2016 Annual General Meeting. 28 November 2016

Transcription

1 2016 Annual General Meeting 28 November 2016

2 WELCOME Chairman of Meeting Welcome/Registration Quorum Notice of Meeting Meeting Procedures 2016 Annual General Meeting 2

3 INTRODUCTIONS Board Of Directors Dr Neale Taylor Mr Bradley Lingo Mr Tim Hargreaves Mr Russell Krause Chairman Managing Director & Chief Executive Officer Non-Executive Director Non-Executive Director Thank you to Mr Matt Healy retired as a Director on 14 October Company Secretary Mr David Franks (Apology: Andrew Bursill, Joint Company Secretary) Company Auditor s Representative Mr Gareth Few (BDO) 2016 Annual General Meeting 3

4 BUSINESS AGENDA Minutes Ordinary Business Presentations by Chairman & Managing Director/CEO Accounts Non-binding Ordinary resolution 1 Ordinary Resolutions 2 to 11, 14 and 15 Special Resolutions 12 and 13 Special Business None 2016 Annual General Meeting 4

5 MINUTES Minutes available for inspection from the Company Secretary 2016 Annual General Meeting 5

6 CHAIRMAN PRESENTATION 6

7 : Delivered on the Promise Coming out of a very weak position in Major achievements in : Put the Grieve CO 2 EOR Project on a solid footing Quality project recognition, restructured and improved JV arrangements, legal dispute resolved, & effort supported by experienced management team Sustained focus Significant new debt and equity capital raised in a difficult capital market Growth & increased diversity in shareholder base with increasing institutional investor presence on the share register US peers now approaching the Company with new opportunities 2016 Annual General Meeting Chairman s Presentation 7

8 FINANCIAL SUMMARY Variance A$ 000 A$ 000 A$ 000 Revenue No material revenue until late 2017/early 2018 Expenses: Cost of sales (53) Professional & corporate 1,019 1,453 (434) services Admin (589) Directors & employees 1,346 2,050 (704) Financial, Deprec n & Amort n 712 2,471 (1,759) & Other expenses Total NPAT (loss) (3,646) (7,168) (3,522) Indicative & related FY16 costs to settle Grieve JV Restructuring & Funding and Crowe Tribe Dispute Major Variances: Crow Tribe Dispute $1.2 M JV restructuring & funding $1.2 M Revamped organisation $0.5 M Impairment & Forex $0.4 M YE Cash & Cash Equivalents 1,567 18,103 Development Expenditure 200 2, Annual General Meeting Chairman s Presentation 8

9 LOOKING AHEAD Tightened strategic focus Top priority: Delivering first oil by late 2017/early 2018 & managing costs Supplementary priority: Growth through additional CO 2 EOR Projects Opportunity set likely to only remain open for a limited time frame US focus Screening will extend to Australia & SE Asia New projects will focus on delivering: Value growth to shareholders Strategic advantage/leverage to the Company Assessing these sometimes offsetting priorities will require focus on: Unique project opportunities Innovative funding with low equity needed Motivation to be provided through a new incentives scheme aligned to sustain focus & deliver measurable low risk objectives 2016 Annual General Meeting Chairman s Presentation 9

