The Group reports an after-tax profit of $17,136,000 for the financial year ending 30 June 2021 (2020: loss: $4,137,000). The primary contributing factor to the profit result was the farm out of the Buffalo project to Advance Energy.
Carnarvon’s balance sheet remained strong with cash and cash equivalents of $98,436,000 (2020: $113,632,000), no debt and minimal commitments going forward.
On 19 April 2021, Carnarvon successfully completed a 50% farm-out of the subsidiary which held its interest in the Buffalo project in Timor-Leste. As a result, the Company recognised a gain on disposal of subsidiary of $23,635,000 (2020: $0). Going forward, the interest in the Buffalo project will be accounted for as a Joint Venture as per AASB 11 under the equity accounting methodology. On this basis, the Company recorded a value of $26,199,000 (2020: $0) at the end of the period for its investment in the Joint Venture. This includes Carnarvon’s 50% share of the loss incurred by the Joint Venture of $77,000 (2020: $0) between the date of the farm-out and the end of the period.
The Company invested a further $6,878,000 on its exploration and evaluation assets. Most of these costs were in relation to pre-Front End Engineering and Design work for the Dorado development and the acquisition of the Archer and Keraudren Extension 3D seismic acquisitions within the Company’s Bedout permits.
The Company recorded A$1,339,000 (2020: $1,037,000) in other financial assets as at 30 June 2021. This represents the current value of the shares held by Carnarvon in CWX Global Limited (formerly Loyz Energy Limited) (“CWX”). The value reflects the increase in the value of the shares during the year which has been recorded in the income statement for the year ended 30 June 2021. The shares were received as settlement of the deferred consideration asset relating to the 2014 sale of half of Carnarvon’s former interests in its producing concessions in Thailand.
Carnarvon spent $2,049,000 (2020: $1,393,000) in new venture and advisory costs as the Company continues to develop its significant regional geological database. This has been integral in identifying highly prospective opportunities within the North-West shelf of Australia to add to the Company’s string of successful discoveries.
During the financial year there was an unrealized loss on foreign exchange of $1,244,000 (2020: gain: $847,000) due to the effect of an appreciation of AUD against the Carnarvon’s USD cash and financial assets.
The Company does not currently use derivative financial instruments to hedge financial risk exposures and therefore it is exposed to daily movements in the international oil prices, exchange rates, and interest rates. The Company manages its cash position in US Dollars and Australian Dollars to naturally hedge its foreign exchange rate exposures having regard for likely future expenditure.