Annual Report1 July 2018 to 30 June 2019

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Contents

NERA’S IMPACT AT A GLANCE ........................................................................................3

EXECUTIVE SUMMARY ........................................................................................................4

NERA’S ROADMAP ................................................................................................................6

NERA’s Technology Vision ............................................................................................................ 7

Industry Driven and Applied Research ..................................................................................... 7

Skills, Capabilities & Capacities that Enable Transformation of the Sector .................... 11

Technology and Service Exports ..............................................................................................13

Low carbon emission/ energy transitions .............................................................................16

Strategic Initiatives .......................................................................................................................17

KEY PERFORMANCE INDICATORS .............................................................................20

DIRECTORS REPORT ......................................................................................................... 24

Our Board ......................................................................................................................................24

Board Committees ......................................................................................................................25

2018/2019 Program Milestones ...............................................................................................26

Financial Summary ......................................................................................................................31

Contribution in winding up ........................................................................................................32

Rounding of amounts .................................................................................................................32

Auditors Independence Declaration ............................................................................. 33

FINANCIAL STATEMENTS .............................................................................................. 34

Statement of Profit or Loss and Other Comprehensive Income ......................................34

Statement of Financial Position ................................................................................................35

Statement of Changes in Equity ...............................................................................................36

Statement of Cash Flows ............................................................................................................37

Notes to the Consolidated Financial Statements .................................................................38

DIRECTORS’ DECLARATION .......................................................................................... 48

INDEPENDENT AUDITOR’S REPORT .........................................................................50

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45

175

4015.6

Lighthouse projects and

initiatives around Australia

project partners

NERA’s collaborative project fund

to the Australian economy

Through the power of collaboration and seed funding of lighthouse projects NERA estimates its investment will unlock

2.5multiplier

million$

10 billion$

leveraging additional project investment from industry

NERA’s impact at a glance

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National Energy Resources Australia (NERA) is an Industry Growth Centre established under the Australian Government Innovation and Competitiveness Agenda with a focus on the energy resources sector.

NERA has the mandate, capacity and vision to promote Australia’s energy resources sector on the global stage. As an incorporated, independent, not-for-profit company governed by a board of industry experts, NERA works side- by-side with sector members across the energy resources value chain to create opportunities for collaboration and innovation to improve energy resources competitiveness and sustainability.

Since opening for business in 2016, NERA has demonstrated its value to Australia by achieving what the energy resources sector cannot do in isolation - collaborate to grow nationalvalue. Where the sector has inthe past been characterisedas ‘not good at collaboration’and industry heavily reliant ona few large and internationaltechnology partners, NERA ischanging that paradigm. NERA’sindependent perspectiveand strong engagement withnational industry, researchers,innovators and SMEs is makinglocal innovation a safer bet andtaking that innovation to globalmarkets.

NERA has leveraged initial funding by creating 2.5 times more investment in the energy resources sector as a result of NERA and industry collaborating on lighthouse projects totalling $39.5 million. These lighthouse projects are projected help to unlock $10 billion of value and will ensure Australia is at the forefront of the energy transition and continues to be a leader and early adopter of technological change.

As the only industry-led knowledge organisation for Australia’s energy resources sector, NERA continues to play a key role in creating the collaboration and innovation ecosystem in and out of Australia. Reflecting our sector’s ambitions to deliver clean energy resources to Australia and the world, NERA’s strategic vision is:

‘Australia as a global energy powerhouse, a sought-after destination for investments and the leading source of knowledge and solutions.’

NERA and the Australian Government continue to forge ahead to promote the country as a global energy hub on the world stage with the energy resources sector prosperity critical to the economic growth of Australia.

Executive Summary

NERA’s value-add in Australia:

• NERA is investing $15.6 million in project funding which is forecast to be matched by $23.9 million from industry for a total of $39.5 million in project investment.

• NERA is investing in 45+ projects and collaborating with more than 175 project partners.

• NERA’s project fund is creating a 2.5 times multiplier in Australia that is leveraging additional project investment from industry.

• Through the power of collaboration and seed funding of lighthouse projects NERA estimates this investment will unlock $10 billion of value to Australia.

• Engaged with 6,400 individuals across Australia and the world spanning 3,300 organisations ranging from researchers, universities, international organisations, federal and state governments, large and small companies.

In summary, NERA’s strategic work program is securing the following key outcomes for Australia:

• Demonstration of the power of the ‘cluster’ business modelto support Australian SMEs to collaborate and access localand global supply chains. For example NERA supported theestablishment of Australia’s first Subsea Cluster for the oil andgas industry (SICA) as well as a new cluster of ocean energybusinesses and researchers (AOEG). NERA is also exploringother clusters to be developed and sustained (potentialdecommissioning, hydrogen and under Future Batteries CRC),including providing support for relevant clusters to accessadditional Federal Government Funding through the Export Hubsinitiative.

• Test facilities/labs to make innovation, testing and prototypingof technologies a safer bet, for example the LNG Futures Facilityand WA Industry 4.0 test lab - one of six funded by the FederalGovernment and the only one focussed specifically on technologyfor the resources sector. This test lab is integrating Open ProcessAutomation Forum developed user protocols, providing one of theworld’s first testing and certification centres for new equipmentwhile serving as a training ground for Australian technicians.

• The Australian economy diversified, and productivity of thenational energy sector improved through deployment ofautomation and digital technologies, for example remoteoperations, next-generation sensors, field robotics, data analyticsand machine learning. Most NERA funded projects have a digitalor automation component, often coupled with skills development,and some specific examples include:

• Staying Ahead of the Game Automation Report (for oil and gasand mining sectors), produced with METS Ignited, the miningtechnology growth centre, contributing to the potentialestablishment of a centre of excellence in WA aroundremote operations, opening up opportunities for innovativetechnology SMEs and the development of future skills andjobs.

• Australian Energy Technology Catalogue www.technologycatalogue.com/nera an online technology platformmaking Australian technology accessible to local and globalindustry.

• A founding member of the Data61-led Sixth Wave Alliance.

• Wireless Industrial Sensor Environment (WISE) program fororganisations in the energy resources sector to identify,test, conduct comparative analysis and deploy innovativetechnology solutions in a collaborative environment withshared resources at lower cost to deliver productivity andefficiencies across the supply chain.

• Interoperability initiative with MIMOSA, providing Australianbusinesses with an opportunity to contribute to and learnfrom the development of ISO 18101, Industry 4.0 Testlab andglobal Open Process Automation Forum.

• More SMEs accessing local and global supply chainsthrough NERA’s support of Australian SMEs by providing fundingassistance, business capability programs and networking andmentoring opportunities that have assisted start-up and scale-upAustralian innovators to commercialise their technologies locallyand globally.

• Leap Vouchers supporting 19 innovators to commercialisetheir innovation

• Accelerator Program boosted 19 Australian businesses.

• Annual SME ConnectER providing 40+ businesses with theopportunity to pitch to Operators and Tier One contractors

• Eight Australian start-ups forged valuable internationalmarket connections through NERA’s Global Tech Xchangewith Station Houston and the Oil and Gas Technology Centre(OGTC) in Aberdeen

• Team Australia businesses represented on NERA’s AustralianPavilion at Gastech 2018 in Barcelona - an Australian first

• Foundation partner and sponsor of CORE Innovation Huband CORE Start program supporting +50 SMEs

• Major driver for innovation and regional developmentthrough promoting clusters in WA as a viable business modeland establishing SICA as the first subsea cluster in Australiawith over 30 WA SME members.

• Increased industry access to talent, skills and capabilities,with every job in Australia’s oil and gas industry supportinganother 10 jobs in the economy (x10 jobs creation), withsome examples of work NERA is involved in including:

• Future skills study Preparing Australia’s future oil and gasworkforce

• Support for skills and business diversification streams of WALNG Jobs Taskforce

• Support to the WA Data Science Innovation Hub

• Business skills and capability development for SMEs -integrated strategy and embedded into cluster model

• Energy Literacy Framework

• APR Intern and IMNIS Mentoring Program

• Skills component in technology projects, for example LNGFutures Facility, Wireless Industrial Sensing Environment(WISE), Nexxis robotics.

• Knowledge sharing through networking events creatingculture of collaboration and building trust across Australia’senergy resources sector innovation ecosystem. For example,NERA at the Australasian Oil and Gas Conference (AOG) each yearcreates connections between innovators, collaborators, operatorsand tech pioneers through a showcase of programs, workshops,networking and engagement opportunities. NERA also runsworkshops and knowledge events, including at CORE InnovationHub (for example clusters, offshore resource explorationtechnologies, decommissioning, knowledge experts such asNSW Data Scientist) and through NERA Board dinners, wherethe critical connections and relationships required for effectivecollaboration are created.

• Safer workplaces, new jobs, future skills development andpotential new exports through the commercialisation andacceleration of automation technologies that take humans out ofchallenging and dangerous environments. For example, NERA issupporting the development on an EX-Rated Robotic Crawler andCamera.

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NERA’s roadmap sets out the focus areas, activities and outcomes to be achieved over a 10-year period. This Report provides progress on this roadmap.

NERA's Focus Areas Activities NERA Outcomes

Industry driven and applied research

• Provide programs and funding opportunities tostimulate and support innovation

• Support industry-funded energy resourcesresearch initiatives

• Support independent and trusted sources ofresearch, science and data around industryperformance and environmental impacts

• Deployment of novel digital technologies andsolutions to unlock resources and value

• Reduced costs and improved efficiency across thewhole value chain

• Support for sustainable environmentalperformance, improved community acceptanceand access to resources

Skills , capabilities & capacities that enable sector transformation

• Support future skills development throughprojects and programs

• Support skills development initiatives that enabledigital transformation of the sector

• Development of the skills and capabilities requiredto support the energy resources sector’s uptake ofdigital technologies

Technology & service exports • Support innovation clusters in the technologyenergy sector

• Establish a pipeline of SMEs for enhancingcommercialisation and scale-up of SMEssupporting a pathway to a global marketplace

• Create global connections into internationalmarkets

• Deployment of novel digital technologies andsolutions to unlock resources and value

• Reduced costs and improved efficiency across thewhole value chain

• Accelerating the growth of an innovative localsupply chain which is integrated into global supplychains

Low carbon emission/ energy transitions

• Monitor and promote energy transitiontechnologies

• Seek and support projects that focus on theenergy transition

• NERA actively supporting the adoption of CCS,CCUS and other carbon abatement projectsacross the Australian economy

• Supporting sustainable environmentalperformance, improved community acceptanceand access to resources

• Commercialisation and adoption of hybrid, cleanand renewable technologies to minimise energyresource sector’s input energy costs and wasteand emissions

Strategic Initiatives • WA Premier’s LNG Jobs Taskforce• National Decommissioning Research Initiative• Energy Literacy Framework• International Standards

• Deployment of novel digital technologies andsolutions to unlock resources and value

• Reduction in costs and improved efficiency acrossthe whole value chain

• Accelerated growth of an innovative local supplychain and its integration into the global supplychains

• Developing the skills and capabilities required tosupport the energy resources sector’s uptake ofdigital technologies

• Commercialisation and adoption of hybrid, cleanand renewable technologies to minimise energyresource sector’s input energy costs and wasteand emissions

• Working with the energy resources sector tosupport their energy transition plans

NERA’s Roadmap

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NERA’s Technology VisionNERA’s technology approach involves Optimising Today, Adapting for Tomorrow and Transforming the Future.

Industry Driven and Applied ResearchIn 2018/19, NERA supported deeper industry research engagement to address genuine industry needs and/or challenges, resulting in improved efficiency and productivity across the life cycle of energy resources projects and a reduction in emissions. This was achieved by providing programs and funding opportunities to stimulate and support innovation. NERA supported industry-funded energy resources research initiatives and projects involving independent and trusted sources of research, science and data.

Sector Knowledge Priorities NERA Outcomes

• Commercialise technology and research.• Understand and unlock Australia’s resources base.• Enhance efficiency in operations and maintenance.• Build talent and enable effective collaboration and innovation.

