Gas2Grid : Annual Report to shareholders

Annual Report

For the year ended 30 June 2020

Gas2Grid Limited

ABN 46 112 138 780

Gas2Grid Limited ABN 46 112 138 780

Annual Report for the year ended 30 June 2020

Table of contents

Chairman's Letter	Page
1
Operations Review	2
Financial Review	7
Corporate Governance Statement	10
Directors' Report	11
Auditor's Independence Declaration	19
Annual Financial Report	20
Directors' Declaration	46
Independent Auditor's Report	47
Additional Information	51

Corporate directory

Directors		Home Stock Exchange
David A Munns - Chairman	ASX Limited
Dennis J Morton - Managing Director	Exchange Centre
Patrick W V M Sam Yue - Executive Director	20 Bridge St
		Sydney NSW 2000
Company Secretary	ASX Code: GGX
Patrick W V M Sam Yue
Registered Office	Solicitors
Suite 22 Level 5		Piper Alderman
58 Pitt Street		Level 23, Governor Macquarie Tower
Sydney NSW 2000	1 Farrer Place
Telephone:	61 2 9241 1927	Sydney NSW 2000
Email:	[e-mail]
Share Registry		Auditors
Next Registries		Stantons International Audit
Level 16		and Consulting Pty Ltd
1 Market Street		6 Middlemiss St
Sydney NSW 2000	Lavender Bay NSW 2060
Telephone:	61 2 9251 1700
Facsimile:	61 2 9251 7138
Email:	[e-mail]
Website

www.gas2grid.com

Gas2Grid Limited

Chairman's Letter

30 June 2020

Dear Shareholders,

During year we commenced the long awaited deepening of Nuevo Malolos-1("NM-1") well in the Malolos Oil Field within Service Contract 44 ("SC 44") to access and production test two known oil bearing sandstones. Should production testing of that well be successful the Company will be able to apply for a 25-year production licence.

In November 2019 during normal operations, a "pry" bar accidently fell into the well and caused the drilling assembly to become stuck. After unsuccessful efforts to free the assembly, we suspended operations just prior to Christmas 2019 in order to provide time for us to arrange for specialist assistance and equipment.

In March 2020, the Covid-19 pandemic struck worldwide and governments imposed measures restricting travel impacting all people, businesses and organisations. In our case, we have had to continue with the suspension of operations until we are again allowed to mobilise crew and equipment.

We invoked Force Majeure for an extension of time to complete the NM-1 well deepening operations.

The last extension of SC 44 ended on 2 September 2020. We do not yet have confirmation of our most recent extension request although we are advised that the extension is legally deemed automatically extended until the government issues a decision. We trust that the government recognizes our commitment to and substantial investments in SC 44 over the many years in Philippines and look forward on their decision to grant the requested extension. On 22 September 2020, the Philippines Government extended the State of Calamity and quarantine by one year. This will impact resumption of our field activities in that period unless we are granted an exemption under the terms and conditions of any extension of SC 44.

While our focus has been the Malolos Oil Field, we have continued to seek new ventures onshore Philippines and elsewhere. The announcement of the Australian Government in September 2020 of their strong support for gas and energy industry development is encouraging, hopefully followed by similar actions by State Governments, and we will be looking for opportunities in Australia.

In January 2020, we lodged a financial claim of €34.35 million against the French Government for their unlawful actions on the St. Griede permit renewal process. The impact of Covid-19 has slowed all legal process in France and it would appear that we will have to wait until 2021 to achieve a resolution.

We thank our shareholders for their continued support as we persevere to develop the Malolos Oil Field, obtain fair compensation for our investment in France and seek opportunities for new investment while the world is impacted by Covid-19 with high uncertainty for business.

David Munns

Chairman

30 September 2020

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Annual Report 2020

Gas2Grid Limited

Operations Review

30 June 2020

EXPLORATION

PHILIPPINES

SERVICE CONTRACT 44 (100% working interest), Onshore Cebu

Location of Service Contract 44 in Philippines

The Department of Energy ("DOE") had confirmed the tenure extension of SC 44 for two years to 2 September 2020 following the issue of Presidential Decree 87 (as amended) which addresses the need to fast track oil and gas exploration/development in the country. The extension requires a minimum US$1.175 million be spent on deepening, completing and testing oil from Nuevo Malolos-1("NM-1") with the drilling operations to commence by the end of September 2019. If the conduct of a long-term

Gas2Grid Limited

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Annual Report 2020