RM 16076 ELK Petroleum AR16 Financials Finalweb

ABN 38 112 566 499
2016 ANNUAL REPORT

ELK PETROLEUM LTD
CONTENTS
Directors’ Report 01
Auditor’s Independence Declaration 20
Statement of Profit or Loss and Other Comprehensive Income 22
Statement of Financial Position 23
Statement of Changes in Equity 24
Statement of Cash Flows 25
Notes to the Financial Statements 26
Directors’ Declaration 63
Independent Auditor’s Report to the members of Elk Petroleum Ltd 64
Shareholders Information 66
Corporate Directory IBC
ANNUAL REPORT 2016 01
DIRECTORS’ REPORT
The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the ‘Group’)
consisting of Elk Petroleum Ltd (referred to hereafter as the ‘Company’ or ‘parent entity’) and the entities it controlled at the end of, or during,
the year ended 30 June 2016.
DIRECTORS
The following persons were Directors of Elk Petroleum Ltd during the whole of the financial year and up to the date of this report, unless
otherwise stated:
Neale Taylor (Chairman)
Bradley Lingo (Managing Director) (appointed 1 August 2015)
Russell Krause
Matthew Healy
Tim Hargreaves
PRINCIPAL ACTIVITIES
The Company specialises in developing enhanced oil recovery (“EOR”) projects. During the year the principal activities of the Company
consisted of the development of a CO2 EOR project at the Grieve oil field in Wyoming, USA, continuation of operations at the Singleton Unit in
Nebraska in anticipation of future implementation of an EOR project in the Singleton Unit and the acquisition of the Singleton South oil field
in Nebraska focusing on development of potential by-passed oil pool on the southern flank of the Singleton Unit. The Grieve CO2 EOR project
is operated by Denbury Onshore LLC and current operations are focused on development of facilities and on CO2 and water injection to re-
pressure the Grieve field prior to commencing first oil production.
REVIEW OF OPERATIONS
The loss for the Group after providing for income tax amounted to $7,168,313 (30 June 2015: $3,645,970). The loss reflects the Company’s
increased corporate activities over the year as set out in the financial review (section f ) below.
Operations review
During the 2015-2016 financial year, the Company has continued development and assessment of four main projects.
a. Grieve Field, Elk 49% (from 35% as at 30 June 2016), and Denbury Operator 51% (from 65% as at 30 June 2016)
As reported in last year’s annual report Elk having dismissed the lawsuit with Denbury started the new year in extensive mutually agreed good
faith negotiations with our Joint Venture Partner. Considerable efforts during the year resulted in negotiations being completed and simultaneous
agreements signed early in the new financial year (August 5th 2016), closing both the Joint Venture restructure with Denbury, Elk moving from
a 35% to a 49% interest and the associated implementation of senior debt financing with Benefit Street Partners. Benefit Street Partners having
provided Elk with a US$58 million senior debt loan facility to be used in connection with the Grieve Project JV restructuring and project funding.
This restructure of the Grieve Joint Venture delivered a 51% increase in Elk net 2P Reserves to 5.3 MMbbls during FY 2015-16.
To maintain project delivery schedules during negotiations on the development of the Grieve CO2 EOR Project, for first oil, during the financial
year prior to completing the Joint Venture restructure, Elk already funded US$2 million as part of its US$55 million total commitment to the
Grieve JV Project. Elk’s remaining contribution commitments will be made over the next 18 months. First production from the Grieve enhanced
oil recovery project is targeted for the last quarter of 2017. Subsequent progress payments will comprise of both debt and equity contributions
and will continue under a fixed price turnkey contract between Elk and Denbury, with a milestone payments process overseen and verified
by an independent third party engineer. The remaining major engineering works to be completed on Grieve being the oil processing and CO2
recompression facilities works.
The CO2 enhanced oil recovery redevelopment plan for the Grieve Project is based on restoring the field’s original pre-production reservoir
pressure of approximately 3,000-3,100 PSI before commencing oil production. This eliminates the need to install artificial lift pumping
(Beam Pumps or ‘Nodding Donkeys’) to produce oil to surface, thereby reducing production well capital and operating expenditure.
Under the proposed development plan, all of the CO2 produced is recycled and injected back into the field to recover more of the remaining oil.
Ultimately at the end of Grieve field life the CO2 can be left in the fully depleted oil reservoirs or potentially reused on other CO2 EOR candidate
fields in the region, as the transmission infrastructure will already be in place.
Injection of CO2 and water has been undertaken on the Grieve Field since mid-2015 and field repressurisation is on schedule. As a result, a
milestone has been achieved in the Field with field pressure increasing above minimum miscible pressure of 2256 PSI (minimum miscible
pressure being the point when CO2 becomes miscible in oil) and downhole surveys in April 2016 indicated a downhole pressure of 2504 PSI.
At minimum miscible pressure CO2 begins to dissolve into the oil in the reservoir causing the oil to swell and reducing its viscosity. As the
pressure further increases through the continued injection of CO2, this enables the CO2 to displace the remaining oil from the rock pores in the
reservoir, pushing it towards production wells in the field. Reaching minimum miscible pressure is a key milestone in any successful miscible
CO2 enhanced oil recovery project. The Company believes that based on the current repressurisation and CO2 injection plan, Grieve Project
production is possible in Q4 2017. With Denbury supplying and covering the full cost of CO2 required to reach facility start-up and projected
point of positive operating cash flow.
02 ELK PETROLEUM LTD
DIRECTORS’ REPORT
b. Grieve Pipeline 100% Elk owned and operated.

Elk holds a 100% interest in the crude oil pipeline running from the Grieve oil field through its subsidiary Grieve Pipeline, LLC. The Grieve oil
pipeline is a 32-mile-long (8-inch diameter) steel pipeline that extends from the Grieve CO2 EOR project to a receiving station located on the
Spectra Energy oil storage facility in Casper, Wyoming, our point of oil sale. Casper is a regional export hub with onward oil export links via
pipeline, rail head and road.
Early in the financial year Elk received a draft proposed Asset Purchase Agreement from a potential pipeline buyer. After careful consideration
it was decided not to proceed with a sale. The pipeline was determined to be strategically important asset in two regards. First, the pipeline is
seen by Elk as a material piece of infrastructure to the development of the Grieve Project and its restructure as well as providing security for the
implementation of senior debt financing with Benefit Street Partners for the Grieve CO2 EOR project. Subsequent to end of year this significance
was borne out when Denbury entered into an oil transportation agreement with Elk to use the pipeline to transport to the market point of
sale in Casper. For Grieve Oil Export Pipeline transportation access the Grieve Unit will be charged US$3/bbl (escalated) on 100% of production
payable to Elk Grieve Oil Pipeline, LLC. Second, with the start-up of the Grieve CO2 EOR project it was recognised that the Grieve Pipeline could
also provide additional oil transport services to third parties generating additional income for the Company.
During the year Elk Grieve Oil Pipeline, LLC undertook a detailed condition survey and subsequent to year end pipeline remediation work is
currently underway, in order to be ready for first oil export in Q4 2017. Capital expenditure over the 2016-17 financial year will be $2.25 million
and covers pipeline repairs, cathodic protection, design and long lead items ordering along with installation and commissioning of equipment
at Grieve and Spectra facilities.
c. Singleton South Field 100% Elk owned and operated.
During the year Elk announced the acquisition of a 100% operated working interest in certain relatively low cost, low risk oil property’s from
a wholly-owned subsidiary of Oklahoma based Devon Energy Inc. The properties are immediately south and contiguous to Elk’s Singleton Oil
Field Enhanced Oil Recovery (EOR) Project in Banner County, Nebraska. Located in the north-eastern portion of the prolific Denver-Julesburg
Basin (the ‘DJ Basin’). The property was acquired for an entire consideration of US$100,000. Elk estimates that Devon’s total investment in the
acquired properties to be in excess of US$10 million.
The properties consist of:
• All of Devon’s oil and gas leasehold interests in Banner County, Nebraska covering 9,738 gross acres (5,987 net acres);
• Two oil exploration wells – one vertical well, Opis 1P and one horizontal well, Opis 1H – both of which have been completed as oil producers;
and
• All of the oil production, processing facilities, storage and oil truck load-out equipment.
The properties are essentially new with the leases first being acquired in 2012 and the Opis 1P well drilled and completed in early 2013 and the
Opis 1H well drilled and completed in late 2013 with production facilities constructed shortly thereafter.
In undertaking the pre-development technical review of the Singleton EOR Project, the Company had identified that in the southern portion
of the Singleton Oil Field some of the oil production was being contributed from a better developed lower Muddy Formation interval J3 sand.
This was later confirmed by Elk prior to purchase during detailed technical due diligence of the Devon Oil Properties, and analysis of drilling
results from the Opis 1P and Opis 1H exploration wells. The shallow depth and relatively thick section of J3 sand present in the Opis 1P and Opis
1H wells contained oil pay. Devon’s primary objective in drilling these 2 wells were the deeper (and after production testing) high water cut
non-commercial Mississippi Limestone oil play. The J3 oil sands were not tested and are now behind casing in these 2 suspended wells. With the
added bonus of newly installed oil production facilities at the Opis 1H production well we have the flexibility to support the Singleton Unit EOR
Project or renter the Opis 1P well and production test the J3 oil sand.
Elk estimates that the Devon Oil Properties contain approximately 3C contingent oil resources of 2.5 MMbbls and 78 Mbbls of 2P oil reserves net
to Elk. The acquisition represents a 25-35% increase in the Company’s current 3C contingent oil resources.
Subsequent to year end your Board has approved a budget of US $195k to start the production appraisal stage utilisiing the Devon Opis-1P well
by re-entering this well and completing the J3 sand to test its oil production potential over a long term oil production test. In addition, water
injection will be restarted in the Singleton Unit at the W3 water injection well.
The Company believes that if appraisal production testing at the Opis 1P and Opis 1H wells can be established, the J3 sand oil pool contained in
the acreage extending from the southern portion of the Singleton Oil Field southern boundary of Banner County may be able to be developed
in CY 2017.
d. Singleton Unit 100% Elk owned and operated.

Elk’s foundation project in the Nebraska portion of the DJ Basin is on the Singleton Oil Field and the Singleton EOR Project as well as extension
of this activity to other mature oil fields in the area around the Singleton Field. The main focus is on executing an EOR Project in the J1 and J2
sands of the Muddy Formation – the same formation and sands that are being redeveloped at the Company’s Grieve Oil Field CO2 EOR Project in
Wyoming. The acquisition during the year of the Devon Oil Properties to the south of the Singleton Oil Field present significant synergies for the
development of the overall Singleton Oil Field and the EOR Project.
The primary focus of Devon’s Opis 1P and 1H wells, the Mississippi Limestone had very high water cut oil in this primary objective. In order to
manage the produced water, Devon was required to truck a significant volume of water to a remote disposal location. At current oil prices the
cost of water disposal to a remote location via a trucking operation at an estimated cost of US$2.50 barrel of water made continuing production
uneconomic.
The produced water from the Opis 1P, from the Mississippi Limestone can provide a water production source necessary for repressuring the
Singleton Unit Oil Field as the initial phase of the EOR Project in the primary oil producing J1 and J2 sands. The cost of this solution is estimated
to be approximately USD0.15 per barrel of water. The presence of a much larger unexploited oil pool in the southern quadrant of the Singleton
Unit and across the former Devon acreage ‘Singleton South’, the J3 sand can provide additional initial oil production in the greater Singleton Oil
Field redevelopment project area while the EOR flooding project is progressing.
During the year Elk has continued with water injection in the Singleton Unit at a modest rate of 4800 barrels per month at the W-10 injection
well. Subsequent to the year we are currently re-entering the W-4 injection well to check its integrity for injection restart. The Company will
be making a reservoir pressure measurement in the Opis-1 well after perforating the J3 sand at the end of August to ascertain if the J3 sand in
the area to the south of the Singleton Unit is in pressure communication with the J1 and J2 sands in the Singleton Unit. These data will help us
better devise an integrated field re-development plan that would optimise the use of EOR techniques available to us.
Throughout the year we have continued with negotiations with interested parties who have pipeline right of way rights to investigate the
construction of a CO2 pipeline from corn ethanol plants in eastern Nebraska to our oil fields in the DJ basin for EOR purposes.
e. Environmental regulation
The consolidated entity’s operations are subject to certain laws regarding environmental matters and discharge of hazardous waste materials.
The consolidated entity conducts its activities in an environmentally responsible manner in accordance with all applicable laws and regulations.
The directors are not aware of any breaches in relation to environmental matters.
f. Financial review
The consolidated entity incurred a loss of $7,168,313 after providing for income tax (2015: $3,645,970). Revenue remained limited during the
year, with the Company in a restructuring, development and assessment phase throughout the year, with first oil expected from the Grieve
Project JV in December 2017 quarter.
The major cost drivers contributing to the increased 2015-16 loss included increased costs for use of consultants and legal costs to assess the
Grieve Project JV restructure, increased associated travel costs relating to the same assessment process, increasing the executive capacity and
corporate infrastructure of the Company with the appointment of a new Managing Director, Chief Financial Officer and Chief Operating Officer
during the year, increased interest costs relating to the convertible note funding implemented late in FY15 and recognising the $1.2m liability
for the Crow Tribe Dispute (refer Note 27).
Cash at the end of the period was A$18,103,239 which is primarily contributed by the rights issue in late June 2016 and the Company raised
approximately A$11 million (before costs) subsequent to the end of the reporting period. The purpose of this raising was for funding of the
restructuring of the Grieve Project JV and ongoing working capital.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There were no significant changes in the state of affairs of the Group during the financial year other than those disclosed elsewhere in this report.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

Subsequent to year end, there have been three major events, being
i. Restructuring of the Grieve CO2 Enhanced Oil Recovery (EOR) Project (“Grieve Project”) Joint Venture (“Grieve JV”) with Denbury Onshore LLC
(“Denbury”);
ii. Completing a senior term loan facility with Benefit Street Partners (“BSP”) for US$58 million for the Grieve Project restructure. The Company
has transferred USD10.2 million to a specific Reserve Account as required under the financing arrangement with BSP; and
iii. Shortfall placement subscriptions for all remaining Shortfall shares under the non-renounceable pro-rata entitlement offer (“Entitlement
Offer”) launched on 3 June 2016 and partially completed on 23 June 2016.
DIRECTORS’ REPORT
The Company executed final binding agreements and completed the restructure of the Grieve Project JV with Denbury on Thursday 4 August
2016 Central Daylight Time (“CDT”) in Dallas, Texas. The key terms of the completion of the restructure of the Grieve CO2 EOR Project joint
venture between Elk and Denbury are:
• Elk’s working interest in Grieve Project increases to 49% with the right to receive 70% of the net operating cash flow from the first 2 million
barrels of production;
• Denbury remains the Operator of the Grieve Project JV and provides a firm commitment to complete the Grieve CO2 EOR Project
development pursuant to a fixed price turnkey contract containing a detailed field development and execution plan and detailed
completion milestones;
• Under the fixed price turnkey contract, Elk will fund US$55 million to complete the development of the Grieve Project with Denbury to cover
any cost overruns;
• Denbury will supply and cover full cost of CO2 to be injected into the Grieve field required to reach first oil production and any additional CO2
up to 82 BCF will be provided on advantageous commercial terms at Denbury’s cost of CO2;
• All of the oil production from the Grieve Project will be shipped via Elk’s 100%-owned and operated Grieve Oil Pipeline under a binding long-
term regulated pipeline tariff at a haulage charge of US$3.00 per barrel;
• Denbury has transferred to Elk a 49% interest in any Grieve Project assets with an estimated value of approximately US$60 million;
• Denbury will forego recovery from Elk 100% of Grieve Project funding indebtedness with an estimated amount of US$20 million associated
with the prior joint venture funding arrangements; and
• Elk and Denbury have entered into a binding settlement agreement under which all prior claims arising out of the original Grieve Project JV
arrangements will be released including legal claims included in the civil lawsuit which the parties previously withdrew pending negotiating
a commercial settlement (see ASX announcement 16 July 2015).
The Company completed closing a senior term loan facility with Benefit Street Partners (“BSP”) for US$58 million for the Grieve Project JV
restructure on Friday 5 August 2016 evening Dallas, Texas local time.
Funds under the Term Loan facility with BSP can only be used to fund the US$ 55 million in field development expenditures committed to by
Elk as part of the Grieve JV restructure, minor upgrades to Elk’s 100% owned Grieve oil pipeline and associated costs. Funds under the Term Loan
facility are immediately available for this purpose.
In conjunction with putting in place the Term Loan facility the Company has implemented a significant oil price hedging program to underwrite
a strong oil price going forward for the Grieve Project. Under this program the Company has purchased US$45/bbl put options for 75% of its
share of forecast oil production from the Grieve Project during in calendar year 2017 and 2018. The put options create a US$45/bbl floor price
for the hedged volumes, but do not limit the oil price upside for the project.
The Company launched an entitlement offer on 3 June 2016, and on 27 June 2016 issued approximately 261.6 million new fully paid ordinary
shares at $0.075 per share to raise $19.6 million (before costs). In August and September 2016 Elk issued approximately 146.5 million shares
priced at $0.075 per share (“Shortfall Shares”) to sophisticated investors and institutional investors new to the Elk register to raise an additional
$11 million.
Also subsequent to year, the following changes were made to the Group structure:
Ownership interest
Principal place of
business/Country Current 2016
Name of incorporation % %
Elk Petroleum Inc. LLC USA 100.00 100.00
Grieve Pipeline LLC* USA 100.00 100.00
North Grieve LLC* USA 100.00 100.00
Natrona Pipeline LLC* USA Ceased 100.00
Elk Operating Company LLC* USA 100.00 100.00
Elk Grieve Project LLC* USA 100.00 100.00
Singleton EOR Project LLC* USA 100.00 100.00
* Subsidiaries of Elk Petroleum Inc.
No other matter or circumstance has arisen since 30 June 2016 that has significantly affected, or may significantly affect the Group’s operations,
the results of those operations, or the Group’s state of affairs in future financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