• Reduce costs and improve efficiency across the whole value chain.• Deploy novel digital technologies and solutions to unlock

resources and value.• Support sustainable environmental performance, improved

community acceptance and access to resources.

• Asset performance

• Asset operation andmaintenance

• Data-driven opportunities

• Enhance well deliverability

• Supply chain

• Skills

• Industry–researchcollaboration

Optimise today

• Deploy innovative tech

• Remote operations

• Automation

• Efficientdecommissioning

Adapt for tomorrow

• Low carbon

• Hydrogen

• Reusable infrastructure

• Transfer skills

• Artificial intelligence

Transform the future

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Provide programs and funding opportunities to stimulate and support innovation

2018/2019 Highlights

NERA’s Roadmap

NERA identifies, develops, connects, facilitates and supports collaborative projects to maximise the value of Australia’s energy resources sector. NERA provided funding to support these industry-led initiatives from a project fund of $15.6 million. These demonstration projects help the sector to achieve the strategic objectives outlined in our Sector Competitiveness Plan, which highlights a 10-year strategic roadmap for Australia’s energy resources sector. Projects that receive NERA funding are selected to deliver results on a national scale and have sector-wide impact, assisting the sector to unlock a potential $10 billion in value.

Bureau of Meteorology (BoM) report and project data on the Objective Tropical Cyclone Reanalysis

During 2017 and 2018 NERA joined partners from the oil and gas industry to support BoM to undertake this objective reanalysis of tropical cyclones in the Australian region. The project improved the quality of historical tropical cyclone data to enhance understanding of the risk profile for new and existing offshore infrastructure. When constructing multi-billion-dollar infrastructure in cyclone prone areas, Australia’s oil and gas industry relies on historical data to forecast the severity of weather conditions and how to engineer for them. With Australia’s oil and gas industry investing an estimated A$320 billion into new oil and gas projects across Australia over the past decade, delivering efficiencies in design represents a huge opportunity. The benefits from this research could also extend to regional communities and other industries, such as maritime and defence.

HyJump leads to Hyfast project

Using research and results from the NERA supported University of Western Australia (UWA) led HyJump project and other research programs, the Hyfast project is developing a hydrate blockage and restriction module to plug into an updated version of a software package used by numerous global oil and gas operators. This expansion from the original project will accelerate the commercialisation of UWA’s Intellectual Property, allowing the insights to be readily (and nearly immediately) used by industry to optimise the flow of gas through subsea pipelines.

HyJump and Hyfast are based in Perth, utilising the world’s first industrial scale laboratory jumper facility to deliver the first high-pressure, pilot-scale insight into the mechanisms of hydrate blockage formation in subsea jumper and pipeline systems.

Abrasive Slurry Injection Jet

This project will commercialise a world market leading fully patented Ultra High-Pressure Hydro-Abrasive wellhead severance and subsea cutting system (ASIJ) to deliver significantly improved reliability, safety and cost advantages over existing cutting systems across the whole oil and gas industry, with worldwide potential.

The commercialised system will allow abandoned wellhead severance to be completed with significantly lower costs independent of the well depth due to a smaller equipment footprint, allowing operators to utilise smaller, readily available vessels, cut at greater depths with far greater control, and in less time with a more certain outcome.

3D Metal printer built, tested and commercialised

Melbourne-based company SPEE3D, in conjunction with Charles Darwin University and ConocoPhillips and with funding support from NERA, has developed a high-speed, low-cost metal 3D printer specifically for the oil and gas industry. The 3D Printer is produced and built in Melbourne with a selection of parts being trialled in a Darwin LNG facility. Australian-developed and Australian-owned, the technology is now benefitting multiple industries (defence and oil and gas) and is exported internationally. The team at SPEE3D has secured a $1.5 million investment into a two-year pilot of SPEE3D technology for the Royal Australian Navy including the deployment of a WarpSPEE3D 3D metal printer to streamline the maintenance of patrol vessels.

In-Water Hull Cleaning Technology

Perth-based innovative marine SME CleanSubSea is integrating image-recognition and AI technology into their Envirocart - one of the world’s first in-water hull-cleaning systems to remove marine growth from ocean vessels. The technology is WA-owned and patented. Until now, industries have combated marine growth by dry-docking their fleets in Singapore. Through this project, the Envirocart will clean and scan a ship’s hull simultaneously, detecting hull damage and defects while the vessel remains in the water. Through Envirocart there is no need for expensive dry-docking, reducing carbon emissions and keeping jobs and industry in Australia. This technology is applicable to multiple industries including defence, cargo and fisheries.

TASER - Subsea Living Laboratories

Four ‘living laboratories’ have been designed and deployed to help Australia’s oil and gas industry tackle the sector-wide costs incurred from operating in Australia’s challenging warm, nutrient rich waters. With funding support from NERA, these living laboratories have been created by some of Australia’s leading subsea researchers, operators and equipment engineers. These state-of-the-art facilities are busy testing dozens of innovative products and subsea coating technologies designed to help our energy resources sector tackle the multi-million- dollar challenge of equipment performance and reliability.

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2018/2019 HighlightsSupport industry-funded energy resources research initiativesCooperative Research Centres (CRCs), and Cooperative Research Centre Projects (CRC-Ps) and Industry Growth Centres work together to be a catalyst for increased and more productive industry-research engagement.

NERA and other Growth Centres provide valuable information for the CRC Advisory Committee, ensuring that industry’s perspective is considered in the selection of successful applications.

Collaboration on innovative research programs that are solving real industry challenges enhances Australia’s reputation as a leading destination for industry-led demonstrative research and technological excellence.

Assistance Provided to CRC, CRC-P, ARC ITRP

NERA’s input is a key part of the assessment process, assisting the CRC Advisory Committee in its assessment of applications and in formulating its recommendations for funding to the Minister for Industry, Science and Technology. In 2018, NERA reviewed and provided advice on four CRC submissions (Blue Economy, Future Batteries, Future Cities, Intelligent Energy Data). In 2019, NERA reviewed and provided advice on a further four CRC submissions (Future Cities, Future Energy Exports, Productive Coasts, Transitions in Mining Economies). Over this same period, NERA reviewed approximately 30 CRC-P applications and provided advice to several prospective ITRP applicants across industry and academia.

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Support Independent and Trusted Sources of Research, Science and Data around Industry Performance and Environmental Impacts

2018/2019 Highlights

In 2018/19, NERA engaged with universities and research organisations on projects and initiatives. These organisations have a critical role in underpinning the knowledge economy. They explore and identify new frontiers, new technology developments, new techniques and trials, create new methodologies and provide independent sources of trusted data.

Wireless Industrial Sensor Environment Program

NERA is supporting the WISE initiative which is helping organisations in the energy and resources sector to identify, test, conduct comparative analysis and deploy innovative technology solutions in a collaborative environment with shared resources, at lower cost, delivering productivity and cost efficiencies across the supply chain.

The WISE Program will reduce industry risks and costs by eliminating the in-house process of research, identification, onboarding and deployment of sensor technology, allowing industry members to capitalise on the research and testing activities undertaken collaboratively at the Innovation Centre.

Industry participants can utilise and test their wireless sensor model prior to procurement and implementation, enabling them to select and deploy appropriate, proven wireless sensor technology with confidence that the desired outcomes will be delivered.

Western Australian Data Science Innovation Hub

Start-ups and businesses are working with universities and the Western Australian Government as part of the Curtin University-led Western Australian Data Science Innovation Hub, ensuring the State remains at the forefront of digital and internet technologies and connected to other state and national data science initiatives.

The Western Australian Government has allocated $800,000 to establish the WA Data Science Innovation Hub at Curtin University, which was launched in October 2018. NERA has joined the Hub, which is connecting industry to universities, transferring knowledge across various sectors impacted by digital disruption including mining, oil and gas, and agriculture.

University of Queensland (UQ) Centre for Natural Gas

The UQ Centre for Natural Gas in collaboration with NERA and industry participants is undertaking a number of projects to improve efficiency and potentially untap resources in the Coal Seam Gas (CSG) industry.

Petrel Plug-in

To identify potentially untapped resources, Australia’s CSG industry relies on a technique that uses mathematics and statistics to estimate where gas and water might be located through a process known as geostatistical modelling. NERA’s funding support and industry connections have helped integrate the code into Petrel, the most common modelling package for the prediction of oil reserves and production in Australia.

Converting Tight Contingent Resources

Many of the CSG resources in Eastern Australia are currently too expensive to extract gas with current hydraulic fracturing processes. Improving the technology to stimulate gas extraction will open up these resources and allow for more abundant reserves. This research will integrate new technologies, apply inputs for fit-for-purpose modelling methods, and develop best practices for implementation under actual Australian stress regimes and reservoir conditions. These methods may have further application in other high stress environments (e.g., India, China, Indonesia) and will translate across basins for applications in other tight unconventional resources such as deep coals, shale gas and tight gas.

Identifying Different Sources of Methane in Groundwater

Methane is often detected in groundwater and monitoring bore samples and there are many potential sources from which the methane could be derived. This is especially an issue in the CSG sector. This project focuses on developing a definitive ‘fingerprinting’ methodology to distinguish where methane is coming from. Methane is a naturally occurring gas that is non-toxic, odourless and difficult to detect. The fingerprinting methodology will be matched with the development of what could be adopted as an industry sampling and standard analysis to quantify desorbed methane present in water bores and CSG wells.

The Great Artesian Basin (GAB): New Body of Knowledge

This project brings together the latest peer-reviewed science and research about the hydrogeological nature and connectivity of the GAB and provides new ways of conceptualising those parts of the GAB still lacking significant data. The GAB Body of Knowledge will facilitate better decision-making when formulating regulatory controls, mitigating risks and determining industry best practice. It will also give landholders and other groundwater users in the community a better understanding of the system.

Enhancing Well Deliverability

This project will leverage existing data in the CSG industry for enhanced production efficiency of CSG wells and reduce the significant operating cost associated with dewatering through the application of advanced, predictive analytics techniques, including machine learning and analytical modelling. Additional project benefits include reduction of onsite maintenance which lessens access requirements for rigs and maintenance activities. This will decrease the disruption to rural activities where the wells are located, ease local traffic, and reduce the environmental impacts associated with well workovers.

NERA’s Roadmap

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Skills, Capabilities & Capacities that Enable Transformation of the Sector

The emerging digital environment and changes to the sector’s commercial and operating models will require a very different mix of skills, presenting opportunities to positively transform the economy and society through creating new jobs, businesses, technologies, infrastructure, capacity and capability to underpin future prosperity. Understanding the future labour requirements in these emerging and evolving operating models and ensuring training and delivery of relevant skills will be essential, requiring ongoing open collaboration between operators, service sector companies and education providers. In 2018/19, NERA supported skills development through funded projects and programs with a focus on skills development to enable the digital transformation of the sector.

Sector Knowledge Priorities NERA Outcomes

• Enhance skills and business capabilities to support automationand digitisation.

• Build talent and enable effective collaboration and innovation.

• Develop the skills and capabilities required to support the energyresources sector’s uptake of digital technologies.

2018/2019 HighlightsLNG Futures Facility

NERA is providing funding to support the front-end engineering design (FEED) for the development of a micro- scale LNG futures facility to be built in Western Australia. Led by UWA, the LNG Living Lab will be a national, open- access resource - a globally unique platform to demonstrate new technologies in a live plant environment. This project will have enormous benefits for Australian innovators by facilitating the capitalisation and realisation of great Australian inventions and will benefit Australia-based resource companies and produce a technology export stream that will aid the wider Australian economy. A key element of the Facility is the training for future plant operators, engineers and maintenance contractors.

NERA welcomed the announcement by Western Australian State Premier Mark McGowan to commit $10 million towards the development of the facility as part of the proposed Future Energy Exports (FEnEx) CRC. The funding commitment from the WA State Government through the Premier’s LNG Jobs Taskforce will help accelerate the delivery of the Facility and maximise its ability to commercialise innovations developed by Australia’s world-class LNG industry.

