Global Petroleum Regulatory News (GBP)

Global Petroleum Limited - Annual Financial Report - 30 June 2012

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 2012 ("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 Blakey

Mr Peter Taylor

Mr Peter Hill (appointed 1 September 2011)

Mr Ian Middlemas (resigned 31 December 2011)

Mr Clint McGhie (resigned 31 December 2011)

Mr Peter Dighton (appointed 31 December 2011)

Mr Damien Cronin (appointed 31 December 2011)

Unless otherwise disclosed, Directors held their office from 1 July 2011 until the date of the financial report and accounts.

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 - May 2012).

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

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. 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

Independent 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. He is a director of Apollo Group Pty Ltd.

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 and resigned on 31 December 2011.

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

Independent 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. Mr McGhie resigned as director and company secretary on 31 December 2011.

Mr Peter Dighton LLB (QUT)

Independent Non-Executive Director

Mr Dighton is a lawyer who specialises in upstream petroleum and LNG projects. He was previously a Non-Executive Director of Global from 2003- 2008 and has also served on the board of the listed entities Falklands Oil and Gas Limited (Dec 2004 - Nov 2009) and Texon Petroleum Limited (May 2006 - Dec 2009). He is currently a director of OSD Pipelines Pty Ltd and is the Australasian representative of the floating LNG developer Flex LNG Limited (2008 - to date).

Mr Dighton was appointed director on 31 December 2011. Mr Dighton has not held any other directorships, other than those listed above, of publicly listed companies in the last three years.

Mr Damien Cronin MAICD MQLS

Independent Non-Executive Director and Company Secretary

Mr Cronin is a solicitor who has over 25 years experience in the oil and gas and resources sectors and has held senior legal and commercial roles with Rio Tinto, Shell, Duke Energy and Incitec Pivot. He has previously served as company secretary to a number of public companies in the oil and gas sector including Sunshine Gas Limited, Blue Energy Limited and as secretary to the operating committee of a number of mining joint ventures, including that for the Sonoma Coal Mine.

Mr Cronin was appointed director and company secretary on 31 December 2011. Mr Cronin 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.

Objectives

The objectives of the Group's principal activities are the enhancement of shareholder value by the identification and commercialisation of oil and gas assets.

OPERATING AND FINANCIAL REVIEW

The Group's primary focus during the year was on the interpretation of 2D seismic data shot over an area of the Group's Namibian Project.

In addition, during the year the Group sold its Olmos production assets and offered its Eagle Ford production assets for sale.

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 (refer to Figure 1). The Licence covers 11,730 square kilometres and is located in offshore Namibia in water depths ranging from 1,300 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 has been interpreted.

The interpretation of this low resolution 2D seismic data confirmed the presence of two leads (Structures A and B) accordingly, Global commissioned a high resolution 2D seismic acquisition programme of some 2,000 km over its acreage, which commenced in September 2011.

During the preliminary interpretation of the 2D data, the Group identified difficulties with the processed data received from the contractor, which necessitated the raw data being completely reprocessed before interpretation could take place. Consequently, the full data was only able to be sent for interpretation in the second quarter of calendar year 2012. Global has now received the results of the interpretation which has confirmed the presence of structures A and B, while also revealing some further potential leads. Given Global's large equity in the Licence (85%), the Group judges it timely to seek a partner for the next phases of exploration activity on its acreage, commencing with 3D seismic.

The Group also notes the announcement made by Chariot Oil & Gas (AIM: CHAR) on 14 May 2012 of well results from the Tapir South exploration well located some 200 km north-east of Global's acreage. The Global Directors and management team are encouraged by the presence of the excellent reservoirs encountered by Tapir South, despite the absence of commercial hydrocarbons. The Group also notes that a well drilled in the 1990s, located some 90 km away in the immediately adjoining acreage to the east, encountered good reservoir and also significant shows of both oil and gas.

Namibia is a highly prospective frontier province as evidenced by recent corporate activity in the country's offshore exploration licences.