Information as to likely developments in the operations of the consolidated entity and expected results of those operations are disclosed in
this report.
ENVIRONMENTAL REGULATION
The consolidated entity’s operations are subject to certain laws regarding environmental matters and discharge of hazardous waste materials.
The consolidated entity conducts its activities in an environmentally responsible manner in accordance with all applicable laws and regulations.
The directors are not aware of any breaches in relation to environmental matters.
INFORMATION ON DIRECTORS
Name: Neale Taylor
Title: Non-Executive Director and Chairman
Experience and expertise: Dr Taylor has extensive technical, operating and commercial experience in oil and gas exploration and
production with Esso Australia, Nexus Energy, and Cambrian Oil & Gas Plc. He is a former non-executive director
of Terra Gas Trader, former non-executive chairman of Tap Oil, a former managing director of Cambrian Oil &
Gas Plc and director of various subsidiaries of Xtract Energy Plc. He is a member of the Society of Petroleum
Engineers and a Fellow of the Australian Institute of Company Directors.
Other current directorships: None
Former directorships None
(last 3 years):
Special responsibilities: Member of the audit committee
Interests in shares: 1,129,771 shares
Interests in options: 50,000 $0.25 22 July 2017 listed options
Interests in rights: 406,731 performance rights, 180,000 retention rights
Name: Bradley Lingo (appointed 1 August 2015)
Title: Managing Director and Chief Executive Officer
Experience and expertise: Mr Lingo is an experienced international resource & energy executive with a proven track record of successfully
of building companies in the upstream and midstream oil & gas energy sectors. Mr Lingo held previous
roles in business development, new ventures, mergers and acquisitions and corporate finance with Tenneco
Energy and El Paso Corporation in the US and Australia, and Senior Vice President and Head of Oil & Gas at
the Commonwealth Bank of Australia. More recently Mr Lingo was Managing Director and CEO of Drillsearch
Energy Limited, where he oversaw more than an eight-fold increase in share price and market cap over a period
of six years, helping build that company into one of Australia’s leading onshore oil and gas producers. Mr Lingo’s
skills include leadership, ability to build market confidence, financial and technical skills, organisation building,
business development and funding capability, and entrepreneurship. His experience also includes equity
and debt capital raising, project and transaction financing and structuring to achieve attractive financial, tax,
accounting and legal treatment for complex commercial, project and financing transactions, similar to Elk’s
current needs.
Other current directorships: Oilex Pty Ltd
Former directorships Drillsearch Energy Limited, Mont Dór Petroleum Limited, Ambassador Energy Limited, Acer Energy Limited
(last 3 years):
Special responsibilities: Member of the risk committee and remuneration committee
DIRECTORS’ REPORT
Name: Matt Healy

Title: Non-Executive Director
Experience and expertise: Mr Healy is an executive with more than 18 years experience working in senior management and operational
roles for multinational organisations, primarily working on asset strategy and project development. His
particular expertise is in business management as well as the overall repositioning and development of large
scale property assets having held executive positions at industry leading companies such as the Westfield Group
and Lend Lease Group. Matt holds a Bachelor of Engineering (Applied Science) from University of Technology,
Sydney as well as an MBA Executive from the Australian Graduate School of Management (AGSM), Sydney.
Other current directorships: None
(last 3 years):
Special responsibilities: Member of the audit committee and chair of the remuneration committee
Name: Russell Krause
Experience and expertise: Mr Krause has over 25 years’ experience in Stockbroking and Investment Management with a primary focus on
the resources sector. He has held a number of Directorships and Senior Management positions with a number
of Australia’s leading firms, including firms with US oil and gas assets. For the past ten years he has worked on
a number of North American oil and gas projects in relation to Capital Raising and Corporate Advisory.
Other current directorships: Carbine Tungsten Limited, Red Sky Energy Limited, Austex Oil Limited
(last 3 years):
Special responsibilities: Member of the remuneration committee, risk committee and chair of the audit committee
Interests in shares: None
Interests in options: None
Name: Timothy Hargreaves
Experience and expertise: Mr Hargreaves has over 35 years’ experience in technical and managerial roles in the petroleum and
minerals sectors in Asia and the Middle East for major companies including BHP, Union Texas Petroleum and
Fletcher Challenge Petroleum as well as start-ups and independents. He has led successful exploration and
commercialisation campaigns in Pakistan and Egypt which were dependent upon technical and commercial
innovation in complex regulatory environments. Since 2009 he has been Research Director of Resources for
Republic Investment Management, a Singapore based investment fund that is a major investor in Elk and has
been a major participant in the rejuvenation of Elk including being the lead investor in the Convertible Loan
Facility of April 2015 and a sub-underwriter of the June 2016 Entitlement Offer. He is a Director of Skyland
Petroleum Limited (ASX : SKP) and is a former Director of The Environmental Group Limited (ASX : EGL).
Other current directorships: Skyland Petroleum Limited
Former directorships The Environmental Group Limited
(last 3 years):
Special responsibilities: Chair of the risk committee
EXECUTIVES
The names and details of the Company’s Executive and Company Secretaries of Elk Petroleum in office during the financial year and until the
date of this report are as follows. Secretaries were in office for this entire period unless otherwise stated.
Alexander Hunter – CFO, Sydney (appointed 11 April 2016)
Mr Hunter has over ten years’ experience in resources sector M&A and capital raising, and previously worked for ten years in construction and
infrastructure project management. Alex was most recently General Manager Business Development at Drillsearch Energy where he helped to
rationalise and grow the business leading various successful takeovers, divestments and capital raisings. He holds an MBA from University of
Southern California Marshall School of Business, a Bachelor of Engineering, and postgraduate qualifications in corporate finance and business law.
David Evans – COO, Sydney (appointed 1 May 2016)
Mr Evans is a geologist with 30 years upstream global oil & gas development, production and exploration experience, with significant exposure
to Brownfield redevelopments and EOR projects. He joins Elk Petroleum from the former Drillsearch where over a 6-year period he held the
positions of Chief Technical Officer and Acting Chief Operating Officer.
David Franks – B.Ec, CA, F Fin, JP Joint Company Secretary
Mr Franks has 20 years in finance and accounting, initially qualifying with PricewaterhouseCoopers (formerly Price Waterhouse) in their Business
Services and Corporate Finance Divisions, Mr Franks has been CFO, Company Secretary and/or Director for numerous ASX listed and unlisted
public and private companies, in a range of industries covering energy retailing, transport, financial services, mineral exploration, technology,
automotive, software development and healthcare.
Current directorships: JCurve Solutions Limited.
Andrew Bursill – B. Agr. Ec, CA Joint Company Secretary
Mr Bursill qualified with PricewaterhouseCoopers then began his career as an outsourced CFO and Company Secretary in 1998. Mr Bursill has been
CFO, Company Secretary and/or director for numerous ASX listed, unlisted public and private companies, in a range of industries covering mineral
exploration, oil and gas exploration, biotechnology, technology, medical devices, retail, venture capital and wine manufacture and distribution.
Current directorships: Argonaut Resources Limited and ShareRoot Limited.
J. Scott Hornafius – President, Denver
Dr Hornafius has 32 years of exploration, technical, management and funding experience in the oil and gas industry including 16 years with
Mobil in the USA, PNG and UK before founding MegaEnergy in 2000. As President of Mega Energy he developed a 100,000 acre position over
the Marcellus shale gas play in the Appalachian Basin which was ultimately divested for over $100 million.
MEETINGS OF DIRECTORS
The number of meetings of the Company’s Board of Directors (‘the Board’) and of each Board committee held during the year ended 30 June
2016, and the number of meetings attended by each director were:
Full Board Audit Committee Remuneration Committee

Attended Held Attended Held Attended Held
N. Taylor 18 18 2 2 1 1
B. Lingo* 16 16 – – – –
M. Healy 16 18 2 2 1 1
R. Krause 14 18 2 2 – 1
T. Hargreaves 18 18 – – – –
Held: represents the number of meetings held during the time the director held office or was a member of the relevant committee.
* Appointed 1 August 2015
There were no separate risk committee meetings held during the year.
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)

This Remuneration Report outlines the remuneration arrangements which were in place during the year, for the directors and other key
management personnel of Elk Petroleum. The remuneration details of key management personnel during the year are set out in the table
below. There are no other key management personnel of the consolidated entity other than those listed.
The remuneration report is set out under the following main headings:
• Principles used to determine the nature and amount of remuneration
• Details of remuneration
• Service agreements
• Share-based compensation
• Additional information
• Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration

The objective of the Group’s and Company’s executive reward framework are to provide incentives for employees to pursue growth in Elk’s
share price, reward performance, reflects the Company’s state of affairs at any given time, is appropriate for the results delivered and ensure the
Company remains competitive in recruiting high-quality executive and technical professionals. The Board of Directors (‘the Board’) ensures that
executive reward satisfies the following key criteria for good reward governance practices:
• competitiveness and reasonableness;
• acceptability to shareholders;
• performance linkage/alignment of executive compensation; and
• transparency.
The Remuneration Committee is responsible for recommending and reviewing remuneration arrangements for the Company’s directors and
executives. The performance of the consolidated entity and Company depends on the quality of its directors and executives. The remuneration
philosophy is to attract, motivate and retain high performance and high quality personnel.
In accordance with best practice corporate governance, the remuneration of non-executive directors and executive remunerations are
administrated under separate structures and systems.
Non-Executive Directors and Company Secretary remuneration
The aggregate amount of remuneration that may be paid to non-executive directors is $350,000. This remuneration may be divided among
the non-executive directors in such a fashion as the Board may determine. Notice of any proposed increase in the aggregate amount of non-
executive directors’ remuneration must be given to members in the notice convening the general meeting at which the increase in aggregate
amount is to be proposed. Non-executive directors also receive retention rights and performance rights as supplementary incentives in
accordance with the shareholder approved Non-Executive Directors & Advisers (“NEDA”) Plan.
Executive remuneration
The Group and Company aims to reward executives with a level and mix of remuneration based on their position and responsibility, which is
both fixed and variable.
The executive remuneration and reward framework has four components:
• base pay or fee and non-monetary benefits (fixed annual remuneration)
• short term incentives
• long term incentives
• other remuneration such as superannuation, long service leave and special allowances
The combination of these components comprises the executive’s total remuneration.
Remuneration of Elk’s key management personnel comprises some or all of the following elements: fixed salary/fee; rights scheme; and other
benefits including motor vehicle allowances and health insurances.
1. Fixed Annual Remuneration (‘FAR)

Each director and employee is paid a fixed annual salary or fee in cash. The Company’s objective is that the fixed annual remuneration be within
the range of +/- 20% of the prevailing competitive market practice.
2. Short Term Incentives (‘STI’)
The Board retains the discretion to make special cash awards (up to 20% FAR). In addition to this, the Board may also offer Funding and
Retention Awards to executives in accordance with their employment contracts which are approved by the shareholders. For the year ended
30 June 2016, the Company has provided a cash bonus of $146,765 and ordinary shares to the value of $50,235 to Mr Lingo in accordance with
these awards which were previously approved by the shareholders in the 2015 AGM.
3. Long Term Incentives (‘LTI’)
Long term incentives are made as share-based payments in the form of retention rights and performance rights within the Company’s
Employee Incentive Rights (‘EIR’) Plan and Non-Executive Directors & Advisers (“NEDA”) Plan. These plans have been approved by shareholders
and full explanation of these plans are available on Elk’s website: www.elkpet.com. There has been no change in the plan’s rates and criteria
for the 30 June 2016 year end. As noted below the Company is taking a review of its incentive plan (no awards has been made under these
incentive plans subsequent to 30 June 2016). The Company retains a previous Employee Options Plan, but no new options have been issued
since approval of the EIR and NEDA plans. All retention and performance rights granted to directors were approved by shareholders under ASX
Listing Rule 10.14.
4. Other remuneration (including superannuation, long service leave and special allowances)
The Company follows regulated requirements in regard to superannuation and long service leave.
Consolidated entity performance and link to remuneration
Remuneration incentives under existing employee plans for certain individuals are directly linked to performance of the consolidated entity.
Vesting of performance rights are dependent on share price targets being met.
Remuneration consultants
During the year, no remuneration consultants were engaged. See below for remuneration consultant engaged post 30 June 2016.
Voting and comments made at the Company’s Annual General Meeting (‘AGM’)
At the 30 June 2014 year end AGM, the remuneration report vote for, while carried, had more than 25% of the votes cast against the resolution
and as a result, this constituted a first strike for the purposes of the Corporations Act.
At the 30 June 2015 year end AGM, the remuneration report vote was carried by poll, with 97.90% of the votes cast for the resolution and as a
result there was no second strike for the purposes of the Corporations Act. The Company therefore has no strike against it remuneration report
going into the 30 June 2016 year end AGM.
Post year end incentive review
Subsequent to 30 June 2016, the Board commenced a review of its remuneration framework for employees, non-executive directors and
advisors. The Company has retained the independent remuneration specialist group, Mastertek, to assist the Company (1) to benchmark its base
pay, fees and non-monetary benefits, and (2) develop proposals to revise the Company’s incentive or reward plans.
The latter work aims to better align incentives/rewards with the changed nature of the Company’s activities with rapidly approaching first oil
production and cash flow from its Grieve CO2 EOR project as well as initiating development work at its Singleton South and Singleton Unit
properties and seeking new producing properties with EOR potential.
The focus of this re-alignment will be to adopt revised incentive/reward plans with awards linked to increases in Proved Developed Producing
Reserves and increases in annual oil or oil-equivalent production. Awards are likely to be paid out in shares or a mixture of cash and shares
depending upon increases achieved.
This change in incentive/reward focus was flagged in July 2015 when the Company announced a summary of the current MD/CEO’s
employment terms and conditions, including the Company’s commitment to develop and seek shareholder approval for such an incentives or
reward system.
This work is underway and one or more resolutions are likely to be tabled for shareholder consideration at the Company’s 2016 AGM. It is likely
any new approved plan/s would apply to performance from 1 July 2016 and no incentive rights under the Company’s existing plans have been
granted for periods from 1 July 2016 pending adoption of one or more new plans.
DIRECTORS’ REPORT
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in the following tables.
The key management personnel of the Group consisted of the following directors of Elk Petroleum Ltd:
• Neale Taylor
• Matthew Healy
• Russell Krause
• Tim Hargreaves
• Bradley Lingo (appointed 1 August 2015)
And the following persons:
• Alex Hunter – Chief Financial Officer, Sydney
• David Evans – Chief Operating Officer, Sydney
• Scott Hornafius – President of Elk’s subsidiaries in Denver, US
• David Franks and Andrew Bursill – Joint Company Secretaries
Post-
employment Long-term Share-based
Short-term benefits benefits benefits payments
Director/KMP Cash Super- Long service Equity-
fees bonus Other annuation leave settled Total
2016 $ $ $ $ $ $ $
Non-Executive Directors:
N. Taylor1 135,000 – 1,000 15,000 – 16,342 167,342
M. Healy 67,500 – – – – 467 67,967
R. Krause 45,000 – – – – – 45,000
T. Hargreaves 45,000 – – – – – 45,000
Executive Directors:
B. Lingo* 297,976 146,765 – 22,858 – 50,235 517,834
Other Key Management Personnel:

A. Hunter** 63,031 – – 4,827 – – 67,858
D. Evans*** 46,749 – – 3,865 – – 50,614
S. Hornafius**** 479,852 – 45,341 19,194 – 37,988 582,375
D. Franks 2
– – – – – 5,565 5,565
A. Bursill2 – – – – – – –
1,180,108 146,765 46,341 65,744 – 110,597 1,549,555
* Appointed 1 August 2015