Development of EX Rated Robotic Crawler

With NERA’s support, Perth-based SME Nexxis and CSIRO’s Data 61 are commercialising an inspection robot that can undertake confined-space and hazardous inspections in areas that are either dangerous or inaccessible for humans. The project is bringing together the science and commercial worlds to support the growth of Australia’s robotics industry. This technology will be available for use across all facets of the energy resources sector and other industries nationally and internationally. Established in 2014 with a workforce of three, Nexxis has now grown to 40 full-time staff and has doubled in the last 12 months, opening new offices in Singapore and Houston. NEXXIS is an example of an Australian SME commercialising Australian research and keeping the IP in Australia, positioning Australia as a world-leader in automated robot inspection research and advanced manufacturing and an export market for EX-rated technology.

To enable future work skills and capability, NEXXIS is also establishing a Registered Training Organisation (RTO) to provide training as the technology deploys. NEXXIS is also aspiring to establish a Robotic Technologies Testing & Training Hub (lab61) in Western Australia, upskilling the workforce and demonstrating the technology in a live environment.

Support future skills development through projects and programsIn 2018/19, NERA progressed several projects that enable the development and adoption of digital technologies in Australia, support the productivity, environmental performance and sustainability of the energy resources sector and enable cost competitive international trade.

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2018/2019 HighlightsNERA’s Workforce Report

In May 2019 NERA launched the ‘Preparing Australia’s future oil and gas workforce’ report. The report outlines the future skill requirements and workforce challenges expected to be faced by the oil and gas sector in 2030 through the uptake of automation and technology. It charts the potential trajectory of the oil and gas workforce in Australia in the years ahead and likely impacts on workforce size. Importantly, the report also highlights the employment multiplier power of the industry, finding that each job in Australia’s oil and gas sector is responsible for another 10 roles through the broader economy.

The report was instrumental in getting NERA a key role in supporting the WA LNG Jobs Taskforce.

NERA’s Roadmap

Support skills development initiatives that enable digital transformation of the sectorSupport skills development initiatives that enable digital transformation of the sector, including development of the data science skills required to maintain and operate assets and the skills needed to work with new technologies and equipment.

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2018/2019 HighlightsSubsea Innovation Cluster Australia (SICA)

As a result of the continued support by NERA and learning from international experience, SICA was established in February 2018 after securing funding from NERA and in-kind support from Subsea Energy Australia. NERA then provided further funding support in 2019 with membership growing to 33 companies. SICA’s vision is to create accelerated sustainable growth and value creation by bringing together companies across the entire subsea value chain, fostering collaboration and innovation initially for the subsea inspection, maintenance and repair (IMR) sector, both in the regional market and worldwide.

Australian Ocean Energy Group (AOEG)

NERA provided start-up funding to establish the Australian Ocean Energy Group, an industry-led cluster formed to facilitate industry collaboration of the ocean energy industry. Based in New South Wales with additional membership in Queensland, Western Australia and Tasmania, the mission of the group is to accelerate the commercialisation of Australia’s ocean energy as the next frontier in low carbon generating capacity and add ocean energy to Australia’s energy resource mix.

Technology and Service ExportsDuring 2018/19, NERA assisted more SMEs to integrate into domestic and global markets and supply chains with innovative technologies and service offerings. Building the capacity and capability of SMEs and accelerating their commercialisation will, in turn, improve global competitiveness and attract new investment into Australia. This was achieved through NERA’s SME Strategy which aims to establish a cohort of SMEs and build capacity through commercialisation to scale-up and access to global pathways.

Sector Knowledge Priorities NERA Outcomes

• Commercialise technology and research.• Develop new market and business models.• Enhance efficiency in operations and maintenance.• Build talent and enable effective collaboration and innovation.

• Reduce costs and improve efficiency across the whole value chain.• Deploy novel digital technologies and solutions to unlock

resources and value.• Accelerate the growth of an innovative local supply chain and

integration into the global supply chains.

Support innovation clusters in the technology energy sectorOver the last decade, innovation clusters and precincts have emerged as a legitimate corporate framework helping drive innovation and regional development. Recognising this potential, NERA embarked on a program in late 2016 to promote and advocate the cluster concept and encourage development of two clusters in the energy resources sector.

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2018/2019 HighlightsInnovation Leap Vouchers

NERA’s Voucher Program has encouraged SMEs and innovators to work with potential clients in energy resources to overcome a specific challenge or barrier to getting their technology adopted. This was provided in the form of $20,000 funding matched by the SME to assist in commercialising their innovation. A total of 19 products and services across two years of Innovation Voucher funding have been approved and distributed matched funding from a range of start-up and scale-up innovators.

Chironix – NERA supporting technology alumni to expand their robotics fleet across various industries

With the help of NERA’s 2018 NERA Leap Voucher Program Chironix has overcome barriers to commercialising their technology and is experiencing an exciting growth trajectory. Chironix’s Husky Explorer Pro robot - Onyx - eliminates health and safety risks in hazardous areas and remote locations. The robot has multiple applications from monitoring and maintenance tasks to rugged exploration activities.

The game-changing potential of this technology has helped Chironix secure a contract in the US Defence, where Onyx will be used to transport patients on a NATO-grade stretcher to receive critical care. Chironix has expanded their team in Western Australia from four to 13 members in 12 months.

RISE Accelerator

The 2019 RISE Accelerator Program was a collaboration with NERA, Western Australian Government, Queensland Government and METs Ignited. Following a 12-week intensive program for innovative SMEs including attendance by the cohort at two leading industry conferences (Austmine and APPEA), the program hosted final pitch events and a graduation event. The collaboration with METs Ignited allowed NERA to leverage Queensland Government funding to assist in subsidising the program meaning that the Perth cohort included companies from the mining sector as well as from the energy resources sector and vice versa in Queensland.

SME ConnectER

Following its successful debut in 2018, NERA’s SME ConnectER returned to AOG 2019 with 24 Australian SMEs represented. The ConnectER involved a curated selection of SMEs pitching their products/services to participating companies with the aim of getting connected with the right people to continue a conversation about their technology. Participating SMEs attended a NERA customised workshop to increase their understanding of the oil and gas supply chain, improve their pitching and business relationships, and learn the best strategies for making the most of a booth (or Pod) at a large exhibition. These workshops were held in Perth and Brisbane two weeks before AOG 2019.

Northern Territory and SEAOCC

NERA supported several key networking and industry events as part of the Northern Territory Resources Week in early September 2018. The Northern Territory Resources Week combines three of the Northern Territory’s foremost resource and construction industry events; South East Asia Australia Offshore and Onshore Conference (SEAAOC), Mining the Territory and Building the Territory along with an extensive combined exhibition.

As part of the program of events, NERA supported the Northern Territory’s Energy Club’s ‘Meet the Buyers’ Event that resulted in an impressive attendance from operators, industry and key government personnel plus business representatives from across the energy resources supply chain.

futuremap™ workshop at AOG2019

At AOG2019 NERA partnered with the Innovative Manufacturing CRC to provide oil and gas participants with their futuremap™ workshop. Developed for the innovative manufacturing sector, the CRC was keen to test relevance for the resources sector and NERA’s presence at AOG offered that opportunity.

The futuremap™ tool provides a hands-on session to help SMEs map the current state of their business and identify where they can lift their awareness, competitiveness and build resilience against 13 key areas of competitiveness. SMEs at the workshop were aided to assess their aspirations and readiness for Industry 4.0 by producing a detailed diagnosis of their business showing key areas for improvement

NERA’s Roadmap

Establish a pipeline of SMEs for enhancing commerciali-sation and scale-up of SMEs supporting a pathway to a global marketplaceNERA’s SME strategy involves working with targeted Australian SMEs to develop their capability to integrate into global supply chains creating value and jobs in the Australian economy. It provides a framework for NERA to efficiently and effectively engage with SMEs to support their journey from idea/innovation to fully realised commercial outcomes and success in global markets. It outlines an engagement pathway for entrepreneurs and businesses in the SME lifecycle, offering a series of NERA-led programs and activities to encourage, challenge and grow their businesses. From start-ups through to scale-ups and exporters, the strategy provides connections, resources, development activities and opportunities for engagement that drive collaboration, innovation, business competitiveness and growth.

NERA is part of a wider innovation and collaboration ecosystem supporting the development and growth of innovators, start-ups and SMEs, and works with organisations operating in the ecosystem to ensure maximum value is extracted from its initiatives. At the national level, NERA’s key partners include Austrade, CSIRO, the Entrepreneurs Program (EP), Accelerating Commercialisation Program (AC) and other growth centres.

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2018/2019 HighlightsGastech Conference, Barcelona Spain 2018

Together with project and industry partners, NERA celebrated a key achievement by uniting Australia’s energy resources innovation community under a national banner at Gastech 2018. More than 30,000 visitors and 700 exhibitors visited Gastech 2018 in Barcelona Spain from September 17 to 20, and through NERA’s work, for the first time in the event’s 45-year history, featured a strategic presence from Australia. NERA brought Australia’s top energy and gas technology innovators together to deliver a strong showcase of local innovation, talent and future capability to the world stage, showing the benefits of collaboration across the supply chain.

The Australian pavilion produced a fantastic result, creating global connections for NERA and the participating SMEs and organisations who formed part of the Team Australia delegation.

Global Pathways - Scottish Development Initiative

Supporting global pathways for Australian SMEs, NERA joined forces with the Scottish Development Initiative (SDI) to host a workshop in Perth connecting Australian SMEs with export opportunities into the North Sea and outlining support available for companies looking to explore the UK market for their exporting ambitions.

NERA has developed a strong working relationship with the SDI and together are developing collaborative opportunities for innovative SMEs looking to gain access to valuable global supply chains.

Global Tech Xchange

Promoting and supporting Australia in a global energy marketplace as part of a global technology exchange program and representing Australia at ONS Norway 2018, Gastech 2018 in Barcelona Spain, the Offshore Technology Conference 2019 in Houston USA, and Offshore Europe Conference 2019 in Aberdeen UK.

Station Houston, Texas - May 2019

Four Australian innovators were selected to take part in the global technology exchange to build global relationships and forge international market connections in a program centred around the Offshore Technology Conference (OTC) in Houston, 5 to 10 May 2019. Once in Houston, the delegation was joined by two companies from the OGTC Accelerator program who accompanied the NERA delegation in many of the activities.

The Oil and Gas Technology Centre (OGTC) Aberdeen UK - September 2019

NERA selected four Australian energy technology innovators as part of the second stage of its global technology exchange program that is connecting Australian tech pioneers with global energy leaders and supply chains.

The four participants each represent innovative technology products and solutions for Australia’s energy resources sector. NERA provided a half-day workshop to the SME’s attending to maximise their benefits of attending the conference. The training developed their readiness and effectiveness while at the conference and was delivered as a Masterclass in Maximising Conference Attendance.

Create global connections into international marketsNERA aims to build stronger, collaborative relationships within the entire energy resources value chain and global partnerships in order to access global supply chains where the synergies and common challenges may lead to novel and valuable solutions.

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2018/2019 Highlights

2018/2019 Highlights

New ME-093 Hydrogen Technologies Committee

NERA has welcomed the establishment of a new Hydrogen Technologies Committee by Standards Australia as a key enabler to drive national agreement and recommendations to enhance the development of the emerging hydrogen industry. The new ME-093 Hydrogen Technologies Committee, which mirrors the ISO Technical Committee 197, will help ensure that the option to transition to a low-carbon economy by the utilisation of hydrogen can be achieved safely and that the economic, environmental and social benefits of the new industry are fully realised. NERA was invited to nominate to the committee, and our nomination is now the Chair of the committee.

Australian state and territory governments have agreed that hydrogen presents an opportunity for Australia to lead in the emerging global market for low and zero emissions energy, which, in 2019, will be realised through the development of a National Hydrogen Strategy by the Council for Australian Governments (COAG).

Solar Hybrid Wellsite Power Generation

Adelaide-based company CD Power has developed a reliable, low carbon and economical alternative power solution for the resources sector, helping maintain a secure energy supply that operators rely on, especially in remote locations. Their solution brings together three key elements: a network of solar panels, a battery storage system and a gas-fuelled generator, controlled by CD Power’s bespoke power program and designed to integrate into each individual customer’s control systems.

