21 October 2021

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 a Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.

Global Petroleum Limited

("Global" or "the Company")

Final Results for the Year Ended 30 June 2021

Global Petroleum Limited announces its Final Results for the year ended 30 June 2021:

 Operational

·    Updated best estimate of Prospective Resources on PEL0094 showing threefold increase to 2,284 million barrels of oil net to Global

·    Farm-out process for PEL0094 initiated and ongoing

·    Commenced remaining year of PEL0094 Initial Exploration Period, expiring in September 2022

Financial

·    Two successful equity raises in the year totaling £2.4 million strengthened finances and positioned Global to continue exploration activities in Namibia

·    Cash balance at period end US$1,834,434 (30 June 2020: US$932,818), increasing to US$2,682,940 at end September 2021 following further £1.0 million equity raise in August

·    Loss after tax US$3,927,794 (2020: loss US$1,526,449), after impairment write-off following expiry of PEL0029 amounting to US$2,410,272 (2020: Nil).

Strategy and Outlook

The Company remains committed to offshore Namibia, where work will continue in seeking a farm-out partner to fund future exploration drilling operations on PEL0094. The upcoming drilling in the Orange Basin by oil majors Total and Shell, expected to commence in Q4 this year, will be closely monitored. Global also remains committed to pursuing its Italian applications, notwithstanding the appeal which is still proceeding and the previous exploration moratorium imposed by the Italian Parliament.

In addition, as previously announced, the Company will continue to explore all strategic alternatives in order to maximise shareholder value.

The Company confirms that a full copy of its latest Annual Report and Accounts will be available shortly on the Company's website: www.globalpetroleum.com.au

Chairman and CEO's Review

We are pleased to present to you the Global Annual Financial Report for the year ended 30 June 2021.

The Company's focus during the reporting period and to date has been completing the work programmes for its Namibian licences, updating its estimate of Prospective Resources for licence PEL0094, and strengthening its finances in order to position it to enter the next sub-phase of the licence from September 2021. In addition, a process to farm-out PEL0094 was commenced and is ongoing.

The updated PEL0094 Prospective Resources (best estimate) net to Global on an unrisked basis - for the Company's main prospects Marula and Welwitschia Deep along with 7 new leads - totals 2,284 million barrels of oil. This represented a threefold increase compared with the previous estimate, and confirmed the Company's view that the acreage is highly prospective.

In August 2021, Global notified the Ministry of Mines and Energy of its intention to enter into the remaining one year of the PEL0094 Initial Exploration Period, expiring in September 2022. The commitment for this period is to shoot a 2,000 square kilometre 3D seismic data survey, which the Company intends to fund via farm-out, as above.

The Company's other Namibian licence, PEL0029, expired in December 2020, enabling Global to focus its technical efforts on PEL0094.

In Italy, regarding the outstanding appeal in relation to the Company's four licence applications in the Adriatic Sea, the judgement of the European Court is expected by the end of 2021. In addition, the final extension of the moratorium on hydrocarbon exploration activities, including permit applications, reportedly expired on 30 September 2021. The report from the Commission appointed to review and make recommendations in relation to future exploration and development activities is expected shortly.

Corporate

On 8 July 2020 the Company formally ceased quotation on the ASX resulting in the quotation of its securities being solely on the Alternative Investment Market in London (AIM). The decision to de-list was made following consideration of the volume of trades, AIM being significantly higher versus ASX, the Company's limited operations in Australia, the limited interest from institutional and retail investors within Australia, and the compliance costs of maintaining two listings.

Along with the continuation of PEL0094 and the updated estimate of Prospective Resources on that licence, the other most significant development for the Company during the year to 30 June 2021, and subsequently, was the strengthening of the Company's financial position with three successful equity share placings - including a subscription by directors alongside the first of the placings in September 2020 - which raised total gross proceeds of £3.4 million (excluding any further proceeds from the exercise of warrants associated with each placing and the subscription).

We are pleased to have successfully completed this strengthening of Global's finances in what remains a very difficult market, particularly for small E&P companies, and are delighted to welcome new shareholders to the Company.

Proceeds from these equity raises has positioned the Company to continue with its exploration activities in Namibia, including entering the remaining one year Initial Exploration Period on its PEL0094 licence until September 2022, and its ongoing efforts to farm-out part of its equity in this licence.

During the reporting period the Company has continued to focus on reducing its cost base to conserve cash resources. A number of measures including further reductions in the level of UK Directors' remuneration, pending an improved financial position, were agreed by the Board throughout the reporting period. In the light of the Company's improved financial position, these remuneration reductions ceased with effect from 1 July 2021.

As a pre-revenue company in the early stages of exploration in Namibia, the impact on our business operations related to COVID- 19, and associated oil price weakness in the reporting period, has fortunately been very limited.

Board

It was with great regret we announced in February 2021 the passing of Peter Blakey, major shareholder and Non-executive Director of the Company. Peter contributed significantly to Global in his time as a Director over many years, and the Board acknowledges its gratitude for this.

In August 2021 we announced that Peter Taylor, major shareholder and Non-executive Director of the Company, had decided to resign from the Board. The Board thanks Peter for his immense contribution to the Company over many years, providing invaluable guidance in shaping and steering Global.

Financial

During the year ended 30 June 2021, the Group recorded a loss after tax of US$3,927,794 (2020: US$1,526,449). Cash balances at 30 June 2021 amounted to US$1,834,434 (2020: US$932,818), the increase reflecting the proceeds from the equity raises completed in the reporting period. At 30 September 2021 cash balances had increased to US$2,682,940, following the equity raise in August 2021. The Group has no debt outside of suppliers who are settled on normal commercial terms

Strategy and Outlook

The Company remains committed to offshore Namibia, where work will continue in seeking a farm-out partner to fund future exploration drilling operations on PEL0094. The upcoming drilling in the Orange Basin by oil majors Total and Shell, expected to commence in Q4 this year, will be closely monitored. Global also remains committed to pursuing its Italian applications, notwithstanding the appeal which is still proceeding and the previous exploration moratorium imposed by the Italian Parliament. In addition, as previously announced, the Company will continue to explore all strategic alternatives in order to maximise shareholder value.

John van der Welle                                                                                        Peter Hill

Chairman                                                                                                         Chief Executive Officer

OPERATING AND FINANCIAL REVIEW

Namibian Project

The Namibian Project consists of an operated 78 per cent participating interest in Petroleum Exploration Licence ("PEL") 0094 (acquired in 2018) which covers Block 2011A (see Figure 1). The Company also previously held an operated 85 per cent participating interest in PEL0029 covering Blocks 1910B and 2010A. PEL0029 expired on 3 December 2020, enabling the Company to focus its technical efforts on PEL0094.

In July 2020 the Company announced updated estimates of Prospective Resources for PEL0094 after interpretation of the existing 3D seismic data, licensed from the Namibian State Oil Company, NAMCOR, in March 2020. The agreement with NAMCOR to licence the 3D seismic data on Block 2011A in return for extra equity in the licence helped conserve the Company's cash resources. The interpretation of the 3D seismic data led to increased confidence in the two prospects, Marula and Welwitschia Deep. The Marula prospect is a distal pinchout of Upper Cretaceous sandstones onto the Welwitschia high. The Welwitschia Deep prospect was also confirmed by interpretation of the 3D seismic data as an Albian carbonate reservoir.