** Appointed 11 April 2016
*** Appointed 1 May 2016
**** See service agreement on page 13 for S Hornafius’ remuneration
1. Excludes consultancy fees paid to entity related to N. Taylor, refer to Note 29, related party transactions.
2. D. Franks and A. Bursill company secretary services are paid to Franks & Associates Pty Ltd, a company in which they are a director and principal
respectively. Franks & Associates Pty Ltd were paid $227,455 (2015: $168,766), excluding GST and out-of-pocket expenses, during the year.
Post-
employment Long-term Share-based
Short-term benefits benefits benefits payments
Director/KMP Base salary Super- Long service Equity-
fees and fees Other annuation leave settled Total
2015 $ $ $ $ $ $ $
N. Taylor 114,920 164,545 1,000 20,080 – 24,530 325,075
M. Healy 63,750 – 1,000 – – 467 65,217
R. Krause* 13,125 – – – – – 13,125
T. Hargreaves** 6,544 – – – – – 6,544
T. Strasser*** 47,251 – 1,000 4,374 – 4,298 56,923
B. Smith**** 34,379 – – 3,184 – 4,313 41,876
R. Cook**** 36,563 – – – – 17,116 53,679

S. Hornafius 420,767 – 35,276 12,566 – 75,488 544,097
D. Franks – – – – – 5,565 5,565
A. Bursill – – – – – – –
737,299 164,545 38,276 40,204 – 131,777 1,112,101
* Appointed 13 March 2015

** Appointed 12 May 2015
*** Ceased 13 March 2015
**** Ceased 21 November 2014
DIRECTORS’ REPORT
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Fixed remuneration At risk – STI At risk – LTI

Name 2016 2015 2016 2015 2016 2015
N. Taylor 90% 92% – – 10% 8%
M. Healy 99% 99% – – 1% 1%
R. Krause 1
100% 100% – – – –
T. Hargreaves 2
100% 100% – – – –
T. Strasser3 – 92% – – – 8%
B. Smith4 – 90% – – – 10%
R. Cook4 – 68% – – – 32%
B. Lingo 5
62% – 28% – 10% –

A. Hunter6 100% – – – – –
D. Evans 7
100% – – – – –
S. Hornafius 93% 86% – – 7% 14%
D. Franks – – – – 100% 100%
A. Bursill – – – – – –
1. Appointed 13 March 2015 4. Ceased 21 November 2014 7. Appointed 1 May 2016

2. Appointed 12 May 2015 5. Appointed 1 August 2015
3. Ceased 13 March 2015 6. Appointed 11 April 2016
Service agreements
Managing Director (MD) and Chief Executive Officer (CEO) – Bradley Lingo (effective 1 August 2015)
From 1 August 2015, Mr Lingo commenced employment as Managing Director (MD) and Chief Executive Officer (CEO) under an executive
employment agreement until 30 June 2018. The term can be extended for a further year by mutual agreement in writing one year ahead of
expiry of the term. Mr Lingo may resign from his position and thus terminate his contract at any time by giving six months written notice.
The Company may terminate his employment agreement by providing six months written notice or providing payment in lieu of the notice
period. The Company may terminate the contract at any time without notice if serious misconduct has occurred. The contract provides for
Mr Lingo to participate in the Company’s retention rights based on length of service under the EIR Plan. In addition, Mr Lingo is entitled to
additional awards in cash or shares for securing additional funding and to retention rights based on the Company’s growth in reserves and
production. All awards are subject to shareholder approval, however, in the event shareholder approval is not obtained, the Company shall
pay the cash equivalent of a vested award’s value.
Mr Lingo’s base annual remuneration salary was initially set at $350,000, inclusive of superannuation contributions and subject to annual
adjustment. This has increased to $400,000 for the year ended 30 June 2017 further to the terms and conditions under the Service Agreement.
Chief Financial Officer (CFO) – Alexander Hunter (effective 11 April 2016)
From 11 April 2016, Mr Hunter commenced employment as Chief Financial Officer (CFO) under an executive employment agreement until
30 June 2019. The term can be extended by mutual agreement in writing one year ahead of expiry of the term. Mr Hunter may resign from
his position and thus terminate his contract at any time by giving three months written notice. The Company may terminate his employment
agreement by providing six months written notice or providing payment in lieu of the notice period. The Company may terminate the contract
at any time without notice if serious misconduct has occurred. Mr Hunter is entitled to additional awards in cash or shares based on the
Company’s growth in reserves and production. All awards are subject to shareholder approval, however, in the event shareholder approval is
not obtained, the Company shall pay the cash equivalent of a vested award’s value.
Mr Hunter’s base annual remuneration salary is set at $300,000, inclusive of superannuation contributions and subject to annual adjustment.
Chief Operating Officer (COO) – David Evans (effective 1 May 2016)

From 1 May 2016, Mr Evans commenced employment as Chief Operating Officer (COO) under an executive employment agreement until
30 June 2019. The term can be extended by mutual agreement in writing one year ahead of expiry of the term. Mr Evans may resign from
his position and thus terminate his contract at any time by giving three months written notice. The Company may terminate his employment
agreement by providing six months written notice or providing payment in lieu of the notice period. The Company may terminate the contract
at any time without notice if serious misconduct has occurred. Mr Evans is entitled to additional awards in cash or shares based on the
Company’s growth in reserves and production. All awards are subject to shareholder approval, however, in the event shareholder approval is
not obtained, the Company shall pay the cash equivalent of a vested award’s value.
Mr Evans’ base annual remuneration salary is set at $300,000, inclusive of superannuation contributions and subject to annual adjustment.
Chief Executive Officer (CEO) to 31 July 2015, president Elk Petroleum Inc. – Scott Hornafius
Dr Hornafius commenced employment as Chief Executive Officer of the Company and President of Elk Petroleum Inc. from 1 June 2013
for a period of 3 years which expired on 30 June 2016. Dr Hornafius is currently employed on an ongoing monthly basis at a base annual
remuneration of US$350,000 per annum.
Share-based compensation
Issue of shares
Details of shares issued to directors and other key management personnel as part of compensation during the year ended 30 June 2016 are set
out below:
Name Date Shares Issue price $

B. Lingo 30 June 2016 610,266 $0.082 50,235
Options
There were no options over ordinary shares issued to directors and other key management personnel as part of compensation that were
outstanding as at 30 June 2016.
There were no options over ordinary shares granted to or vested by directors and other key management personnel as part of compensation
during the year ended 30 June 2016.
Performance rights
The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration of directors and other key
management personnel in this financial year or future reporting years are as follows:
Fair value
Vesting date and per right at
Grant date exercisable date Expiry date grant date
13/08/2013 30/06/2016 30/06/2016 $0.032
30/11/2013 30/06/2016 30/06/2016 $0.030
30/11/2013 30/06/2016 30/06/2016 $0.045
30/11/2013 30/06/2017 30/06/2017 $0.022
30/11/2013 30/06/2018 30/06/2018 $0.007
05/09/2014 30/06/2017 30/06/2017 $0.020
18/12/2014 30/06/2017 30/06/2017 $0.002
30/06/2016 30/06/2018 30/06/2018 $0.049
Performance rights granted carry no dividend or voting rights.

DIRECTORS’ REPORT
Details of performance rights over ordinary shares granted and vested for directors and other key management personnel as part of
compensation during the year ended 30 June 2016 are set out below:
Value of Value of
Number of rights rights
rights granted vested
Name Grant date Vesting date granted $ $
N. Taylor* 30/06/2016 30/06/2018 280,000 13,832 –
M. Healy* 30/06/2016 30/06/2018 40,000 1,976 –
R. Krause* 30/06/2016 30/06/2018 40,000 1,976 –
T. Hargreaves* 30/06/2016 30/06/2018 40,000 1,976 –
S. Hornafius 30/06/2016 30/06/2018 400,000 19,760 –
D. Franks 30/06/2016 30/06/2018 250,000 12,350 –
* These rights were issued under the Shareholder approved NEDA Plan, where approval had been sought under ASX Listing Rule 10.14.
Retention rights
The terms and conditions of each grant of retention rights over ordinary shares affecting remuneration of directors and other key management
personnel in this financial year or future reporting years are as follows:
Fair value
Vesting date and Share price target per right at
Grant date exercisable date Expiry date for vesting grant date
13/08/2013 30/06/2016 30/06/2016 $0.000 $0.080
18/12/2014 30/06/2017 30/06/2017 $0.000 $0.020
30/06/2016 30/06/2018 30/06/2018 $0.000 $0.082
Retention rights granted carry no dividend or voting rights.

The Board is cognisant of general shareholder concern that long-term equity-based reward for employees and directors should be linked to
the achievement by the Company or employee/director against certain retention and performance measures. The existing retention rights
and performance rights granted to EIR & NEDA plan participants are subject to the retention and performance measures previously approved
by the shareholders. Performance rights vest to ordinary shares on achievement of specific performance objectives and market based
performance-based on the Compound Annual Growth Rate (“CAGR”) of Total Shareholder Return (‘TSR”) achieved by the Company between
the beginning and end of the Measure Period (ie. over 3 years). No monies are payable on conversion to ordinary shares if the performance
rights vest. Retention rights vest to ordinary shares based on completion of service over a 3 year period. If the holder of a retention right ceases
service before the end of the vesting period, none of the retention rights vest into ordinary shares. On the other hand, 100% of the retention
rights vest into ordinary shares in the Company on full completion of the retention period. Both performance and retention rights are issue for
nil consideration and detailed criteria remain as set out in the Notice of the 2011 & 2014 AGM. The required measured performance must be
achieved by the Company or participant before rights vest and an appropriate proportion of shares are issued to an employee or director.
Details of retention rights over ordinary shares granted and vested for directors and other key management personnel as part of compensation
during the year ended 30 June 2016 are set out below:
Value of Value of Number of Value of

Number of rights rights rights rights
rights granted vested lapsed lapsed
Name Grant date Vesting date granted $ $ $
N. Taylor* 30/06/2016 30/06/2018 40,000 3,293 933 – –
M. Healy* 30/06/2016 30/06/2018 20,000 1,646 – – –
R. Krause* 30/06/2016 30/06/2018 20,000 1,646 – – –
T. Hargreaves* 30/06/2016 30/06/2018 20,000 1,646 – – –
* All these rights were issued under the Shareholder approved NEDA Plan, where approval had been sought under ASX Listing Rule 10.14.
Additional information
The earnings of the Group for the five years to 30 June 2016 are summarised below:
2016 2015 2014 2013 2012

$ $ $ $ $
Loss after income tax (7,168,313) (3,645,970) (7,346,965) (5,595,663) (3,912,862)
The factors that are considered to affect total shareholders return (‘TSR’) are summarised below:
2016 2015 2014 2013 2012

Share price at financial year end ($) 0.07 0.02 0.11 0.17 0.15
Basic earnings per share (cents per share) (2.72) (1.85) (4.08) (3.51) (2.87)
Additional disclosures relating to key management personnel

Shareholding
The number of shares in the Company held during the financial year by each director and other members of key management personnel of the
Group, including their related parties, is set out below:
Balance at the At appointment Balance at the

start of the year date Additions Other end of the year
Ordinary shares
N. Taylor* 715,545 – 392,115 22,111 1,129,771
M. Healy 1,353,008 – – – 1,353,008
T. Hargreaves 3,543,669 – 5,648,728 – 9,192,397
B. Lingo (appointed on 1 August 2015)** – 620,000 11,796,070 610,266 13,026,336
R. Krause – – – – –
S. Hornafius (President – US Operations) 235,408 – – – 235,408
D. Evans (COO) (appointed 1 May 2016) – 100,000 – – 100,000
A. Hunter (CFO) (appointed 11 April 2016) – – – – –
D. Franks (Joint Company Secretary) – – 1,750,000 – 1,750,000
A. Bursill (Joint Company Secretary) – – – – –
5,847,630 720,000 19,586,913 632,377 26,786,920
* Other – represent the conversion of retention rights

** Other – issued in relation to the vesting of A and B CEO awards
DIRECTORS’ REPORT
Option holding
The number of options over ordinary shares in the Company held during the financial year by each director and other members of key
management personnel of the Group, including their related parties, is set out below:
Balance at the Balance at the

start of the year Granted Exercised Other end of the year
Options over ordinary shares
N. Taylor 50,000 – – – 50,000
M. Healy 50,000 – – – 50,000
T. Hargreaves 833,333 – – – 833,333
B. Lingo (appointed on 1 August 2015) – – – – –
R. Krause – – – – –
S. Hornafius (President – US Operations) – – – – –
D. Evans (COO) (appointed 1 May 2016) – – – – –
D. Franks (Joint Company Secretary) – – – – –
933,333 – – – 933,333
Performance rights holding

The number of performance rights over ordinary shares in the Company held during the financial year by each director and other members of
key management personnel of the Group, including their related parties, is set out below:
Balance at the Balance at the

start of the year Granted Lapsed Other end of the year
Performance rights over ordinary shares
N. Taylor 1,543,228 280,000 (1,416,497) – 406,731
M. Healy – 40,000 – – 40,000
T. Hargreaves – 40,000 – – 40,000
R. Krause – 40,000 – – 40,000
S. Hornafius (President – US Operations) 7,280,327 400,000 (1,969,570) – 5,710,757
D. Franks (Joint Company Secretary) 614,425 250,000 (367,299) – 497,126
9,437,980 1,050,000 (3,753,366) – 6,734,614
Retention rights holding

The number of retention rights over ordinary shares in the Company held during the financial year by each director and other members of key
management personnel of the Group, including their personally related parties, is set out below:
Balance at the Exercised/ Balance at the

start of the year Granted expired/lapsed Other end of the year
Retention rights over ordinary shares
N. Taylor 175,000 40,000 (35,000) – 180,000
M. Healy 70,000 20,000 – – 90,000
T. Hargreaves – 20,000 – – 20,000
R. Krause – 20,000 – – 20,000
S. Hornafius (President – US Operations) – – – – –
D. Franks (Joint Company Secretary) – – – – –
245,000 100,000 (35,000) – 310,000
Loans to directors and executives

At the reporting date, there were no loans to directors and executives.
This concludes the remuneration report, which has been audited.

DIRECTORS’ REPORT
Shares under option

Unissued ordinary shares of Elk Petroleum Ltd under option at the date of this report are as follows:
Number
Grant date Expiry date Exercise price under option
23/07/2014 22/07/2017 $0.250 125,000
23/07/2014 22/07/2017 $0.250 2,600,000
29/07/2014 22/07/2017 $0.250 12,950,000
05/09/2014 22/07/2017 $0.250 7,000,000
01/04/2016 31/03/2018 $0.075 1,333,333
24,008,333
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the Company or of any
other body corporate.
Shares under performance rights

Unissued ordinary shares of Elk Petroleum Ltd under performance rights at the date of this report are as follows:
Number
Grant date Expiry date Exercise price under rights
30/11/2013 30/06/2017 $0.000 2,000,000
30/11/2013 30/06/2018 $0.000 2,000,000
05/09/2014 30/06/2017 $0.000 2,706,388
18/12/2014 30/06/2017 $0.000 126,731
30/06/2016 30/06/2018 $0.000 1,810,000
8,643,119
No person entitled to exercise the performance rights had or has any right by virtue of the performance right to participate in any share issue of
the Company or of any other body corporate.
Shares under retention rights

Unissued ordinary shares of Elk Petroleum Ltd under retention rights at the date of this report are as follows:
Number
Grant date Expiry date Exercise price under rights
05/09/2014 30/06/2017 $0.000 510,000
18/12/2014 30/06/2017 $0.000 226,286
30/06/2016 30/06/2018 $0.000 195,000
931,286
No person entitled to exercise the retention rights had or has any right by virtue of the retention right to participate in any share issue of the
Company or of any other body corporate.
Shares issued on the exercise of options

There were no ordinary shares of Elk Petroleum Ltd issued on the exercise of options during the year ended 30 June 2016 and up to the date of
this report.
Shares issued on the exercise of performance rights

There were no ordinary shares of Elk Petroleum Ltd issued on the exercise of performance rights during the year ended 30 June 2016 and up to
the date of this report.
Shares issued on the exercise of retention rights

The following ordinary shares of Elk Petroleum Ltd were issued during the year ended 30 June 2016 and up to the date of this report on the
exercise of retention rights granted:
Number of
Date retention rights granted Exercise price shares issued
13/08/2013 $0.000 25,750
INDEMNITY AND INSURANCE OF OFFICERS

Elk Petroleum has made an agreement to indemnify all the directors and officers of the Group against all indemnifiable losses or liabilities
incurred by each director and officer in their capacities as directors and officers of the consolidated entity. During the year Elk Petroleum paid
insurance premiums in respect of directors and officers liability insurance contracts for current officers of the Company, including officers of the
Company’s subsidiaries. The liabilities insured are damages and legal costs that may be incurred in defending civil or criminal proceedings that
may be brought against the officers in their capacity as officers of entities in the consolidated entity. The total amount of insurance premiums
paid has not been disclosed due to confidentiality reasons.
INDEMNITY AND INSURANCE OF AUDITOR

The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Company or any
related entity against a liability incurred by the auditor.
PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company,
or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or
part of those proceedings.
NON-AUDIT SERVICES
There were no non-audit services provided during the financial year by the auditor.
OFFICERS OF THE COMPANY WHO ARE FORMER PARTNERS OF BDO EAST COAST PARTNERSHIP
There are no officers of the Company who are former partners of BDO East Coast Partnership.
AUDITOR’S INDEPENDENCE DECLARATION

