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Annual Financial Report

27 Sep 2019 08:00

RNS Number : 9267N
Range Resources Limited
27 September 2019
 

Range Resources Limited

('Range' or 'the Company') 

 

 

27 September 2019

 

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATIONS (EU) NO. 596/2014 ("MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA REGULATORY INFORMATION SERVICE ("RIS"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

AUDITED ANNUAL RESULTS FOR THE 12 MONTHS ENDED 30 JUNE 2019

 

Range, an international company with oil and gas projects and oilfield service businesses in Trinidad and Indonesia, today releases its Annual Report for the 12 months ended 30 June 2019. A copy of the full Annual Report is available on the Company's website, www.rangeresources.co.uk and also the Australian Securities Exchange's website, www.asx.com.au (ASX code: RRS).

2019 Highlights:

·; In Trinidad, the focus continued on low cost production activities, as well as completion of infrastructure modernisation, FDP on the Beach Marcelle licence, and new exploration studies on the St Mary's licence;

·; Net proved and probable reserves (2P) of 15.0 MMbbl and net contingent resources 2C (P50) of 12.9 MMboe largely unchanged from FY2018;

·; Subsequent to the year end, the Company signed an SPA with LandOcean for the sale of Range Resources Trinidad Limited in exchange for offsetting all outstanding debt and payables (US$91.5 million as at 30 June 2019) and a cash consideration of US$2.5 million, subject to shareholders' approvals and Trinidad government approvals;

·; Revenues of US$12.4 million (FY2018: US$13.1 million) on production of 538 bopd (FY 2018: 650 bopd) and realised oil price of US$59.1 / barrel (FY 2018: US$54.4 / barrel);

·; Net impairment charge against Trinidad and Indonesia of US$30.2 million (as reported at half-year for the period ended 31 December 2018), with no further impairment recorded on these assets at year-end;

·; Net loss after tax of US$49.5 million mainly due to the impairment (FY2018: loss of US$17.5 million); and

·; Cash balance of US$1.8 million (FY2018: US$3.9 million). To improve the balance sheet and preserve the existing cash position, a £1 million equity placement was completed, as well as an agreement to pay the annual interest payment under the convertible note by way of issuance new ordinary shares. Subsequent to the year end, a £0.75 million subscription was completed and a VAT refund of US$1.03 million received.

 

 

 

Range's Chairman, Zhiwei Gu, commented:

 

"During the year, our main focus has been on securing debt restructuring agreements that would allow us to restore the Company's financial health, increase liquidity and improve shareholder sentiment. I am delighted that (subsequent to the year end) our efforts have been rewarded with the signing of a milestone agreement with LandOcean, which will allow the Company to be completely debt-free and have sufficient cash resources to progress with new opportunities. Our aim for the remainder of 2019 (calendar year) is to secure the necessary approvals to complete this transformative transaction. As part of a wider strategy, we are continuing to evaluate attractive acquisition targets and exploring options in respect of the drilling business in Trinidad. Having successfully delivered on our agenda with a positive outcome for all stakeholders, the Company's future looks very exciting. I look forward to reporting on our progress in the upcoming months."

 

 

 

Contact Details

 

 

 

Range Resources Limited

Evgenia Bezruchko (Group Corporate Development Manager & Joint Company Secretary)

e. admin@rangeresources.co.uk

t. +44 (0)20 3865 8430

Cantor Fitzgerald Europe (Nominated Adviser and Broker)

David Porter / Rick Thompson (Corporate Finance)

t. +44 (0)20 7894 7000

 

Competent Person statement

The information contained in this announcement has been reviewed and approved by Mr Lubing Liu. Mr Liu is a suitably qualified person with over 24 years of industry experience. He holds a BSc in Petroleum Engineering from the Southwest Petroleum University, China and is a member of the SPE (Society of Petroleum Engineers). Mr Liu holds the role of Chief Operating Officer and Trinidad General Manager with the Company.

The reserves and resources stated in this announcement were prepared in accordance with the definitions and guidelines in the Society of Petroleum Engineers (SPE) 2007 Petroleum Resources Management System (PRMS). The reserve figures are reported according to Range's net economic interest, net of royalties and net of lease fuel up to the reference point. The reference point is defined as the point of sale to third parties. Petroleum reserves are prepared using deterministic and probabilistic methods. Project and field totals are aggregated by arithmetic summation by category.

 

 

+ Directors' Report

The Directors of Range Resources Limited ("Range" or "the Company") and the entities it controls (together, the "Group") present the financial report for the year ended 30 June 2019.

Directors

The names and details of the Company's directors in office during the financial year and until the date of this report are as follows. The directors were in office during the entire period unless otherwise stated.

Name

Position

Mr Zhiwei Gu

Executive Chairman (appointed 10 December 2018)

Non-Executive Chairman (resigned 10 December 2018)

Mr Lubing Liu

Executive Director, Chief Operating Officer

Dr Mu Luo

Non-Executive Director (appointed 11 January 2019)

Ms Juan Wang

Non-Executive Director (resigned 22 July 2019)

Mr Yan Liu

Executive Director, Chief Executive Officer (resigned 10 December 2018)

Dr Yi Zeng

Non-Executive Director (resigned 27 November 2018)

 

Mr Zhiwei Gu: Executive Chairman

Qualifications:

LL.B, LL.M., MSc

Interest in shares and options:

2,083,333 ordinary shares

30,000,000 unlisted options (£0.01, 30 March 2020)

Directorships held in other listed entities during the past three years

None

 

Mr Gu is an experienced corporate lawyer, who has worked with numerous companies seeking listings on various international stock markets, including the Toronto Stock Exchange and the Hong Kong Stock Exchange. He is currently a partner of Dentons, one of the largest global law firms. Mr Gu has participated in several venture capital and private equity investment cases by various funds such as London Asia Fund, Warburg Pincus, Korea Development Bank, China Venture Investment Co., and China Cinda AMC. During his time with China National Gold Group Corp., Mr Gu was in charge of mineral resource merger and acquisition activities. Mr Gu holds a LL.B. from the Jilin University in China; a LL.M. from the Northeast University in China; and a Master of Applied Finance from the Macquarie University in Australia. Mr Gu is a qualified lawyer and securities practitioner in China.

 

 

 

Mr Lubing Liu: Executive Director, Chief Operating Officer

Qualifications:

BSc

Interest in shares and options:

None

Directorships held in other listed entities during the past three years

None

 

Mr Lubing Liu has 24 years of global experience in petroleum exploration, development, production, joint venture operations and new ventures. Prior to joining Range, Mr Liu held various subsurface leader roles, including Chief Reservoir Engineer with Melbana Energy Limited, Vice President of Exploration and Petroleum Technology with Sinopec East Puffin Pty Ltd, and petroleum engineering leader roles with other international exploration and production and energy service companies including ConocoPhillips, CNOOC, Woodside, RPS and LR. Mr Liu is experienced in petroleum engineering and has extensive IOR/EOR (waterflood inclusive) and gas cycling experience having worked at the Xijiang24-3/30-2/24-1 oilfields, Liuhua 11-1 oilfield and Penglai oilfield in China, the Chinguetti oilfield in Mauritania, Block 95 in Peru, Goodwyn gas field, Thylacine & Geographe gas field and Longtom gas field in Australia. Mr Liu holds a BSc in Petroleum Engineering from the Southwest Petroleum University, China. He is a Member of the Society of Petroleum Engineers.

 

Dr Mu Luo: Non-Executive Director

Qualifications:

BSc; MSc; PhD

Interest in shares and options:

None

Directorships held in other listed entities during the past three years

None

 

Dr Luo is a senior oil and gas professional with 36 years' experience working for leading international E&P and oilfield services companies. He has worked on various giant conventional and unconventional projects across all levels from research to operations. He is currently a principal development geophysicist to Inpex Corporation, leading a multi-billion Ichthys LNG project in Australia. Prior to that, he held principal roles with Sinopec Oil and Gas, PGS, Japan Petroleum Exploration Company Limited, and Japan Oil, Gas and Metals National Corporation. Dr Luo holds a PhD in Exploration Geophysics from the Curtin University, Australia; MSc in Geophysics from the University of Queensland, Australia; and BSc in Geophysics from the Petroleum University of China. He is a member of the Australian Society of Exploration Geophysicists, the European Association of Geoscientists and Engineers, and the Society of Exploration Geophysicists.

 

 

 

 

 

 

Ms Juan Wang: Non-Executive Director (resigned 22 July 2019)

Qualifications:

BA, MBA

Interest in shares and options:

2,083,333 ordinary shares

 

Directorships held in other listed entities during the past three years

Anterra Energy Inc. (from December 2014 to June 2016)

 

Ms Wang was previously the President of Energy Prospecting Technology USA, Inc. and LandOcean Energy Canada Ltd. where she was responsible for overall management work for the subsidiary companies of LandOcean in Houston and Calgary. Previously, she was also an investment manager and director at Anterra Energy Inc. responsible for Chinese investor liaisons and a manager of corporate mergers and acquisitions at LandOcean. Ms Wang has a commercial banking background having previously worked for Deutsche Bank and Bank of East Asia.

 

Mr Yan Liu: Executive Director, Chief Executive Officer (resigned 10 December 2018)

Qualifications:

B.Ec, MCom

Interest in shares and options:

6,333,333 ordinary shares

Directorships held in other listed entities during the past three years

None

 

Mr Liu has over 20 years of accounting and corporate advisory experience in China and Australia. Previously, Mr Liu was a partner of Agile Partners, the financial advisory company based in China and the Financial Controller at Legalwise Seminars Pty in Australia. He also spent 8 years at Chinatex Corporation where he worked in project management positions. Mr Liu holds a Bachelor degree in Economics from the Central University of Finance and Economics, China, and a Masters degree in Commerce from the University of New South Wales, Australia.

 

Dr Yi Zeng: Non-Executive Director (resigned 27 November 2018)

Qualifications:

BSc; MSc; PhD

Interest in shares and options:

None

Directorships held in other listed entities during the past three years

None

 

Dr Yi Zeng has over 30 years of experience in the oil and gas and mining industries. Dr Zeng has held various technical and research positions with global companies including BHP Billiton and Santos Asia Pacific. Dr Zeng holds a PhD in Geophysics from the Victoria University of Wellington, New Zealand, an MSc in Applied Geophysics and a BSc in Geophysical Exploration from the Chengdu University of Technology, China.

 

Company Secretary

The following persons held the position of company secretary during the financial year:

·; Ms Sara Kelly

·; Ms Evgenia Bezruchko (appointed 1 April 2019)

·; Mr Nick Beattie (resigned 31 March 2019)

 

Ms Sara Kelly: Joint Company Secretary

Qualifications:

B.Com, LLB

Interest in shares and options:

1 ordinary share

Directorships held in other listed entities during the past three years

Homestay Care Limited (from 13 November 2018)

Ragnar Metals Limited (from June 2017 to September 2019)

 

Ms Sara Kelly is an experienced Company Secretary and Corporate Lawyer with over 15 years' experience. Sara has comprehensive knowledge of and experience in administering regulatory frameworks and processes in a listed company environment and practised as a corporate lawyer specialising in acquisitions, takeovers, capital raisings and listing of companies on ASX and AIM. Sara has acted as the company secretary of a number of ASX listed companies. Sara is a partner at Edwards Mac Scovell, a boutique Western Australian legal practice based in Perth.

Ms Evgenia Bezruchko: Joint Company Secretary (appointed 1 April 2019)

Qualifications:

BSc, MSc, MBA

Interest in shares and options:

1,428,571 ordinary shares

Directorships held in other listed entities during the past three years

None

 

Ms Evgenia Bezruchko has almost 10 years experience in corporate development and capital markets in natural resources sector. Prior to joining Range in 2012, Evgenia worked in corporate broking and equity sales for an independent merchant bank Brandon Hill Capital (formerly Fox-Davies Capital Limited), covering a wide range of listed and private oil & gas and mining companies. Evgenia holds a BSc in Pharmacology from the University of Bristol, an MSc in Finance from the University of Westminster and an MBA from the American InterContinental University.

 

 

 

 

 

 

 

 

 

Mr Nick Beattie: Chief Financial Officer and Joint Company Secretary (resigned 31 March 2019)

Qualifications:

BA (Hons), FCIBS, AMCT

Interest in shares and options:

2,916,667 ordinary shares

Directorships held in other listed entities during the past three years

None

 

Mr Nick Beattie has 28 years of experience in finance working with a range of international banks. Most recently he was a Managing Director in the BNP Paribas Upstream Oil and Gas team in London where he was responsible for leading the bank relationships with UK focused independent E&P companies. Nick has over 10 years' experience specifically financing the E&P sector and whilst at BNP Paribas, he structured and led numerous reserve based loans, development financings and other debt facilities. Prior to working with BNP Paribas, Nick worked as a Director within the Oil and Gas finance team at Fortis Bank covering Europe, Middle East and Africa and in a variety of roles with National Australia Bank Group. Nick is an Associate Member of the Association of Corporate Treasurers, a Fellow of the Chartered Institute of Bankers in Scotland and a Member of the Chartered Institute for Securities and Investment.

 

Results of operations

The Company's net loss after taxation attributable to the members of Range Resources Limited for the year to 30 June 2019 was US$49.5 million (FY2018: US$17.5 million). Loss for the year from continuing operations was $US24.4 million (FY2018: US$11.0 million) and loss for the year from discontinuing operations was US$25.1 million (FY2018: US$6.5 million).

Dividends

No dividend was paid or declared by the Company during the year and up to the date of this report.

Corporate structure

Range Resources Limited is a company limited by shares, which is incorporated and domiciled in Australia.

Nature of operations and principal activities

The principal activity of the Group during the financial year was oil and gas exploration, development and production in Trinidad.

 

 

 

 

+ Operational Review

 

TRINIDAD

Production

The Group's oil and gas production for the financial year was 196,651 barrels (average of 538 bopd) net to Range, which is a 17% decrease in production from the previous year (FY 2018: 650 bopd). Production activities comprised low-cost workovers, reactivation and swabbing activities on the existing wells.

The Company had been facing challenges in maintaining production rates at consistent levels largely due to the limitations associated with the infrastructure at the Beach Marcelle field. To provide a greater resilience in the production infrastructure, the Company completed infrastructure modernisation programme at the field including installation of two new 500-barrel settling tanks and a new 1000-barrel storage tank.

Beach Marcelle waterflood and field development plan

Over the last few years, Range had been conducting waterflood operations over some parts of the Beach Marcelle field, with average reported waterflood production from the field during the year of 135 bopd.

Range in combination with independent consulting groups Rockflow Resources Ltd and Petrofac Facilities Management Ltd., completed a full Field Development Plan ("FDP") for the further development of the Beach Marcelle licence. The main objective of the FDP was to identify options for expanding waterflood operations over larger areas of the field, and increasing future production rates and reserves. The subsurface part of the study also identified areas where there could be considerable volumes of oil that has not yet been properly appraised or produced by primary depletion.

Geological tool studies

The Company acquired a new geological tool to undertake studies on its fields that are expected to significantly enhance subsurface understanding, and assist in identifying shallow reservoirs and economic well locations. Preparations of subsurface geological data surveys had been ongoing.

St Mary's exploration studies

Range in combination with LEAP Energy Partners Sdn. Bhd, an independent subsurface consultancy, completed new exploration studies on the licence. The objective of these studies was to assess the work scope required to convert various leads into drillable prospects and to establish a future work plan. The study targeted seven main prospects, at differing reservoir horizons (all producing at nearby fields), and with different potential volumes and levels of risk. The study suggests the potential, for each prospect, of reprocessing some of the seismic data, adding further 2D lines as necessary, and comparing the existing log data with the analogue producing fields nearby.

 

 

Oilfield services

During the year, RRDSL was awarded a new contract with Touchstone Exploration Trinidad Limited, a subsidiary of Touchstone Exploration Inc ("Touchstone"). Under the work scope of the contract, RRDSL provided turnkey services for drilling one well on Touchstone's onshore WD8 block in Trinidad. The drilling operations were safely completed. RRDSL also continued to provide swabbing services on a regular basis to another onshore operator in Trinidad.

Given challenges at winning new contracts, the Company identified the need to reduce the costs of RRDSL's services and improve its competitiveness. As a result, the Company initiated a corporate restructuring of RRDSL, which resulted in decrease in headcount by 23% during the year.

Indonesia

Despite continued efforts by the operator of the project to establish production from the field during the year, no continuous, sustained production had been achieved. The Company made a decision to write off the value of its investment in Indonesia (as reported in the half-yearly report for the period ended 31 December 2018). The Company is not intending to invest any material further sums into this project and is exploring opportunities to dispose of its interest.

CORPORATE

Debt restructuring

On 18 March 2019, Range entered into debt restructuring agreements with LandOcean Energy Services Co. Ltd ("LandOcean") conditional on Range completing an acquisition of an interest in a pre-school educational business operating in China. Subsequent to the year end, Range announced that despite continued efforts the Company was not able to agree binding acquisition terms that would be in the best interest of the Company's shareholders, and the Board made a decision to terminate the acquisition. As a result, the debt restructuring agreements announced on 18 March 2019 were also terminated.

On 3 September 2019, Range announced that it signed a binding conditional Sale and Purchase Agreement with LandOcean for the sale of Range Resources Trinidad Limited ("RRTL") (the "SPA") in exchange for (i) offsetting all outstanding debt and payables (including the convertible note) due from Range and its subsidiaries to LandOcean and its subsidiaries, and (ii) a cash consideration of US$2.5 million (the "Transaction"). RRTL holds interests in all of Range's oil and gas licences in Trinidad (onshore), namely Morne Diablo, South Quarry, Beach Marcelle (where RRTL holds a 100% interest), and St Mary's (where RRTL holds an 80% interest).

On completion, all outstanding debt from Range and its subsidiaries to LandOcean and its subsidiaries (including the US$20 million convertible note) will be fully repaid by offsetting against the consideration and all underlying debt agreements will be terminated. From the date of signing the SPA and up to the completion date, all payables by Range to LandOcean under any underlying debt agreements will be deferred. The maturity date of the US$20 million convertible note will change to the earlier of the date on which completion occurs under the SPA or the longstop date (being 30 June 2020). As part of the agreements, LandOcean undertakes not to issue a conversion notice.