Together they are designed for low power wellsite applications requiring constant loads under 8kW, with the solar, battery and generator delivering peak loads of 24kW in power. This means the hybrid power solution still delivers near 100% reliable power for operators but, through the integration of solar, the system can reduce the carbon footprint and noise emissions from wellsites with each hour of operation. With most wellsites running on grid or powered by fuel at source generators alone, this project demonstrates the potential of lower emission intensity opportunities for resources operators and lights the way for clean technology integration across the sector

NERA’s Roadmap

Monitor and promote energy transition technologies

Seek and support projects that focus on the energy transition

Low carbon emission/ energy transitionsAustralia is committed to reducing carbon emissions to 26-28 per cent on 2005 levels by 2030. This target represents a 50 to 52 per cent reduction in emissions per capita and a 64 to 65 per cent reduction in the emissions intensity of the economy between 2005 and 2030. This level of emissions reduction needs to be achieved at the lowest cost while maintaining a reliable energy supply1.

Globally, there are a range of solutions to reduce carbon emissions at various stages of development and commercialisation, including zero carbon energy technology deployment, fuel-switching, improved efficiency and behaviour change and CCS and CCUS. In 2018/19, NERA progressed developing a position on its role with CCS and CCUS to support their adoption across the sector and broader economy.

Sector Knowledge Priorities NERA Outcomes

• Pursue a sustainable and low carbon energy future.• Understand and unlock Australia’s resource base.

• NERA position supporting the adoption of CCS, CCUS and othercarbon abatement projects across the Australian economy.

• Commercialise and adopt hybrid, clean and renewabletechnologies to minimise energy resource sector’s input energycosts and waste and emissions.

• Support sustainable environmental performance, improvedcommunity acceptance and access to resources.

1 Source - Department of the Environment analysis https://www.environment.gov.au/climate-change/publications/factsheet-australias-2030-climate-change-target

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2018/2019 HighlightsNERA is an integral and contributing member of the WA LNG Jobs Taskforce with participation across all working streams and leading development of the Western Australian pavilion at Offshore Europe Aberdeen 2019. NERA has become integrally involved in the shaping and operation of the WA Premier’s LNG Jobs Taskforce by contributing early opportunities for collaboration and for the Taskforce to make an immediate and visible impact, including the LNG Future Facility, establishing Western Australia as a global leader in remote operation and automation capabilities, Standards Australia work and the establishment of the Subsea Innovation Cluster (SICA).

Strategic InitiativesNERA’s strategic initiatives are the means through which our vision is translated into practice and include programs with a finite duration that are most impactful to achieving transformational change on a national level. In 2018/19, NERA progressed a number of strategic initiatives to enhance the competitiveness, productivity and sustainability of the energy resources sector in Australia.

Sector Knowledge Priorities NERA Outcomes

• Develop new markets and business models.• Enhance skills and business capabilities to support automation

and digitisation.• Build talent and enable effective collaboration and innovation.• Pursue a sustainable and low carbon energy future.• Understand and unlock Australia’s resources base.• Commercialise technology and research.• Enhance efficiency in operations and maintenance.• Optimise the regulatory framework.

• Reduce costs and improve efficiency across the whole value chain.• Deploy novel digital technologies and solutions to unlock

resources and value.• Accelerate the growth of an innovative local supply chain and

integration into the global supply chains.• Develop the skills and capabilities required to support the energy

resources sector’s uptake of digital technologies.• Commercialise and adopt hybrid, clean and renewable

technologies to minimise industry’s input energy costs and wasteand emissions.

• Work with the energy resources sector to support their energytransition plans, through developing a roadmap to alternate andaffordable future energy solutions such as Hydrogen for Export(leveraging the industry’s LNG experience and capabilities).

• Support sustainable environmental performance, improvedcommunity acceptance and access to resources.

WA Premier’s LNG Jobs Taskforce

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NERA’s Roadmap

2018/2019 Highlights

2018/2019 Highlights

2018/2019 Highlights

Western Australia is now home to the NERA-led National Decommissioning Research Initiative (NDRI). The NDRI was established to improve community, regulatory and industry understanding of the impact of infrastructure on the marine environment.

The NDRI has been formed to commission and publish independent scientific research to improve the understanding of the importance of infrastructure in the Australian offshore marine environment. NERA is facilitating development and delivery of the NDRI on behalf of eight industry partners. It will ultimately provide an independent evidence base to inform decommissioning decisions, comparative assessments and environmental impact assessments

Exmouth Artificial Reef

The NERA funded ‘King Reef’ was installed in early August 2018 and is an Australian first. Six giant steel structures provided by BHP, combined with 49 purpose-built concrete modules, were deployed in the Exmouth Gulf only 10 minutes from the Exmouth Marina - providing safe and accessible experiences for families in small boats.

Integrated artificial reefs provide multiple benefits to their communities through habitat enhancement and restoration, as well as recreational fishing and employment opportunities. The project demonstrates an opportunity to build understanding around the viability and effectiveness of artificial structures to provide industry, regulators and the community with a level of confidence around the benefits and impacts of various artificial reef structures and inform new solutions for repurposing offshore assets in the future.

To help support an independent, collaborative and evidence-based approach to building energy literacy across Australia, NERA commissioned the University of Queensland to undertake a piece of research. The research was led by Professor Peta Ashworth, Chair in Sustainable Energy Futures. Professor Ashworth is one of Australia’s leading experts in sustainability, energy literacy and public perceptions of climate and energy technologies.

The University of Queensland and NERA released the Energy Literacy Report on 23 May 2019. The major recommendation from the Building Australia’s Energy Literacy Report was to hold a facilitated national workshop to bring together a range of stakeholders who deliver activities that relate to building energy literacy.

In 2017 NERA, as part of the global standardisation initiative being pursued through IOGP, successfully delivered a project to elevate Australia to full participating member status of the International Standards Organisation’s Technical Committee for oil and gas, petrochemicals and energy. Australia’s participation is coordinated through the Standards Australia’s committee that also oversees several working groups progressing specific initiatives to enhance Australia’s competitiveness. This committee enabled Australia to become the 22nd country in the world to receive the participatory status, which gives it the power to influence and leverage its voice in the international standards arena.

To further support the drive towards international standardisation, NERA led and coordinated a highly successful suite of international standards events in Perth over the week 19 to 22 November 2018, concluding with a NERA supported workshop ‘Standards for Australia’s Advantage’. Seventeen countries were represented at the event which was also supported by Woodside and Standards Australia.

NERA led the way in engaging the Australian industry in international standards development by hosting a major international Standards event in 2018 and promoting and establishing driving harmonisation of international oil and gas and interoperability standards.

National Decommis-sioning Research Initiative

Energy Literacy Framework

International Standards

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Strategic LeadershipNERA is building a shared vision for transformational change, creating connections to improve the productivity and competitiveness of the energy resources sector through innovation and technology, and assisting the sector successfully transition to a low carbon economy. NERA’s CEO led the NERA Team and engaged with the Board to achieve the above.

Key Performance Indicators:

• NERA work program aligned toshared vision, strategic focusareas, knowledge priorities andoutcomes.

• Sector Competitiveness Plan(SCP) reviewed annuallyto reflect trends anddevelopments, re-set strategicfocus areas and knowledgepriorities over a 10-yearhorizon and inform NERA workprogram for next 12 months.

• High calibre NERA team withdiverse range of skills anddomain expertise in place.

• High quality agendaand papers to ProgramDevelopment Committeeclearly establishing alignmentto vision, strategic focus areasand knowledge priorities andtherefore delivering projectsand achieving outcomes.

Results:

• All individuals in the NERA team understand clearly how theiractivities are linked to overallstrategic direction. Teamplanning and review days areheld each quarter and NERA’sPerformance Managementprocess ensures individual KPIsand performance aligns withNERA’s strategic outcomes.

• Annual Board strategicplanning confirms ongoingrelevance of or revises visionand strategic focus andinforms annual SCP revision.NERA held two strategicplanning meetings with theBoard in 2018/19. Thesemeetings provide Boardmembers capacity to discussforward-looking opportunitiesand issues.

• Stakeholders are engaged ininitiatives and projects alignedto vision, strategic focus areasand knowledge priorities.NERA’s SCP is shared broadlywith NERA’s stakeholders andis available at www.nera.org.au. NERA personnel speakwidely across the country inpublic presentations, forums,and panels. NERA’s Boardis a major advocate of theorganisation and promotesNERA in public forums.

• During 2018/19, NERAcommissioned researchreports to inform changeleadership documentsincluding the Energy LiteracyStrategy and the FutureWorkforce Report.

• NERA is an integral memberof the WA LNG Jobs Taskforceand is included on localand steering committees ofnational importance to leadchange as required.

• NERA’s Program DevelopmentCommittee met four timesduring 2018/19 and oversees40+ projects collaboratingwith more than 160+ projectpartners

Key Performance Indicators

NERA’s corporate scorecard aligns business activities to the vision and strategies and will be used to monitor organisational performance. The annual corporate scorecard provides a balanced approach to measure NERA’s performance and influence on sector competitiveness and operational outcomes across four dimensions:

• Strategic Leadership,

• Stakeholder Engagementand Communication

• Project PortfolioManagement, and

• Governance andOperations.

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Key Performance Indicators:

• The Industry GrowthCentre Initiative overall andNERA’s brand, value offer,opportunities for collaborationand innovation, work programand achievements/outcomespromoted broadly across thesector, resulting in strongawareness and support anda wide range of stakeholdersproactively engaging withNERA.

• Innovative directcommunication opportunitiesand channels identified andare being used regularly byNERA to proactively engagewith stakeholders and themedia.

• National and global pathwaysfor SMEs in the energyresources sector identified andSMEs supported through NERAprograms to access pathways.

• EOIs, project fundingannouncements and keyproject achievementscommunicated to stakeholders, including to Federal andrelevant State Governmentsand key Ministers.

Results:

• NERA’s ConnectER Newsletteris distributed electronicallymonthly to NERA’s CRMdatabase.

• NERA’s website provides acomprehensive go to ‘hub’for all stakeholders who areaccessing it regularly to findinformation on NERA projects,connections and links toSMEs and initiatives aroundtechnology, collaboration andinnovation.

• Social media channels such astwitter and LinkedIn are usedto target relevant stakeholderswith timely and usefulinformation e.g. immediatelyfollowing project or eventannouncements.

• NERA’s Salesforce CRMprovides a mechanism forstrategic targeting of NERAcommunication to differentstakeholders to ensurerelevance and impact. NERAconnected with 6,400 contactsacross Australia and the worldspanning 3,300 organisationsranging from researchers,universities, internationalorganisations, federal and stategovernments, large and smallcompanies.

• Two case study bookswere published in 2018/19highlighting the benefits andimpact across 14 NERA fundedprojects.

• NERA’s cohort of 140+ SMEssponsored and supportedthrough networking events,matched funding programs,capability workshops andmentoring and exposure tointernational delegations.

• NERA’s alumni of 20+ SMEswho attend internationalevents in Barcelona, Houstonand Aberdeen.

• NERA partnered with Statetrade offices, Austrade and theEntrepreneurs Program during2018/19 to support SMEs intonational and global pathways.

Stakeholder Engagement and CommunicationNERA uses innovative and effective strategies to communicate and engage with internal and external stakeholders to achieve alignment with NERA’s vision and support for NERA’s work program

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Key Performace Indicators

Key Performance Indicators:

• Effective program development governance and process in place and projects are industry-led, balanced across the sector and focused on improving sector competitiveness and sustainability.

• Projects are delivered within scope, budget and time and achieve program outcomes.

Results:

• NERA’s Expression of Interest (EOI) process has been applied online and is effectively utilised and automated.

• The project management process and monitoring were assisted with the implementation of a project management system to track and monitor achievement of outcomes and benefits from projects.

• Projects approved have secured a minimum of equal industry funding.