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this
directors’ report.
AUDITOR
BDO East Coast Partnership continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
Neale Taylor
Chairman
28 September 2016
Sydney
AUDITOR’S INDEPENDENCE DECLARATION
Tel: +61 2 9251 4100 Level 11, 1 Margaret St

Fax: +61 2 9240 9821 Sydney NSW 2000
www.bdo.com.au Australia
DECLARATION OF INDEPENDENCE BY GARETH FEW TO THE DIRECTORS OF ELK PETROLEUM LIMITED
As lead auditor of Elk Petroleum Limited for the year ended 30 June 2016, I declare that, to the best of
my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Elk Petroleum Limited and the entities it controlled during the period.
Gareth Few
Partner
BDO East Coast Partnership
Sydney, 28 September 2016
BDO East Coast Partnership ABN 83 236 985 726 is a member of a national association of independent entities which are all members of BDO Australia Ltd
ABN 77 050 110 275, an Australian company limited by guarantee. BDO East Coast Partnership and BDO Australia Ltd are members of BDO International Ltd,
a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved
under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.
CONTENTS
Statement of Profit or Loss and Other Comprehensive Income 22

Statement of Financial Position 23
Statement of Changes in Equity 24
Statement of Cash Flows 25
Notes to the Financial Statements 26
Directors’ Declaration 63
Independent Auditor’s Report to the members of Elk Petroleum Ltd 64
GENERAL INFORMATION
The financial statements cover Elk Petroleum Ltd as a group consisting of Elk Petroleum Ltd and the entities it controlled at the end of, or during,
the year. The financial statements are presented in Australian dollars, which is Elk Petroleum Ltd’s functional and presentation currency.
Elk Petroleum Ltd is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place
of business are:
REGISTERED OFFICE PRINCIPAL PLACE OF BUSINESS

Suite 4 Level 9 Exchange House
341 George Street Suite 101, Level 1
Sydney NSW 2000 10 Bridge Street
Australia Sydney NSW 2000
Australia
A description of the nature of the consolidated entity’s operations and its principal activities are included in the notes to the financial
statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 28 September 2016.
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the year ended 30 June 2016
Consolidated
2016 2015
Note $ $
Revenue 4 58,729 42,289
Expenses
Cost of sales (316,666) (263,582)
Professional and corporate services 5 (1,453,158) (1,019,422)
Administrative expenses 5 (936,477) (347,425)
Directors and employees costs 5 (2,050,133) (1,346,307)
Other expenses 5 (1,980,669) (430,770)
Finance costs 5 (489,939) (280,753)
Loss before income tax expense (7,168,313) (3,645,970)
Income tax expense 6 – –
Loss after income tax expense for the year attributable to the owners of (7,168,313) (3,645,970)
Elk Petroleum Ltd
Other comprehensive income
Items that may be reclassified subsequently to profit or loss

Foreign currency translation 43,164 892,763
Other comprehensive income for the year, net of tax 43,164 892,763
Total comprehensive income for the year attributable to the owners of
Elk Petroleum Ltd (7,125,149) (2,753,207)
Cents Cents
Basic earnings per share 35 (2.72) (1.85)
Diluted earnings per share 35 (2.72) (1.85)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
STATEMENT OF FINANCIAL POSITION

As at 30 June 2016
Consolidated
2016 2015
Note $ $
Assets
Current assets
Cash and cash equivalents 7 18,103,239 1,567,344
Trade and other receivables 8 1,800,703 168,172
Non-current assets classified as held for sale 9 – 813,479
Total current assets 19,903,942 2,548,995
Non-current assets
Property, plant and equipment 10 158,335 26,145
Oil and gas properties – Grieve project 11 38,478,594 26,030,398
Oil and gas properties – South Singleton Field 12 332,455 –
Oil and gas properties – Singleton project 13 2,717,413 2,883,331
Other 14 239,159 39,190
Total non-current assets 41,925,956 28,979,064
Total assets 61,829,898 31,528,059
Liabilities
Current liabilities
Trade and other payables 15 13,565,264 4,376,790
Borrowings 16 4,245 3,585,360
Total current liabilities 13,569,509 7,962,150
Non-current liabilities
Borrowings – Denbury JV 17 21,607,955 18,930,906
Other financial liabilities 18 487,248
Provisions 19 3,380,956 3,216,439
Total non-current liabilities 25,476,159 22,147,345
Total liabilities 39,045,668 30,109,495

Net assets 22,784,230 1,418,564
Equity
Issued capital 20 66,082,643 37,761,520
Reserves 21 1,903,338 1,690,482
Accumulated losses (45,201,751) (38,033,438)
Total equity 22,784,230 1,418,564
The above statement of financial position should be read in conjunction with the accompanying notes.
STATEMENT OF CHANGES IN EQUIT Y

Foreign Currency
Contributed Translation Option Accumulated
equity reserve reserve losses Total equity
Consolidated $ $ $ $ $
Balance at 1 July 2014 36,919,205 (1,290,329) 1,909,518 (34,387,468) 3,150,926
Loss after income tax expense for the year – – – (3,645,970) (3,645,970)
Other comprehensive income for the year,
net of tax – 892,763 – – 892,763
Total comprehensive income for the year – 892,763 – (3,645,970) (2,753,207)
Transactions with owners in their capacity

as owners:
Contributions of equity, net of transaction 842,315 – – – 842,315
costs (Note 20)
Share-based payments (Note 36) – – 178,530 – 178,530
Balance at 30 June 2015 37,761,520 (397,566) 2,088,048 (38,033,438) 1,418,564
Foreign Currency
Contributed Translation Option Accumulated
equity reserve reserve losses Total equity
Consolidated $ $ $ $ $
Balance at 1 July 2015 37,761,520 (397,566) 2,088,048 (38,033,438) 1,418,564
Loss after income tax expense for the year – – – (7,168,313) (7,168,313)
Other comprehensive income for the year,
net of tax – 43,164 – – 43,164
Total comprehensive income for the year – 43,164 – (7,168,313) (7,125,149)
Transactions with owners in their capacity

as owners:
Contributions of equity, net of transaction 28,321,123 – – – 28,321,123
costs (Note 20)
Share-based payments (Note 36) – – 169,692 – 169,692
Balance at 30 June 2016 66,082,643 (354,402) 2,257,740 (45,201,751) 22,784,230
The above statement of changes in equity should be read in conjunction with the accompanying notes.
STATEMENT OF CASH FLOWS

Consolidated
2016 2015
Note $ $
Cash flows from operating activities
Receipts from customers 24,084 38,952
Payments to suppliers (4,349,745) (3,238,825)
Interest received 11,056 4,451
Finance costs (1,229) (162,099)
Management fees and other receipts 30,283 20,080
Net cash used in operating activities 34 (4,285,551) (3,337,441)
Cash flows from investing activities

Acquisition of plant and equipment (175,654) (7,890)
Acquisition of leases (112,559) –
Exploration and development expenditure (2,887,322) (200,337)
Payment for security and bonds deposits (211,992) –
Proceeds from disposal of oil and gas properties, net of costs – 1,807,479
Proceeds from disposal of plant and equipment 22,667 –
Proceeds from release of security and bonds deposits – 960,466
Net cash from/(used in) investing activities (3,364,860) 2,559,718
Cash flows from financing activities

Proceeds from issue of shares 20 25,360,794 850,000
Share issue transaction costs (957,374) (137,222)
Proceeds from borrowings – 5,268,712
Repayment of borrowings (141,289) (4,068,754)
Net cash from financing activities 24,262,131 1,912,736
Net increase in cash and cash equivalents 16,611,720 1,135,013

Cash and cash equivalents at the beginning of the financial year 1,567,344 403,258
Effects of exchange rate changes on cash and cash equivalents (75,825) 29,073
Cash and cash equivalents at the end of the financial year 7 18,103,239 1,567,344
The above statement of cash flows should be read in conjunction with the accompanying notes.
NOTES TO THE FINANCIAL STATEMENTS

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently
applied to all the years presented, unless otherwise stated.
New, revised or amending Accounting Standards and Interpretations adopted

The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting
Standards Board (‘AASB’) that are mandatory for the current reporting period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Going concern
The Group incurred a loss for the year after tax of $7,168,313 (2015: $3,645,970) and a net cash out flow from operating activities of $4,285,551
(2015: $3,337,441). These outcomes reflect the Group’s pre-production development status on the Grieve CO2 EOR Project in Wyoming
and several early stage projects in Nebraska with material funding recently put in place. Profits are forecast to occur after the 2017/18 year.
The financial report has been prepared on the basis of a going concern but a number of short term sensitivities are noted, as described below.
Subsequent to year end the Company executed a US$58 million senior funding facility with Benefit Street Partners for the purpose of
funding a revised JV structure with Denbury for the development of the Grieve CO2 EOR Project and funding of project related Elk overheads.
The Company’s view based on operator project planning indicates that the Grieve CO2 EOR Project is expected to commence late in the
December quarter of 2017 and the Company expects the project to provide a long term material cash flow to the Group; however, net positive
cash flow to Group is not expected to occur until later in 2018. The Group has raised approximately $30 million additional equity subsequent to
the year-end to supplement the Grieve Project JV restructure requirements as well as cover development and operations on Elk’s other projects
and remaining corporate administrative costs over the intervening period. There exists material future timing and other uncertainties that bear
on the Company’s current financial position to meet all of these needs over this intervening period and may cast significant doubt over Elk’s
ability to continue as a going concern over this period.
It is noted that the Company’s current forecasts do not require any material raising (comparative to recent raisings undertaken by the Company)
unless a major transaction was contemplated.
Should the Group be unable to meet its short term funding requirements at the times required, it may be necessary to reduce costs, and/or raise
additional debt and/or equity, including realising the value of some or all assets and discharge its liabilities in the normal course of business at
amounts different to those stated in the financial statements.
Management believe that there is significant value of assets in excess of carrying value which would deliver cash above present cash needs
if asset sales were required. Hence the financial report has been prepared on the basis of a going concern since the Directors believe that
adequate funding will be raised to enable the Group to pay its debts as and when they become due for a period of twelve months from the
date of approving this report.
In a wider sense, until the Company has material positive cash flow from the Grieve CO2 EOR Project and other projects, which are under
development, the Company is likely to need to raise money from time to time for such new ventures and for corporate working capital
purposes in pursuit of its objectives to grow the value of the Company. Any such fund raisings may be such to factors beyond the control of
the consolidated entity and its Directors. When the Group requires further funding for its programs, then it is the Group’s intention that the
additional funds would be raised in a manner deemed most expedient and appropriate by the Board of Directors at the time.
The financial statements do not include any adjustment relating to the recoverability and classification of asset carrying amounts or the amount
of liabilities that might result should the Company be unable to continue as a going concern and meet its debts as and when they fall due.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board (‘AASB’) and the Corporations Act 2001, as appropriate for for-profit oriented entities.
These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards
Board (‘IASB’).
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of available-
for-sale financial assets, financial assets and liabilities at fair value through profit or loss, investment properties, certain classes of property,
plant and equipment and derivative financial instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its
judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the financial statements, are disclosed in Note 2.
Parent entity information

In accordance with the Corporations Act 2001, these financial statements present the results of the Group only. Supplementary information
about the parent entity is disclosed in Note 30.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Elk Petroleum Ltd (‘Company’ or ‘parent entity’)
as at 30 June 2016 and the results of all subsidiaries for the year then ended. Elk Petroleum Ltd and its subsidiaries together are referred to in
these financial statements as the ‘Group’.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the
entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date
that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated. Unrealised losses are
also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have
been changed where necessary to ensure consistency with the policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of
control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share
of the non-controlling interest acquired is recognised directly in equity attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the
subsidiary together with any cumulative translation differences recognised in equity. The Group recognises the fair value of the consideration
received and the fair value of any investment retained together with any gain or loss in profit or loss.
Operating segments
Operating segments are presented using the ‘management approach’, where the information presented is on the same basis as the internal
reports provided to the Chief Operating Decision Makers (‘CODM’). The CODM is responsible for the allocation of resources to operating
segments and assessing their performance.
Foreign currency translation

The financial statements are presented in Australian dollars, which is Elk Petroleum Ltd.’s functional and presentation currency. For the
subsidiaries located in the United States of America, these entities’ functional currency are denominated in US Dollars.
Foreign currency transactions
Foreign currency transactions are translated into their respective functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-
end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
Foreign operations
For the purposes of the presentation currency (Australian dollar), the assets and liabilities of foreign operations are translated into Australian
dollars using the exchange rates at the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars
using the average exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange
differences are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Revenue recognition
Revenue is recognised when it is probable that the economic benefit will flow to the Group and the revenue can be reliably measured.
Revenue is measured at the fair value of the consideration received or receivable.
Sale of goods
Sale of goods revenue is recognised at the point of sale, which is where the customer has taken delivery of the goods, the risks and rewards are
transferred to the customer and there is a valid sales contract. Amounts disclosed as revenue are net of sales returns and trade discounts.
Rendering of services
Rendering of services revenue is recognised when services have been completed.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of
a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

Note 1. Significant accounting policies (continued)
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Income tax
The income tax expense or benefit for the period is the tax payable on that period’s taxable income based on the applicable income tax rate for
each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the
adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are recovered
or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
• When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not
a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or
• When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the reversal
can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts
will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised
are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be recovered.
Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to
recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax
liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity
or different taxable entities which intend to settle simultaneously.
Financial instruments and other financial assets

Financial assets are recognised at fair value through profit or loss. Assets in this category are classified as current assets if they are held for
trading or are expected to be realised within 12 months of the reporting date.
Current and non-current classification

Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group’s normal operating
cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash
or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other
assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group’s normal operating cycle; it is held primarily for the
purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement
of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments
with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value.
Trade and other receivables

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any
provision for impairment. Trade receivables are generally due for settlement within 30 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written off by reducing the
carrying amount directly. A provision for impairment of trade receivables is raised when there is objective evidence that the Group will not
be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability
that the debtor will enter bankruptcy or financial reorganisation and default or delinquency in payments (more than 60 days overdue) are
considered indicators that the trade receivable may be impaired. The amount of the impairment allowance is the difference between the asset’s
carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to
short-term receivables are not discounted if the effect of discounting is immaterial.
Other receivables are recognised at amortised cost, less any provision for impairment.
Non-current assets or disposal groups classified as held for sale

Non-current assets and assets of disposal groups are classified as held for sale if their carrying amount will be recovered principally through a
sale transaction rather than through continued use. They are measured at the lower of their carrying amount and fair value less costs of disposal.
For non-current assets or assets of disposal groups to be classified as held for sale, they must be available for immediate sale in their present
condition and their sale must be highly probable.
An impairment loss is recognised for any initial or subsequent write down of the non-current assets and assets of disposal groups to fair value
less costs of disposal. A gain is recognised for any subsequent increases in fair value less costs of disposal of a non-current assets and assets of
disposal groups, but not in excess of any cumulative impairment loss previously recognised.
Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the
liabilities of assets held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of disposal groups classified as held for sale are presented separately on the face
of the statement of financial position, in current assets. The liabilities of disposal groups classified as held for sale are net off against the non-
current assets classified as held for sale on the face of the statement of financial position.
Joint ventures
The Group has recognised its joint venture arrangement with Denbury (“Denbury JV”) as a farm-out arrangement whereby the Group uses
the carrying amount of the interest before the farm-out as the carrying amount for the portion of the interest retained; credits any cash
consideration received against the carrying amount, with any excess included as a gain in profit or loss; and the Group does not record
exploration expenditures on the oil and gas properties made by the Denbury JV.
Property, plant and equipment

Costs and valuation
All items of property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment. The carrying values
are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. Where carrying
values exceed their recoverable amount, assets are written down to their recoverable amount.
Depreciation/Amortisation
Property, plant and equipment, excluding land, are depreciated at rates based on the expected useful economic life of each item, using the
straight line method. Oil field plant is amortised using the lesser of its useful life or the life of the field based on the straight-line or unit of
production method respectively. Buildings and equipment, which includes vehicles and furniture, are depreciated on the straight-line basis at
rates, which will reduce their book values to estimated residual values over their expected useful lives. Capitalised leased assets are depreciated
over the shorter of the estimated useful life of the asset or the lease term. The major depreciation rates for all periods presented are:
• Plant and equipment, including assets held under lease 4-10 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the consolidated
entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss. Any revaluation surplus reserve
relating to the item disposed of is transferred directly to retained profits.
Development expenditure
Well development expenditure represents the costs incurred in preparing wells for production and costs reclassified from exploration and
evaluation. These costs are capitalised to the extent they are expected to be recouped through successful exploitation of the related field. Once
production commences, these costs are amortised using the units-of-production method based on the estimated economically recoverable
reserves to which they relate or are written off if the field is abandoned.
Exploration and evaluation expenditure

Expenditure on exploration and evaluation is accounted for in accordance with the ‘area of interest’ method. Exploration and evaluation
expenditure and exploration licence acquisition costs are capitalised and subject to half yearly impairment testing and all exploration and
evaluation costs including general permit activity, geological and geophysical costs and new venture activity costs, are capitalised provided
the rights to tenure of the area of interest is current and either:
• the exploration and evaluation activities are expected to be recouped through successful development and exploitation of the area of
interest or, alternatively, by its sale; or
• exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or relating to, the
area of interest are continuing.
The costs of drilling exploration wells are initially capitalised as exploration and evaluation expenditure pending the results of the well. Costs are
expensed where the well does not result in the successful discovery of economically recoverable hydrocarbons. Areas of interest may be recognised
at either the field or the well level, depending on the nature of the project.