 

Completion of the SPA is subject to satisfaction (or waiver) of the following key conditions:

·; Approval by Range shareholders at General Meeting of the Company, as the Transaction would be a material disposal falling under AIM Rule 15 and the ASX Listing Rules and Corporations Act 2001 (Cth), expected to be held in November 2019;

·; Approval by LandOcean shareholders at General Meeting of LandOcean, expected to be held at the end of October 2019; and

·; Approvals by the government of Trinidad and Tobago. 

£1m subscription

During the year, the Company completed a subscription for new ordinary shares to raise £1 million before expenses.

£0.75 million subscription

Subsequent to the year end, the Company completed a subscription for new ordinary shares to raise £750,000.

As part of the subscription, the investor can nominate up to two non-executive directors to the Board of the Company and shall retain this ability for so long as it holds 10% or more of the Company's shares in issue.

Convertible note interest payment

The Company completed an agreement with LandOcean to pay the annual interest payment of US$1.6 million under the US$20 million convertible note by way of issuance new ordinary shares in the Company. Following approval at the General Meeting, the Company issued 1,739,076,923 new ordinary shares to LandOcean.

Colombia legacy matter concluded

The court in Colombia approved the decision to settle all outstanding historic claims and disputes between Agencia Nacional de Hidrocarburos ("ANH") and the consortium of Optima Oil Corporation and the Company (the "Consortium"). ANH confirmed that Range (and the Consortium) has no liability for any payments or debts and all proposed penalties had been lifted. The Consortium agreed to waive all potential claims against ANH and to the termination of the exploration licences.

Georgia

Range submitted a Notice of Arbitration against the State of Georgia in respect of the wrongful termination of the production sharing contract over Block VIA dated 29 March 2007 in Georgia.

Range also signed an agreement to acquire Georgian Oil Pty Ltd, which is a 20% interest holder in Strait Oil and Gas ("SOG") for a nominal upfront sum. Following completion which occurred in October 2018, Range holds a 65% interest in SOG.

Director and management changes

Dr Mu (Robin) Luo was appointed as a Non-Executive Director of the Company.

Mr Yan Liu and Dr Yi Zeng tendered their resignations as Chief Executive Officer & Executive Director and Non-Executive Director, respectively. Subsequent to the year end, Ms Juan Wang tendered her resignation as Non-Executive Director of the Company.

Mr Nick Beattie tendered his resignation as Chief Financial Officer ("CFO") and Joint Company Secretary. Mr Theo Eleftheriades, the Group Financial Controller assumed the role of Acting CFO and Ms Evgenia Bezruchko, the Group Corporate Development Manager assumed the role of Joint Company Secretary, both with effect from 1 April 2019.

Significant changes in the state of affairs

There have been no significant changes in the state of affairs of the Group during the financial year, other than as set out in this report.

Significant events after the reporting date

Debt restructuring

Subsequent to the year end, Range announced that it was unable to reach terms for the binding agreement to acquire an interest in a pre-school educational business operating in China. Since debt restructuring agreements announced on 18 March 2019 were conditional on Range completing this acquisition, those were also terminated.

On 3 September 2019, Range announced that it signed a binding conditional Sale and Purchase Agreement with LandOcean for the sale of Range Resources Trinidad Limited ("RRTL") (the "SPA") in exchange for (i) offsetting all outstanding debt and payables (including the convertible note) due from Range and its subsidiaries to LandOcean and its subsidiaries, and (ii) a cash consideration of US$2.5 million (the "Transaction"). RRTL holds interests in all of Range's oil and gas licences in Trinidad (onshore), namely Morne Diablo, South Quarry, Beach Marcelle (where RRTL holds a 100% interest), and St Mary's (where RRTL holds an 80% interest).

On completion, all outstanding debt from Range and its subsidiaries to LandOcean and its subsidiaries (including the US$20 million convertible note) will be fully repaid by offsetting against the consideration and all underlying debt agreements will be terminated. From the date of signing the SPA and up to the completion date, all payables by Range to LandOcean under any underlying debt agreements will be deferred. The maturity date of the US$20 million convertible note will change to the earlier of the date on which completion occurs under the SPA or the longstop date (being 30 June 2020). As part of the agreements, LandOcean undertakes not to issue a conversion notice.

Completion of the SPA is subject to satisfaction (or waiver) of the following key conditions:

·; Approval by Range shareholders at General Meeting of the Company, as the Transaction would be a material disposal falling under AIM Rule 15 and the ASX Listing Rules and Corporations Act 2001 (Cth), expected to be held in November 2019;

·; Approval by LandOcean shareholders at General Meeting of LandOcean, expected to be held at the end of October 2019; and

·; Approvals by the government of Trinidad and Tobago. 

 

£0.75 million subscription

Subsequent to the year end, the Company completed a subscription for new ordinary shares to raise £0.75 million. As part of the subscription, the investor can nominate up to two non-executive directors to the Board of the Company and shall retain this ability for so long as it holds 10% or more of the Company's shares in issue.

Director resignation

Ms Juan Wang tendered her resignation as Non-Executive Director of the Company, effective 22 July 2019.

Likely developments and expected results of operations

The Company's main focus is to complete debt restructuring of the Group conditional on the sale of Range Resources Trinidad Limited. In the interim, the Company will continue with its Trinidad operations. The Company also continues to evaluate new acquisition opportunities.

Environmental regulations and performance

The Group's operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of a state or territory.

The Directors have considered compliance with the National Greenhouse and Energy Reporting Act 2007 which requires entities to report annual greenhouse gas emissions and energy use. The directors have assessed that there are no current reporting requirements, but may be required to do so in the future.

Share options

As at 30 June 2019, the unissued ordinary shares of Range under option are as follows:

Date of expiry

Exercise price

Number under option

3 September 2019

£0.01

194,585,862

3 September 2019

£0.02

172,557,274

30 March 2020

£0.01

37,500,000

Total: 404,643,136

During the year ended 30 June 2019 no ordinary shares of Range were issued on the exercise of options (2018: nil).

Indemnifying directors and officers

In accordance with the constitution, except where prohibited by the Corporations Act 2001, every director, principal executive officer and secretary of the Company shall be indemnified out of the property of the Company against any liability incurred by him/her in his/her capacity as director, principal executive officer or secretary of the Company or any related corporation in respect of any act or omission whatsoever and howsoever occurring or in defending any proceedings whether civil or criminal.

During the financial year, the Company has paid premiums of US$38,789 to insure the Directors and Officers against certain liabilities arising out of the conduct of acting as an officer of the Company. Under the terms and conditions of the insurance contract, the nature of liabilities insured against and the premium paid cannot be disclosed.

Meetings of Directors

During the financial year, four meetings of the board of directors were held. Attendances by each director during the year were as follows:

Director

Board Meetings

Eligible to attend

Attended

Zhiwei Gu

4

2

Yan Liu (resigned 10 December 2018)

3

3

Juan Wang

4

2

Lubing Liu

4

4

Yi Zeng (resigned 27 November 2018)

3

3

Mu Luo (appointed 11 January 2019)

1

1

Proceedings on behalf of the company

No person has applied for leave of Court to bring proceedings on behalf of the Company or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.

The Company was not a party to any such proceedings during the year.

Corporate governance

In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Range Resources Limited support and have adhered to the principles of sound corporate governance. The Board recognises the recommendations of the Australian Securities Exchange Corporate Governance Council, and considers that the Company complies to the extent possible with those guidelines, which are of importance to the commercial operation of a junior listed company.

During the financial year, shareholders continued to receive the benefit of an efficient and cost-effective corporate governance policy for the Company. The Company has established a set of corporate governance policies and procedures which can be found, along with the Company's Corporate Governance Statement, on the Company's website: www.rangeresources.co.uk.

Non-audit services

The total value of non-audit services provided by a related practice of BDO Audit (WA) Pty Ltd in respect to the Company's tax compliance is US$15,500 (2018: US$17,010).

The board of directors has considered the position and is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the auditor did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

1. all non-audit services have been reviewed by the Board to ensure they do not impact the impartiality and objectivity of the auditor; and

2. none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants.

+ Remuneration Report (Audited)

 

Remuneration policy

The remuneration policy of Range has been designed to align director and executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long-term incentives based on key performance areas affecting the Group's financial results. The Board of Range Resources Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and directors to run and manage the Group, as well as create alignment of goals between directors, executives and shareholders.

The Board's policy for determining the nature and amount of remuneration for Board members and senior executives of the Company is as follows:

The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was developed and approved by the Board.

Non-executive directors, executive directors and senior executives receive a base salary (which is based on factors such as length of service and experience), which is calculated on a total cost basis and includes any FBT charges related to employee benefits including motor vehicles, as well as employer contributions to superannuation funds where applicable.

Executive and non-executive directors can be employed by the Company on a consultancy basis on Board approval, with remuneration and terms stipulated in individual consultancy agreements.

The Board exercises its discretion in determining remuneration performance of executives. Given the size and nature of the entity, the Board does not deem it to be realistic to measure performance against defined criteria. As such remuneration and performance have historically not been linked.

All remuneration paid to directors and executives is valued at the cost to the Company and expensed. Shares given to directors and executives are valued as the difference between the market price of those shares and the amount paid by the director or executive. Unlisted options are valued using the Black-Scholes methodology.

The Board policy is to remunerate non-executive directors at market rates for comparable companies taking into consideration time, commitment and level of responsibility. As approved by shareholders on 30 November 2011, the aggregate non-executive remuneration per annum is currently A$350,000 (US$260,555). Fees for non-executive directors are not linked to the performance of the Group. The directors are not required to hold any shares in the Company under the Constitution of the Company; however, to align directors' interests with shareholder interests, the directors are encouraged to hold shares in the Company.

Options may be issued to directors and executives as part of remuneration. Options issued to directors historically were not based on performance criteria. However, the options issued to the current directors on 27 March 2015 and the Key Management Personnel on 1 September 2015 and November 2016, principally vest upon satisfaction of set company performance criteria detailed in Note 29.

Under the Company's share trading policy, all employees and directors of the Company and its related companies are prohibited from trading in the Company's shares or other securities if they are in possession of inside information.

The Board believes that it has implemented suitable practices and procedures that are appropriate for an organisation of this size and maturity.

Company performance, shareholder wealth and directors and executive's remuneration

No relationship exists between shareholder wealth, director and executive remuneration and Company performance.

Voting and comments made at the company's 2018 Annual General Meeting

Range Resources Limited received 98% of "yes" votes on its remuneration report for the 2018 financial year. The Board believes that this reflects the conservative remuneration practices of the company.

Key Management Personnel

Name

Position

Appointed/Resigned

Mr Zhiwei Gu

Non-Executive Chairman

 

Executive Chairman

appointed 25 May 2016, resigned 10 December 2018.

appointed 10 December 2018

Mr Yan Liu

Executive Director, Chief Executive Officer

appointed 25 May 2016, resigned 10 December 2018

Ms Juan Wang

Non-Executive Director

appointed 30 November 2014, resigned 22 July 2019

Mr Lubing Liu

Executive Director, Chief Operating Officer and Trinidad General Manager

appointed 1 March 2018

 

Dr Yi Zeng

Non-Executive Director

appointed 16 June 2016, resigned 27 November 2018

Mr Nick Beattie

CFO & Company Secretary

appointed 23 May 2014 (as CFO) and 30 March 2015 (as Company Secretary), resigned 31 March 2019

Dr Mu Luo

Non-Executive Director

appointed 11 January 2019

 

 

 

 

 

Details of remuneration

The remuneration for the Key Management Personnel of the Group during the year was as follows:

2019

Short Term Benefits

Post-employment benefits

Share based payments

Total

Cash salary & fees

One-off payment

Termination benefits

Super annuation / pensions

Options

Currency

US$

US$

US$

US$

US$

US$

Directors & Officers

Mr Gu (i)

250,000

58,333

-

-

(12,386)

295,947

Mr Y Liu

81,459

-

-

10,666

(31,044)

61,081

Ms Wang

25,000

-

-

-

(6,440)

18,560

Mr L Liu (ii)

154,164

-

-

13,619

-

167,783

Dr Zeng

10,417

-

-

-

-

10,417

Mr Beattie

177,165

28,823

-

13,103

(22,758)

196,333

Dr Luo

11,828

-

-

-

-

11,828

Total

710,033

87,156

-

37,388

(72,628)

761,949

 

(i) Fees paid to Mr Gu comprised US$30,000 received in his capacity as a non-executive director, US$25,000 in his role as Chairman and US$253,333 for additional consulting work.

(ii) Fees paid to Mr L Liu comprised US$7,700 received for additional consulting work, US$6,350 benefits in kind and salary of US$140,114 in his capacity as Chief Operating Officer.

2018

Short Term Benefits

Post-employment benefits

Share based payments

Total

Cash salary & fees

One-off payment

Termination benefits

Super annuation / pensions

Options

Currency

US$

US$

US$

US$

US$

US$

Directors & Officers

Mr Gu (i)

250,000

-

-

-

(12,990)

237,010

Mr Y Liu

166,685

-

-

16,669

(32,009)

151,345

Ms Wang (ii)

141,250

-

-

-

(10,853)

130,397

Mr L Liu (iii)

88,688

-

-

4,920

-

93,608

Dr Zeng

25,000

-

-

-

-

25,000

Mr Beattie

181,477

-

-

18,148

(27,373)

172,252

Mr Xiu (iv)

31,747

-

-

-

(760)

30,987

Mr Yu Wang (v)

-

-

-

-

-

-

Total

884,847

-

-

39,737

(83,985)

840,599

 

(i) Fees paid to Mr Gu comprised US$30,000 received in his capacity as a non-executive director, US$25,000 in his role as Chairman and US$195,000 for additional consulting work.

(ii)Fees paid to Ms Wang comprised US$28,750 received in her capacity as a non-executive director and US$112,500 received for additional consulting work.

(iii) Fees paid to Mr L Liu comprised US$16,667 received in his capacity as a non-executive director, US$37,340 received for additional consulting work and salary of US$39,601 in his capacity as Chief Operating Officer.

(iv) Fees paid to Mr Xiu comprised US$31,747 received in his capacity as a Vice President of Operations and Production.

(v) Mr Yu Wang tendered his resignation as Non-Executive Director effective 26 September 2017.

 

Equity instrument disclosures relating to Key Management Personnel

Share-based payments (year ended 30 June 2019)

No options were issued to key management personnel. The expense reversal is due to the change in the probability of meeting the vesting conditions prior to the options expiring as explained below:

·; Probability of meeting the 1,500 barrels of oil per day for a continuous 15-day period in Trinidad vesting condition is 0%;

·; Probability of meeting the 2,500 barrels of oil per day for a continuous 15-day period in Trinidad vesting condition is 0%; and

·; Probability of meeting the 4,000 barrels of oil per day for a continuous 15-day period in Trinidad vesting condition is 0%.

Share-based payments (year ended 30 June 2018)

No options were issued to key management personnel. The expense reversal is due to the change in the probability of meeting the vesting conditions prior to the options expiring as explained below:

·; Probability of meeting the 1,500 barrels of oil per day for a continuous 15-day period in Trinidad vesting condition is 100%;

·; Probability of meeting the 2,500 barrels of oil per day for a continuous 15-day period in Trinidad vesting condition is 0%; and

·; Probability of meeting the 4,000 barrels of oil per day for a continuous 15-day period in Trinidad vesting condition is 0%.

Fully paid share holdings

The numbers of shares in the Company held during the financial year or at time of resignation by Key Management Personnel of the Company, including their personally related parties, are set out below.

2019

Balance at the start of the year

Granted as Compensation

Other Changes

Balance at the end of the year

Balance held indirectly

Mr Gu

2,083,333

-

-

2,083,333

-

Mr Y Liu

6,333,333

-

-

6,333,333

-

Ms Wang

2,083,333

-

-

2,083,333

-

Mr Wang

-

-

-

-

-

Mr L Liu

-

-

-

-

-

Dr Zeng

-

-

-

-

-

Dr Luo

-

-

-

-

-

Mr Beattie

2,916,667

-

(2,916,667)

-

-

Total:

13,416,666

-

(2,916,667)

10,499,999

-

Options held by Key Management Personnel

The numbers of options in the company held during the financial year or at time of resignation by Key Management Personnel of the Company, including their personally related parties, are set out below:

2019

Balance at the start of the year

Granted as Compensation

Other Changes

Balance at the end of the year

Vested and exercisable

Mr Gu

30,000,000

-

-

30,000,000

7,500,000

Mr Y Liu

30,000,000

-

(30,000,000)

-

-

Ms Wang

7,500,000

-

-

7,500,000

1,875,000

Mr L Liu

-

-

-

-

-

Dr Zeng

-

-

-

-

-

Dr Luo

-

-

-

-

-

Mr Beattie

25,000,000

-

(25,000,000)

-

-

 Total:

92,500,000

-

(55,000,000)

37,500,000

9,375,000

Loans to Key Management Personnel

There were no loans made to directors of Range and other Key Management Personnel of the Group, including their personally related parties during the 2018 or 2019 financial years. The consulting fees paid to Zhiwei Gu and Lubing Liu were US$253,333 and US$7,700 respectively.

Employment contracts of Directors and other Key Management Personnel

On appointment, Executive Directors and Other Key Management Personnel enter into an employment contract with the Company (or another company within the Group). This contract sets out their duties, remuneration and other terms of employment. These contracts may be terminated by either the Company or the employee as detailed below.

All non-executive directors are eligible to receive consulting fees for services provided to the Company over and above the services expected from a non-executive director.

