, the company’s governance practices depart from the ASX corporate governance recommendations, the Board has set these out at the end of the Statement of corporate governance in its “if not, why not” report.

Principle 1: Lay solid foundations for management and oversight

Role of the Board

The Board has the primary responsibility for guiding and monitoring the business and affairs of the company, including compliance with the company’s corporate governance objectives. The Board is responsible for the oversight and performance of the company.

The managing Director is responsible for the day to day activities of the company, and such other activities as are delegated by the Board. The Board’s role is set out in the Board charter which establishes the relationship between the Board and management and describes their respective functions and responsibilities.

The Board is responsible for the oversight and performance of the company, including matters such as:

evaluating, approving and monitoring the strategic and financial plans and performance objectives for the Company;
evaluating, approving and monitoring the annual budgets and business plans;
evaluating, approving and monitoring major capital expenditure, capital management and all major corporate transactions including the issue of any securities of the company;
monitoring and approving all financial reports and all other reporting and external communications by the Company; and
approving and monitoring the Company’s risk management strategy and internal controls and accountability systems and their effectiveness.

The managing Director may delegate responsibilities to senior management.

current directors of the company have been provided with letters of appointment. All executives of the company are employed under contracts which outline their duties, rights and responsibilities, and entitlements upon termination.

with the consent of the chairman, directors may seek independent professional advice.

Evaluation of Senior Executives

The company has published the process for evaluating the performance of senior management on its website. The review of the executive team undertaken during the reporting period was based on specific criteria including the business performance of the company and its subsidiaries, whether specific objectives were achieved and the development and management of personnel.

The group has a process to educate new directors about the nature of the business, current issues, and the corporate strategy with respect to the performance of directors. Directors are given the opportunity to access management to obtain a greater understanding of the business. Directors are provided with access to continuing education opportunities to update and enhance their skills and knowledge.

Page 19

WHL ENERGY LTD – ANNUAL REPORT 2012

Corporate Governance Statement

Principle 2: Structure the Board to add value

Director independence

The Board has four directors, two of whom are executive, being mr noske and mr rowbottam. The two non-executive Directors are the chairman, mr Benson, and Dr wulff.

The names, date of first appointment and status of the company’s directors are set out below.

Name	Appointed	Executive	Independent	Term of appointment
mr noske	2010	yes	no	Until 30 June 2014
mr rowbottam	2010	yes	no	Until Agm 2012
mr Benson	2011	no	yes	Until Agm 2012
Dr wulff	2012	no	yes	Until Agm 2012
mr chandler	2011	no	yes	resigned 3 June 2012
mr Bartter	2005	no	no	resigned 22 november 2011

Directors are expected to bring independent views and judgment to the Board’s deliberations. The Board has reviewed the position and associations of each of the four directors in office and has determined that mr Benson and Dr wulff are independent.

In making this determination the Board has had regard to the independence criteria in ASX Principle 2 and other facts, information and circumstances that the Board considers relevant. The Board assesses the independence of new directors upon appointment and reviews their independence, and the independence of the other directors, as appropriate.

Nomination Committee

During the year, the company formed a nomination committee consisting solely of non-executive Directors. Its role included overseeing the performance evaluation process of the board, its committees and individual directors.

The constitution of the company requires one third of the directors, other than the managing Director, to retire from office at the end of each annual general meeting. Directors who have been appointed by the Board during the year are required to retire from office at the next annual general meeting and are not taken into account in determining the number of directors to retire at that annual general meeting. Directors cannot hold office for a period in excess of three years (or later than the third annual general meeting following their appointment) without submitting themselves for re-election. retiring directors may be eligible for reelection by shareholders. If the appointment of an executive director, including the managing director is for a fixed term, the term must not exceed five years.

Evaluation of the Board, its committees and individual directors

A performance evaluation for the Board, its committees and directors has taken place in the reporting period in accordance with the process as disclosed in the Performance evaluation Statement disclosed on the company’s website. The nomination committee has reviewed the role of the Board and the remuneration committee has overseen the performance evaluation process of the executive team. In addition to this, the Board has undertaken a review of its performance.

Principle 3: Promote ethical and responsible decision making

Code of conduct

The company has adopted a code of conduct for directors and employees to guide those parties as to the practices necessary to maintain confidence in the company’s integrity and the reporting of unethical practices. The corporate code of conduct is published on the company’s website.

Through its stewardship of company activities, the Board ensures that best practice standards of ethics and integrity in all business dealings and operations are maintained, including the company’s interactions with its shareholders, employees, business partners, customers, suppliers, and the community.

The company has adopted a securities trading policy for employees and directors or their related entities. employees and directors of the company may not trade in the company’s shares when in possession of inside information. The securities trading policy is published on the company’s website.

Page 20

WHL ENERGY LTD – ANNUAL REPORT 2012

Diversity

The company has adopted a diversity policy which can be viewed on its website. The company recognises that a diverse and talented workforce is a competitive advantage and encourages a culture that embraces diversity.

The Board has identified the following as being relevant achievable objectives for the company at this time, to assist in working

towards a balanced representation of diversity in the company:

to review the number of women employed by the company at each wage level (Board, Senior management, whole of organisation), noting whether they are employed on a full time of part time basis;
to review employment options provided to employees having regard to their domestic responsibilities and implement improvements in recruitment and retention through creating flexible working options and equitable participation in company incentive plans; and
to identify what the company considers to be key values and criteria for recruitment at all levels of the company. consider how implementation of these key values and criteria may promote an inclusive workplace culture.

The proportion of women employees in the whole organisation is 30%, women in senior management is 25% and there are presently no women on the Board.

Principle 4: Safeguard integrity in financial reporting

Audit and Risk Committee, structure and formal charter

During the reporting period, the Board reconstituted the Audit and risk committee so that it consists of two non-executive directors and one executive director. The Audit and risk committee is chaired by an independent non-executive director who is not the chairman of the Board.

The Audit and risk committee has a formal charter which can be found on the company’s website.

External auditor

As part of the company’s commitment to safeguarding integrity in financial reporting, the company has implemented procedures and policies to monitor the independence and competence of the company’s external auditors.

The company’s external auditors are hlB mann Judd. The effectiveness, performance and independence of the external auditors are reviewed by the audit committee. If it becomes necessary to replace the external auditors for performance or independence reasons, the Board will then formalise a procedure and policy for the selection and appointment of new auditors. It is a requirement, given that the company is ASX listed, that the audit engagement partner is rotated at least every five years.

Principle 5: Make timely and balanced disclosure

The Board has an established written company policy on continuous disclosure (including requirements for approval for release of information by the company). This can be found on the company’s website.

In addition to its disclosure obligations under the ASX listing rules, the company communicates with its shareholders through a number of means including:

annual and half-yearly reports, including material presented at the Annual General Meeting;
quarterly shareholder updates released to the ASX, sent by email to shareholders and others who so request, and placed on the company’s website; and
media releases, public announcements and investor briefings.

All material disclosed, where feasible, and as authorised by the chairman, is posted to the company’s website. A summary of the continuous Disclosure and Shareholder reporting Policy designed to guide compliance with listing rule disclosure requirements is available on the company’s website at www.whlenergy.com.

Principle 6: Respect the rights of shareholders

The company has a positive and formal strategy to communicate with shareholders and actively promote shareholder involvement in the company. This can be found on the company’s website.

The company also aims to continually increase and improve the information available to shareholders on its website. All company announcements, presentations to analysts and other significant briefings will be posted on the company’s website after release to the Australian Securities exchange.

Page 21

WHL ENERGY LTD – ANNUAL REPORT 2012

Corporate Governance Statement

consistent with ASX Principle 6 and The corporate law economic reform Program (Audit reform and corporate Disclosure) Act 2004 (also known as clerP 9) a representative of hlB mann Judd will attend, and be available to answer questions at the company’s annual general meeting. The company encourages shareholders to register for receipt of announcements and updates electronically.

Principle 7: Recognise and manage risk

consistent with ASX Principle 7, the company is committed to the identification, monitoring and management of risks associated with its business activities and has established, as part of its management and reporting systems, a number of risk management controls.

During the reporting period, the company reconstituted the Audit and risk committee so that it consisted of two non-executive directors and one executive director. The Audit and risk committee is chaired by an independent non-executive Director who is not the chairman of the Board.

The company has adopted a general risk management statement addressing the profile of risk relevant to the company given its operational context supported by a set of internal procedures. Approval of detailed procedures and monitoring of their implementation is subject to ongoing review. A copy of the risk management statement is available on the company’s website at www.whlenergy.com.

In accordance with ASX Principle 7, the managing Director, who performs the chief executive function and the Finance Director, who performs the chief financial officer function provide the Board with an annual written statement that:

“the statement given with respect to the integrity of the financial statements is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board; and
the Company’s risk management and internal compliance and control system is operating efficiently and effectively in all material respects”.

The risk profile can be expected to change and procedures adapted as the company’s business develops and it grows in size and complexity. regular review by the Board will be implemented to ensure that procedures adopted continue to be appropriate.

The company has not yet established an internal audit function due to the small size of the company but continually reviews the internal control procedures.

Principle 8: Remunerate fairly and responsibly

During the reporting period, the company formed the nomination and remuneration committee consisting of the two non-executive Directors. It is chaired by the non-executive chairman.

The aggregate remuneration of directors is determined by shareholders, apart from payments to executive directors, and the Board determines individual directors’ remuneration and reviews the remuneration of employees. The company’s remuneration policy is to balance the need to provide industry-competitive remuneration in order to attract and retain high quality personnel, while ensuring effective use of shareholder funds.

In accordance with best practice corporate governance, the structure of the non-executive and executive remuneration is separate and distinct.

no schemes for retirement benefits (other than statutory contributions to a superannuation scheme where relevant) are in place.

Explanations for departures from ASX Corporate Governance Recommendations

The Board sets out below, on an “if not, why not” basis, disclosure of any ASX corporate governance recommendations that have not been adopted by the company during the financial year ended 30 June 2012.

Principle 2 – Recommendation 2.1

notification of and explanation for departure

During the year ending 30 June 2012, the Board did not have a majority of independent Directors. The ASX corporate governance recommendations provide for a test of independence as set out in Box 2.1 of the ASX corporate governance recommendations (Independence Test). In accordance with the Independence Test, and as a result of information obtained from Directors’ Independence Questionnaires:

Page 22

WHL ENERGY LTD – ANNUAL REPORT 2012

Director	Nature of interest
mr Benson is considered to be independent	not applicable
Dr wulff is considered to be independent	not applicable
mr noske is not considered to be independent	mr noske held the executive role of managing Director for the
	entire reporting period
mr rowbottam is not considered to be independent	mr rowbottam held the executive role of Finance Director for the
	entire reporting period
mr chandler is considered to have been independent	not applicable
mr Bartter is considered not to have been independent	mr Bartter was executive chairman for part of the year so there
	has not been a period of at least 3 years since being an executive
	mr Bartter is also a substantial shareholder of the company

materiality thresholds were not applicable in determining the independence of directors.

explanation for departure

given the present size of the company and the Board, the Directors do not consider any material additional efficiencies will be obtained by appointing an additional independent director to effectively discharge their responsibilities and duties.

The Board considers that its structure and size is, and will continue to be, appropriate in the context of the company’s strategic plans. The company considers that the non-independent directors possess the skills and experience suitable for building the company. The Board intends to reconsider its composition as the company’s operations evolve, and intends to appoint additional independent directors as it deems appropriate. mr Benson was appointed as an independent non-executive Director in December 2011 and Dr wulff was appointed independent non-executive director in June 2012.

All directors are aware that they are required to bring an independent judgment to bear on Board decisions. where a potential conflict of interest may arise, involved directors must, unless the remaining directors resolve otherwise, withdraw from deliberations concerning the matter. Further, each director has the right to seek independent professional advice at the expense of the company.

Principle 4 – Recommendations 4.2

notification of and explanation for departure

By virtue of the size of the Board and a decision to source members for the Audit and risk committee solely from the Board, the company could not satisfy ASX corporate governance recommendation 4.2 requiring that the nomination and remuneration committee should be structured so that it consists only of non-executive Directors.

Principle 8 – Recommendation 8.2

notification of and explanation for departure

By virtue of the size of the Board and a decision to source members for the nomination and remuneration committee solely from the Board, the company could not satisfy ASX corporate governance recommendation 8.2 requiring that the nomination and remuneration committee should be structured so that it has at least three members.

Page 23

WHL ENERGY LTD – ANNUAL REPORT 2012

Auditors’ Independence Declaration

==> picture [168 x 71] intentionally omitted <==

AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the financial report of whl energy limited for the year ended 30 June 2012, I declare that to the best of my knowledge and belief, there have been no contraventions of:

a) the auditor independence requirements of the corporations Act 2001 in relation to the audit; and
b) any applicable code of professional conduct in relation to the audit.

This declaration is in respect of whl energy limited.

==> picture [149 x 57] intentionally omitted <==

Perth, western Australia 21 September 2012

N G NEILL Partner, hlB mann Judd

==> picture [17 x 15] intentionally omitted <==

HLB Mann Judd (WA Partnership) ABN 22 193 232 714 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: [email protected]. Website: http://www.hlb.com.au Liability limited by a scheme approved under Professional Standards Legislation

HLB Mann Judd (WA Partnership) is a member of

International, a worldwide organisation of accounting firms and business advisers.