When the technical feasibility and commercial viability of extracting a mineral resource has been demonstrated then any capitalised exploration
and evaluation expenditure is reclassified as capitalised oil field development expenditure. Prior to reclassification, capitalised exploration and
evaluation expenditure is assessed for impairment.
The recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful development and commercial
exploitation, or alternatively, sale of the respective areas of interest.
Impairment
The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment at an “area of interest” level whenever facts
and circumstances suggest that the carrying amount of the asset may exceed its recoverable amount.
The recoverable amount of capitalised exploration and evaluation expenditure is the higher of fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent
cash inflows, recoverable amount is determined for the cash-generating unit to which the asset belongs, unless the asset’s value in use can be
estimated to be close to its fair value.
An impairment exists when the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable amount. The asset or
cash-generating unit is then written down to its recoverable amount. Any impairment losses are recognised in the profit or loss.
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment
of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use
the asset.
A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all the risks and benefits
incidental to the ownership of leased assets, and operating leases, under which the lessor effectively retains substantially all such risks and
benefits.
Finance leases are capitalised. A lease asset and liability are established at the fair value of the leased assets, or if lower, the present value of
minimum lease payments. Lease payments are allocated between the principal component of the lease liability and the finance costs, so as
to achieve a constant rate of interest on the remaining balance of the liability.
Leased assets acquired under a finance lease are depreciated over the asset’s useful life or over the shorter of the asset’s useful life and the lease
term if there is no reasonable certainty that the Group will obtain ownership at the end of the lease term.
Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a straight-line basis over the term of
the lease.
Exploration and evaluation assets

Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure are current is carried forward as an
asset in the statement of financial position where it is expected that the expenditure will be recovered through the successful development and
exploitation of an area of interest, or by its sale; or exploration activities are continuing in an area and activities have not reached a stage which
permits a reasonable estimate of the existence or otherwise of economically recoverable reserves. Where a project or an area of interest has
been abandoned, the expenditure incurred thereon is written off in the year in which the decision is made.
Oil and gas properties

Oil and gas properties include construction, installation or completion of infrastructure facilities such as pipelines and platforms, capitalised
borrowing costs, transferred exploration and evaluation costs, and the cost of development wells. Subsequent costs are included in the asset’s
carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the
item will flow to the consolidated entity and the cost of the item can be measured reliably. All other costs are charged to the profit or loss during
the financial period in which they are incurred.
Depreciation
Oil and gas properties and plant and equipment, other than freehold land, are depreciated to their residual values on a unit of production basis. The
remaining assets use the diminishing value approach. Oil and gas properties – plant and equipment are amortised on a unit of production basis.
Impairment
The carrying values of oil and gas property, plant and equipment are reviewed for impairment at each reporting date, with the recoverable
amount being estimated when events or changes in circumstances indicate the carrying value may be impaired. The recoverable amount of oil
and gas properties and plant and equipment is the greater of fair value less costs to sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is
determined for the cash-generating unit to which the asset belongs, unless the asset’s value in use can be estimated to be close to its fair value.
An impairment exists when the carrying value of an asset or cash-generating unit exceeds its estimated recoverable amount. The asset or cash-
generating unit is then written down to its recoverable amount. For plant and equipment, impairment losses are recognised in the profit or loss.
Impairment of non-financial assets

Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment,
or more frequently if events or changes in circumstances indicate that they might be impaired. Other non-financial assets are reviewed 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 carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset’s fair value less costs of disposal and value-in-use. The value-in-use is the present value of the
estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the asset
belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit.
Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and which are unpaid.
Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid
within 30 days of recognition.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs.
Where there is an unconditional right to defer settlement of the liability for at least 12 months after the reporting date, the loans or borrowings
are classified as non-current.
Environmental rehabilitation expenditure

The provision for rehabilitation represents the cost of restoring site damage following initial disturbance. Increases in the provision are charged
to oil field assets and amortised over the life of the field using the units of production method on estimated proven and probable reserves.
Expenditure on ongoing rehabilitation costs is brought to account when incurred.
Gross rehabilitation costs are estimated at the present value of the expenditures expected to settle the obligation, using estimated cash flows
based on current prices. The estimates are discounted at a pre-tax rate that reflects current market assessments of the time value of money and
where appropriate the risk specific to the liability.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in which
they are incurred.
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is probable the Group will
be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision
is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and
uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted using a current pre-tax rate specific
to the liability. The increase in the provision resulting from the passage of time is recognised as a finance cost.
Employee benefits
Wages and salaries
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits
that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus
related on-costs.
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of
services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by reference to the
share price.

The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using either the
Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the
share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for
the term of the option, together with non-vesting conditions that do not determine whether the Group receives the services that entitle the
employees to receive payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period. The
cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that
are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount
calculated at each reporting date less amounts already recognised in previous periods.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are considered to
vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense
is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based compensation
benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a cancellation. If the
condition is not within the control of the Group or employee and is not satisfied during the vesting period, any remaining expense for the award
is recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised
immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a
modification.
Fair value measurement

When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based
on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in
the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their
economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that
are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant
observable inputs and minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the significance of the inputs
used in making the measurements. Classifications are reviewed at each reporting date and transfers between levels are determined based on a
reassessment of the lowest level of input that is significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or when
the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is a significant
change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification of the major
inputs applied in the latest valuation and a comparison, where applicable, with external sources of data.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
Earnings per share

Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Elk Petroleum Ltd, excluding any costs of servicing
equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus
elements in ordinary shares issued during the financial year.
Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income
tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares
assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Goods and Services Tax (‘GST’) and other similar taxes

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax
authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable
to, the tax authority is included in other receivables or other payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable
from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been
early adopted by the Group for the annual reporting period ended 30 June 2016. The Group has not yet assessed the impact of these new or
amended Accounting Standards and Interpretations.
NOTE 2. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported
amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent
liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various
factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting
judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk
of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
Share-based payment transactions

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date
at which they are granted. The fair value is determined by using either the Binomial or Black-Scholes model taking into account the terms
and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-based
payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit
or loss and equity.
Rehabilitation provision
A provision has been made for the present value of anticipated costs of the remediation work that will be required to comply with environmental
and legal obligations. The provision is estimated based on currently available facts, technology expected to be available at the time of the clean-
up, laws and regulations presently or virtually certain to be enacted and prior experience in remediation of contaminated sites.
Exploration and evaluation costs

Exploration and evaluation costs have been capitalised on the basis that the Group will commence commercial production in the future, from
which time the costs will be amortised in proportion to the depletion of the mineral resources. Key judgements are applied in considering costs
to be capitalised which includes determining expenditures directly related to these activities and allocating overheads between those that are
expensed and capitalised. In addition, costs are only capitalised that are expected to be recovered either through successful development or
sale of the relevant mining interest. Factors that could impact the future commercial production at the mine include the level of reserves and
resources, future technology changes, which could impact the cost of mining, future legal changes and changes in commodity prices. To the
extent that capitalised costs are determined not to be recoverable in the future, they will be written off in the period in which this determination
is made.
Impairment
The Board has reviewed the carrying values of all its major assets and exercised its judgement in electing to make no impairment to any current
carrying value as discussed in the financial statements.

NOTE 3. OPERATING SEGMENTS

Geographical segments
The Group’s reportable segments are based on geographical areas as follows. The exploration assets located in the US have been aggregated in
the US reportable segment.
Australia
The parent Company of the Group is based in Sydney and comprises the corporate head office function.
US
The subsidiaries of the Group are based in Casper, Wyoming and comprise administration, production, exploration, evaluation and development
of oil and gas fields and ownership of pipelines. The Company and its subsidiaries opened a small office in Denver, Colorado, where the
President of the subsidiaries is based together with the Vice President of Operations of the subsidiaries. All remaining operations continue to be
managed out of Casper.
Operating segment information
United States Australia Total

Consolidated – 2016 $ $ $
Revenue
Sales to external customers 24,084 – 24,084
Interest revenue 464 10,592 11,056
Other revenue 23,589 – 23,589
Total revenue 48,137 10,592 58,729
Total revenue above 48,137 10,592 58,729

Other expenses (4,034,657) (3,192,385) (7,227,042)
Loss before income tax expense (3,986,520) (3,181,793) (7,168,313)
Income tax expense –
Loss after income tax expense (7,168,313)
Assets
Segment assets 43,215,622 18,614,276 61,829,898
Total assets 61,829,898
Liabilities
Segment liabilities 37,927,086 1,118,582 39,045,668
Total liabilities 39,045,668
United States Australia Total

Consolidated – 2015 $ $ $
Revenue
Sales to external customers 30,770 – 30,770
Interest revenue 2,693 1,758 4,451
Other revenue 7,068 – 7,068
Total revenue 40,531 1,758 42,289
Total revenue above 40,531 1,758 42,289

Other expenses (2,260,224) (1,428,035) (3,688,259)
Loss before income tax expense (2,219,693) (1,426,277) (3,645,970)
Income tax expense –
Loss after income tax expense (3,645,970)
Assets
Segment assets 30,059,600 1,468,459 31,528,059
Total assets 31,528,059
Liabilities
Segment liabilities 26,256,101 3,853,394 30,109,495
Total liabilities 30,109,495
NOTE 4. REVENUE

Consolidated
2016 2015
$ $
Sales revenue
Sale of oil 24,084 30,770
Rendering of services 23,589 7,068
47,673 37,838
Other revenue
Interest 11,056 4,451
Revenue 58,729 42,289

NOTE 5. EXPENSES

Consolidated
2016 2015
$ $
Loss before income tax includes the following specific expenses:
Professional and corporate services

Accounting, auditing and tax fees 283,129 284,994
Consultants fees 720,919 398,140
Legal fees 245,241 160,443
Share registry, ASX and ASIC fees 38,775 57,979
Contract services – company secretary 165,094 117,866
1,453,158 1,019,422
Administrative expenses
Serviced office 130,709 91,108
Travel and accommodation 369,166 34,379
Insurance 79,814 99,229
Computer, website and marketing 49,060 29,476
Other 307,728 93,233
936,477 347,425
Director and employee costs

Directors and executives’ fees and salaries 607,448 535,687
Non-executive directors’ fees 223,601 112,250
Employee wages 1,030,871 515,851
Employee benefits 188,213 182,519
2,050,133 1,346,307
Finance costs
Interest and finance charges paid/payable 489,939 280,753
Other expenses
Foreign exchange (gain)/loss 152,651 (609)
Depreciation and amortisation 174,978 242,823
Share-based payment expense 169,692 178,530
Other – retired leases/disposed assets – 10,026
Loss arising from Crow Tribe Dispute* 1,199,526 –
Impairment 283,822 –
1,980,669 430,770
* As per the announcement on the ASX on 23 February 2016, the Company has been advised that the US District Court in Montana has issued a decision
in favour of the Bureau of Indian Affairs (BIA) in relation to a permit dispute with the Crow Tribe. Subsequent to year end, Elk has agreed to settle the
amount for the previously noted liability of US$869,177 payable in 20 equal monthly payments commencing July 2016, therefore a liability has been
recognised in the current period financial statements in accordance with the requirements of AASB 110 Events after the Reporting Period. See Note 27
for further details.
NOTE 6. INCOME TAX BENEFIT

Consolidated
2016 2015
$ $
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense (7,168,313) (3,645,970)
Tax at the statutory tax rate of 30% (2,150,494) (1,093,791)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Impairment of assets 85,147 –
Share-based payments 50,908 53,559
Non-deductible/(taxable) amounts 36,004 62,785
(1,978,435) (977,447)
Current year tax losses not recognised 1,978,435 977,447
Income tax expense – –
Consolidated
2016 2015
$ $
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised 43,113,797 36,519,013
Potential tax benefit @ 30% 12,934,139 10,955,704
Unused tax losses include losses of the US subsidiaries which is subject to an expiry period of 20 years, beginning from the year 2026. The above
potential tax benefit for tax losses has not been recognised in the statement of financial position. These tax losses can only be utilised in the
future if the continuity of ownership test is passed, or failing that, the same business test is passed.
NOTE 7. CURRENT ASSETS – CASH AND CASH EQUIVALENTS

Consolidated
2016 2015
$ $
Cash on hand and deposits on call 18,103,239 1,567,344

NOTE 8. CURRENT ASSETS – TRADE AND OTHER RECEIVABLES

Consolidated
2016 2015
$ $
Trade receivables 337,649 43,497
Prepayments 1,261,467 124,675
Other receivables 201,587 –
1,463,054 124,675
1,800,703 168,172
Terms and conditions relating to the above financial instruments:

• Trade receivables are non-interest bearing and generally on 60 day terms;
• Other receivables are non-interest bearing and have repayment terms between 30 and 90 days; and
• Security deposits are interest bearing and provide security towards performance bonds provided by the consolidated entity bank to state
governmental agencies against environmental obligations.
The prepayments include prepaid legal fees of $1,230,241 in relation to the restructuring of the Grieve CO2 EOR project between Elk and
Denbury – refer to Note 33 for further details.
NOTE 9. CURRENT ASSETS – NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE
Consolidated
2016 2015
$ $
Oil and gas properties – Grieve pipeline – 813,479
Grieve oil pipeline

In the financial year ended 30 June 2015, the Grieve oil pipeline was transferred from non-current assets at carrying value. Offers received as at
that date have not materialised in any sale but on the basis that the value of these offers were higher than carrying value, the directors estimate
the carrying value remains appropriate.
During this financial year, the Directors have decided to retain this asset and as such the asset has been transferred to oil and gas properties. The
value in use of the Grieve pipeline under the LOI with Denbury exceeds the carrying value of the asset in non-current assets.
NOTE 10. NON-CURRENT ASSETS – PROPERTY, PLANT AND EQUIPMENT

Consolidated
2016 2015
$ $
Furniture and fittings – at cost 561,588 374,692
Less: Accumulated depreciation (410,499) (367,664)
151,089 7,028
Plant and equipment – at cost 118,221 175,579

Less: Accumulated depreciation (110,975) (156,462)
7,246 19,117
158,335 26,145
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Office furniture Plant and

and fittings equipment Total
Consolidated $ $ $
Balance at 1 July 2014 18,592 29,399 47,991
Disposals – (4,442) (4,442)
Exchange differences 3,283 9,886 13,169
Depreciation expense (14,847) (15,726) (30,573)
Balance at 30 June 2015 7,028 19,117 26,145

Additions 175,654 – 175,654
Exchange differences (816) 810 (6)
Depreciation expense (30,777) (12,681) (43,458)
Balance at 30 June 2016 151,089 7,246 158,335
Property, plant and equipment secured under finance leases

Refer to Note 28 for further information on property, plant and equipment secured under finance leases.