10 MANAGING DIRECTOR PRESENTATION 10

11 Disclaimer & Important Notice This presentation does not constitute investment advice. Neither this presentation not the information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase or sale of shares in Elk Petroleum Ltd ABN (the Company ) - in any jurisdiction. Shareholders should not rely on this presentation. This presentation does not take into account any person s particular investment objectives, financial resources or other relevant circumstances and the opinions and recommendations in this presentation are not intended to represent recommendations of particular investments to particular persons. All securities transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments. The information set out in this presentation does not purport to be all inclusive or to contain all the information which its recipients may require in order to make an informed assessment of the Company. You should conduct your own investigations and perform your own analysis in order to satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained in this presentation. To the fullest extent permitted by law, the Company does not make any representation or warranty, express or implied, as to the accuracy or completeness of any information, statements, opinions, estimates, forecasts or other representations contained in this presentation. No responsibility for any errors or omissions from this presentation arising out of the negligence or otherwise is accepted. This presentation may include forward looking statements. Forward looking statements are only predictions and are subject to risks, uncertainties and assumptions which are outside the control of the Company. These risks, uncertainties and assumptions include commodity prices, currency fluctuations, economic and financial market conditions in various countries and regions, environmental risks and legislative, fiscal or regulatory developments, political risks, project delay or advancement, approvals and cost estimates. Actual values, results or events may be materially different to those expressed or implied in this presentation. Any forward looking statements in this presentation speak only at the date of issue of this presentation. Subject to any continuing obligations under applicable law and the ASX Listing Rules, the Company does not undertake any obligation to update or revise any information or any of the forward looking statements in this presentation or an changes in events, conditions or circumstances on which any such forward looking statement is based. The reserves and resources assessment follows the guidelines set forth by the Society of Petroleum Engineers Petroleum Resource Management System (SPE- PRMS). The Reserves and Contingent Resources in this announcement relating to the Grieve CO 2 EOR project, operated by Denbury Resources, is based on an independent review and audit conducted by VSO Petroleum Consultants, Inc. and fairly represents the information and supporting documentation reviewed. The review and audit was carried out in accordance with the SPE Reserves Auditing Standards and the SPE-PRMS guidelines under the supervision of Mr Grant Olsen, a Director of VSO Petroleum Consultants, Inc., an independent petroleum advisory firm. Mr Olsen is a Registered Professional Engineer in the State of Texas and his qualifications include a Bachelor of Science and Master of Science (both in Petroleum Engineering) from Texas A&M University. He has more than 10 years of relevant experience. MrOlsen is a member of the Society of Petroleum Engineers (SPE) and an Associate Member of the Society of Petroleum Evaluation Engineers. Mr Olsen meets the requirements of Qualified Petroleum Reserve and Resource Evaluator as defined in Chapter 19 of the ASX Listing Rules and consents to the inclusion of this information in this report. The information in this presentation that relates to Reserve and Contingent Resources estimates for the Grieve CO2 EOR project and the Contingent Resource estimates for the Singleton CO2 EOR project have been compiled or in the case of the Singleton CO2 EOR project and the recently acquired Devon Oil Properties prepared by Mr Brian Dolan, COO and VP-Engineering of Elk Petroleum USA who is a qualified person as defined under the ASX Listing Rule 5.11 and has consented to the use of the reserves figures in the form and context in which they appear in this presentation. Mr Dolan is a full-time employee of the company. Mr Dolan earned a degree in Mechanical Engineering from the University of Colorado at Boulder and has more than 23 years of relevant experience. Mr Dolan has sufficient experience that is relevant to the company s Reserves and Resources to qualify as a Reserves and Resources Evaluator as defined in the ASX Listing Rules. Mr Dolan consents tothe inclusion in this presentation of the matters based on the information in the form and context in which it appears 2016 Annual General Meeting Managing Director s Presentation 11

12 Our story in a nutshell from last year s AGM Elk as Australia s only company focused on enhanced oil recovery is uniquely positioned to take advantage of current low oil price environment Elk has significant conventional 2P reserves undergoing EOR field redevelopment nearing first oil production Over the next 2-3 months, Elk has a unique opportunity to consolidate its ownership of our main development project & substantially increase 2P reserves Main project has upside both in terms of reserves and commodity price and in this type of project in main operating area is highly repeatable Development represents low F&D cost reserves and high margin production at current prices with low post-production CAPEX with significant NPV of USD million Project consolidation can deliver a significant leap in Elk underlying NPV, 2P/EV likely driving an expected significant increase in company s equity value Elk also has identified opportunity in the near future to export its EOR project expertise into Australia and SE Asia where this opportunity set is virtually untapped 2016 Annual General Meeting Managing Director s Presentation 12

13 Our story remains unchanged & opportunity to grow has increased Elk as Australia s only company focused on enhanced oil recovery is uniquely positioned to take advantage of current low oil price environment Over the last year, Elk has consolidated/increased its ownership of the Grieve project and put it back on the development track & substantially increased 2P reserves Conventional 2P reserves from the Grieve Field increased 51% from 3.5mmbbls to 5.3mmbbls Targeting first oil production from Grieve Field year end 2017 / beginning 2018 Under the restructured JV arrangements, Grieve CO 2 EOR Project has upside both in terms of reserves and commodity price Grieve development represents low F&D cost reserves and high margin production at current prices with low post-production CAPEX and NPV of USD m Grieve Project consolidation has delivered a significant increase in Elk s underlying NPV, 2P/EV and has driven a significant increase in Company s equity value Grieve Project restructure has generated significant profile for Elk among US CO 2 EOR operators who are now approaching Elk as a potential partner for CO 2 EOR production expansion projects In current market and our core area of the Rocky Mountains, our investment approach to CO 2 EOR along the lines of the restructured Grieve Project is highly repeatable Elk also has identified opportunity to export its EOR project expertise into Australia and SE Asia where this opportunity set is virtually untapped 2016 Annual General Meeting Managing Director s Presentation 13