Mr Zhiwei Gu as Non-Executive Chairman

Non-Executive Chairman contract (resigned 10 December 2018)

Contract start date:

25 May 2016

Base Payment:

US$55,000 per annum

Superannuation:

No superannuation entitlement

Notice period:

3 months

Termination benefits:

Payment in lieu of notice at Company option for termination without cause

Consulting services:

From May 2016, Mr Gu provides additional executive and consulting services over and above services rendered to the Company at a rate of US$16,250 per month

 

 

 

Mr Zhiwei Gu as Executive Chairman

Executive Chairman contract (commenced 10 December 2018)

Contract start date:

10 December 2018

Base Payment:

US$55,000 per annum

Superannuation:

No superannuation entitlement

Notice period:

3 months

Termination benefits:

Payment in lieu of notice at Company option for termination without cause

Consulting services:

Mr Gu provides additional executive and consulting services over and above services rendered to the Company at a rate of US$16,250 per month

 

Mr Yan Liu as Chief Executive Officer (resigned 10 December 2018)

Chief Executive Officer contract

Contract start date:

25 May 2016

Base Payment:

AU$215,000 per annum

Superannuation:

10% of base salary

Bonus:

Eligible to receive bonus at the discretion of the board

Notice period:

3 months

Termination benefits:

Payment in lieu of notice at Company option for termination without cause

 

Ms Juan Wang as Non-Executive Director

Non-Executive Director contract

Contract start date:

1 April 2018

Base Payment:

US$25,000 per annum

Superannuation:

No superannuation entitlement

Termination benefits:

None

 

Mr Lubing Liu as Chief Operating Officer, Trinidad General Manager and Executive Director

Chief Operating Officer and Trinidad General Manger contract

Contract start date:

1 March 2018

Base Payment:

US$140,110 per annum

Superannuation:

10% of base

Notice period:

3 months

Termination benefits:

3 months' salary

 

Dr Yi Zeng as Non-Executive Director (resigned 27 November 2018)

Non-Executive Director contract

Contract start date:

16 June 2016

Base Payment:

US$25,000 per annum

Superannuation:

No superannuation entitlement

Termination benefits:

None

 

 

Mr Nick Beattie as Chief Financial Officer (resigned 31 March 2019)

Chief Financial Officer contract

Contract start date:

23 May 2014

Base Payment:

GB£135,000 per annum, reviewed annually

Pension:

10% of base

Bonus:

Eligible to receive bonus at the discretion of the board

Notice period:

3-6 months

Termination benefits:

6 months' salary

 

Dr Mu Luo as Non-Executive Director (appointed 11 January 2019)

Non-Executive Director contract

Contract start date:

11January 2019

Base Payment:

US$25,000 per annum

Superannuation:

No superannuation entitlement

Termination benefits:

None

 

Additional information

The earnings of the consolidated entity for the five years to 30 June 2019 are summarised below:

 

 

2019

2018

2017

2016

2015

 

$'000

$'000

$'000

$'000

$'000

Sales revenue

12,357

13,059

8,435

7,062

13,153

EBITDA

(39,044)

(6,000)

(7,900)

(5,658)

(7,462)

EBIT

(43,002)

(10,951)

(14,189)

(11,149)

(12,379)

Loss after income tax

(49,461)

(17,530)

(54,363)

(43,875)

(30,729)

 

The factors that are considered to affect total shareholders return ('TSR') are summarised below:

 

 

2019

2018

2017

2016

2015

 

$'000

$'000

$'000

$'000

$'000

Share price at financial year end (US$)

0.0004

0.002

0.004

0.005

0.01

Total dividends declared (US$)

-

-

-

-

-

Basic earnings per share (US$)

(0.48)

(0.23)

(0.70)

(0.60)

(0.59)

 

 

Voting and comments made at the company's 2018 Annual General Meeting

Range Resources Limited received 98% of "yes" votes on its remuneration report for the 2018 financial year. The Board believes that this reflects the conservative remuneration practices of the company.

This is the end of the audited remuneration report.

Auditor's Independence Declaration

The auditor's independence declaration, as required under Section 307C of the Corporations Act 2001, for the year ended 30 June 2019 has been received and can be found on the following page.

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

 

Zhiwei Gu: Chairman

27 September 2019

 

 

 

 

 

+ Auditor's Independence Declaration

 

 

 

 

 

+ Consolidated Statement of Profit or Loss and other Comprehensive Income for the year ended 30 June 2019

The below consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

 

Note

Consolidated

2019 (US$)

2018 (US$)

Revenue from continuing operations

3

759,974

429,426

 

 

 

 

Operating expenses

 

(794,867)

(1,220,634)

Royalties

 

-

-

Depreciation, depletion and amortisation

 

(2,464,926)

(3,703,963)

Cost of sales

4a

(3,259,793)

(4,924,597)

 

 

 

 

Gross loss

 

(2,499,819)

(4,495,171)

 

 

 

 

Other income and expenses from continuing operations

Other income

3

2,936

422,188

Finance costs

4b

(5,803,077)

(2,487,202)

General and administration expenses

4c

(2,103,250)

(3,434,629)

Exploration expenditure and land fees

4d

(1,302,346)

(1,946,306)

Impairment of non-current assets

5

(8,362,271)

-

Loss before income tax expense from continuing operations

 

(20,067,827)

(11,941,120)

 

 

 

 

Income tax expense

6

(4,305,605)

903,227

Loss after income tax expense from continuing operations

 

(24,373,432)

(11,037,893)

Loss from discontinued operations, net of tax

7c

(25,087,323)

(6,492,344)

Loss for the year attributable to equity holders of Range Resources Limited

 

(49,460,755)

(17,530,237)

 

 

 

 

Other comprehensive income

Items that may be reclassified to profit or loss

 

 

 

Exchange differences on translation of foreign operations

25c

3,091,241

(1,423,892)

Other comprehensive inflow/(loss) for year, net of tax

 

3,091,241

(1,423,892)

Total comprehensive loss attributable to equity holders of Range Resources Limited

 

(46,369,514)

(18,954,129)

 

 

 

 

Loss per share from continuing operations attributable to the ordinary equity holders of the Company:

Basic gain/(loss) per share (cents per share)

9a

(0.24)

(0.15)

Diluted loss per share (cents per share)

9b

n/a

n/a

Loss per share from discontinuing operations attributable to the ordinary equity holders of the Company:

Basic loss per share (cents per share)

9a

(0.48)

(0.08)

Diluted loss per share (cents per share)

9b

n/a

n/a

+ Consolidated Statement of Financial Position as at 30 June 2019

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

 

Note

Consolidated

2019 (US$)

2018 (US$)

Assets

Current Assets

Cash and cash equivalents

10

880,681

3,945,683

Trade and other receivables

11

157,827

4,875,766

Inventory

12

959,304

3,277,096

Other current assets

12

34,208

3,054,911

Assets of disposal group classified as held for sale

7a

83,609,947

-

Total current assets

 

85,641,967

15,153,456

 

 

 

 

Non-Current Assets

Trade and other receivables

11

-

2,251,384

Deferred tax asset

 

-

13,517,531

Goodwill

14,15

-

3,241,472

Property, plant and equipment

16

23,009,704

25,489,614

Exploration assets

17

-

6,744,997

Producing assets

18

-

109,091,650

 

 

 

 

Total non-current assets

 

23,009,704

160,336,648

Total assets

 

108,651,671

175,490,104

 

 

 

 

Current liabilities

Trade and other payables

19

782,502

9,929,506

Current tax liabilities

19

17,472

246,917

Borrowings

20c

1,600,000

1,600,000

Option liability

20b

-

33,345

Provisions

21

-

811,737

Liabilities directly associated with assets classified as held for sale

7b

59,071,174

-

Total current liabilities

 

61,471,149

12,621,505

 

 

 

 

Non-current liabilities

Trade and other payables

19

44,997,793

50,441,779

Borrowings

20

44,551,690

42,439,606

Deferred tax liabilities

22

-

64,761,942

Employee service benefits

23

324,742

731,350

Total non-current liabilities

 

89,874,225

158,374,677

Total liabilities

 

151,345,373

170,996,182

 

 

 

 

Net (liabilities)/assets

 

(42,693,702)

4,493,922

 

 

 

 

Equity

Contributed equity

24

386,726,067

383,918,397

Reserves

25

27,806,287

24,822,953

Non-controlling interest

17

-

3,517,873

Accumulated losses

 

(457,226,056)

(407,765,301)

Total equity/deficit

 

(42,693,702)

4,493,922

+ Consolidated Statement of Changes in Equity for the year ended 30 June 2019

 

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

 

Note

Contributed equity

Accumulated losses

Foreign currency translation reserve

Share-based payment reserve

Option premium reserve

Non-controlling interests

Total equity

(US$)

(US$)

(US$)

(US$)

(US$)

 

(US$)

Balance at 1 July 2017

 

383,918,397

(390,235,064)

5,765,112

8,516,837

12,057,362

-

20,022,644

Other comprehensive income

 

-

-

(1,423,892)

-

-

-

(1,423,892)

Profit attributable to members of the company

 

 

(11,037,893)

 

 

 

 

(11,037,893)

Loss from discontinued operations

 

-

(6,492,344)

-

-

-

-

(6,492,344)

Total comprehensive loss for the year

 

-

(17,530,237)

(1,423,892)

-

-

-

(18,954,129)

 

 

 

 

 

 

 

 

 

Transactions with owners in their capacity as owners:

Issue of share capital

 

-

-

-

-

-

-

-

Cost of share-based payments

4

-

-

-

(92,466)

-

-

(92,466)

Non-controlling interests on acquisition of subsidiary

17

-

-

-

-

-

3,517,873

3,517,873

Balance at 30 June 2018

 

383,918,397

(407,765,301)

4,341,220

8,424,371

12,057,362

3,517,873

4,493,922

 

Balance at 1 July 2018

 

383,918,397

(407,765,301)

4,341,220

8,424,371

12,057,362

3,517,873

4,493,922

Other comprehensive income

 

-

-

3,091,241

-

-

-

3,091,241

Loss attributable to members of the company

 

-

(24,373,432)

-

-

-

-

(24,373,432)

Loss from discontinued operations

 

-

(25,087,323)

-

-

-

-

(25,087,323)

Total comprehensive loss for the year

 

-

(49,460,755)

3,091,241

-

-

-

(46,369,514)

 

 

 

 

 

 

 

 

 

Transactions with owners in their capacity as owners:

Issue of share capital

24

2,807,670

-

-

-

-

-

2,807,670

Cost of share-based payments

4

-

-

-

(107,907)

-

-

(107,907)

Non-controlling interests

17

-

-

-

-

-

(3,517,873)

(3,517,873)

Balance at 30 June 2019

 

386,726,067

(457,226,056)

7,432,461

8,316,464

12,057,362

-

(42,693,702)

 

+ Consolidated Statement of Cash Flows for the year ended 30 June 2019

 

The below consolidated statement of cashflows should be read in conjunction with the accompanying notes

 

Note

Consolidated

2019 (US$)

2018 (US$)

Cash flows from operating activities

Receipts from customers

 

8,184,780

6,580,150

Payments to suppliers and employees

 

(9,832,657)

(9,868,121)

Income taxes (paid)/received

 

(1,019,231)

1,954,339

Interest (paid)/received

 

(8,780)

115,477

Payment for exploration expenditure

 

-

-

Net cash outflow from operating activities

28

(2,675,888)

(1,218,155)

 

 

 

 

Cash flows from investing activities

Cash acquired on business combination

14(a)

-

357,940

Payment for property, plant & equipment

 

(328,868)

(254,088)

Payments for exploration and evaluation expenditure

 

(617,173)

(1,253,329)

Acquisitions

17(i)

-

(2,560,000)

Proceeds from disposal of property, plant and equipment

 

121,976

19,061

Payments for loan to external parties

 

-

(4,047,630)

Net cash outflow from investing activities

 

(824,065)

(7,738,046)

 

 

 

 

Cash flows from financing activities

Receipts from share issue

 

1,294,181

-

Interest and other finance income

 

154,115

-

Payment to LandOcean

12

-

(2,800,000)

Repayment of borrowings - convertible note interest

20

-

(1,600,000)

Net cash inflow/(outflow) from financing activities

 

1,448,296

(4,400,000)

 

Net decrease in cash and cash equivalents

 

(2,051,658)

(13,356,201)

Net foreign exchange differences

 

(46,204)

47,524

Cash and cash equivalents at beginning of financial year

 

3,945,683

17,254,360

Cash and cash equivalents at end of financial year

10

880,681

3,945,683

Classified as held for sale

7a, 7c

967,140

-

 

 

 

+ Notes to Consolidated Financial Statements

Note 1: Significant accounting policies

These financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. Range Resources Limited is a for-profit entity for the purpose of preparing the financial statements.

The financial statements cover the Group consisting of Range Resources Limited and its controlled entities. Financial information for Range Resources Limited as an individual entity is disclosed in Note 31. Range Resources Limited is a listed public company, incorporated and domiciled in Australia.

The following is a summary of the material accounting policies adopted by the Group in the preparation of the financial statements. The accounting policies have been consistently applied, unless otherwise stated. The financial report was authorised for issue by the Directors on 27 September 2019.

Basis of preparation

Historical cost convention

The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value through other comprehensive income, investment properties, certain classes of property, plant and equipment and derivative financial instruments.

Compliance with IFRS

The financial statements of Range Resources Limited also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The financial statements were approved by the Board of Directors on 27 September 2019.

Functional and presentation currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the "Functional Currency"). The consolidated financial statements are presented in United States Dollars (USD), which is Range Resources Limited's functional and presentation currency.

Going concern

This report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and settlement of liabilities in the normal course of business.

For the year ended 30 June 2019 the Group recorded a loss of US$46,283,298 (2018: US$17,530,237) and had net cash outflows of US$2,051,658 (2018: cash outflows of US$13,356,201).

The ability of the Group to continue as a going concern is dependent on securing additional funding through the issue of shares and/or debt to fund its activities and the conclusion of the sale of Range Resources Trinidad Limited to LandOcean as described in Note 7 which will subsequently result to its debt restructuring.

These conditions indicate a material uncertainty that may cast a significant doubt about the Group's ability to continue as a going concern and, therefore, it may be unable to realise its assets and discharge its liabilities in the normal course of business.

On 19 September 2019 the Group completed a subscription agreement to raise £750,000 which will provide the flexibility for additional working capital. At the reporting date, Range had US$880,861 of unrestricted cash at bank.

Management believe there are sufficient funds to meet the Group's working capital requirements as at the date of this report.

The Company is currently seeking other opportunities to further expand its operations in other geographic locations.

Should the Company not be able to continue as a going concern, it may be required to realise its assets and discharge its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or liabilities that might be necessary should the Company not continue as a going concern.

New and amended standards adopted by the Group

 

The Group has applied the following standards for the first time for their reporting period commencing 1 July 2018:

·; AASB 9 Financial Instruments ("AASB 9"); and

·; AASB 15 Revenue from Contracts with Customers ("AASB 15").

 

AASB 9 financial instruments

 

·; AASB 9 Financial Instruments replaces the provisions of AASB 139 Financial Instruments: Recognition and Measurement that relate to the recognition, classification and measurement of financial assets and financial liabilities, derecognition of financial instruments, impairment of financial assets and hedge accounting; and

·; The adoption of AASB 9 Financial Instruments from 1 July 2018 resulted in changes in accounting policies but did not give rise to any material transitional adjustments. The new accounting policies (applicable from 1 July 2018) are set out below.

Classification and measurement

 

Except for certain trade receivables the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.

Under AASB 9 financial assets are subsequently measured at fair value through profit or loss (FVPL), amortised cost, or fair value through other comprehensive income (FVOCI). The classification is based on two criteria: the Group's business model for managing the assets; and whether the instruments' contractual cash flows represent 'solely payments of principal and interest' on the principal amount outstanding (the 'SPPI criterion').

The new classification and measurement of the Group's financial assets are, as follows:

·; Debt instruments at amortised cost, for financial assets that are held within a business model with the objective to hold the financial assets in order to collect contractual cash flows that meet the 'SPPI criterion'. This category includes the Group's trade and other receivables and long term other receivables; and

·; Financial assets at FVPL comprise debt instruments whose cash flow characteristics fail the SPPI criterion or are not held within a business model whose objective is either to collect contractual cash flows, or to both collect contractual cash flows and sell.

On transition to AASB 9 the assessment of the Group's business models was made as of the date of initial application, 1 July 2018. The assessment of whether contractual cash flows on debt instruments are solely comprised of principal and interest was made based on the facts and circumstances as at the initial recognition of the assets.

Impairment

From 1 July 2018 the group assesses on a forward looking basis the expected credit losses (ECLs) associated with its debt instruments carried at amortised cost. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive. The shortfall is then discounted at an approximation to the asset's original effective interest rate.

For trade receivables the group has applied the standard's simplified approach and has calculated ECLs based on lifetime expected credit losses. The Group has established a provision matrix that is based on the Group's historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

For long term receivables, the ECL is based on either the 12-month or lifetime ECL. The 12-month ECL is the portion of lifetime ECLs that results from default events on a financial instrument that are possible within 12 months after the reporting date. When there has been a significant increase in credit risk since origination, the allowance will be based on the lifetime ECL. In all cases, the Group considers that there has been a significant increase in credit risk when contractual payments are more than 90 days past due.

The Group considers a financial asset in default when contractual payment are 180 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group.

On the above basis, the results of applying the ECL was not material and no loss allowance was recognised.

 

AASB 15 revenue from contracts with customers

The Group has adopted AASB 15 with a date of initial application of 1 July 2018. As a result of adoption of AASB 15, the Group has changed its accounting policy for revenue recognition as detailed below:

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control over a product or service to a customer.

Impact of adoption of AASB 15

The Group has determined that the application of AASB 15's requirements at transition 1 July 2018 did not result in any adjustment.

(a) Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Range Resources Limited ("Parent Entity" or "Company") as at 30 June 2019 and the results of all subsidiaries for the year then ended. Range Resources Limited and its subsidiaries together are referred to as the "Group".

Subsidiaries are all those entities (including special purpose entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its investment with the entity and has the ability to affect those returns through its power to direct the activities of the entity.

Where controlled entities have entered or left the Group during the year, their operating results have been included/excluded from the date control was obtained or until the date control ceased. A list of controlled entities is contained in Note 13 to the financial statements. All controlled entities have a 30 June financial year-end.

All inter-company balances and transactions between entities in the Group, including any unrealised profits or losses have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the Group.

Associates are all entities over which the Group has significant influence but not control or joint control, generally accompanying a shareholding of between 20-50% of the voting rights. Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting, after initially being recognised at cost.

(b) Income tax

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

Deferred tax is accounted for using the liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled. Deferred tax is credited in profit or loss except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the Group will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

(c) Property, plant and equipment

Owned assets

Plant and equipment are measured on the historical cost basis less accumulated depreciation and impairment losses.

The cost of fixed assets constructed within the Group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

Oil and gas assets

These properties represent the accumulation of all exploration, evaluation and development expenditure, pre-production development costs and ongoing costs of continuing the develop reserves for production incurred by or on behalf of the entity in relation to areas of interests.

Where further development expenditure is incurred in respect of a property after the commencement of production, such expenditure is carried forward as part of the cost of that property only when expected future economic benefits are to be received, otherwise such expenditure is classified as part of the cost of production.