Page 24

WHL ENERGY LTD – ANNUAL REPORT 2012

Statement of Comprehensive Income

for the year ended 30 June 2012

revenue operating expenses Finance costs Loss before income tax expense Income tax expense Loss after tax from continuing operations loss after tax from discontinued operations Loss for the year other comprehensive income exchange differences on translating foreign operations Fair value adjustment to fnancial assets Other comprehensive income Total comprehensive loss for the year loss attributable to: owners of parent Total comprehensive loss attributable to owners of the parent Earnings per share Basic loss per share (cents per share) Basic loss per share from continuing operations (cents per share) Basic loss per share from discontinued operations (cents per share)	Notes	Consolidated Consolidated 2012 2011 $ $ 275,443 104,390 (4,407,719) (1,705,537) (1,484) (2,120) (4,133,760) (1,603,267) - - (4,133,760) (1,603,267) (609,052) (4,280,847) (4,742,812) (5,884,114) 165,665 (450,645) (50) 6,869 165,615 (443,776) (4,577,197) (6,327,890) (4,577,197) (6,327,890) (4,577,197) (6,327,890) cents cents 0.38 0.95 0.33 0.26 0.05 0.69
	2 3 3 4 2 & 3 7 7 7

The accompanying notes form part of these financial statements

Page 25

WHL ENERGY LTD – ANNUAL REPORT 2012

Statement of Financial Position

as at 30 june 2012

Current assets cash and cash equivalents Trade and other receivables other fnancial assets Asset classifed as held for sale Total current assets Non-current assets other fnancial assets Plant and equipment Deferred exploration expenditure Intangible assets Total non-current Total assets Current liabilities Trade and other payables other fnancial liabilities Provisions liabilities associated with assets held for sale Total current liabilities Total liabilities Net assets Equity Issued capital reserves Accumulated losses Total equity	Notes	Consolidated Consolidated 2012 2011 $ $
	8 9 10 6 10 11 12 13 14 15 16 6 17 18	8,176,683 9,411,547 301,363 397,404 - 22,810
		8,478,046 9,831,761 - 574,687
		8,478,046 10,406,448
		- 57 236,080 55,200 17,841,086 15,608,786 - 2
		18,077,166 15,664,045
		26,555,212 26,070,493
		515,256 1,290,738 - 2,328,590 73,506 21,127 - 34,630
		588,762 3,675,085
		588,762 3,675,085
		25,966,450 22,395,408
		59,726,589 53,339,799 763,935 344,850 (34,524,074) (31,289,241)
		25,966,450 22,395,408

The accompanying notes form part of these financial statements

Page 26

WHL ENERGY LTD – ANNUAL REPORT 2012

Statements of Cashflows

for the year ended 30 June 2012

Cash fows from operating activities receipts from other Payments to suppliers and employees Interest paid Net cash used in operating activities Cash fows from investing activities Proceeds from sale of fnancial assets Payment for plant and equipment Payment for deferred exploration expenditure Proceeds from disposal of exploration interests Proceeds from disposal of entities Interest received Net cash used in investing activities Cash fows from fnancing activities Proceeds from issue of shares Payments for share issue costs repayment of borrowings Net cash provided by fnance activities Net increase/(decrease) in cash and cash equivalents cash and cash equivalents at beginning of period effect of exchange rate fuctuations on cash held Cash and cash equivalents at end of period	Notes	Consolidated Consolidated 2012 2011 $ $
	8	56,153 - (4,756,962) (2,584,665) (1,645) (1,812)
		(4,702,454) (2,586,477)
		37 127,218 (265,804) (23,872) (4,025,833) (7,248,661) 102,779 6,629 15,627 - 202,856 77,752
		(3,970,338) (7,060,934)
		8,403,400 19,756,400 (967,575) (835,912) - (22,000)
		7,435,825 18,898,488
		(1,236,967) 9,251,077 9,411,547 175,785 2,103 (15,315)
		8,176,683 9,411,547

The accompanying notes form part of these financial statements

Page 27

WHL ENERGY LTD – ANNUAL REPORT 2012

Statement of Changes in Equity

for the year ended 30 June 2012

Consolidated Balance as at 1 July 2010 loss for the year other comprehensive income Total comprehensive income for the year Shares issued during the year recognition of share-based payments Balance at 30 June 2011 Balance as at 1 July 2011 loss for the year other comprehensive income Total comprehensive income for the year Shares issued during the year Share issue costs recognition of share-based payments lapsed options transferred to accumulated losses Balance at 30 June 2012	Issued Capital Accumulated Losses Asset Revaluation Reserve Foreign Currency Translation Reserve Option Reserve Total $ $ $ $ $ $
	28,853,461 (25,405,127) (6,819) 200,364 - 3,641,879 - (5,884,114) - - - (5,884,114) - - 6,869 (450,645) - (443,776)
	- (5,884,114) 6,869 (450,645) - (6,327,890) 24,486,338 - - - - 24,486,338 - - - - 595,081 595,081
	53,339,799 (31,289,241) 50 (250,281) 595,081 22,395,408
	53,339,799 (31,289,241) 50 (250,281) 595,081 22,395,408 - (4,758,925) - 16,113 - (4,742,812) - - (50) 165,665 - 165,615
	- (4,758,925) (50) 181,778 - (4,577,197) 8,403,400 - - - - 8,403,400 (504,115) (504,115) - - - - 248,954 248,954 (1,512,495) 1,524,092 - - (11,597) -
	59,726,589 (34,524,074) - (68,503) 832,438 25,966,450

The accompanying notes form part of these financial statements

Page 28

WHL ENERGY LTD – ANNUAL REPORT 2012

Notes to the Financial Statements

for the year ended 30 June 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the corporations Act 2001, Accounting Standards and Interpretations and complies with other requirements of the law.

The accounting policies detailed below have been consistently applied to all of the years presented unless otherwise stated. The financial statements are for the consolidated entity consisting of whl energy limited and its subsidiaries.

The financial report has also been prepared on a historical cost basis, except for available-for-sale investments and derivative financial instruments, which have been measured at fair value. cost is based on the fair values of the consideration given in exchange for assets.

The financial report is presented in Australian dollars, which is the company’s functional currency unless otherwise stated.

The company is a listed public company, incorporated in Australia and operating in United States, Seychelles and United Kingdom. During the financial year the company discontinued its operations in the United Kingdom and the United States. The entity’s principal activities are oil and gas exploration.

(b) Adoption of new and revised standards

Changes in accounting policies on initial application of Accounting Standards

In the year ended 30 June 2012, the group has reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for the current annual reporting period.

The following new and revised Standards and Interpretations have been adopted in the current year and have had no impact on the amounts reported in these financial statements.

Standards affecting presentation and disclosure
Amendments to AASB 7 ‘Financial Instruments:	The amendments (part of AASB 2010-4 ‘Further Amendments
Disclosure’	to Australian Accounting Standards arising from the Annual
	Improvements Project’) clarify the required level of disclosures
	about credit risk and collateral held and provide relief from
	disclosures previously required regarding negotiated loans.
Amendments to AASB 101 ‘Presentation	The amendments arising under AASB 2010-4 clarify that an
of Financial Statements’	entity may choose to present the required analysis of items of
	other comprehensive income either in the statement of changes
	in equity or in the notes to the fnancial statements.
AASB 1054 ‘Australian Additional Disclosures	AASB 1054 sets out the Australian-specifc disclosures for
	entities that have adopted Australian Accounting Standards. This
	Standard contains disclosures requirements that are in addition
	to IFrSs in areas such as compliance with Australian Accounting
	Standards, the nature of fnancial statements (general purpose
	or special purpose), audit fees, imputation (franking) credits and
	the reconciliation of net operating cash fow to proft (loss).
AASB 124 ‘related Party Disclosures’	AASB 124 (revised December 2009) has been revised on the
(revised December 2009)	following two aspects: a) AASB 124 (revised December 2009)
	has changed the defnition of a related party and b) AASB 124
	(revised December 2009) introduces a partial exemption from the
	disclosure requirements for government-related entities.
	Associates of the ultimate holding company of the company
	are treated as related parties of the group under the revised
	Standard whilst such entities were not treated as related parties
	of the groupunder theprevious Standard.

It has been determined by the Directors that there is no impact, material or otherwise, of any other new and revised Standards and Interpretations on its business and, therefore, no change is necessary to group accounting policies.

The group has also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the year ended 30 June 2012. As a result of this review the Directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change is necessary to group accounting policies.

Page 29

WHL ENERGY LTD – ANNUAL REPORT 2012

Notes to the Financial Statements

for the year ended 30 June 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(b) Adoption of new and revised standards (CONTINUED)

These Standards and Interpretations will be first applied in the financial report of the group that relates to the annual reporting period beginning after the effective date of each pronouncement.

(c) Statement of compliance

The financial report was authorised for issue on 21 September 2012.

The financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial reporting Standards (“AIFrS”). compliance with AIFrS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial reporting Standards (“IFrS”).

(d) Basis of consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of whl energy limited (“company” or parent entity”) as at 30 June 2012 and the results of all subsidiaries for the year then ended. whl energy limited and its subsidiaries are referred to in this financial report as the group or the consolidated entity.

The financial statements of the subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies.

In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses, and profit and losses resulting from intra-group transactions have been eliminated in full.

Subsidiaries are fully consolidated from the date on which control is transferred to the group and cease to be consolidated from the date on which control is transferred out of the group. control exists where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing when the group controls another entity.

when the group ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint controlled entity or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

(e) Critical accounting judgements and key sources of estimation uncertainty

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.

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.

Impairment of intangibles with indefinite useful lives

The group determines whether goodwill and intangibles with indefinite useful lives are impaired at least on an annual basis. This requires an estimation of the recoverable amount of the cash generating units to which the goodwill and intangibles with indefinite useful lives are allocated. The assumptions used in this estimation of recoverable amount and the carrying amount of goodwill and intangibles with indefinite useful lives are disclosed in note 13.

Share-based payment transactions

The group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using Black-Scholes and Binomial models, using the assumptions detailed in note 19.

The group measures the cost of cash-settled share-based payments at fair value at the grant date using the Black-Scholes formula and a binomial model taking into account the terms and conditions upon which the instruments were granted, as discussed in note 19.

Exploration and evaluation costs carried forward

The recoverability of the carrying amount of exploration and evaluation costs carried forward has been reviewed by the Directors. In conducting the review, the recoverable amount has been assessed by reference to the higher of “fair value less costs to sell”

Page 30

WHL ENERGY LTD – ANNUAL REPORT 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(e) Critical accounting judgements and key sources of estimation uncertainty (CONTINUED)

and “value in use”. The exploration and evaluation of the mineral resources has not reached a stage at which there is sufficient information to estimate future cash flows for determining value in use.

The group has decided that until there is sufficient data to determine technical feasibility and commercial viability, the exploration asset will not be assessed for impairment by reference to value in use. however, when such information becomes available or other fact and circumstances suggest that the asset may be impaired, the exploration asset will be assessed for impairment which in turn could impact future financial results.

Impairment of available-for-sale financial assets

The group follows the guidance of AASB 139 Financial Instruments: recognition and measurement to determine when an available-for-sale financial asset is impaired. This determination requires significant judgement. In making this judgement, the group evaluated, among other factors, an offer received and a review of the assets by an independent consultant and production performance and the extent to which the fair value of an investment is less than its cost.

(f) Segment reporting

operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors of whl energy limited.

(g) Foreign currency translation

Both the functional and presentation currency of whl energy limited and its Australian subsidiaries is Australian dollars. each entity in the group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

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 consolidated 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.

Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity.

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. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss.

As at the balance date the assets and liabilities of these subsidiaries are translated into the presentation currency of whl energy limited at the rate of exchange ruling at the balance date and their statements of comprehensive income are translated at the weighted average exchange rate for the year.

The exchange differences arising on the translation are taken directly to a separate component of equity, being recognised in the foreign currency translation reserve.

on disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in profit or loss.

(h) Revenue recognition

revenue is measured at fair value of the consideration received or receivable. revenue is recognised to the extent that it is probable that the economic benefits will flow to the group and the revenue can be reliably measured. The following specific criteria must also be met before revenue is recognized.

Sale of goods

revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and the costs incurred or to be incurred in respect of the transaction can be measured reliably. risks and rewards of ownership are considered passed to the buyer at the time of delivery of the goods to the customer.

Page 31

WHL ENERGY LTD – ANNUAL REPORT 2012

Notes to the Financial Statements

for the year ended 30 June 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(h) Revenue recognition (CONTINUED)

Interest income

Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial asset.

(i) Borrowing costs

Borrowing costs are capitalised when they are directly attributable 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.

(j) Leases

leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

operating lease payments are recognised as an expense on a straight line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

(k) Income tax

The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary difference and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the company’s subsidiaries and associates operate and generate taxable income. management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance date.

Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences except:

when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:

when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Page 32

WHL ENERGY LTD – ANNUAL REPORT 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(k) Income tax (CONTINUED)

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance date.

Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

(l) Other taxes

revenues, expenses and assets are recognised net of the amount of gST except:

when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the gST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
receivables and payables, which are stated with the amount of GST included.

The net amount of gST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

cash flows are included in the statement of cash flows on a gross basis and the gST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority 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.

(m) Impairment of assets

The group assesses at each balance date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset’s value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. when the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a revaluation decrease).

An assessment is also made at each balance date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

(n) Cash and cash equivalents

cash comprises cash at bank and in hand.

For the purposes of the Statement of cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above.

(o) Trade and other receivables

Trade and other receivables are measured on initial recognition at fair value and are subsequently measured at amortised cost using the effective interest rate method, less any allowance for impairment. Trade and other receivables are generally due for settlement within periods ranging from 15 days to 30 days.

