Global Petroleum Regulatory News (GBP)

30 September 2011

RNS AIM release

Global Petroleum Limited - Annual Financial Report - 30 June 2011

The Directors of Global Petroleum Limited present their report on the Consolidated Entity consisting of Global Petroleum Limited ("the Company" or "Global" or "Parent") and the entities it controlled at the end of, or during, the year ended 30 June 2011 ("Consolidated Entity" or "Group").

DIRECTORS

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

Mr Mark Savage

Mr Peter Hill (appointed 1 September 2011)

Mr Peter Blakey

Mr Peter Taylor

Mr Ian Middlemas

Mr Clint McGhie

Unless otherwise disclosed, Directors held their office from 1 July 2010 until the date of this report.

CURRENT DIRECTORS AND OFFICERS

Mr Mark Savage B.Bus

Chairman

Mr Savage was born and educated in the United States of America where he received a business degree from the University of Colorado and was a senior executive for a number of US banks before he joined an Australian based merchant bank. Mr Savage has experience in debt and equity markets as well as in the corporate advisory area.

During the three year period to the end of the financial year, Mr Savage has held directorships in CGA Mining Ltd (April 2000 - present), BPC Limited (September 2008 - October 2009) and Tower Resources Plc (January 2006 - present).

Mr Savage was appointed a director of the Company on 23 November 1999, and Chairman of the Company on 2 April 2007.

Mr Peter Hill MA Law (Oxon)

Managing Director and Chief Executive Officer

Mr Hill has extensive experience in the energy sector as a senior executive with a significant track record worldwide in high-level M&A and business development roles, primarily in the oil industry. Most recently Mr Hill was the global head of Corporate M&A for Statoil ASA, where he was responsible for several large transactions, being a key member of the team responsible for Statoil's merger with Norsk Hydro Oil & Gas in December 2006, and leading the acquisition of EnCana's Gulf of Mexico deepwater assets in 2005. Prior to agreeing to join Global, Mr Hill was responsible for supervising execution of the IPO of Statoil's Energy & Retail division in the latter part of 2010.

Previously Mr Hill set up the international business of Waterous & Co as Managing Director in the UK, and before that worked for Enterprise Oil plc for many years, latterly as Head of International New Ventures. Mr Hill started in the energy industry with Total Oil Marine and is a UK qualified Solicitor, having commenced his career with Clifford Chance. He holds an MA in Law from Oxford University.

Mr Hill was appointed as Managing Director and Chief Executive Officer of the Company on 1 September 2011. Mr Hill has not held any other directorships of publicly listed companies in the last three years.

Mr Peter Blakey B.Sc CEng

Non-Executive Director

Mr Peter Taylor B.Sc CEng

Non-Executive Director

Mr Blakey and Mr Taylor are joint chairmen of TM Services Ltd, an international oil and gas consulting company. In 1991, they were founding members and directors of TM Oil Production Ltd, which became Dana Petroleum Plc. This company was subsequently purchased by KNOC in October 2010 for £1.87b. They were also founding members and directors of Consort Resources Ltd, which has become a significant North Sea gas production company, and of Planet Oil which was merged with Hardman Resources in 1998.

During the three year period to the end of the financial year, Mr Blakey and Mr Taylor both held a directorship in Tower Resources Plc (January 2006 - present).

Mr Blakey and Mr Taylor were appointed directors of the Company on 4 October 2001.

Mr Ian Middlemas B.Com, CA

Non-Executive Director

Mr Middlemas is a Chartered Accountant, a member of the Financial Services Institute of Australasia and holds a Bachelor of Commerce degree. He worked for a large international Chartered Accounting firm before joining the Normandy Mining Group where he was a senior group executive for approximately 10 years. He has extensive corporate and management experience, and is currently a director with a number of publicly listed companies in the resources sector.

During the three year period to the end of the financial year, Mr Middlemas has held directorships in Papillon Resources Limited (May 2011 - present), Pacific Ore Limited (April 2010 - present), Wildhorse Energy Limited (January 2010 - present), Equatorial Resources Limited (November 2009 - present), WCP Resources Limited (September 2009 - present), Coalspur Mines Limited (March 2007 - present), Sovereign Metals Limited (July 2006 - present), Pacific Energy Limited (June 2006 - August 2010), Sierra Mining Limited (January 2006 - present), Mantra Resources Limited (September 2005 - June 2011), Odyssey Energy Limited (September 2005 - present), Aguia Resources Limited (September 2008 - August 2010), Indo Mines Limited (December 2006 - June 2010), Neon Energy Limited (November 1995 - June 2010), Transaction Solutions International Limited (July 2001 - February 2010), and Fusion Resources Limited (May 2002 - March 2009).