NOTE 11. NON-CURRENT ASSETS – OIL AND GAS PROPERTIES – GRIEVE PROJECT
Consolidated
2016 2015
$ $
Oil properties acquired – at cost 52,004 50,550
Less: Accumulated amortisation (20,073) (19,512)
31,931 31,038
Oil field plant and equipment – at cost 1,130,542 265,643

Less: Accumulated amortisation (314,223) (261,162)
816,319 4,481
Oil field development expenditure – at cost 38,771,394 26,986,410

Less: Accumulated amortisation (1,241,940) (1,207,221)
37,529,454 25,779,189
Closure costs – at cost 100,890 215,690
38,478,594 26,030,398
Reconciliations
Oil and gas

properties Total
Consolidated $ $
Balance at 1 July 2014 15,882,152 15,882,152
Additions 12,822 12,822
Expenditure during the year 7,073,333 7,073,333
Disposals (171,689) (171,689)
Exchange differences 4,148,428 4,148,428
Write off of assets (802,719) (802,719)
Amortisation expense (111,929) (111,929)
Balance at 30 June 2015 26,030,398 26,030,398

Expenditure during the year 11,273,306 11,273,306
Asset reclassified from held for sale (Note 9) 853,272 853,272
Exchange differences 512,513 512,513
Provision for closure costs (114,800) (114,800)
Balance at 30 June 2016 38,478,594 38,478,594
Expenditure during the year was principally financed by Denbury through their facility and extended trade credit.
Additions above relate to equipment costs attributed to the project during the year. Expenditure includes field/well development costs
capitalised during the year.
NOTE 12. NON-CURRENT ASSETS – OIL AND GAS PROPERTIES – SOUTH SINGLETON FIELD
Consolidated
2016 2015
$ $
Oil field plant and equipment – at cost 53,931 –
Oil field development expenditure – at cost 84,471 –
Closure costs – at cost 194,053 –
332,455 –
Reconciliations
Oil and gas

properties Total
Consolidated $ $
Balance at 1 July 2014 – –
Balance at 30 June 2015 – –

Additions 135,513 135,513
Expenditure during the year 2,524 2,524
Exchange differences 365 365
Provision for closure costs 194,053 194,053
Balance at 30 June 2016 332,455 332,455


NOTE 13. NON-CURRENT ASSETS – OIL AND GAS PROPERTIES – SINGLETON PROJECT
Consolidated
2016 2015
$ $
Oil field plant and equipment – at cost 46,887 21,125
Less: Accumulated amortisation (1,431) –
45,456 21,125
Oil field development expenditure – at cost 1,395,102 1,245,856

Less: Impairment (282,220) –
1,112,882 1,245,856
Closure costs – at cost 1,559,075 1,616,350
2,717,413 2,883,331
Reconciliations
Oil and gas

properties Total
Consolidated $ $
Balance at 1 July 2014 3,841,553 3,841,553
Additions 7,890 7,890
Transfers in/(out) (1,906,051) (1,906,051)
Balance at 30 June 2015 2,883,331 2,883,331

Additions 62,350 62,350
Impairment of assets (282,220) (282,220)
Provision for closure costs (57,275) (57,275)
Balance at 30 June 2016 2,717,413 2,717,413
Additions above relate to equipment costs attributed to the project during the year. Expenditure includes field/well development costs
capitalised during the year.
NOTE 14. NON-CURRENT ASSETS – OTHER

Consolidated
2016 2015
$ $
Security deposits 97,738 –
Environmental bond deposits 141,421 39,190
239,159 39,190
Environmental bond deposits represents the restricted funds set aside as required with the State and Federal regulatory agencies for Elk
Petroleum’s wells and oil fields. These are rolled on an annual basis and matched to the underlying asset.
NOTE 15. CURRENT LIABILITIES – TRADE AND OTHER PAYABLES

Consolidated
2016 2015
$ $
Trade payables 12,296,272 4,156,958
Accruals and other liabilities 1,268,992 219,832
13,565,264 4,376,790
Refer to Note 23 for further information on financial risk management and instruments.
Trade payables are non-interest bearing. Refer to Note 29 for further information on related party transactions.
An amount of $10,231,268 is included within trade payables as outstanding to Denbury Onshore LLC as at 30 June 2016 (30 June 2015:
$3,929,881). This amount reflects the Denbury advised joint venture expenditure above the loan limit.
The accrual and other liabilities includes the liability owing to BIA–Crow Tribe of $704,738. Refer to Note 27 for further details.
Subsequent to year end, the Company has restructured the Grieve CO2 Enhanced Oil Recovery (EOR) Project (“Grieve Project”) Joint Venture
(“Grieve JV”) with Denbury Onshore LLC (“Denbury”). As the restructure occurred subsequent to year end, the Company is required to account
for the Grieve Project under the original transaction agreement with Denbury. Note 33 outlines some of the expected changes in accounting
treatment in the 30 June 2017 financial year.

NOTE 16. CURRENT LIABILITIES – BORROWINGS

Consolidated
2016 2015
$ $
Other loans _ 3,582,829
Lease liability 4,245 2,531
4,245 3,585,360
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Consolidated
2016 2015
$ $
Total facilities
Convertible loan – secured – 3,582,829
Used at the reporting date

Unused at the reporting date

Convertible loan – secured – –
On 16 April 2015, the Company entered into 12.5% interest (compounded monthly) secured convertible loan facilities agreements totalling
$3.6 million for a period of 12 months. Interest is accrued and is either paid together with the principal at the end of the loan term or can be
converted into new shares of the Company at $0.038 per share. During the year, the notes and capitalised interest were all fully converted to
ordinary shares.
NOTE 17. NON-CURRENT LIABILITIES – BORROWINGS – DENBURY JV

Consolidated
2016 2015
$ $
Financial liability to Denbury JV 21,607,955 18,930,906
The Denbury financial liability relates to the Elk Petroleum Inc.’s portion of JV costs incurred at the Grieve EOR project, being Tranche 2 of the
loan financing arrangements as per Elk’s agreement with Denbury Onshore, LLC (a subsidiary of Denbury Resources NYSE:DNR) executed in
April 2011, plus interest accrued under that agreement.
Included in the Denbury loan is interest capitalised for the financial year of US$1,632,731 (2015:US$1,458,971).
In line with billing arrangement, a further amount of $10,231,268 is included within trade payables as outstanding to Denbury Onshore LLC as
at 30 June 2016 (30 June 2015: $3,929,881).
Subsequent to year end, the Company has restructured the Grieve CO2 Enhanced Oil Recovery (EOR) Project (“Grieve Project”) Joint Venture
(“Grieve JV”) with Denbury Onshore LLC (“Denbury”). As the restructure occurred subsequent to year end, the Company is required to account
for the Grieve Project under the original transaction agreement with Denbury. Note 33 outlines some of the expected changes in accounting
treatment in the 30 June 2017 financial year.
NOTE 18. NON-CURRENT LIABILITIES – OTHER FINANCIAL LIABILITIES

Consolidated
2016 2015
$ $
Other financial liability – BIA Crow Tribe 467,237 –
Lease liability 20,011 –
487,248 –
The other financial liability – BIA crow tribe relates to the payments in relation to the Crow Tribe which is greater than 12 months – See Note 27
for details.
Total secured liabilities

The total secured liabilities (current and non-current) are as follows:
Consolidated
2016 2015
$ $
Other financial liability – BIA Crow Tribe 467,237 –
Lease liability 24,256 2,531
491,493 3,585,360
Assets pledged as security

During the reporting year, a number of US bank facilities were secured by mortgages over the assets of Elk Petroleum, Inc., a US subsidiary of the
consolidated entity but were subsidiary to Elk’s Denbury loan. These facilities were paid out and liens cancelled in September 2014.
Subsequent to year end, the Company has restructured the Grieve CO2 Enhanced Oil Recovery (EOR) Project (“Grieve Project”) Joint
Venture (“Grieve JV”) with Denbury Onshore LLC (“Denbury”), including security arrangements. See Note 33 for the changes in the security
arrangements in the 30 June 2017 financial year.
Convertible notes were secured over the assets of the Company and Elk Petroleum, Inc., a US subsidiary of the Group. The security provided in
relation to Elk’s 35% working interest in the Grieve Oil CO2 EOR Project is secondary to Elk’s Denbury loan.
The lease liabilities were effectively secured as the rights to the leased assets, recognised in the statement of financial position, revert to the
lessor in the event of default.

NOTE 19. NON-CURRENT LIABILITIES – PROVISIONS

Consolidated
2016 2015
$ $
Rehabilitation costs 3,380,956 3,216,439
Rehabilitation
A provision for rehabilitation is recognised in relation to the exploration and production activities for costs associated with the rehabilitation
of the various sites. Estimates of the rehabilitation obligations are based on anticipated technology and legal requirements and future costs. In
determining the rehabilitation provision, the entity has assumed no significant changes will occur in the relevant Federal and State legislation
to rehabilitation in the future. The Singleton Oil Field liability was re-estimated for FY2015 financial statements. The revised estimate is based on
actual costs to abandon the Singleton Unit 5 well in 2015 and a decrease in number of wells under this provision. This updated data has resulted
in a significant decrease in estimated total abandonment liability provision from the previous year. Furthermore, an inflation rate adjustment
occurred in the calculation change for both Grieve Oil Field and Singleton Oil Field from 6.0% to 4.3%.
Movements in provisions
Movements in each class of provision during the current financial year, other than employee benefits, are set out below:
Rehabilitation
costs
Consolidated – 2016 $
Carrying amount at the start of the year 3,216,439
Additional provisions recognised 103,697
Amounts used (229,492)
Foreign exchange difference 92,450
Additional amount capitalised during the year as part of exploration asset 197,862
Carrying amount at the end of the year 3,380,956
NOTE 20. EQUITY – ISSUED CAPITAL

Consolidated
2016 2015 2016 2015
Shares Shares $ $
Ordinary shares – fully paid 672,309,014 201,113,393 66,082,643 37,761,520
Movements in ordinary share capital
Details Date Shares Issue price $

Balance 1 July 2014 188,894,512 36,919,205
Share issue – share purchase plan 7 July 2014 125,000 $0.120 15,000
Share issue – exercise of 2011 retention rights 7 July 2014 174,707 $0.000 –
Share issue – share purchase plan 23 July 2014 2,600,000 $0.120 312,000
Share issue to underwriters 29 July 2014 4,483,334 $0.120 538,000
Share issue to holders of convertible loan 16 April 2015 3,950,000 $0.024 94,800
Share issue to holders of convertible loan 12 May 2015 789,470 $0.025 19,737
Share issue – exercise of 2012 retention rights 30 June 2015 96,370 $0.000 –
Share issue costs – $0.000 (137,222)
Details Date Shares Issue price $

Balance 30 June 2015 201,113,393 37,761,520
Share issue – placement 2 December 2015 13,333,333 $0.030 400,000
Share issue – placement 7 December 2015 8,333,333 $0.030 250,000
Share issue – placement 11 January 2016 39,999,984 $0.063 2,519,999
Share issue – suppliers 16 March 2016 890,524 $0.095 84,600
Share issue – placement 1 April 2016 13,333,333 $0.075 1,000,000
Share issue – conversion of convertible notes 16 April 2016 107,145,743 $0.038 4,071,538
Share issue – suppliers 21 April 2016 592,105 $0.095 56,250
Share issue – placement 24 May 2016 25,332,171 $0.075 1,899,913
Share issue – rights issue and shortfall 28 June 2016 261,599,079 $0.075 19,619,931
Share issue – vesting of 2013 retention rights 30 June 2016 25,750 $0.000 –
Share issue – vesting of A and B CEO awards 30 June 2016 610,266 $0.082 50,235
Less share issue costs – $0.000 (1,631,343)
Balance 30 June 2016 672,309,014 66,082,643
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to the number
of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company does not have a limited amount of
authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have
one vote.
Capital risk management

The directors’ primary objective is to maintain a capital structure that ensures the lowest cost of capital available to the Group. At balance date,
the Group has external borrowings for working capital, plant and equipment and for the Denbury JV.
The Group is not subject to any externally imposed capital requirements.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total borrowings
less cash and cash equivalents.

NOTE 21. EQUITY – RESERVES

Consolidated
2016 2015
$ $
Foreign currency reserve (354,402) (397,566)
Share-based payments reserve 2,257,740 2,088,048
1,903,338 1,690,482
Foreign currency reserve

The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign operations to Australian
dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign operations.
Share-based payments reserve

The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remuneration, and other
parties as part of their compensation for services.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Foreign Share-based
currency payment Total
Consolidated $ $ $
Balance at 1 July 2014 (1,290,329) 1,909,518 619,189
Foreign currency translation 892,763 – 892,763
Share-based payment – 178,530 178,530
Balance at 30 June 2015 (397,566) 2,088,048 1,690,482

Foreign currency translation 43,164 – 43,164
Share-based payment – 169,692 169,692
Balance at 30 June 2016 (354,402) 2,257,740 1,903,338

NOTE 22. EQUITY – DIVIDENDS

There were no dividends paid, recommended or declared during the current or previous financial year.
NOTE 23. FINANCIAL RISK MANAGEMENT AND INSTRUMENTS

Financial risk management objectives
The Group’s activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and interest rate risk),
credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the financial performance of the Group. The Group uses derivative financial instruments such as forward
foreign exchange contracts to hedge certain risk exposures. Derivatives are exclusively used for hedging purposes, i.e. not as trading or other
speculative instruments. The Group uses different methods to measure different types of risk to which it is exposed. These methods include
sensitivity analysis in the case of interest rate, foreign exchange and other price risks, ageing analysis for credit risk and beta analysis in respect
of investment portfolios to determine market risk.
Financial risk management is carried out by senior finance executives (‘finance’) under policies approved by the Board of Directors (‘the Board’).
These policies include identification and analysis of the risk exposure of the Group and appropriate procedures, controls and risk limits. Finance
identifies, evaluates and hedges financial risks within the Group’s operating units. Finance reports to the Board on a monthly basis.
Market risk
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through foreign exchange
rate fluctuations. Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity’s functional currency. As each of the individual entity within the Group primarily transact in
their own respective functional currency, foreign currency risk is deemed to be minimal.
Price risk
The Group was exposed to price risk during the year. However, due to the low volume of sales in 2016 and 2015, any risk arising from the
changes in commodity price is considered to be minimal in these both years.
Interest rate risk
The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s Denbury loan facility with floating interest
rates. Financial instruments with variable rates expose the Group to cash flow interest rate risk. All other financial assets and liabilities, in the
form of receivables and payables (including the lease liabilities), are non-interest bearing or bear fixed interest rates. The Group currently does
not engage in any hedging or derivative transactions to manage interest rate risk.

Note 23. Financial risk management and instruments (continued)
As at the reporting date, the Group had the following variable rate borrowings outstanding:
2016 2015
Weighted average Weighted average
interest rate Balance interest rate Balance
Consolidated % $ % $
Financial liability – Denbury JV 11.00% 21,607,955 11.00% 18,930,906
Net exposure to cash flow interest rate risk 21,607,955 18,930,906
An analysis by remaining contractual maturities is shown in ‘liquidity and interest rate risk management’ below.
The effect on profit and equity as a result of changes in the interest rate, on the assumption that all other variables remain unchanged, is as
follows:
Basis points increase Basis points decrease

Basis points Effect on profit Basis points Effect on profit
Consolidated – 2016 change before tax Effect on equity change before tax Effect on equity
Financial liability –
100 (216,079) (216,079) 100 216,079 216,079
Denbury JV
Basis points increase Basis points decrease

Basis points Effect on profit Basis points Effect on profit
Consolidated – 2015 change before tax Effect on equity change before tax Effect on equity
Financial liability –
100 (189,309) (189,309) 100 189,309 189,309
Denbury JV
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has
a strict code of credit, including obtaining agency credit information, confirming references and setting appropriate credit limits. The Group
obtains guarantees where appropriate to mitigate credit risk. The maximum exposure to credit risk at the reporting date to recognised financial
assets is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes
to the financial statements. The Group does not hold any collateral.
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash equivalents) and available
borrowing facilities to be able to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously monitoring actual
and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
Remaining contractual maturities
The following tables detail the Group’s remaining contractual maturity for its financial instrument liabilities. The tables have been drawn up
based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be paid.
The tables include both interest and principal cash flows disclosed as remaining contractual maturities, except for the Denbury JV loan which is
shown as its carrying amount at year end. This is because the amount of interest that will be payable is dependent on the date of repayment to
Denbury which is not confirmed at the reporting date, due to this the amount of interest to be paid cannot be accurately disclosed. Therefore,
these totals may differ from their carrying amount in the statement of financial position. For the convertible loans, it assumes monthly
capitalisation of interest payments.
Weighted Remaining
average Between 1 and Between 2 and contractual
interest rate 1 year or less 2 years 5 years Over 5 years maturities
Consolidated – 2016 % $ $ $ $ $
Non-derivatives
Non-interest bearing
Trade payables – 13,565,264 – – – 13,565,264
Other loan – BIA Crow Tribe – 467,237 – – – 467,237
Interest-bearing – variable
Lease liability 18.00% 4,245 5,357 14,654 – 24,256
Financial liability to Denbury JV 11.00% – – 21,607,955 – 21,607,955
Total non-derivatives 14,036,746 5,357 21,622,609 – 35,664,712
Weighted Remaining
average Between 1 and Between 2 and contractual
interest rate 1 year or less 2 years 5 years Over 5 years maturities
Consolidated – 2015 % $ $ $ $ $
Non-derivatives
Non-interest bearing
Trade and other payables – 4,376,790 – – – 4,376,790
Interest-bearing – variable
Lease liability 7.20% 2,531 – – – 2,531
Financial liability to Denbury JV 11.00% – – 18,930,906 – 18,930,906
Interest-bearing – fixed rate

Convertible loans 12.50% 4,071,538 – – – 4,071,538
Total non-derivatives 8,450,859 – 18,930,906 – 27,381,765
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above. The convertible
loans can be converted to shares in the Company at the end of the 12 months term.
Fair value of financial instruments

Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.

NOTE 24. FAIR VALUE MEASUREMENT

Fair value hierarchy
The following tables detail the Group’s assets and liabilities, measured or disclosed at fair value, using a three level hierarchy, based on the
lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 3: Unobservable inputs for the asset or liability
Level 1 Level 2 Level 3 Total

Consolidated – 2016 $ $ $ $
Liabilities
Other loan – Denbury JV – 21,607,955 – 21,607,955
Other loan – BIA Crow Tribe – 467,237 – 467,237
Obligations under finance leases – 24,256 – 24,256
Total liabilities – 22,099,448 – 22,099,448
Level 1 Level 2 Level 3 Total

Consolidated – 2015 $ $ $ $
Assets
Non-current assets classified as held for sale – – 813,479 813,479
Total assets – – 813,479 813,479
Liabilities
Other loan – Denbury JV – 18,930,906 – 18,930,906
Convertible loans – 3,582,829 – 3,582,829
Obligations under finance leases – 2,531 – 2,531
Total liabilities – 22,516,266 – 22,516,266
There were no transfers between levels during the financial year.