Page 33

WHL ENERGY LTD – ANNUAL REPORT 2012

Notes to the Financial Statements

for the year ended 30 June 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(o) Trade and other receivables (CONTINUED)

Impairment of trade and other receivables is continually reviewed and those that are considered to be uncollectible are written off by reducing the carrying amount directly. An allowance account is used when there is objective evidence that the group will not be able to collect all amounts due according to the original contractual terms.

Factors considered by the group in making this determination include known significant financial difficulties of the debtor, review of financial information and significant delinquency in making contractual payments to the group. The impairment allowance is set equal to the difference between the carrying amount of the receivable and the present value of estimated future cash flows, discounted at the original effective interest rate. where receivables are short-term discounting is not applied in determining the allowance.

The amount of the impairment loss is recognised in the statement of comprehensive income within other expenses. when a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in the statement of comprehensive income.

(p) Non-current assets (or disposal groups) held for sale and discontinued operations

non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits and financial assets that are carried at fair value.

An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group) but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date of derecognition.

non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognised.

non-current assets classified as held for sale and the assets of the disposal group classified as held for sale are presented separately from the other assets in the statement of financial position. The liabilities of a disposal group classified as held for sale are presented separately from other liabilities in the statement of financial position.

A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose of such a line of business or area of operations. The results of discontinued operations are presented separately in the statement of comprehensive income.

(q) Derivative financial instruments and hedging

The group uses derivative financial instruments such as forward currency contracts to hedge its risks associated with foreign currency fluctuations. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured to fair value. Derivatives are carried as assets when their fair value is positive and as liabilities when their fair value is negative.

Any gains or losses arising from changes in the fair value of derivatives, except for those that qualify as cash flow hedges, are taken directly to net profit or loss for the year.

The fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles.

(r) Financial assets

Financial assets in the scope of AASB 139 Financial Instruments: recognition and measurement are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale investments, as appropriate. when financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The group determines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial year-end. All regular way purchases and sales of financial assets are recognised on the trade date, i.e. the date that the group commits to

Page 34

WHL ENERGY LTD – ANNUAL REPORT 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(r) Financial assets (CONTINUED)

purchase the asset. regular way purchases or sales are purchases or sales of financial assets under contracts that require delivery of the assets within the period established generally by regulation or convention in the marketplace.

Financial assets at fair value through profit or loss

Financial assets classified as held for trading are included in the category “financial assets at fair value through profit or loss”. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. Derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

Loans and receivables

loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

Available-for-sale investments

Available-for-sale investments are those non-derivative financial assets that are designated as available-for-sale or are not classified as any of the two preceding categories. After initial recognition available-for sale investments are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in profit or loss.

The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on the balance date.

(s) Impairment of financial assets

The group assesses at each balance date whether a financial asset or group of financial assets is impaired.

Financial assets carried at amortised cost

If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced either directly or through use of an allowance account. The amount of the loss is recognised in profit or loss.

The group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant. If it is determined that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset is included in a group of financial assets with similar credit risk characteristics and that group of financial assets is collectively assessed for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognised are not included in a collective assessment of impairment.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent reversal of an impairment loss is recognised in profit or loss, to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date.

Financial assets carried at cost

If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is not carried at fair value (because its fair value cannot be reliably measured), or on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the current market rate of return for a similar financial asset.

Available-for-sale investments

If there is objective evidence that an available-for-sale investment is impaired, an amount comprising the difference between its cost (net of any principal repayment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to the statement of comprehensive income. reversals of impairment losses for equity instruments classified as available-for-sale are not recognised in profit. reversals of impairment losses for debt instruments are reversed through profit or loss if the increase in an instrument’s fair value can be objectively related to an event occurring after the impairment loss was recognised in profit or loss.

Page 35

WHL ENERGY LTD – ANNUAL REPORT 2012

Notes to the Financial Statements

for the year ended 30 June 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(t) Interest in a jointly controlled operation

The group has certain contractual arrangements with other ventures to engage in joint venture activities that do not give rise to a jointly controlled entity. These arrangements involve the joint ownership of assets dedicated to the purposes of the joint venture. The assets are used to derive benefits for the ventures.

The interests of the parent entity and group in the unincorporated joint ventures are brought to account by recognising in the financial statements under the groups proportionate share of joint venture revenues expenses, assets and liabilities.

(u) Plant and equipment

Items of plant and equipment are stated at cost or deemed cost less accumulated depreciation and impairment losses. The residual value, useful life and depreciation method applied to an asset are reassessed at least annually.

where parts of an item of plant and equipment have different useful lives, they are accounted for as separate items of plant and equipment.

Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:

Plant and equipment – over 3 to 15 years

The assets’ residual values, useful lives and amortisation methods are reviewed and adjusted, if appropriate, at each financial year end.

Impairment

The carrying values of plant and equipment are reviewed for impairment at each balance date, with the recoverable amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the statement of comprehensive income, unless an asset has previously been re-valued, in which case the impairment loss is recognised as a reversal to the extent of that previous revaluation with any excess recognised through profit or loss.

The recoverable amount of assets is the greater of their net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Derecognition and disposal

An item of plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.

(v) Exploration and evaluation

exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration and evaluation asset in the year in which they are incurred where the following conditions are satisfied:

the rights to tenure of the area of interest are current; and
at least one of the following conditions is also met:
the exploration and evaluation expenditures are expected to be recouped through successful development and exploration of the area of interest, or alternatively, by its sale; or
exploration and evaluation activities in the area of interest have not at the balance 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 areas of interest are continuing.

exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortised of assets used in exploration and evaluation activities. general and administrative costs are only included in the measurement of exploration and evaluation costs where they are related directly to operational activities in a particular area of interest.

Page 36

WHL ENERGY LTD – ANNUAL REPORT 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(v) Exploration and evaluation (CONTINUED)

exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any).

where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years.

where a decision has been made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is reclassified to development.

(w) Intangible assets

Intangible assets acquired

Intangible assets acquired separately are recorded at cost less accumulated amortisation and impairment. Amortisation is charged on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method is reviewed at the end of each annual reporting period, with any changes in these accounting estimates being accounted for on a prospective basis.

(x) Trade and other payables

Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided to the group prior to the end of the financial year that are unpaid and arise when the group becomes obliged to make future payments in respect of the purchase of these goods and services. Trade and other payables are presented as current liabilities unless payment is not due within 12 months.

(y) Provisions

Provisions are recognised when the group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses.

Provisions are measured at the present value or management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability.

when discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.

(z) Employee leave benefits

Wages, salaries, annual leave and sick leave

liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled within 12 months of the balance date are recognised in other payables in respect of employees’ services up to the balance 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.

Long service leave

The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the balance date. consideration is given to expected future wage and salary levels, experience of employee departures, and period of service. expected future payments are discounted using market yields at the balance date on national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.

(aa) Share-based payment transactions

Equity settled transactions

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

There is currently one employee Share option Plan (“eSoP”) which provides benefits to directors, senior executives and employees. It was approved by shareholders at a general meeting held on 31 may 2011. on 24 June 2011, the whl Qualifying rights Plan (“QrP”) that received shareholder approval at a general meeting held on 24 June 2008 lapsed.

Page 37

WHL ENERGY LTD – ANNUAL REPORT 2012

Notes to the Financial Statements

for the year ended 30 June 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(aa) Share-based payment transactions (CONTINUED)

The cost of these equity-settled transactions with employees 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 Black-Scholes and Binomial models, further details of which are given in note 19.

In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of whl energy limited (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 cumulative expense recognised for equity-settled transactions at each balance date until vesting date reflects:

the extent to which the vesting period has expired; and
the Group’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The statement of comprehensive income charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

no expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition.

If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.

If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. however, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph.

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share (see note 7).

(bb) 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 new business are not included in the cost of acquisition as part of the purchase consideration.

(cc) Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss attributable to equity holders of the company by the weighted average number of ordinary shares outstanding during the financial year.

Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:

costs of servicing equity (other than dividends) and preference share dividends
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

Page 38

WHL ENERGY LTD – ANNUAL REPORT 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(dd) Parent entity financial information

The financial information for the parent entity, whl energy limited, disclosed in note 23 has been prepared on the same basis as the consolidated financial statements, except as set out below.

Investments in subsidiaries, associates and joint venture entities

Investments in subsidiaries are accounted for at cost in the financial statements of whl energy limited.

Share-based payments

The grant by the company of options over its equity instruments to the employees of subsidiary undertakings in the group is treated as a capital contribution to that subsidiary undertaking. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity.

NOTE 2: REVENUE

NOTE 2: REVENUE
Revenue from continuing operations Interest income Unrealised foreign exchange gain other Revenue from discontinued operations Proft on disposal of operations Proft on deconsolidation of subsidiaries other US income Interest income Success fee - Poll lochaig	Consolidated Consolidated 2012 2011 $ $
	232,270 83,502 43,143 - 30 20,888
	275,443 104,390
	1,509 34,697 161,107 - 48,093 - 6 - 8,060 -
	218,775 34,697

Page 39

WHL ENERGY LTD – ANNUAL REPORT 2012

Notes to the Financial Statements

for the year ended 30 June 2012

NOTE 3: OPERATING EXPENSES

Expenses and losses from continuing operations: Depreciation Employee beneft Share based payments wages and salaries other Total employee benefts Finance costs Other expenses Accounting, audit and compliance general and administrative expenses consultants exploration expenditures occupancy costs Travel and accommodation Subsidiary acquisition costs Foreign exchange losses other expenses Total other expenses Expenses and losses from discontinued operations: Accounting, audit and compliance general and administrative expenses consultants Project expenses Impairment of assets occupancy costs Travel and accommodation loss on sale of oil and gas assets employee benefts other expenses Total expenses and losses from discontinued operations	Consolidated Consolidated 2012 2011 $ $
	55,384 3,221 248,954 - 1,909,470 531,452 37,120 13,920
	2,195,544 545,372
	1,484 2,120 234,239 355,302 222,507 58,158 381,378 360,277 791,570 - 251,739 37,053 103,268 122,257 - 131,169 171,302 83,421 788 9,307
	2,156,791 1,156,944
	24,425 128,077 6,620 5,172 12,885 91,809 248,291 452,486 523,694 2,718,669 7,224 20,366 - 22,699 - 693,733 (596) 172,893 5,284 9,640
	827,827 4,315,544

Page 40

WHL ENERGY LTD – ANNUAL REPORT 2012

NOTE 4: INCOME TAX EXPENSE

numerical reconciliation between tax expense and pre-tax net proft loss before tax Income tax using the domestic corporation tax rate 30% Increase/(decrease) in income tax expense due to: non-deductible expenses Tax losses forgone under failure of loss recoupment rules other deferred tax assets and tax liabilities not recognised Tax assets relating to losses not recognised Income tax expense Deferred tax assets have not been recognised in respect of the following items: Taxable temporary differences (net) Tax losses Net deferred tax assets	Consolidated Consolidated 2012 2011 $ $
	(4,742,812) (5,884,114)
	(1,422,844) (1,765,234) 85,230 3,275 2,917,828 957,805 (81,549) 907,906 (1,498,665) (103,752)
	- -
	1,395,551 1,511,852 3,605,517 5,104,184
	5,001,068 6,616,036

The taxable temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the consolidated entity can utilise the benefits from.

NOTE 5: SEGMENT REPORTING

The operating segments have been identified on the basis of internal reports about components of the group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance.

Information reported to the group’s chief operating decision maker for the purpose of resource allocation and assessment of performance focused on operating oil and gas exploration, the wind farm activity in the UK and the corporate administration entity.

The segment information for the corporate entity focused on the administration costs and the minimisation thereof as assessment of performance. The exploration entity and the windfarm development entity were reviewed as a whole and the assessment of performance focused on exploration expenditure and cost minimisation. The operating entity’s performance was assessed based on cashflow information. A consolidated position was not used to assess the performance of the operating segments. This information is prepared in the tables below to reconcile to the Annual Financial Statements for the period.

There are no accounting policy differences between the reportable segments.

Page 41

WHL ENERGY LTD – ANNUAL REPORT 2012

Notes to the Financial Statements

for the year ended 30 June 2012

NOTE 5: SEGMENT REPORTING (CONTINUED)

Information regarding the group’s reportable segments is presented below.

Segment information

The following table present revenue and profit information and certain asset and liability information regarding business segments for the year ended 30 June 2012.

Year ended 30 June 2012	Continuing Operations Discontinued Operations Oil and Gas Exploration Australia Oil and Gas Exploration Seychelles Corporate Entity US Oil and Gas Operations UK Windfarm Development Consolidation Entry Total
Revenue Interest received other revenue Total segment revenue operating expenses Segment net operating loss Segment assets cash and cash equivalents other receivables loans subsidiaries Investment subsidiaries Deferred exploration expenditure Plant & equipment Intangible assets Total segment assets Segment liabilities Trade and other payables Provisions loan from parent entity Total segment liabilities	- - 232,270 - 6 - 232,276 - - 1,473,617 210,709 8,060 (1,430,444) 261,942
	- - 1,705,887 210,709 8,066 (1,430,444) 494,218
	(748,417) (1,193,203) (4,574,561) (651,902) (187,646) 2,118,699 (5,237,030)
	(748,417) (1,193,203) (2,868,674) (441,193) (179,580) 688,255 (4,742,812)
	- - 8,176,683 - - - 8,176,683 - - 301,363 - - - 301,363 - - 16,189,341 - - (16,189,341) - - - 13,211,519 - - (13,211,519) - 71,380 10,892,326 - - - 6,877,380 17,841,086 - - 236,080 - - - 236,080 - - - - - - -
	71,380 10,892,326 38,114,986 - - (22,523,480) 26,555,212
	- - 515,367 - - (111) 515,256 - - 73,506 - - - 73,506 - 10,545,449 5,643,892 - - (16,189,341) -
	- 10,545,449 6,232,765 - - (16,189,452) 588,762

Page 42

WHL ENERGY LTD – ANNUAL REPORT 2012

NOTE 5: SEGMENT REPORTING (CONTINUED)

Segment information

The following table present revenue and profit information and certain asset and liability information regarding business segments for the year ended 30 June 2011.