Mr Middlemas was appointed a director of the Company on 2 April 2007.

Mr Clint McGhie B.Com, CA, ACIS, F Fin

Non-Executive Director and Company Secretary

Mr McGhie gained a Bachelor of Commerce degree from the University of Western Australia and is a member of the Institute of Chartered Accountants, the Institute of Chartered Secretaries and the Financial Services Institute of Australasia. He commenced his career with an international Chartered Accounting firm and has since worked in the role of Company Secretary and Chief Financial Officer for a number of listed companies that operate in the resources and energy sectors.

Mr McGhie was appointed a director and company secretary of the Company on 1 June 2010. Mr McGhie has not held any other directorships of publicly listed companies in the last three years.

PRINCIPAL ACTIVITIES

The principal activities of the Consolidated Entity during the year consisted of oil and gas exploration, development and production and there has been no change in the nature of those activities.

DIVIDENDS

No dividends have been declared, provided for or paid in respect of the financial year ended 30 June 2011 (2010: nil).

EARNINGS PER SHARE

CORPORATE STRUCTURE

Global Petroleum Limited is a company limited by shares that is incorporated and domiciled in Australia. The Company has prepared a consolidated financial report including the entities it incorporated and controlled during the financial year.

REVIEW OF OPERATIONS AND ACTIVITIES

The Group's primary focus during the year was completing the acquisition of Jupiter Petroleum Limited which holds prospective oil and gas exploration interests in offshore Namibia and in offshore Juan de Nova, a French dependency in the Mozambique Channel.

The acquisition of these interests, which was completed on 26 August 2011, enables Global to participate in the prospective and active exploration province of offshore Namibia and position itself as an African focused oil and gas explorer. Global is proceeding with an active exploration program for the Namibian Project having already undertaken a review of historic seismic data and commencing a new 2D Seismic survey.

In addition, during the year Global also participated in the drilling of two Eagle Ford wells at the Leighton Project in Texas, USA. These are the first Eagle Ford wells in which Global has an interest following an agreement with Texon Petroleum Limited ("Texon") in August 2010 to simplify arrangements for Eagle Ford wells straddling areas of different ownership. The first Eagle Ford well commenced production in December 2010, whilst the second well was drilled in June 2011 and commenced production in August 2011.

Three Olmos wells were also drilled at the Leighton Project during the year, taking to eight the total number of producing wells from the Olmos reservoir at 30 June 2011, with a ninth commencing production in August 2011.

Following year-end, the Company has appointed Mr Peter Hill as Managing Director and Chief Executive Officer. Mr Hill is an experienced oil and gas and business development executive whose immediate focus is to expedite the exploration of the highly prospective project located in Namibia.

Acquisition of Jupiter

On 29 January 2011, the Company entered into a conditional share purchase agreement to acquire Jupiter Petroleum Limited ("Jupiter") which holds prospective oil and gas exploration interests in offshore Namibia and in offshore Juan de Nova, a French dependency in the Mozambique Channel.

The agreement provided for Global to acquire 100% of Jupiter, a UK registered company which was owned 50% by Mr Peter Taylor and 50% by Mr Peter Blakey who are both also Directors of Global. The commercial terms of the acquisition included the issue of 25 million Global shares at settlement and the reimbursement of reasonable historical expenditure on the Namibian and Juan de Nova interests. The agreement was conditional on the satisfaction of a number of conditions precedent, including due diligence investigations, a report from an independent expert that the transaction is fair and reasonable to Global Shareholders, and Shareholder approval at a general meeting.

The final conditions precedent were satisfied in August 2011, and settlement occurred on 26 August 2011.

The acquisition of these interests enables Global to participate in the prospective and active exploration province of offshore Namibia and position itself as an African focused oil and gas explorer.

Namibian Project

The Namibian Project consists of an 85% participating interest in Petroleum Exploration Licence No. 0029 ("Licence") covering Offshore Blocks 1910B and 2010A in the Republic of Namibia issued on 3 December 2010. The Licence covers 11,730 square kilometres and is located in offshore Namibia in water depths ranging from 1,200 metres to 3,000 metres.

A reconnaissance grid of more than 2,000 kilometres of 1990's 2D seismic data over both blocks was purchased in July 2011 and was subsequently interpreted. This interpretation confirmed the presence of the two leads (designated Structure A and Structure B), and revealed both their extent and configuration with much greater clarity. The interpretation of the 2D seismic has also confirmed the presence in Licence 0029 of several stratigraphic plays which could be of significant size.