Depreciation

The depreciable amount of all fixed assets including capitalised lease assets is depreciated on a straight-line basis over their useful lives to the Group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

The depreciation rates used for each class of depreciable asset are:

Class of fixed Asset

Depreciation Rate

Plant & equipment

11.25% - 33%

Production equipment

10 - 20%

Motor vehicles, furniture & fixtures

25 - 33%

Leasehold improvements

10 - 12.50%

The residual values of the assets and their useful lives are reviewed and adjusted if appropriate at each reporting date.

The carrying amount of plant and equipment is reviewed annually by the directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows which will be received from the employment of the assets and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

The carrying amount of the asset is written down to its recoverable amount if its carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in profit or loss. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to accumulated losses.

(d) Exploration and evaluation expenditure and the recognition of assets

Acquisition costs for exploration and evaluation projects are accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

The recoverability of the carrying amount of the exploration and evaluation assets is dependent on the successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.

The carrying values of expenditures carried forward are reviewed for impairment at each reporting date when the facts, events or changes in circumstances indicate that the carrying value may be impaired.

Accumulated expenditures are written off to profit or loss to the extent to which they are considered to be impaired.

The group applies AASB 6 Exploration and Evaluation of Mineral Resources which is equivalent to IFRS 6. The carrying value of exploration and evaluation expenditure is historical cost less impairment.

Ongoing exploration costs incurred in respect of the Group's Trinidadian and Indonesian interests are expensed as incurred. Initial acquisition costs to obtain the right to explore are capitalised.

(e) Producing assets

Upon the commencement of commercial production from each identifiable area of interest, the exploration and evaluation expenditure incurred up to that point is impairment tested and then reclassified to producing assets.

When production commences, the accumulated costs for the relevant area of interest are amortised on a "units of production" method which is based on the ratio of actual production to remaining proved and probable reserves (1P) as estimated by independent petroleum engineers over the life of the area according to the rate of depletion of the economically recoverable reserves.

Subsequent costs such as workovers, are included in the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be reliably measured. All other costs are charged to profit or loss during the financial period in which they are incurred.

The carrying amount of producing assets is reviewed annually by the directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount of an asset is the greater of its fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows of an asset are discounted to their present value using a post-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where an asset does not generate cash flows that are largely independent from other assets or groups of assets, the recoverable amount is determined for the cash generating unit to which the asset belongs. For producing assets, the estimated future cash flows for the value-in-use calculation are based on estimates, the most significant of which are 2P hydrocarbon reserves, future production profiles, commodity prices, operating costs and any future development costs necessary to produce the reserves which the group is committed. Under a fair value less costs to sell calculation, future cash flows are based on estimates of 2P hydrocarbon reserves.

Estimates of future commodity prices are based on the Group's best estimate of future market prices with reference to external market analysts' forecasts, current spot prices and forward curves. Future commodity prices are reviewed at least annually.

The carrying amount of an asset is written down to its recoverable amount if its carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in profit or loss. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to accumulated losses.

The Group records the present value of the estimated cost of legal and constructive obligations to restore operating locations in the period in which the obligation arises. The nature of restoration activities includes the removal of facilities, abandonment of wells and restoration of affected areas. A restoration provision is recognised and updated at different stages of the development and construction of a facility and then reviewed on an annual basis. When the liability is initially recorded, the estimated cost is capitalised by increasing the carrying amount of the related exploration and evaluation/development assets.

Over time, the liability is increased for the change in the present value based on a post-tax discount rate appropriate to the risk inherent in the liability. The unwinding of the discount is recorded as an accretion charge within finance costs. The carrying amount capitalised in oil and gas properties is depreciated over the useful life of the related asset.

Costs incurred that relate to an existing condition caused by past operation and do not have a future economic benefit are expensed.

(f) Financial instruments

The Group's financial instruments include cash and cash equivalents, trade and other receivables and available-for-sale financial assets.

The Group has adopted AASB 9 from 1 July 2018. The standard introduced new classification and measurement models for financial assets. A financial asset shall be measured at amortised cost if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows which arise on specified dates and that are solely principal and interest.

A debt investment shall be measured at fair value through other comprehensive income if it is held within a business model whose objective is to both hold assets in order to collect contractual cash flows which arise on specified dates that are solely principal and interest as well as selling the asset on the basis of its fair value.

All other financial assets are classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading or contingent consideration recognised in a business combination) in other comprehensive income ('OCI').

Despite these requirements, a financial asset may be irrevocably designated as measured at fair value through profit or loss to reduce the effect of, or eliminate, an accounting mismatch. For financial liabilities designated at fair value through profit or loss, the standard requires the portion of the change in fair value that relates to the entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch).

New simpler hedge accounting requirements are intended to more closely align the accounting treatment with the risk management activities of the entity. New impairment requirements use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment is measured using a 12-month ECL method unless the credit risk on a financial instrument has increased significantly since initial recognition in which case the lifetime ECL method is adopted. For receivables, a simplified approach to measuring expected credit losses using a lifetime expected loss allowance is available.

 

 

(g) Foreign currency transactions and balances

Functional and presentation currency

The functional currency of each entity within the Group is determined using the currency of the primary economic environment in which that entity operates.

Transaction and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction.

Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items are recognised in profit or loss

Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity; otherwise the exchange difference is recognised in profit or loss.

(h) Provisions

Provisions for legal claims, service warranties and make good obligations are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

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

(i) Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position.

(j) Trade receivables

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30 days.

The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.

Other receivables are recognised at amortised cost, less any allowance for expected credit losses.

(k) Revenue recognition

The consolidated entity has adopted AASB 15 from 1 July 2018. The standard provides a single comprehensive model for revenue recognition. The core principle of the standard is that an entity shall recognise revenue to depict the transfer of promised goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard introduced a new contract-based revenue recognition model with a measurement approach that is based on an allocation of the transaction price. This is described further in the accounting policies below. Credit risk is presented separately as an expense rather than adjusted against revenue. Contracts with customers are presented in an entity's statement of financial position as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity's performance and the customer's payment. Customer acquisition costs and costs to fulfil a contract can, subject to certain criteria, be capitalised as an asset and amortised over the contract period.

 

Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected to be entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the Group identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised.

 

Revenue from a contract to provide services is recognised over time as the services are rendered based on either a fixed price or an hourly rate.

 

Revenue from the sale of oil and gas and related products is recognised when the Group

has transferred to the buyer the significant risks and rewards of ownership and the

amounts can be measured reliably. In the case of oil, this usually occurs at the time of lifting. Other revenue is recognised when it is received or when the right to receive payment is established.

(l) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.

Cash flows are presented in the consolidated statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

(m) Comparative figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

(n) Fair value estimation

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement for disclosure purposes.

The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the Group is the current bid price.

The fair value of financial instruments that are not traded in an active market (for example over-the-counter derivatives) is determined using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each reporting date.

The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short-term nature. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash follows at the current market interest rate that is available to the Group for similar financial instruments.

(o) Investments in associates

Investments in associates are accounted for using the equity method of accounting in the consolidated financial statements.

Under the equity method, the investment in the associate is carried in the consolidated statement of financial position at cost plus post-acquisition changes in the Group's share of net assets of the associate.

After application of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss with respect to the Group's net investment in the associate.

The Group's share of the associate post-acquisition profits or losses is recognised in the statement of profit or loss and other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group's share of losses in the associate equals or exceeds its interest in the associate, including any unsecured long-term receivables and loans, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

The reporting dates of the associate and the Group are identical and the associate's accounting policies conform to those used by the Group for like transactions and events in similar circumstances.

(p) Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition unless alternative terms are agreed. The Group's most material balance is with LandOcean which has specific payment terms of 3 years.

(q) Dividends

Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the financial year but not distributed at reporting date.

(r) Contributed equity

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.

(s) Earnings per share

Basic earnings per share

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

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares.

(t) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting 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 Chief Executive Officer.

(u) Impairment of assets

Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which they are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

(v) Intangible assets (goodwill)

Goodwill is measured at cost less any impairment write-downs. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is not amortised but it is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose, identified according to operating segments (note 27).

(w) Share-based payments

The fair value of options granted is recognised as an expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the options granted, which includes any market performance conditions and the impact of any non-vesting conditions but excludes the impact of any service and non-market performance vesting conditions.

(x) Employee benefits

Wages and salaries and annual leave

Liabilities for wages and salaries, including non-monetary benefits are recognised in current liabilities in respect of employees' services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.

Long service benefit

The liability for long service benefit is recognised in current and non-current liabilities, depending on the unconditional right to defer settlement of the liability for at least 12 months after the reporting date. The liability is measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.

(y) Leases

The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.

A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to ownership of leased assets, and operating leases, under which the lessor effectively retains substantially all such risks and benefits.

Finance leases are capitalised. A lease asset and liability are established at the fair value of the leased assets, or if lower, the present value of minimum lease payments. Lease payments are allocated between the principal component of the lease liability and the finance costs, so as to achieve a constant rate of interest on the remaining balance of the liability.

Leased assets acquired under a finance lease are depreciated over the asset's useful life or over the shorter of the asset's useful life and the lease term if there is no reasonable certainty that the company will obtain ownership at the end of the lease term.

Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a straight-line basis over the term of the lease.

(z) Borrowings

Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method.

Where there is an unconditional right to defer settlement of the liability for at least 12 months after the reporting date, the loans or borrowings are classified as non-current.

(aa) Compound financial instruments

Compound financial instruments issued by the Group comprise convertible notes that can be converted to ordinary shares at the option of the holder, when the number of shares to be issued is fixed.

The liability component of a compound financial instrument is recognised initially at the fair value of a similar liability that does not have an equity conversion option. The equity component is recognised initially at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest method. The equity component of a compound financial instrument is not re-measured subsequent to initial recognition.

Interest related to the financial liability is recognised in profit or loss. On conversion the financial liability is reclassified to equity and no gain or loss is recognised.

Convertible notes that can be converted to share capital at the option of the holder and where the number of shares is variable, contains an embedded derivative liability. The embedded derivative liability is calculated (at fair value) first and the residual value is assigned to the debt host contract. The embedded derivative is subsequently measured at fair value and movements are reflected in profit or loss.

Certain convertible notes issued by the Group which include embedded derivatives (option to convert to variable number of shares in the Group) are recognised as financial liabilities at fair value through profit or loss. On initial recognition, the fair value of the convertible note will equate to the proceeds received and subsequently the liability is measured at fair value at each reporting period until settlement. The fair value movements are recognised in profit or loss as finance costs.

Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in which they are incurred.

 

 

(bb) Inventories

Inventories include consumable supplies and maintenance spares and are valued at the lower of cost and net realisable value. Cost is determined on a weighted average basis and includes direct costs and an appropriate portion of fixed and variable production overheads where applicable. Inventories determined to be obsolete or damaged are written down to net realisable value, being the estimated selling price less selling costs.

The directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group. Areas involving a higher degree of judgement or complexity, or areas where estimations and assumptions are significant to the financial statements are disclosed here.

(cc) Non-current assets classified as held for sale

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. They are measured at the lower of their carrying amount and fair value less costs to sell. For non-current assets to be classified as held for sale, they must be available for immediate sale in their present condition and their sale must be highly probable.

An impairment loss is recognised for any initial or subsequent write down of the non-current assets to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of a non-current asset, but not in excess of any cumulative impairment loss previously recognised.

Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of assets held for sale continue to be recognised.

Non-current assets classified as held for sale are presented separately on the face of the consolidated statement of financial position, in current assets. The liabilities of disposal groups classified as held for sale are presented separately on the face of the statement of financial position, in current liabilities.

Discontinued operations

A discontinued operation is a component of the Group's business, the operations and cash flows of which can be clearly distinguished from the rest of the Group and which:

·; represents a separate major line of business or geographical area of operations;

·; is part of a single co-ordinated plan to dispose of a separate major line of business or geographical are of operations; and

·; is a subsidiary acquired exclusively with a view to resale.

Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to be classified as held-for-sale.

When an operation is classified as a discontinued operation, the comparative consolidated statement of profit or loss and other comprehensive income is re-presented as if the operation had been discontinued from the start of the comparative year.

 

Note 2: Critical accounting estimates and judgements 

Non-current assets classified as held for sale and discontinued operations

Towards the end of the financial year ended 30 June 2019, the Group undertook a review of the oil and gas business culminating in the decision to sell Range Resources Trinidad Limited to LandOcean. The Board of Directors have judged that as a result of this review, the assets and associated liabilities of Range Resources Trinidad Limited should be classified as held for sale as at 30 June 2019 and all operations of Range Resources Trinidad to be classified as discontinued. In reaching this judgement, the Board of Directors have considered that the requirements of AASB 5: Non-current assets held for sale and discontinued operations have been met.

 

Producing asset expenditure

The classification of exploration and evaluation expenditure to producing assets is based on the time of first commercial production. Producing asset expenditure for each area of interest is carried forward as an asset provided certain conditions listed in Note 1(e) are met and depreciated on a unit of production basis on P1 reserves. P1 reserves have been determined by an independent expert.

Producing assets are assessed for impairment when facts and circumstances suggest that the carrying amount of a production asset may exceed its recoverable amount. These timings, calculations and reviews require the use of assumptions and judgement. The related carrying amounts are disclosed in Note 18.

Reserves and resources

Estimates of reserves requires judgement to assess the size and quality of reservoirs and their anticipated recoveries. Estimates of reserves are used to calculate depreciation, depletion and amortisation charges.

Impairment of goodwill and producing assets

The Group tests whether goodwill or the producing assets has suffered any impairment in accordance with the accounting policies stated in notes 1(e) and 1(u). The recoverable amount of the cash-generating unit to which the assets belong is estimated based on the present value of future cash flows.

The expected future cash flow estimation is always based on a number of factors, variables and assumptions, the most important of which are estimates of reserves, future production profiles, commodity prices and costs. In most cases, the present value of future cash flows is most sensitive to estimates of future oil price and discount rates. A change in the modelled assumptions in isolation could materially change the recoverable amount. Refer to note 14 for details of these key assumptions.

Deferred tax liability

Upon acquisition of SOCA Petroleum Ltd in June 2011, in accordance with the requirement of AASB 112 Income Taxes, a deferred tax liability of US$46,979,878 was recognised in relation to the difference between the carrying amount for accounting purposes of deferred development assets and their actual cost base for tax purposes.

The carrying value of this deferred tax liability is US$3,177,457 at 30 June 2019. In the event that the manner by which the carrying value of these assets is recovered differs from that which is assumed for the purpose of this estimation, the associated tax charges may be significantly less than this amount.

Recoverability of deferred tax assets

Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Management considers that it is probable that future taxable profits will be available to utilise those temporary differences. Judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future profits.

Fair value of assets acquired and liabilities assumed in business combination

Identifiable assets acquired and liabilities assumed in business combination are measured at their fair values at the acquisition date.

Share based payments transactions

The Group measures the cost of equity-settled share-based payment transactions with employees by reference to the fair value of the equity instruments at the grant date. The fair value is determined using a Black-Scholes model. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact expenses and derivative liability.

Contingent liabilities

The Directors are of the opinion that no provision is required to be raised in respect to any of the matters disclosed in Note 26 as the likely outcome of any outflow is considered to be remote.

Recoverability of capitalised exploration and evaluation expenditure

The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale. Factors that could impact the future recoverability include the level of reserves and resources, future technological changes, which could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices. To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, profits and net assets will be reduced in the period in which this determination is made.

Accounting for Strait Oil & Gas Limited

Range owns 65% of the issued share capital of Strait Oil & Gas Limited ("SOG"). This is achieved by interest through a 45% shareholding held by Range itself plus a 20% shareholding through its full ownership of Georgian Oil Pty Ltd. Despite owning a majority of the issued share capital, management do not view this as control and the principal rationale for that view is as follows:

1. Range has no appointed directors of SOG so exercises no effective control over the company. The sole director of SOG is a different corporate entity;

2. All shareholders must agree to any termination of the management agreement which governs the role of the appointed director;

3. The Articles of Association of SOG are silent on the ability of shareholders to appoint directors. To appoint a director, management believe that the articles would need to be amended. To amend the articles requires a special resolution which needs 75% votes (Range only controls 65%) and management do not believe they would get support from the other shareholders to do this;

In practice all decision making and corporate activities require consent of all the shareholders resulting in Range have no demonstrable control over SOG.

 

The Group therefore intends to continue to account for this as an "Other Asset" with a carrying value equal to the US$20,000 which was the cost of acquiring Georgian Oil Pty Ltd. All previous costs incurred by Range in relation to SOG have been impaired and the Company will continue to expense any ongoing expenses which are incurred.

Allowance for expected credit losses

The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit loss rate for each group. These assumptions include recent sales experience and historical collection rates.

Rehabilitation provision

A provision has been made for the present value of anticipated costs for future rehabilitation of land explored. The Group's exploration activities are subject to various laws and regulations governing the protection of the environment. The Group recognises management's best estimate for assets retirement obligations and site rehabilitations in the period in which they are incurred. Actual costs incurred in the future periods could differ materially from the estimates. Additionally, future changes to environmental laws and regulations and discount rates could affect the carrying amount of this provision.

 

Note 3: Revenue

 

Note

Consolidated

2019 (US$)

2018 (US$)

From continuing operations

Revenue from services to third parties recognised over time

 

759,974

429,426

Total revenue from continuing operations

 

759,974

429,426

From discontinued operations

Revenue from sale of oil recognised at a point in time

 

11,597,161

12,629,996

Total revenue from discontinued operations

 

11,597,161

12,629,996

Other income from continuing operations

Interest income

 

2,936

422,188

Total other income from continuing operations

 

2,936

422,188

Other income from discontinued operations

Interest income

 

 

 

Other income

 

7,108

-

Total other income from discontinued operations

 

7,108

-

 

Revenue from third party services and sale of oil is solely generated in the Republic of Trinidad and Tobago.