Year ended 30 June 2012	Continuing Operations Discontinued Operations Oil and Gas Exploration Australia Oil and Gas Exploration Seychelles Corporate Entity US Oil and Gas Operations UK Windfarm Development Consolidation Entry Total
Revenue Interest received other revenue Total segment revenue operating expenses Segment net operating loss Segment assets cash and cash equivalents other receivables loans subsidiaries Investment subsidiaries other investments Deferred exploration expenditure Plant & equipment Intangible assets Total segment assets Segment liabilities Trade and other payables loan from parent entity Total segment liabilities	- - 83,502 - - - 83,502 - - 20,888 34,697 - - 55,585
	- - 104,390 34,697 - - 139,087
	- (24,846) (3,551,625) (3,576,271) (745,211) 1,874,752 (6,023,201)
	- (24,846) (3,447,235) (3,541,574) (745,211) 1,874,752 (5,884,114)
	- - 9,348,602 59,633 3,312 - 9,411,547 - 10,547 355,082 42,682 11,903 - 420,214 - - 9,781,013 - - (9,781,013) - - - 6,609,454 - - (6,609,454) - - - 57 - - - 57 - 13,702,100 1,906,686 566,160 - - 16,174,946 - - 55,200 8,527 - - 63,727 - - - - 2 - 2
	- 13,712,647 28,056,094 677,002 15,217 (16,390,467) 26,070,493
	- - 3,606,041 34,630 34,519 (105) 3,675,085 - 9,140,908 - 1,471,091 7,230,908 (17,842,907) -
	- 9,140,908 3,606,041 1,505,721 7,265,427 (17,843,012) 3,675,085

(i) Segment net operating loss reconciliation to the statement of comprehensive income management meet on a regular basis to assess the performance of each segment

(i) Segment net operating loss reconciliation to the statement of comprehensive income management meet on a regular basis to assess the performance of each segment
reconciliation of segment net operating loss after tax to net loss before tax net operating loss after tax net gains/(losses) on available-for-sale investments Translation differences on translating foreign operations Total operating loss per the statement of comprehensive income	Consolidated Consolidated 2012 2011 $ $
	(4,742,812) (5,884,114) (50) 6,869 165,665 (450,645)
	(4,577,197) (6,327,890)

Page 43

WHL ENERGY LTD – ANNUAL REPORT 2012

Notes to the Financial Statements

for the year ended 30 June 2012

NOTE 5: SEGMENT REPORTING (CONTINUED)

(ii) Segment assets reconciliation to the statement of financial position

In assessing the segment performance on a monthly basis, management analyse the segment assets.

cash and cash equivalents other receivables other fnancial assets Assets classifed as held for sale Available for sale assets Plant and equipment Deferred exploration expenditure Intangible assets Total assets per the statement of fnancial position	Consolidated Consolidated 2012 2011 $ $
	8,176,683 9,411,547 301,363 397,404 - 22,810 - 574,687 - 57 236,080 55,200 17,841,086 15,608,786 - 2
	26,555,212 26,070,493

(iii) Segment liabilities reconciliation to the statement of financial position

Segment liabilities include trade and other payables and debt. The group has a centralised finance function that is responsible for raising debt and capital for the entire operations. each entity or business uses this central function to invest excess cash or obtain funding for its operations. management review the level of debt for each segment.

reconciliation of segment operating liabilities to the statement of financial position

Trade and other payables other fnancial liabilities liabilities directly associated with assets classifed as held for sale Provisions Total liabilities per the statement of fnancial position	Consolidated Consolidated 2012 2011 $ $
	515,256 1,290,738 - 2,328,590 - 34,630 73,506 21,127
	588,762 3,675,085

NOTE 6: ASSETS AND LIABILITIES HELD FOR SALE AND DISCONTINUED OPERATIONS

US oil and gas operations

These assets were classified as held for sale during the financial year ended 30 June 2011 as a result of the consolidated entity’s change in strategic focus from US oil and gas assets to the Seychelles exploration asset.

During the year the company concluded the divestment of the US oil and gas assets and the company has dissolved the US entities. The disposal proceeds before costs was $112,544.

The total exploration impairment losses recognised in discontinued operations in the current reporting period is $523,694 (2011:$2,718,669).

Page 44

WHL ENERGY LTD – ANNUAL REPORT 2012

NOTE 6: ASSETS AND LIABILITIES HELD FOR SALE AND DISCONTINUED OPERATIONS (CONTINUED)

The results of the discontinued operation which have been included in the statement of comprehensive income are as follows:

revenue expenses loss before tax from discontinued operations Tax expense Loss for the year from discontinued operations loss attributable to owners of the parent entity relates to: Loss from discontinuing operations	Consolidated Consolidated 2012 2011 $ $
	210,709 34,697 (651,902) (3,576,270)
	(441,193) (3,541,573) - -
	(441,193) (3,541,573)
	(441,193) (3,541,573)

All the assets and liabilities comprising the operations were sold at balance date.

UK wind farm operations

During the year the company made a decision to relinquish the company’s UK based wind farm assets allowing the company to strategically focus on its oil and gas exploration activities.

The company review indicated that the length of time and the costs to resolve the radar mitigation and obtaining planning consent did not provide sufficient value to the company. The company is in the process of dissolving the UK entities.

The results of the discontinued operation which have been included in the statement of comprehensive income are as follows:

revenue expenses loss before tax from discontinued operations Tax expense Loss for the year from discontinued operations loss attributable to owners of the parent entity relates to: Loss from discontinuing operations	Consolidated Consolidated 2012 2011 $ $ 8,066 - (175,925) (739,274) (167,859) (739,274) - - (167,859) (739,274) - - (167,859) (739,274)

There were no assets and liabilities for the operations at balance date.

Page 45

WHL ENERGY LTD – ANNUAL REPORT 2012

Notes to the Financial Statements

for the year ended 30 June 2012

NOTE 7: EARNINGS PER SHARE

NOTE 7: EARNINGS PER SHARE
Basic earnings per share: loss from continuing operations loss from discontinued operations Total basic loss per share Diluted earnings per share There is no dilution of shares due to options as the potential ordinary shares are not dilutive and are therefore not included in the calculation of diluted loss per share. Basic earning per share The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share is as follows: loss for the year (refer (i)) loss from continuing operations (refer (i)) Weighted average number of ordinary shares weighted average number of ordinary shares for the purposes of basic earnings per share (i) Earnings used in the calculation of total basic loss per share reconciles to net loss in the income statement as follows: loss used in the calculation of loss per share loss from discontinued operation loss used in the calculation of basic loss per share from continuing operations	Consolidated Consolidated 2012 2011 Centsper share Centsper share
	0.33 0.26 0.05 0.69
	0.38 0.95
	$ $
	(4,742,812) (5,884,114)
	(4,133,760) (1,603,267)
	Number Number
	1,264,588,454 619,225,395
	$ $ (4,742,812) (5,884,114) 609,052 4,280,847
	(4,133,760) (1,603,267)

NOTE 8: CASH AND CASH EQUIVALENTS

cash at bank and on hand Short-term deposits	Consolidated Consolidated 2012 2011 $ $
	2,961,146 5,691,547 5,215,537 3,720,000
	8,176,683 9,411,547

cash at bank earns interest at floating rates on daily deposit rates.

Short-term deposits are made for varying periods of between one day and six months, depending on the immediate cash requirements of the group, and earn interest at the respective short-term deposit rates.

Reconciliation to cash flow statement

For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand at bank and investments in money market instruments, net of outstanding bank overdrafts.

cash and cash equivalents as shown in the statement of cash flows is reconciled to the related items in the statement of financial position as follows:

Page 46

WHL ENERGY LTD – ANNUAL REPORT 2012

NOTE 8: CASH AND CASH EQUIVALENTS (CONTINUED)

Reconciliation of loss for the year to net cash flows used in operating activities

Reconciliation of loss for the year to net cash fows used in operating activities
loss from operations Items classifed as investing/fnancing activities Interest received Non cash items Depreciation Foreign exchange (gain)/loss Impairment of plant and equipment Impairment of oil and gas exploration assets loss/(proft) on disposal of oil and gas exploration assets Proft on available for sale assets Provision for employee entitlements Share based payments Change in assets and liabilities receivables Trade and other payables affecting operating activities Net cash used in operating activities NOTE 9: TRADE AND OTHER RECEIVABLES Trade receivables gST recoverable other receivables	Consolidated Consolidated 2012 2011 $ $
	(4,742,812) (5,884,114) (202,856) (77,752) 55,384 3,221 (43,143) 83,421 - 3,771 523,694 2,718,669 (162,616) 693,733 (30) (15,300) 52,379 21,127 248,954 95,081 (85,237) (292,065) (346,171) 63,731
	(4,702,454) (2,586,477)

	Consolidated Consolidated 2012 2011 $ $
	- 13,048 122,558 138,997 178,805 245,359
	301,363 397,404

The average credit period on sales of goods and rendering of services is 30 days. An allowance has been made for estimated irrecoverable trade receivable amounts arriving from the past sale of goods and rendering of services, determined by reference to past default experience.

There are no related party receivables.

There are no related party receivables.
Aging of past due but not impaired 30 – 60 days 60 – 90 days 90 – 120 days 120 and over	Consolidated Consolidated 2012 2011 $ $
	183,913 379,609 62,001 10,208 15,571 2,997 39,878 4,590
	301,363 397,404

In determining the recoverability of a trade receivable, the group considers any changes in the credit quality of the trade receivable from the date credit was initially granted up to the balance date. The directors believe that there is no provision required for impairment.

Page 47

WHL ENERGY LTD – ANNUAL REPORT 2012

Notes to the Financial Statements

for the year ended 30 June 2012

NOTE 10: OTHER FINANCIAL ASSETS

Current Derivatives that are designated and effective as hedging instruments carried at fair value: Foreign currency option contracts Non-Current Available-for-sale investments carried at fair value (i) listed shares	Consolidated Consolidated 2012 2011 $ $
	- 22,810
	- 22,810
	- 57
	- 57

(i) Available-for-sale investments consist of investments in ordinary shares, and therefore have no fixed maturity date or coupon rate.

NOTE 11: PLANT AND EQUIPMENT

Plant and equipment

Opening balance, net of accumulated depreciation and impairment Additions Disposals - discontinued operation Assets included in discontinued operation held for sale Impairment Depreciation charge for the year Foreign currency exchange differences Closing balance, net of accumulated depreciation and impairment cost or fair value Accumulated depreciation and impairment Net carrying amount	Consolidated Consolidated 2012 2011 $ $
	55,200 5,707 236,264 63,138 - 3,058 - (8,526) - (3,771) (55,384) (3,221) - (1,185)
	236,080 55,200
	294,685 80,494 (58,605) (25,294)
	236,080 55,200

Impairment of plant and equipment

During the year, the recoverable amount was estimated for certain items of plant and equipment. There was no impairment loss recognised during the financial year to reduce the carrying amount of certain of those assets to recoverable amount (2011: $3,771). The recoverable amount estimation was based on fair value less costs to sell and was determined at the cash-generating unit level.

The useful life of the assets was estimated as follows for both 2012 and 2011:

Plant and equipment 3 to 15 years

Page 48

WHL ENERGY LTD – ANNUAL REPORT 2012

NOTE 12: DEFERRED EXPLORATION EXPENDITURE

NOTE 12: DEFERRED EXPLORATION EXPENDITURE
costs carried forward in respect of: exploration and evaluation phase – at cost Balance at beginning of year Acquisition of tenements expenditure incurred Disposal of tenements Impairment of asset Foreign currency exchange differences classifed as held for sale Balance at end of fnancial year	Consolidated Consolidated 2012 2011 $ $
	15,608,786 3,951,394 4,490 11,455,702 1,925,970 3,953,692 - (700,362) - (2,718,669) 301,840 233,190 - (566,161)
	17,841,086 15,608,786

Ultimate recoupment of this expenditure is dependent upon the group’s right to tenure of the area of interest and the discovery of commercially viable oil and gas reserves, their successful development and exploitation, or alternatively, the sale of the respective areas of interest at an amount at least equal to book value.

Impairment losses are provided when the carrying amounts exceed the recoverable amounts.

exploration expenditure is written off for any related impairment losses when the permits are relinquished or disposed of.

Interest in petroleum tenements

Tenure description	Location	Operator	Expirydate	Interest 2012	Interest 2011
Seychelles exploration blocks as	Seychelles	Petroquest International Inc.	31/01/2040	100%	100%
defned in the Petroleum Agreement
wA-460-P	wA Australia	Strike energy limited	08/11/2017	33%	-%
Vic/P67	VIc Australia	whl energy limited	04/05/2018	100%	-%
girard & Union Town gas	Kansas USA	whl energy(midcon) llc	n/a	-%	100%
mccune & wax Smith oil	Kansas USA	whl energy(midcon) llc	n/a	-%	100%

NOTE 13: INTANGIBLE ASSETS

Cost opening balance closing balance Accumulated amortisation and impairment opening balance closing balance Balance at end of fnancial year	Consolidated Consolidated 2012 2011 $ $
	- 3,770,264
	- 3,770,264
	- 3,770,262
	- 3,770,262
	- -
	- 2

Page 49

WHL ENERGY LTD – ANNUAL REPORT 2012

Notes to the Financial Statements

for the year ended 30 June 2012

NOTE 14: TRADE AND OTHER PAYABLES

Trade payables

	Consolidated	Consolidated
	2012	2011
	$	$
	515,256	1,290,738

Trade payables are non-interest bearing and are normally settled on 30-day terms.