Following completion of the acquisition of Jupiter, Global has now commenced a new 2D seismic survey of approximately 2,000 kms over its prospective oil and gas exploration blocks offshore Namibia. The new seismic survey will be shot using a longer cable than the old surveys and will be of higher resolution. As well as better delineating the two structural leads and clarifying the extent of the stratigraphic plays, the new survey will provide data in areas currently lacking seismic coverage.

Although only a few wells have been drilled in the area, they have established the presence of oil and gas-prone source rocks, good potential reservoirs and migrated hydrocarbons in the region, making this an attractive frontier play. It is believed that the regional basin or basins were formed in response to thermal subsidence following the rifting preceding the separation of Africa from South America.

The Jupiter blocks lie adjacent to acreage held by Arcadia Petroleum Limited, whose partner Tower Resources has announced encouraging estimates (from a Competent Person's Report) for finding hydrocarbons in one or more of their prospects.

To the north east of the Jupiter blocks, a well drilled last year by Sintezneftgaz (Nakor Investments) reportedly found a substantial gas column whilst Chariot Oil and Gas has recently announced the identification of new structures and increases in its estimates of gross unrisked mean prospective resources in its licences in offshore Namibia. Chariot has shot 3D seismic and also has a Competent Person's Report.

The Jupiter blocks represent one of the last remaining opportunities to participate in this prospective and active exploration province in this part of offshore Namibia.

The Licence is held jointly by Jupiter Petroleum (Namibia) Limited ("Jupiter Namibia" - a subsidiary of Jupiter), the National Petroleum Corporation of Namibia (Pty) Ltd ("NAMCOR") and Bronze Investments Pty Ltd ("Bronze"). In addition to the Licence, Jupiter Namibia, NAMCOR and Bronze are parties to:

(i) a Petroleum Agreement dated 3 December 2010 between them and The Government of the Republic of Namibia ("Petroleum Agreement"); and

(ii) a Joint Operating Agreement dated 6 December 2010 between them, pursuant to which they have agreed to hold their interests as a participating interest of 85% for Jupiter Namibia, and carried interests (carried through exploration) of 10% for NAMCOR and 5% for Bronze ("JOA").

In accordance with the terms of the Petroleum Agreement and JOA, the following minimum work and expenditure programme must be undertaken and funded by Jupiter:

(a) Initial Exploration Period (First Four Years of Licence):

Undertake geological, geochemical, geophysical and related studies and review all existing gravity and magnetic data, and other available information, including the purchase of existing relevant and reasonable quality seismic data and acquire, process and interpret a minimum of 1,000 kilometres of 2D seismic data. Minimum exploration expenditure for the Initial Exploration Period is US$1 million.

(b) First Renewal of Exploration Period (Two Years):

The drilling of one exploration well. Minimum exploration expenditure for the First Renewal Exploration Period is US$20 million.

(c) Second Renewal Period (Two Years):

Acquisition, processing and interpretation of additional seismic data (if necessary) and the drilling of one exploration well.

Minimum exploration expenditure for the Second Renewal Exploration Period is US$20 million, or US$21 million if new seismic is required.

Juan de Nova Project

Jupiter Juan de Nova Limited (a subsidiary of Jupiter) has a 30% interest in the Juan de Nova Est Permit which was issued by the French Government in December 2008. The Permit covers approximately 9,010 square kilometres and is situated to the east of the small island of Juan de Nova in the Mozambique Channel, immediately to the west of Madagascar.

The permit lies within the exclusive economic zone surrounding Juan de Nova which is under French control. The remainder of the exclusive economic zone, which is immediately to the west of Juan de Nova Est, is covered by a permit which Roc Oil (Madagascar) Pty Ltd has recently agreed to sell to South Atlantic Petroleum JDN SAS for between US$8 million and US$8.5 million subject to working capital adjustments.

Water depths range from 200 metres to approximately 1,500 metres, with at least half of the permit lying in shallow water on the continental shelf of the island of Madagascar. The shallow water shelf area is probably underlain by late Paleozic and early Mesozoic rocks, mainly sandstone and shales with interbedded volcanics, whilst the deeper water areas are probably underlain by younger rocks of late Mesozoic and Tertiary age, whose lithology is unknown.

No systematic petroleum exploration has taken place around Juan de Nova and this area is considered to be a frontier province.

Wessex Exploration PLC is the operator and 70% interest holder in the Juan de Nova Est Permit. The current term of the exploration permit runs to 31 December 2013 with three phases of exploration and a production period of 25 years for any discovery made. The work obligations for the current term of the exploration permit include geologic studies, seismic acquisition and reprocessing and a commitment to drill one well with a contingency for a second well. The total financial commitment for this period is €8.38 million.