In July 2020, the Company also announced that the Ministry of Mines and Energy in Namibia (the "Ministry") had agreed to extend the PEL0094 licence sub-period from September 2020 to September 2021 and to modify the work commitments. The four-year Initial Exploration Period had been split into two sub-periods of two years each, with the first sub-period ending in September 2020. The amendment agreed by the Ministry gave Global a further year to fulfill a modified work commitment, concentrated on the licensing of existing seismic data and the carrying out of studies specifically designed to focus on the exciting Marula and Welwitschia Deep prospects.

In August 2021 - post the reporting period - Global notified the Ministry of its intention to enter into the remaining one year of the Initial Exploration Period, expiring in September 2022. The commitment for this period is to shoot a new 2,000 square kilometre 3D seismic data survey, which the Company intends to fund via a farm-out. The Company expects to be able to secure a further one-year extension to the Initial Exploration Period (to September 2023) if necessary, based on the precedent of PEL0029 and that of other companies holding exploration licences offshore Namibia.

In accordance with the modified work programme, in November 2020 the Company purchased historic 2D seismic data in order to map the source rock from the Wingat-1 and Murombe-1 wells in the south of the Walvis Basin into Global's acreage to the north. The Company also commissioned studies to examine the amplitude with offset ("AVO") response of the source rock in both the wells and on the seismic data, and also performed seismic inversion on some of the data. The Company's interpretation of this data, together with the commissioned studies, enabled the source rock to be mapped with even further confidence into Global's acreage.

In December 2020 the Company purchased further historic 2D seismic data in order to improve interpretation of both its Marula prospect and also the relatively under-explored eastern part of the block.

Consequently, in January 2021 the Company announced an updated estimate of Prospective Resources for PEL0094. The additional Prospective Resources in the east of PEL0094 consist of 7 new leads with a total unrisked gross Prospective Resources (Best Estimate) of 2,048 million barrels of oil ("barrels"). As previously reported in July 2020, the pre-existing prospects - Marula and Welwitschia Deep - contain a total of 881 million barrels, making a new total on the licence of 2,929 million barrels unrisked gross Prospective Resources (Best Estimate). Regarding the Prospective Resources attributable to Global, the total unrisked net Prospective Resources (Best Estimate) now total 2,284 million barrels compared with the previous number of 687 million barrels net to Global - which related to Marula and Welwitschia Deep alone. This means that the total unrisked net Prospective Resources (Best Estimate) - both gross and net - are over three times as large, due to the new leads identified. When adjusted for exploration risk, Prospective Resources have approximately doubled.

The technical work undertaken in late 2020 more than fulfilled the firm work commitments for the extended sub-period to September 2021. As well as identification of the significant new leads in the eastern part of PEL0094, the geological chance of success of Marula was increased from 18 per cent to 22 per cent and the further work has significantly reinforced the Company's confidence that the source rock is present and generating oil in PEL0094.The Company believes that the latest work has vindicated the Company's view that the acreage is highly prospective. The updated Prospective Resources estimates were also timely as the Company commenced the farm-out process for PEL0094, which is currently underway.

The wider perspective in offshore Namibian exploration is the drilling programme in Namibia's Orange Basin to be undertaken by the oil majors, Total (Venus-1) and Shell (Graff-1), both wells expected to spud in Q4 2021.

Much of the interest by super-majors and other oil companies is driven by the perception that the Barremian-Aptian source rock in Namibia is of excellent quality, regionally developed and so capable of generating substantial volumes of hydrocarbons. The source rock has been proven by previous drilling in southern Namibia where the Orange Basin is located. The same Barremian-Aptian source rock is also proven by two previous wells in the Walvis Basin in the north (where PEL0094 is situated). Global has used part of the proceeds raised over the last year to map the source rock from those wells into its licence, using the latest technology, and has now started a study to calculate the volume of oil likely generated and available to migrate into Global's prospects and leads.

In the general Namibia context, it is to be expected that a drilling success by any company would lead to other companies wishing to acquire acreage, as was seen in recent years after the major discoveries offshore Ghana, Senegal, Guyana and Surinam, which in turn we would expect to be beneficial to the farm-out process for PEL0094.

http://www.rns-pdf.londonstockexchange.com/rns/8137P_1-2021-10-21.pdf

FIGURE 1 - Map of Namibia showing Global Petroleum's Licences

Permit Applications Offshore Italy

In August 2013, the Company submitted an application, proposed work programme and budget to the Italian Ministry of Economic Development for four exploration areas offshore Italy in the Southern Adriatic (the "Permit Applications"). The Company's four Application Blocks are contiguous with the Italian median lines abutting Croatia, Montenegro and Albania respectively (Figure 2 below).

As previously reported, various local authorities and interest groups appealed to either the Rome Tribunal or the President of the Republic against the Environmental Decrees in relation to the applications of the four areas. Publication of Environmental Decrees is the final administrative stage before grant of the Permits. All first instance appeals made to the Rome Tribunal and to the President of the Republic were subsequently adjudicated in Global's favour.

However, Puglia, as the Italian region principally interested, made additional appeals to the Council of State (the highest level of appeal in Italy) against the judgements of the Rome Tribunal. The subsequent appeals were heard by the Council of State in January 2020, and in February 2020 the Council of State issued a judgement. Essentially, the Council of State suspended the proceedings before it and referred the matter to the European Court, requesting the Court to rule whether the four Licence Applications contravene a relevant EU Directive relating to the maximum permissible size of individual permits, in particular having regard to the fact that the four permit applications are contiguous. The town of Margherita di Savoia also appealed to the Council of State against the Rome Tribunal judgments previously made against it. The Council of State has deferred the Hearing of this appeal pending the judgement of the European Court with respect to the Puglia appeal.

The Company is currently advised that the European Court judgement is expected by the end of 2021.

In February 2019, the Italian Parliament passed a Bill suspending all hydrocarbon exploration activities - including permit applications - for a period of 18 months. Under the proposed legislation, a Government appointed Commission was to review all onshore and offshore areas for the stated purpose of evaluating their suitability for hydrocarbon exploration and development in the future. In doing so, the suitability of such activities in the context of social, industrial, urban, water source and environmental factors were to be evaluated. In offshore areas, suitability would additionally be assessed having regard to the impact of such activity on the littoral environment, marine ecosystems and shipping routes. Following the 18-month evaluation period, the intention was that a hydrocarbon plan would be activated, setting out a strategy for future exploration and development.

Following the expiry of its initial 18-month term, the moratorium has been extended twice. The latest, and final, extension reportedly expired on 30 September 2021, and the Commission is expected to publish the hydrocarbon plan shortly.

The southern Adriatic and adjacent areas continue to be the focus of industry activity. Most notably, in Montenegro, offshore concessions were awarded in 2016/2017 to Energean and Eni/Novatek (the latter just 35 km from the nearest of the Applications). Eni/Novatek reportedly committed nearly $100 million on exploration on these permits, where an exploration well is currently underway with results expected shortly.

Energean acquired 3D seismic data on its blocks in 2019. In Albania, Shell continues to evaluate its Shpiragu discovery after the Shpiragu -4 well tested at several thousand barrels of oil per day in 2019.

http://www.rns-pdf.londonstockexchange.com/rns/8137P_2-2021-10-21.pdf

FIGURE 2 - Map of Global Petroleum's 4 Permit Applications offshore Italy in Southern Adriatic

Results of operations

The results of the Group include revenue from interest income of US$792 (2020: US$23,928).

Review of financial conditions

As at 30 June 2021, the Group had cash of US$1,834,434 (2020: US$932,818) and had no debt outside of suppliers who are settled on normal commercial terms.