The Licence is held jointly by Jupiter Petroleum (Namibia) Limited ("Jupiter Namibia" - a subsidiary of Global), 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 Global:

(a) Initial Exploration Period (First Four Years of Licence commencing on 3rd December 2010):

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 (A$0.977 million).

(b) First Renewal of Exploration Period (Two Years from 3rd December 2014):

The drilling of one exploration well. Minimum exploration expenditure for the First Renewal Exploration Period is US$20 million (A$19.5 million).

(c) Second Renewal Period (Two Years from 3rd December 2016):

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 (A$19.5 million), or US$21 million (A$20.5 million) if new seismic is required.

Juan de Nova Project

Jupiter Juan de Nova Limited (a subsidiary of Global) 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 (refer to Figure 2 below).

The permit lies within the exclusive economic zone surrounding Juan de Nova which is under French control. 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 attributable to the Group for the current term is €8.38 million (A$10.37 million).

The operator recently announced that it had completed the reprocessing of historic 2D data (1,000 km) which it had acquired, and that it's farm-out negotiations were proceeding. The probable next stage of operations in Juan de Nova is the shooting of 2D seismic as soon as practicable. It is presently Global's intention to fund its full 30% equity through the 2D seismic campaign, and to consider farm-down only after processing and interpretation thereof.

Wessex and Global have also initiated discussions in relation to the work programme going forward with the relevant French authorities having jurisdiction over Juan de Nova, having regard in particular to the expiration of the initial period of the Juan de Nova licence in December 2013.

Global's Directors and management team consider the Juan de Nova interest to be an additional highly prospective play and are encouraged by the level of interest being shown in the area, in particular following the significant gas discoveries made in offshore Mozambique.

Leighton Project (Discontinued operations)

(i) Olmos Reservoir

Global had 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 and in nine producing Olmos wells.

During the year ended 30 June 2012 the Group completed a Sale and Purchase Agreement in respect of its interest. The Group's net proceeds from the sale amounted to A$2.64 million before tax.

The Group's share of production from the Olmos wells to 1 February 2012 (the effective date of the Sale and Purchase Agreement) was 115,386 boe (45,481 bo and 420,632 mcfg).

(ii) Eagle Ford Shale

The Group has engaged consultants to seek buyers for the Group's interest (7.939% Working Interest) (5.95% Revenue Interest) in the Eagle Ford Shale assets.

The Group's share of production from the Eagle Ford wells to 30 June 2012 was 169,917 boe (114,399 bo and 177,108 mcfg).

Glossary:

bbl: barrel

bo: barrels of oil

boe: barrels of oil equivalent

boepd: barrels of oil equivalent per day (including gas converted to oil equiv barrels on basis of 6 barrel of oil equivalent)

bopd: barrels of oil per day

mcf: thousand cubic feet

mcfg: thousand cubic feet of gas

mmcfg: million cubic feet of gas

mcfgpd: thousand cubic feet of gas per day

mmbtu: million British thermal units

NRI: Net Revenue Interest

Result of operations

The results of the Consolidated Entity include revenue from oil and gas sales of $1,612,342 (2011: $1,700,218) and interest income of $877,527 (2011: $1,040,457). Following the Group's decision to discontinue it's operations in the Leighton Project (Olmos and EFS oil and gas production wells and associated licences) via a sales process, the results of the Group have been split to show the continuing and discontinuing operations. The prior year figures have been restated to reflect this decision.

Review of financial condition

As at 30 June 2012 the Group had cash of $24,329,070 (2011: $25,317,051).

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.

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.

EVENTS SUBSEQUENT TO REPORTING DATE

As at the date of the financial report and accounts, there are no matters or circumstances which have arisen since 30 June 2012 that have significantly affected or may significantly affect:

(i) the operations, in financial years subsequent to 30 June 2012 of the Consolidated Entity;

(ii) the results of those operations, in financials years subsequent to 30 June 2012 of the Consolidated Entity; or

(iii) the state of affairs, in financial years subsequent to 30 June 2012 of the Consolidated Entity.