Wessex has engaged an agent to assist in finding a partner who is willing to earn into the Juan de Nova Est Permit by funding exploration activities. Jupiter's interest in the Juan de Nova Est Permit would be part of any farmout arrangement.

Preliminary work undertaken on the permit to date has included an assessment of the available data and an extensive review of literature on the North Morondava Basin in which the permit lies.

Leighton Project

During the year ended 30 June 2011, two Eagle Ford and three Olmos wells were drilled at the Leighton oil prospect in which the Company has an interest.

Eagle Ford Shale

In August 2010, Global reached agreement with Texon Petroleum Ltd ("Texon") to simplify the ownership arrangements for Eagle Ford wells that would straddle areas of differing ownership, by cross assigning lease holdings across the expanded contract area. Under the amended Participation Agreement the contract area of the Leighton prospect has been expanded to 1,651 acres for all depths beneath the Olmos Formation. Global now owns an undivided 7.939% Working Interest (5.95% Net Revenue Interest) across the expanded area including the Eagle Ford Shale (131.05 nett acres).

The additional 777.059 acres included in the expanded contract area is adjacent to and in the vicinity of the original contract area of the Leighton Prospect and is comprised of 457.059 acres in Leighton Prospect lying outside the original contract area and 320 acres in the adjacent Mandurah Prospect with depths from 7,100 feet down to 100 feet below the base of the Edwards Limestone Formation.

The first Eagle Ford well at the Leighton Project, Tyler Ranch EFS #1H was completed during December having reached a total depth of 3,252m (10,670ft) and 1,372m (4,500ft) laterally. Good oil and gas shows were encountered during drilling, and following fracture stimulation and testing, the well had an initial flow in late December of 1,267 boepd, representing 1,202 bopd of light sweet crude and 782 mcfgpd of gas on a 16/64" choke.

Total sales from Tyler Ranch EFS #1H to 30 June 2011 was 78,975 boe (representing 63,105 bo and 95,220 mcfg). Global's net revenue interest share (5.95%) was 4,700 boe.

The second Eagle Ford well, Tyler Ranch EFS #2H, commenced drilling in June and successfully drilled 4,500 feet of horizontal well in the Eagle Ford reservoir in July 2011 having previously reached its total depth of 15,767 feet. The well tested oil and gas at the initial rates of 1,488 bopd and 700 mcfgpd (combined 1,605 boepd) through a 16/64" choke at a flowing tubing pressure of 3,000 psi in August 2011.

Olmos Reservoir

Global has a 15% working interest (11.25% net revenue interest) in approximately 873 acres from the surface down to the stratigraphic equivalent of the Olmos formation. Global has an interest in nine producing Olmos wells (eight at 30 June 2011), including three wells drilled during the year.

Texon advised during the year that the seventh Leighton well, Tyler Ranch #6, reached its total depth of 2,774 metres (9,100 feet) and began to flow oil and gas at the gross rate of 350 boepd from the Olmos reservoir (comprising 205 bopd and 880 mcf of gas per day) through a 10/64" choke at 2,000 psi.

Tyler Ranch #6 was connected to oil tanks and a gas sales pipeline in September 2010 so that Global is now receiving revenue from the production.

The eighth well targeting the Olmos reservoir in which Global has an interest, Peeler #2, was drilled in February 2011 and reached its total depth of 2,774 metres (9,100 feet). The Olmos in Peeler #2 has similar reservoir characteristics to the Olmos in the previous Leighton wells.

Peeler #2 begun to flow oil and gas in April 2011 at the gross rate of 252 boepd from the Olmos reservoir (comprising 192 bopd and 360 mcf of gas per day).

As at 30 June 2011, the Company had an interest in, and was receiving revenue from, the production of 8 Leighton wells from the Olmos reservoir. An additional Leighton well, Peeler #3 commenced drilling in June 2011 and reached its total vertical depth of 2,774 metres (9,100 feet) in July 2011. Peeler #3 began to flow oil and gas in August 2011 at the combined rate of 370 boepd from the Olmos reservoir (comprising 325 bopd and 268 mcfgpd).

The combined total sales from the eight (8) producing Leighton wells (Peeler #1, Peeler #2, Tyler Ranch #1, Tyler Ranch #2, Tyler Ranch #3, Tyler Ranch #4, Tyler Ranch #5 and Tyler Ranch #6) during the year was a gross 172,945 boe (73,666 bo and 595,675 mcfg) with Global's beneficial interest (11.25% NRI) being 19,456 boe.