The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair values due to their
short-term nature. Unless otherwise stated, the carrying amounts of the financial liabilities reflect their fair value.
The fair value of the Grieve pipeline, included in non-current assets classified as held for sale in 2015, was determined based on its carrying
value being lower than the value of offers received to date.
NOTE 25. KEY MANAGEMENT PERSONNEL DISCLOSURES

Compensation
The aggregate compensation made to directors and other members of key management personnel of the Group is set out below:
Consolidated
2016 2015
$ $
Short-term employee benefits 1,373,214 940,120
Post-employment benefits 65,744 40,204
1,549,555 1,112,101
NOTE 26. REMUNERATION OF AUDITORS

During the financial year the following fees were paid or payable for services provided by BDO East Coast Partnership, the auditor of the
Company, and unrelated firms:
Consolidated
2016 2015
$ $
Audit services – BDO East Coast Partnership
Audit or review of the financial statements 76,700 80,378
Audit services – unrelated firms

Audit or review of the financial statements 50,912 30,414
NOTE 27. CROW TRIBE

The Company was involved in a legal dispute with the Crow Tribe over the validity of an agreement to lease at Uluru, Montana, USA. The
Company has appealed a decision made by the Bureau of Indian Affairs (BIA) that a valid lease existed. The Interior Board of Indian Appeals (IBIA)
took Elk’s appeal under advisement on March 31, 2011.
During 2013, the IBIA provided an opinion on the matter. That opinion was appealed and the IBIA has rejected Elk’s appeal of the earlier Bureau
of Indian Affairs decision in favour of the Crow Tribe.
As a result of the IBIA’s decision and Elk’s view of the matters in dispute, in March 2014, Elk filed a Complaint seeking Declaratory Relief in a
Montana permit dispute with the Crow Tribe. This matter after being pursued through a number of judicial bodies established to deal with such
matters through the Bureau of Indian Affairs was heard at Elk’s request by a US District Court in Montana. The Crow Tribe filed an Answer and
Counterclaim to Elk’s Complaint for Declaratory Relief in February 2015 and Elk responded. On 23 February 2016, the Company was advised
that the US District Court in Montana issued a decision in favour of the BIA, including that Elk is liable for payments under the Indian Mineral
Development Act Agreement (IMDAA) and owes BIA US$869,177. Subsequent to year end, Elk agreed to settle the amount for the previously
noted liability of US$869,177 payable in 20 equal monthly payments commencing July 2016, therefore a liability has been recognised in the
current period financial statements in accordance with the requirements of AASB 110 Events after the Reporting Period.

NOTE 28. COMMITMENTS

Consolidated
2016 2015
$ $
Lease commitments – operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year 139,047 3,948
One to five years 84,007 –
223,054 3,948
Lease commitments – finance

Committed at the reporting date and recognised as liabilities, payable:
Within one year 4,245 2,531
One to five years 20,011 –
Total commitment 24,256 2,531
Less: Future finance charges – –
Net commitment recognised as liabilities 24,256 2,531
Representing:
Lease liability – current (Note 16) 4,245 2,531
Lease liability – non-current (Note 18) 20,011 –
24,256 2,531
NOTE 29. RELATED PARTY TRANSACTIONS

Parent entity
Elk Petroleum Ltd is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in Note 31.
Joint operations
Interests in joint operations are set out in Note 32.
Key management personnel

Disclosures relating to key management personnel are set out in Note 25 and the remuneration report included in the directors’ report.
Transactions with related parties

Caper Creative, a company of which R Cook’s daughter is a director, was paid $5,975 in 2015 for graphic design services. R Cook was a director
of the Company until 21 November 2014.
Franks & Associates Pty Ltd, a company in which D Franks and A Bursill are director and principal respectively, were paid company secretarial
and accounting fees of $227,455 (2015: $161,043), excluding GST and out-of-pocket expenses, during the year.
Katherine Hornafius, S Hornafius’ daughter, was paid US$8,200 (AUD$11,006) consulting fees (2015: $Nil) for research activities related to
quantifying the value of “green” nature of enhanced oil production from a carbon dioxide-EOR project sourcing its supply of carbon dioxide
from anthropogenic sources.
Oil & Gas Worx Pty Ltd (“OGW”) is a company in which N Taylor is a director. In 2015, Elk incurred services from OGW totalling $181,000. There
were no services incurred in 2016. In 2016, Elk paid $82,000 relating to the accrued expenses from 2015. These amounts were previously
included as fees to directors in the 2015 Remuneration Report and relate to supplementary consulting services provided by N Taylor over the
period from 1 January 2014 to 11 September 2015; the services were provided in relation to the January 2014 loan, various 2014 capital raisings,
the Metgasco merger proposal, the April 2015 convertible loan facility, and a number of other tasks that are outside N Taylor’s duties as a non-
executive director. As at 30 June 2016, $99,000 remained unpaid (2015: $181,000).
Loans to/from related parties

In 2015, Mr. T Hargreaves held convertible notes with a subscription value of $100,000 in the company. The loan accrued interest at 12.5% up
until maturity on 15 April 2016 which was capitalised. No interest was paid during the year ended 30 June 2015 or 30 June 2016. The convertible
notes were fully settled in 2016 via conversion to ordinary shares at $0.038 per share, being 2,982,062 shares.

NOTE 30. PARENT ENTITY INFORMATION

Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Parent
2016 2015
$ $
Loss after income tax (7,125,146) (2,753,209)
Total comprehensive income (7,125,146) (2,753,209)
Statement of financial position
Parent
2016 2015
$ $
Total current assets 18,509,511 1,468,456
Total assets 23,902,811 5,272,044
Total current liabilities 1,118,582 3,853,484
Total liabilities 1,118,582 3,853,484
Equity
Issued capital 66,082,643 37,761,520
Share-based payments reserve 2,257,740 2,088,048
Accumulated losses (45,556,154) (38,431,008)
Total equity 22,784,229 1,418,560
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2016 and 30 June 2015.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2016 and 30 June 2015.
Capital commitments – Property, plant and equipment

The parent entity had no capital commitments for property, plant and equipment at as 30 June 2016 and 30 June 2015.
Significant accounting policies

The accounting policies of the parent entity are consistent with those of the Group, as disclosed in Note 1, except for the following:
• Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
• Investments in associates are accounted for at cost, less any impairment, in the parent entity.
• Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an indicator of an
impairment of the investment.
NOTE 31. INTERESTS IN SUBSIDIARIES

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the
accounting policy described in Note 1:
Ownership interest
Principal place of business/ 2016 2015
Name Country of incorporation % %
Natrona Pipeline LLC* USA 100.00 100.00
Elk Grieve Project LLC* USA 100.00 –
Singleton EOR Project LLC* USA 100.00 –
NOTE 32. INTERESTS IN JOINT OPERATIONS

Elk Petroleum Inc., a controlled entity, entered into a joint operation with Denbury Onshore, LLC (a subsidiary of Denbury Resources NYSE:DNR)
in May 2011 in which Denbury gained a 65% working interest in and is the operator of the Grieve oil project. Elk retains a 35% working interest
in the Grieve field. Details of the terms of these original arrangements are set out below.
Under the original agreement, the Grieve CO2 EOR Project joint operation covers all geological horizons at the Grieve Field except the Niobrara
formation in which Elk has retained 100% working interest. The terms of the joint operation require Denbury to fully carry Elk for the first
US$28.571 million gross expenditure of the project (=US$10 million Elk share) and to provide access to loan funds to cover Elk’s share of
development and operating costs for up to a further US$12 million net to Elk should the project costs exceed US$28.751 million gross. Under
these arrangements, the US$12 million loan plus accrued interest (at 11%) is to be paid out of Elk’s share of oil production until “payout” is
reached. There was some minor 2011-2012 oil production that was accrued and Elk’s share of this pre-development oil production and sales is
to be credited to the “payout” amount.
To implement the development of the CO2 EOR Project on the Grieve Field Denbury is to construct and operate a newly built oil and CO2
processing and CO2 recompression facilities at the Grieve field as well as built a 3-mile-long carbon dioxide supply pipeline required for the
project. Under these original arrangements, the cost of these newly-built facilities owned by Denbury is to be recovered by Denbury through
a monthly processing and transportation fee calculated by amortising Denbury’s 100% investment in these facilities over 15 years at a 12%
interest rate.
Elk transferred to Denbury it rights to the carbon dioxide supply contract with ExxonMobil as well as the rights to the carbon dioxide transportation
contract with Anadarko. Under various agreements with Denbury, Elk retains certain rights to the supply the carbon dioxide and Anadarko’s
transportation of carbon dioxide under it various agreement with Denbury. In January 2013, Denbury acquired a number of rights from
ExxonMobil; these rights included the rights to the carbon dioxide supply contract with ExxonMobil. Denbury has advised Elk that it will meet all its
obligations to Elk under the original agreements. Elk has accounted for its share of the Grieve Property with a corresponding entry in borrowings.
On 4 August 2016, the above arrangements were subsequently amended and materially modified – see Note 33 for subsequent event.
On 18 May 2015, EPI filed a civil lawsuit in the Wyoming Federal Court asserting several breaches of the agreements between EPI and Denbury
including the Participation and Development Agreement (PDA) signed on 6 May 2011 that provides for the development and operation of the
Grieve CO2 EOR project. Since filing the lawsuit, EPI has discussed these matters with Denbury in an effort to find a resolution to the dispute.
A resolution was not reached prior to the requirement for Denbury to respond to Elk’s Complaint. Denbury therefore filed an Answer to Elk’s
Complaint and Counterclaims in the United States District Court for the District of Wyoming. Please refer to subsequent events note below
relating to this matter.
As part of the Restructuring of the Grieve CO2 Enhanced Oil Recovery (EOR) Project, both Denbury and the Company withdrew their
respective claims and these claims were fully settled on 4 August 2016 – see Note 33 for subsequent event.

NOTE 33. EVENTS AFTER THE REPORTING PERIOD

Subsequent to year end, there have been three major events, being
i. Restructuring of the Grieve CO2 Enhanced Oil Recovery (EOR) Project (“Grieve Project”) Joint Venture (“Grieve JV”) with Denbury Onshore
LLC (“Denbury”);
ii. Completing a senior term loan facility with Benefit Street Partners (“BSP”) for US$58 million for the Grieve Project restructure. The Company
has transferred USD10.2 million to a specific Reserve Account as required under the financing arrangement with BSP; and
iii. Shortfall placement subscriptions for all remaining Shortfall shares under the non-renounceable pro-rata entitlement offer (“Entitlement
Offer”) launched on 3 June 2016 and partially completed on 23 June 2016.
The Company executed final binding agreements and completed the restructure of the Grieve Project JV with Denbury on Thursday 4 August
2016 Central Daylight Time (“CDT”) in Dallas, Texas. The key terms of the completion of the restructure of the Grieve CO2 EOR Project joint
venture between Elk and Denbury are:
• Elk’s working interest in Grieve Project increases to 49% with the right to receive 70% of the net operating cash flow from the first 2 million
barrels of production;
• Denbury remains the Operator of the Grieve Project JV and provides a firm commitment to complete the Grieve CO2 EOR Project
development pursuant to a fixed price turnkey contract containing a detailed field development and execution plan and detailed
completion milestones;
• Under the fixed price turnkey contract, Elk will fund US$55 million to complete the development of the Grieve Project with Denbury to cover
any cost overruns;
• Denbury will supply and cover full cost of CO2 to be injected into the Grieve field required to reach first oil production and any additional CO2
up to 82 BCF will be provided on advantageous commercial terms at Denbury’s cost of CO2;
• All of the oil production from the Grieve Project will be shipped via Elk’s 100%-owned and operated Grieve Oil Pipeline under a binding long-
term regulated pipeline tariff at a haulage charge of US$3.00 per barrel;
• Denbury has transferred to Elk a 49% interest in any Grieve Project assets with an estimated value of approximately US$60 million;
• Denbury will forego recovery from Elk 100% of Grieve Project funding indebtedness with an estimated amount of US$20 million associated
with the prior joint venture funding arrangements; and
• Elk and Denbury have entered into a binding settlement agreement under which all prior claims arising out of the original Grieve Project JV
arrangements will be released including legal claims included in the civil lawsuit which the parties previously withdrew pending negotiating
a commercial settlement (see ASX announcement 16 July 2015).
The Company completed closing a senior term loan facility with Benefit Street Partners (“BSP”) for US$58 million for the Grieve Project JV
restructure on Friday 5 August 2016 evening Dallas, Texas local time.
Funds under the Term Loan facility with BSP are to be used to fund the US$ 55 million in field development expenditures committed to by Elk
as part of the Grieve JV restructure, minor upgrades to Elk’s 100% owned Grieve oil pipeline and associated costs. Funds under the Term Loan
facility are immediately available.
In conjunction with putting in place the Term Loan facility the Company has implemented a significant oil price hedging program to underwrite
a strong oil price going forward for the Grieve Project. Under this program the Company has purchased US$45/bbl put options for 75% of its
share of forecast oil production from the Grieve Project during in calendar year 2017 and 2018.The put options create a US$45/bbl floor price for
the hedged volumes, but do not limit the oil price upside for the project.
The Company launched an entitlement offer on 3 June 2016, and on 27 June 2016 issued approximately 261.6 million new fully paid ordinary
shares at $0.075 per share to raise $19.6 million (before costs). In August and September 2016 Elk issued approximately 146.5 million shares
priced at $0.075 per share (“Shortfall Shares”) to sophisticated investors and institutional investors new to the Elk register to raise an additional
$11 million.
As a result of the restructuring of the Grieve Project, the following accounting treatments are expected in the FY17 year:
i. No change to the net asset position at the date of the signing of the binding agreement. The Grieve project assets and liabilities owing to
Denbury will be reduced through the reversal of charges from Denbury from 1 February 2016, including JB expenses and interest of loans
previously invoiced by Denbury to the Company; and
ii. Payments for the US$55m Turnkey Project will first be used to extinguish the remaining trade creditor liabilities and borrowings owed to
Denbury, with the balance to be capitalised as part of the carrying value of Elk’s share of the Grieve oil field.
Also subsequent to year, the following changes were made to the Group structure:
Ownership interest
Principal place of business/ Current 30/06/2016
Name Country of incorporation % %
Natrona Pipeline LLC* USA Ceased 100.00
Elk Grieve Project LLC* USA 100.00 100.00
Singleton EOR Project LLC* USA 100.00 100.00
No other matter or circumstance has arisen since 30 June 2016 that has significantly affected, or may significantly affect the Group’s operations,
the results of those operations, or the Group’s state of affairs in future financial years.
NOTE 34. RECONCILIATION OF LOSS AFTER INCOME TAX TO NET CASH USED IN OPERATING ACTIVITIES
Consolidated
2016 2015
$ $
Loss after income tax expense for the year (7,168,313) (3,645,970)
Adjustments for:
Foreign exchange differences 152,651 (806)
Depreciation and amortisation 174,978 242,822
Impairment of development expenditure 283,822 –
Loss on asset disposal – 10,260
Loss arising from Crow Tribe Dispute 1,199,526 –
Finance costs 488,709 –
Change in operating assets and liabilities:

Decrease/(increase) in trade and other receivables (7,593) 84,537
Decrease in inventories – 8,519
Increase/(decrease) in trade and other payables 420,977 (215,333)
Net cash used in operating activities (4,285,551) (3,337,441)


NOTE 35. EARNINGS PER SHARE

Consolidated
2016 2015
$ $
Loss after income tax attributable to the owners of Elk Petroleum Ltd (7,168,313) (3,645,970)
Number Number
Weighted average number of ordinary shares used in calculating basic earnings per share 263,176,566 196,669,387
Weighted average number of ordinary shares used in calculating diluted earnings per share 263,176,566 196,669,387
Cents Cents
Basic earnings per share (2.72) (1.85)
Diluted earnings per share (2.72) (1.85)
NOTE 36. SHARE-BASED PAYMENTS

The Company has an employee share option plan, an employee incentive performance and retention rights plan and a non-executive director
and advisor rights plan. The objective of the plans is to assist in the recruitment, reward, retention and motivation of non-executives and
employees of Elk Petroleum and its subsidiaries.
Under the option plan, directors and employees are invited to participate in the plan and receive options. An individual may receive the options
or nominate a relative or associate to receive them. This plan is currently not in use.
Under the performance and retention rights plans, rights are not transferrable. The measurement periods are over the 3 years following the
commencement date for each grant of performance rights, at the end of which the Board will determine the extent to which vesting has been
achieved (the vested rights) in relation to each tranche. Any retention rights or performance rights that do not vest will be forfeited.
The performance rights vest on achievement of specific performance objectives including Compound Annual Growth Rate of Total Shareholder
Return achieved by the Company over the 3 years following the commencement date for each grant of performance rights.
The retention rights vest to ordinary shares based on completion of 3 years of service. Generally, if service ceased before completion of 3 years
of service, none of the retention rights vest whereas if service is continuous until completion of 3 years of service, then 100% of the retention
rights will vest.
Set out below are summaries of options granted under the employee share option plan:
2016 Balance at Expired/ Balance at

the start of forfeited/ the end of
Grant date Expiry date Exercise price the year Granted Exercised other the year
01/07/2011 30/06/2016 $0.200 100,000 – – (100,000) –
100,000 – – (100,000) –
2015 Balance at Expired/ Balance at

the start of forfeited/ the end of
Grant date Expiry date Exercise price the year Granted Exercised other the year
01/07/2011 30/06/2016 $0.200 100,000 – – – 100,000
100,000 – – – 100,000
Options granted under the plan are for no consideration.