LIKELY DEVELOPMENTS

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 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 Group and accordingly, has not been disclosed.

DIRECTORS' INTERESTS

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

Notes

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

(2) Incentive options means one unlisted option exercisable at various amounts and dates - see below.

(3) During the year, in connection with the acquisition of Jupiter Petroleum Limited, Mr P Blakey and Mr P Taylor were issued a total of 25 million fully paid ordinary shares, with 12.5 million shares each being included in their interest in Ordinary Shares in the table above.

(4) Mr Hill was appointed as a Director on 1 September 2011. Mr Hill was granted the following options:

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.

(5) Subject to Shareholder approval at the AGM, the Company will grant Mr Dighton (or his nominee) 300,000

incentive options exercisable at A$0.25 each on or before 30 June 2014.

SHARE OPTIONS

On 19 August 2011, the Company granted 400,000 incentive options exercisable at $0.25 each on or before 30 June 2014. 300,000 of these were granted to Mr C McGhie and the remaining 100,000 were granted to a key consultant employed by a related party company, who provides administrative and accounting assistance to the Group.

On 29 November 2011, the Company granted Mr Hill 6,000,000 incentive options as set out above.

Subject to shareholder agreement at the 2012 AGM, Mr Dighton will be granted 300,000 incentive options excisable at $0.25 each on or before 30 June 2014.

Since 30 June 2012, no shares have been issued as a result of the exercise of options.

DIRECTORS' MEETINGS

The number of directors' meetings and the number of meetings attended by each of the directors of the company during the financial year are:

The Company does not currently have separate committees of the Board, given current size of the Board.

Matters that would otherwise be within the charter of such committees are considered by the Board at its meetings. The table above includes Circulatory Resolutions.

REMUNERATION REPORT - AUDITED

Details of Key Management Personnel

Mr P Hill (appointed 1 August 2011)

Mr M Savage

Mr P Blakey

Mr P Taylor

Mr I Middlemas (resigned 31 December 2011)

M C McGhie (resigned 31 December 2011)

Mr P Dighton (appointed 31 December 2011)

Mr D Cronin (appointed 31 December 2011)

Unless otherwise disclosed, the KMP held their position from 1 July 2011 until the date of the financial report and accounts.

The Group's remuneration policy for its key management personnel (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.

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 aims to align executives' objectives with shareholder and business objectives.

Currently given the size and nature of the Group operations, there is only one executive, Mr Peter Hill, who is also a director.

(i) Fixed remuneration

Fixed remuneration consists of a base salary, as well as an employer contribution to a superannuation fund and other non-cash benefits. Non-cash benefits may include provision of motor vehicles and health care benefits.

The 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. However external advice has not been sought in 2012 (2011; nil).

(ii) Performance based remuneration - short term incentive

The executive is 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 is in the process of determining the specific KPI's.

During the 2012 financial year, no cash bonuses were paid or are payable (2011: none).

(iii) Performance based remuneration - long term incentive

The Board may issue incentive options to the executive as a key component of the incentive portion of their remuneration, in order to attract and retain the services of the executive and to provide an incentive linked to the performance of the Consolidated Entity. The Board has a policy of granting incentive options to the executive with exercise prices at and/or above market share price (at the time of agreement). As such, incentive options granted to the executive will generally only be of benefit if the executive performs to the level whereby the value of the Consolidated Entity increases sufficiently to warrant exercising the incentive options granted. For details of options granted to Mr Peter Hill during the year refer to section 4.3.3.1 of the financial report and accounts.

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.

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 Group, Incentive Options have been used to attract and retain certain 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 however no external advice has been sourced this year (2011: nil).

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, up to 31 December 2011 for Mr McGhie and Mr Middlemas, are presently set at $45,000 per annum (2011: $45,000). Messrs Dighton and Cronins' fees are presently set at $30,000 per annum. These fees relate to responsibilities as a director only. Refer to table in note 4.3.2 of the financial report and accounts for further details. Non-Executive Directors can rescind their position at any time by submitting their resignation in writing. A Non-Executive Director's appointment can be terminated at any time by a shareholder vote. The Non-Executive Directors are not entitled to any pay-outs on termination.