14 Where we operate Rockies CO 2 EOR Fairway Elk Country Source: NETL 2010 Vast CO 2 reserves, extensive CO 2 infrastructure, multiple CO 2 EOR operating projects and numerous new projects for development 2016 Annual General Meeting Managing Director s Presentation 14

15 The elevator pitch Conventional oil, long-term production, proven practices, repeatable growth Focused on low risk enhanced oil recovery ( EOR ) redeveloping proven, conventional oil fields EOR born from low oil prices to maintain reserves & production from existing assets Restructure of Grieve CO 2 EOR Project JV ( Grieve Project ) completed and fully funded Project development well advanced with production expected late 2017 / early 2018 Grieve Project expected to deliver net production to Elk of 2.4 to 3.1 mmbbls through 2023* Strong cash flow coming with annual net income of A$24-A$29 million p.a ** Positioned for opportunity in current oil price environment Multiple organic and bolt-on acquisition opportunities * Based on 2P and 3P forecast production first 5Y from first oil ** Range: Futures to Bloomberg Consensus - 21 November 2016 for 2P (12.3MMbbl) production profile first 5Y from first oil / ^ AUD:USD exchange rate Engineering - not exploration 2016 Annual General Meeting Managing Director s Presentation 15

16 Grieve Project Fully Funded! Completed US$58 million in senior debt funding Benefit Street Partners (BSP) providing US$58 million conventional oil field development loan BSP is credit unit of Providence Capital a recognized global asset management firm Full amount available at financial close - US$30 million drawn/funded into project as of AGM Elk has completed A$31m entitlement offer & shortfall placement 1 New share for every Elk share A$0.075 per New Elk Share Total raising = A$30.8m (including shares issued for advisors success fees) Debt and Equity funds to be used to fully fund completion of Grieve Project Direct Grieve Project & Grieve Oil Pipeline capital costs needed to complete field development Equity raising and bank financing transaction costs Project oil price US$45/bbl floor (no cap) through oil price put options Corporate working capital Fully funded development Not just bankable but banked! 2016 Annual General Meeting Managing Director s Presentation 16

17 How does Grieve stack up? - Peer F&D Cost Comparables Elk s forecast F&D costs are low relative to its industry peers Finding & development costs (F&D) by company (1)(2)(3) US$/boe Sunk Forecast 6 - Apache Devon Denbury Chevron Occidental Hess Whiting Larendo ConocoPhilips Elk Anadarko Rex Grieve Development (1) Peers identified from Denbury Investor Presentation (2015), IER (Leadenhall s 2015). (2) F&D costs of peers are based on three-year averages and are calculated as unproved property acquisition costs, exploration costs, development costs and identified related asset retirement obligation costs divided by extensions and discoveries, revisions and improved recovery of proved reserves. The calculation excludes the effect of proved reserves purchased. (3) (Elk F&D costs from Elk Model Source: US Oil and Gas Reserves Study, EY (2015) 2016 Annual General Meeting Managing Director s Presentation 17

18 How does Grieve Stack up? - Production Cost & Margin Production margins remain robust, even in low oil price conditions Average Production Costs (Including Royalties) (1) of First 5 Years (US$/bbl, Real) 70 Production Costs Margin Production Cost & Margin (US$/bbl) Futures Curve Oil Price (US$/bbl) Bloomberg Consensus (2) (2) (1) Includes all Elk s share of the Grieve Oil Pipeline cash flows (2) Bloomberg (21 November 2016) 2016 Annual General Meeting Managing Director s Presentation 18

19 How does Grieve stack up? Global development cost comparison The Grieve Project compares favourably to other tier 1 energy developments globally Grieve Project On average comparable new project costs, only onshore OPEC Middle East is lower cost than Grieve 2016 Annual General Meeting Managing Director s Presentation 19

20 How does Grieve stack up? - Production Net to Elk Elk s net share of production is estimated to be between 2.4 and 3.1 MMbbls over the first 5 years 2P & 3P Production (Net to Elk, Post Royalties) kbbls % WI Additional Sweep To Elk P 3P 2P 3P 2P 3P 2P 3P 2P 3P Production Year 2016 Annual General Meeting Managing Director s Presentation 20