For terms and conditions relating to related party payables refer to note 22.

Information regarding the interest rate, foreign exchange and liquidity risk exposure is set out in note 20.

NOTE 15: OTHER FINANCIAL LIABILITIES

Derivatives that are designated and effective as hedging instruments are carried at fair value Forward currency option contracts Amounts due under contract	Consolidated Consolidated 2012 2011 $ $
	- 95,830 - 2,232,760
	- 2,328,590

NOTE 16: PROVISIONS

Employee benefts Balance at beginning of year Arising during the year Utilised Balance at end of fnancial year	Consolidated Consolidated 2012 2011 $ $
	21,127 - 131,847 28,182 (79,468) (7,055)
	73,506 21,127

NOTE 17: ISSUED CAPITAL

ordinary shares issued and fully paid listed options	Consolidated Consolidated 2012 2012 2011 2011 No. $ No. $
	1,407,038,386 59,726,589 1,212,100,886 51,827,304 - - 169,808,346 1,512,495
	1,407,038,386 59,726,589 1,381,909,232 53,339,799

changes to the then corporations law abolished the authorised capital and par value concept in relation to share capital from 1 July 1998. Therefore, the company does not have a limited amount of authorised capital and issued shares do not have a par value. Fully paid ordinary shares carry one vote per share and carry the right to dividends.

Page 50

WHL ENERGY LTD – ANNUAL REPORT 2012

NOTE 17: ISSUED CAPITAL (CONTINUED)

Movement in ordinary shares on issue

	2012	2012	2011	2011
	No.	$	No.	$
Balance at beginning of fnancial year	1,212,100,886	51,827,304	292,303,142	28,766,966
Issue of shares
new equity issued on 13 December 2010	-	-	22,727,273	500,000
new equity issued on 23 november 2010	-	-	166,666,667	2,000,000
new equity issued on 15 December 2010	-	-	217,391,304	5,000,000
new equity issued on 28 February 2011 as consideration for	-	-	150,000,000	5,190,000
acquisition of controlled entity
new equity issued in June 2011 pursuant to equity issue of $10m	-	-	298,012,500	9,536,400
new equity issued on 8 June 2011	-	-	65,000,000	2,080,000
new equity issued on 15 July 2011 pursuant to equity issue of $10m	14,487,500	463,600	-	-
new equity issued on 13 April 2012 pursuant to equity issue of $7.9m	180,000,000	7,920,000	-	-
new equity issued on 18 April 2012 pursuant to equity issue of $7.9m	450,000	19,800	-	-
Share issue costs	-	(504,115)	-	(1,246,062)
Balance at end of fnancial year	1,407,038,386	59,726,589	1,212,100,886	51,827,304

Movement in listed options on issue

Balance at beginning of fnancial year Issue of options new equity issued on 15 December 2010 new equity issued on 28 February 2011 new equity issued on 28 February 2011 as consideration for acquisition of controlled entity new equity issued on 28 February 2011 options lapsed on 30 June 2012 Balance at end of fnancial year Total issued capital	2012 2012 2011 2011 No. $ No. $
	169,808,346 1,512,495 9,808,346 86,495 - - 30,000,000 30,000 - - 10,000,000 10,000 - - 60,000,000 786,000 - - 60,000,000 600,000 (169,808,346) (1,512,495) - -
	- - 169,808,346 1,512,495

	1,407,038,386 59,726,589 1,381,909,232 53,339,799

Share options granted under the Company’s employee share option plan

At 30 June 2012, executives and employees held options over 41,550,000 ordinary shares of the company, of which 2,000,000 lapsed on 2 August 2012, 4,550,000 will expire on 31 July 2013 and 35,000,000 will expire on 31 December 2013. At 30 June 2011, executives and employees held options over 1,000,000 ordinary shares of the company, of which 1,000,000 lapsed on 4 August 2011.

Share options granted under the company’s employee share plan carry no right to dividends and no voting rights. Further details of the employee share option plan are provided in note 19.

Page 51

WHL ENERGY LTD – ANNUAL REPORT 2012

Notes to the Financial Statements

for the year ended 30 June 2012

NOTE 17: ISSUED CAPITAL (CONTINUED)

Other options on issue

At 30 June 2012, the company has 306,550,000 share options on issue (2011: 260,500,000), exercisable on a 1:1 basis for 306,550,000 ordinary shares of the company (2011: 260,500,000). The options exercise price and expiry dates are as follows:

ExpiryDate Exerciseprice		Number of shares under option
31/08/2013 $0.0850 31/08/2013 $0.0850 30/09/2013 $0.0750 30/09/2013 $0.0500 30/09/2013 $0.0392 31/12/2013 $0.0001 31/12/2013 $0.0495 NOTE 18: ACCUMULATED LOSSES AND RESERVES Accumulated losses movements in accumulated losses were as follows: Balance at beginning of fnancial year net loss for the year Transfer from option reserve Transfer of lapsed options from issued capital Balance at end of fnancial year Nature and purpose of reserves Net unrealised gains reserve This reserve records fair value changes on available-for-sale fnancial assets.		5,000,000 2,000,000 5,000,000 5,000,000 4,550,000 250,000,000 35,000,000
		306,550,000

		Consolidated Consolidated 2012 2011 $ $
		31,289,241 25,405,127 4,758,925 5,884,114 (11,597) - (1,512,495) -
		34,524,074 31,289,241

Share based payments reserve

This reserve is used to record the value of equity benefits provided to:

employees and directors as part of their remuneration;
as part of the consideration to acquire a controlled subsidiaries; and
as part consideration for services.

Movement in share based payment reserve

Balance at the beginning of fnancial year Issued/(lapsed) pursuant to share based payment to employee Issued on 18 november 2010 as consideration for services Issued on 28 February 2011 as consideration for acquisition of controlled entity Issued/(lapsed) pursuant to share based payment to executives and employees1 Issued on 1 December 2011 as consideration for services Balance at end of fnancial year	2012 2012 2011 2011 No. $ No. $
	260,500,000 595,081 - - (500,000) (11,597) 500,000 11,597 - - 10,000,000 83,484 - - 250,000,000 500,000 41,550,000 170,726 - - 5,000,000 78,228 - -
	306,550,000 832,438 260,500,000 595,081

Balance at the beginning of fnancial year
Issued/(lapsed) pursuant to share based payment to employee
Issued on 18 november 2010 as consideration for services
Issued on 28 February 2011 as consideration for acquisition of
controlled entity
Issued/(lapsed) pursuant to share based payment to executives
and employees1
Issued on 1 December 2011 as consideration for services
Balance at end of fnancial year

2012
2012
2011
2011
No.
$ No.
$

260,500,000
595,081
-
-
(500,000)
(11,597)
500,000
11,597
-
-
10,000,000
83,484
-
-
250,000,000
500,000
41,550,000
170,726
-
-
5,000,000
78,228
-
-

306,550,000
832,438
260,500,000
595,081

During the year 1,000,000 options were issued and forfeited.

Page 52

WHL ENERGY LTD – ANNUAL REPORT 2012

NOTE 18: ACCUMULATED LOSSES AND RESERVES (CONTINUED)

Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries. It is also used to record the effect of hedging net investments in foreign operations.

NOTE 19: SHARE BASED PAYMENT PLANS

Employee share option plan

The company believes that the way to encourage employees to align their interests with those of shareholders. There is currently an employee Share option Plan (“eSoP”) which provides benefits to directors, senior executives and employees. It was approved by shareholders at a general meeting held on 31 may 2011. The following incentives are provided for under the eSoP.

each share option converts into one ordinary share of the company on exercise. no amounts are paid or payable by the recipient on receipt of the option. The options carry neither right to dividends nor voting rights. options may be exercised at any time from the date of vesting to the date of their expiry.

retention Incentive

As part of the policy to retain staff, other than directors and senior executives, options are available to be issued under the eSoP. Vesting of the options issued to employees will occur in accordance with the following milestones:

50% of the options will vest after 12 months continuous employment; and
50% of the options will vest after 24 months of continuous employment.

Performance Incentive

As part of the policy to retain executive directors and senior executives, options are available to be issued under the eSoP. Vesting of any options issued to executive directors and senior executives will occur in accordance with the following milestones:

The Company (or one of its subsidiaries) has entered into one or more binding farmin agreements with one or more third parties under which the farminee/s’ have a collective obligation to spend the greater of $10 million or 50% of the work commitment on the licences; or
The volume weighted average price of the Company’s shares as traded on ASX is at least 10 cents or more for ten (10) consecutive trading days.

At the general meeting of shareholders held on 31 may 2011, approval was obtained for the issue under the eSoP of 15,000,000 options to mr noske and 10,000,000 options to mr rowbottam. At the Annual general meeting of shareholders held on 22 november 2011, approval was obtained for the issue under the eSoP of 2,000,000 options to mr chandler.

The exercise price of each option will be determined by reference to the 5-day volume-weighted average share price (“VwAP”) together with a predetermined uplift factor based on the length until expiry of the options.

During the year 42,550,000 options were issued under the whl energy limited eSoP plan. During the year 1,500,000 options lapsed. The fair value of the options recognised in the statement of comprehensive income for the year was $170,726. Subsequent to year end 2,000,000 options on issue lapsed refer note 26.

The expense recognised in the statement of comprehensive income in relation to the employee share-based payments is disclosed in note 3.

Share based payments for services

on 1 December 2011 5,000,000 options were issued to mr Bartter in recognition for his contribution to the company this was approved at the Annual general meeting of shareholders held on 22 november 2011. options issued vested immediately at an exercise price of $0.085 and expire on 30/08/2013.

The expense recognised in the statement of comprehensive income in relation to share-based payment is $78,228.

Page 53

WHL ENERGY LTD – ANNUAL REPORT 2012

Notes to the Financial Statements

for the year ended 30 June 2012

NOTE 19: SHARE BASED PAYMENT PLANS (CONTINUED)

The following share-based payment arrangements were in place during the current and prior periods:

Option series	Number	Grant date	Expiry date	Exercise price	Fair value at
				$	grant date $
employee Share option Plan-whnA1	500,000	04/04/2010	31/08/2012	0.0550	11,597
Share based payments for services-whnAK	5,000,000	18/11/2010	30/09/2013	0.0500	45,854
Share based payments for services-whnAm	5,000,000	18/11/2010	30/09/2013	0.0750	37,630
Share based payments to acquire subsidiary-whnAo	250,000,000	28/02/2011	31/12/2013	0.0001	500,000
employee Share option Plan- whnA1	35,000,000	30/07/2011	31/12/2013	0.0495	101,500
employee Share option Plan- whnA2	4,550,000	04/07/2011	31/07/2013	0.0392	37,935
employee Share option Plan whnA42	2,000,000	01/12/2011	31/08/2013	0.0850	31,291
Share based payments for services-whnAQ	5,000,000	01/12/2011	31/08/2013	0.0850	78,228

1.The options lapsed on 4 August 2011

2.The options lapsed on 2 August 2012

The following table illustrates the number (no.) and weighted average exercise prices of and movements in share options issued during the year. no share options were exercised during the year.

Movement in unlisted share options during the year

Outstanding at the beginning of the year granted during the year Forfeited during the year exercised during the year expired during the year Outstanding at the end of the year Exercisable at the end of the year	2012 No. 2012 Weighted average exercise price 2011 No. 2011 Weighted average exercise price
	260,500,000 0.0026 - - 46,550,000 0.0538 261,000,000 0.0027 (500,000) 0.0550 (500,000) 0.0550 - - - - - - - -
	306,550,000 0.0103 260,500,000 0.0026
	4,275,000 - - -

Share options outstanding at the end of the year

Option Series	Number Exerciseprice$
Share based payments for services-whnAK Share based payments for services-whnAm Share based payments to acquire subsidiary-whnAo employee Share option Plan- whnA1 employee Share option Plan- whnA2 employee Share option Plan whnA42 Share based payments for services-whnAQ	5,000,000 0.0500 5,000,000 0.0500 250,000,000 0.0001 35,000,000 0.0495 4,550,000 0.0392 2,000,000 0.0085 5,000,000 0.0085 306,550,000

2.The options lapsed on 2 August 2012

The weighted average remaining contractual life for the share options outstanding as at 30 June 2012 is 541 days (2011:910 days).

Page 54

WHL ENERGY LTD – ANNUAL REPORT 2012

NOTE 19: SHARE BASED PAYMENT PLANS (CONTINUED)

The range of exercise prices for options outstanding at the end of the year was $0.0001 - $0.0850 (2010: $0.0001 - $0.0500).

Fair value of options granted in the year

The fair value of the equity-settled share options granted under the option is estimated as at the date of grant using the BlackScholes model or the Binomial option pricing model, taking into account the terms and conditions upon which the options were granted.

options issued under whnA1 series were fair valued using the binomial option pricing model. where relevant, the expected life used in the model have been adjusted based on management’s best estimate for the effects of non-transferability, exercise restrictions (including the probability of meeting market conditions attached to the option). expected volatility is based on the historical share price over the last year.