The board has no retirement scheme in place. Directors who retire from the board of directors are not entitled to any retirement payment. The Group will make contributions to superannuation funds where required, in 2012 to Messrs Middlemas, McGhie, Dighton and Cronin (2011: Messrs Middlemas and McGhie).

Relationship between remuneration of KMP and shareholder wealth

During the Group's project identification, acquisition, exploration and development phases of its business, the Board anticipates that the Group will retain earnings (if any) and other cash resources for the exploration and development of its resource projects. Accordingly the Group 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 Group during the current and previous four financial years. 

Relationship between remuneration of KMP and shareholder wealth (continued)

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 Group 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), 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.

Details of the nature and amount of each element of the remuneration of each Director and key management personnel of the Consolidated Entity 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) The fair value of the options was determined using the Black Scholes option pricing model or the Binomial option pricing model.

(3) Mr D Cronin was remunerated $18,000 (2011: nil) as company secretary, separate to his role as director and thus not included in table above.

(4) Indicative valuation at 30 June 2012 as grant date has not been reached, refer to the table below.

Options granted to Directors and Key Management Personnel - audited

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

In 2012, the following equity-settled share-based payments were issued for no consideration or will be issued for no consideration subject to shareholder approval at the annual general meeting. During 2011, no equity-settled share-based payments were issued.

(1) Subject to shareholder approval at 2012 annual general meeting.

(2) Indicative valuation at 30 June 2012 as grant date has not been reached.

Once the Vesting date has been reached there are no exercise conditions attached to these options. No options were exercised during the year.

The fair value of the options was determined using the Black Scholes option pricing model or the Binomial option pricing model. The total expense arising from the share based payments to KMP was $402,242. The expected volatility of the options was calculated using the Hoadley's volatility calculator for a 3 year period, using data extracted from Bloomberg. For the purpose of the valuations above, the future estimated volatility level of 85% (for options granted on 19 August 2011) and 90% (on remaining options) was used in the pricing model.

Indemnification Insurance of Officers - audited

The Constitution of the Group requires the Group, to the extent permitted by law, to indemnify any person who is or has been a director or officer of the Group 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 Group or Group in relation to these indemnities.

During the financial year, an insurance premium of $21,510 (2011: $21,663) was paid by the Group, covering the period from 6 December 2011 to 6 December 2012, 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

During the year KPMG, the Group's auditor, has performed certain other services in addition to their statutory duties.

The Board has considered the non-audit services provided during the year by the auditor and in accordance with written resolution of the directors of the company and is satisfied that the provision of those non-audit services during the year by the auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons:

The non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involves reviewing or auditing the auditor's own work, acting in a management or decision making capacity for the Group, acting as an advocate for the Group of jointly sharing risks and rewards.

Details of the amounts paid to the auditor of the group, KPMG, and its related practices for audit and non-audit services provided during the year are set out below.

AUDITOR'S INDEPENDENCE DECLARATION

The auditor's independence declaration is on Page 26, and forms part of the Directors' Report for the financial year ended 30 June 2012.

DIRECTORS DECLARATION

The financial report and accounts are made in accordance with a resolution of the Directors made pursuant to section 298(2) of the Corporations Act 2001. 

DAMIEN CRONIN

DIRECTOR and COMPANY SECRETARY

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2012

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME AS AT 30 JUNE 2012

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2012

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2012

*Restated to present discontinued operations - refer note 6 of the financial report and accounts.

The following sections are set out in the full version of the financial report and accounts, available to download from the Company's website, www.globalpetroleum.com.au and from the ASX website, www.asx.com.au:

- Auditors Independence Declaration

- Notes to the Financial Statements

- Directors' Declaration

- Independent Auditor's Report

The Company also confirms that the full version of the financial report and accounts have today been posted to shareholders.