Placings and Subscription

On 16 September 2020 the Company announced that it had successfully raised £1,327,500 in aggregate before costs, through the placing of 177,000,000 Ordinary Shares at a placing price of 0.75 pence per share and that in addition certain Directors of the Company intended to subscribe for, in aggregate, 9,666,667 Ordinary Shares, raising £72,500. In aggregate, the gross quantum of funds raised by the placing and the subscription were £1.4 million.

As a further component of the placing and the subscription, 186,666,667 Warrants were issued at an exercise price of 1.5 pence per share for a period of 2 years (one Warrant for every one new Ordinary Share). In the event the Warrants are exercised in due course in full, associated proceeds will be £2.8 million, with the result that the Company will have raised gross proceeds of £4.2 million at a weighted average price of 1.125 pence per share.

Panmure Gordon UK Limited ("Panmure Gordon") acted as the Company's sole broker in respect of the placing. The Company had announced Panmure Gordon's appointment as broker and NOMAD on 14 July 2020.

On 29 April 2021 the Company announced that it had successfully raised £1,000,000 in aggregate before costs, through the placing of 222,222,222 Ordinary Shares at a placing price of 0.45 pence per share.

As a further component of the placing, 111,111,111 Warrants were also issued at an exercise price of 0.9 pence per share for a period of 2 years (one Warrant for every two new Ordinary Shares). In the event the Warrants are exercised in due course in full, associated proceeds will be £1.0 million, with the result that the Company will have raised gross proceeds of £2.0 million at a weighted average price of 0.6 pence per share.

Monecor (London) Ltd, trading as ETX Capital ("ETX Capital"), acted as the Company's sole broker in respect of the placing, and was appointed Joint Broker to the Company effective from 5 May 2021.

Subsequent to the reporting period, on 12 August 2021 the Company announced that it had successfully raised £1,000,000 in aggregate before costs through the placing of 200,000,000 Ordinary Shares at a placing price of 0.5 pence per share.

As a further component of the placing, 100,000,000 Warrants were also issued at an exercise price of 1.0 pence per share for a period of 2 years (one Warrant for every two new Ordinary Shares). In the event the Warrants are exercised in due course in full, associated proceeds will be £1,000,000 with the result that the Company will have raised gross proceeds of £2.0 million at a weighted average price of 0.67 pence per share.

Monecor (London) Ltd, trading as ETX Capital ("ETX Capital"), acted as sole broker in respect of the placing.

The accompanying notes form part of these financial statements

The accompanying notes form part of these financial statements

GLOBAL PETROLEUM LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2021

The accompanying notes form part of these financial statements

GLOBAL PETROLEUM LIMITED

CONSOLIDATED STATEMENT OF CASHFLOWS

FOR THE YEAR ENDED 30 JUNE 2021

The accompanying notes form part of these financial statements

GLOBAL PETROLEUM LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2021

Global Petroleum Limited ("Global", the "Company") is a company domiciled in Australia. Global is a company limited by shares incorporated in Australia whose shares are publicly traded on the AIM market of the London Stock Exchange ("AIM"). The consolidated annual financial statements of the Company as at, and for the 12 months ended, 30 June 2021 comprise the Company and its controlled entities (together referred to as the "Group"). The Group is a for-profit entity and is primarily involved in oil and gas exploration and development.

The consolidated annual financial statements of the Group as at, and for the year ended, 30 June 2021 are available upon request from the Company's registered office at C/- DW Accounting & Advisory, Level 4, 91 William Street, Melbourne, Victoria, 3000, Australia or at www.globalpetroleum.com.au.

The separate financial statements of the parent entity, Global Petroleum Limited ("Parent"), have not been presented within this annual financial report as permitted by the Corporations Act 2001.

The financial statements were authorised for issue on 20 October 2021 by the Board of Directors of the Company.

Note 1  Summary of Significant Accounting Policies

These general purpose consolidated financial statements have been prepared in accordance with the Corporations Act 2001, Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board and in compliance with International Financial Reporting Standards as issued by the International Accounting Standards Board. The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless stated otherwise.

Except for cash flow information, the financial statements have been prepared on an accrual basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

(a)          Going Concern

The financial statements have been prepared on the going concern basis of accounting, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business.

The Group has no source of operating revenue and settles its expenditure obligations from existing cash resources. It generated a loss of US$3,927,794 (2020: loss of US$1,526,449) and had net cash outflows from the operating activities of US$1,341,196 (2020: net cash outflows of US$1,402,868) for the year ended 30 June 2021. As of that date, the Group had net assets of US$2,696,047 (2020: US$3,418,172) and cash assets of US$1,834,434 (2020: US$932,818). The Group has no debt.

The Directors have prepared a cash flow forecast for the next 12 months based on best estimates of future inflows and outflows of cash, to support the Group's ability to continue as a going concern. The ability of the Company to continue as a going concern is principally dependent upon a combination of one or more of the following factors - management of existing funds; securing further funds via raising capital from equity markets (See note 15 - Issued Share Capital); concluding a farm-out arrangement whereby a farm- in party would assume the costs of meeting certain future exploration and other commitments on the Company's Namibian licence; and the deferral of licence commitments. (See note 11 - Exploration Assets and note 16 - Future Commitments).

The raising of additional equity capital is subject to market conditions and investor demand; securing a farm-out requires agreement with a suitable third party which the Group has not achieved to date; and any deferral of licence commitments would require the consent of the Namibian Ministry of Mines and Energy. As each of these are not within the Company's control, these conditions constitute a material uncertainty that may cast significant doubt on the use of the going concern basis of accounting. However the Directors have a reasonable expectation that one or more of these actions will be achieved, and following two successful equity placings in the reporting period which raised gross proceeds of GBP2.4 million. In August 2021, Global announced a further successful placing of ordinary shares in the Company, raising gross proceeds of GBP1 million (See note 20 - Events After the Reporting Period). On this basis the Group's projections indicate that it will have sufficient liquidity to meet its expenditure related liabilities as they fall due in the next twelve months from the date of finalising these financial statements.

Accordingly, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, and therefore the Directors continue to adopt the going concern basis of accounting in preparing the financial statements. The financial statements do not include any adjustments relating to the classification of assets including Exploration and Evaluation assets, or the recoverability of asset carrying values, or to the amount and classification of liabilities, that might result should the Group be unable to continue as a going concern.

(b)          Principles of Consolidation

The consolidated financial statements incorporate all of the assets, liabilities and results of Global Petroleum Limited and all of its subsidiaries being entities that the Parent controls. The Parent controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. A list of the subsidiaries is provided in Note 9.

The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the date that control ceases. Inter- company transactions, balances and unrealised gains or losses on transactions between Group entities are fully eliminated on consolidation. Accounting policies of subsidiaries may be changed and adjustments made where necessary to ensure uniformity of the accounting policies adopted by the Group

Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as "non-controlling Interests". The Group initially recognises non-controlling interests that are present ownership interests in subsidiaries and are entitled to a proportionate share of the subsidiary's net assets on liquidation at either fair value or the non-controlling interests' proportionate share of the subsidiary's net assets. Subsequent to initial recognition, non-controlling interests are attributed their share of profit or loss and each component of other comprehensive income. Non-controlling interests are shown separately within the equity section of the statement of financial position and statement of comprehensive income. No non-controlling interests were recognised for the reporting period

Business Combinations

Business combinations occur where an acquirer obtains control over one or more businesses.