• Projects cover the knowledge priorities identified within the Sector Competitiveness Plan that are within NERA’s influence.

Key Performance Indicators:

• All Funding Agreement milestones achieved.

• Industry Growth Centre Performance Evaluation demonstrates impact on sector.

• Financial governance working effectively and Risk Management Framework in place.

• NERA staff have the right skills, capabilities and resources needed to support achievement of NERA’s vision, work program and outcomes.

• Website and CRM capacity is the ‘go to place’ for connecting stakeholders into industry collaboration initiatives.

Results:

• Milestones outlined in the funding agreement achieved within timeframes, including Sector Competitiveness Plan, Business Plan, Quarterly Reports, Annual Report delivered to the required standards.

• Annual audit opinion achieved with no significant financial issues reported.

• Plan in place to ensure smooth continuity of all critical business and financial governance if critical personnel leave.

• Risks are reviewed every six months and all risks managed effectively.

• Annual review of work program to identify the skills and resources required to achieve outcomes linked to annual review of team and individual performance and assessment of competencies to align with above.

• NERA’s website and CRM ‘Salesforce’ have been updated and integrated and are the key source of connecting with stakeholders.

Project Portfolio ManagementNERA is supporting and managing projects that are aligned with NERA’s vision, strategic focus, knowledge priorities and outcomes to help unlock the full potential of the energy resource sector.

Governance and OperationsNERA has the capacities and capabilities (skills, tools and access to external expertise as needed) to meet all contractual, financial and governance requirements; this supports NERA to achieve the objectives of the Australian Government’s Industry Growth Centre initiative.

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Mr Ken Fitzpatrick B.E. Chem. Eng, MBA, MAICD

Board Chairman and Independent Non-Executive Director since 27 November 2015

• Member of the Risk and Audit Committee

• Member of the Program Development Committee

• Member of the Nominations and Remuneration Committee

Ms Erica Smyth AC BSc (Hons), Hon.Dlitt, MSc (App), FTSE, FAICD

Independent Non-Executive Director since 27 November 2015

• Chair of the Risk and Audit Committee

Professor Andrew Garnett MSc, MBA

Independent Non-Executive Director since 27 November 2015

• Chair of the Program Development Committee

Ms Pia Turcinov LLB, BA, GAICD

Independent Non-Executive Director since 27 November 2015

• Chair of the Nominations and Remuneration Committee

• Member of the Program Development Committee•

Mr Bruce Denney BE (Hons), MBA, MAICD

Independent Non-Executive Director since 24 April 2016

• Member of the Program Development Committee

Mr Tony Nunan LLB, B.Land.Res.Sc

Independent Non-Executive Director since 29 December 2015

Resigned 2 December 2019

Directors Report

Our BoardThe Board consists of six members, including the Chair, and is supported by a Company Secretary. The breadth of Board knowledge and experience reflects the diversity of NERA’s portfolio with industry representation from oil, gas, coal seam gas, uranium, research, SMEs and services. NERA’s Board are also members of the organisation.

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Risk and Audit Committee

Program Development Committee

Nominations and Remuneration Committee

The Risk and Audit Committee comprises the Board Chair and one Director. The Committee acts as delegate of the Board to oversee annual financial reporting and corporate policies and monitors the organisation’s risk management framework.

The Program Development Committee comprises the Board Chair and three Directors. The Committee oversees the selection, management and evaluation of NERA’s Project Management Portfolio ensuring alignment with its obligations under the Commonwealth Funding Agreement.

The Nominations and Remuneration Committee comprises the Board Chair and one Director. The Committee assists the Board to ensure the organisation has coherent remuneration policies and practices, monitors performance of the Board and Executive and ensures that reward mechanisms align with organisational performance and the external pay environment.

Board Committees

Directors’ meetings

The Board has three committees to assist it to perform its duties and allow detailed consideration of complex issues.

The number of meetings of the Board and Board Committees held during the year and the number of meetings attended by each Non-Executive Director are as follows:

Board Meetings* Program Development Committee*

Risk and Audit Committee*

Nominations and Remuneration Committee*

A H A H A H A H

Ken Fitzpatrick (a) 4 4 4 4 2 2 2 2

Andrew Garnett (b) 4 4 4 4 (g) (g) (g) (g)

Erica Smyth (c) 4 4 (g) (g) 2 2 (g) (g)

Pia Turcinov (d) 4 4 4 4 (g) (g) 2 2

Tony Nunan (e) 4 4 (g) (g) (g) (g) (g) (g)

Bruce Denney (f) 4 4 4 4 (g) (g) (g) (g)

A Number of meetings attended | H Number of meetings held during the time the Non-Executive Director held office. (a) Ken Fitzpatrick is Chair of the Board and a member of all Committees | (b) Andrew Garnett is Chair of the Program Development Committee. (c) Erica Smyth is Chair of the Risk and Audit Committee | (d) Pia Turcinov is Chair of the Nominations and Remuneration Committee and member of the Program Development Committee | (e) Tony Nunan is a Non-Executive member of the Board | (f) Bruce Denney is a member of the Program Development Committee | (g) Director is not a member of this Committee.

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Directors Report

2018/2019 Program MilestonesNERA’s Principal ActivitiesNERA has worked hard to build trust with our industry, and we are increasingly seen as a unique national, independent and credible source of information. Since the launch of our first Sector Competitiveness Plan (SCP) in 2017 NERA has over 45 projects collaborating with over 175 industry partners including Tier 1 and 2 operators, researchers and innovative SMEs, covering a broad national, sector and SCP knowledge priority scope. All NERA projects contribute to the Industry Growth Centre objectives of increasing collaboration and commercialisation, improving international opportunities and market access, enhancing management and workforce skills and identifying opportunities for regulatory reform. There have been no significant changes in the nature of these activities and no major issues occurred during the year.

Program ObjectivesThe overarching objective of the Growth Centres Program is to improve the productivity and competitiveness of the sector. Competitive strength is the strategic priority in the Australian economy. The Program will achieve these objectives through:

• Improving engagement between research and industry, and within industry, to achieve strongercoordination and collaboration of research and stronger commercialisation outcomes;

• Enhancing management and workforce skills;

• Improving the capability of the key sectors to engage with international markets and access globalsupply chains; and

• Identifying regulations that are unnecessary or over-burdensome for the six sectors and impedetheir ability to grow and suggesting possible reforms.

Information of NERA’s activities in 2018/19 are as follows:During the financial year NERA updated and optimised the core suite of branded promotional materials including a total overhaul of NERA’s website https://www.nera.org.au/

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• Hybrid CSG Wellsite Power – Installation in Roma• International Program – SMART Australia QLD Cohort• Accelerator Program – RISE QLD Cohort• SME Innovation Vouchers• Automating Groundwater Compliance Monitoring – design & manufacture

of prototype• Unlocking the Toolebuc Formation – research• New Geostatistical Technique (Petrel plug-in) – research

• Identifying Different Sources of Methane in Groundwater – research• Converting Tight Contingent CSG Resources – research • Resetting our understanding of the Great Artesian Basin – research• Diagnostic Acoustic Sensing for coal resource exploration – field trial • CSG Wellhead Compression • Enhancing Well Deliverability• Machine learning driving future geological models

• Automating Groundwater Compliance Monitoring – field trial and regulatory engagement• Radiological Risk Assessment Tools • Hybrid CSG Wellsite Power – design & build• Decommissioning Initiative

• Ocean Energy Cluster – cluster member

• Metal 3D Printing – testing, application & research in Darwin• Centralised Environmental Plans for Seismic Operations• Decommissioning Initiative

• Machine learning driving future geological models • Natural degradation of hydrocarbons – field testing• Ocean Energy Cluster – cluster member• Automating Groundwater Compliance Monitoring – manufacturing of sensors• Scheduling system for coal export terminals

• Unlocking Marginal Uranium Deposits – research• Tropical Cyclone Reanalysis• SME Innovation Vouchers NSW recipients

• Natural degradation of hydrocarbons – field testing • Metal 3D Printing – design & manufacture in Melbourne• Automating Groundwater Compliance Monitoring – research• Ocean Energy Cluster – cluster member

• Decommissioning Initiative

• Natural degradation of hydrocarbons – field testing

Project partners

Project partners

Project partners

Project partners

• Natural degradation of hydrocarbons – field testing & research

• International Program – SMART Australia WA Cohort• Accelerator Program – RISE WA Cohort• SME Innovation Vouchers WA recipients• Ocean Energy Cluster – cluster members• Centralised Environmental Plans for Seismic Operations• Decommissioning Initiative• Tropical Cyclone Reanalysis• Exmouth Integrated Artificial Reef• Living Lab Subsea Test Structure• LNG Futures Facility

• Unlocking Marginal Uranium Deposits• Hydrate Risk in Subsea Jumpers• Integration of Image Recognition Technology into water hull cleaning tool • Subsea Innovation Cluster Australia • CORE Innovation Hub • EX-rated Robotic Crawler• Abrasive Slurry Jet Injection• Wireless Industrial Sensor Environment Program• WA Data Science Innovation Hub• HyFast – predicting hydrate blockages• Open Innovation Platform • Diagnostic Acoustic Sensing for coal resource exploration – research• Open Interoperability Standards• Hydrogen Industry Cluster• QuantumTX

91 Project partners

Project partners

Project partners

Project partners

Project partners

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Creating connections for growthOur lighthouse projects demonstrate our sector-wide impact and support a range of technology and innovation solutions that help achieve our vision of Australia as a global energy powerhouse while transitioning towards a low carbon and digitised economy.

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We are NERA.

Building a brighter

energy future.

NERA’s vision is Australia as a global energy

powerhouse, a sought-after destination

for investment and the leading source of

knowledge and solutions.

NERA works to maximise value to the Australian economy by supporting

an energy resources sector that is globally competitive, sustainable,

innovative and diverse.

As the Industry Growth Centre for Australia’s energy resources

industries, NERA delivers value to the Australian economy.

Together, our sector-wide impact will unlock +$10 billion of new

value for the benefit of all Australians.

We are an industry broker and the source of insight into the

challenges, solutions, skills and regulation that will ensure

Australia maximises its huge energy resources advantage

and becomes a global energy powerhouse.

As an industry-led research and knowledge organisation

for Australia’s energy resources industries, NERA is a

trusted go-to source of information and a connector

and facilitator between operators, entrepreneurs,

innovators, researchers, SMEs and governments.