The weighted average remaining contractual life of employee share options outstanding at the end of the financial year was nil (2015: 1 year).
The weighted average exercise price is $0.20 (2015: $0.20).
Set out below are summaries of performance rights granted under the plan:
2016 Balance at Balance at

the start of the end of
Grant date Expiry date Exercise price the year Granted Vested Lapsed the year
13/08/2013 30/06/2016 $0.000 3,450,306 – – (3,450,306) –
30/11/2013 30/06/2016 $0.000 1,077,519 – – (1,077,519) –
30/11/2013 30/06/2016 $0.000 1,000,000 – – (1,000,000) –
30/11/2013 30/06/2017 $0.000 2,000,000 – – – 2,000,000
30/11/2013 30/06/2018 $0.000 2,000,000 – – – 2,000,000
05/09/2014 30/06/2017 $0.000 2,706,388 – – – 2,706,388
18/12/2014 30/06/2017 $0.000 126,731 – – – 126,731
30/06/2016 30/06/2018 $0.000 – 1,810,000 – – 1,810,000
12,360,944 1,810,000 – (5,527,825) 8,643,119
Performance rights issued to non-executive directors and employees under the non-executive director and advisor rights and employee
incentive rights plans.
Performance rights are issued for nil consideration and will vest after three years to ordinary shares based on market based performance
conditions. The fair value of the performance rights granted on 5 September 2014, 18 December 2014 and 30 June 2016 were $0.0200, $0.0020
and $0.0494 respectively.

Grant date Expiry date Exercise price the year Granted Vested Lapsed the year
15/08/2012 30/06/2015 $0.000 1,311,000 – – (1,311,000) –
12/12/2012 30/06/2015 $0.000 592,000 – – (592,000) –
13/08/2013 30/06/2016 $0.000 3,450,306 – – – 3,450,306
30/11/2013 30/06/2016 $0.000 1,077,519 – – – 1,077,519
30/11/2013 30/06/2015 $0.000 1,000,000 – – (1,000,000) –
30/11/2013 30/06/2016 $0.000 1,000,000 – – – 1,000,000
30/11/2013 30/06/2017 $0.000 2,000,000 – – – 2,000,000
30/11/2013 30/06/2018 $0.000 2,000,000 – – – 2,000,000
05/09/2014 30/06/2017 $0.000 – 2,706,388 – – 2,706,388
18/12/2014 30/06/2017 $0.000 – 126,731 – – 126,731
12,430,825 2,833,119 – (2,903,000) 12,360,944
The weighted average remaining contractual life of performance rights outstanding at the end of the financial year was 1.44 years (2015: 1.72 years).
The calculation used to determine the fair value of the performance rights at the grant date assumes a discount of 60% on the value of Elk’s
share price to reflect the probability of meeting the market based vesting condition.

Note 36. Share-based payments (continued)
Set out below are summaries of retention rights granted under the plan:

Grant date Expiry date Exercise price the year Granted Exercised Lapsed the year
13/08/2013 30/06/2016 $0.000 56,054 – – (56,054) –
05/09/2014 30/06/2017 $0.000 510,000 – – – 510,000
18/12/2014 30/06/2017 $0.000 226,286 – – – 226,286
30/06/2016 30/06/2018 $0.000 – 195,000 – – 195,000
792,340 195,000 – (56,054) 931,286
Retention rights issued to non-executive directors and employees under the non-executive director and advisor rights and employee incentive
rights plans.
Retention rights are issued for nil consideration and will vest after three years to ordinary shares based on continuity of employment conditions.
The fair value of the retention rights issued on 5 September 2014, 18 December 2014 and 30 June 2016 were $0.0800, $0.0200 and $0.0823
respectively.

Grant date Expiry date Exercise price the year Granted Exercised Lapsed the year
15/08/2012 30/06/2015 $0.000 181,000 – (175,374) (5,626) –
12/12/2012 30/06/2015 $0.000 51,000 – (41,083) (9,917) –
13/08/2013 30/06/2016 $0.000 78,000 – – (21,946) 56,054
05/09/2014 30/06/2017 $0.000 – 510,000 – – 510,000
18/12/2014 30/06/2017 $0.000 – 280,000 – (53,714) 226,286
310,000 790,000 (216,457) (91,203) 792,340
The weighted average remaining contractual life of retention rights outstanding at the end of the financial year was 1.21 years (2015: 1.93 years).
The calculation used to determine the fair value of the retention rights at the grant date assumes a probability of meeting the service condition
of 50%. The value of the right is the value of an underlying share in Elk as traded on ASX at the date of issue of the rights.
DIRECTORS’ DECLARATION
In the directors’ opinion:

• the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations
Regulations 2001 and other mandatory professional reporting requirements;
• the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International
Accounting Standards Board as described in Note 1 to the financial statements;
• the attached financial statements and notes give a true and fair view of the Group’s financial position as at 30 June 2016 and of its
performance for the financial year ended on that date; and
• there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
Neale Taylor
Chairman
28 September 2016
Sydney
INDEPENDENT AUDITOR’S REPORT
Tel: +61 2 9251 4100 Level 11, 1 Margaret St

Fax: +61 2 9240 9821 Sydney NSW 2000
www.bdo.com.au Australia
To the members of Elk Petroleum Limited
Report on the Financial Report

We have audited the accompanying financial report of Elk Petroleum Limited, which comprises the
statement of financial position as at 30 June 2016, the statement of profit or loss and other
comprehensive income, the statement of changes in equity and the statement of cash flows for the
year then ended, notes comprising a summary of significant accounting policies and other explanatory
information, and the directors’ declaration of the consolidated entity comprising the company and the
entities it controlled at the year’s end or from time to time during the financial year.
Directors’ Responsibility 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 and the Corporations Act 2001
and for 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 Note 1, the directors also state, in accordance with Accounting Standard AASB 101
Presentation of Financial Statements, that the financial statements comply with International
Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the company’s
preparation of the financial report that gives a true and fair view in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by the directors, as
well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
BDO East Coast Partnership ABN 83 236 985 726 is a member of a national association of independent entities which are all members of BDO Australia Ltd
ABN 77 050 110 275, an Australian company limited by guarantee. BDO East Coast Partnership and BDO Australia Ltd are members of BDO International Ltd,
a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved
under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which
has been given to the directors of Elk Petroleum Limited, would be in the same terms if given to the
directors as at the time of this auditor’s report.
Opinion
In our opinion:
(a) the financial report of Elk Petroleum Limited is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2016
and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in
Note 1.
Emphasis of matter
Without modifying our opinion, we draw attention to Note 1 in the financial report, which indicates
that the ability of the consolidated entity to continue as a going concern is dependent upon the future
successful raising of necessary funding through equity and/or debt and/or the reduction of costs. These
conditions, along with other matters as set out in Note 1, indicate the existence of a material
uncertainty that may cast significant doubt about the consolidated entity’s ability to continue as a
going concern and therefore, the consolidated entity may be unable to realise its assets and discharge
its liabilities in the normal course of business.
Report on the Remuneration Report

We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2016. The directors of the company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Elk Petroleum Limited for the year ended 30 June 2016
complies with section 300A of the Corporations Act 2001.
BDO East Coast Partnership
Gareth Few
Partner
Sydney, 28 September 2016
2
SHAREHOLDERS INFORMATION
The shareholders information set out below was applicable as at 21 September 2016.
DISTRIBUTION OF EQUITABLE SECURITIES

Analysis of number of equitable security holders by size of holding:
Number of holders
Number of holders of options over
of ordinary shares ordinary shares
1 to 1,000 99 1
1,001 to 5,000 270 –
5,001 to 10,000 194 –
10,001 to 100,000 492 24
100,001 and over 322 27
1,377 52
Holding less than a marketable parcel 457 22
EQUITY SECURITY HOLDERS

Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
Ordinary shares % of total
Number held shares issued
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 200,210,889 24.27
CYPRESSWOOD CAPITAL PTE LTD 57,000,000 6.91
MR ROBERT ANTHONY HEALY 53,867,591 6.53
CATALAN INVESTMENTS PTY LTD 27,330,626 3.31
NATIONAL NOMINEES LIMITED 23,752,894 2.88
BEGLEY SUPERANNUATION CO PTY LTD <BEGLEY ENGINEERING S/F A/C> 22,629,760 2.74
BNP PARIBAS NOMS PTY LTD <DRP> 20,928,455 2.54
CITICORP NOMINEES PTY LIMITED 19,690,306 2.39
MS TRACEY LEANNE MARSHALL 17,251,466 2.09
CHNG SENG CHYE 15,403,809 1.87
LINK TRADERS (AUST) PTY LTD 14,992,389 1.82
CAIRNGLEN INVESTMENTS PTY LTD <WOODFORD SUPER FUND A/C> 14,666,667 1.78
HO DUAN JUAT 11,871,658 1.44
UBS NOMINEES PTY LTD 10,866,144 1.32
RICH TREND VENTURES LTD 10,670,000 1.29
MR BRADLEY WILLIAM LINGO 10,643,162 1.29
J P MORGAN NOMINEES AUSTRALIA LIMITED 10,568,167 1.28
MRS TRACY FRASER 10,095,238 1.22
TEO PENG KWANG 10,080,000 1.22
EAST TIMOR TRADING LDA 10,000,000 1.21
572,519,221 69.41
Options over
Options over ordinary shares
ordinary shares % of total
Number held options issued
MR LUKE KUKULJ 4,188,333 18.47
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 2,916,667 12.86
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED 2,248,167 9.91
CORAL PRODUCTION CORPORATION 1,800,000 7.94
MR ROBERT ANTHONY HEALY 1,500,000 6.62
UNITING PROPERTIES PTY LTD 1,225,000 5.40
MR RODNEY HARPER + MRS ELIZABETH HARPER <HARPER MUMBY SUPER FUND A/C> 1,200,000 5.29
IVYLINE INVESTMENTS PTY LTD <THE BERNLOR HOLDINGS S/F A/C> 1,125,000 4.96
BEGLEY SUPERANNUATION CO PTY LTD <BEGLEY ENGINEERING S/F A/C> 833,333 3.68
INVIA CUSTODIAN PTY LIMITED <HARGREAVES S/FUND A/C> 833,333 3.68
DJ CARMICHAEL PTY LTD 800,000 3.53
JOJO ENTERPRISES PTY LTD <SFI FAMILY A/C> 416,667 1.84
MRS MARGARET MURDOCK + MR NICHOLAS MURDOCK 416,666 1.84
MR MARK JOHN TURNER 265,000 1.17
MR JASWINDER SINGH TAKHAR 209,000 0.92
MSRF PTY LIMITED <MICHAEL SMITH RETIREMENT A/C> 200,000 0.88
MR SALVATORE DI VINCENZO 166,668 0.74
MR AARON JENN LUNG LIM 166,666 0.74
L E E T INVESTMENTS PTY LTD 150,000 0.66
MRS MANISHA MUDE 150,000 0.66
20,810,500 91.78
Unquoted equity securities
Number of
Number on issue holders
Options over ordinary shares issued expiring on 31/03/2018 @ $0.075 1,333,333 1
Holders of 20% or more of unquoted equity securities:
Name Class Number held

CAIRNGLEN INVESTMENTS Options expiring 1,333,333
31/03/2018 @ $0.075
SHAREHOLDERS INFORMATION
Unlisted rights
Number of
Rights Expiry Number on issue holders
Performance rights 2013 30 June 2017 2,000,000 1
Retention rights 2014 30 June 2017 736,286 4
Retention rights 2015 30 June 2018 195,000 6
Substantial holders
Substantial holders in the Company are set out below based on the shares disclosed as held from the last Form 604 lodged by the shareholder:
Ordinary shares
Ordinary shares % of total
Number held shares issued
REPUBLIC INVESTMENT MANAGEMENT PTE. LTD.* 154,501,980 19.21
CYPRESSWOOD CAPITAL PTE LTD** 57,000,000 8.49
MR ROBERT ANTHONY HEALY*** 53,884,136 6.70
* Based on the shares on issue at 21 September 2016, the holding would represent 18.73% of the Company rather than the percentage disclosed on
the historic Form 604
** Based on the Top 20 Shareholder listing, the shares held by the Company as at 21 September 2016 would represent 6.91% of the Company rather
than the percentage disclosed on the historic Form 604.
*** Mr Healy has advised directly to the Company that he currently holds the noted shares, which represents 6.55% of the Company.
ORDINARY SHARES
All ordinary shares carry one vote per share without restriction. Performance rights options do not carry any voting rights.
ON-MARKET BUY BACK

There is no current on-market buy back.
LISTING RULES 3.13.1 AND 14.3

The Annual General Meeting is scheduled to be held on 28 November 2016.
RESERVES AND RESOURCES

Refer to 2016 Shareholder Review for the year ended 30 June 2016 of the Annual Report.
ANNUAL REPORT 2016
CORPORATE DIRECTORY
DIRECTORS SHARE REGISTER

Neale Taylor (Chairman) Computershare Investor Services Pty Ltd
Bradley Lingo (Managing Director and Chief Executive Officer) Yarra Falls, 452 Johnston Street
Abbotsford VIC 3067
Matt Healy (Non-Executive Director)
Russell Krause (Non-Executive Director) Telephone: +61 3 9415 5000
Facsimile: +61 3 9473 2500
Timothy Hargreaves (Non-Executive Director)
AUDITOR
COMPANY SECRETARIES BDO East Coast Partnership
David Franks and Andrew Bursill
1 Margaret Street
Sydney NSW 2000
REGISTERED OFFICE
Suite 4 Level 9
STOCK EXCHANGE LISTING
341 George Street
Elk Petroleum Ltd shares are listed on the Australian Securities
Sydney NSW 2000
Exchange (ASX code: ELK).
Australia
As at the date of this report, the Company also had one series
Telephone: +61 2 9299 9690
of options listed on the Australian Securities Exchange
Facsimile: +61 2 9299 9629
(ASX code: ELKO).
PRINCIPAL PLACE OF BUSINESS

Exchange House WEBSITE
Suite 101, Level 1 www.elkpet.com
10 Bridge Street
Sydney NSW 2000 CORPORATE GOVERNANCE STATEMENT
Telephone: + 61 2 9093 5400 www.elkpet.com/about-elk/corporate-governance/

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ABN 38 112 566 499

2016 ANNUAL REPORT

b. Grieve Pipeline 100% Elk owned and operated.

d. Singleton Unit 100% Elk owned and operated.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

* Subsidiaries of Elk Petroleum Inc.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

Name: Matt Healy

Full Board Audit Committee Remuneration Committee

REMUNERATION REPORT (AUDITED)

Principles used to determine the nature and amount of remuneration

1. Fixed Annual Remuneration (‘FAR)

Other Key Management Personnel:

* Appointed 1 August 2015

Other Key Management Personnel:

* Appointed 13 March 2015

Fixed remuneration At risk – STI At risk – LTI

Other Key Management Personnel:

1. Appointed 13 March 2015 4. Ceased 21 November 2014 7. Appointed 1 May 2016

Chief Operating Officer (COO) – David Evans (effective 1 May 2016)

Name Date Shares Issue price $

Performance rights granted carry no dividend or voting rights.

Retention rights granted carry no dividend or voting rights.

Value of Value of Number of Value of

2016 2015 2014 2013 2012

2016 2015 2014 2013 2012

Additional disclosures relating to key management personnel

Balance at the At appointment Balance at the

* Other – represent the conversion of retention rights

Balance at the Balance at the

Performance rights holding

Balance at the Balance at the

Retention rights holding

Balance at the Exercised/ Balance at the

Loans to directors and executives

This concludes the remuneration report, which has been audited.

Shares under option

Shares under performance rights

Shares under retention rights

Shares issued on the exercise of options

Shares issued on the exercise of performance rights

Shares issued on the exercise of retention rights

INDEMNITY AND INSURANCE OF OFFICERS

INDEMNITY AND INSURANCE OF AUDITOR

PROCEEDINGS ON BEHALF OF THE COMPANY

AUDITOR’S INDEPENDENCE DECLARATION

AUDITOR’S INDEPENDENCE DECLARATION

Tel: +61 2 9251 4100 Level 11, 1 Margaret St

DECLARATION OF INDEPENDENCE BY GARETH FEW TO THE DIRECTORS OF ELK PETROLEUM LIMITED

BDO East Coast Partnership

Sydney, 28 September 2016

Statement of Profit or Loss and Other Comprehensive Income 22

REGISTERED OFFICE PRINCIPAL PLACE OF BUSINESS

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Loss before income tax expense (7,168,313) (3,645,970)

Income tax expense 6 – –

Other comprehensive income

Items that may be reclassified subsequently to profit or loss