 

Note 4: Expenses

 

Note

Consolidated

2019 (US$)

2018 (US$)

a: Cost of sales - continuing operations

Costs of operations

 

794,867

1,220,634

Depreciation and amortisation

 

2,464,926

3,703,963

Total cost of sales from continuing operations

 

3,259,793

4,924,597

a: Cost of sales - discontinued operations

Costs of production

 

1,917,217

5,468,124

Royalties

 

4,400,775

4,605,811

Staff costs

 

3,045,048

4,080,334

Depreciation and amortisation

 

1,493,021

1,246,702

Total cost of sales from discontinued operations

 

10,856,061

15,400,971

 

 

 

 

b: Finance costs - continuing operations

Fair value movement of derivative liability

 

(383,894)

(2,308,556)

Fair value movement of option liability

20(b)

(33,345)

(308,273)

Foreign exchange loss

 

118,502

193,109

Interest expense

 

3,316,336

2,602,366

Interest on convertible note

 

2,785,478

2,308,556

 Total finance costs from continuing operations

 

5,803,077

2,487,202

b: Finance costs - discontinued operations

Interest expense

 

645,376

463,403

Foreign exchange loss

 

9,873

144,190

Total finance costs from discontinued operations

 

655,249

607,593

 

-

 

 

c: General and administration expenses - continuing operations

Directors' and officers' fees and benefits

 

837,874

840,599

Share based payments - employee, director and consultant options

 

(107,907)

(92,466)

Other expenses

 

1,373,283

2,686,496

Total general and administration expenses from continuing operations

 

2,103,250

3,434,629

 

c: General and administration expenses - discontinued operations

Other expenses

 

1,106,200

668,083

Total general and administration expenses from discontinued operations

 

1,106,200

668,083

 

d: Exploration expenditure - continuing operations

Indonesia (i)

 

617,173

1,253,329

Trinidad (ii)

 

685,173

670,856

Other

 

-

22,121

Total exploration expenditure from continuing operations

 

1,302,346

1,946,306

(i) Amounts expensed in the year in Indonesia relate to exploration activities in the Perlak field for which the company policy is to expense.

(ii) Amounts expensed in the year in Trinidad relate to land fees in relation to St Mary's for which the company policy is to expense.

Note 5: Impairment of non-current assets

Impairment testing was performed during the current half-year as impairment indicators were identified and an impairment was recorded. The impairment was due to a combination of lower assumed long-term oil prices together with a deferred work programme. In line with the announced work plans for 2019, Range was not anticipating any material production growth during 2019 and when updating the models for the revised production profiles it resulted in a lower NPV. This was exacerbated by lower oil prices assumption when compared to the impairment review in September 2018.

The long term WTI forward price has settled into a band of between US$53 - US$55/bbl which is just above the level at which Supplemental Petroleum Tax takes effect. This had a materially negative impact on the NPV calculation and Range believes this highlights the regressive nature of this particular tax. As a result, a goodwill impairment of US$3,241,472 and Trinidad asset impairment of US$48,079,057 were recorded. Impairment testing was not performed at year-end, although impairment indicators were identified, due to the fact that the book value of the producing assets was supported by the consideration of the SPA signed between the Group and LandOcean. Please refer to note 7 for further information on the agreement.

Non-current receivables of US$2,284,398 were fully impaired as they are not deemed recoverable. These relate to Sincep and LandOcean Energy, refer to Note 11.

In Indonesia, despite continued efforts by the operator of the project to establish stable and continuous production from the field, no material production had been achieved from the work programme to date. As a result, a decision was made to fully impair the asset related to Indonesia exploration, which resulted to an impairment of US$6,077,873.

 

 

Note 6: Income tax expense

 

Note

Consolidated

2019 (US$)

2018 (US$)

a: Income tax expense

Current tax

 

-

-

Deferred tax

 

(26,602,649)

1,419,725

Adjustments for current tax of prior periods

 

3,661,806

122,479

 

 

(22,940,843)

1,542,204

Income tax expense/(benefit) is attributable to:

Loss from continuing operations

 

4,305,605

-

Loss from discontinued operations

 

(27,246,448)

1,542,204

Aggregate income tax (credit)/expense

 

(22,940,843)

1,542,204

b: The prime facie tax on profit from ordinary activities before income tax is reconciled to the income tax as follows:

Loss from continuing operations before income tax

 

(20,067,827)

(11,941,120)

Loss from discontinuing operations before income tax

 

(52,333,771)

(4,046,913)

 

 

(72,401,598)

(15,988,033)

Prime facie tax (benefit) payable on loss from ordinary activities before income tax at 30% (2018: 30%) Group

 

(21,720,479)

(4,474,410)

 

 

(21,720,479)

(4,796,410)

Add tax effect of:

Other taxes

 

2,863,914

88,626

Expenses not deductible for tax

 

6,615,840

4,883,415

Tax losses not brought to account

 

10,305,814

11,316,449

Income not assessable for tax

 

(3,781,594)

-

 Benefit of tax tax losses not previously recognised

 

(2,822,802)

-

Expenses deductible for tax purposes

 

-

(5,961,448)

Deferred tax assets not brought to account

 

1,534,226

331,010

Differences in tax rates

 

(15,935,762)

(4,319,439)

 

 

(22,940,843)

1,542,204

Unrecognised deferred tax asset

Capital losses

 

498,254

443,654

Revenue losses

 

10,905,153

10,595,377

Other

 

4,381,634

2,866,987

Offset of deferred tax liabilites

 

(8,292,796)

(5,680,826)

Net Deferred Tax Assets not brought to account

 

7,492,245

8,225,192

c: Recognised deferred tax assets

Temporary differences

7a

15,439,010

13,517,531

 

 

15,439,010

13,517,531

 

Recognised deferred tax liabilities

Accelerated depreciation

 

(39,184,861)

(36,332,757)

DTL arising on business combination

 

(905,471)

(28,429,185)

Net deferred tax liabilities

 

(40,090,332)

(64,761,942)

     

Deferred tax assets not brought to account, the benefits of which will only be realised if the conditions for deductibility set out in Note 1(b) occur.

Note 7: Discontinued operations

Towards the end of the financial year, the Group entered negotiations with LandOcean to sell Range Resources Trinidad Limited. On 2 September 2019, the parties have successfully signed a binding conditional Sale and Purchase Agreement for the sale of Range Resources Trinidad Limited to LandOcean in exchange for offsetting all outstanding debt and payables (including the convertible note) due from Range and its subsidiaries to LandOcean and its subsidiaries, and a cash consideration of US$2,500,000. The Board of Directors has decided that Range Resources Trinidad Limited will be presented on the Statement of Financial Position as held for sale as at 30 June 2019. Total debt and payables to be offset, as at 30 June 2019, which does not form part of the assets held for sale and associated liabilities are detailed below. The interest on these balances was extrapolated to 31 December 2019 which is the anticipated date for the transaction to be completed.

 

Debtor

Creditor

Amount (US$)

Agreement Regarding Amounts Outstanding between the Purchaser and RRDSL dated 30 November 2017

RRDSL

LandOcean Energy Services

1,878,458

Agreement Regarding Amounts Outstanding between EPT and RRDSL dated 30 November 2017

RRDSL

EPT

1,306,958

Agreement Regarding Amounts Outstanding between GPN and RRDSL dated 30 November 2017

RRDSL

GPN

487,447

Agreement Regarding Amounts Outstanding between LOPCL and RRDSL dated 30 November 2017

RRDSL

LOPCL

22,167,122

Agreement Regarding Amounts Outstanding between CWUPET and RRDSL dated 30 November 2017

RRDSL

CWUPET

612,564

Purchase Order No. 9 in respect of the IMSC dated 31 January 2018

RRL

Hong Kong Fu Tong International Petroleum Technology Ltd

553,012

Letter Agreement to the IMSC and Purchase Orders entered into by the Purchaser, RRDSL, CWUPET, and PST Service Corp. (together as the Contractor) and the Seller, Range Resources GY Shallow Limited and the Company dated 6 April 2017

RRL

LandOcean Energy Services

45,045,913

Sale and Purchase Agreement between SOCA and LOPCL dated 27 April 2017

SOCA

LOPCL

502,704

Convertible note deed between the Seller and the Purchaser date 31 December 2019

RRL

LandOcean Energy Services

21,600,000

Grand total

 

 

94,154,178

 

Note 7a: Assets of disposal group classified as held for sale

 

Note

Consolidated

2019 (US$)

2018 (US$)

Current assets

Cash and cash equivalents

 

967,140

-

Trade and other receivables

 

4,320,067

-

Other current assets

 

2,064,575

-

Total current assets

 

7,351,782

-

Non-current assets

Deferred tax asset

 

15,439,010

-

Property, plant and equipment

 

1,159,235

-

Producing assets

 

58,986,034

-

Exploration assets

 

673,886

 

Total non-current assets

 

76,258,165

-

Total held for sale assets

 

83,609,947

-

On 2 September 2019, Range and LandOcean successfully signed a binding conditional Sale and Purchase Agreement for the sale of Range Resources Trinidad Limited (disposal group classified as held for sale) to LandOcean in exchange for offsetting all outstanding debt and payables (including the convertible note) due from Range and its subsidiaries to LandOcean and its subsidiaries, and a cash consideration of US$2,500,000.

The first tranche of the cash consideration of US$500,000 is payable upfront as deposit, US$1,000,000 to be paid within five business days of the approval of the shareholders' meeting of LandOcean (first payment) and US$1,000,000 to be paid within five business days of the completion date (final payment).

The completion is subject to shareholder and government approvals; Range's shareholder meeting to consider the Transaction is planned for November 2019. The agreed long stop date for the Transaction is 30 June 2020.

If the key conditions for completion are not satisfied by 30 June 2020, the deposit and the first payment (together with interest accrued at 8% per annum) will be repaid to LandOcean. If all conditions are satisfied but LandOcean chooses not to proceed with completion for any reason, the Deposit and the First Payment will be retained by Range.

Range will provide mortgages over its workover and swabbing rigs as security, with such mortgages to be released upon completion or termination of the SPA. This is to provide comfort to LandOcean in case the key conditions for completion are not satisfied by 30 June 2020. The book value of the rigs mortgaged is US$1,539,370.

Note 7b: Liabilities directly associated with assets classified as held for sale

 

Note

Consolidated

2019 (US$)

2018 (US$)

Current liabilities

Trade and other payables

 

18,694,044

-

Deferred tax liabilities

22

40,090,332

-

Accrued expenditure

 

286,798

-

Total current liabilities

 

59,071,174

-

Total held for sale liabilities

 

59,071,174

-

 

Note 7c: Discontinued operations

The financial performance of Range Resources Trinidad Limited is shown below.

 

Note

Consolidated

2019 (US$)

2018 (US$)

Financial Performance and cash flow information

Revenue from sale of oil

 

11,597,161

12,629,996

Other income

 

7,108

-

Royalties

 

(4,400,775)

(4,605,811)

Operating expenses

 

(4,962,266)

(9,548,458)

Oil and gas properties depreciation, depletion and amortisation

 

(1,493,021)

(1,246,702)

Administrative expenses

 

(1,106,200)

(668,083)

Impairment expense

 

(51,320,529)

-

Finance expenses

 

(655,249)

(607,593)

Taxation (charge)/benefit

 

27,246,448

(2,445,693)

Total loss after tax

 

(25,087,323)

(6,492,344)

Net cash inflow from operating activities

 

146,962

3,666,148

Net cash outflow from investing activities

 

(206,893)

(3,234,717)

Net cash from financing activities

 

115,086

-

Net cash increase in cash generated by the subsidiary

 

55,155

431,431

 

 

 

 

 

 

 

Note 8: Auditor's remuneration

 

Note

Consolidated

2019 (US$)

2018 (US$)

Remuneration of the auditor of the Parent Entity for:

Auditing or reviewing the financial report by BDO Audit (WA) Pty Ltd

 

68,000

56,016

Non-audit services provided by a related entity of BDO Audit (WA) Pty Ltd in respect to Parent Entity's tax compliance

 

15,500

17,010

Professional services provided by BDO UK LLP in respect to AIM admission

 

-

160,591

Total remuneration for the Parent Entity

 

83,500

233,617

Remuneration of the auditors of the subsidiaries

Auditing or reviewing the financial report by BDO UK

 

4,670

2,016

Auditing or reviewing the financial report by BDO Barbados

 

7,500

14,175

Auditing or reviewing the financial report by BDO Trinidad

 

34,150

30,801

Auditing or reviewing the financial report by BDO Indonesia

 

-

19,300

Total remuneration for the subsidiaries

 

46,320

66,292

Note 9: Loss per share

 

Note

Consolidated

2019 (US$)

2018 (US$)

a: Basic loss per share

Gain/(loss) per share from continuing operations attributable to the ordinary equity holders of the company

 

(0.24)

(0.15)

Loss per share attributable to the ordinary equity holders of the company

 

(0.24)

(0.23)

Loss per share from discontinued operations attributable to the ordinary equity holders of the company

 

(0.48)

(0.08)

b: Diluted loss per share

Loss per share from continuing operations attributable to the ordinary equity holders of the company

 

n/a

n/a

Loss per share attributable to the ordinary equity holders of the company

 

n/a

n/a

Loss per share from discontinued operations attributable to the ordinary equity holders of the company

 

n/a

n/a

c: Reconciliation of loss used in calculating earnings per share

Basic/ Diluted loss per share

 

 

 

Loss from continuing operations attributable to the ordinary equity holders of the company

 

(24,373,432)

(11,037,893)

Loss attributable to the ordinary equity holders of the company

 

(49,460,755)

(17,530,237)

Loss from discontinued operations attributable to the ordinary equity holders of the company

 

(25,087,323)

(6,492,344)

d: Weighted average number of shares used as the denominator

Weighted average number of ordinary shares used as the denominator in calculating basic EPS

 

10,243,998,615

7,595,830,782

Note 10: Cash and cash equivalents

 

Note

Consolidated

2019 (US$)

2018 (US$)

Cash at bank and on hand

 

880,681

3,945,683

 

Risk exposure

Information about the Group's exposure to credit risk, foreign exchange risk and price risk is provided in Note 32.

Note 11: Trade and other receivables

 

Note

Consolidated

2019 (US$)

2018 (US$)

Current

Trade receivables (i)

 

157,827

1,197,336

Taxes receivable

 

-

3,678,430

Total trade and other receivables

 

157,827

4,875,766

 

(i) Trade receivables are generally due for settlement within 30 days. They are presented as current assets unless collection is not expected for more than 12 months after the reporting date.

Fair value approximates the carrying value of trade and other receivables at 30 June 2019 and 30 June 2018.

 

Note

Consolidated

2019 (US$)

2018 (US$)

Non-current

Other receivables (i)

 

-

2,251,384

Total trade and other receivables

 

-

2,251,384

 

 (i) Non-current receivables of $2,284,398 were fully impaired as they are not deemed recoverable. They were receivables from LandOcean Energy Services Co. Ltd and Sincep Oilog Equipment Co. Ltd which are both part of LandOcean group of companies.

Fair value approximates the carrying value of non-current trade and other receivables at 30 June 2019 and 30 June 2018.

Risk exposure

Information about the Group's exposure to credit risk, foreign exchange risk and price risk is provided in Note 32.

Allowance for expected credit losses

The consolidated entity has recognised a loss in profit or loss in respect of the expected credit losses for the year ended 30 June 2019 as described above.

Note 12: Other current assets

 

Note

Consolidated

2019 (US$)

2018 (US$)

Current

Prepayments

 

34,208

242,142

Inventory - finished goods

 

959,304

3,277,096

Other assets (i)

 

-

2,812,769

Total other current assets

 

993,512

6,332,007

(i) Other assets were payment of $2,800,000 made to LandOcean Petroleum Corp. Ltd on 22 December 2017 in respect of RRDSL acquisition.

Note 13: Controlled entities

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with accounting policy described in Note 1(a).

Controlled Entities Consolidated

Country of Incorporation

Percentage Owned (%)

30 June 2019

30 June 2018

Subsidiaries of Range Resources Limited:

Range Resources (Barbados) Limited

Barbados

100

100

SOCA Petroleum Limited

Barbados

100

100

Range Resources Drilling Services Limited

Trinidad

100

100

West Indies Exploration Company Limited

Trinidad

100

100

Range Resources Trinidad Limited (held

for sale)

Trinidad

100

100

Range Resources West Coast Limited

Trinidad

100

100

Range Resources (Barbados) GY Limited

Barbados

100

100

Range Resources GY Shallow Limited

Trinidad

100

100

Range Resources GY Deep Limited

Trinidad

100

100

Range Resources Upstream Services Limited

United Kingdom

100

100

Range Resources HK Limited

Hong Kong

100

100

PT Hengtai Weiye Oil and Gas

Indonesia

60

60

PT Jasmine Oil and Gas Services

Indonesia

60

60

PT Lubuk Kawai Raya (i)

Indonesia

46.8

46.8

PT Aceh Timur Kawai Energi (i)

Indonesia

42.1

42.1

Georgian Oil Pty Ltd

Australia

20

-

 

(i) Indirect control of these companies was obtained with the acquisition of 60% of share capital in PT Hengtai Weiye Oil and Gas.

Note 14a: Business combinations

On 30th November 2017, Range acquired RRDSL from LandOcean Petroleum Corp. Ltd. for a consideration of US$5,500,000. Details of the purchase consideration, the net assets acquired and goodwill are below.

 

Purchase consideration comprises:

 

 

US$

Cash payable

 

5,500,000

Total consideration

 

5,500,000

 

 

The group has reported provisional amounts for the assets and liabilities acquired as follows:

Net identifiable assets acquired

 

2,258,528

 

 

 

Net assets acquired:

 

 

Plant and equipment

 

24,739,434

Deferred tax asset

 

2,544,203

Cash and cash equivalents

 

357,940

Trade and other receivables

 

4,013,278

Inventory

 

1,470,349

Trade and other payables

 

(1,745,851)

Deferred tax liability

 

(5,289,460)

Borrowings

 

(23,831,365)

Goodwill

 

3,241,472

 

(a) Goodwill recognition and allocation

On 30th November 2017, Range acqured RRDSL from LandOcean Petroleum Corp. Ltd. for a consideration of US$5,500,000 which was due to be is payable on 30 November 2020. But as disclosed in Note 7 all debt balances with LandOcean will be forgiven. Goodwill of US$3,241,472 represented the costs savings achieved within the Group now that RRDSL is part of Range group which has now been fully impaired.

 

 (b) Revenue and loss contribution

Revenue and net loss before tax of RRDSL included in the consolidated statement of profit or loss and other comprehensive income from the acquisition date to 30 June 2018 were US$429,426 and US$(3,015,699). If the acquisition had occurred on 1 July 2017, revenue and net profit from RRDSL would have been US$529,002 and US$268,188.