21 How does Grieve stack up - Net Operating Income to Elk The Project will generate strong and stable cash flows from first oil* Elk Net operating income (A$m, Nominal) (1) 40 49% WI Additional Sweep to Elk Net operating income (A$m, Nominal) Futures Consensus Futures Consensus Futures Consensus Futures Consensus Futures Consensus (1) Assumes AUD:USD exchange rate sourced from Bloomberg (22 November 2016) Pricing sourced from Bloomberg (21 November 2016) Production Year 2016 Annual General Meeting Managing Director s Presentation 21

22 Grieve restructure impact on Elk asset value and financial condition Asset Value & Financial Status - Non-IFRS (USD millions) Restructure Project Completion JV working interest 35% 49% 49% JV net revenue interest [20%] [57%] [57%] Net 2P reserves (mmbbls) Production share (mmbbls) First 5 yrs Production share (mmbbls) Field life Asset value ~ Elk JV 12% p.a Elk 3 rd party 10% p.a Hedging 0 US$45 floor price US$45 floor price 2016 Annual General Meeting Managing Director s Presentation 22

23 Our new relationship with Denbury Grieve JV restructure built on a totally new relationship with Denbury Denbury s A-Team in charge of delivering Grieve Project Denbury committed to complete the Grieve Project under fixed price, turnkey EPC contract Independent engineering oversight of entire field development & construction Comprehensive project activity reporting weekly & monthly basis Progress payments only disbursed upon completion of work AND sign-off by independent engineer Liquidated damages and ultimate penalty is loss of interest in the project for failure to complete Grieve Project Turnkey Field Development Contract with independent engineering oversight & rigorous/continuous reporting 2016 Annual General Meeting Managing Director s Presentation 23

24 Grieve Project execution - Heading down the home stretch Denbury has a dedicated project execution team assigned to completing Grieve Project Turnkey EPC Contract contains detailed project scope, milestones & payment schedules Denbury Project execution team making significant progress Detailed engineering by Jacobs Engineering and HAZOP nearing completion Procurement for balance of plant & materials well advanced with RFQs and purchase orders issued CO 2 injection tracking right in line with contract milestones Major JV meeting early December where complete detailed project schedule & execution plan to be provided Regular project progress reporting to Shareholders to commence early Annual General Meeting Managing Director s Presentation 24

25 Grieve Project Driving to completion - New works already underway JV restructure & debt financing closed 5 August 2016 Crude oil pipeline repairs commenced August 2016 & completed early October 2016 Next phase of pipeline works - connection of Grieve Oil Pipeline to Spectra Oil terminal to commence Q Installation of segment of replacement pipeline New pipeline segment of completed Restored right-of-way 2016 Annual General Meeting Managing Director s Presentation 25

26 Where to from here? The road ahead For the year ahead, Elk has 3 clear priorities Priority 1 Project Delivery Absolute No. 1 priority is delivering the Grieve Project completion and reaching 1 st oil Priority 2 Growth through acquisition Accelerate reaching first cash flow through acquisition of CO 2 EOR-related production asset with additional development potential in need of further capital investment Priority 3 Financial discipline Maintain strong financial discipline and prepare/build the ground-work for refinancing the Grieve Project development financing and strengthening the balance sheet to enable cash returns to shareholders 2016 Annual General Meeting Managing Director s Presentation 26

27 Why focus on CO 2 EOR? Low risk o Approximately 90% of projects developed to date have succeeded technically & commercially Large reserves o Plenty of mature big fields suitable for CO 2 EOR Long-life, low decline production o Typical projects have 15+ year reserve life Negligible sustaining CAPEX o Developed areas have little on-going CAPEX Smart field developments deliver low operating costs o LOE (lease operating expense) below US$20/bbl Result = Significant annuity-like cash flows 2016 Annual General Meeting Managing Director s Presentation 27

28 CO 2 EOR Big Business in the Rocky Mountains Wyoming contains one of US largest proven CO 2 reserves - 10 TCF TCF potential Over 500 target CO 2 EOR projects identified in Wyoming alone Elk well established in Northern Rockies CO 2 EOR Production Fairway Beyond Grieve Project, Elk has identified and is pursuing similar bolt-on CO 2 EOR production 2630 Cumulative Oil Production (MMBO) 2425 Northern Rockies Basin Name Total CO2 EOR Candidate Reservoirs Powder River 289 Bighorn 105 Wind River 45 Greater Green River 49 Overthrust Belt 12 Laramie 11 Denver Cheyene 6 Over 500 target projects in Wyoming alone! Market conditions also generating significant CO 2 EOR production project acquisition opportunities Regulatory environment also conducive to supporting CO 2 EOR Open for business Plenty of scope for both organic and acquisition growth Source: SPE MS-Estimates of Potential CO 2 Demand for CO 2 EOR in Wyoming Basins *US Department of Energy **Visiongain Research, October 2014 Significant growth potential with deep pipeline of attractive projects 2016 Annual General Meeting Managing Director s Presentation 28

