The Group reports an after-tax loss $4,137,000 for the financial year ending 30 June 2020 (2019: loss: $8,021,000).

Carnarvon’s balance sheet remained strong with cash and cash equivalents of $113,632,000 (2019: $73,900,000), no debt and minimal commitments going forward.

During the financial year, Carnarvon successfully completed a capital raising through a placement to sophisticated and institutional investors raising $78,671,000 after fees. The Placement provided additional funds for Carnarvon’s appraisal and exploration activities, engineering and design work for Dorado and a new 3D seismic acquisition over the Dorado and Roc fields and over prospective exploration prospects within the Bedout sub-basin.

The Company invested a further $33,753,000 on its exploration assets. Most of these costs were in relation to the drilling costs for the Dorado-2, Dorado-3 and Roc South-1 wells and the Keraudren 3D seismic acquisition, all within the Company’s Bedout project. In addition, the Company continued its preparatory work for the Buffalo oil field redevelopment and other exploration projects.

Carnarvon wrote off $1,174,000 (2019: $0) during the year of exploration expenditure which was previously capitalised. This expenditure related to the WA-524-P permit, containing the Maracas project. Whilst Carnarvon’s technical work identified some prospectivity, these were not deemed to be material within the Company’s portfolio and the permit was relinquished to the regulator.

The Company recorded A$1,037,000 (2019: $629,000) in other financial assets as at 30 June 2020. This represents the current value of the shares held by Carnarvon in CWX Global Limited (formerly Loyz Energy Limited) (“CWX”). The movement reflects the increase in the value of the shares during the year which has been recorded on the income statement for the year ended 30 June 2020. The shares were received as settlement of the deferred consideration asset relating to the 2014 sale of half of Carnarvon’s former interests in its producing concessions in Thailand.

Carnarvon spent $1,393,000 (2019: $1,666,000) in new venture and advisory costs as the Company continues to develop its significant regional geological database. This has been integral in identifying highly prospective opportunities within the North-West shelf of Australia to add to the Company’s string of successful discoveries.

During the financial year there was an unrealized gain on foreign exchange of $847,000 (2019: $2,237,000) due to the effect of a depreciation of AUD against the Carnarvon’s USD cash and financial assets.

The Company does not currently use derivative financial instruments to hedge financial risk exposures and therefore it is exposed to daily movements in the international oil prices, exchange rates, and interest rates. The Company manages its cash position in US Dollars and Australian Dollars to naturally hedge its foreign exchange rate exposures having regard for likely future expenditure.