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The business combination will be accounted for from the date that control is obtained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to certain limited exemptions).

When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent consideration arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability is remeasured each reporting period to fair value, recognising any change to fair value in profit or loss, unless the change in value can be identified as existing at acquisition date.

All transaction costs incurred in relation to business combinations, other than those associated with the issue of a financial instrument, are recognised as expenses in profit or loss when incurred.

The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase'

Goodwill

Goodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the excess of the sum of:

(i)            the consideration transferred at fair value;
(ii)           any non-controlling interest (determined under either fair value or proportionate interest method); and
(iii)          the acquisition date fair value of any previously held equity interest,

over the acquisition date fair value of any identifiable assets acquired and liabilities assumed.

The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date fair value of any previously held equity interest shall form the cost of the investment in the separate financial statements.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Group.

When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated as the difference between

(i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as specified/permitted by applicable AASB Accounting Standards). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under AASB 139: Financial Instruments: Recognition and Measurement, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.

The amount of goodwill recognised on acquisition of each subsidiary in which the Group holds less than 100% interest will depend on the method adopted in measuring the non-controlling interest. The Group can elect in most circumstances to measure the non- controlling interest in the acquiree either at fair value (full goodwill method) or at the non-controlling interest's proportionate share of the subsidiary's identifiable net assets (proportionate interest method). In such circumstances, the Group determines which method to adopt for each acquisition and this is stated in the respective note to the financial statements disclosing the business combination.

Under the full goodwill method, the fair value of the non-controlling interest is determined using valuation techniques which make the maximum use of market information where available.

Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates.

Goodwill is tested for impairment annually and is allocated to the Group's cash-generating units or groups of cash-generating units, representing the lowest level at which goodwill is monitored and not larger than an operating segment. Gains and losses on the disposal of an entity include the carrying amount of goodwill related to the entity disposed of.

(c)           Income Tax

The income tax expense (income) for the year comprises current income tax expense (income) and deferred tax expense (income).

Current income tax expense charged to profit or loss is the tax payable on taxable income for the current period. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority using tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses.

Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates to items that are recognised outside profit or loss or arising from a business combination.

A deferred tax liability shall be recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from: (a) the initial recognition of goodwill; or (b) the initial recognition of an asset or liability in a transaction which: (i) is not a business combination; and (ii) at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset or liability, where there is no effect on accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled and their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. With respect to non-depreciable items of property, plant and equipment measured at fair value and items of investment property measured at fair value, the related deferred tax liability or deferred tax asset is measured on the basis that the carrying amount of the asset will be recovered entirely through sale. When an investment property that is depreciable is held by the entity in a business model whose objective is to consume substantially all of the economic benefits embodied in the property through use over time (rather than through sale), the related deferred tax liability or deferred tax asset is measured on the basis that the carrying amount of such property will be recovered entirely through use.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised, unless the deferred tax asset relating to temporary differences arises from the initial recognition of an asset or liability in a transaction that:

-              is not a business combination; and
-              at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.

Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where: (i) a legally enforceable right of set-off exists; and (ii) the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

(d)          Fair Value of Assets and Liabilities

The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending on the requirements of the applicable accounting standard.

Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly (i.e. unforced) transaction between independent, knowledgeable and willing market participants at the measurement date.

As fair value is a market-based measure, the closest equivalent observable market pricing information is used to determine fair value. Adjustments to market values may be made having regard to the characteristics of the specific asset or liability. The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market data.

To the extent possible, market information is extracted from either the principal market for the asset or liability (i.e. the market with the greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the most advantageous market available to the entity at the end of the reporting period (i.e. the market that maximises the receipts from the sale of the asset or minimises the payments made to transfer the liability, after taking into account transaction costs and transport costs).

For non-financial assets, the fair value measurement also takes into account a market participant's ability to use the asset in its highest and best use or to sell it to another market participant that would use the asset in its highest and best use.

The fair value of liabilities and the entity's own equity instruments (excluding those related to share-based payment arrangements) may be valued, where there is no observable market price in relation to the transfer of such financial instruments, by reference to observable market information where such instruments are held as assets. Where this information is not available, other valuation techniques are adopted and, where significant, are detailed in the respective note to the financial statements.

(e)          Property, Plant and Equipment

Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses.

Plant and equipment

Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated depreciation and any accumulated impairment. In the event the carrying amount of plant and equipment is greater than the estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable amount and impairment losses are recognised either in profit or loss. A formal assessment of recoverable amount is made when impairment indicators are present (refer to Note 1(h) for details of impairment).

The carrying amount of plant and equipment is reviewed annually by 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 that will be received from the asset's employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

The cost of fixed assets constructed within the consolidated 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 recognised as expenses in profit or loss during the financial period in which they are incurred.

Depreciation

The depreciable amount of all fixed assets including buildings and capitalised leased assets, but excluding freehold land, is depreciated on a straight-line basis over the asset's useful life 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 assets are:

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's 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 and losses are recognised in profit or loss in the period in which they arise. Gains shall not be classified as revenue. When revalued assets are sold, amounts included in the revaluation surplus relating to that asset are transferred to retained earnings.

(f)           Exploration and Evaluation Expenditure

Expenditure on exploration and evaluation is accounted for in accordance with the 'area of interest' method and with AASB 6 Exploration for and Evaluation of Mineral Resources, which is the Australian equivalent of IFRS 6 - Exploration for and Evaluation of Mineral Resources.

Exploration and evaluation costs are capitalised as intangible assets and assessed for impairment where facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed the recoverable amount. Exploration and evaluation costs are capitalised if the rights to tenure of the area of interest are current and either:

(i)            the expenditure relates to an exploration discovery where, at balance sheet date, activities have not yet reached a stage which permits an assessment of the existence or otherwise of economically recoverable reserves and active and significant operations in, or in relation to, the area of interest are continuing; or

(ii)           it is expected that the expenditure will be recouped through successful exploitation of the area of interest, or alternatively, by its sale.

Costs incurred before the Group has obtained the legal rights to explore an area are expensed.

Each potential or recognised area of interest is reviewed every six months to determine whether economic quantities of reserves have been found or whether further exploration and evaluation work is underway or planned to support the continued carry forward of capitalised costs.

Where a determination is made that there is no further value to be extracted from the data licenses then any unamortised balance is written off.

Once management has determined the existence of economically recoverable reserves for an area of interest, deferred costs are tested for impairment and then classified from exploration and evaluation assets to oil and gas assets on the Consolidated Statement of Financial Position.

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

(g)          Financial Instruments

Recognition and Initial Measurement

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions to the instrument. For financial assets, this is the date that the Group commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted).

Financial instruments (except for trade receivables) are initially measured at fair value plus transactions costs except where the instrument is classified 'at fair value through profit or loss' in which case transaction costs are expensed to profit or loss immediately. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted.

Trade receivables are initially measured at the transaction price if the trade receivables do not contain a significant financing component or if the practical expedient was applied as specified in AASB 15.63.

Classification and Subsequent Measurement

Financial liabilities

Financial instruments are subsequently measured at:

-           amortised cost; or
-           fair value through profit or loss.

A financial liability is measured at fair value through profit and loss if the financial liability is:

-           held for trading; or
-           initially designated as at fair value through profit or loss.

All other financial liabilities are subsequently measured at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest expense in profit or loss over the relevant period. The effective interest rate is the internal rate of return of the financial asset or liability. That is, it is the rate that exactly discounts the estimated future cash flows through the expected life of the instrument to the net carrying amount at initial recognition.