All other options issued were fair valued using the Black-Scholes model.

The following table lists the inputs to the Black-Scholes model used for the years ended 30 June 2012:

Option Series Dividend yield (%) expected volatility (%) risk-free interest rate (%) Discount rate (%) expected life of option (days) exercise price grant date share price	Valued using a Binomial model Valued using Black-Scholes model
	WHNA1 WHNA2 WHNA4 WHNAQ
	- - - - 102 105 93 93 4.4 4.50 3.13 3.13 30 30 30 30 549 396 427 427 0.0495 0.0392 0.0850 0.0850 0.0300 0.0280 0.0590 0.0590

NOTE 20: FINANCIAL INSTRUMENTS

Capital risk management

The company’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns to shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the company may return capital to shareholders, issue new shares or sell assets.

The group’s overall strategy remains unchanged from 2011.

none of the group’s entities are subject to externally imposed capital requirements.

Categories of financial instruments

Categories of fnancial instruments
Financial assets Derivative fnancial instruments loans and receivables cash and cash equivalents Financial liabilities Derivative fnancial instruments Trade and other payables Borrowings other fnancial liabilities	Consolidated Consolidated 2012 2011 $ $
	- 22,810 180,174 366,103 8,176,683 9,411,547 - 2,328,590 515,256 985,368 - - - 340,000

Page 55

WHL ENERGY LTD – ANNUAL REPORT 2012

Notes to the Financial Statements

for the year ended 30 June 2012

NOTE 20: FINANCIAL INSTRUMENTS (CONTINUED)

Financial risk management objectives

The group is exposed to market risk (including currency risk, fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk.

exposure limits are reviewed by management on a continuous basis. The group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

Market risk

The group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and commodity prices. The group enters into a variety of derivative financial instruments to manage its exposure to foreign currency risk including foreign exchange forward contracts to hedge the exchange rate.

There has been no change to the group’s exposure to market risks or the manner in which it manages and measures the risk from the previous period.

Foreign currency risk management

The group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations arise. exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.

The carrying amounts of the group’s foreign currency denominated monetary assets and monetary liabilities at the balance date explained in Australian dollars are as follows:

explained in Australian dollars are as follows:
US dollars gBP	Liabilities Liabilities Assets Assets 2012 2011 2012 2011 $ $ $ $
	38,688 708,077 1,311,280 100,989 13,143 34,509 - 15,211

The group is exposed to US Dollar (USD currency fluctuations).

The following table details the group’s sensitivity to a 10% increase and decrease in the Australian dollar against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates.

The sensitivity analysis includes external loans as well as loans to foreign operations within the group where the denomination of the loan is in a currency other than the currency of the lender or the borrower. A positive number indicates an increase in profit or loss and other equity where the Australian Dollar strengthens against the respective currency. For a weakening of the Australian Dollar against the respective currency there would be an equal and opposite impact on the profit and other equity and the balances below would be negative.

Proft or loss other equity	USD USD GBP GBP Consolidated Consolidated Consolidated Consolidated 2012 2011 2012 2011 $ $ $ $
	(123,007) (60,709) (1,314) (3,120) 123,007 60,709 1314 3,120

Forward foreign exchange contracts

It is the policy of the group to enter into forward foreign exchange contracts to cover specific foreign currency payments. The following table details the forward foreign currency contracts outstanding as at balance date:

Page 56

WHL ENERGY LTD – ANNUAL REPORT 2012

NOTE 20: FINANCIAL INSTRUMENTS (CONTINUED)

Outstanding	Average		Average	Foreign		Foreign	Contract		Contract	Fair value		Fair value
contracts	exchange		exchange				value		value
	rate		rate
	2012		2011	USD$		USD$	A$		A$	A$		A$
Buy US Dollars
less than 3 months		-	1.04		-	2,366,100		-	2,282,970		-	2,232,760

As at balance date, the aggregate amount of unrealised losses under forward foreign exchange contracts charged to the statement of comprehensive income is the exposure on these anticipated future transactions is $nil (2011:$50,210).

Interest rate risk management

The group is subject to interest rate exposure through its cash and cash equivalents. The group is currently not exposed to interest rate risk on borrowings as it has no borrowings.

Interest rate risk sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to interest rates at the balance date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the possible change in interest rates.

At balance date, if interest rates had been 50 basis points higher or lower and all other variables were held constant, the group’s profit or loss will be impacted as follows:

Proft or loss equity	Consolidated Consolidated 2012 2011 $ $
	16,232 24,250 16,232 24,250

The consolidated entity’s exposure to interest rate risk is minimal as it has no borrowings with variable interest rates. The risk is attributable to the groups exposure to interest rates on its variable rate deposits.

Equity price risk

At 30 June 2012 the group had $nil (2011 $57) in “available for sale” financial assets representing an unmarketable parcel of shares. The group’s exposure to equity price risks arising from “available for sale” financial assets is $nil for 2012. (In 2011 equity reserves would increase/decrease by $57 for the group, as a result of the change in fair value of “available for sale” assets and profit would have been unaffected).

equity investments are held for strategic rather than trading purposes. The group does not actively trade these investments.

Credit risk management

credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the group. The group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The group’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. credit exposure is reviewed and approved by managers on a continuous basis.

The group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.

The carrying amount of financial assets recorded in the financial statements, net of any allowance for losses, represents the group’s maximum exposure to credit risk without taking account of the value of any collateral obtained.

Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board of directors, who have built an appropriate liquidity risk management framework for the management of the group’s short, medium and long-term funding and liquidity management requirements. The group manages liquidity risk by maintaining adequate reserves, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

Page 57

WHL ENERGY LTD – ANNUAL REPORT 2012

Notes to the Financial Statements

for the year ended 30 June 2012

NOTE 20: FINANCIAL INSTRUMENTS (CONTINUED)

The following table details the group’s expected maturity for its non-derivative financial liabilities. These have been drawn up based on undiscounted contractual maturities of the financial assets including interest that will be earned on those assets except where the group anticipates that the cash flow will occur in a different period.

Weighted average effective interest rate %	Less than 1 month 1 – 3 Months 1 – 12 Months 1-5 years Total $ $ $ $
2012 Financial assets non-interest bearing Variable interest rate instruments 3.79 Fixed interest rate instruments 5.15 Financial Liabilities non-interest bearing	1,457,208 17,343 9,522 - 1,484,073 1,657,247 - - - 1,657,247 1,304,243 3,061,294 850,000 - 5,215,537
	4,418,698 3,078,637 859,522 - 8,356,857
	515,256 - - - 515,256
	515,256 - - - 515,256

Weighted average effective interest rate %	Less than 1 month 1 – 3 Months 1 – 12 Months 1-5 years Total $ $ $ $
2011 non-interest bearing Variable interest rate instruments 4.73 Fixed interest rate instruments 5.90 Financial Liabilities non-interest bearing	424,031 22,935 22,810 - 469,776 5,610,685 - - - 5,610,685 - 3,720,000 - - 3,720,000
	6,034,716 3,742,935 22,810 - 9,800,461
	1,203,427 2,232,760 217,771 - 3,653,958
	1,203,427 2,232,760 217,771 - 3,653,958

NOTE 21: COMMITMENTS AND CONTINGENCIES

Work programme commitments

The company has obligations to carry out certain work programme commitments on exploration in tenement areas. The work programmes are not defined in terms of annual commitments but in terms of periods which include more than one year. These obligations may be varied from time to time and are expected to be fulfilled in the normal course of operation of the company. expenditures are contingent upon successful raising of the required capital and/or farmin partner arrangements and failure to make these expenditures may result in the forfeiture of the associated project rights or a reduction in working interest revenue until a multiple of capital costs are earned.

commitments contracted for at balance date but not recognised as liabilities are as follows:

within one year After one year but not more than fve years Total	Consolidated Consolidated 2012 2011 $ $
	41,133,300 - 108,412,900 58,653,105
	149,546,200 58,653,105

Page 58

WHL ENERGY LTD – ANNUAL REPORT 2012

NOTE 21: COMMITMENTS AND CONTINGENCIES (CONTINUED)

Capital expenditure commitments

Capital expenditure commitments
Plant and equipment Total	Consolidated Consolidated 2012 2011 $ $
	22,313 -
	22,313 -

Other expenditure commitments

The group has non-cancellable operating leases for the following:

Office Premises: the Company entered into a lease in August 2011. The lease expires on 11 August 2016 and the Company does not have an option to purchase the leased property at the expiry of the leased period;
Corporate Services contracts expiring in July 2012 and 31 December 2012 respectively; and
Other operating contracts with varying terms from 12 months to 36 months.

commitments contracted for at balance date but not recognised as liabilities are as follows:

commitments contracted for at balance date but not recognised as liabilities are as follows:
within one year After one year but not more than fve years longer than fve years Total Operating lease arrangements Payments recognised as an expense minimum lease payments Total non-cancellable operating lease commitments within one year After one year but not more than fve years longer than fve years Total	Consolidated Consolidated 2012 2011 $ $
	1,985,088 1,532,301 783,420 - - -
	2,768,508 1,532,301

	Consolidated Consolidated 2012 2011 $ $
	217,513 -
	217,513 -

	Consolidated Consolidated 2012 2011 $ $
	230,805 - 772,776 - - -
	1,003,581 -

Guarantee entered into in relation to the operating lease

The company lodged a deposit of $60,678 as surety for a Bank guarantee in respect of the operating lease for the west Perth office.

Legal claim

The company at balance date was not party to any legal proceedings. The directors are not aware of any pending proceedings to which the company may be a party.

Contingent liabilities

Subject to commercial production commencing there are overriding royalty interests on the production of oil, gas and other associated hydrocarbons produced under the Seychelles Petroleum Agreement.

Page 59

WHL ENERGY LTD – ANNUAL REPORT 2012

Notes to the Financial Statements

for the year ended 30 June 2012

NOTE 22: RELATED PARTY TRANSACTIONS

Controlled entities

whl is a public company, which was incorporated in Australia on 10 march 2005 and listed on the ASX on 10 September 2007.

The consolidated financial statements include the financial statements of whl energy limited and its subsidiaries listed in the following table.

Name	Countryof Incorporation	% EquityInterest 2012
wind hydrogen (UK) holdings limited	United Kingdom	100%
Petroquest International Incorporated	USA	100%
Indian ocean Petroleum holdings Pty limited (formerly	Australia	100%
Seyco energy Proprietary limited)

Key management personnel

The following table provides the total amount of transactions that were entered into with key management personnel for the relevant financial year. refer to note 27 for details of key management personnel remuneration.

Transactions with related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

		Fees to related	Expenditure	Amounts owed	Amounts owed
		parties	related parties	by related	to related
Related party				parties	parties
		$	$	$	$
mr Bartter (Peter Bartter enterprises Pty limited)	2012	-	29,800	-	-
	2011	40,000	38,541	-	-
mr noske (Ausoco Pty limited)	2012	-	-	-	-
	2011	77,249	44,359	-	12,950
mr rowbottam (ovid management Services Pty limited)	2012	-	2,818	-	-
	2011	-	50,847	-	-
mr Fittall (goodwells geoscience)	2012	-	-	-	-
	2011	34,000	-	-	-

There are no outstanding balances at year end (2011:$12,950) refer to note 14.

Page 60

WHL ENERGY LTD – ANNUAL REPORT 2012

NOTE 23: PARENT ENTITY DISCLOSURE

Financial position

NOTE 23: PARENT ENTITY DISCLOSURE Financial position
Assets current assets non-current assets Total assets Liabilities current liabilities Total liabilities Equity Issued capital Asset revaluation reserve Share based payment reserve retained earnings Total equity Financial performance loss for the year other comprehensive income Total comprehensive income	2012 2011 $ $
	8,463,862 9,679,144 17,677,765 16,445,724
	26,141,627 26,124,868
	583,161 3,260,331
	583,161 3,260,331
	59,726,588 53,339,799 - 50 832,438 595,081 (35,000,560) (31,070,393)
	25,558,466 22,864,537

	2012 2011 $ $ (5,454,254) (6,150,292) 50 6,869
	(5,454,204) (6,143,423)

NOTE 24: DISPOSAL OF SUBSIDIARY

on 31 march 2012, the company disposed of its interests in whl energy (midcon) llc which held the remaining US oil and gas interests. This transaction released the company from any potential cost in terms of environmental and abandonment liabilities. Consideration received

Consideration received
consideration received in cash and cash equivalents Total assets Analysis of assets and liabilities over which control was lost Current Assets cash and cash equivalents receivables Non-Current assets Property, Plant and equipment Deferred exploration assets Current liabilities Accounts payable Net assets disposed	2012 $
	112,544
	112,544

	2012 $

	8,801 52,247 8,821 64,395 (23,229)
	111,035

on 31 march 2012, the company discontinued the UK wind Farm operations. no consideration was received and the UK companies are in the process of being dissolved. There were no assets in the companies and the only liabilities were intercompany loans to support the entities.