29 Foundations for further growth CO 2 Sources Direct investment in CO 2 supplies Control of CO 2 essential Competitive advantage Potential profit as 3 rd party supplier Core focus moving forward EOR Project Fields Ownership & development of CO 2 EOR Projects Main financial engine room Small club of competitors Already a recognized player Long-term, low risk cash flows CO 2 & Production Infrastructure Oil & CO 2 pipelines, gas processing Grieve Oil Pipeline shows value of 3 rd party revenues Potential additional value in CCS 2016 Annual General Meeting Managing Director s Presentation 29

30 Sustainability & social license to operate - the environmental benefits Freemont County Wyoming Salt Creek CO 2 EOR Project A recycled oil field with a reduced footprint 2016 Annual General Meeting Managing Director s Presentation 30

31 Value-add Strategy Australasia Opportunity Grieve CO 2 EOR Redevelopment Singleton EOR Project Commence field repressurisation & EOR production pilot Asset Accumulation Current oil price environment provides opportunity to strengthen asset portfolio in existing geography and new markets Take EOR technology to largely untapped regions Australia, Indonesia and Malaysia Complete development, commence oil production 2016 Annual General Meeting Managing Director s Presentation 31

32 Growth Potential Potential 2P Volumes, Net to Elk 30 Existing Portfolio Projects Potential Project Acquisition Targets (USA) MMboe Grieve (35%) Grieve (Increased Interest) Singleton Area (1) Wyoming Bolt-on Projects (2) Additional IOR/EOR Projects (2,3) Total (1) Assuming conversion of 2C resources into 2P reserves (2) On the basis of initial exploratory engagement (3) Based on indicative PDP forecast Note: Volumes shown are rounded to 1 decimal place Elk has identified additional EOR opportunities that are achievable in the short to medium term 2016 Annual General Meeting Managing Director s Presentation 32

33 So what do we need to do? The specifics See Grieve Project through to first oil New deal now in place with Denbury Grieve Pipeline repairs completed & awaiting interconnection to Spectra Casper Pipeline system Keep to strict contract compliance under Turnkey Contract to complete project & commence production Accelerate timing to positive cash flow through production asset acquisition Grieve Project restructure has put Elk back on the map with other CO 2 EOR Project operators/developers, banks and other capital providers Many companies with high quality CO 2 and CO 2 EOR Projects in balance sheet repair, in need of new partner or project capital and selling assets with current production & positive cash flow Take advantage of current market and acquire attractive, on-strategy assets, projects at the bottom of the price cycle Singleton Project prepare the asset for future activity post Grieve 1 st oil Restart Mississippi Limestone oil production from existing Opis 1H well Build low-cost water pipeline to Singleton Oil Field Commence water flood of Singleton Oil Field with Opis 1H water production 2016 Annual General Meeting Managing Director s Presentation 33

34 OUR NEW LOOK

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37 ELK PETROLEUM LIMITED INVESTOR PRESENTATION 37 THE INVESTMENT CASE Strong Leadership EOR Expertise Existing Assets Core Area EOR Opportunities Oil Price Global EOR Opportunities Focused Strategy Near-term Transformation Elk Petroleum has strong leadership with proven track record of value creation Extensive experience and expertise in Enhanced Oil Recovery (EOR) Existing US assets provide strong foundation for cash flow and growth Significant further EOR project growth potential in core areas Current oil price environment presents unique opportunity for low cost EOR project asset accumulation Significant opportunity to apply EOR in largely untapped areas outside of the USA including Australia, Indonesia and Malaysia Focused and differentiated strategy to deliver shareholder value Strong news flow pipeline to first oil across several projects - targeted for CY2017