$10 billion

x2.5 multiplier$15.6 million

NERA is creating connections to

innovate and transform the energy

resources sector to unlock

of value to the Australian economy

is creating a

that is leveraging additional project

investment in the energy resources sector.As at February 2020

NERA’s project fund of

To be part of our energy innovation ecosystem, visit

www.nera.org.au

175

x10

project partners

across Australia and

internationally

NERA works with

Every job in Australia’s

oil and gas industry

supports another

10 jobs in the economy

Registered office:

Australian Resources Research Centre

Level 3, 26 Dick Perry Avenue, Kensington WA 6151

ABN 24 609 540 285

1300 589 310 | contact@nera.org.au

@NERAnetwork

NERA – National Energy Resources Australia

nera.org.au

NERA’s

Knowledge

Priorities

NERA’s

Strategic

Outcomes

1. Enhance skills and

business capabilities

to support automation

and digitisation

2. Build talent and enable

effective collaboration

and innovation

3. Pursue a sustainable

and low carbon energy

future

4. Understand and

unlock Australia’s

resources base

5. Develop new markets

and business models

6. Commercialise

technology and

research

7. Enhance efficiency

in operations and

maintenance

8. Optimise the

regulatory framework

1. Reduce costs and improve efficiency

across the whole value chain

2. Deploy novel digital technologies and

solutions to unlock resources and value

3. Accelerate the growth of an innovative

local supply chain and integration into the

global supply chains

4. Develop the skills and capabilities

required to support the energy resources

sector’s uptake of digital technologies

5. Commercialise and adopt hybrid, clean

and renewable technologies to minimise

industry’s input energy costs and waste

and emissions

6. Work with the energy resources sector

to support their energy transition plans,

through for example developing a

roadmap to alternate and affordable

future energy solutions such as Hydrogen

for Export (leveraging the industry’s LNG

experience and capabilities)

7. Support sustainable environmental

performance, improved community

acceptance and access to resources

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Published documents by NERA:

• 2019 Sector Competitiveness Plan: https://www.nera.org.au/Article?Action=View&Article_id=240

• Building Australia’s Energy Literacy: https://www.nera.org.au/Publications-and-insights/Energy-literacy

• Preparing Australia’s Future Oil and Gas Workforce: https://www.nera.org.au/Publications-and- insights/Workforce-report

• Staying Ahead of the Game: https://www.nera.org.au/Publications-and-insights/Staying-ahead-of-the-game

• Creating our New Energy Futures: https://www.nera.org.au/Energy-futures

• NERA Brochure: https://12259- console.memberconnex.com/Attachment?Action=Download&Attachment_id=312

Case studies by NERA:

• Exmouth Artificial Reef: https://www.nera.org.au/Video-case-studies/Exmouth-Integrated-Artificial-Reef

• Taser Living Lab: https://www.nera.org.au/Video-case-studies/TASER-Living-Lab

• Ocean Energy Cluster: https://www.nera.org.au/NERA-projects/Ocean-Energy-Cluster

• HyJump: https://www.nera.org.au/NERA-projects/HyJump

• Innovation Voucher Program / Leap Voucher Program: https://www.nera.org.au/NERA-projects/Innovation- Voucher-Program

• Petrel Plug-in / New Geostatistical Technique: https://www.nera.org.au/NERA-projects/New-geostatistical- technique

Media releases:

https://www.nera.org.au/In-the-news

Podcasts:

https://energyinnovatorspodcast.com/

Social media:1,000+ followers

476 tweets in 2018/19

1,900+ followers

370 posts in 2018/19

Sector Competitiveness

Plan

Update 2019

A7950 NERA Pull Up Banner_1000x2000_Illuminated-6.indd 1

24/9/19 4:29 pm

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CREATING OUR NEW ENERGY FUTURESMeet the next generation of energy resources innovators

ISS

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Directors Report

Program milestones achievedIncreasing collaboration and commercialisation

NERA supported better collaboration and commercialisation in 2018/2019 by:

• Supporting and funding collaborative projects to maximise the value of Australia’s energy resourcessector. NERA commenced a number of projects involving collaboration between universities,researchers and companies to substantially improve productivity, efficiency and safety in the sector.These projects also involve SMEs providing innovative technologies that enhance business and jobsgrowth within Australian. Examples are:

• CleanSubsea has implementing technology to undertake in-water cleaning of vessels withouthaving to dry dock in Singapore saving time, cost and reducing carbon emissions and ultimatelykeeping jobs and industry in Australia.

• Melbourne based company SPEE3D who manufacture high-speed 3D metal printers is testingthis technology to produce metal parts in minutes in remote locations.

• Robotics SME Nexxis is working with CSIRO’s Data 61 to commercialise an inspection robot thatcan undertake confined space and hazardous inspections.

• Adelaide based CD Power is testing solar hybrid technology with a major gas operator toprovide a low carbon and economic power solution for the resources sector.

• Subcon Blue Solutions, a subsea engineering company based in Perth, designed and installed anew reef in Exmouth using decommissioned steel structures along with purpose-built concretemodules to create a recreational fishing and diving reef for the local community and tourists.

• Supporting universities and research organisations to explore and identify new frontiers, newtechnology developments, new techniques and trials, create new methodologies and provideindependent sources of trusted data. Examples of these are:

• In Western Australia, NERA is supporting collaborative projects with UWA such as the HyJump,Hyfast and the Wireless Industrial Sensor Environment Program; Curtin University with theDistributed Acoustic Sensing project for coal exploration, research on the impact of the newExmouth reef; and Edith Cowan University (ECU) working alongside CleanSubsea undertakingresearch of their in-water hull cleaning technology.

• In Queensland, NERA is supporting projects with the University of Queensland Centre forNatural Gas that look to improve efficiency and potentially untap resources in the coal seamgas industry. NERA is also supporting a project involving Queensland University of Technologyto undertake research into the optimisation of coal export terminals through schedulingalgorithms.

• In South Australia, NERA is supporting research with Flinders University to develop specificdata sets to better understand the actual and potential radiological impacts of projects. Thisresearch aims to obtain Australian specific information for evidence-based assessments of theenvironmental radiological impacts of energy, mining and nuclear projects.

• In New South Wales, NERA is supporting research with the University of Sydney to developa machine learning approach to coal seam gas exploration allowing for better predictionmodelling of coal and gas deposits.

• Nationally, NERA supports Cooperative Research Centres (CRCs), and Cooperative ResearchCentre Projects (CRC-Ps) by reviewing and providing advice on CRC submissions and reviewingapproximately 30 CRC-P applications while also providing advice to a number of prospectiveITRP applicants across industry and academia.

• NERA has contributed to and played a significant role on the WA LNG Jobs Taskforce as an integralmember across all work streams and the Secretariat.

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Enhancing management and workforce skills

NERA supported programs and projects to enhance management and workforce skills in 2018/19 as follows:

• Support of the Western Australian LNG Futures Facility which will provide a key training hub forfuture plant operators, engineers and maintenance operators.

• Through support of SMEs such as Nexxis, who are aiming to become a registered trainingorganisation in robotics and automation.

• Other activities include the 2019 release of NERA’s Workforce Report which outlines the future skillsrequirements and workforce challenges for the oil and gas industry.

• NERA provided a number of programs and initiatives during 2018/19 to support SMEs developbusiness capabilities such as Accelerator Program boosting 19 Australian businesses, SMEConnectER programs providing 40+ businesses to prepare for pitching to operators and tier onecontractors, masterclasses for SMEs to prepare for international markets, technology deploymentworkshops for 100 technology SMEs to learn about how most effectively to deploy their technologyinto the market and the futuremap workshop assisting SMEs to develop their business propositionfor Industry 4.0.

Improving international opportunities and market access

NERA led initiatives and supported SMEs to connect with opportunities and gain international experience for business growth in 2018/19 as follows:

• NERA celebrated a key achievement by uniting Australia’s energy resources innovation communityunder a national banner at Gastech 2018. This was the first Australian country pavilion at Gastech inthe history of the event.

• Working with the Scottish Development Initiative to create better connections and developcollaborative opportunities for SMEs to gain access to global markets.

• Launching the Global Tech Xchange with Station Houston and The OGTC Aberdeen.

Identifying opportunities for regulatory reform

NERA’s regulatory reform program continued to gain momentum in 2018/19 as follows:

• A new Hydrogen Technologies Committee was established by Standards Australia to help Australiatransition to a low-carbon economy.

• Engaging the Australian industry in international standards development with NERA leading theway to host a major international Standards event in 2018 and promoting and establishing drivingharmonisation of international oil and gas and interoperability standards.

• Launching the National Decommissioning Research Initiative to improve community, regulatory andindustry understanding of the impact of infrastructure on the marine environment.

• For the past 2.5 years, NERA has supported a project to verify the effectiveness of naturalbiodegradation of petroleum hydrocarbons at Australian contaminated sites. Led by CRC CARE,this collaborative project examined the extent of natural source-zone depletion at six sites acrossAustralia, including an oil refinery in Western Australia, a mine terminal in the North-West, and aservice station in Eastern Australia, comparing the differences in this naturally occurring processbased on petroleum type, geology of the site and climate as several influencing factors. Ultimatelythe project aims to deliver regulatory change and significantly reduce remediation costs, whileachieving best practice environmental outcomes across multiple sectors. Highlights of the project todate are:

• Exemplary collaboration: the project has been delivered by major industry operators (miningand energy), state government regulators, key national researchers and multinationalconsultants.

• Development of a technical guidance document, management guide and relevant case studiesto enable relevant regulators to make informed policy decisions.

• The impact from this project is far reaching and will enable substantial reductions inremediation costs for the mining, petroleum, defence and other sectors equating to $350million over the next 10 years.

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Directors Report

To fulfil the Programme objectives, NERA will aim to achieve the following outcomes in the energy resources sector:

• A reduction in the cost of doing business through regulatory reform;

• Increased Research and Development coordination and collaboration leading to improvedcommercialisation outcomes;

• More businesses, including SMEs, integrated into domestic and global supply chains and marketsleading to increased export income;

• Improved management and workforce skills of businesses; and

• Improved employment opportunities and contribution to the creation of high-skilled jobs.

Commonwealth Funding AgreementThe Funding Agreement between the Commonwealth of Australia as represented by the Department of Industry, Science, Energy and Resources (DISER) and NERA, was ratified on 9 February 2016. Funding is provided to NERA to take a national approach to improve the competitiveness, productivity and sustainability of the energy resources sector in Australia, and to address knowledge gaps and priorities at the sector level where economic value can be maximised.

A Deed of Variation was signed with the Federal Government on 23 January 2019 extending NERA’s funding extension for an additional two years to 30 June 2022.

Section 26.4 (a) (i) of the Commonwealth Funding Agreement sets out the rights and remedies of the Commonwealth on termination of the Agreement. The Commonwealth is not obliged to pay to NERA any outstanding amount of the funds, except to the extent that those monies have been legally committed for expenditure. As at 30 June 2019, NERA had legal commitments of $9.136 million, which it would have funded through a cash balance $10.226 million.

Cash ContributionsCash contributions were received from industry partners for the following initiatives in 2018/19 as follows:

• Gastech 2018 - $30k received from SMEs and organisations to attend the conference.

• WA Government - $348k was received for SME engagement programs.

• National Decommissioning Research Initiative - $250k was received from industry.

• Exmouth Artificial Reef - $3k was received from industry towards development of the video casestudy for this project.

• Radiological Risk Assessment Tools project - $184k was received as contribution towards this projectfrom two of the participants.

• Centralised Environmental Plans for Seismic Activities project - $162k was received from nineindustry participants.

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Financial SummaryActual versus budget for the for the year ended 30 June 2019

Actual

$’000

Budget

$’000

Variance

$’000

Revenue 8,498 12,214 (3,716)

Other income 244 100 144

Consultancy expense (147) (100) (47)

Employee benefits expense (2,151) (2,021) (130)

Marketing and branding expense (20) (72) 52

Professional fees expense (132) (86) (46)

Project fees expense (4,703) (8,624) 3,921

Other expense (1,174) (966) (208)

Budget variance - surplus/(deficit) 415 445 (30)

NERA achieved a surplus of $415k for the financial year against a budget of $445k. NERA came in below budget by $30k; however, still achieved a healthy surplus which will be carried forward to the new financial year. The key variances of note are as follows:

• Projects did not commence as early as anticipated. This is due to a delay between projects being approved for funding and project funding agreements being signed by all parties. This impacted both revenue and the project fee expense.

• Other income was above budget due to sponsorship income from external stakeholders for NERA organised events and conferences.

• Employee benefits were higher for the year than budget due to funding for a Program Director for the National Decommissioning Research Initiative.

• Professional fees were higher for the period due to additional legal fees for contractual reviews and advice.

• Other expenses were above budget due to conferences and seminar costs - some of these costs were offset by other income.

The following subcontractors were engaged during the 2018/19 financial year:

Financial, audit and legal

Consulting, advisory and communications

Capability building

Strategic analysis

• PKF Perth

• Grant Thornton

• Lavan legal

• Wrays

• Robin Wright

• Klarite Pty Ltd

• Nous

• Eliza

• Studio Papa

• KPMG

• Deployment Matters

• Unearthed

• University of Queensland

• AlphaBeta Strategy Economics

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Directors Report

Contribution in winding upThe Company is incorporated under the Corporations Act 2001 and is a Company limited by guarantee. If the Company is wound up, the Constitution states that each member is required to contribute a maximum of $10 each towards meeting any outstanding obligations of the entity. At 30 June 2019 the total amount that members of the Company are liable to contribute if the Company wound up is $60 (2018: $60).