A financial liability is held for trading if:

-           it is incurred for the purpose of repurchasing or repaying in the near term; or
-           it is part of a portfolio where there is an actual pattern of short-term profit taking.

Any gains or losses arising on changes in fair value are recognised in profit or loss to the extent that they are not part of a designated hedging relationship are recognised in profit or loss.

The change in fair value of the financial liability attributable to changes in the issuer's credit risk is taken to other comprehensive income and are not subsequently reclassified to profit or loss. Instead, they are transferred to retained earnings upon derecognition of the financial liability. If taking the change in credit risk in other comprehensive income enlarges or creates an accounting mismatch, then these gains or losses should be taken to profit or loss rather than other comprehensive income.

A financial liability cannot be reclassified.

Financial assets
Financial assets are subsequently measured at:
-           amortised cost;
-           fair value through other comprehensive income; or
-           fair value through profit or loss.

Measurement is on the basis of two primary criteria:
-           the contractual cash flow characteristics of the financial asset; and
-           the business model for managing the financial assets.

A financial asset that meets the following conditions is subsequently measured at amortised cost:
-           the financial asset is managed solely to collect contractual cash flows; and
-           the contractual terms within the financial asset give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding on specified dates.

A financial asset that meets the following conditions is subsequently measured at fair value through other comprehensive income:
-           the contractual terms within the financial asset give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding on specified dates;
-           the business model for managing the financial assets comprises both contractual cash flows collection and the selling of the financial asset.

By default, all other financial assets that do not meet the measurement conditions of amortised cost and fair value through other comprehensive income are subsequently measured at fair value through profit or loss.

The Company initially designates a financial instrument as measured at fair value through profit or loss if:
-           it eliminates or significantly reduces a measurement or recognition inconsistency (often referred to as "accounting mismatch") that would otherwise arise from measuring assets or liabilities or recognising the gains and losses on them on different bases;
-           it is in accordance with the documented risk management or investment strategy, and information about the groupings was documented appropriately, so that the performance of the financial liability that was part of a group of financial liabilities or financial assets can be managed and evaluated consistently on a fair value basis.

The initial designation of the financial instruments to measure at fair value through profit or loss is a one-time option on initial classification and is irrevocable until the financial asset is derecognised.

Derecognition

Derecognition refers to the removal of a previously recognised financial asset or financial liability from the statement of financial position.

Derecognition of financial liabilities

A liability is derecognised when it is extinguished (i.e. when the obligation in the contract is discharged, cancelled or expires). An exchange of an existing financial liability for a new one with substantially modified terms, or a substantial modification to the terms of a financial liability is treated as an extinguishment of the existing liability and recognition of a new financial liability.

The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

Derecognition of financial assets

A financial asset is derecognised when the holder's contractual rights to its cash flows expires, or the asset is transferred in such a way that all the risks and rewards of ownership are substantially transferred.

All of the following criteria need to be satisfied for derecognition of financial asset:
-           the right to receive cash flows from the asset has expired or been transferred;
-           all risk and rewards of ownership of the asset have been substantially transferred; and
-           the Company no longer controls the asset (i.e. the Company has no practical ability to make a unilateral decision to sell the asset to a third party).

On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognised in profit or loss.

On derecognition of a debt instrument classified as at fair value through other comprehensive income, the cumulative gain or loss previously accumulated in the investment revaluation reserve is reclassified to profit or loss.

On derecognition of an investment in equity which was elected to be classified under fair value through other comprehensive income, the cumulative gain or loss previously accumulated in the investment revaluation reserve is not reclassified to profit or loss, but is transferred to retained earnings.

Impairment

The Group recognises a loss allowance for expected credit losses on:
-           financial assets that are measured at amortised cost or fair value through other comprehensive income.

Loss allowance is not recognised for:
-           financial assets measured at fair value through profit or loss.

Expected credit losses are the probability-weighted estimate of credit losses over the expected life of a financial instrument. A credit loss is the difference between all contractual cash flows that are due and all cash flows expected to be received, all discounted at the original effective interest rate of the financial instrument.

The Group uses the following approaches to impairment, as applicable under AASB 9: Financial Instruments:
-           the general approach

General approach

Under the general approach, at each reporting period, the Group assesses whether the financial instruments are credit-impaired, and if:
-           the credit risk of the financial instrument has increased significantly since initial recognition, the Group measures the loss allowance of the financial instruments at an amount equal to the lifetime expected credit losses; or
-           there is no significant increase in credit risk since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses.

(h)          Impairment of Assets

At the end of each reporting period, the company assesses whether there is any indication that an asset may be impaired. The assessment will include the consideration of external and internal sources of information, including dividends received from subsidiaries, associates or joint ventures deemed to be out of pre-acquisition profits. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset's fair value less costs of disposal and value in use, to the asset's carrying amount. Any excess of the asset's carrying amount over its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with another Standard (e.g. in accordance with the revaluation model in AASB 116: Property, Plant and Equipment ). Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that other Standard.

Where it is not possible to estimate the recoverable amount of an individual asset, the entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Impairment testing is performed annually for goodwill, intangible assets with indefinite lives and intangible assets not yet available for use.

When an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase

(i)           Interests in Joint Arrangements

Joint arrangements represent the contractual sharing of control between parties in a business venture where unanimous decisions about relevant activities are required.

Separate joint venture entities providing joint venturers with an interest to net assets are classified as a joint venture and accounted for using the equity method.

Joint operations represent arrangements whereby joint operators maintain direct interests in each asset and exposure to each liability of the arrangement. The company's interests in the assets, liabilities, revenue and expenses of joint operations are included in the respective line items of the financial statements.

Gains and losses resulting from sales to a joint operation are recognised to the extent of the other parties' interests. When the Company makes purchases from a joint operation, it does not recognise its share of the gains and losses from the joint arrangement until it resells those goods/assets to a third party.

(j)           Foreign Currency Transactions and Balances

Functional and presentation currency

The functional currency of the Company is the currency of the primary economic environment in which that entity operates. The financial statements are presented in United States dollars, which is the Company's functional currency.

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, except exchange differences that arise from net investment hedges.

Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive income to the extent that the underlying gain or loss is recognised in other comprehensive income, otherwise the exchange difference is recognised in the profit or loss.

The Company

The financial results and position of foreign operations whose functional currency is different from the entity's presentation currency are translated as follows:

-           assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
-           income and expenses are translated at exchange rates on the date of transaction; and
-           all resulting exchange differences are recognised in other comprehensive income.

Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars are recognised in other comprehensive income and included in the foreign currency translation reserve in the statement of financial position and allocated to non-controlling interest where relevant. The cumulative amount of these differences is reclassified into profit or loss in the period in which the operation is disposed of.

(k)          Employee Benefits

Short-term employee benefits

Provision is made for the Company's obligation for short-term employee benefits. Short-term employee benefits are benefits (other than termination benefits) that are expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render the related service, including wages, salaries and sick leave. Short-term employee benefits are measured at the (undiscounted) amounts expected to be paid when the obligation is settled.

The Company's obligations for short-term employee benefits such as wages, salaries and sick leave are recognised as part of current trade and other payables in the statement of financial position. The Company's obligations for employees' annual leave and long service leave entitlements are recognised as provisions in the statement of financial position.