Glossary:

bbl: barrelbo: barrels of oilboe: barrels of oil equivalentboepd: barrels of oil equivalent per day (including gas converted to oil equiv barrels on basis of 6 mcf to 1 barrel of oil equivalent)bopd: barrels of oil per daymcf: thousand cubic feetmcfg: thousand cubic feet of gasmmcfg: million cubic feet of gasmcfgpd: thousand cubic feet of gas per daymmbtu: million British thermal unitsNRI: Net Revenue Interest

Uganda

An Option Agreement with Neptune Petroleum (Uganda) Limited, a wholly owned subsidiary of Tower Resources plc ("Tower"), provides Global with a right to convert its investment in the project to date into a 25% legal and beneficial interest in Uganda Licence EA5. Global retains its option to earn an interest in the Licence by funding its share of a forthcoming commitment well, but Global does not expect to make a final decision before funding of its own share of the well by Tower has been secured.

RESULTS OF OPERATIONS

The results of the Consolidated Entity include gross profit from oil and gas sales of $807,840 (2010: $562,044) and interest income of $1,040,928 (2010: $869,729). In the current year, the consolidated results include a foreign exchange loss of $1,050,211 arising primarily from restatement of the Company's USD cash balances (2010: gain of $489,541), and tax expense of $1,063,970 relating to recognition of a deferred tax liability of $401,387 and adjustments to prior year tax estimates of a subsidiary of $662,583.

CORPORATE AND FINANCIAL POSITION

As at 30 June 2011 the Company had cash of $25,317,051 (2010: $27,898,875).

The Board continues to review opportunities for other acquisitions, joint ventures, or investments in the resources sector, both domestic and overseas, which may enhance shareholder value.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Other than as outlined in the Review of Operations and Activities above, there were no other significant changes in the state of affairs of the Consolidated Entity during the year.

SIGNIFICANT POST BALANCE DATE EVENTS

(i) On 15 August 2011, the Company advised that the ninth well targeting the Olmos reservoir at the Leighton Project, Peeler #3, began to flow oil and gas at the combined rate of 370 boepd from the Olmos reservoir (comprising 325 bopd and 268 mcfgpd).

(ii) On 19 August 2011, the Company granted a total of 400,000 Incentive Options to a director and other key consultants of the Company. The Incentive Options are exercisable at $0.25 each on or before 30 June 2014 and have been valued at $0.15 per Option.

(iii) On 26 August 2011, the Company announced that it had completed the acquisition of Jupiter Petroleum Limited ("Jupiter") which holds prospective oil and gas exploration interests in offshore Namibia and in offshore Juan de Nova, a French dependency in the Mozambique Channel.

In consideration for the acquisition of 100% of the issued capital of Jupiter, Global has issued Mr Peter Blakey and Mr Peter Taylor (Vendors) 25 million fully paid ordinary shares. The consideration shares are subject to a 12 month holding lock at the register from issue. The Vendors are also Directors of Global. The Shares have been recorded at the market value at the date of issue.

As part of the acquisition, the Company has also reimbursed the Vendors for costs incurred in connection with obtaining the licence and other reasonable costs in connection with the agreement totalling approximately £272,000 (A$430,000).

In addition to the above consideration amounts, the Company loaned US$245,000 (A$251,102) to Jupiter during the 30 June 2011 financial year and a further US$687,000 (A$647,000) subsequent to year end. These amounts have been to fund the activities of Jupiter and have been treated as loans receivable. Subsequent to the date of acquisition, these loans will eliminate on consolidation of Jupiter.

(iv) On 30 August 2011, the second Eagle Ford well in which Global has an interest, Tyler Ranch EFS #2H tested oil and gas at the initial rates of 1,488 bopd and 700 mcfgpd (combined 1,605 boepd) through a 16/64" choke at a flowing tubing pressure of 3,000 psi.

(v) Mr Peter Hill commenced as Managing Director and Chief Executive Officer on 1 September 2011.

(vi) On 19 September, the Company advised that it had completed interpretation of more than 2,000 kms of purchased 2D seismic data from the 1990s. This confirmed the presence of two leads (designated Structure A and Structure B), and revealed both their extent and configuration with much greater clarity. The interpretation enabled Global to present new Gross and Net Attributable Prospective Resources for the two leads. In addition, the Company advised that it was commencing a new 2D seismic survey of approximately 2,000 kms over its prospective oil and gas exploration blocks offshore Namibia.