 

(c) Purchase consideration - cash outflow

Outflow of cash to acquire subsidiary net of cash acquired US$

 

Cash consideration

 

-

Less cash acquired

 

357,940

Net inflow of cash - investing activities

 

357,940

    

 

Acquisition related costs

Acquisition related costs of US$736,881 were included in general and administration expenses in profit or loss and in operating cash flows in the statement of cash flows for the year ended 30 June 2018.

 (d) Accounting policy

The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of subsidiary comprises the:

(i) fair values of the assets transferred

(ii) liabilities incurred to the former owners of the acquired business

(iii) equity interests issued by the group

(iv) fair value of any asset or liability resulting from contingent consideration arrangement, and

(v) fair value of any pre-existing equity interest in the subsidiary

Identifiable assets acquired and liabilities and contingent liabilities assumed in business combination are, with limited exceptions, measured initially at their fair values at the acquisition date.

Acquisition-related costs are expensed as incurred.

The excess of the

(i) consideration transferred,

(ii) amount of any non-controlling interest in the acquired entity, and

(iii) acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired, the difference is recognised directly in profit or loss as bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which similar borrowing could be obtained from an independent financier under comparable terms and conditions.

Note 15: Intangible Assets

 

Note

Consolidated

2019 (US$)

2018 (US$)

 

Cost

 

3,241,472

3,241,472

Impairment write down

 

(3,241,472)

-

Net book amount

 

-

3,241,472

 

 

 

 

Year ended 30 June 2018

Opening net book amount

 

3,241,472

-

Additions-acquisition

14a

-

3,241,472

Impairment charge

 

(3,241,472)

-

Closing net book amount

 

-

3,241,472

 

Impairment tests

During the year ended 30 June 2019, the Group recorded an impairment with respect to the total value goodwill of US$3,241,472. Refer to note 5 for more information.

Goodwill had been allocated for impairment testing purposes to one cash-generating unit (CGU), identified according to operating segments, being Trinidad - oil and gas production. The goodwill represented the costs savings achieved within the group as a result of the RRDSL acquisition.

 

 

 

 

 

 

Note 16: Property, Plant & Equipment

Consolidated

Production equipment and access roads

Gathering station and field office

Leasehold improvement

Motor vehicle, furniture, fixtures & fittings

 

Total

 

US$

US$

US$

US$

US$

Year ended 30 June 2018

Opening net book amount

1,607,570

87,445

184,857

141,810

2,021,682

Foreign currency movement

2,381

127

404

210

3,122

Acquisitions from business combination

23,742,231

-

-

997,203

24,739,434

Additions

214,331

-

14,484

228,082

456,897

Depreciation charge

(1,475,122)

(11,571)

(18,255)

(226,573)

(1,731,521)

Closing net book amount

24,091,391

76,001

181,490

1,140,732

25,489,614

At 30 June 2018

Cost

30,265,925

496,647

539,886

2,337,172

33,639,630

Accumulated depreciation

(6,174,534)

(420,646)

(358,396)

(1,196,440)

(8,150,016)

Net book amount

24,091,391

76,001

181,490

1,140,732

25,489,614

 

Year ended 30 June 2019

Opening net book amount

24,091,391

76,001

181,490

1,140,732

25,489,614

Foreign currency movement

(1,213,335)

349,820

(16,215)

(2,956)

(882,686)

Additions

162,814

-

-

-

162,814

Disposals

(60,954)

-

-

(40,019)

(100,973)

Depreciation charge

(263,537)

-

-

(236,293)

(499,830)

Classified as held for sale

(418,738)

(425,821)

(165,275)

(149,401)

(1,159,235)

Closing net book amount

22,297,641

-

-

712,063

23,009,704

At 30 June 2019

Cost

24,016,629

-

-

949,452

24,966,081

Accumulated depreciation

(1,718,988)

-

-

(237,389)

(1,956,377)

Net book amount

22,297,641

-

-

712,063

23,009,704

 

 

Note 17: Exploration assets

 

Note

Consolidated

2019 (US$)

2018 (US$)

Opening balance (ii)

 

6,744,977

632,176

Acquisition (i)

 

-

6,077,873

Impairment (ii)

 

(6,077,873)

-

Foreign exchange

 

6,782

34,948

Classified as held for sale (note 7a)

 

(673,886)

-

Closing net book amount

 

-

6,744,997

 

(i) Asset acquisition

On 30th October 2017, Range Resources Limited acquired through Range Resources HK Limited, 60% of the shares of PT Hengtai Weiye Oil and Gas ("Hengtai"), resulting in a 23% indirect equity interest in the Perlak field, Indonesia. Control has been obtained through the shareholder agreements in place at each entity level.

Details of the fair value of the assets acquired are as follows:

Purchase consideration comprises:

 

US$

Cash

 

2,560,000

Total cash paid

 

2,560,000

Total consideration

 

2,560,000

 

Net assets acquired:

 

US$

Exploration and evaluation assets

 

6,077,873

Less: non-controlling interests

 

(3,517,873)

Total

 

2,560,000

 

Put option agreement

The vendor has agreed to provide Range with a put option, whereby Range has the option to enforce a buyback of its full 60% interest in Hengtai should agreed milestones not be achieved, therefore providing protection to Range's investment. These milestones, amongst others, include achieving minimum production of 800 bopd from Perlak field over a continuous 90-day period, as well as proving up independently audited 1P reserves of at least 10 mmbbl within a three-year period. On acquisition, a cash consideration of US$2,560,000 was paid.

Asset acquisition accounting policy

The transaction is not deemed a business combination as the assets acquired did not meet the definition of a business. When an asset acquisition does not constitute a business combination, the assets and liabilities are assigned a carrying amount based on their relative fair values in an asset purchase transaction and no deferred tax will arise in relation to the acquired assets and assumed liabilities as the initial recognition exemption for deferred tax under AASB 112 applies. No goodwill arose on the acquisition and transaction costs of the acquisition will be included in the capitalised cost of the asset. The non-controlling interest is recognised at fair value. All the other expenses in relation to Indonesia are expensed in exploration costs in the Income Statement.

(ii) Impairment

Range has been actively working with its partners on the Perlak oil project for approximately 18 months. The initial results from the wells re-entered have been below expectations and given the ongoing difficulties being experienced the Company has decided to fully expense all costs incurred to date and will continue to do so going forward. Given these disappointing results, the Company has made a decision to write off the value of its investment in Indonesia, resulting to an impairment of US$6,077,873.

Note 18: Producing assets

 

Note

Consolidated

2019 (US$)

2018 (US$)

Cost

 

46,006,207

152,711,418

Accumulated amortisation

 

(46,006,207)

(43,619,768)

Net book value

 

-

109,091,650

 

 

 

 

Opening net book amount

 

109,091,650

108,347,455

 

 

 

 

Foreign currency movement

 

1,053,641

88,034

Additions

 

1,407,974

3,875,306

Impairment charge

 

(51,320,529)

-

Amortisation charge

 

(1,246,702)

(3,219,145)

Classified as held for sale (note 7a)

 

(58,986,034)

 

Closing net book amount

 

-

109,091,650

 

Although impairment indicators existed at 30 June 2019, the Group did not undertake an impairment assessment as the value of producing assets was derived from the Sale and Purchase Agreement with LandOcean as fair value of the consideration exceeds the carrying value of the assets, refer to note 7.

Note 19: Trade and other payables

 

Note

Consolidated

2019 (US$)

2018 (US$)

a: Current

Trade payables

 

648,693

1,416,480

Sundry payables and accrued expenses

 

151,281

8,513,026

Total

 

799,974

9,929,506

b: Non-Current

Interest bearing trade payables

 

44,395,944

41,359,805

Accrued expenses

 

-

5,796,050

Other payables - interest bearing

 

482,886

3,242,977

Other payables - non-interest bearing

 

118,963

42,947

Total

 

44,997,793

50,441,779

Risk exposure

Trade payables are non-interest bearing. Interest bearing other payables are amounts due to LandOcean and form part of the conditional SPA signed in September. Contractually, they are not payable until April 2020. Interest charged at 6%. Other interest-bearing payables relate to the consideration due to LandOcean Petroleum Corp which also forms part of the SPA.

Note 20: Borrowings

 

Note

Consolidated

2019 (US$)

2018 (US$)

Current borrowings

Interest on convertible note

20c

1,600,000

1,600,000

Option liability

20b

-

33,345

Total current borrowings

 

1,600,000

1,633,345

Non-current borrowings

Borrowings at amortised cost

20a

25,791,724

24,481,224

Convertible note

20c

18,759,966

17,958,382

Total non-current borrowings

 

44,551,690

42,439,606

 

 

Note

Consolidated

2019 (US$)

2018 (US$)

a: Borrowings

Principal

 

15,640,024

15,640,024

Interest due on outstanding balance

 

10,151,700

8,841,200

Closing net book amount

 

25,791,724

24,481,224

 

These are unsecured payables to EPT, Unionpetro, GPN and LO Petroleum, which all belong to the LandOcean group of companies. Interest is charged at 6% on net balance outstanding, with the amounts being payable within three years.

 

Note

Consolidated

2019 (US$)

2018 (US$)

b: Option liability

Option liability at fair value through profit or loss

 

-

33,345

Closing net book amount

 

-

33,345

During 2019, no options were exercised (2018: Nil).

Total fair value movement recognised in the Statement of Profit or Loss was a gain of US$33,345 (2018: US$308,273).

 

 

Note

Consolidated

2019 (US$)

2018 (US$)

c: Convertible note

Convertible note liability element

 

16,507,750

16,507,750

Convertible note derivative element

 

113

384,007

Interest due on outstanding balance - non-current

 

652,103

1,066,625

Interest due on outstanding balance- current

 

1,600,000

1,600,000

Closing net book amount

 

18,759,966

19,558,382

 

The terms of the convertible note are as follows:

Issuer

Range Resources Limited

Noteholder

LandOcean Energy Services Co. Limited

Amount

US$20,000,000

Tenor

Three years, maturity date 28 November 2019 (i)

Repayment

Bullet at maturity date

Interest

8% per annum, payable annually in arrears (ii)

Security

None

Conversion price

0.88p per share

Lender Conversion Right

At any time, in a minimum amount of US$10,000,000

The proceeds from this convertible note were utilised solely to replace a portion of the outstanding payable balance due to LandOcean under the terms of the Integrated Master Services Agreement ("IMSA").

(i) As per SPA dated 2 September 2019, a maturity date is the earlier of 30 June 2020 and the date on which completion occurs under. Under SPA, LandOcean undertakes not to issue a conversion notice.

(ii) On 5 March 2019, the Group issued 1,739,076,923 new ordinary fully paid shares at A$0.0013 in lieu of annual interest payment of US$1,600,000 due in November 2018.

Given that the transaction with LandOcean to sell Range Resources Trinidad Ltd is approved as previously explained in note 7 and described, all borrowings will be waived and form part of the transaction consideration.

Note 21: Provision for rehabilitation

The Group records the present value of the estimated cost of legal and constructive obligations to restore operating locations in the period in which the obligation arises. The nature of restoration activities includes removal of facilities, abandonment of wells and restoration of affected areas.

 

 

Note

Consolidated

2019 (US$)

2018 (US$)

Provision for rehabilitation

 

811,737

811,737

Movement in the provision for rehabilitation during the financial year are set out below:

Carrying amount at the start of the year

 

811,737

784,316

Additional provision recognised

 

24,618

27,420

Included in held for sale (note 7b)

 

(836,355)

 

Carrying amount at the end of the year

 

-

811,737

 

Note 22: Deferred taxes

 

 

Accrued interest

Total

Deferred tax asset US$ US$

Movements: Year ended 30 June 2019

Opening balance

13,517,531

13,517,531

Charged/(credited) - to profit or loss

1,921,479

1,921,479

Acquisition of subsidiary

-

2,544,203

Closing net book amount (i)

15,439,010

15,439,010

     

(i) Deferred tax asset is included in the asset held for sale (note 7a)

 

Fair value uplift on business combination

Accelerated depreciation

Total

Deferred tax liability US$ US$ US$

Movements: Year ended 30 June 2018

Opening balance

28,332,926

26,167,218

54,500,144

Foreign currency movement

-

(567,580)

(567,580)

Charged/(credited) - to profit or loss

96,259

5,443,659

5,539,918

Acquisition of subsidiary

-

5,289,460

5,289,460

Closing net book amount

28,429,185

36,332,757

64,761,942

 

 

 

 

Movements: Year ended 30 June 2019

Opening balance

28,429,185

36,332,757

64,761,942

Foreign currency movement

-

(645,359)

(645,359)

Charged/(credited) - to profit or loss

1,617,020

(25,643,271)

(24,026,251)

Closing net book amount (i)

30,046,205

10,044,127

40,090,332

     

(i) Deferred tax liability is included in liabilities directly associated with assets held for sale (note 7b)

 

 

 

Note 23: Other non-current liabilities

 

Note

Consolidated

2019 (US$)

2018 (US$)

Employee service benefits

 

324,742

731,350

Total

 

324,742

731,350

 

Risk exposure

Information about the Group's exposure to credit risk, foreign exchange risk and price risk is provided in Note 32.

Note 24: Contributed equity

 

Note

Consolidated

2019 (US$)

2018 (US$)

10,243,998,615 (2018: 7,595,830,782) fully paid ordinary shares

 

407,770,469

404,910,284

Share issue costs

 

(21,044,402)

(20,991,887)

Total contributed equity

 

386,726,067

383,918,397

 

 

Consolidated

2019 No.

2019 (US$)

2018 No.

2018 (US$)

a: Fully paid ordinary shares

At the beginning of reporting period

7,595,830,782

404,910,284

7,595,830,782

404,910,284

Shares issued during year

2,648,167,833

2,860,185

-

-

Total contributed equity

10,243,998,615

407,770,469

7,595,830,782

404,910,284

 

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held.

On a show of hands every holder of ordinary shares present at a meeting of the Company, in person or by proxy, is entitled to one vote and upon a poll each share is entitled to one vote.

On 28 July 2018, the Group announced a subscription for new ordinary shares to raise £1 million before expenses. Pursuant to the Subscription, the Group issued 909,090,910 new ordinary shares at a price of 0.11 pence per new ordinary share.

On 5 March 2019, the Group issued 1,739,076,923 new ordinary fully paid shares at A$0.0013 in lieu of annual interest payment of US$1.6 million under the convertible note with LandOcean Energy Services Co., Ltd.

 

 

Consolidated

 

2019 No.

2018 No.

b: Options

At the beginning of reporting period

781,844,977

808,844,977

Options expired

(377,201,840)

(27,000,000)

Options exercised during year

-

-

Total options

404,643,137

781,844,977

 

At 30 June 2019, the unissued ordinary shares under option are as follows:

Date of expiry

Exercise price

Number under option

3 September 2019

£0.01

194,585,862

3 September 2019

£0.02

172,557,275

30 March 2020

£0.01

37,500,000

Total number under option:

404,643,137

 

The holders of these options do not have any rights under the options to participate in any share issues of the company.

During the year ended 30 June 2019, no ordinary shares of Range were issued on the exercise of options (2018: nil).

Note 25: Reserves

 

Note

Consolidated

2019 (US$)

2018 (US$)

a: Share-based payment reserve

Balance 1 July 2018

 

8,424,371

8,516,837

Share based payment expenses (Note 29)

 

(107,907)

(92,466)

Balance 30 June 2019

 

8,316,464

8,424,371

The share-based payment reserve records items recognised as expenses on the fair valuation of shares and options issued as remuneration to employees, directors and consultants. For the year ended 30 June 2019 is a debit balance reflecting the expiration and cancellation of a large amount of options.

 

Note

Consolidated

2019 (US$)

2018 (US$)

b: Option premium reserve

Balance 1 July 2018

 

12,057,362

12,057,362

Fair value movement of exercised options that were originally classified as a derivative liability

 

-

-

Balance 30 June 2019

 

12,057,362

12,057,362

The option premium reserve is used to recognise the grant date fair value of options.

 

 

Note

Consolidated

2019 (US$)

2018 (US$)

c: Foreign currency translation reserve

Balance 1 July 2018

 

4,341,220

5,765,112

Currency translation differences arising during the year

 

3,091,241

(1,423,892)

Balance 30 June 2019

 

7,432,461

4,341,220

 

The foreign currency translation reserve is used to record exchange differences arising from the translation balances of foreign subsidiaries.

Total reserves at 30 June 2019

27,806,287

24,822,953

Note 26: Contingent liabilities and contingent assets

Geeta Maharaj

Range received an invoice from Geeta Maharaj, a Trinidad based attorney seeking payment for legal services in the amount of approximately US$1.9 million. The invoice purports to relate to legal work undertaken during mid-2014 including the preparation of inter-company loan agreements. Range strongly refutes the amount of this purported invoice and considers it to be vastly excessive and therefore not payable. A claim has been filed by Ms Maharaj seeking the sum of TT$12,019,573 (approximately US$1.9 million) plus interest and costs. Range filed a notice of application to strike out this claim on 14 July 2017. An initial hearing on this application was held on 29 September 2017 at which the parties were ordered to file and exchange written submissions by 20 October 2017 with replies, if any, to be filed by 30 October 2017. Both parties filed and exchanged written submissions and responses by the requested dates and a further hearing was scheduled for 1 December 2017. This hearing was rescheduled by the court and the Company is awaiting notification of a rescheduled date.

Separately, Range has received further correspondence from Ms Maharaj on a related matter claiming damages of TT$6,000,000 (approximately US$890,000) on the basis of a conspiracy designed to damage Ms Maharaj's reputation. Again, Range firmly refutes the allegation and in conjunction with its legal counsel in Trinidad has responded to this demand. A claim has been filed by Ms Maharaj seeking damages of TT$6,000,000 (approximately US$890,000) plus interest and costs. The Company, in conjunction with its legal counsel, has filed a defence in respect of this claim and a preliminary hearing was scheduled for 1 December 2017. This hearing was rescheduled by the court and the Company is awaiting notification of a rescheduled date.

While the Company, having taken legal advice, considers the probability of Ms Maharaj succeeding in either of her claims to be remote, there can be no guarantee that there will be a favourable outcome for the Company. There have been no other updates with regards to this case since 30 June 2018.

The Directors are not aware of any further contingent liabilities or contingent assets as at 30 June 2019.