Other long-term employee benefits

Provision is made for employees' long service leave and annual leave entitlements not expected to be settled wholly within 12 months after the end of the annual reporting period in which the employees render the related service. Other long-term employee benefits are measured at the present value of the expected future payments to be made to employees.

Expected future payments incorporate anticipated future wage and salary levels, durations of service and employee departures and are discounted at rates determined by reference to market yields at the end of the reporting period on government bonds that have maturity dates that approximate the terms of the obligations. Any remeasurements for changes in assumptions of obligations for other long- term employee benefits are recognised in profit or loss in the periods in which the changes occur.

The Company's obligations for long-term employee benefits are presented as non-current provisions in its statement of financial position, except where the company does not have an unconditional right to defer settlement for at least 12 months after the end of the reporting period, in which case the obligations are presented as current provisions.

(l)           Provisions

Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period.

(m)         Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and deposits available on demand with banks, other short-term highly liquid investments with original maturities of 3 months or less.

(n)          Revenue and Other Income Revenue recognition

Interest income is recognised using the effective interest method.

(o)          Trade and Other Payables

Trade and other payables represent the liabilities for goods and services received by the Group that remain unpaid at the end of the reporting period. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability. Trade and other payables are initially measured at fair value and subsequently measured at amortised cost using the effective interest method.

(p)          Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST/VAT, except where the amount of GST/VAT incurred is not recoverable from the relevant taxation authority.

Receivables and payables are stated inclusive of the amount of GST/VAT receivable or payable. The net amount of GST/VAT recoverable from, or payable to, the relevant taxation authority is included with other receivables or payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST/VAT components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the relevant taxation authority are presented as operating cash flows included in receipts from customers or payments to suppliers.

(q)          Comparative Figures

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

Where the Group retrospectively applies an accounting policy, makes a retrospective restatement or reclassifies items in its financial statements, an additional (third) statement of financial position as at the beginning of the preceding period in addition to the minimum comparative financial statements is presented.

(r)           Critical Accounting Estimates and Judgements

The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following Notes:

-              Note 11 - Exploration and evaluation assets
-              Note 3 - Taxes

Note 2  Parent Information

Note 3  Tax Expense

(b)          Current tax payable

The Group has no current tax payable (2020: Nil).

On 1 April 2014, Global Petroleum Limited changed its tax domicile from Australia to the United Kingdom. However, it must be noted that under Australian tax law, Global Petroleum Limited remains an Australian tax resident. As a result, Global Petroleum Limited is a tax resident of both Australia and the United Kingdom. Under the terms of the Australia-United Kingdom Double Tax Treaty, Global Petroleum Limited will be a dual resident company deemed to be a resident in the UK for the purposes of allocating taxing rights.

Multilateral Instruments (MLI) came into force in January 2019 which impact the tie breaker rule previously used for dual resident entities. The MLI changes currently cover six of Australia's double tax treaties which includes the UK. The dual residents entitlement to any treaty benefits will be denied where the two competent authorities, the Australia Taxation Office and HM Revenue and Customs do not reach an agreement on a single jurisdiction of tax residency. On 13 October 2020, the Company received a decision from the Australian Taxation Office determining the Company is deemed to be a resident only in the UK.

(c)           Deferred income tax

The amount of UK tax losses carried forward is US$13.28 million as at 30 June 2021 (2020: US$12.25 million). A corresponding deferred tax asset, calculated using the rate of 25% (which has been enacted in the Finance Act 2021 effective from 1 April 2023), of US$3.32 million (2020: US$2.33 million at 19%) has not been recognised due to insufficient certainty regarding the availability of future profits against which the losses can be utilised.

In addition the Group has a pool of pre-trading revenue expenditure of US$0.2 million (2020: US$1.03 million) and a pool of pre-trading capital expenditure of approximately US$7.8 million (2020: US$8.5 million) arising in the overseas subsidiaries for which no deferred tax asset has been recognised due to insufficient certainty regarding the availability of future profits against which the costs can be utilised

Note 4  Key Management Personnel Compensation

Refer to the Remuneration Report contained in the Directors' Report for details of the remuneration paid or payable to each member of the Group's key management personnel (KMP) for the year ended 30 June 2021.

The totals of remuneration paid to KMP of the Company and the Group during the year are as follows

Short-term employee benefits
-             these amounts include fees and benefits paid to the Non-Executive Chairman and Non-Executive Directors as well as all salary, paid leave benefits, fringe benefits and cash bonuses awarded to Executive Directors and other KMP.

Post-employment benefits
-             these amounts are the current year's estimated costs of providing for the Group's defined benefits scheme post-retirement, superannuation contributions made during the year and post-employment life insurance benefits.

Share-based payments
-             these amounts represent the expense related to the participation of KMP in equity-settled benefit schemes as measured by the fair value of the options, rights and shares granted on grant date.

Further information in relation to KMP remuneration can be found in the Remuneration Report.

Other key management personnel transactions

A number of Directors, or their related parties, hold positions in other entities that result in them having control or significant influence over the financial or operating policies of those entities. A number of these entities transacted with the Company or its controlled entities in the reporting period.

During the year, the Company paid DW Accounting and Advisory Pty Ltd, a company controlled by Mr A Draffin US$46,671 (2020: US$46,671) for company secretarial services and accountancy fees and Northlands Advisory Services Limited, a company controlled by Mr J van der Welle, US$22,384 (2020: US$41,319) for consulting services.

Note 5  Auditor's Remuneration

The Company's auditor for 2021 is Hall Chadwick WA Audit Pty Ltd, and for 2020, the auditor was Bentleys Audit and Corporate (WA) Pty Ltd.

Note 6  Earnings per Share

The above data reflects the income and share data used in the calculations of basic and diluted earnings per share.

Basic earnings per share is calculated by dividing the profit 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 year, adjusted for bonus elements in ordinary shares issued during the year.

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares

Note 7  Cash and Cash Equivalents

Note 8  Trade and Other Receivables

Credit risk

The Group has no significant concentration of credit risk with respect to any single counter party or group of counter parties other than those receivables specifically provided for and mentioned within Note 8. The class of assets described as Trade and Other Receivables is considered to be the main source of credit risk related to the Group.

On a geographic basis, the Group has significant credit risk exposures in United Kingdom and Australia given the substantial operations in those regions. The Group's exposure to credit risk for receivables at the end of the reporting period in those regions is as follows:

The Group always measures the loss allowance for trade receivables at an amount equal to lifetime expected credit loss. The expected credit losses on trade receivables are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the debtor's current financial position, adjusted for factors that are specific to the debtors, general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of conditions at the reporting date.

There has been no change in the estimation techniques or significant assumptions made during the current reporting period.

The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings, or when the trade receivables are over two years past due, whichever occurs earlier. None of the trade receivables that have been written off is subject to enforcement activities.

Note 9  Interests in Subsidiaries

(a)          Information about Principal Subsidiaries

The subsidiaries listed below have share capital consisting solely of ordinary shares or ordinary units which are held directly by the Group. The proportion of ownership interests held equals the voting rights held by Group. Each subsidiary's principal place of business is also its country of incorporation.

Subsidiary financial statements used in the preparation of these consolidated financial statements have also been prepared as at the same reporting date as the Group's financial statements.

(b)          Significant Restrictions

There are no significant restrictions over the Group's ability to access or use assets, and settle liabilities, of the Group.

Note 10  Property, Plant and Equipment

(a) Movements in Carrying Amounts

Movements in carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year:

Note 11  Exploration and Evaluation Assets

At 30 June 2021, the balance of the Group's exploration and evaluation assets relates solely to its Namibian licence PEL0094.