Other than as outlined above, as at the date of this report, there are no matters or circumstances which have arisen since 30 June 2011 that have significantly affected or may significantly affect:

(i) the operations, in financial years subsequent to 30 June 2011 of the Consolidated Entity;

(ii) the results of those operations, in financials years subsequent to 30 June 2011 of the Consolidated Entity; or

(iii) the state of affairs, in financial years subsequent to 30 June 2011 of the Consolidated Entity.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Consolidated Entity's operations are subject to various environmental laws and regulations under the relevant government's legislation. Full compliance with these laws and regulations is regarded as a minimum standard for all operations to achieve.

Instances of environmental non-compliance by an operation are identified either by external compliance audits or inspections by relevant government authorities.

There have been no significant known breaches by the Consolidated Entity during the financial year.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

It is the Board's current intention that the Consolidated Entity will focus on maximising the value of its oil and gas exploration assets in the United States of America and Africa and continue to examine new opportunities in mineral exploration, particularly in the oil and gas sector.

All of these activities are inherently risky and the Board is unable to provide certainty that any or all of these activities will be able to be achieved. In the opinion of the Directors, any further disclosure of information regarding likely developments in the operations of the Consolidated Entity and the expected results of these operations in subsequent financial years may prejudice the interests of the Company and accordingly, has not been disclosed.

INFORMATION ON DIRECTORS' INTERESTS IN SECURITIES OF GLOBAL

The following table sets out each Director's relevant interest in shares and options in shares of the Company as at the date of this report:

Notes

(1) Ordinary Shares means fully paid ordinary shares in the capital of the Company.

(2) Incentive Options means one unlisted option exercisable at $0.25 on or before 30 June 2014.

(3) On 26 August 2011, following shareholder approval, Mr McGhie was granted 300,000 Incentive Options exercisable at $0.25 each on or before 30 June 2014.

(4) Subsequent to year end, in connection with the acquisition of Jupiter Petroleum Limited, Mr Peter Blakey and Mr Peter Taylor were issued a total of 25 million fully paid ordinary shares, with 12,500,000 shares each being included in their interest in Ordinary Shares in the table above.

(5) Mr Hill was appointed as a Director on 1 September 2011. Subject to shareholder approval, the Company has agreed to grant Mr Hill (or his nominee) the following options. Shareholder approval was not received prior to the date of this report and accordingly these options are not included in the table above.

a. 1,500,000 incentive options exercisable at A$0.25 each on or before 1 April 2014, vesting on 1 April 2012;

b. 1,750,000 incentive options exercisable at A$0.30 each on or before 1 October 2014, vesting on 1 October 2012;

c. 1,750,000 incentive options exercisable at A$0.35 each on or before 1 April 2015, vesting on 1 April 2013; and

d. 1,000,000 incentive options exercisable at A$0.45 each on or before 1 October 2015, vesting on 1 October 2013.

SHARE OPTIONS

On 26 August 2011, the Company granted 400,000 Incentive Options exercisable at $0.25 each on or before 30 June 2014.

Since 30 June 2011, no shares have been issued as a result of the exercise of options.

MEETINGS OF DIRECTORS

The following table sets out the number of meetings of the Company's Directors held during the year ended 30 June 2011, and the number of meetings attended by each Director.

REMUNERATION REPORT - AUDITED

This Remuneration Report, which forms part of the Directors' Report, sets out information about the remuneration of Key Management Personnel ("KMP") of the Group.

Details of Key Management Personnel

Details of the KMP of the Group during or since the end of the financial year are set out below:

Current Directors

Mr Mark Savage

Mr Peter Hill (appointed 1 September 2011)

Mr Peter Blakey

Mr Peter Taylor

Mr Ian Middlemas

Mr Clint McGhie

Unless otherwise disclosed, the KMP held their position from 1 July 2010 until the date of this report.

Remuneration Policy

The Group's remuneration policy for its KMP has been developed by the Board taking into account the size of the Group, the size of the management team for the Group, the nature and stage of development of the Group's current operations, and market conditions and comparable salary levels for companies of a similar size and operating in similar sectors.

In addition to considering the above general factors, the Board has also placed emphasis on the following specific issues in determining the remuneration policy for KMP:

(i) the Group is currently focused on undertaking exploration, appraisal and development activities;

(ii) risks associated with developing oil and gas companies whilst exploring and developing projects; and

(iii) other than profit which may be generated from asset sales, as the Company is currently undertaking new project acquisition, exploration and development activities, it does not expect to be undertaking profitable operations until sometime after the commencement of commercial production on any of its projects.