38 ELK PETROLEUM LIMITED INVESTOR PRESENTATION 38 KEY TAKEAWAYS INVESTING IN ELK Only ASX-listed oil company focussed on enhanced oil recovery (EOR) Main projects are in the prolific Northern Rocky Mountain Oil Fairway in USA Company s flagship the Grieve Project is over 75% complete Grieve Project fully funded from combination of senior debt and new equity capital funding Anticipated Grieve first oil production late 2017/early 2018 Northern Rockies CO 2 EOR production fairway is extensive with additional projects in close proximity to CO 2 infrastructure Current focus on securing producing EOR asset with development/expansion upside Nebraska DJ Basin EOR Projects provide an additional parallel growth path Key metrics Grieve Reserves (2P) Singleton Contingent Resources (2C) Reserve/Production Life ratio Development cost Operating cost - (Excluding royalties) Profit Margin (First 5 years, real) (2,3) Total projected revenues (project life) (1,2,3) First 5 years annual net operating income (1,2,3) 5.3 mmbbls 4.9 mmbbls years US$7-10/bbl US$11-16/bbl US$35-39/bbl A$ m A$24-29m/yr

39 SHAREHOLDER QUESTIONS RETURN TO AGM ORDINARY BUSINESS 39

40 ACCOUNTS FOR THE YEAR TO 30 JUNE 2016 Table 2015/16 Financial Report together with the Directors Report and Auditor s Report Questions on Reports, including questions to the Auditor s representative, Mr Gareth Few 2016 Annual General Meeting 40

41 RESOLUTIONS 41

42 ORDINARY RESOLUTIONS 1. Adoption of the Remuneration Report (Non-binding ordinary resolution) 2. Re-election of Director Dr Neale Taylor 3. Ratification of prior issue of shares to exempt, sophisticated & professional investors under ASX Listing Rule Ratification of prior issue of shares to Abbey West Capital Pty Ltd and Catalan Investments Pty Ltd under ASX Listing Rule Ratification of prior issue of shares to Cairnglen Investments Pty Ltd under ASX Listing Rule Ratification of prior issue of shares to Catalan Investments Pty Ltd under ASX Listing Rule Ratification of prior issue of shares to exempt, sophisticated & professional investors under ASX Listing Rule Ratification of prior issue of shares to Durham Capital Corporation under ASX Listing Rule Ratification of prior issue of shares to Catalan Investments Pty Ltd under ASX Listing Rule Ratification of prior issue of shares to exempt, sophisticated & professional investors under ASX Listing Rule 7.1A 11. Ratification of prior issue of shares to exempt, sophisticated & professional investors under ASX Listing Rule 7.1A 14. Approval of Employee Performance Incentive Plan 15. Approval of grant of Shares to Mr Bradley Lingo, MD 2016 Annual General Meeting 42

43 SPECIAL RESOLUTIONS 12. Approval of 10% Placement Capacity 13. Approval of new Constitution 2016 Annual General Meeting 43

44 RESOLUTION 1 Adoption of the Remuneration Report To consider and, if thought fit, to pass, with or without amendment, the following resolution, as a Non-Binding Ordinary Resolution: To adopt the Elk Remuneration Report for the year ended 30 June FURTHER INFORMATION: Voting exclusions & restrictions for Key Management Personnel & Closely Related Parties are set out in the NOM The Chairman will vote open usable proxies in favour of Resolution 1 Current and former members of the KMP, whose details are in Remuneration Report or who are a KMP as at the AGM, and Closely Related Parties will abstain from voting The Remuneration Report forms part of the Director s Report, which was approved in accordance with a unanimous resolution of the Board. Each Director recommends that Shareholders vote in favour of adopting the Remuneration Report Annual General Meeting 44

45 RESOLUTION 2 Re-election of Director Dr Neale Taylor To consider and, if thought fit, to pass, with or without amendment, the following resolution, as an Ordinary Resolution: That Dr Neale Taylor, being a Director of the Company and who retires by rotation in accordance with clauses 11.3, 11.5 and of the Constitution and, being eligible for re-election, is re-elected as a Director of the Company. FURTHER INFORMATION: Brief CV, summary of experience, expertise, other directorships, and committee membership are included in the NOM No voting exclusions & restrictions apply The Chairman will vote open usable proxies in favour of Resolution Annual General Meeting 45

46 RESOLUTION 3 Ratification of prior issue of shares to exempt, sophisticated and professional investors under ASX Listing Rule 7.1 To consider and, if thought fit, to pass, with or without amendment, the following resolution, as an Ordinary Resolution: That for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify and approve the prior issue of 17,721,979 ordinary shares to certain exempt, sophisticated and professional investors at $0.063 per Share, for the purposes and on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Meeting. FURTHER INFORMATION: Voting exclusions & restrictions are set out in the NOM The Chairman will vote open usable proxies in favour of Resolution 3 Persons that are the subject of this Resolution 3 and any associates will abstain from voting The Directors unanimously recommend that Shareholders vote for Resolution Annual General Meeting 46