During the year, the Group wrote off US$2,410,272 (2020:Nil) in capitalised expenditure on expiry of the licence PEL0029 (refer note 16 for further details).

During the year, the Group did not incur any exploration and evaluation expenditure that did not meet the criteria for recognition as exploration assets under the Group's accounting policy (2020: Nil).

In addition, an amount of US$16,070 (2020: US$98,315) was spent on business development, which relates to the Group's activities in assessing opportunities in the oil and gas sector.

Namibia

In September 2018, Global Petroleum Namibia was awarded licence PEL0094 and a Petroleum Agreement was signed on 11 September 2018. The Initial Exploration Period runs for four years, and is divided into two sub periods of two years each; IEP1, and IEP2. IEP1 runs from September 2018 to September 2020. During IEP1, Global has undertaken to purchase and reprocess the existing available 3D seismic data and other 2D data, as well as some additional G & G studies. In July 2020, agreement was reached with the Ministry of Mines and Energy ("MME") for the extension of the sub-period ending in September 2020 for one year to September 2021, with a modified work commitment. The Company has met all IEP1 commitments at the date of this report. In August 2021, the Company announced that the Namibian authorities had acknowledged the exercise by the Company of its option to enter into the next sub-period of PEL0094 from September 2021 to September 2022.

Exploration commitments on the Company's exploration tenements are detailed in Note 16.

Note 12  Other Assets

Note 13  Trade and Other Payables

Note 14  Provisions

Provision for Employee Benefits

Provision for employee benefits represents amounts accrued for annual leave and long service leave.

Liabilities for wages, salaries and remuneration, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in provisions 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. Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable. Employee benefits payable later than one year are measured at the present value of the estimated future cash flows to be made for those benefits.

Note 15  Issued Capital

At 30 June 2021, the Group has authorised share capital amounting to 611,541,816 fully paid ordinary shares. The shares have no par value.

(d)          Capital Management

The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Given the stage of development of the Group, the Board's objective is to minimise debt and to raise funds as required through the issue of new shares. The Company conducted two equity fund-raisings during the reporting period and one after the year-end. (See Note 1(a) - Going Concern and Note 20 - Events After the Reporting Period)

There were no changes in the Group's approach to capital management during the year. The Group is not subject to any externally imposed capital requirements.

(e)          Dividends

No dividends have been paid or declared during the year (2020: Nil).

(f)           Capital Raise

In August 2021, the Company completed a capital raise where an additional 200,000,000 ordinary shares were issued bringing the total ordinary shares on issue to 811,541,816 at the date of this report.

Note 16   Capital and Joint Venture Commitments

(a)          Exploration expenditure commitments

In order to maintain current rights of tenure to exploration tenements, the Group is required to perform minimum exploration work to meet the minimum expenditure requirements specified by various foreign governments where exploration tenements are held. These obligations are subject to renegotiation when application for a tenement is made and at other times. These obligations are not provided for in the financial statements. Financial commitments for subsequent periods can only be determined at future dates, as the success or otherwise of exploration programmes determines courses of action allowed under options available in tenements. The Group's only exploration expenditure commitments relate to its interest in joint ventures. Refer to Note 16(b) for further information.

(b)          Namibia Licence PEL0094

Global was awarded licence PEL0094 in Namibia in September 2018, and a Petroleum Agreement was signed on 11 September 2018. The Initial Exploration Period ("IEP") runs for four years, and is divided into two sub periods of two years each; IEP1, and IEP2. IEP 1 runs from December 2018 to December 2020. In July 2020, agreement was reached with the MME for an extension of the sub period ending September 2020 for one year to September 2021, with a modified work commitment.

During IEP1, Global has undertaken to licence existing seismic data and the carry out of studies specifically designed to focus on the Marula and Welwitschia Deep prospects. The technical work undertaken in late 2020 has more than fulfilled the firm work commitments in respect of IEP1. In August 2021, the Company elected to enter the next licence sub-period IEP2 until September 2022. The commitment is to shoot and process a new 2,000 square kilometre 3D seismic data survey.

Global Petroleum Namibia Limited has an 78 per cent interest in the PEL0094, however it is responsible for 100 per cent of the expenditure requirements with its joint venture partners holding a total of 22 per cent free carried interest.

With respect to PEL0029 (Blocks 1910B and 2010A), the licence was issued on 3 December 2010 and expired under its terms on 3 December 2020, further extensions not being permitted under Namibian petroleum exploration law. The Company completed its outstanding licence work programme commitments for PEL0029 under budget in the latter part of 2020.

Note 17  Operating Segments

General Information

Identification of reportable segments

The Group operates in the oil and gas exploration, development and production segments as described below: The Group currently holds a prospective oil and gas exploration interests offshore Namibia.

Basis of accounting for purposes of reporting by operating segments

(a)          Accounting policies adopted

Unless stated otherwise, all amounts reported to the Board of Directors, being the chief operating decision makers with respect to operating segments, are determined in accordance with accounting policies that are consistent with those adopted in the annual financial statements of the Group.

(b)          Intersegment transactions

An internally determined transfer price is set for all intersegment sales. This price is reset quarterly and is based on what would be realised in the event the sale was made to an external party at arm's length. All such transactions are eliminated on consolidation of the Group's financial statements.

Corporate charges are allocated to reporting segments based on the segment's overall proportion of revenue generation within the Group. The Board of Directors believes this is representative of likely consumption of head office expenditure that should be used in assessing segment performance and cost recoveries.

Intersegment loans payable and receivable are initially recognised at the consideration received/to be received net of transaction costs. If intersegment loans receivable and payable are not on commercial terms, these are not adjusted to fair value based on market interest rates. This policy represents a departure from that applied to the statutory financial statements.

(c)           Segment assets

Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of the economic value from the asset. In most instances, segment assets are clearly identifiable on the basis of their nature and physical location.

(d)          Segment liabilities

Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and are not allocated. Segment liabilities include trade and other payables and certain direct borrowings.

(e)          Unallocated items

The following items of revenue, expense, assets and liabilities are not allocated to operating segments as they are not considered part of the core operations of any segment:

•             Derivatives
•             Net gains on disposal of available-for-sale investments
•             Impairment of assets and other non-recurring items of revenue or expense
•             Income tax expense
•             Deferred tax assets and liabilities
•             Current tax liabilities
•             Other financial liabilities
•             Intangible assets
•             Discontinued operations
•             Retirement benefit obligations

(f)           Segment information

(i) Segment performance

Note 18  Cash Flow Information

Note 19  Share-based Payments

The aggregate share-based payments for the year ended 30 June 2021 are set out below

The following share-based payment arrangements were in existence during the current reporting period

Options were valued using the Black-Scholes model. Where relevant, the expected life used in the model has been adjusted based on management's best estimate of the effects of non-transferability of exercise restrictions. Expected volatility is based on the historical share price volatility of the Company's ordinary shares over the reporting period.

Note 20  Events After the Reporting Period

On 10 August 2021, the Company announced that the Namibian authorities had acknowledged the exercise by the Company of its option to enter into the next sub-period of PEL0094 from September 2021 to September 2022.

On 12 August 2021 the Company announced that it had successfully raised £1,000,000 in aggregate before costs, through the placing of 200,000,000 Ordinary Shares at a placing price of 0.5 pence per share.