 

Note 27: Segment reporting

30 June 2019

Trinidad - Oil & Gas Production

US$

Trinidad - Oilfield Services

 US$

Indonesia US$

Unallocated US$

Total

US$

Segment revenue

Total segment revenue

11,597,161

4,218,523

-

-

15,815,684

Intersegment revenue

-

(3,458,549)

-

-

(3,458,549)

Revenue from external customers

11,597,161

759,974

-

-

12,357,135

Other income

7,108

-

-

2,936

10,045

Segment result

Depreciation

(1,493,021)

(2,464,926)

-

-

(3,957,947)

Interest expense

(655,249)

(1,532,938)

-

(4,270,140)

(6,458,327)

Other segment income/(expenses)

(61,789,770)

1,177,183

(6,695,045)

(7,044,871)

(74,352,503)

Loss before income tax

(52,333,771)

(2,060,707)

(6,695,045)

(11,312,075)

(72,401,598)

Income tax

27,246,448

(168,633)

-

(4,136,972)

(22,940,843)

Loss after income tax

(25,087,323)

(2,229,340)

(6,695,045)

(15,449,047)

(49,460,755)

Segment assets

Segment assets

83,609,947

24,244,249

-

797,474

108,651,670

Total assets

83,609,947

24,244,249

-

797,474

108,651,670

Segment liabilities

Segment liabilities

59,071,174

23,974,481

-

68,299,717

151,345,372

Total liabilities

59,071,174

23,974,481

-

68,299,717

151,345,372

30 June 2018

Trinidad - Oil & Gas Production

US$

Trinidad - Oilfield Services

 US$

Indonesia US$

Unallocated US$

Total

US$

Segment revenue

Total segment revenue

12,629,996

3,561,259

-

-

16,191,255

Intersegment revenue

-

(3,131,833)

-

-

(3,131,833)

Revenue from external customers

12,629,996

429,426

-

-

13,059,422

Other income

161,828

15,060

-

245,009

421,897

Segment result

Depreciation

(2,374,508)

(2,576,158)

-

-

(4,950,666)

Interest income/(expense)

103,187

(498,435)

-

(2,704,172)

(3,099,420)

Other segment expenses

(12,044,090)

(4,874,421)

(1,253,329)

(3,247,456)

(21,419,296)

Loss before income tax

(1,523,587)

(7,504,498)

(1,253,329)

(5,706,619)

(15,988,033)

Income tax

(1,827,521)

285,317

-

-

(1,542,204)

Loss after income tax

(3,351,108)

(7,219,181)

(1,253,329)

(5,706,619)

(17,530,237)

Segment assets

Segment assets

127,047,106

34,469,110

6,077,873

7,896,015

175,490,104

Total assets

127,047,106

34,469,110

6,077,873

7,896,015

175,490,104

Segment liabilities

Segment liabilities

68,336,505

37,226,190

-

65,433,487

170,996,182

Total liabilities

68,336,505

37,226,190

-

65,433,487

170,996,182

       

 

 

(i) Unallocated assets

 

30 June 2019

US$

30 June 2018

US$

Segment assets

Cash

797,474

3,000,847

Other

-

4,895,168

Total segment assets

797,474

7,896,015

 

 

Note

Consolidated

2019 (US$)

2018 (US$)

a: Other segment information

Segment other revenue - all other segments

Other income

 

2,936

245,009

Total unallocated segment revenue

 

2,936

245,009

 

 

Note

Consolidated

2019 (US$)

2018 (US$)

Segment result - all other segments

Directors' and officers' fees and benefits

 

924,584

939,802

Share based payments - employee and onsultant shares

 

(107,907)

(92,466)

Discontinued operations

 

-

-

Finance costs

 

4,648,884

2,393,872

Other general and administration expenses

 

1,919,773

2,895,353

Total unallocated segment expenses

 

7,385,334

6,136,561

Accounting policies

AASB 8 requires operating segments to be 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. The chief operating decision maker is the Chief Executive Officer and through this role the Board of Directors.

Information regarding these segments is presented above. The accounting policies of the reportable segments are the same as those of the Group. Segment information is prepared in conformity with the accounting policies of the entity as disclosed in Note 1.

Segment revenues and expenses are those directly attributable to the segments and include any joint revenue and expenses where a reasonable basis of allocation exists. Segment assets include all assets used by a segment and consist principally of cash, receivables, plant and equipment, exploration expenditure capitalised and development assets net of accumulated depreciation and amortisation. While most such assets can be directly attributed to individual segments, the carrying amount of certain assets usedvjointly by two or more segments is allocated to the segments on a reasonable basis. Segment disclosures do not include deferred income taxes.

Revenue from Trinidad - Oil & Gas Production segment of US$11,597,161 (2018: US$12,629,996) is derived from the subsidiary's sole customer, which is Heritage Petroleum Limited.

Intersegment transfers

Segment revenues, expenses and results do not include any transfers between segments.

Note 28: Cash flow information

 

Note

Consolidated

2019 (US$)

2018 (US$)

Reconciliation of cash flow from operations with loss after income tax

Loss after income tax

 

(49,760,755)

(17,530,237)

Non-cash flows in profit

 

 

 

Depreciation, depletion and amortisation

 

3,957,947

4,950,666

Share based payment- consultants and employees

 

(107,907)

(92,466)

Impairment of non-current assets

 

6,077,873

-

Foreign exchange (gain)/loss

 

118,502

193,079

Impairments recognised on held for sale assets

 

51,320,529

-

Fair value movement of derivative

4

(383,894)

(2,308,556)

Decrease in other current assets

 

(5,338,495)

(1,854,276)

Decrease in trade and other receivables

 

6,969,323

5,479,970

Decrease/(increase) in deferred tax asset

 

-

(6,664,396)

(Decrease)/increase in trade and other payables

 

(15,030,944)

7,367,699

Decrease in income tax payable

 

(229,445)

-

(Decrease)/increase in deferred tax liabilities

 

-

10,261,798

(Decrease)/increase in provisions

 

(811,737)

27,420

Increase/(decrease) in borrowings

 

2,112,084

-

(Decrease)/Increase in non-current operating payables

 

(430,323)

(2,302,185)

Held for sale

 

(1,438,646)

-

Net cash outflow (from)/to operations

 

(2,675,888)

(2,471,484)

     

 

Financial liability reconciliation

 

2018

Cash Flows

Non-cash changes

2019

 

Acquisition

Fair value/other changes

Interest accrued

Borrowings

24,481,224

-

-

-

1,310,500

25,791,724

Convertible note

19,558,382

-

-

(1,983,894)

1,681,975

19,256,463

Total liabilities from financing activities

44,039,606

-

-

(1,983,894)

2,992,475

45,048,187

 

On 05 March 2019, the Group issued 1,739,076,923 new ordinary fully paid shares at A$0.0013 in lieu of annual interest payment of US$1,600,000 due in November 2018.

Non-cash changes comprise the aforementioned US$1,600,000 plus fair value movement of US$383,394.

Note 29: Share based payments

Employee option plan

Year ended 30 June 2019

No options were issued to key management personnel. The expense reversal is due to the change in the probability of meeting the vesting conditions as explained below.

Probability of meeting the 1,500 barrels of oil per day for a continuous 15-day period in Trinidad vesting condition is 0%.

Probability of meeting the 2,500 barrels of oil per day for a continuous 15-day period in Trinidad vesting condition is 0%.

Probability of meeting the 4,000 barrels of oil per day for a continuous 15-day period in Trinidad vesting condition is 0%.

Year ended 30 June 2018

No options were issued to key management personnel, employees and consultants.

Expenses recognised in the profit or loss

During the year, share-based payments recognised in profit or loss amounts to a reversal of US$107,907 (2018: reversal of US$92,466).

 

 

2019 No.

Average exercise price (US$)

2018 No.

Average exercise price (US$)

As at 1 July

761,844,977

0.023

788,844,977

0.019

Granted during year:

 

 

 

 

Other

-

-

-

-

Expired

(357,201,840)

0.017

(27,000,000)

0.025

Forfeited

-

-

-

-

As at 30 June

404,643,137

0.018

761,844,977

0.023

 

 

 

 

 

Vested and exercisable at 30 June

9,375,000

0.01

701,845,000

0.025

Weighted average remaining contractual life options outstanding at end of period

85 days

 

153 days

 

 

 

 

Note 30: Related party transactions

(a) Parent entity

The ultimate Parent Entity and ultimate Australian Parent Entity within the Group is Range Resources Limited.

(b) Subsidiaries

Interests in subsidiaries are set out in Note 13.

(c) Transactions with Key Management Personnel

The following transactions occurred during the year with Key Management Personnel or their related parties:

 

2019

US$

2018

US$

Consulting fees paid or payable to Kaiyuan Guosen Management Consulting Limited, a company owned by Mr Gu

253,333

195,000

Consulting fees paid or payable to Plentiful Wise Holdings Limited, a company owned by Ms Wang

-

112,500

Consulting fees paid or payable to Ten Faye Limited, a company owned by Mr L Liu

7,700

25,740

Balances at year end to related parties

Lijun Xiu and related entities

-

42,000

 

 

Note

Consolidated

2019 (US$)

2018 (US$)

d: Key Management Personnel compensation

Short-term benefits

 

797,189

884,847

One-off payments

 

-

-

Post-employment benefits

 

37,388

39,737

Termination benefits

 

-

-

Share based payments

 

(72,628)

(83,985)

Total

 

761,949

840,599

 

 

 

 

 

 

 

 

 

Note 31: Parent entity information

The following details information related to the Parent Entity Range Resources Limited, at 30 June 2019. The information presented here has been prepared in accordance using consistent accounting policies as presented in Note 1.

 

Note

Consolidated

2019 (US$)

2018 (US$)

Current assets

 

3,597,474

5,823,790

Non-current assets

 

22,008,541

64,091,154

Total assets

 

25,606,015

69,914,944

 

 

 

 

Current liabilities

 

307,884

2,176,682

Non-current liabilities

 

67,991,834

63,244,340

Total liabilities

 

68,299,718

65,421,022

 

 

 

 

Contributed equity

 

387,730,534

383,918,396

Accumulated losses

 

(452,663,645)

(402,977,948)

Reserves

 

22,239,408

23,553,474

Total equity

 

(42,693,703)

4,493,922

 

 

 

 

Loss for the year from continuing operations

 

(34,810,725)

(15,352,002)

Total comprehensive loss for the year

 

(34,810,725)

(15,352,002)

 

The contingent liabilities of the parent are included within those of the Group as disclosed in Note 26.

The contractual commitments of the parent are included within those of the Group as disclosed in Note 33.

Note 32: Financial risk management

The Group has exposure to the following risks from their use of financial instruments:

·; Credit risk

·; Liquidity risk

·; Market risk

This note presents information about the Group's exposure to each of the above risks, their objectives, policies and processes for measuring and managing risk, and the management of capital. Further quantitative disclosures are included throughout these financial statements. The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.

Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed to reflect changes in market conditions and the Group's activities. The Group, through training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all consultants and agents understand their roles and obligations.

Credit risk

Credit risk is the risk of financial loss to the Group if counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group's receivables and cash held at financial institutions.

Credit risk is managed on a group basis. Individual risk limits are set based on internal or external ratings in accordance with limits set by the board. Although there is only one customer and hence significant concentration to one customer, the credit risk is considered low.

The credit quality of financial assets that are neither past due or impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates.

 

Note

Consolidated

2019 (US$)

2018 (US$)

Cash at bank, restricted deposits and short-term bank deposits (S&P ratings)

AAA -

 

398,530

2,509,501

AA-

 

398,944

490,986

A+

 

-

-

BBB+

 

83,207

945,196

BBB-

 

-

-

Not rated

 

-

-

Total

10

880,681

3,945,683

 

Exposure to credit risk

The carrying amount of the Group's financial assets represents the maximum credit exposure. The Group's maximum exposure to credit risk at the reporting date was:

 

Note

Consolidated

2019 (US$)

2018 (US$)

Trade and other receivables - non-current (i)

11

-

2,251,384

Trade and other receivables - current (i)

11

157,827

4,875,766

Cash and cash equivalents

10

880,681

3,945,683

Total

 

1,038,508

11,072,833

(i) Counterparties without an external credit rating.

Loans and receivables

The Group's exposure to credit risk is influenced mainly by the individual characteristics of each debtor. No collateral was held in relation to these receivables.

Impairment losses

No impairment loss was recognised in relation to other receivables respectively in the prior year.

 

 

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.

The Group uses activity-based costing to cost its activities, which assists in monitoring cash flow requirements and optimising its cash return on investments. Typically, the Group ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 12 months; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

Group 2019

 

Carrying amount

Contractual cash flows

Within one year

1-2 years

2-5 years

Financial liabilities at amortised cost

Trade and other payables

45,797,767

45,797,767

12,901,659

32,896,108

-

Borrowings

46,151,690

44,551,690

1,600,000

44,551,690

-

Total

92,274,199

90,674,199

14,501,659

77,272,540

-

 

Group 2018

 

Carrying amount

Contractual cash flows

Within one year

1-2 years

2-5 years

Financial liabilities at amortised cost

Trade and other payables

60,371,285

60,371,285

9,929,506

50,441,779

-

Borrowings

44,039,606

42,439,605

1,600,000

42,439,606

-

Total

104,410,891

102,811,430

11,529,506

92,881,385

-

 

Market risk

Market risk is the risk that changes in market prices, such as interest rates and equity prices will affect the Group's income or the value of its holdings of available for sale assets. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Oil price

Future value, growth and financial conditions are dependent upon the prevailing prices for oil. Prices for oil are subject to fluctuations and are affected by numerous factors beyond the control of the Company. Sustained periods of low oil price may impact the viability of growth projects. The Company monitors and analyses the current and forecast oil prices on a regular basis. Range does not currently hedge its oil price exposure. Price hedging arrangements would be implemented if deemed appropriate for financial planning and to mitigate commodity price risks.

 

Equity price risk

The Group is exposed to equity securities price risk. This arises from investments held by the Group and classified on the statement of financial position as available for sale as well as from the option liability held as a current liability. A 10% increase or decrease in Range's share price would not have an effect to the option liability.

Foreign exchange risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar, AU dollar, TT Dollar and British pound. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and cash flow forecasting.

The Group's treasury risk management policy is to closely monitor exchange rate fluctuations. To date, the Group has not sought to hedge its exposure to fluctuations in exchange rates, however this policy will be reviewed on an ongoing basis.

The Group's exposure to foreign currency risk at the reporting date was as follows:

 

Consolidated

2019 AUD

2018 AUD

2019 GBP

2018 GBP

Cash

249,624

206,996

38,965

60,911

Amount payable to other entities

(66,216)

(73,269)

(48,631)

(50,550)

Total

183,408

133,727

(9,666)

10,361

 

Sensitivity

Based upon the amounts above, had the Australian dollar strengthened by 10% against the US dollar with all other variables held constant, the Group post-tax loss for the year on current amounts receivable/payable would have been US$10,824 higher (2018: US$18,064 higher), mainly as a result of foreign exchange gains/losses on translation of AUD and GBP

denominated payables as detailed in the table above. A 10% weakening of the Australian dollar against the above currencies at 30 June would have had the equal but opposite effect, on the basis that all other variables remain constant.

The Trinidad entities are minimally exposed to foreign exchange risk arising from various currencies, primarily with respect to the United States Dollar.

Interest rate risk

The group's main interest rate risk arises from non-current receivables. Non-current receivables issued at fixed rates expose the group to fair value interest rate if the loans are carried at fair value. During 2019 and 2018, the group loan receivables were denominated in Australian Dollars, British Pounds and US Dollars.

 

 

Weighted Average

Effective Interest Rate

Floating Interest

Rate

Fixed Interest Maturing

Non-interest bearing

Total

 

 

2019

2018

2019

2018

2019

2018

2019

2018

2019

2018

 

%

%

US$

US$

US$

US$

US$

US$

US$

US$

Financial Assets:

Cash and cash equivalents

1.8%

1.8%

880,681

3,945,683

-

-

-

-

880,681

3,945,683

Trade and other receivables

-

-

-

-

-

-

157,827

7,127,150

157,827

7,127,150

Total financial assets

 

 

880,681

3,945,683

-

-

157,827

7,127,150

1,038,508

11,072,833

 

Financial Liabilities:

Trade and other payables

10%

10%

-

-

44,878,830

44,602,782

918,937

15,768,503

45,797,767

60,371,285

Borrowings

6%

6%

-

-

46,151,690

44,039,606

-

-

46,151,690

44,039,606

Total financial liabilities

-

-

-

-

91,030,520

88,642,388

918,937

15,768,503

91,949,457

104,410,891

Profile

At the reporting date, the interest rate profile of the Group's financial instruments which exposes the group to cash flow interest rate risks are:

 

 

Sensitivity analysis for variable rate instruments

The sensitivity on interest rates for 2019 and 2018 assumes a change of 100 basis points in the interest rates at the reporting date and would have increased / (decreased) profit or loss by the amounts shown. Both analyses for each year assume that all other variables, in particular foreign currency rates, remain constant.

 

Group

Weighted Average Interest Rate

%

2019

 

+100 bps

US$

2019

 

-100 bps

US$

Weighted Average Interest Rate

%

2018

 

+100 bps

US$

2018

 

-100 bps

US$

 

Variable rate instruments

 

Financial assets (cash and cash equivalents)

1.8%

-

-

1.8%

-

-

 

Financial assets (loan and receivables)

-

-

-

-

-

-

 

 

 

 

 

 

 

 

              

Fair values versus carrying amounts

The fair value of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position, are as follows:

Group

30 June 2019

US$

30 June 2018

US$

Carrying amount

Fair value

Carrying amount

Fair

value

Trade and other receivables

157,827

157,827

7,127,150

7,127,150

Cash and cash equivalents

880,681

880,681

3,945,683

3,945,683

Trade and other payables

(45,797,767)

(45,797,767)

(60,371,285)

(60,371,285)

Borrowings

(46,151,690)

(46,151,690)

(44,039,606)

(44,039,606)

Total

(91,949,457)

(91,949,457)

(93,338,058)

(93,338,058)

 

The basis for determining fair value is disclosed in Note 1(n).

Other price risks

The Group is not exposed to any other price risks.

Capital management

The entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital.

The entity's overall strategy remains unchanged from 2018.