Page 61

WHL ENERGY LTD – ANNUAL REPORT 2012

Notes to the Financial Statements

for the year ended 30 June 2012

NOTE 25: AUDITOR’S REMUNERATION

NOTE 25: AUDITOR’S REMUNERATION
The auditor of whl energy limited is hlB mann Judd. Amounts received or due and receivable by hlB mann Judd for: An audit or review of the fnancial report of the entity and any other entity in the group Tax compliance Amounts received or due and receivable by non hlB mann Judd audit frms Auditor’s remuneration (non hlB mann Judd audit frms) An audit or review of the fnancial report - US lohrey Tax compliance - US lohrey An audit or review of the fnancial report - US PmB helin An audit or review of the fnancial report-UK lubbock Fine Tax compliance - UK lubbock Fine Amounts paid to the previous auditors are as follows: Auditor’s remuneration (russell Bedford frm) Audit and review of Financial reports - Australia other services (russell Bedford frm) Tax compliance - gould ralph	Consolidated Consolidated 2012 2011 $ $
	55,450 41,500 5,900 5,000
	61,350 46,500
	- 24,794 7,934 16,748 355 32,548 9,058 31,392 - 9,356 - -
	17,347 114,838
	- 8,179 - 1,170 -- 5,608
	- 14,957

NOTE 26: EVENTS AFTER THE BALANCE DATE

Capital raising

on 12 September 2012 the company announced a “Shareholder entitlement option Programme” managed by Quattro capital group. The renounceable offer was opened to all shareholders at the record date of 24 September 2012, with every qualifying shareholder entitled to apply for one option for every four shares held at the record date. At the time of this report the prospectus is still open for applications. The options have a strike price of $0.04 cents and an expiry date of 30 november 2014, the company intends to apply to the ASX to have the options listed after the closing date of 15 october 2012.

The Shareholder entitlement option Programme is expected to raise approximately $3,517,596 at issue less costs and if fully exercised in november 2014 approximately a further $14,000,000 would be raised. The money is being raised to further progress seismic activity in the otway basin and for general working capital purposes.

Employee share options lapsed

on 2 August 2012 mr chandler’s employee share options lapsed following his resignation.

The Directors are not aware of any other matter or circumstances not otherwise dealt with within the financial report that has significantly or may significantly affect the operations of the group, the results of those operations or the state of affairs of the group in subsequent years.

Page 62

WHL ENERGY LTD – ANNUAL REPORT 2012

NOTE 27: DIRECTORS AND EXECUTIVES DISCLOSURES

Details of key management personnel Directors mr Bartter chairman (non-executive) – resigned 30 September 2011 mr Benson chairman (non-executive) – appointed 4 June 2012 Director (non-executive) – appointed 5 December 2011 mr noske managing Director mr rowbottam Finance Director mr chandler chairman (non-executive) – resigned 3 June 2012 Director (non-executive) – appointed 17 August 2011 Dr wulff Director (non-executive) – appointed 1 June 2012 executives mr Fittall exploration manager mr laurie commercial manager and legal counsel– appointed 5 June 2012

Key management personnel remuneration has been included in the remuneration report section of the Directors’ report.

The remuneration of directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends. Information regarding the individual directors and executives compensation is provided in the remuneration report as set out on page 12.

The aggregate compensation made to key management personnel of the group is set out below

Short-term employee benefts Post-employee benefts Share based payments Total	Consolidated Consolidated For the year ended 30 June 2012 For the year ended 30 June2011 $ $ 1,436,577 611,502 83,573 21,076 211,019 11,597
	1,731,169 644,175

Shareholdings of key management personnel

All equity transactions with key management personnel have been entered into under terms and conditions no more favourable than those adopted if dealing at arm’s length.

The number of ordinary shares in the company held during the financial year by key management personnel of whl energy limited, including their personally related parties are set out below:

30 June 2012 Directors mr Bartter2 mr Benson mr chandler2 mr noske mr rowbottam Dr wulff Executives mr Fittall mr laurie Total
	Balance at beginningofyear Options exercised Share based payment Net change other1 Balance at end ofyear
	47,500,000 - - (47,500,000) - - - - - - - - - - - - - - 3,500,000 3,500,000 - - - - - - - - - - 634 438 - - - 634 438 - - - - -
	48,134,438 - - (44,000,000) 4,134,438

Page 63

WHL ENERGY LTD – ANNUAL REPORT 2012

Notes to the Financial Statements

for the year ended 30 June 2012

NOTE 27: DIRECTORS AND EXECUTIVES DISCLOSURES (CONTINUED)

30 June 2011 Directors mr Bartter2 mr noske mr rowbottam Executives mr radford3 mr Fittall Total
	Balance at beginningofyear Options exercised Share based payment Net change other1 Balance at end ofyear
	44,037,741 - - 3,462,259 47,500,000 - - - - - - - - - - - - - - - - - - 634 438 634 438
	44,037,741 - - 4,096,697 48,134,438

net change other includes balances held at the time of appointment, balances at time of termination and transactions that do not involve the company.
These key management personnel resigned during the year to 30 June 2012.
These key management personnel resigned during the year to 30 June 2011.

Listed options

The number of listed options over ordinary shares in the company held during the financial year by each director of whl energy limited and other key management personnel of the group, including their personally related parties are set out below.

30 June 2012 Directors mr Bartter2 mr Benson mr chandler2 mr noske mr rowbottam Dr wulff Executives mr Fittall mr laurie Total 30 June 2011 Directors mr Bartter2 mr noske mr rowbottam Executives mr radford3 mr Fittall Total
	Balance at beginningofyear Options Lapsed Share based payment Net change other1 Balance at end ofyear
	- - - - - - - - - - - - - - - 5,000,000 (5,000,000) - - - 5,000,000 (5,000,000) - - - - - - - - - - - - - - - - - -
	10,000,000 (10,000,000) - - -

	Balance at beginningofyear Options Lapsed Share based payment Net change other1 Balance at end ofyear
	- - - - - - - - 5,000,000 5,000,000 - - - 5,000,000 5,000,000 - - - - -
	- - - - -
	- - - 10,000,000 10,000,000

Net change other includes balances held at the time of appointment, balances at time of termination and transactions that do not involve the company.
These key management personnel resigned during the year to 30 June 2012.
These key management personnel resigned during the year to 30 June 2011.

Page 64

WHL ENERGY LTD – ANNUAL REPORT 2012

NOTE 27: DIRECTORS AND EXECUTIVES DISCLOSURES (CONTINUED)

All equity transactions with key management personnel other than those arising from the exercise of remuneration options have been entered into under terms and conditions no more favourable than those the group would have adopted if dealing at arm’s length.

Shareholding of key management personnel in unlisted options

The only unlisted options over ordinary shares in the company held during the financial year ended 30 June 2012 by the directors of whl energy limited and other key management personnel of the group, including their personally related parties is set out below.

30 June 2012

30 June 2012
						Vested	as at end of period
	Balance at	Granted as	Options	Net change	Balance at	Total	Exercisable	Not
	beginning of	remuneration	exercised	other1	end of period			exercisable
	period
30 June 2012
Directors
mr Bartter2	-	-	-	-	-	-	-	-
mr Benson	-	-	-	-	-	-	-	-
mr chandler2	-	2,000,000	-	-	2,000,000	2,000,000	2,000,000	-
mr noske	-	15,000,000	-	-	15,000,000	15,000,000	-	15,000,000
mr rowbottam	-	10,000,000	-	-	10,000,000	10,000,000	-	10,000,000
Executives	-	-	-	-	-	-	-	-
mr Fittal	-	10,000,000	-	-	10,000,000	10,000,000	-	10,000,000
mr laurie	-	-	-	-	-	-	-	-
mr radford3	500,000	-	-	(500,000)	-	-	-	-
Total	500,000	37,000,000	-	(500,000)	37,000,000	37,000,000	2,000,000	35,000,000

Subsequent to year end the options granted to Mr Chandler were forfeited refer Note 26.

30 June 2011 Executives mr radford3 Total	Vested as at end of period Balance at beginning of period Granted as remuneration Options exercised Net change other1 Balance at end of period Total Exercisable Not exercisable
	- 1,000,000 500,000 (500,000) 500,000 500,000 500,000 -
	- 1,000,000 500,000 (500,000) 500,000 500,000 500,000 -

net change other includes forfeitures.
These key management personnel resigned during the year to 30 June 2012.
These key management personnel resigned during the year to 30 June 2011.

There were no unlisted options over ordinary shares in the company held during the financial year ended 30 June 2011 by the directors of whl energy limited, including their personally related parties.

Page 65

WHL ENERGY LTD – ANNUAL REPORT 2012

Directors’ Declaration

In the opinion of the directors of whl energy limited (the “company”):
a. the accompanying financial statements, notes and the additional disclosures are in accordance with the corporations Act 2001 including:
- i. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2012 and of its performance for the year then ended; and
- ii. complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the corporations regulations 2001.
b. there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable;
c. the financial statements and notes thereto are in accordance with International Financial reporting Standards issued by the International Accounting Standards Board.
This declaration has been made after receiving the declarations required to be made to the directors in accordance with Section 295A of the corporations Act 2001 for the financial year ended 30 June 2012.

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

==> picture [147 x 58] intentionally omitted <==

Mr Noske managing Director Perth, 21 September 2012

Page 66

WHL ENERGY LTD – ANNUAL REPORT 2012

Independent Auditor’s Report

==> picture [168 x 71] intentionally omitted <==

INDEPENDENT AUDITOR’S REPORT

To the members of whl energy limited

Report on the Financial Report

we have audited the accompanying financial report of whl energy limited (“the company”), which comprises the consolidated statement of financial position as at 30 June 2012, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated 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 for the consolidated entity. The consolidated entity comprises the company and the entities it controlled at the year’s end or from time to time during the financial year.

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 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error.

In note 1(c), the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements, that the consolidated financial report complies 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 that we 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. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report 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 entity’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.

our audit did not involve an analysis of the prudence of business decisions made by directors or management.

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.

HLB Mann Judd (WA Partnership) is a member of International, a worldwide organisation of accounting firms and business advisers.

Page 67

WHL ENERGY LTD – ANNUAL REPORT 2012

Independent Auditor’s Report

==> picture [168 x 71] intentionally omitted <==

Matters relating to the electronic presentation of the audited financial report and remuneration report

This auditor’s report relates to the financial report and remuneration report of whl energy limited for the financial year ended 30 June 2012 published in the annual report and included on the company’s website. The company’s directors are responsible for the integrity of the company’s website. we have not been engaged to report on the integrity of this website. The auditor’s report refers only to the financial report and remuneration report. It does not provide an opinion on any other information which may have been hyperlinked to/from the financial report and remuneration report. If users of the financial report and remuneration report are concerned with the inherent risks arising from publication on a website, they are advised to refer to the hard copy of the audited financial report and remuneration report to confirm the information contained in this website version of the financial report and remuneration report.

Auditor’s Opinion

In our opinion:

(a) the financial report of whl energy limited is in accordance with the corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2012 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 note 1(c).

Report on the Remuneration Report

we have audited the remuneration report included in the directors’ report for the year ended 30 June 2012. 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

In our opinion the remuneration report of whl energy limited for the year ended 30 June 2012 complies with section 300A of the corporations Act 2001.

==> picture [137 x 34] intentionally omitted <==

HLB MANN JUDD

chartered Accountants

==> picture [149 x 57] intentionally omitted <==

Perth, western Australia 21 September 2012

N G NEILL Partner

Page 68

WHL ENERGY LTD – ANNUAL REPORT 2012

ASX Additional Information

Australian Securities exchange ltd (“ASX”) and not shown elsewhere in this report is as follows. The information is current as at 17 September 2012.

a) Twenty largest shareholders

(i) The names of the twenty largest holders of ordinary shares are:

SeychelleS PeTroleUm comPAny lImITeD
JP morgAn nomIneeS AUSTrAlIA lImITeD
neFco nomIneeS PTy lTD
mr PeTer John BArTTer
hSBc cUSToDy nomIneeS (AUSTrAlIA) lImITeD-gSco ecA
mr roBerT AnThony heAly
hSBc cUSToDy nomIneeS (AUSTrAlIA) lImITeD
mr roBerT AnThony heAly
hUmPhrey hAnSen PTy lTD
mr roBerT heAly
cITIcorP nomIneeS PTy lImITeD
mr roBerT AnThony heAly
mrS JennIFer Ann BArTTer
UoB KAy hIAn PrIVATe lImITeD
mr roBerT AnThony heAly
VIcTor m lewIS PTy lTD
mS TrAcey leAnne mArShAll
george clArK
reVolVe ProJecTS PTy lTD
mr mArK rowBoTTAm

Number of shares
% of ordinaryshares

65,000,000
4.62%
61,276,402
4.35%
35,500,000
2.52%
34,000,000
2.42%
20,200,000
1.44%
20,000,000
1.42%
19,315,000
1.37%
16,000,000
1.14%
13,500,000
0.96%
11,000,000
0.78%
10,998,975
0.78%
10,318,656
0.73%
10,000,000
0.71%
9,295,000
0.66%
8,333,333
0.59%
8,001,090
0.57%
8,000,000
0.57%
7,500,000
0.53%
6,923,762
0.49%
6,900,000
0.49%

382,052,218
27.15%

b) Distribution of equity securities

(i) listed securities

As at 17 September 2012 there were 5,958 holders of ordinary voting shares, distributed as follows:

	Ordinary voting shares Number of holders Number of ordinaryshares
1 to 1,000 1,001 to 5,000 5,001 to 10,000 10,001 to 100,000 100,001 and over Total holdings less than a marketable parcel	89 9,772 82 338,022 407 3,737,880 3,611 170,487,100 1,769 1,232,465,612
	5,958 1,407,038,386
	1,039 10,206,163

Page 69

WHL ENERGY LTD – ANNUAL REPORT 2012

ASX Additional Information

(ii) Unlisted securities

As at 17 September 2012 there were 42 holders of class B options distributed as follows:

	Class B options Number of holders Number of options
1 to 1,000 1,001 to 5,000 5,001 to 10,000 10,001 to 100,000 100,001 and over Total	0 0 0 0 0 0 5 206,250 37 249,793,750
	42 250,000,000

As at 17 September 2012 there was 1 holder of each of the following classes of options:

	Unlisted options WHNAK Unlisted Options WHNAM Number of holders Number of ordinary shares Number of holders Number of options
1 to 1,000 0 0 0 0 1,001 to 5,000 0 0 0 0 5,001 to 10,000 0 0 0 0 10,001 to 100,000 0 0 0 0 100,001 and over 1 5,000,000 1 5,000,000 Total 1 5,000,000 1 5,000,000 Name of holders ofgreater than 20% Total	0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 5,000,000 1 5,000,000
	1 5,000,000 1 5,000,000
Name of holder of greater than 20% of WHNAK Zenix nominees Pty ltd 5,000,000 Name of holder of greater than 20% of WHNAM Zenix nominees Pty ltd 5,000,000

As of 17 September 2012 the holders of each of the following classes of options are indicated below:

	Unlisted ESOP (SERIES 1) Unlisted ESOP (SERIES 2) Number of holders Number of ordinary shares Number of holders Number of options
1 to 1,000 1,001 to 5,000 5,001 to 10,000 10,001 to 100,000 100,001 and over Total	0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 6 35,000,000 3 4,550,000
	6 35,000,000 3 4,550,000

c) Substantial shareholders of ordinary shares

nil

d) Class of shares and voting rights

The voting rights attached to ordinary shares, as set out in the company’s constitution, are that every member in person or by proxy, attorney or representative, shall have one vote on a show of hands and one vote for each share held on a poll.