As a further component of the placing, 100,000,000 Warrants were also issued at an exercise price of 1 pence per share for a period of 2 years (one Warrant for every two new Ordinary Shares). In the event the Warrants are exercised in due course in full, associated proceeds will be £1,000,000 with the result that the Company will have raised gross proceeds of £2,000,000 at a weighted average price of 0.67 pence per share.

Monecor (London) Ltd, trading as ETX Capital ("ETX Capital"), the Company's Joint Broker, acted as sole broker in respect of the placing. On 31 August 2021, the Company announced the resignation of long-term Director and major shareholder, Mr Peter Taylor.

Note 21  Related Party Transactions

Related Parties

(a)          Ultimate parent

Global Petroleum Limited is the ultimate Parent Entity of the Group.

(b)          Key Management Personnel:

The key management personnel of the Group during or since the end of the financial year were as follows:

Other key management personnel transactions

A number of Directors, or their related parties, hold positions in other entities that result in them having control or significant influence over the financial or operating policies of those entities. A number of these entities transacted with the Company or its controlled entities in the reporting period.

During the year, the Company paid DW Accounting and Advisory Pty Ltd, a company controlled by Mr A Draffin US$46,671 (2020: US$46,671) for company secretarial services and accountancy fees and Northlands Advisory Services Limited, a company controlled by Mr J van der Welle, US$22,384 (2020: US$41,319) for consulting services.

Note 22  Financial Risk Management

The Group's principal financial instruments comprise trade and other receivables, trade and other payables, cash and term deposits. The main risks arising from the Group's financial instruments are interest rate risk, foreign currency risk, credit risk and liquidity risk.

This note presents information about the Group's exposure to each of the above risks, its objectives, policies and processes for measuring and managing risk, and the management of capital. Other than as disclosed, there have been no significant changes since the previous financial year to the exposure or management of these risks.

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Given the nature and size of the business, no formal risk management committees have been established, however responsibility for control and risk management is delegated to the appropriate level of management with the Chairman, CEO and Company Secretary (or their equivalent) having ultimate responsibility to the Board for the risk management and control 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 regularly to reflect changes in market conditions and the Group's activities.

Arrangements put in place by the Board to monitor risk management include regular reporting to the Board in respect of the operations and financial position of the Group. The Board also reviews risks that relate to operations and financial instruments as required, at least every six months.

Given the uncertainty as to the timing and amount of cash inflows and outflows, the Group has not implemented any additional strategies to mitigate the financial risks and no hedging has been put in place. As the Group's operations change, the Directors will review this policy periodically going forward.

The totals for each category of financial instruments, measured in accordance with AASB 139: Financial Instruments: Recognition and Measurement as detailed in the accounting policies to these financial statements, are as follows.

The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of interest rate risk, foreign currency risk and other price risk (commodity and equity price risk). There have been no substantive changes in the types of risks the Group is exposed to, how these risks arise, or the Board's objectives, policies and processes for managing or measuring the risks from the previous period.

a.            Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. This arises principally from cash and cash equivalents and trade and other receivables.

There are no significant concentrations of credit risk within the Group with exception of cash on deposit as described below.

Trade and other receivables comprise accrued interest, GST, VAT and other tax refunds due. Where possible, the Group trades only with recognised, creditworthy third parties. It is the Group's policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Group's exposure to bad debts is not significant. At 30 June 2021, none (2020: none) of the Group's receivables are past due. No impairment losses have been recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.

With respect to credit risk from cash and cash equivalents, the Group's exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments.

b.            Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Board's approach to managing liquidity is to ensure, as far as possible, that the Group will have sufficient liquidity to meet its liabilities when due. As at 30 June 2021, the Group has sufficient liquid assets to meet its financial obligations.

The table below reflects an undiscounted contractual maturity analysis for financial assets and financial liabilities. Financial guarantee liabilities are treated as payable on demand since the Group has no control over the timing of any potential settlement of the liabilities.

Cash flows realised from financial assets reflect management's expectation as to the timing of realisation. Actual timing may therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflect the earliest contractual settlement dates and do not reflect management's expectations that banking facilities will be rolled forward.

Financial Liability and Financial Asset Maturity Analysis

c.             Market Risk

i.             Interest rate risk

The Group's exposure to the risk of changes in market interest rates relates primarily to the cash at bank and term deposits with a floating interest rate.

These financial assets with variable rates expose the Group to cash flow interest rate risk. All other financial assets and liabilities, in the form of receivables and payables, are non-interest bearing.

Interest rate sensitivity

A sensitivity of 50 basis points ("bp") increase or decrease to the existing floating rate has been selected as this is considered reasonable given the current level of both short term and long term interest rates.

A change of 50 basis points in interest rate at the deporting date would have increased (decreased) profit or loss and equity by the amount shown below. The analysis assumes that all other variables, in particular foreign currency rates, remain constant.

The Group currently does not engage in any hedging or derivative transactions to manage interest rate risk.

ii.            Foreign currency risk

The Company and its subsidiaries in the Group have a functional currency of the US Dollar. The Group is exposed to foreign currency risk from transactional currency exposure. Such exposure arises from transactions denominated in currencies other than the functional currency of the entities in the Group.

With instruments being held by overseas operations, fluctuations in the US Dollar and UK Pound Sterling may impact on the Group's financial results unless those exposures are appropriately hedged.

The Group currently does not engage in any hedging or derivative transactions to manage foreign currency risk.

Sensitivity analysis for currency risk

A sensitivity of 10% has been selected as this is considered reasonable given historic and potential future changes in foreign currency rates. This sensitivity analysis is prepared as at the balance sheet date

There have been no changes in any of the methods or assumptions used to prepare the above sensitivity analysis from the prior year.

Fair Values

Fair value estimation

The fair values of financial assets and financial liabilities are presented in the following table and can be compared to their carrying amounts as presented in the statement of financial position.

Differences between fair values and carrying amounts of financial instruments with fixed interest rates are due to the change in discount rates being applied by the market since their initial recognition by the Group.

(i) Cash and cash equivalents, trade and other receivables, and trade and other payables are short-term instruments in nature whose carrying amounts are equivalent to their fair values.

(ii) Term receivables reprice to market interest rates every three months, ensuring carrying amounts approximate fair value.

Note 23  Reserves

a.            Foreign currency translation reserve

The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations where their functional currency is different to the presentation currency of the Parent Entity. As a result of the change in functional currency of the Company and several of its subsidiaries on 1 July 2014, no further foreign currency translation differences were recognised as all entities in the Group have a US Dollar functional currency.

b.            Option reserve

The option reserve comprises the cumulative grant date fair value of options issued to Directors, other personnel and consultants over the vesting period.

i.             Analysis of items of other comprehensive income by each class of reserve

Note 24  Interests in Joint Operations

The Group holds interest in various joint ventures, whose principal activities are in petroleum exploration and production. Refer to Note 11 - Exploration and Evaluation Assets.

Costs incurred attributable to joint operations have been capitalised based on accounting policies in Note 1(f) - Exploration and Evaluation Expenditure.

Included in the assets and liabilities of the Group are the following assets and liabilities relating to interests in joint ventures:

The Parent Entity does not guarantee to pay the deficiency of its controlled entities in the event of a winding up of any controlled entity.

In accordance with normal industry practice, the Group has entered into joint ventures with other parties for the purpose of exploring and developing petroleum interests. If a party to a joint venture defaults and does not contribute its share of joint venture obligations, then the other joint venture participants may be liable to meet those obligations. In this event, the interest in the permit held by the defaulting party may be redistributed to the remaining joint venture participants.