The capital structure of the group consists of cash and cash equivalents and equity attributable to equity holders of the Company, comprising issued capital, reserves and accumulated losses as disclosed in Notes 24 and 25 respectively. None of the entities within the group are subject to externally imposed capital requirements.

Gearing ratio

The Board reviews the capital structure on an annual basis. As a part of this review the Board considers the cost of capital and the risks associated with each class of capital.

 

Note

Consolidated

2019 (US$)

2018 (US$)

Financial assets

Cash and cash equivalents

10

880,681

3,945,683

Other financial assets

 

-

2,800,000

Financial liabilities

Trade and other payables

19

(46,122,509)

(60,371,285)

Borrowings

20

(46,151,690)

(44,602,782)

Net debt

 

(92,274,199)

(104,974,067)

Equity

 

(39,516,245)

4,443,822

Net debt to equity ratio

 

N/A

2,197.8%

 

Categories of financial instruments

 

Note

Consolidated

2019 (US$)

2018 (US$)

Financial assets

Cash and cash equivalents

10

880,681

3,945,683

Trade and other receivables - non-current

 

-

2,251,384

Trade and other receivables - current

11

157,827

4,875,766

Total

 

1,038,508

11,072,833

Financial liabilities

Trade and other payables

19

45,797,767

60,371,285

Borrowings

20

46,151,690

44,039,606

Option liability

 

-

33,345

Total

 

91,949,457

104,444,236

 

The carrying amount reflected above represents the Group's maximum exposure to credit risk for such loans and receivables.

(a) Fair value hierarchy

AASB 13 requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:

(a) Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1),

(b) Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly (level 2), and

(c) Inputs for the asset or liability that are not based on observable market data (unobservable inputs (level 3).

The following table presents the Group's financial assets and financial liabilities measured and recognised at fair value at 30 June 2018 and 30 June 2017 on a recurring basis.

At 30 June 2019

Level 1

US$

Level 2

US$

Level 3

US$

Total

Assets

Financial asset measured at Fair Value through profit and loss

 

 

 

 

Equity securities

-

-

-

-

Total assets

-

-

-

-

 

 

 

 

 

Liabilities

Option liability at fair value through profit or loss

-

-

-

-

Derivative liability at fair value through profit or loss

-

113

-

113

Total liabilities

-

113

-

113

At 30 June 2018

Level 1

US$

Level 2

US$

Level 3

US$

Total

Assets

Financial asset measured at Fair Value through profit and loss

 

 

 

 

Equity securities

-

-

-

-

Total assets

-

-

-

-

 

 

 

 

 

Liabilities

Option liability at fair value through profit or loss

-

33,345

-

33,345

Derivative liability at fair value through profit or loss

-

384,007

-

384,007

Total liabilities

-

417,352

-

417,352

 

The Group's policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the end of the reporting period. There were no transfers between the levels of the fair value hierarchy during the year ended 30 June 2019.

(b) Fair values of other financial instruments

The Group has financial instruments which are measured at amortised cost in the consolidated statement of financial position.

Due to their short-term nature, the carrying amounts of the current receivables, current payables, current borrowings, and current other financial liabilities is assumed to approximate their fair value.

(c) Fair values of non-current receivables, payables and borrowings

For non-current receivables, payables and borrowings, the fair values are not materially different to their carrying amounts since the interest on these balances is close to current market rates.

 

Note 34: Events after the reporting date

Conditional Sale and Purchase Agreement with LandOcean Energy Services

On 2 September 2019, the parties have successfully signed a binding conditional Sale and Purchase Agreement for the sale of Range Resources Trinidad Limited to LandOcean in exchange for offsetting all outstanding debt and payables (including the convertible note) due from Range and its subsidiaries to LandOcean and its subsidiaries, and a cash consideration of US$2,500,000 million. This is conditional upon Range shareholders' approval, LandOcean shareholders' approval and Trinidad and Tobago government approval. There is no guarantee the transaction will complete.

Director resignation

Ms Juan Wang has tendered her resignation as Non-Executive Director of the Company on 23 July 2019. Ms Wang was appointed to the Board of the Company in 2014 as a nominee of Abraham Ltd, pursuant to Abraham's contractual right to appoint up to two Non-Executive Directors to the Board as part of its investment in Range in 2014, as long as it holds 8% or more of the Company's shares on issue (as announced on 15 May 2014). As Abraham's shareholding in the Company is currently below 8%, it no longer has the right to have any nominee Directors on the Board of the Company.

Placement £750k

The Group has completed a subscription agreement to raise £750,000 with a new investor, Sramek BioDynamics Holdings Limited. Pursuant to the Subscription, the Group issued 1,536,599,792 new ordinary shares at a price of 0.049 pence per new ordinary share. The subscription shares represent 15% of the issued ordinary share capital of the Group prior to the subscription which was undertaken under the Company's available 15% placement capacity under ASX Listing Rule 7.1. The shares were admitted on AIM on 20 September 2019.

VAT refund - Trinidad

In September, the Group received a VAT refund from the Board of Inland Revenue in Trinidad and Tobago of US$1.03 million.

Other than the above, no events occurred after the reporting date.

Note 35: New accounting Standards and interpretations

Australian accounting Standards/amendments released but not yet effective: 30 June 2019 year end

Certain new accounting Standards and Interpretations have been published that are not mandatory for 30 June 2019 reporting periods and have not been early adopted by the Group. The Group's assessment of the impact of these new Standards and Interpretations is set out below. In all cases the Group intends to apply these standards from the application date as indicated in the tables below.

 

 

 

Reference:

AASB 16

Title:

Leases

Standard application date:

1 January 2019

Group application date:

1 July 2019

 

Key Requirements

The key features of AASB 16 are as follows:

Lessee accounting

·; Lessees are required to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of a low value.

·; A lessee measures right-of-use assets similarly to other non-financial assets and lease liabilities similarly to other financial liabilities.

·; Assets and liabilities arising from a lease are initially measured on a present value basis. The measurement includes non-cancellable lease payments, and also includes payments to be made in optional periods if the lessee is reasonably certain to exercise an option to extend the lease, or not to exercise an option to terminate the lease.

·; AASB 16 contains disclosure requirements for leases.

 

Lessor accounting

AASB 16 substantially carries forward the lessor accounting requirements in AASB 117. Accordingly, a lessor continues to classify its leases as operating leases or finance leases, and to account for those two types of leases differently. AASB 16 also requires enhanced disclosures to be provided by lessors that will improve information disclosed about a lessor's risk exposure, particularly to residual value risk.

 

Impact

Management have assessed AASB 16 and do not expect any significant impact on the Group.

There are no other standards that are not yet effective and that would be expected to have a material impact on Range in the current or future period and on foreseeable future transactions.

Note 36: Company details

The registered office of the company is:

c/o Edwards Mac Scovell, Level 7, 140 St Georges Terrace, Perth WA 6000

Telephone: +61 8 6205 3012

The principal place of business is:

c/o Edwards Mac Scovell, Level 7, 140 St Georges Terrace, Perth WA 6000

Telephone: +61 8 6205 3012

 

 

+ Directors' Declaration

The directors of the company declare that:

·; The financial statements, comprising the consolidated statement of profit or loss and other comprehensive income, consolidated statement of financial position, consolidated statement of cash flows, consolidated statement of changes in equity, accompanying notes, are in accordance with the Corporations Act 2001 and:

• comply with Accounting Standards and the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

• give a true and fair view of the Group's financial position as at 30 June 2019 and of its performance for the year ended on that date.

·; The company has included in the notes to the financial statements an explicit and unreserved statement of compliance with International Financial Reporting Standards.

·; In the directors' opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

·; The directors have been given the declarations by the chief executive officer and chief financial officer required by section 295A.

This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors by:

Zhiwei Gu

Chairman

 

27 September 2019

 

 

 

+ Independent Audit Report to the Members of Range Resources Limited

 

 

 

 

+ Reserves and Resources Statement

 

Reserves

As at 30 June 2019, Range's net proved and probable reserves (2P) are assessed to be 15.0 million barrels of oil (MMbbl). The only factor attributing to the revision in reserves is:

·; Production during the period commencing 1 July 2018 up to 30 June 2019

Reserves as at 30 June 2019 (MMbbl):

Category

Proved (1P)

Proved & probable (2P)

Proved, probable & possible (3P)

Developed

2.9

4.7

6.2

Undeveloped

6.2

10.3

15.5

Total

9.1

15.0

21.7

1. The reserve figures (1P, 2P and 3P) include reserves associated with the Company's Morne Diablo, South Quarry and Beach Marcelle licences in Trinidad. Range's net interest in all three fields is 100%.

2. Competent Persons Report ("CPR") prepared by Rockflow Resources Ltd, effective 30 June 2017 was used as a basis for estimation of the reserve figures.

3. Range's Morne Diablo and South Quarry fields are operated under farm-out agreements, with rights to production net of Trinidad government royalties, overriding royalties, and production taxes.

4. Range's Beach Marcelle field is operated under the terms of an Incremental Production Service Contract, entitling Range to a defined portion of the future revenue stream. No oil and gas reserves are owned by Range.

Movement in reserves (MMbbl):

Category

Proved (1P)

Proved & probable (2P)

Proved, probable & possible (3P)

Reserves as at 30 June 2018

9.3

15.2

21.9

FY 2018 production

-0.2

-0.2

-0.2

Reserves as at 30 June 2019

9.1

15.0

21.7

 

 

 

 

Contingent resources

As at 30 June 2019, Range's net contingent resources 2C (P50) are assessed to be 12.9 million barrels of oil equivalent (MMboe). The contingent resources remain unchanged due to no material activities on commercialization of identified contingent resources in both Trinidad and Indonesia during the past financial year period commencing 1 July 2018 up to 30 June 2019.

Contingent resources as at 30 June 2019:

Category

1C

2C

3C

Project

Gas Bscf

Oil MMbbl

Total MMboe

Gas Bscf

Oil MMbbl

Total MMboe

Gas Bscf

Oil MMbbl

Total MMboe

Trinidad (net 100 %)

-

4.6

4.6

-

8.0

8.0

-

15.4

15.4

Indonesia (net 23%)

1.7

0.9

1.2

10.9

3.1

4.9

41.1

18.4

25.3

Total

1.7

5.5

5.8

10.9

11.1

12.9

41.1

33.8

40.7

1. The Trinidad resource figures (1C, 2C and 3C) include contingent resources associated with the Company's Morne Diablo, South Quarry and Beach Marcelle licences in Trinidad. Range's net interest in all three fields is 100%.

2. The Trinidad resource figures are based on the CPR prepared by Rockflow Resources Ltd, effective 30 June 2017.

3. The Indonesia resource figures (1C, 2C and 3C) include contingent resources associated with the Company's interest in the Perlak field. Range's net interest is 23%.

4. The Indonesia resource figures are based on the CPR prepared by LEAP Energy Partners Sdn. Bhd, effective 1 August 2017.

5. The conversion factor used for converting gas to oil equivalent volumes is 6,000 scf to 1 boe.

 

Movement in contingent resources (MMboe):

Category

1C

2C

3C

Contingent resources as at 30 June 2018

5.8

12.9

40.7

Revisions

+0.0

+0.0

+0.0

Contingent resources as at 30 June 2019

5.8

12.9

40.7

 

 

 

 

Notes on calculation of reserves and resources

·; The reserves and resources stated in this report are prepared in accordance with the definitions and guidelines in the Society of Petroleum Engineers (SPE) 2007 Petroleum Resources Management System (PRMS).

·; Range reviews and updates its oil and gas reserves and resources position on an annual basis and reports the updated estimates as of 30 June each year. Separately, Range reviews and updates its oil and gas reserves and resources position as frequently as required by the magnitude of the petroleum reserves and resources and changes indicated by new data.

·; The reserve and resource figures are reported according to Range's net economic interest, net of royalties and net of lease fuel up to the reference point.

·; The reference point defined as the point of sale to third parties.

·; Petroleum reserves and resources are prepared using deterministic and probabilistic methods.

·; Project and field totals are aggregated by arithmetic summation by category.

·; Totals may not exactly reflect arithmetic addition due to rounding.

·; Oil and gas reserves estimates are expressions of judgment based on knowledge, experience and industry practice. Estimates that were valid when originally calculated may alter significantly when new information or techniques become available. Additionally, by their very nature, reserve and resource estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further information becomes available through additional drilling and analysis, the estimates are likely to change. This may result in alterations to development and production plans which may, in turn, adversely impact the Company's operations. Reserves estimates and estimates of future net revenues are, by nature, forward looking statements and subject to the same risks as other forward-looking statements.

 

Qualified person review

The information contained in this report has been reviewed and approved by Mr Lubing Liu. Mr Liu is a suitably qualified person with 24 years of industry experience. Mr Liu is a full-time employee of Range and holds a role of a Chief Operating Officer and Trinidad General Manager. He holds a BSc in Petroleum Engineering from the Southwest Petroleum University, China and is a member of the SPE (Society of Petroleum Engineers). Mr Liu is qualified in accordance with ASX listing rule 5.41 and consents to the use of petroleum reserve and resource figures in the form and context in which they appear in this statement.

 

 

 

 

 

+ ASX Additional Information

 

Additional information required by the Australian Securities Exchange Listing Rules and not disclosed elsewhere in this Annual Report is set out below.

Top 20 shareholders

The 20 largest shareholders of the Company as at 31 August 2019 are listed below:

Rank

Shareholder

Number of shares

Percentage held (%)

 

1.

BEIJING SIBO INVESTMENT MANAGEMENT LP

2,447,620,912

23.89

 

2.

LANDOCEAN ENERGY SERVICES CO LTD

1,739,076,923

16.98

 

3.

INTERACTIVE INVESTOR SERVICES NOMINEES LIMITED

728,480,359

7.11

 

4

ABRAHAM LIMITED

712,377,560

6.95

 

5.

BARCLAYS DIRECT INVESTING NOMINEES LIMITED

556,622,350

5.43

 

6.

INTERACTIVE INVESTOR SERVICES NOMINEES LIMITED

480,811,795

4.69

 

7.

HARGREAVES LANSDOWN (NOMINEES) LIMITED

296,273,980

2.89

 

8.

HSDL NOMINEES LIMITED

287,907,659

2.81

 

9.

HSDL NOMINEES LIMITED

174,183,889

1.70

 

10.

HARGREAVES LANSDOWN (NOMINEES) LIMITED

161,381,580

1.58

 

11.

HARGREAVES LANSDOWN (NOMINEES) LIMITED

160,296,133

1.57

 

12.

HSBC CLIENT HOLDINGS NOMINEE (UK) LIMITED

151,595,552

1.48

 

13.

SHARE NOMINEES LTD

100,867,728

0.99

 

14.

WEALTH NOMINEES LIMITED

93,529,952

0.91

 

15.

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

72,716,846

0.71

 

16.

LAWSHARE NOMINEES LIMITED

71,809,408

0.70

 

17.

CITICORP NOMINEES PTY LIMITED

69,947,400

0.68

 

18.

J P MORGAN NOMINEES AUSTRALIA PTY LIMITED

64,962,626

0.63

 

19.

VIDACOS NOMINEES LIMITED

59,293,575

0.58

 

20.

JIM NOMINEES LIMITED

58,892,984

0.58

 

Total

8,488,649,211

 82.86

 

 

Substantial shareholders

An extract of the Company's register of substantial shareholders (being those shareholders who held 5% or more of the issued capital on 31 August 2019) is below:

Shareholder

Number of shares

Percentage held (%)

BEIJING SIBO INVESTMENT MANAGEMENT LP

2,447,620,912

23.89

LANDOCEAN ENERGY SERVICES CO LTD

1,739,076,923

16.98

INTERACTIVE INVESTOR SERVICES NOMINEES LIMITED

728,480,359

7.11

ABRAHAM LIMITED

712,377,560

6.95

BARCLAYS DIRECT INVESTING NOMINEES LIMITED

556,622,350

5.43

 

Distribution of equity securities

There were 2,499 holders of less than a marketable parcel of ordinary shares (being 165,777,662 shares on 31 August 2019).

The number of shareholders by size of holding is set out below:

Size of holding

Number of holders

Number of shares

1 - 1,000

215

69,850

1,001 - 5,000

335

1,041,441

5,001 - 10,000

298

2,424,646

10,001 - 100,000

1,159

54,448,501

100,001 and over

921

10,186,014,177

Total

2,928

10,243,998,615

 

Tenement schedule

The tenement schedule for the Group as at 30 June 2019 is tabulated below:

Tenement Reference

Location

Percentage held (%)

Operator

Morne Diablo

Trinidad

100

Range

South Quarry

Trinidad

100

Range

Beach Marcelle

Trinidad

100

Range

St Mary's Block

Trinidad

80

Range

Perlak1

Indonesia

23

PT Aceh Timur Kawai Energi

Notes:

1. Range's indirect interest in the Perlak field is held through its 60% shareholding in Hengtai, which holds a 78% interest in Lukar which in turn holds a 49% interest in PT Aceh Timur Kawai Energi.

2. The Production Sharing Contracts relating to Guayaguayare Deep and Shallow expired in 2015. Any renewal will be subject (inter alia) to government and other regulatory approvals.

 

 

 

+ Corporate Directory

 

Directors

Zhiwei Gu

Executive Chairman

Lubing Liu

Executive Director and COO

Dr Mu Luo

Non-Executive Director

 

Company Secretary

Evgenia Bezruchko and Sara Kelly

Registered office & principal place of business

c/o Edwards Mac Scovell, Level 7, 140 St Georges Terrace

Perth WA 6000, Australia

Telephone: +61 8 6205 3012

Share Registry (Australia)

Computershare Investor Services Pty Ltd

Level 11, 172 St Georges Terrace, Perth WA 6000

Telephone: +61 3 9415 4000

Share Registry (United Kingdom)

Computershare Investor Services plc

PO Box 82, The Pavilions, Bridgwater Road, Bristol, UK BS99 6ZZ

Telephone: +44 370 702 0000

Auditor

BDO Audit (WA) Pty Ltd, 38 Station Street;

Subiaco WA 6008, Australia

Stock Exchange Listing

Range Resources Limited shares are listed on the Australian Securities Exchange (ASX code: RRS) and

Alternative Investment Market of the London Stock

Exchange (AIM code: RRL)

Country of Incorporation

Australia

Website

www.rangeresources.co.uk

 

 

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
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