Page 70

WHL ENERGY LTD – ANNUAL REPORT 2012

A member holding partly paid shares is entitled to a fraction of a vote equivalent to the proportion which the amount paid up bears to the issue price for the share.

no other class of equity security carries any voting rights.

e) Home exchange

The company is listed on the Australian Securities exchange. The home exchange is Perth. The company’s securities are not quoted on any other stock exchange.

f) Buy back

nil.

g) Restricted securities

There were no securities restricted by the ASX at the date of this report or the year ended 30 June 2012.

Interest in mining tenements

(i) Seychelles exploration blocks - 100%

Block number	Area	Coordinates	Coordinates	Coordinates
37/11 (part)	340.1	1.	4 30 00 S	54 40 00 e
		2.	4 30 00 S	54 50 00 e
		3.	4 40 00 S	54 40 00 e
		4.	4 40 00 S	54 50 00 e

37/12 (part)	340.1	1.	4 30 00 S	54 50 00 e
		2.	4 30 00 S	55 00 00 e
		3.	4 40 00 S	54 50 00 e
		4.	4 40 00 S	55 50 00 e

37/16	680.2	1.	4 40 00 S	54 30 00 e
		2.	4 40 00 S	54 40 00 e
		3.	5 00 00 S	54 30 00 e
		4.	5 00 00 S	54 40 00 e

37/17	680.2	1.	4 40 00 S	54 40 00 e
		2.	4 40 00 S	54 50 00 e
		3.	5 00 00 S	54 40 00 e
		4.	5 00 00 S	54 50 00 e

37/18	680.2	1.	4 40 00 S	54 50 00 e
		2.	4 40 00 S	55 00 00 e
		3.	5 00 00 S	54 50 00 e
		4.	5 00 00 S	55 00 00 e

Page 71

WHL ENERGY LTD – ANNUAL REPORT 2012

ASX Additional Information

Block number	Area	Coordinates	Coordinates	Coordinates
38/13	680.2	1.	4 40 00 S	55 00 00 e
		2.	4 40 00 S	55 10 00 e
		3.	5 00 00 S	55 00 00 e
		4.	5 00 00 S	55 10 00 e

38/14	680.2	1.	4 40 00 S	55 10 00 e
		2.	4 40 00 S	55 20 00 e
		3.	5 00 00 S	55 10 00 e
		4.	5 00 00 S	55 20 00 e

39/17 (part)	340.1	1.	4 50 00 S	56 40 00 e
		2.	4 50 00 S	56 50 00 e
		3.	5 00 00 S	56 40 00 e
		4.	5 00 00 S	56 50 00 e

49/2	680.2	1.	5 00 00 S	55 10 00 e
		2.	5 00 00 S	55 20 00 e
		3.	5 20 00 S	55 10 00 e
		4.	5 20 00 S	55 20 00 e

49/3	680.2	1.	5 00 00 S	55 20 00 e
		2.	5 00 00 S	55 30 00 e
		3.	5 20 00 S	55 20 00 e
		4.	5 20 00 S	55 30 00 e

49/4	680.2	1.	5 00 00 S	55 30 00 e
		2.	5 00 00 S	55 40 00 e
		3.	5 20 00 S	55 30 00 e
		4.	5 20 00 S	55 40 00 e

49/5	680.2	1.	5 00 00 S	55 40 00 e
		2.	5 00 00 S	55 50 00 e
		3.	5 20 00 S	55 40 00 e
		4.	5 20 00S	55 50 00 e

49/6	680.2	1.	5 00 00 S	55 50 00 e
		2.	5 00 00 S	56 00 00 e
		3.	5 20 00 S	55 50 00 e
		4.	5 20 00 S	56 00 00 e

Page 72

WHL ENERGY LTD – ANNUAL REPORT 2012

Block number	Area	Coordinates	Coordinates	Coordinates
49/14 (part)	340.1	1.	5 50 00 S	55 10 00 e
		2.	5 50 00 S	55 20 00 e
		3.	6 00 00 S	55 10 00 e
		4.	6 00 00 S	55 20 00 e

49/15 (part)	340.1	1.	5 50 00 S	55 20 00 e
		2.	5 50 00 S	55 30 00 e
		3.	6 00 00 S	55 20 00 e
		4.	6 00 00 S	55 30 00 e

50/1	680.2	1.	5 00 00 S	56 00 00 e
		2.	5 00 00 S	56 10 00 e
		3.	5 20 00 S	56 00 00 e
		4.	5 20 00 S	56 10 00 e

50/5	680.2	1.	5 00 00 S	56 40 00 e
		2.	5 00 00 S	56 50 00 e
		3.	5 20 00 S	56 40 00 e
		4.	5 20 00 S	56 50 00 e

50/6	680.2	1.	5 00 00 S	56 50 00 e
		2.	5 00 00 S	57 00 00 e
		3.	5 20 00 S	56 50 00 e
		4.	5 20 00 S	57 00 00 e

50/8	680.2	1.	5 20 00 S	56 10 00 e
		2.	5 20 00 S	56 20 00 e
		3.	5 40 00 S	56 10 00 e
		4.	5 40 00 S	56 20 00 e

50/9	680.2	1.	5 20 00 S	56 20 00 e
		2.	5 20 00 S	56 30 00 e
		3.	5 40 00 S	56 20 00 e
		4.	5 40 00 S	56 30 00 e

50/10	680.2	1.	5 20 00 S	56 30 00 e
		2.	5 20 00 S	56 40 00 e
		3.	5 40 00 S	56 30 00 e
		4.	5 40 00 S	56 40 00 e

Page 73

WHL ENERGY LTD – ANNUAL REPORT 2012

ASX Additional Information

Block number	Area	Coordinates	Coordinates	Coordinates
50/11	680.2	1.	5 20 00 S	56 40 00 e
		2.	5 20 00 S	56 50 00 e
		3.	5 40 00 S	56 40 00 e
		4.	5 40 00 S	56 50 00 e

50/12	680.2	1.	5 20 00 S	56 50 00 e
		2.	5 20 00 S	57 00 00 e
		3.	5 40 00 S	56 50 00 e
		4.	5 40 00 S	57 00 00 e

50/14	680.2	1.	5 40 00 S	56 10 00 e
		2.	5 40 00 S	56 20 00 e
		3.	6 00 00 S	56 10 00 e
		4.	6 00 00 S	56 20 00 e

50/15	680.2	1.	5 40 00 S	56 20 00 e
		2.	5 40 00 S	56 30 00 e
		3.	6 00 00 S	56 20 00 e
		4.	6 00 00 S	56 30 00 e

50/16	680.2	1.	5 40 00 S	56 30 00 e
		2.	5 40 00 S	56 40 00 e
		3.	6 00 00 S	56 30 00 e
		4.	6 00 00 S	56 40 00 e

50/17	680.2	1.	5 40 00 S	56 40 00 e
		2.	5 40 00 S	56 50 00 e
		3.	6 00 00 S	56 40 00 e
		4.	6 00 00 S	56 50 00 e

50/18	680.2	1.	5 40 00 S	56 50 00 e
		2.	5 40 00 S	57 00 00 e
		3.	6 00 00 S	56 50 00 e
		4.	6 00 00 S	57 00 00 e

84/2	680.2	1.	7 00 00 S	56 10 00 e
		2.	7 00 00 S	56 20 00 e
		3.	7 20 00 S	56 10 00 e
		4.	7 20 00 S	56 20 00 e

Page 74

WHL ENERGY LTD – ANNUAL REPORT 2012

Block number	Area	Coordinates	Coordinates	Coordinates
84/6 (part)	340.1	1.	7 10 00 S	56 50 00 e
		2.	7 10 00 S	57 00 00 e
		3.	7 20 00 S	56 50 00 e
		4.	7 20 00 S	57 00 00 e

84/12 (part)	340.1	1.	7 20 00 S	56 50 00 e
		2.	7 20 00 S	57 00 00 e
		3.	7 30 00 S	56 50 00 e
		4.	7 30 00 S	57 00 00 e

85/1 (part)	340.1	1.	7 10 00 S	57 00 00 e
		2.	7 10 00 S	57 10 00 e
		3.	7 20 00 S	57 00 00 e
		4.	7 20 00 S	57 10 00 e

85/7 (part)	340.1	1.	7 20 00 S	57 00 00 e
		2.	7 20 00 S	57 10 00 e
		3.	7 30 00 S	57 00 00 e
		4.	7 30 00 S	57 10 00 e

112/12	680.2	1.	9 20 00 S	50 50 00 e
		2.	9 20 00 S	51 00 00 e
		3.	9 40 00 S	50 50 00 e
		4.	9 40 00 S	51 00 00 e

113/7	680.2	1.	9 20 00 S	51 00 00 e
		2.	9 20 00 S	51 10 00 e
		3.	9 40 00 S	51 00 00 e
		4.	9 40 00 S	51 10 00 e

Page 75

WHL ENERGY LTD – ANNUAL REPORT 2012

ASX Additional Information

Interest in mining tenements (continued)

(ii) Australian oil and gas interests

WA-460-P – Palta - 33%

cloates (9SF49) map Sheet, Block no 1719

VIC/P67 – La Bella - 100% hamilton [SJ54] map Sheet

Block Number	Block Number	Block Number	Block Number	Block Number
2137 (Part)	2138 (Part)	2139 (Part)	2209	2210
2211	2212	2281	2282	2283
2353	2354	2355	2356	2358
2425	2426	2427	2428	2429
2430	2497	2498	2499	2500
2501	5202	2571	2572	2573
2574	2575	2576	2577	2645
2646	2647	2648	2649	2718
2719	2720	2721	2791 (Part)	2792 (Part)
2793 (Part)

Page 76

==> picture [596 x 842] intentionally omitted <==

----- Start of picture text -----

www.whlenergy.com
----- End of picture text -----

AI assistant

ZIMI LIMITED — Annual Report 2012

66122_rns_2012-09-20_f8c8d11b-6e27-4bda-9546-a7a05c7eb668.pdf

Corporate Information

Contents

Directors

Chairman’s Report

Australian assets La Bella (VIC/P67)

Palta (WA-460-P)

UK assets

UK wind business

US assets

US oil and gas

Equity issues

Board changes

Outlook

Directors’ Report

Directors

Directors’ Report

Mr Peter Bartter

Non-Executive Chairman (10 March 2005 Appointed) (30 September 2011 Resigned)

Non-Executive Director (22 November 2011 Resigned)

Mr John Chandler , LL.B (Hons), Diploma in Business Administration

Non-Executive Chairman (30 September 2011 Appointed) (3 June 2012 Resigned)

Previously Non-Executive Director (17 August 2011 Appointed)

CoMPaNY SECRETaRY

Mr Matthew Edmondson , B.Comm. CA, ACIS

Company Secretary (21 September 2010 Appointed)

Directors’ interests in the shares and options of the Company and related bodies corporate

Shares under options

Dividends

Principal activities

Review of operations

Seychelles

Directors’ Report

Australian operations La Bella VIC/P67

Directors’ Report

Palta WA-460-P

US operations

McCune County Kansas

Wardlaw oil project Texas

UK operations

Significant changes in the state of affairs

Operating results for the year

Shareholder returns

Significant events after balance date Capital raising

Directors’ Report

Employee share options lapsed

Likely developments and expected results

Environmental legislation

Key management personnel

Remuneration philosophy

Remuneration report (Audited)

Remuneration committee

Remuneration structure

Non-Executive Director remuneration

Senior Executive remuneration

Fixed remuneration

Variable remuneration

Directors’ Report

Employment contracts

non-executive Directors

executive Directors

executives

Directors’ Report

Remuneration of key management personnel

Details of Employee Share Option Plans

retention Incentive

Performance Incentive

Directors’ Report

Director’s meetings

Proceedings on behalf of the Company

Indemnification and insurance of Directors and officers

auditor independence and non-audit services

Non-audit services

Corporate Governance Statement

Principle 1: Lay solid foundations for management and oversight

Role of the Board

Evaluation of Senior Executives

Corporate Governance Statement

ZIMI LIMITED Annual Report 2012