Rounding of amountsNERA is a type of Company referred to in ASIC Corporations (Rounding in Financial / Directors’ Reports) Instrument 2016/191 and therefore the amounts contained in this report and in the financial report have been rounded to the nearest $1,000, or in certain cases, to the nearest dollar.

Auditors Independence DeclarationA copy of the Auditor’s Independence Declaration as required under s.307C of the Corporations Act 2001 is included in page 33 of this financial report and forms part of the Directors’ Report.

Signed in accordance with a resolution of the Directors.

Ken Fitzpatrick Erica Smyth

Chair Non-Executive Director

18 December 2019 18 December 2019

36

Corporations Act 2001

Corporations Act 2001

36

Corporations Act 2001

Corporations Act 2001

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37

Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation.

www.grantthornton.com.au

Central Park, Level 43 152-158 St Georges Terrace Perth WA 6000 Correspondence to: PO Box 7757 Cloisters Square Perth WA 6850 T +61 8 9480 2000 F +61 8 9480 2050 E info.wa@au.gt.com W www.grantthornton.com.au

Auditor’s Independence Declaration To the Directors of Australian Energy Resources Growth Centre Ltd

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Australian Energy Resources Growth Centre Ltd for the period from 1 July 2018 to 30 June 2019, I declare that, to the best of my knowledge and belief, there have been:

a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

b no contraventions of any applicable code of professional conduct in relation to the audit.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants M D Dewhurst Partner – Audit & Assurance Perth, 18 December 2019

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Financial StatementsStatement of Profit or Loss and Other Comprehensive IncomeFor the year ended 30 June 2019

Notes2019

$’000

2018

$’000

Revenue 4 8,498 6,492

Other income 4 244 167

Consultancy expense (147) (234)

Employee benefits expense 11.1 (2,151) (2,003)

Marketing and branding expense (20) (183)

Professional fees expense (132) (188)

Project fees expense (4,703) (2,790)

Other expense 3.3.1 (1,174) (2,203)

Share of loss 13 - -

Surplus / (deficit) before income tax 415 (941)

Income tax expense 3.7 - -

Surplus / (deficit) for the year 415 (941)

Other comprehensive income - -

Total comprehensive income / (loss) for the year 415 (941)

This statement should be read in conjunction with the notes to the financial statements.

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Statement of Financial PositionAs at 30 June 2019

Assets Notes2019

$’000

2018

$’000

Current assets

Cash and cash equivalents 5 10,226 10,729

Trade and other receivables 6 58 115

Other assets 9 33 75

Current assets 10,317 10,919

Non-current assets

Property, plant and equipment 8 71 78

Non-current assets 71 78

Total assets 10,388 10,997

Liabilities

Current liabilities

Trade and other payables 10 387 405

Provisions 11.2 95 54

Other liabilities 12 9,153 10,200

Current liabilities 9,635 10,659

Total liabilities 9,635 10,659

Net assets 753 338

Equity

Retained earnings 753 338

Total equity 753 338

This statement should be read in conjunction with the notes to the financial statements.

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Statement of Changes in EquityFor the year ended 30 June 2019

Retained earnings $’000

Total equity

$’000

Balance at 30 June 2017 1,280 1,280

Deficit for the period (942) (942)

Other comprehensive income - -

Balance as at 30 June 2018 338 338

Balance as at 1 July 2018 338 338

Surplus for the period 415 415

Other comprehensive income - -

Balance at 30 June 2019 753 753

This statement should be read in conjunction with the notes to the financial statements.

Financial Statements

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Statement of Cash FlowsFor the year ended 30 June 2019

Notes2019

$’000

2018

$’000

Operating activities

Receipts from:

Government grants 2,680 10,792

Project funds 4,010 2,526

Interest income 194 165

Other income 43 2

Payments to clients, suppliers and employees (7,435) (8,688)

Net cash provided by operating activities (508) 4,797

Investing activities

Payment of property, plant and equipment 5 (70)

Net cash provided by / (used in) investing activities 5 (70)

Financing activities - -

Net cash from / (used in) financing activities - -

Net change in cash and cash equivalents 5.1 (503) 4,727

Cash and cash equivalents, beginning of period 10,729 6,002

Cash and cash equivalents, end of period 5 10,226 10,729

This statement should be read in conjunction with the notes to the financial statements.

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Notes to the Consolidated Financial Statements1. General information and statement of complianceThe financial report includes the financial statements and notes of Australian Energy Resources Growth Centre Ltd.

These financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards - Reduced Disclosure Requirements and the Corporations Act 2001. Australian Energy Resources Growth Centre Ltd is a not-for-profit entity for the purpose of preparing the financial statements.

The financial statements for the year ended 30 June 2019 were approved and authorised for issue by the Board of Directors on 18 December 2019.

2. Changes in accounting policies

2.1 New standards adopted as at 1 January 20182

2.1.1. AASB 9 Financial Instruments

AASB 9 Financial Instruments replaces AASB 139 Financial Instruments: Recognition and Measurement. It makes major changes to the previous guidance on the classification and measurement of financial assets and introduces an ‘expected credit loss’ model for impairment of financial assets. When adopting AASB 9, the Group has applied transitional relief and opted not to restate prior periods. Differences arising from the adoption of AASB 9 in relation to classification, measurement, and impairment are recognised in opening retained earnings as at 1 January 2018.

Based on assets and liabilities of the Company the impact of the standard is immaterial.

2.2 Other standard adopted by the Group which do not have a material impact on the financial statements

• AASB 2016-5 Amendments to Australian Accounting Standards - Classification and Measurement of Share-based Payment Transactions.

• Interpretation 22 Foreign Currency Transactions and Advance Consideration.

2.3 Accounting standards issued but not yet effective and not been adopted early by the Company

2.3.1. AASB 15 Revenue from Contracts with Customers

AASB 15 Revenue from Contracts with Customers:

• replaces AASB 118 Revenue, AASB 111 Construction Contracts and some revenue-related Interpretations:

• establishes a new revenue recognition model

• changes the basis for deciding whether revenue is to be recognised over time or at a point in time

• provides new and more detailed guidance on specific topics (e.g. multiple element arrangements, variable pricing, rights of return, warranties and licensing)

• expands and improves disclosures about revenue.

The Company is yet to undertake a detailed assessment of the impact of AASB 15. However, based on the Company’s preliminary assessment, the Standard is not expected to have a material impact on the transactions and balances recognised in the financial statements when it is first adopted for the year ending 30 June 2020.

2 As the amendments have a significant impact on these financial statements, detailed disclosures have been made. Entities should assess the impact of AASB 9 on their financial statements based on their own facts and circumstances and make appropriate disclosures.

Notes to the Consolidated Financial Statements

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AASB 16 Leases

AASB 16 Leases:

• replaces AASB 117 Leases and some lease-related Interpretations

• requires all leases to be accounted for ‘on-balance sheet’ by lessees, other than short-term and low value asset leases

• provides new guidance on the application of the definition of lease and on sale and lease back accounting

• largely retains the existing lessor accounting requirements in AASB 117

• requires new and different disclosures about leases.

The entity is yet to undertake a detailed assessment of the impact of AASB 16. However, based on the entity’s preliminary assessment, the Standard is not expected to have a material impact on the transactions and balances recognised in the financial statements when it is first adopted for the year ending 30 June 2020.

AASB 1058 Income of Not-for-Profit Entities

AASB 1058 clarifies and simplifies the income recognition requirements that apply to not-to-profit (NFP) entities, in conjunction with AASB 15 Revenue from Contracts with Customers.

These Standards supersede all the income recognition requirements relating to private sector NFP entities, and the majority of income recognition requirements relating to public sector NFP entities, previously in AASB 1004 Contributions. Under AASB 1058, the timing of income recognition depends on whether a NFP transaction gives rise to a liability or other performance obligation (a promise to transfer a good or service), or a contribution by owners, related to an asset (such as cash or another asset) received by an entity.

This standard applies when an NFP entity enters into transactions where the consideration to acquire an asset is significantly less than the fair value of the asset principally to enable the entity to further its objectives. In the latter case, the entity will recognise and measure the asset at fair value in accordance with the applicable Australian Accounting Standard (e.g. AASB 116 Property, Plant and Equipment). Upon initial recognition of the asset, AASB 1058 requires the entity to consider whether any other financial statement elements (called ‘related amounts’) should be recognised, such as: a Contributions by owners; b Revenue, or a contract liability arising from a contract with a customer; c A lease liability; d A financial instrument; or e A provision. These related amounts will be accounted for in accordance with the applicable Australian Accounting Standard.

The entity is yet to undertake a detailed assessment of the impact of AASB 1058. However, based on the entity’s preliminary assessment, the Standard is not expected to have a material impact on the transactions and balances recognised in the financial statements when it is first adopted for the year ending 30 June 2020.

3. Summary of accounting policies

3.1 Overall considerations

The significant accounting policies that have been used in the preparation of these consolidated financial statements are summarised below.

The consolidated financial statements have been prepared using the measurement bases specified by Australian Accounting Standards for each type of asset, liability, income and expense. The measurement bases are more fully described in the accounting policies below.

3.2 Revenue

Revenue comprises revenue from the sale of goods, government grants, fundraising activities and client contributions. Revenue from major products and services is shown in Note 4.

Revenue is measured by reference to the fair value of consideration received or receivable by the Group for goods supplied and services provided, excluding sales taxes, rebates, and trade discounts.

Revenue is recognised when the amount of revenue can be measured reliably, collection is probable, the costs incurred or to be incurred can be measured reliably, and when the criteria for each of the Group’s different activities have been met. Details of the activity-specific recognition criteria are described below.

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3.2.1. Government grants

A number of the Company’s programs are supported by grants received from federal and state governments.

If conditions are attached to a grant which must be satisfied before the Company is eligible to receive the contribution, recognition of the grant as revenue is deferred until those conditions are satisfied.

Where a grant is received on the condition that specified services are delivered to the grantor, this is considered a reciprocal transaction. Revenue is recognised as services are performed and at year end a liability is recognised until the service is delivered.

Revenue from a non-reciprocal grant that is not subject to conditions is recognised when the Company obtains control of the funds, economic benefits are probable, and the amount can be measured reliably. Where a grant may be required to be repaid if certain conditions are not satisfied, a liability is recognised at year end to the extent that conditions remain unsatisfied.

Where the Company receives a non-reciprocal contribution of an asset from a government or other party for no or nominal consideration, the asset is recognised at fair value and a corresponding amount of revenue is recognised.

3.2.2. Client contributions

Fees charged for care or services provided to clients are recognised when the service is provided.

3.2.3. Interest income

Interest income is recognised on an accrual basis using the effective interest method.

3.3 Operating expenses

Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin.

3.3.1. Other expenses

Other expenses include travel and accommodation, program expenses, conferences and seminars, catering and entertainment, and IT services.

3.4 Property, plant and equipment

3.4.1. Property, plant and other equipment

Property, plant and other equipment (comprising fittings and furniture) are initially recognised at acquisition cost or manufacturing cost, including any costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by the Group’s management.

Property, plant and other equipment are subsequently measured using the cost model, cost less subsequent depreciation and impairment losses.

Depreciation is recognised on a straight-line basis to write down the cost less estimated residual value of buildings, plant and other equipment. The following useful lives are applied:

• computer hardware: 3-7 years

• office equipment: 3-13 years

In the case of leasehold property, expected useful lives are determined by reference to comparable owned assets or over the term of the lease, if shorter.

Material residual value estimates and estimates of useful life are updated as required, but at least annually.

Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognised in profit or loss within other income or other expenses.

3.5 Leases

3.5.1. Operating leases

Where the Group is a lessee, payments on operating lease agreements are recognised as an expense on a straight-line basis over the lease term. Associated costs, such as maintenance and insurance, are expensed as incurred.

3.6 Impairment testing of on-financial assets

For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. Goodwill is allocated to those cash-generating units that are expected to benefit from synergies of the related business combination and represent the lowest level within the Group at which management monitors goodwill.