Executive Remuneration

The Group's remuneration policy is to provide a fixed remuneration component and a performance based component (short term incentive and long term incentive). The Board believes that this remuneration policy is appropriate given the considerations discussed in the section above and is appropriate in aligning executives' objectives with shareholder and business objectives.

Fixed Remuneration

Fixed remuneration consists of base salaries, as well as employer contributions to superannuation funds and other non-cash benefits. Non-cash benefits may include provision of motor vehicles and health care benefits.

Fixed remuneration is reviewed annually by the Board in the absence of a Remuneration and Nomination Committee. The process consists of a review of company and individual performance, relevant comparative remuneration externally and internally and, where appropriate, external advice on policies and practices.

Performance Based Remuneration - Short Term Incentive

Some executives are entitled to an annual cash bonus upon achieving various key performance indicators ("KPI's"), as set by the Board. Having regard to the current size, nature and opportunities of the Company, the Board has determined that these KPI's will include measures such as successful completion of exploration activities (e.g. completion of exploration programs within budgeted timeframes and costs), development activities (e.g. completion of feasibility studies), corporate activities (e.g. recruitment of key personnel) and business development activities (e.g. project acquisitions and capital raisings). The Board currently assesses performance against these criteria annually on the anniversary of the executive's start date.

During the 2011 financial year, no cash bonuses have been paid or are payable (2010: none).

Performance Based Remuneration - Long Term Incentive

The Board may issue incentive options to some executives as a key component of the incentive portion of their remuneration, in order to attract and retain the services of the executives and to provide an incentive linked to the performance of the Consolidated Entity. The Board considers that each executive's experience in the resources industry will greatly assist the Consolidated Entity in progressing its projects to the next stage of development and the identification of new projects. As such, the Board believes that the number of incentive options to be granted to executives will be commensurate to their value to the Consolidated Entity.

The Board has a policy of granting incentive options to executives with exercise prices at and/or above market share price (at the time of agreement). As such, incentive options granted to executives will generally only be of benefit if the executives perform to the level whereby the value of the Consolidated Entity increases sufficiently to warrant exercising the incentive options granted.

Other than service-based vesting conditions, there are not expected to be additional performance criteria on the incentive options granted to executives, as given the speculative nature of the Consolidated Entity's activities and the small management team responsible for its running, it is considered the performance of the executives and the performance and value of the Consolidated Entity are closely related.

The Company does not currently have a policy regarding executives entering into arrangements to limit their exposure to Incentive Options granted as part of their remuneration package.

Relationship between Remuneration of KMP and Shareholder Wealth

During the Company's project identification, acquisition, exploration and development phases of its business, the Board anticipates that the Company will retain earnings (if any) and other cash resources for the exploration and development of its resource projects. Accordingly the Company does not currently have a policy with respect to the payment of dividends and returns of capital. Therefore there was no relationship between the Board's policy for determining the nature and amount of remuneration of KMP and dividends paid and returns of capital by the Company during the current and previous four financial years.

The Board did not determine the nature and amount of remuneration of the KMP by reference to changes in the price at which shares in the Company traded between the beginning and end of the current and the previous four financial years. However, as noted above, a number of KMP have received or are entitled to receive Incentive Options which generally will only be of value should the value of the Company's shares increase sufficiently to warrant exercising the Incentive Options.

Relationship between Remuneration of KMP and Earnings

As discussed above, the Company is currently undertaking new project acquisition, exploration and development activities, and does not expect to be undertaking profitable operations (other than by way of material asset sales, none of which is currently planned) until sometime after the successful commercialisation, production and sales of commodities from one or more of its projects. Accordingly the Board does not consider earnings during the current and previous four financial years when determining the nature and amount of remuneration of KMP.

Non-Executive Director Remuneration

The Board's policy is for fees to Non-Executive Directors to be no greater than market rates for comparable companies for time, commitment and responsibilities. Given the current size, nature and risks of the Company, Incentive Options have been used to attract and retain Non-Executive Directors. The Board determines payments to the Non-Executive Directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required.

The maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by shareholders at a General Meeting. Director's fees paid to Non-Executive Directors accrue on a daily basis. Fees for Non-Executive Directors are not linked to the performance of the Group. However, to align Directors' interests with shareholder interests, the Directors are encouraged to hold shares in the Company and Non-Executive Directors may in limited circumstances receive unlisted incentive options in order to secure their initial or ongoing services.

Non-Executive Director fees for Messrs Savage, Blakey, Taylor and McGhie are presently set at $45,000 per annum (2010: $45,000). These fees cover main board activities only. Mr Middlemas was paid consulting fees of $49,050 (inclusive of superannuation) for the year ended 30 June 2011 (2010: $49,050). Non-Executive Directors may receive additional remuneration for other services provided to the Company, including but not limited to, membership of committees.

