Note 23. Commitments Guarantee The Consolidated Entity has provided no guarantees (2022: $23,467) at 30 June 2023. Exploration Commitments In order to maintain rights of tenure to petroleum exploration tenements, the Consolidated Entity has minimum exploration requirements to fulfil. These requirements are not provided for in the financial statements. If the Consolidated Entity decides to relinquish certain tenements and/or does not meet these obligations, assets recognised in the Statement of financial position may require review in order to determine the appropriateness of carrying values. The commitments for exploration expenditure in Australia of approximately $1,000,000 include the minimum expenditure requirements that the Consolidated Entity is required to meet in order to retain its present permit interests over the next fiscal year. These obligations may be subject to renegotiation, may be farmed out or may be relinquished. The Company has met all of its exploration commitments for the current exploration subperiod in Block 9 PSC. The next exploration subperiod, should the Company choose to enter it, has a commitment of two exploration wells which are expected to be met by the drilling of appraisal wells Alameda-2 and Alameda-3. For Australian exploration permits in the jurisdiction of the Commonwealth of Australia, the first three-years of a work program are referred to as the primary term. The work program is guaranteed and cannot be reduced. Later years (4, 5 and 6) are referred to as the secondary term and the work program for each year becomes guaranteed upon entry to that year. Whilst failure to complete a guaranteed work program does not result in a financial penalty, it is grounds for cancellation of the permit. Further, the default may be considered by the Regulator in relation to future interactions with the defaulting party for a period of 5 years. WA-544-P and NT/P87 (Melbana 100%) In November 2020 the Company was awarded petroleum exploration permits as a result of applications it had made under the Australian Government’s 2019 Offshore Petroleum Exploration Acreage Release. These permits, designated as WA-544-P and NT/P87, were awarded for an initial period of six years each with work commitments consisting of reprocessing and various studies in their primary terms (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 to WA-488-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. Melbana retains a 100% interest in the adjacent permit areas WA-544-P and NT-P87, which contain the undeveloped oil discoveries Turtle and Barnett. Melbana is currently conducting geoscientific studies over these permit areas. During the reporting period the Company applied for an 18-month suspension and extension to the primary term of these permits. 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. Melbana made this application for this permit under the Australian Government’s 2020 Offshore Petroleum Exploration Acreage Release. During the first three years of the licence period, the Company must undertake the following activities: – Licence, reprocess and interpret available seismic survey data – Drill an exploration well During the reporting period the relevant regulator approved the Company’s application for a 24-month suspension and extension to the permit’s primary term. Cuba Block 9 (Melbana 30%) In September 2015, Melbana executed the Block 9 Production Sharing Contract (PSC) with the national oil company of Cuba, Cuba Petróleo Union (CUPET). The exploration period of the Block 9 PSC is split into four sub-periods with withdrawal options at the end of each sub-period. The Company is currently in the third exploration subperiod, for which all work commitments have been met. There are no material commitments or contingencies other than as set out in this note. Notes to the Consolidated Financial Statements for the year ended 30 June 2023 58 Melbana Energy Limited Annual Report 2023
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