47 RESOLUTION 4 Ratification of prior issue of shares to Abbey West Capital Pty Ltd (Abbey) and Catalan Investments Pty Ltd (Catalan) under ASX Listing Rule 7.1 To consider and, if thought fit, to pass, with or without amendment, the following resolution, as an Ordinary Resolution: That for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify and approve the prior issue of 416,842 ordinary shares to Abbey and 473,682 ordinary shares to Catalan at $0.095 per Share, for the purposes and on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Meeting. FURTHER INFORMATION: Voting exclusions & restrictions are set out in the NOM The Chairman will vote open usable proxies in favour of Resolution 4 Abbey and Catalan and any associates will abstain from voting on Resolution 4 The Directors unanimously recommend that Shareholders vote for Resolution Annual General Meeting 47

48 RESOLUTION 5 Ratification of prior issue of shares to Cairnglen Investments Pty Ltd (Cairnglen) under ASX Listing Rule 7.1 To consider and, if thought fit, to pass, with or without amendment, the following resolution, as an Ordinary Resolution: That for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify and approve the prior issue of 13,333,333 ordinary shares and 1,333,333 unlisted options to Cairnglen Investments Pty Ltd <Woodford Super Fund A/C>, for the purposes and on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Meeting. FURTHER INFORMATION: Voting exclusions & restrictions are set out in the NOM The Chairman will vote open usable proxies in favour of Resolution 5 Cairnglen and any associates will abstain from voting on Resolution 5 The Directors unanimously recommend that Shareholders vote for Resolution Annual General Meeting 48

49 RESOLUTION 6 Ratification of prior issue of shares to Catalan Investments Pty Ltd (Catalan) under ASX Listing Rule 7.1 To consider and, if thought fit, to pass, with or without amendment, the following resolution, as an Ordinary Resolution: That for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify and approve the prior issue of 592,105 ordinary shares to Catalan at $0.095 per Share, for the purposes and on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Meeting. FURTHER INFORMATION: Voting exclusions & restrictions are set out in the NOM The Chairman will vote open usable proxies in favour of Resolution 6 Catalan and any associates will abstain from voting on Resolution 6 The Directors unanimously recommend that Shareholders vote for Resolution Annual General Meeting 49

50 RESOLUTION 7 Ratification of prior issue of shares to exempt, sophisticated and professional investors under ASX Listing Rule 7.1 To consider and, if thought fit, to pass, with or without amendment, the following resolution, as an Ordinary Resolution: That for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify and approve the prior issue of 14,617,596 ordinary shares to certain exempt, sophisticated and professional investors at $0.075 per Share, for the purposes and on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Meeting. FURTHER INFORMATION: Voting exclusions & restrictions are set out in the NOM The Chairman will vote open usable proxies in favour of Resolution 7 Persons that are the subject of this Resolution 7 will abstain from voting The Directors unanimously recommend that Shareholders vote for Resolution Annual General Meeting 50

51 RESOLUTION 8 Ratification of prior issue of shares to Durham Capital Corporation (Durham) under ASX Listing Rule 7.1 To consider and, if thought fit, to pass, with or without amendment, the following resolution, as an Ordinary Resolution: That for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify and approve the prior issue of 4,000,000 ordinary shares to Durham at $0.10 per Share, for the purposes and on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Meeting. FURTHER INFORMATION: Voting exclusions & restrictions are set out in the NOM The Chairman will vote open usable proxies in favour of Resolution 8 Durham and any associates will abstain from voting on Resolution 8 The Directors unanimously recommend that Shareholders vote for Resolution Annual General Meeting 51

52 RESOLUTION 9 Ratification of prior issue of shares to Catalan Investments Pty Ltd (Catalan) under ASX Listing Rule 7.1 To consider and, if thought fit, to pass, with or without amendment, the following resolution, as an Ordinary Resolution: That for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify and approve the prior issue of 29,262,354 ordinary shares to Catalan at $0.095 per Share, for the purposes and on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Meeting. FURTHER INFORMATION: Voting exclusions & restrictions are set out in the NOM The Chairman will vote open usable proxies in favour of Resolution 9 Catalan and any associates will abstain from voting on Resolution 9 The Directors unanimously recommend that Shareholders vote for Resolution Annual General Meeting 52