The board has no retirement scheme in place. Directors who retire from the board of directors are not entitled to any retirement payment. Where required, the Company will make contributions to superannuation funds.

Director Remuneration

Details of the nature and amount of each element of the remuneration of each Director of the Company for the financial year are as follows:

Notes in relation to the table of directors' and executive officers' remuneration:

(1) There was no short term cash bonus paid during the year.

(2) No options were granted during the financial year.

(3) TM Services Limited, a company controlled by Mr P Taylor and Mr P Blakey, was paid a total of $60,000 (2010: $30,000) during the year for additional consulting services provided to the Group by Mr P Taylor and Mr P Blakey.

(4) Mr S Cranswick resigned on 1 June 2010.

(5) Mr C McGhie was appointed on 1 June 2010.

(6) Mr S Cranswick (prior to his resignation) and Mr C McGhie (following his appointment) provided services as the Company's Company Secretary through a services agreement with Apollo Group Pty Ltd. Under the agreement, Apollo Group Pty Ltd provides administrative, company secretarial and accounting services, and the provision of a fully serviced Australian office to the Company for a monthly retainer of $19,000 (2010: $17,000). Mr Cranswick was an employee of Apollo Group Pty Ltd and Mr McGhie is an employee of Apollo Group Pty Ltd.

Options Granted to Key Management Personnel

Details of options granted to each Key Management Personnel of the Company or Group during the financial year are as follows:

2011

No options were granted as part of their remuneration to key management personnel during the 2011 financial year.

2010

No options were granted as part of their remuneration to key management personnel during the 2010 financial year.

There were no options granted, exercised or that lapsed for any Key Management Personnel of the Company or Group during the financial year.

Employment Contracts with Key Management Personnel

Mr Hill, Managing Director and Chief Executive Officer, has a contract of employment with Global Petroleum Limited dated 1 August 2011. The contract specifies the duties and obligations to be fulfilled by the Managing Director and Chief Executive Officer. The contract has a rolling annual term and may be terminated by the Company by giving 3 months notice. Mr Hill will receive a salary of £220,000 plus pension contributions of £30,000 per annum and a discretionary bonus subject to the achievement of key performance indicators (KPI's) to be established by the Board.

Subject to the necessary approvals, Mr Hill will also be granted the following options:

·; 1,500,000 incentive options exercisable at A$0.25 each on or before 1 April 2014, vesting on 1 April 2012;

·; 1,750,000 incentive options exercisable at A$0.30 each on or before 1 October 2014, vesting on 1 October 2012;

·; 1,750,000 incentive options exercisable at A$0.35 each on or before 1 April 2015, vesting on 1 April 2013; and

·; 1,000,000 incentive options exercisable at A$0.45 each on or before 1 October 2015, vesting on 1 October 2013.

INSURANCE OF OFFICERS AND AUDITORS

The Constitution of the Company requires the Company, to the extent permitted by law, to indemnify any person who is or has been a director or officer of the Company or Group for any liability caused as such a director or officer and any legal costs incurred by a director or officer in defending an action for any liability caused as such a director or officer. During or since the end of the financial year, no amounts have been paid by the Company or Group in relation to these indemnities.

During the financial year, an insurance premium of $21,663 was paid by the Group to insure against a liability incurred by a person who is or has been a director or officer of the Company or Group. The insurance policy does not contain details of the premiums paid in respect of individual officers of the Company.

NON-AUDIT SERVICES

The auditor, KPMG, did not provide any non-audit services to the Company during the financial year.

AUDITOR'S INDEPENDENCE DECLARATION

The auditor's independence declaration is on Page 19, and forms part of the Directors' Report.

This report is made in accordance with a resolution of the Directors made pursuant to section 298(2) of the Corporations Act 2001.

For and on behalf of the Directors

PETER HILL

Managing Director

29 September 2011

CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2011

The accompanying notes form part of these financial statements.

CONSOLIDATED STATEMENT OF

FINANCIAL POSITION

AS AT 30 JUNE 2011

The accompanying notes form part of these financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2011

The accompanying notes form part of these financial statements.

CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2011

Amounts are stated net of tax

The accompanying notes form part of these financial statements.

The following sections are available in the full version of the Annual Financial Report on Global Petroleum Limited's website www.globalpetroleum.com.auand on the ASX website www.asx.com.au:

·; Auditor's independence Declaration

·; Notes to the Financial Statements

·; Directors' Declaration

·; Independent Auditor's Report

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