Melbana Energy Limited Annual Report 2022

with work commitments consisting of reprocessing and various studies in their primary term (years 1 to 3). The Company may withdraw from the permits prior to entering their secondary terms which contain more material expenditure commitments. These permits lie adjacent toWA488-P and allow the Company to build on the knowledge it has gained in that permit area to pursue other leads in this expanded area. The Company has a 100% interest in these permit areas, which contain the undeveloped oil discoveries Turtle and Barnett. The Company is currently conducting geoscientific studies over these permit areas. AC/P50, AC/P51 (Melbana contingent cash and royalty interest) Exploration permits AC/P50 and AC/P51 are located in the Vulcan sub-basin. The Company sold its 55% interest in these permits to joint venture partner Rouge Rock Pty Ltd (Rouge Rock) in 2018, givingMelbana an interest in any future farmout or sale of the permits. Directors’ Report continued Subsidiaries of Australia’s Santos and Malaysia’s SapuraOMV (Purchasers) acquired AC/P50 inMay 2021 and Melbana received an upfront cash payment of about $397,000. Melbana retains an entitlement to receive a 10% share of any future royalty Rouge Rock would receive for production that occurs from this permit area during a defined period. The Purchasers have also acquired the right to acquire AC/P51. Should this right be exercised, Melbana would be entitled to receive similar cash consideration and contingent royalties. AC/P70 (Melbana 100%) On 16 February 2022, the Company announced that it had been granted petroleum exploration permit AC/P70, located in the Territory of Ashmore and Cartier Islands, for an initial period of six years. The Company made this application for this permit under the Australian Government’s 2020 Offshore PetroleumExploration Acreage Release. Petroleum exploration permit AC/P70 contains the undeveloped Vesta-1 oil discovery drilled in 2005. The Vesta-2 appraisal well drilled in 2007 identified a gas cap. This complex field is an attractive opportunity to a junior explorer like the Company with the technical capability and track record of identifying new play types and attracting large, wellfunded, partners to test its exploration theses – often by overturning conventional thinking. Tassie Shoals (Melbana 100%) The Company has Australian Government environmental approvals to construct, install and operate two stand-alone world scale 1.75Mtpa methanol plants - collectively referred to as the Tassie Shoal Methanol Project - and a single 3 Mtpa LNG plant - known as the Tassie Shoal LNG Project - on Tassie Shoal, an area of shallow water in the Australian waters of the Timor Sea approximately 275 km north-west of Darwin, Northern Territory. These Environmental Approvals are valid until 2052. These projects uniquely provide a development option for discovered but undeveloped gas resources in the region. Progress for these projects is dependent on securing access to a proximate gas supply on suitable commercial terms. No material progress was made in this regard during the reporting period but ongoing and increased activity in the energy sector in offshore northern Australia is closely monitored by the Company to identify possible opportunities to progress the development of this project. Results for the year The net profit after tax of the Consolidated Entity for the financial year was $6,333,812 (2021: net loss after tax of $1,398,123). The profit for the year was mainly due to the sale of permit WA-488-P of $10,391,856 offset by administration costs of $4,002,458 (2021: $2,472,101). Overall profit for the year increased by $7,730,935 compared to the 2021 financial year. During the year, the Consolidated Entity incurred net operating cash outflows of $2,119,543 (2021: outflows of $2,000,361), net investing cash inflows of $3,264,709 (2021: inflows of $11,598,463) and net financing cash inflows of $23,830,840 (2021: outflows of $125,997). 10 Melbana Energy Limited Annual Report 2022