53 RESOLUTION 10 Ratification of prior issue of shares to exempt, sophisticated and professional investors under ASX Listing Rule 7.1A To consider and, if thought fit, to pass, with or without amendment, the following resolution, as an Ordinary Resolution: That for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify and approve the prior issue of 22,278,0056 ordinary shares to certain exempt, sophisticated and professional investors at $0.063 per Share, for the purposes and on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Meeting. FURTHER INFORMATION: Voting exclusions & restrictions are set out in the NOM The Chairman will vote open usable proxies in favour of Resolution 10 Persons that are the subject of this Resolution 10 and any associates will abstain from voting The Directors unanimously recommend that Shareholders vote for Resolution Annual General Meeting 53

54 RESOLUTION 11 Ratification of prior issue of shares to exempt, sophisticated and professional investors under ASX Listing Rule 7.1A To consider and, if thought fit, to pass, with or without amendment, the following resolution, as an Ordinary Resolution: That for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify and approve the prior issue of 10,714,575 ordinary shares to certain exempt, sophisticated and professional investors at $0.075 per Share, for the purposes and on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Meeting. FURTHER INFORMATION: Voting exclusions & restrictions are set out in the NOM The Chairman will vote open usable proxies in favour of Resolution 11 Persons that are the subject of this Resolution 11 and any associates will abstain from voting The Directors unanimously recommend that Shareholders vote for Resolution Annual General Meeting 54

55 RESOLUTION 12 Approval of 10% Capacity To consider and, if thought fit, to pass, with or without amendment, the following resolution, as a Special Resolution: That for the purposes of Listing Rule 7.1A and for all other purposes, Shareholders approve the issue of Equity Securities up to 10% of the issued capital of the Company (at the time of issue) calculated in accordance with the formula prescribed in Listing Rule 7.1A.2 and on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Meeting. FURTHER INFORMATION: Voting exclusions & restrictions are set out in the NOM The Chairman will vote open usable proxies in favour of Resolution 12 The Company will disregard any votes by any person/associate who may participate in or benefit from the proposed issue The Directors unanimously recommend that Shareholders vote for Resolution Annual General Meeting 55

56 RESOLUTION 13 Approval of New Constitution To consider and, if thought fit, to pass, with or without amendment, the following resolution, as a Special Resolution: That for the purposes section 136(1)(b) of the Corporations Act 2001, the Constitution tabled at the Meeting be approved and adopted as the Constitution of the Company in substitution for and to the exclusion of the existing Constitution which is repealed in its entirety by the Resolution taking effect on and from the close of the Meeting. FURTHER INFORMATION: No voting exclusions or restrictions apply The Chairman will vote open usable proxies in favour of Resolution Annual General Meeting 56

57 RESOLUTION 14 Approval of Employee Performance Incentives Plan To consider and, if thought fit, to pass, with or without amendment, the following resolution, as an Ordinary Resolution: That the Employee Performance Incentive Plan ( EPI Plan ), a summary of the rules which are set out in the Explanatory Statement accompanying this Notice of meeting and the issue of shares under the EPI Plan, be approved for all purposes including ASX Listing Rules 7.2 (Exception 9). FURTHER INFORMATION: Voting exclusions & restrictions for Key Management Personnel & Closely Related Parties are set out in the NOM Mr Brad Lingo and any associates will abstain from voting on this Resolution 14 Other members of KMP and any associates will abstain from voting as a proxy on this Resolution 14 The Chairman will vote open usable proxies in favour of Resolution Annual General Meeting 57

58 RESOLUTION 15 Approval of Grant of Shares to Mr Bradley Lingo, Managing Director To consider and, if thought fit, to pass, with or without amendment, the following resolution, as an Ordinary Resolution: That for the purposes of ASX Listing Rules and 10.15A and for all other purposes, the grant to Mr Bradley lingo, Managing Director of the Company, of up to 25,000,000 Shares under the Employee Performance Incentives Plan ( EPI Plan ) over the next three years and otherwise on terms, which are set out in the Explanatory Statement, be approved. FURTHER INFORMATION: Voting exclusions & restrictions for Key Management Personnel & Closely Related Parties are set out in the NOM Mr Brad Lingo and any associates will abstain from voting on this Resolution 15 Other members of KMP and any associates will abstain from voting as a proxy on this Resolution 15 The Chairman will vote open usable proxies in favour of Resolution Annual General Meeting 58

59 POLLS & CLOSE OF MEETING Polls (if any) No other business Meeting closed Thank you for your attendance Refreshments in foyer 2016 Annual General Meeting 59

60 LOOKING FORWARD TO YOUR CONTINUING SUPPORT IN THE YEAR AHEAD

61 Elk Petroleum Limited Exchange House Level 1, Suite Bridge Street Sydney NSW AUSTRALIA