Notes to the Consolidated Financial Statements (continued)

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Cash-generating units to which goodwill has been allocated (determined by the Group’s management as equivalent to its operating segments) are tested for impairment at least annually. All other individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount exceeds its recoverable amount, which is the higher of fair value less costs to sell and value-in-use. To determine the value-in-use, management estimates expected future cash flows from each cash generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. The data used for impairment testing procedures are directly linked to the Group’s latest approved budget, adjusted as necessary to exclude the effects of future reorganisations and asset enhancements. Discount factors are determined individually for each cash-generating unit and reflect management’s assessment of respective risk profiles, such as market and asset-specific risks factors.

Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that cash-generating unit. Any remaining impairment loss is charged pro rata to the other assets in the cash- generating unit. With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist. An impairment charge is reversed if the cash- generating unit’s recoverable amount exceeds its carrying amount.

3.7 Income taxes

No provision for income tax has been raised as the Group is exempt from income tax under Division 50 of the Income Tax Assessment Act 1997.

3.8 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

3.9 Employee benefits

3.9.1. Short-term employee benefits

Short-term employee benefits are benefits, other than termination benefits, that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. Examples of such benefits include wages and salaries, non-monetary benefits and accumulating sick leave. Short-term employee benefits are measured at the undiscounted amounts expected to be paid when the liabilities are settled.

3.9.2. Other long-term employee benefits

The Group’s liabilities for annual leave and long service leave are included in other long-term benefits as they are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are measured at the present value of the expected future payments to be made to employees. The expected future payments incorporate anticipated future wage and salary levels, experience of employee departures and periods of service, and are discounted at rates determined by reference to market yields at the end of the reporting period on high quality corporate bonds that have maturity dates that approximate the timing of the estimated future cash outflows. Any re-measurements arising from experience adjustments and changes in assumptions are recognised in profit or loss in the periods in which the changes occur.

The Group presents employee benefit obligations as current liabilities in the statement of financial position if the Group does not have an unconditional right to defer settlement for at least 12 months after the reporting period, irrespective of when the actual settlement is expected to take place.

3.10 Provisions, contingent liabilities and contingent assets

Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. Provisions are discounted to their present values, where the time value of money is material.

Any reimbursement that the Group can be virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provision.

No liability is recognised if an outflow of economic resources as a result of present obligation is not probable. Such situations are disclosed as contingent liabilities, unless the outflow of resources is remote in which case no liability is recognised.

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3.11 Deferred income

The liability for deferred income is the unutilised amounts of grants received on the condition that specified services are delivered or conditions are fulfilled. The services are usually provided, or the conditions usually fulfilled within 12 months of receipt of the grant. Where the amount received is in respect of services to be provided over a period that exceeds 12 months after the reporting date or the conditions will only be satisfied more than 12 months after the reporting date, the liability is discounted and presented as non-current.

13.12 Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.

Cash flows are presented in the statement of cash flows on a gross basis, except for the GST components of investing and financing activities, which are disclosed as operating cash flows.

13.13 Economic dependence

The Group is dependent upon the ongoing receipt of Federal and State Government grants to ensure the ongoing continuance of its programs. At the date of this report, management has no reason to believe that this financial support will not continue.

13.14 Significant management judgement in applying accounting policies

When preparing the financial statements, management undertakes a number of judgements, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses. Given the simplistic nature of the financial statements there are no significant judgements applied.

4. RevenueThe Group’s revenue may be analysed as follows for each major product and service category:

2019 $’000

2018

$’000

Revenue

Federal and state government funding 3,813 3,966

Project funds 4,685 2,526

Total Revenue 8,498 6,492

Other income

Interest income 194 165

Reimbursement income 50 2

Total other income 244 167

Notes to the Consolidated Financial Statements (continued)

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5. Cash and cash equivalentsCash and cash equivalents consist the following:

2019 $’000

2018

$’000

Cash at bank 10,226 10,729

Cash and cash equivalents 10,226 10,729

5.1 Reconciliation of cash

Cash at the end of the financial year as shown in the statement of cash flows is reconciled in the statement of financial position as follows:

Notes 2019 $’000

2018

$’000

Surplus/(deficit) 414 (942)

Increase/(decrease) in deferred income 12 (1,042) 5,766

Changes in assets and liabilities

Increase in trade and other receivables 6 57 (105)

Increase in other current assets 9 42 (20)

Increase in fixed assets 8 5 (65)

Increase in trade and other payables 10 (16) 108

Decrease in other current liabilities 11.2 41 (15)

Net change in cash and cash equivalents (503) 4,727

6. Trade and other receivables

2019 $’000

2018

$’000

Trade receivables 58 115

Total trade and other receivables 58 115

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7. Assets and liabilities

7.1 Categories of Assets and liabilities

The carrying amounts presented in the statement of financial position relate to the following categories of assets and liabilities:

Notes 2019 $’000

2018

$’000

Assets

Cash and cash equivalents 5 10,226 10,729

Total Assets 10,226 10,729

Financial liabilities

Financial liabilities measured at amortised cost 10 387 405

Total financial liabilities 387 405

8. Property, plant and equipmentDetails of the Group’s property, plant and equipment and their carrying amount are as follows:

2019 $’000

2018

$’000

Gross carrying amount

Balance 1 July 2018 92 92

Additions 5 5

Disposals - -

Transfer - -

Revaluation increase - -

Balance 30 June 2019 97 97

Depreciation and impairment

Balance 1 July 2018 14 14

Disposals - -

Depreciation 12 12

Balance 30 June 2019 26 26

Carrying amount 30 June 2019 71 71

Notes to the Consolidated Financial Statements (continued)

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9. Other assetsOther assets consist the following:

2019 $’000

2018

$’000

Current

Prepayments 33 3

Deposits - 72

Total other assets 33 75

10. Trade and other payablesTrade and other payables recognised consist of the following:

2019 $’000

2018

$’000

Current

Trade payables 267 170

Other creditors and accruals 105 216

Credit cards 15 19

Total trade and other payables 387 405

All above liabilities are short-term. The carrying values are considered to be a reasonable approximation of fair value.

11. Employee remuneration

11.1 Employee benefits expense

Expenses recognised for employee benefits are analysed below:

Notes 2019 $’000

2018

$’000

Wages, salaries 1,900 1,808

Workers compensation insurance 13 15

Superannuation 196 184

Employee benefit 11.2 41 (15)

Staff training/Welfare 1 11

Employee benefits expense 2,151 2,003

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11.2 Employee benefits

The liabilities recognised for employee benefits consist of the following amounts:

2019 $’000

2018

$’000

Current

Annual leave 95 54

Total employee benefits 95 54

12. Other liabilitiesOther liabilities can be summarised as follows:

2019 $’000

2018

$’000

Deferred income 8,662 10,086

Accrued other (4) (8)

Industry project funds 495 122

Total other liabilities 9,153 10,200

Deferred income consists of government grants received in advance for services to be rendered by the Group. Deferred income is amortised over the life of the contract.

13. Interest in joint ventureThe consolidated entity had a 50% interest in Nureka Pty Ltd which is a for-profit joint venture. As the entity is jointly controlled entity it has been treated as a joint venture under AASB11 Joint Arrangements, with the consolidated entity’s investment in Nureka Pty Ltd accounted for using the equity method in the consolidated financial statements. During the 2019 financial year this interest was sold

Summarised statement of financial position of Nureka Pty Ltd:

2019 $’000

2018

$’000

Cash and cash equivalents - 69

Trade and other receivables - 82

Trade and other payables - (136)

Loans to related parties - (80)

Net assets/equity - (65)

NERA’s 50% share of Nureka Pty Ltd’s net assets - (33)

NERA’s carrying amount of the investment in Nureka Pty Ltd - -

NERA’s unimpaired share of Nureka’s loss for the period - (33)

The original investment by NERA’s 50% share in Nureka Pty Ltd was 1 ordinary share at a cost of $1. As a result of impairment in the 2018 financial year this cost base has been fully impaired in accordance with AASB 11 Joint Arrangements. The interest in Nureka Pty Ltd was sold for $1 during the financial year.

Notes to the Consolidated Financial Statements (continued)

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14. Related party transactionsThe Group’s related parties include its key management personnel and related entities as described below.

Unless otherwise stated, none of the transactions incorporate special terms and conditions and no guarantees were given or received. Outstanding balances are usually settled in cash.

14.1 Transactions with related entities

During the reporting period, the company funded a Joint Venture with $117,115. During the year the company also disposed of its interests in the Joint Venture for $1.

14.2 Transactions with and key management personnel

Key management of the Company are the Executive Management and NERA’s Board of Directors.

2019 $’000

2018

$’000

Total key management personnel remuneration 900 775

15. Contingent liabilitiesThere are no contingent liabilities that have been incurred by the Group in relation to 2019 or 2018.

16. Leases

16.1 Operating leases as lessee

The Group’s future minimum operating lease payments are as follows:

Within 1 year $’000

1 to 5 years

$’000

After 5 years

$’000

Total

$’000

30 June 2019 4 3 - 7

30 June 2018 - - - - The lease expense during the period amounted to $2,471 representing the minimum lease payments. The lease expense relates to operating leases for computer equipment with lease terms of between one and five years.

17. Post-reporting date eventsNo adjusting or significant non-adjusting events have occurred between the reporting date and the date of authorisation.

18. Member’s guaranteeThe Company is incorporated under the Corporations Act 2001 and is a Company limited by guarantee. If the Company is wound up, the constitution states that each member is required to contribute a maximum $10 each towards meeting any outstanding obligations of the entity. At 30 June 2019, the total amount that members of the Company are liable to contribute if the Company wound up is $60 (2017: $60).

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Directors’ DeclarationIn the opinion of the Directors of Australian Energy Resources Growth Centre Ltd:

The consolidated financial statements and notes of Australian Energy Resources Growth Centre Ltd are in accordance with the Corporations Act 2001, including:

Giving a true and fair view of its financial position as at 30 June 2019 and of its performance for the financial year ended on that date; and

Complying with Australian Accounting Standards - Reduced Disclosure Requirements (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and

There are reasonable grounds to believe that Australian Energy Resources Growth Centre Ltd will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of the Directors.

Ken Fitzpatrick Erica Smyth

Chair Non-Executive Director

18 December 2019 18 December 2019

36

Corporations Act 2001

Corporations Act 2001

36

Corporations Act 2001

Corporations Act 2001

Notes to the Consolidated Financial Statements (continued)

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Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited. Liability limited by a scheme approved under Professional Standards Legislation.

www.grantthornton.com.au

Central Park, Level 43 152-158 St Georges Terrace Perth WA 6000 Correspondence to: PO Box 7757 Cloisters Square Perth WA 6850 T +61 8 9480 2000 F +61 8 9480 2050 E info.wa@au.gt.com W www.grantthornton.com.au

Independent Auditor’s Report To the Members of Australian Energy Resources Growth Centre Ltd

Report on the audit of the financial report

Opinion

We have audited the financial report of Australian Energy Resources Growth Centre Ltd (the Company) and it subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2019, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the Directors’ declaration.

In our opinion, the accompanying financial report of the Company is in accordance with the Corporations Act 2001, including:

a giving a true and fair view of the Company’s financial position as at 30 June 2019 and of its performance for the year ended on that date; and

b complying with Australian Accounting Standards – Reduced Disclosure Requirements and the Corporations Regulations 2001.

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Company in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independent Auditor’s Report

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57

Information other than the financial report and auditor’s report thereon

The Directors are responsible for the other information. The other information comprises the information included in the Company’s annual report for the year ended 30 June 2019, but does not include the financial report and our auditor’s report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors’ for the financial report

The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards – Reduced Disclosure Requirements and the Corporations Act 2001. The Directors’ responsibility also includes such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar3.pdf. This description forms part of our auditor’s report. GRANT THORNTON AUDIT PTY LTD Chartered Accountants M D Dewhurst Partner – Audit & Assurance

Perth, 18 December 2019

Australian Resources Research CentreLevel 3, 26 Dick Perry Avenue, Kensington WA 6151ABN 24 609 540 2851300 589 310 | contact@nera.org.au

nera.org.au

@NERAnetwork

NERA – National Energy Resources Australia